America Movil named as dominant telecoms company

10 Mar 2014

Following reports last week that the Instituto Federal de Telecomunicaciones (Ifetel) had reached a decision regarding which operators it considers dominant the telecommunications sector, the new Mexican regulator has now confirmed Carlos Slim-owned America Movil (AM) as holding significant market power (SMP). According to Reuters, the Ifetel has also taken the somewhat unusual step of naming two of Slim’s other companies, bank Inbursa and conglomerate Grupo Carso, as being dominant in the telecoms sector by dint of the fact that they have the same ‘economic interests’ as AM. Both Inbursa and Grupo Carso are said to be analysing the decision and considering their response.

As part of the decision, AM will now be subject to tougher regulation, including no longer being able to charge national roaming fees. Commenting on the legislative plans, Ifetel head Gabriel Contreras said: ‘The measures also prevent evasion of regulation through a subsidiary,’ with the executive noting that the new regulations are expected to be implemented within 30 days. Further, it was confirmed that the Ifetel is not planning to push for the break-up of any companies at this time, with such actions only expected to be taken as a last resort. Meanwhile, a review of the antitrust measures is to be conducted after two years, following which the regulator could opt to either take stronger action against dominant players or ease the regulatory burden.

As previously reported by CommsUpdate, ahead of confirming the names of the dominant operators Ifetel was cited as saying at the end of last week that it had approved the imposition of measures aimed at enhancing competition which included the introduction of local loop unbundling (LLU). Other measures which are expected to be introduced include asymmetric regulation for mobile market leader Telcel, a subsidiary of AM, which would have to pay more to complete calls on its network than it charges for incoming calls.

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