BUENOS AIRES: 21 Aug 2010 (Dow Jones)--DirecTV Group Inc. (DTV) late Thursday said it plans to invest $46 million in Argentina to improve its satellite TV services and start offering Internet access.

News of DirecTV's plans came just hours after the Argentine government announced that it would shut down the country's top Internet provider, Fibertel, which is owned by the multimedia conglomerate Grupo Clarin SA (GCLA.BA). The government, which has been engaged in a fierce battle with Grupo Clarin over the future of Argentina's media industry, touted the announcement on its websites.

DirecTV will invest the funds through 2011. Its plans to offer broadband access through DirecTV Net will initially be limited to the province of Mendoza.

The company also said it will start producing television decoders in the southern province of Tierra del Fuego. The government recently offered tax incentives to companies that move production facilities to the province.

Earlier Thursday the government turned up the heat in its ongoing battle with Grupo Clarin, targeting its lucrative broadband Internet service.

Planning Minister Julio de Vido said Fibertel's license was invalid and he gave the company 90 days to wind up operations. The company "doesn't exist anymore," he said.

Fibertel currently has a lock on 25% of Argentina's broadband Internet market, providing service to more than 1 million customers. The loss of its Internet business could be very costly for Grupo Clarin

Internet subscriptions accounted for 480 million pesos ($120 million), or 14%, of the group's sales during the first half of this year. Satellite Internet Servicesource: online.wsj.com