Slim's efforts to find a way into the TV market in Mexico have so far been blocked by the government, which fears he will use his financial clout to stifle competition.

However, the 72-year-old billionaire still hopes to break the deadlock.

On Wednesday, Mexico's telecoms watchdog Cofetel approved a plan to auction two new TV channels.

Still, Mexican daily Excelsior reported Telmex Chief Executive Officer Hector Slim Seade as saying that this way into the market was not in Telmex's interests.

"Basically our interest is that they let Telmex carry video," the newspaper quoted Slim Seade as saying.

No date has yet been set for the television auction, which could challenge the dominance of industry giants Televisa (TLVACPO.MX) and TV Azteca (AZTECACPO.MX). Between them, the two have about 95 percent of Mexico's broadcast television market.

Last year the government rejected Telmex's bid to offer pay TV on the basis it had not yet met the regulatory requirements for a concession, but Slim Seade said the company had done so.

Slim, the world's richest man, is already a dominant force in the pay television market elsewhere in Latin America. His companies control around 70 percent of the mobile phone market in Mexico and about 80 percent of the fixed line business.

(Reporting By Dave Graham; Editing by Doina Chiacu)

• A Permanent Economic Emergency