May 17, 2013
Spain’s Telefonica expects Mexico’s new government to quickly implement new regulations designed to challenge billionaire Carlos Slim’s dominance in the local telecommunications market, a top company official said. In the last decade since entering Mexico, Telefonica has battled Slim’s firms – the country’s dominant fixed-line, Internet and mobile providers – while struggling to convince regulators to level the playing field.
However, President Enrique Pena Nieto successfully pushed a sweeping telecommunication legislation through Congress this spring that should help growth at Telefonica, No. 2 in Mexico in terms of subscribers with about 20 percent of the mobile phone market. This week a majority of Mexican states approved the constitutional reform designed to circumvent the legal hurdles that have prevented regulators from boosting competition in the sector for so long.
May 15, 2013
A Mexican law to boost competition in telecommunications and media gained approval from a majority of state legislatures, surmounting its final hurdle for passage. “It’s a historic day for Mexico,” Jose Ignacio Peralta, deputy communications minister, said in a message posted on Twitter announcing the milestone. President Enrique Pena Nieto has already pledged support for the bill, which passed both houses of Congress last month.
The proposal seeks to increase investment and reduce prices in the phone and pay-television industries and to create more choice in broadcast TV. It would create tougher conditions for America Movil SAB, which has 70 percent of Mexico’s mobile-phone subscribers, and Grupo Televisa SAB, which gets 70 percent of the nation’s broadcast-television audience.
May 13, 2013
Loud laughter greeted Slim’s early remarks, and within a few minutes a major nonviolent protest erupted: kazoo-playing audience members trooped around the giant hall and left the building after flinging multicolored pieces of monopoly money into the air.
What was printed on that money? It bore the legend “$73 Billion Net Worth By Price Gouging & Overcharging.” And that’s when I realized that this moment represented a turning point: Monopoly communications industry behavior may finally become socially interesting in America. There are just a few steps between what’s happened in Mexico and what’s going on here in the United States.
April 22, 2013
The Wall Street Journal, 4/19/13
Mexico’s Senate on Friday passed a telecommunications reform bill that aims to increase competition and development in the industry and rein in the market power of dominant players. Senators voted 118 to three in favor of the bill in the early hours, and returned it to the lower house of Congress, which has to approve a number of changes that senators made to the proposal. The lower house had already passed the bill.
President Enrique Pena Nieto sent the telecommunications proposal to Congress in early March, seeking to give regulators increased powers to improve competitive conditions in the market, raise investment, and rapidly expand access to broadband services at more affordable rates.
April 12, 2013
Billionaire Carlos Slim is preparing an aggressive push into Mexico’s television market to take advantage of new telecommunications legislation, even as the changes threaten his dominance in the phone business. While Slim’s wireless carrier, America Movil SAB, is one of the chief targets of a bill to create more competition in Mexico, proposals to give consumers more options in cable and satellite TV will benefit the company, Chief Financial Officer Carlos Garcia-Moreno said last month. The bill is under Senate review after passing the lower house of Congress in March.
The law offers Slim his best chance in years to get a license to offer pay-TV services over satellite and cable, said Pablo Vallejo, an analyst at Corporativo GBM SAB. Slim, the world’s richest person, is amassing media assets, including Mexican soccer teams and the rights to air the Olympics, to lure customers with exclusive programming.
April 4, 2013
Mexico’s competition watchdog said on Wednesday it would temporarily suspend a $53 million fine it had levied against a fixed-line phone company controlled by billionaire Carlos Slim. The Federal Competition Commission (Cofeco) ordered in February that Telmex, part of Slim’s telecoms giant America Movil , should pay 657 million Mexican pesos ($53.4 million) after regulators found it had denied rival Axtel access to some of its network.
Cofeco said on its website that an appeal had been filed and that the fine would be suspended during a review by the regulators. Telmex has said it believes Cofeco’s ruling is unfounded. Slim’s legal teams have been able to avoid major rulings against his firms by Cofeco and the country’s telecoms regulator, which have both sought for years to curb the dominance of Slim’s companies.
March 22, 2013
Mexico’s lower house of Congress approved a modified proposal to increase competition in the telecommunications and media industries, inserting changes that benefit broadcasters Grupo Televisa SAB (TLEVICPO) and TV Azteca SAB. The bill was approved 393-98 at 4:11 a.m. local time today to be delivered to the Senate, according to the house’s website. It will require the vote of two-thirds of the Senate. At least parts of the legislation will also need constitutional changes, which have to be approved by a majority of legislatures from 31 Mexican states and the capital.
In a measure to let foreigners own as much as 49 percent of Mexican broadcast networks, lawmakers added a “reciprocity” clause requiring outside investors to come from countries that also allow stakes of that size in their media industries. That could cut down on investment from companies from the U.S., which has a restriction of 25 percent foreign ownership in many cases. Televisa and Azteca, both based in Mexico City, account for almost all of Mexico’s broadcast-television audience. The telecommunications law calls for creating two new broadcast networks through an airwave auction. Comcast Corp.’s Telemundo, a U.S. Spanish-language network, had sought to air in Mexico as recently as 2006, when it was owned by General Electric Co.
March 22, 2013
Mexico’s lower house of Congress gave broad approval Thursday night to a telecommunications reform that threatens to loosen tycoon Carlos Slim’s grip on the phone market and broadcaster Televisa’s dominance of the airwaves.
The proposal attracted overwhelming support, with 414 lawmakers in favor of the reform and only 50 opposed. Lawmakers must still vote on amendments to the bill, which has dampened confidence in Slim’s prospects, though investors are hopeful the Mexican tycoon can at least partly offset curbs to his phone empire by entering the television market.
March 18, 2013
With a bill introduced by the president and backed by all three political parties, Mexico is poised to take on a few of the country’s biggest monopolies and moguls. But for Mexico to truly engage in economic competition, it needs to do much more.
A lack of competition pervades the Mexican economy, as one or a few companies dominate sectors as diverse as glass, cement, flour, soft drinks, sugar, and tortilla flour, not to mention the state’s control of energy and electricity. This hits consumers’ bottom lines — an OECD study estimates that it increases the costs of basic goods for households by some 40%. It hurts Mexico’s working and middle classes the most, as they must spend a larger proportion of what they earn on these goods and services. It also hits the burgeoning manufacturing sector, which has to pay more for raw materials and basic inputs.