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 News Around the Republic of Mexico | July 2005 
Fees For Receiving Long Distance Calls To Be Eliminated
 Adriana Arai - Bloomberg News
Mexico plans to do away with charges that mobile-telephone users pay to receive long-distance calls, a measure that may spur completion rates and boost phone usage.
The telecommunications regulator probably will publish this month new rules that transfer the interconnection costs to the person who makes the call, as has been done on a local level since 1999, said Abel Hibert, a commissioner at the regulator. Cell phone users often refrain from answering calls from other area codes and overseas because it costs them money, Hibert said.
"What we're trying to achieve is to have more call completion to mobile phones, and stimulate traffic," Hibert, one of three commissioners who serve under the regulator president, said in an interview in Mexico City.
The new regulation will benefit consumers who have cellular phones just to receive calls about 15 million of Mexico's 41 million mobile-phone users, Hibert said. These users are currently unable to receive longdistance calls. It also opens a new market for America Movil SA and Telefonica SA, Latin America's biggest companies, which could gain by selling phones to relatives of the 11 million Mexicans that live in the United States.
"Telefonica agrees with the proposed calling party pays regulation because it will stimulate growth and penetration of mobile telephony in the country," spokesman Juan Antonio Azcárraga said in response to questions sent by e-mail.
Mexico's 38.5 million users of pre-paid mobile phones, 94 percent of the total, pay an average 2 pesos per minute to receive long-distance calls, Hibert said. Telefonica's customers will save an estimated 47 centavos per minute after the interconnection cost is shifted to the person who calls them, Azcárraga said.
EUROPE, LATIN AMERICA
The regulation change will bring Mexico in line with Europe and most countries in Latin America, including Brazil, Argentina and Colombia, where mobile-phone users don't pay to receive calls when in their local areas. In the United States, users pay for incoming calls because they count towards their paid minutes.
America Movil is against the regulator's plans because it said the regulator never consulted the company on the matter, Chief Executive Daniel Hajj said at a news conference on June 21 in Mexico City to announce investments. Hibert said all mobile phone companies had time to express their opinion on the new rules and America Movil missed the deadline to do so.
The elimination of charges on incoming calls will spur sales of pre-paid cell phones among family members of Mexicans living in the U.S., who often come from poorer Mexican states and can't afford to pay for installation of a fixed-line phone, Hibert said. The charge on incoming calls also discourages them from buying mobile phones, he said. In small towns, people often tell their relatives in the U.S. to call the pharmacy or a shop when they want to communicate with them.
REVENUE
"The question is whether these companies will be savvy enough to commercialize handsets in those poor areas that could potentially benefit from incoming international traffic," said José Otero, president of Signals Consulting, a telecommunications consultancy in Coral Gables, Florida. "Most Latin American companies that have tried to market their services to emigrant communities in the U.S. weren't very successful." Revenue that America Movil and Telefonica receive from longdistance calls may fall in the first six months after the new rules take effect because they will receive 1.71 pesos per minute to connect the calls, instead of the 2 pesos per minute that they make currently on incoming calls.
Long-distance calls to mobile phones probably will increase 5 percent after the measure takes effect, which won't be enough to compensate for the lower revenue per call, Hibert said.
That will probably change in favor of the companies in the following months because of the broadening of the market and continued increase in call traffic, said Hibert and analysts such as Jose Luis Ramirez from Deutsche Bank AG.
"We know from our experience with the calling party pays on a local level that the traffic increase in the medium-term more than compensates for the lower revenue per call," Hibert said. |
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