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 Business News | November 2007 
Calderon to Push Competition in Mexico Telecom, Banks
 Adriana Arai - Bloomberg
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 |  | Competition translates into better prices.
- Felipe Calderon |  | |
Mexican President Felipe Calderon said promoting competition in telecommunications and banking is a priority in his plan to spur economic growth and create jobs.
"We'll foster a clearer competition structure in key industries," Calderon said in a speech today in Mexico City to outline his economic goals through 2012. "Competition translates into better prices."
The plan will test Calderon's willingness to take on the nation's richest man, Carlos Slim, as well as some of the world's largest international lending institutions.
Slim's Telefonos de Mexico SAB controls about 90 percent of Mexico's fixed telephone lines and his America Movil SAB has about three-quarters of the wireless market. About 80 percent of banking assets are controlled by five foreign institutions, led by Banco Bilbao Vizcaya Argentaria SA and Citigroup Inc.
Two government ministers speaking at the same event also emphasized that more competition is needed to meet Calderon's goal of raising the annual economic expansion rate to 5 percent and creating at least 800,000 jobs a year.
'Effective Competition'
Mexico will encourage more carriers to enter the telecommunications business and will push for better quality service, Communications and Transportation Minister Luis Tellez said in a speech today.
"We will invest more, have more service providers, more competition, more quality and better prices meeting international standards," Tellez said. "This is essential to maintain our productivity and competitiveness."
Finance Minister Agustin Carstens said Mexico needs "effective competition" and improved regulations to foster investment in the economy and local companies.
Deputy Finance Minister Alejandro Werner told reporters after the event that the government's plan to increase spending to a record next year will bolster the economy and offset any drop in U.S. demand because of defaults on subprime home loans.
"The problems caused by these vehicles that invest in subprime mortgage-backed securities have been bigger than expected," said Werner, "However, our view is that Mexico's economic strength today makes it less vulnerable to a slowdown in the U.S. economy."
Mexico's government and companies will spend a record amount on the construction and upgrade of roads, ports and other infrastructure next year, Werner said. Mexico's economy shrank 1.4 percent in 2001 after the Sept. 11 terrorist attacks caused U.S. expansion to slow to 0.8 percent. The U.S. buys about 80 percent of Mexico's exports.
The government expects economic growth to accelerate to 3.7 percent next year from about 3 percent in 2007.
To contact the reporter on this story: Adriana Arai in Mexico City at aarai1(at)bloomberg.net |
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