Mexico’s telecommunications regulator said Thursday that it completed its investigation to determine which companies are dominant in their respective markets, and will unveil the results once the companies have been notified.
Mexican authorities are about to strike a bold blow to phone companies of tycoon Carlos Slim, and leading broadcaster Grupo Televisa, in a bid to stoke competition in their near-monopolistic markets, according to a person familiar with the situation. Mexico’s new telecoms regulator is expected to next week declare Televisa and America Móvil units Telmex and Telcel as dominant in their respective sectors.
Mexico’s president signed into law a monopoly-busting telecommunications law Monday that’s expected to drive down telephone prices for consumers and cost the country’s richest man billions of dollars. Carlos Slim, the tycoon whose America Movil SAB controls 70 percent of Mexico’s cellphone business and 80 percent of the country’s landlines, has seen his net worth plummet $5 billion since March, when the law was proposed, as investors sold off the company’s stock for fear of the law’s impact. The slump dropped Slim to second, behind Microsoft founder Bill Gates, in the competition to be the world’s richest man. The law’s implementation is likely to further undercut his business empire.
President Enrique Pena Nieto took less than three months to push the proposal through Congress, a sign of his race to obtain major changes before a broad pact of Mexico’s major political parties unravels. Moments before signing the measure into law, Pena Nieto said it would strengthen Mexican companies and favor consumers with lower prices. That, in turn, will attract foreign investment and speed economic growth, he said.
Jesús Briseño is a Mexican entrepreneur, brewing craft beers like pale ale, stout and a pilsner named for Jesús Malverde, the patron saint of smugglers and drug dealers. But often it’s not Mexico bars that sell his beer but U.S.-based outlets here like Wal-Mart and 7-Eleven.
The reason has to do with Mexico’s system of monopolies that are allowed to secure exclusive rights to major industries and products such as telecommunications, broadcasting, cement, even beer. Mexico’s two largest brewers use exclusivity contracts to prevent all products but their own from being sold in nearly all of Mexico’s bars and restaurants.
Dallas Morning News, 12/03/2012
Enrique Peña Nieto became the president of Mexico on Saturday and outlined an ambitious plan to transform it into a middle-class society by taking on powerful monopolies and unions and reducing poverty, hunger and violence. “We are a nation that grows at two speeds,” Peña Nieto said.
Mexico’s competition watchdog has revoked a nearly 12 billion peso ($925 million) fine against the domestic unit of billionaire Carlos Slim’s telecommunications firm America Movil, the company said on Wednesday.
America Movil, the cash cow of Slim’s business empire, said in a statement that it “was notified with a resolution issued by the Federal Competition Commission (Cofeco) that revoked and left without effect a 11.989 billion peso fine for alleged relative monopolistic practices.” The revocation of the fine could strengthen the view that regulators in Mexico lack enough muscle to reign in the massive influence of a businessmen like Slim, the world’s richest person, according to Forbes.
The market already bet America Movil would skirt the fine, with its shares closing on Wednesday at their highest since February 2011, before the first mention of the fine and concerns of a regulatory crackdown spurred a slump in the stock. Federal competition commission Cofeco had slapped America Movil’s Telcel with the record sanction in April 2011 after ruling the company charged excessive prices to wireless and wireline competitors to connect to its network.
Billionaire Carlos Slim was out of context and off the mark in his criticism of a study finding a lack of competition in Mexico’s phone industry, the Organization for Economic Cooperation and Development said.
Slim told reporters yesterday that the group’s report, released earlier this week, seemed to use data “pulled out of thin air.” The 72-year-old, who controls Mexico’s largest wireless and landline-phone companies, denied the study’s claims that Mexican carriers overcharged consumers $13.4 billion a year for phone and Internet services from 2005 to 2009.
Mexico’s government, which commissioned the study, is using it to validate efforts to create more competition in telecommunications. The findings support the government’s plan to auction off fiber-optic lines owned by the state power company and contracts to push high-speed Internet into communities where it’s not available, Communications and Transportation Minister Dionisio Perez-Jacome said this week.
“The OECD stands by its report in full,” the group said today in an e-mailed statement.