|
|
|
 Business News | April 2008 
Mexico Widens Power Probe of Slim's America Movil
 Chris Aspin - Reuters
go to original
Mexico City - Mexico's antitrust watchdog on Wednesday widened once more a probe into monopolistic practices by telecommunications companies controlled by billionaire tycoon Carlos Slim.
The Federal Competition Commission said it is starting an investigation to determine whether any company wields "substantial power" in Mexico's local cell phone market, a thinly-veiled reference to Slim's America Movil(AMXL.MX)(AMX.N).
America Movil, the largest cell phone operator in Latin America, provides service to seven out of every 10 mobile users in Mexico, well ahead of the No. 2 operator, Movistar, the brand of Spain's Telefonica (TEF.MC).
It is the eighth probe against Slim's companies in the last five months. Six are looking into dominance issues involving Telefonos de Mexico, or Telmex, the largest fixed-line phone company in Mexico.
The seventh is an investigation into the interconnection fees of America Movil.
America Movil was not immediately available for comment, but in the past it has defended its market share by saying it invests more and provides better service across the entire country and not just in profitable cities.
Telmex (TELMEXL.MX) (TMX.N) was declared "dominant" several years ago in a similar probe by antitrust regulators, but Slim got that ruling overturned in Mexican courts.
Mexico's Communications and Transport Ministry can set rates for calls between dominant companies and their smaller rivals.
Mexico's competition commission chief Eduardo Perez Motta has said the investigations will return rulings by mid-2008 but the latest probe could be even faster.
"The investigation period of the current process will not be less than 15 days nor more than 45 days," the commission said in the government's official gazette, although the probe could be extended.
The investigations come 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.
Calderon has promised to get tough on industries where weak competition has led to unfair pricing and little choice for consumers and businesses. But there have been few signs he is making serious moves against big corporations.
Competitors have complained to the anti-monopoly commission that Telmex and America Movil wield too much power in their markets, which hurts competition.
Slim, who is one of the world's richest men, bought Telmex from the government in 1990 and spun off America Movil in 2000.
Telmex rivals have argued Slim's company charges high interconnection rates as a tool to maintain its advantage. Rivals have to use its lines to place calls, which allows Telmex to control phone rates.
(Editing by Gerald E. McCormick) |
| |
|
Vallarta Weddings
Tell a Friend
Site Map
Print this Page
Email Us