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 Editorials | Issues | October 2007 
Hanging Up? Slim Looks to Legacy
 Adam Thomson - Financial Times
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 |  | Señorita, I have no idea what you are talking about.
- Carlos Slim |  | |
The sky has turned grey, a storm is throwing down hailstones the size of grapes and Carlos Slim, who sits at a large dining table at one of his houses in a wealthy neighbourhood of Mexico City, is struggling with his mobile phone.
“I don’t know how to do this,” he tells the Financial Times in an interview. (Click here to read excerpts of the conversation.)
Mr Slim, who by some estimates this year became the richest man in the world – Forbes still ranks him second but is expected to accord him the top slot on its next list of wealthy individuals – has got into this predicament because he took a picture with it and is trying to send it to another cellular phone.
As he fumbles with the keypad, it quickly becomes apparent that Mr Slim, aged 67 and owner of a pantheon of businesses studded with telecommunications companies throughout the Americas, is no Bill Gates.
The software developer from Seattle, whom Mr Slim is nudging from top spot on the rich list, made his fortune by occupying the knowledge forefront of his industry. Mr Slim did not: at a four-hour press conference in March, he took a technical question about telecoms from a local journalist, politely heard her out, paused and then replied: “Señorita, I have no idea what you are talking about.”
But Mr Slim, who trained as an engineer and taught mathematics at university after graduating, has proved to be a formidable businessman. He sits atop an empire that stretches from banking, insurance, supermarkets and retail outlets to restaurants, mining, cigarettes and cement, as well as to Telmex and América Móvil, his telecommunications giants.
Telmex dominates fixed-line telephony in Mexico, accounting for more than 90 per cent of the market. It is also extremely profitable: every year it generates enough in top-line earnings to pay for its original acquisition price.
In spite of that stranglehold on landlines, the Mexican government subsequently allowed Mr Slim to enter the wireless market, a business he would later spin off into América Móvil, which he controls. The company has increased its subscriber rate by an average of 65 per cent a year since 2000, according to Mr Slim, and now has more than 125m clients.
Much of that growth has come from the businessman’s seemingly unerring ability to spot undervalued and weakly managed companies, pick them up and turn them round. Yet his detractors say he could never have become the world’s richest man had it not been for two things. The first is his purchase of Telmex in 1990 as part of a Mexican privatisation programme. Detractors say this deal held up telecoms competition for years.
The second is the prices he manages to charge his customers. According to a report this year by the Organisation for Economic Co-operation and Development, Mexico has some of the highest telecommunications charges of its member countries.
Mr Slim dismisses both criticisms. On countless occasions, he has cited Telmex’s basic $14-a-month fee as evidence that his fixed-line rates are competitive. He also claims that cellular phone use in Mexico is cheaper than in many other countries. To underline the point, he asks his assistant to bring him the latest list of global telecoms prices and, when it arrives, gets up and walks round the table.
Drawing up a chair and pulling out a pen, he looks down the columns to compare the numbers. “You see? Eleven cents a minute,” he says. “We are cheaper than the average for Latin America, Europe and all the developed countries.”
The chart routine is one he has perfected over the years. The problem is that he is looking at a column based on subscription contracts, which only a tiny proportion of Mr Slim’s customers have; the rest use pay-as-you-go services, an innovation he claims he invented, which cost about 35 US cents a minute.
While Mexicans continue to debate monopolies and pricing and the country’s Federal Competition Commission keeps Mr Slim’s telecoms companies in its sights, there is no doubt that his involvement in the sector has been instrumental in turning Mr Slim into an extremely wealthy man. With more than 200 companies in all – he claims to have lost count of the exact number – his empire makes up more than a third of Mexico’s stock exchange index capitalisation. According to Forbes, which last put his fortune at $53.1bn (£26.2bn, €37.6bn), Mr Slim’s net worth last year increased by $19bn, or $52m a day.
Yet for all the money, Mr Slim is relatively frugal. The house where he is sitting is large but it could never be described as a mansion. He uses it as an alternative office – his own home elsewhere in the capital is one he has occupied for 36 years. The hall is lined with bookshelves filled on one side with old, leather-bound tomes. On the other side are more shelves, these housing contemporary books: My Life, by the former US president Bill Clinton, Isaac Asimov’s Book of Facts and a work entitled You Can Profit From a Monetary Crisis.
In between the two collections there is a heavy, antique refectory-style table covered in yet more books, a forest of framed family photographs and a cluster of nine-inch-high elephants carved from a tree trunk. Mr Slim’s tastes are essentially conservative. He is well-known for not indulging in the yachts and luxury villas flaunted by Mexico’s other billionaires. Indeed, he makes a point out of not owning a single property outside Mexico.
“What for?” he asks. “If I had a place in New York or somewhere else, I would have to have an entire staff to deal with it and I would only use it for a few days a year. It’s so much easier to stay in a hotel.”
This low-key approach to life at times teeters on the brink of parsimony. He may smoke Cohiba cigars but he lights them with a white, disposable plastic lighter with “Telmex” written on the side. He wears a Victorinox Swiss Army watch with a scarlet dial. Mr Slim insists he does not care about being the world’s richest individual. “This is not a football match,” he says. Nor is he concerned with wealth per se. “I came from a wealthy family. I have always had money.”
Mr Slim’s father, an immigrant who fled violence in his native Lebanon, quickly made good in Mexico City after founding a general store, The Orient Star. The fifth of six children, Mr Slim soon showed his own entrepreneurial flair: according to family members, the young Carlos would use family dinners and get-togethers as an opportunity to sell sweets and cigarettes.
A widower, Mr Slim does not seem anxious over the pitfalls of succession. He has already handed over the leadership of his main businesses to his sons and says he is confident that the empire will keep on course even after he backs out completely.
Not that he admits to any plans to do so. “It’s like being a painter,” he says. “Artists don’t just stop doing what they are doing because they have painted a beautiful painting. They carry on until they die.”
Yet he does seem preoccupied with the prospect of old age. The sexagenarian comments constantly on the youth of those who surround him and, on several occasions during the interview, pauses to dab at a weeping right eye. There is a plastic bottle of pills among the scattered papers on the dining table.
The worry seems to be pushing Mr Slim into a new phase in his life, one dominated by nostalgia and the increasing fear of not leaving a sufficiently important legacy. Provocatively, he asks whether anybody wants to see a picture of him naked. It is an excuse to open a large family album sitting on the table. On the first page are two sepia images of him as a baby, looking at the camera in a vintage pose.
On the legacy front, he recently decided to boost contributions to his companies’ charitable foundations from $4bn to $10bn in the next four years. He has joined Mr Clinton in several philanthropic ventures and is supporting the efforts of Nicholas Negroponte from the Massachusetts Institute of Technology to supply computers to children in developing countries.
“What Mexico needs is human and physical capital,” he says – code for education and healthcare. “We intend to start from the woman at the point when she becomes pregnant. We need a population that has better health and that is better prepared.”
Few would argue with him. According to government figures, almost half the population lives below the poverty line. Go to almost any city, town or village and destitute families are to be found surviving on crumbs, alms and, more than occasionally, not surviving at all. For years, but particularly since Sentido Común, a Mexican financial website, this year announced that Mr Slim had become the richest man on the planet, Mexicans have complained that he has not done enough to help.
So why did he not begin his philanthropic pursuits earlier? “I was too busy working,” he says. “Now the time has come to make a difference ... to change things.” He has promised not to curb spending through his charities and foundations until he has contributed significantly to the goal of eradicating Mexico’s most basic problems in education and health by 2015.
The evening is advancing, it is dark outside and it has only just stopped raining. Mr Slim sinks further into nostalgia as he starts to tell the story of the bottle-green 1941 Cadillac in his garage downstairs.
“My children gave it to me when I recovered from an illness 10 years ago,” he says. His father had one just the same and it was the car in which Mr Slim learnt to drive. It is under a polythene sheet and looks as if it has been garage-bound for a while.
“I never drive it,” he admits. “But I often open the door, get behind the wheel and sit there thinking about life, and about my father.” |
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