America Movil hit by tougher rules in Mexico

America Movil hit by tougher rules in Mexico

10 MAR 2014

IFT, Mexico’s regulator, named Telcel and Telmex – mobile and fixed-line businesses owned by Carlos Slim’s America Movil – as dominant. It then hit both of them with a raft of sanctions in an attempt to create a more level playing field.

The move was widely expected and part of a 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.

The regulator also said Slim’s bank Inbursa and conglomerate Grupo Carso were dominant in telecoms because they were part of a group with the same economic interests as America Movil.

Among the new rules is regulation on interconnection, including the imposition of asymmetric rates to be determined by IFT.

The sharing of passive infrastructure – such as towers, sites, ducts and rights of way – is also required. IFT will leave operators to negotiate terms but if no agreement can be reached then the regulator will determine prices using LRAIC (long-run average incremental cost) methodology.

National roaming charges are scrapped too, while regulation of wholesale roaming rates is to be done on the same basis as rates for passive infrastructure sharing – IFT will leave operators to negotiate but will step in with LRAIC-based prices if need be.

And Telcel must give infrastructure access to MVNOs – again, on terms negotiated between operators but using IFT as arbiter if no agreement can be reached.

Televisa, which has 70 per cent of the terrestrial TV market and about half of the pay-TV sector, was also – as expected – deemed dominant in broadcasting. It will have to let competitors use its towers for a set fee and publish its advertising prices.

Bloomberg reports companies must comply with the regulator’s restrictions before they can get unified licences, which allows the bundling together of TV, internet and phone services.

Opening up the markets might work to Slim’s long-term advantage if he can gain a stronger foothold in broadcasting. However, IFT President Gabriel Contreras told reporters he would need at least 60 days to determine whether America Movil qualifies for a license to offer additional TV services.

America Movil, in a statement, said the IFT resolution was currently being analysed “from an economic, technical, regulatory, operating and business perspective in order [for the company] to be able to evaluate its effects”.

Author

Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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