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 Business News | December 2007 
Mexico Launches Probe Into Tycoon's Telecom Empire
 Jason Lange & Tomas Sarmiento - Reuters
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| | The growth of América Móvil, a cellphone provider controlled by Carlos Slim Helú, continues. (Paulo Whitaker/Reuters) |
Mexico City - The Mexican government said on Friday it launched two antitrust probes into its telecommunications sector dominated by billionaire Carlos Slim, by some accounts the world's richest man.
The investigation is the first of its kind into Slim's flagship company, America Movil, which provides service to seven out of every 10 cellular phones in Mexico.
The probe comes after promises by President Felipe Calderon to boost economic growth by improving competition in key sectors of the economy such as telecommunications. Economists say Mexican growth is hampered by high costs for telephone and Internet services.
Competitors have complained to the country's anti-monopoly commission that America Movil charges too much to allow calls into its cellular phone network.
While the commission did not mention Slim's company by name, it said it was probing cellular interconnection fees. Analysts said the only possible target of the probe would be America Movil.
In a statement published in the government gazette, the commission also said a second probe is looking into monopoly practices in the broadband Internet market.
Slim's telephone company, Telmex, has about 60 percent of the country's high-speed Internet market, and operates more than 90 percent of fixed lines.
Slim bought Telmex from the government in 1990, and spun off America Movil in 2000. Fortune Magazine has called him the world's richest man with a fortune of $59 billion.
Since taking office one year ago, Calderon has said increasing competition is a priority for his government. Analysts say Mexico's telecom sector has some of the highest costs for businesses and households in the industrialized world.
Earlier this month, the government ordered Telmex to give other operators access to its network.
Telmex declined to comment. America Movil was not immediately available for comment.
Analysts said the government could force America Movil to reduce its interconnection fees.
"The most likely scenario is that the fees come down ... though the financial impact on America Movil will be limited and gradual," Martin Lector, an analyst at Vector brokerage in Mexico City, wrote in a note to clients.
America Movil's stock was 2.2 percent higher at 33.50 pesos, buoyed by bets that U.S. interest rates could soon fall, while its New York traded shares rose 2.4 percent to $61.51.
Telmex was up 3.86 percent at 20.17 pesos, while its New York traded shares gained 3.6 percent to $36.73.
(Reporting by Jason Lange and Tomas Saramiento; Editing by Jeffrey Benkoe) |
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