Mexico regulator rolls back major 2014 reform - Mobile World Live

Mexico regulator rolls back major 2014 reform

03 NOV 2017

Mexican regulator IFT reintroduced rules allowing America Movil to charge rivals for terminating calls on its networks, marking a major win for the country’s dominant operator.

The move, which was approved by the Mexican Supreme Court in August, represents the first major roll back of reforms introduced in 2014 to limit America Movil’s power and increase competition.

IFT, which will set the interconnection rates going forward, said in a statement it had used a cost model based on a public consultation process which started in 2016.

Starting from 1 January 2018, America Movil will be able to charge rivals MXN0.038562 ($0.002) per minute for calls on its network, and competitors can charge MXN0.112799 per minute for mobile calls to their networks, IFT confirmed.

The 2014 measure, which had an effect on America Movil’s margins, were unfair and led to a loss of business rights, the operator argued.

It also described the rules as asymmetrical, because companies were still able to charge America Movil.

In its statement, IFT added: “The establishment of interconnection tariffs based on costs is a regulatory policy mechanism that aims to balance competition, reduce the disadvantages derived from the size of the network, and allow smaller companies to have tariff plans that position them competitively in the provision of the service.”

Competitors including AT&T had fought for IFT to keep the zero interconnection rate, or something close to it.

Indeed, while the 2014 reforms were designed to limit America Movil’s dominance, the operator still holds around 70 per cent market share.

An AT&T representative told Reuters the decision “helps the preponderant and harms consumers and competitors”.

“We are disappointed because the new interconnection tariff is a step backwards on the path toward delivering on the objective of the reforms,” the representative added.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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