The battle to control Mexican telecoms
Goings-on in Mexican telecoms are akin to a telenovela. América Móvil, the empire owned by the country’s richest man, Carlos Slim, stars in every season. So it is with the latest installment of the soap opera. Televisa, a heavyweight of Mexican broadcasting, AT&T, an American telecoms group with big operations in the country, and Mexico’s chamber of telecommunications have asked the Federal Telecommunications Institute (IFT), the industry regulator, to order that Telmex, the broadband and fixed-line subsidiary of América Móvil, be split into separate firms with two sets of shareholders. That, its rivals contend, would increase competition.
América Móvil has been subject to laws aiming to boost competition for almost a decade. Under anti-monopoly legislation passed in 2014 “preponderant” firms, with over a 50% share of the market, such as Telmex, have been subject to strict regulations. The legislation (which is revised every three years) has forced Telmex to run its retail and wholesale businesses separately. It was previously obliged to share its infrastructure with other operators, for a fee.
The results have been mixed. Telmex’s retail arm, Telcel, remains the dominant firm in mobile phones and mobile internet. In the former it held 63% of the market last year, compared with 69% in 2013. The mobile market is hard for more than a few companies to crack, says Leonardo Olmos of UBS, a bank. Creating a network with national coverage is expensive, giving incumbents a formidable advantage.
2023-04-27 08:02:15
Source from www.economist.com
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