Mexico brings in legislation to slice up Slim’s telecoms monopoly
The Mexican government has signed off a number of reforms that look certain to improve the quality of service and competitiveness in the telecoms sector
Carlos Slim, who owns telecoms giant América Móvil, occupies approximately 70 percent of Mexico's mobile market and 60 percent of its fixed-line business. But all is to change as the government enforced anti-monopoly legislation
Mexico’s government has finally signed into law a number of major telecoms sector reforms designed to force media magnate Carlos Slim to split up his vast América Móvil empire. The long-delayed anti-monopoly legislation requires dominant industry players with over 50 percent of the market to share infrastructure with rival players and lower their prices, while inhibiting them from entering a number of different markets.
“This reform will promote greater competition, more and better conditions, better coverage and service quality, as well as lower prices and costs,” said Mexico’s President Pena Nieto to government officials and major industry executives in Mexico City shortly after he signed the reforms into law.
If the reforms have the desired effect, the country’s telecoms industry could emerge transformed
The new laws bolster last year’s reforms, which likewise sought to strengthen competition in the market and curb Slim’s dominance. Previous reforms included the creation of the Instituto Federal de Telecomunicaciones, which was established to uphold telecoms regulation and healthy competition. However, on-going delays in signing additional reforms into law have left the organisation lacking in power.
América Móvil, a major corporate force on the world stage and Mexico’s largest mobile network operator, occupies approximately 70 percent of the nation’s mobile market and 60 percent of the fixed-line business. However, the corporation is being forced to concede some of its piece of the pie in an effort to avoid new regulations that could threaten its competitiveness.
It’s as yet unknown how exactly Slim will reduce his market share, though possible solutions include a major sell-off, or splitting select divisions into separate businesses. For example, the company could make its infrastructure and mobile business into separate entities and avoid costly regulations in the process.
If the reforms have the desired effect, the country’s telecoms industry could emerge transformed, paving the way for improved quality of service and more competitive consumer pricing. Competition, or lack thereof, is a major challenge for corporations in Mexico, and many will be hoping that other sectors follow suit.
