Megacable Comunicaciones de Mexico

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Megacable Comunicaciones de Mexico was awarded a license to provide local telecommunications services in Mexico City, Monterrey, and Guadalajara in 1997. The company was an affiliated of cable service provider Megacable. Among the main shareholders were C-TEC Corp. The company planned to developed a fiber-optic ring around each of those three cities. The company invested US$ 50 million in developed its network in Mexico city in 1998. It launched its commercial services in Mexico City in December 1998. Megacable Comunicacaciones de Mexico selected Lucent as equipment supplier for its local access network. The company invested an additional US$ 60 million in Monterrey and Guadalajara during 1999. In 2005, Lucent upgraded MCM Telecom's Multi-Protocol Label Switching (MPLS) backbone network in Mexico City and Juniper Networks enhanced the security and performance of network. In this same year, Megacable, MCM and 23 of their shareholders filed an arbitration petition against RCN with the International Chamber of Commerce International Court of Arbitration with the argument that RCN rejected its obligations under one of the three agreements governing the relationship between RCN, Megacable and its shareholders. In March of 2006, a new holding company, Teleholding SA de CV bought MCM Holdings and Megacable. In that same month, RCN Corporation sold its 48.93% interests in Megacable, S.A. de C.V. and Megacable Communicaciones de Mexico S.A. for net after-tax proceeds of $300 million in cash. Teleholding, S.A. de C.V. purchased the interests. In 2006, RCN entered into an agreement to sell its investments in Megacable and MCM to the shareholders and the arbitration proceedings and Bankruptcy Court motion will be withdrawn. In March of 2006, a new holding company, Teleholding SA de CV bought MCM Holdings and Megacable. In that same month, RCN Corporation sold its 48.93% interests in Megacable, S.A. de C.V. and Megacable Communicaciones de Mexico S.A. for net after-tax proceeds of $300 million in cash. Teleholding, S.A. de C.V. purchased the interests. Megacable in 2005 has 2.2 million cable subscribers and invested US$15 million to offer telephone services in 2004 (it had not received the license to provide this service in 2005, it would receive it in 2006).