Under a new telecoms bill presented by the government to Mexico’s Congress, Carlos Slim’s America Movil could be slapped with fines of up to 10 per cent of country revenue if it falls foul of new and tougher competition rules.
A number of other proposals in the bill, which give extra power to regulator IFT, were widely expected. These include the scrapping of national roaming charges, the regulation of interconnection and wholesale rates, and forcing Telcel – America Movil’s mobile operation in Mexico – to give infrastructure access to MVNOs.
And according to Reuters, IFT will be able to force companies to seek approval annually for interconnection and infrastructure-sharing terms.
The proposed fines for violating competition rules are, however, significant – 5 per cent of income in Mexico for first offences, and 10 per cent for repeat offences.
America Movil’s total wireless revenues in Mexico during 2013 reached MXP179.4 billion ($13.6 billion). The fixed-line operation of America Movil – Telmex – generated sales of MXP104.5 billion.
“I have no doubt that with this law we are going to achieve a move to greater competition and that the problem of concentration will become fairer,” said Jose Ignacio Peralta, communications undersecretary, quoted by the Financial Times.
He expected the bill would “level the playing field” in a market which has seen a “high degree of concentration” and “anti-competitive practices”. “This is the law that Mexico needs,” said Peralta.
Earlier this month, IFT named Telcel and Telmex as pre-dominant. The move was part of an anticipated crackdown on anti-competitive behaviour by President Enrique Pena Nieto.
Telcel has 70 per cent of Mexico’s mobile subscribers while Telmex controls 80 per cent of the fixed-line market.
Televisa, identified as a pre-dominant player in broadcasting with about 70 per cent of the free-to-air market and around half of the pay-TV sector, would also come under increased anti-competitive scrutiny if the bill goes through.