Market leader America Movil has acknowledged that Mexico’s newly-adopted telecoms legislation threatens to have a significant impact on its business.
In a regulatory filing, the operator admitted the legislation’s effects are “uncertain but likely to be material”.
The company lists the features of the reforms including the establishment of a new regulatory body, the Federal Telecommunications Institute; the creation of specialised courts for telecoms and broadcasting markets; and limitations on judicial power to suspend regulatory measures pending judicial review.
The legislation would also identify “preponderant” players, based on their market share, and look to impose asymmetric rates and regulations, as well as structural separation.
The bill defines preponderant as a carrier with a national market share of more than 50 per cent in telecoms or broadcasting, measured by users, subscribers, audience, network traffic or capacity utilisation.
America Movil has around 70 per cent market share in the mobile market (and an even greater 80 per cent market share of the fixed market).
However, the legislation has yet to be implemented. Although America Movil says the bill is likely to become effective in “substantially its current form”, its impact will depend on how it is implemented by further legislation and by the new regulator.
“It would therefore be premature to predict the long-term effects of the bill and the
new framework it contemplates”, it said. If approved rapidly, then the company expects specific rules and regulations “to begin taking effect in 2014”.
The telecoms bill has just passed the Senate for final approval. It had previously been approved by the same body and then resubmitted to the parliament’s lower house which made some minor changes to the bill. The bill must still be approved by a majority of the country’s state-level congresses.