Mexico’s telecoms watchdog approved a reluctant proposal by America Movil to separate its fixed-line unit into a separate entity, although the operator confirmed plans to fight the move.
The approval follows an order by regulator Federal Institute of Telecommunications (IFT) in February 2017, requiring America Movil to present a proposal for the separation of its fixed line business Telnor from mobile business Telmex, following a review on the progress of telecoms reforms introduced in 2014.
In a statement, IFT said America Movil’s new fixed-line unit will be required to provide local network services and establish a board of directors separate from America Movil. In addition, the unit cannot use current or past brand names including Telmex, Telnor and Telcel.
America Movil will have two years to complete the separation, but the company already said it plans to appeal the decision.
“The legal and functional separation plan ordered by the IFT substantially differs from the plan presented by Telmex and Telnor in compliance with IFT’s separation order of 2017,” America Movil stated.
America Movil listed its grievances about the new plan, including the fact regulated prices for services provided by the new entity “are substantially lower with respect to international benchmarks”. The company also said it had proposed a price structure as part of its plan, but this was not taken into account by IFT.
Mexico’s landmark 2014 telecoms law was designed to promote competition in the country and reduce the power of dominant player America Movil. Four years on, however, America Movil still holds a dominant market share in both fixed and mobile.
In a separate development, IFT revealed five companies had expressed an interest in an upcoming spectrum auction in the 2.5GHz to 2.69GHz band
The regulator is auctioning a total of 120MHz of spectrum in the band for a period of 20 years. Winning bidders will be announced in November or December.