Mexico’s Supreme Court sided with America Movil by ruling against a law which bars the operator from charging rivals interconnection fees, representing a major rollback of the country’s 2014 telecoms reforms.
The Supreme Court, which is currently reviewing reforms designed to reduce the dominance of America Movil and increase competition in the country, ruled telecoms regulator IFT should set interconnection rates.
America Movil had argued the previous rules, which prohibited the company from charging other operators for calls made on its network, were unfair and led to a loss of business rights.
It also described the rules as “asymmetrical” because they were not applied the other way around, and companies continued to charge America Movil.
In a statement, America Movil welcomed the Supreme Court’s unanimous vote against the “zero-rated” tariff rules, while adding IFT would set an interconnection rate fee from 1 January 2018.
“Such rate shall be based on international best practices, cost orientated methodologies, transparency and rationality,” the operator stated.
Bloomberg reported earlier in the year a favourable ruling for America Movil over the issue could see the company potentially entitled to more than $800 million in back payments from its rivals.
However, the court said the ruling would not have “retroactive effects”, suggesting rivals including Telefonica and AT&T would not be liable to make back payments.
Telefonica, which invested heavily in the market, hit out at the ruling, stating it could have “serious consequences for the sustainability and makeup of the sector”, Reuters reported.
AT&T, which was able to enter Mexico as a result of reforms, said it continued to believe in the market’s potential. It told Reuters it invested in Mexico “trusting in the strong public support that the constitutional and legislative reforms of telecommunications received”, adding the process of reforming the telecom’s industry is “arduous” and “requires continuous dedication.”
Despite increased competition, America Movil today still holds approximately two thirds of the country’s mobile market.