June 27, 2013
Telefonica SA’s Mexican unit, the nation’s second-largest phone company, wants to triple its share of the industry’s wireless revenue, in part by selling more smartphones and Wi-Fi services and targeting small businesses. The company, which began operating in Mexico in 2001, currently accounts for 12 percent of the wireless market’s revenue, leaving plenty of room for growth, said Francisco Gil Diaz, president of Telefonica Mexico.
“That’s an extremely low share,” he said in an interview yesterday in New York. “We have to increase that share to at least 30 percent in the next few years.” The move would escalate competition with America Movil SAB, the phone company controlled by billionaire Carlos Slim. America Movil accounts for about 70 percent of mobile-phone subscribers, leaving Telefonica Mexico with about 20 percent — though legislation passed this month that may rein in Slim’s dominance. On a revenue basis, the disparity is even greater, putting pressure on Telefonica to wring more money from customers.
June 14, 2013
Mexican regulators made progress on a plan to redefine area codes so that phone carriers such as America Movil SAB have to charge local prices instead of heftier long-distance fees. The decision would cut the number of area codes to 172 from 397, the Federal Telecommunications Commission said today in a statement. The agency altered and resubmitted the plan to the Federal Commission for Regulatory Improvement, which must sign off on it before it can become official.
Mexican officials have been seeking to reduce area codes for several years, meeting opposition from America Movil, which said previous plans were designed to favor its competitors. The phone agency is running out of time to implement the plan because it is due to be replaced by a new government body under a law signed this week by President Enrique Pena Nieto.
June 13, 2013
Congressional leaders of Mexico’s main parties said on Wednesday they had agreed to hold two special sessions of Congress in July and August to tackle outstanding initiatives, paving the way for key energy and fiscal reforms to move forward in the autumn. President Enrique Pena Nieto plans to send measures aimed at boosting Mexico’s paltry tax take and overhauling ailing state-oil monopoly Pemex to Congress during the second regular session of Congress, which begins in September.
But an overhang of outstanding initiatives from the first congressional session, which ended in April, threatened to push back the much anticipated reforms. The two extraordinary sessions agreed to on Wednesday would be held in the second halves of July and August respectively, said Emilio Gamboa, who heads the ruling Institutional Revolutionary Party (PRI) in the Senate.
June 12, 2013
Mexican billionaire Carlos Slim says a new Mexican telecoms law –a law that seeks to break up monopolies- won’t hurt his large telecom holding. Slim, the world’s second richest man and controlling shareholder of Latin American cellphone empire America Movil, told CNBC in an interview that he does not expect the reform will hit the company’s profits. (Slim was the world’s richest man as of the Forbes billionaires’ list in March but was recently overtaken by Bill Gates.)
“I don’t think the profitability is any problem,” Slim said. “Profitability is coming from productivity, efficiency, management, austerity, and the way to manage the business.” Despite Slim’s reassurances, investors seem concerned about the telecoms overhaul. America Movil’s shares have dropped about 15% in dollar terms since new President Enrique Pena Nieto took office on December 1, 2012.
May 17, 2013
The Mexico Institute’s “Weekly News Summary,” released every Friday afternoon summarizes the week’s most prominent Mexico headlines published in the English-language press, as well as the most engaging opinion pieces by Mexican columnists.
What the English-language press had to say…
A bipartisan immigration reform bill survived another week under review by the Senate Judiciary Committee [see this useful graphic by The Washington Post containing rulings to key amendments to the bill]. A Los Angeles Times editorial pointed out that as baby boomers retire and U.S. birthrates continue to decline, immigrants will be needed to fill labor gaps. A different article in the same paper questioned whether or not a path to citizenship for undocumented immigrants would lead to an increase of the unauthorized population similar to the increase that followed the IRCA legalization of 1986.
VOXXI, a news website, argued that while border security should be a factor in the immigration reform debate, improving the efficiency of cross-border flows would provide a huge economic boost to both countries. The New York Times, meanwhile, highlighted San Diego Mayor Bob Filner’s efforts to reach out to his counterpart in Tijuana and address border inefficiencies.
Read the rest of this entry »
May 17, 2013
Global Post, 5/17/2013
Mexican President Enrique Peña Nieto vows big changes with the economic reforms he’s pushing and they’ve already taken more than a little change from the pockets of mega-mogul Carlos Slim. With stock in his flagship phone company America Movil slipping because of telecommunications reforms about to become law, Slim lost the title of world’s richest man Thursday to Microsoft founder Bill Gates for the first time in six years.
Peña Nieto seems on a roll with his campaign to shift the chatter about his country from drug war violence to economic possibility. Since taking office in December, he has worked with political opponents to push constitutional fixes aimed at breaking the choke hold interest groups have around Mexico’s economy.
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 1, 2013
The Wall Street Journal, 4/30/13
Mexico’s Senate on Tuesday adopted legislation to revamp the country’s telecom market, giving final congressional passage to a bill intended to increase competition and end quasimonopolistic practices. The telecom reform, proposed by Mexican President Enrique Pena Nieto and the main parties of the opposition in early March, is seen as a game-changing effort that gives the Mexican state enlarged powers to rein in longtime dominant players such as billionaire Carlos Slim’s America Movil SAB (AMX) and Grupo Televisa (TV), the world’s largest Spanish-language television network.
The vote in the upper house was 108-3 in favor, ratifying a revised bill passed by the Chamber of Deputies last week. It obtained support across the political spectrum, from Mr. Pena Nieto’s Institutional Revolutionary Party, or PRI, to the right-wing National Action Party, or PAN, and the leftist Party of the Democratic Revolution, or PRD. With the congressional approval, the bill now has to be passed by a majority of state legislatures, a process that will likely be a formality, lawmakers said. Mr. Pena Nieto could sign the bill into law in June, they added.
April 26, 2013
Mexico’s lower house sent a bill to increase competition in telecommunications back to the Senate, paving the way for tougher regulators to challenge the dominance of America Movil SAB and Grupo Televisa SAB. The proposal, also backed by President Enrique Pena Nieto, must be approved a second time by the Senate because of a small change in wording in the lower house version of the bill. Then it requires the signoff of a majority of legislatures in Mexico’s 31 states and capital. Under the bill, new government agencies would have the power to force companies that control more than 50 percent of the market to share or even sell assets.
Lawmakers aim to increase investment and reduce prices in the phone and pay-television industries and to create more choice in broadcast TV. The proposal would create tougher conditions for America Movil, which has 70 percent of Mexico’s mobile-phone subscribers, and Televisa, which gets 70 percent of the nation’s broadcast-television audience.