Feb. 25 (Bloomberg) -- Grupo Televisa SA, Mexico's largest broadcaster, obtained conditional approval from antitrust regulators to buy a stake in a cable company in northern Mexico it plans to use to offer telephone services.

Televisa will be allowed to buy 50 percent of Television Internacional de Monterrey on the condition that it offers its free channels to all pay-TV providers nationwide, Mexico's Federal Competition Commission said in an e-mail today. Televisa, based in Mexico City, also must carry free channels from other companies, the commission said.

``With this decision, Televisa cannot use its content as a mechanism to displace competitors,'' said Eduardo Perez Motta, president of the Federal Competition Commission, on a conference call. ``This will create competition in this industry.''

The conditions are ``too tough'' and Televisa will study what measures it can take, the company said in an e-mail today. A spokesman for Televisa in Mexico City declined to comment beyond the statement.

Televisa wants to buy cable companies to offer packaged television, phone and Internet services and compete with telephone carriers. The company owns a Mexico City-based cable operation with 497,000 subscribers and planned to buy more operators in other parts of Mexico, Executive Vice-President Alfonso de Angoitia said on a conference call last week.

Cablemas Purchase

The commission said the rules announced today will apply to any future cable acquisition and will guide its analysis of Televisa's plan to buy Mexico's second-largest cable company, Cablemas SA.

In a Feb. 21 statement, Televisa said it agreed in November to buy 49 percent of Cablemas for $258 million. The commission said today it will issue a separate ruling on the transaction.

Televisa hadn't previously disclosed the purchase of a stake in Television Internacional de Monterrey. Perez Motta said Televisa agreed to buy 50 percent of the company.

Televisa, the bigger of two broadcasters that operate in Mexico, reported 20.97 billion pesos ($1.9 billion) of broadcasting revenue for 2006. Rival TV Azteca SA had 9.58 billion pesos in revenue.

Mexican regulators published regulations in 2006 allowing cable companies to offer phone services later this year. Telephone carriers also will be allowed to provide television services.

Shares of Televisa have risen 12 percent this year, compared with a 7.8 percent increased in the benchmark Mexican stock index. The stock rose 0.5 percent to 65.68 pesos in Mexico City trading on Feb. 23.

To contact the reporter on this story: Adriana Arai in Mexico City at aarai1@bloomberg.net

Last Updated: February 25, 2007 16:16 EST