China Telecom plans bid to build Mexico broadband network

China's third-largest carrier China Telecom is preparing a possible bid for a contract to build and run a new mobile broadband network in Mexico and is seeking local partners to join it in a consortium, three people with knowledge of the matter said.

It has already secured up to several billion dollars of financing from Chinese state-controlled banks, including the China Development Bank, for the project, which Mexico estimates will cost $10 billion over 10 years, one of the people said.

The proposed network is part of a sweeping reform designed to break billionaire Carlos Slim's hold on the Mexican telecoms business, but the Chinese involvement could prove controversial and trigger concerns from the US, some Mexican officials say.

Mexico's government is trying to ease its economic dependence on the United States and ramp up Chinese investment. A Chinese-led consortium looks poised to win a $3.75 billion contract to build a high-speed train system, sources with knowledge of the plan say. This is despite the group's previous winning bid being revoked late last year amid a political scandal.

Representatives for China Telecom did not return requests for comment, and representatives for China Development Bank could not be reached for comment. A spokesman for Mexico's Communications and Transport Ministry (SCT) declined to comment.

On a trip to China in November to reduce tensions caused by the train contract cancellation, Communications and Transport Minister Gerardo Ruiz Esparza also discussed the mobile network plan with the Chinese government, according to a ministry press release.

State-owned China Telecom's international subsidiary China Telecom Global wants to be an operating partner in the network and not just an investor, said the people, who requested anonymity.

It is still looking for Mexican partners, the people said. It was unclear who had been approached.