Tags: Calderon | Slim | carlos | mexico | Companies | Antitrust | Law

Calderon: Slim's Companies a Focus of Antitrust Law

Tuesday, 10 May 2011 02:54 PM

Mexican President Felipe Calderon said antitrust legislation he signed yesterday aims to end “monopolistic behavior” by big companies including ones in the telecommunications industry owned by billionaire Carlos Slim.

Calderon, in an interview with Bloomberg television in New York, said that while many of Slim’s companies follow “good practices” there are “big enterprises” in Mexico, including in telecommunications, that need to be better regulated for anti-competitive behavior.

“I really respect Carlos Slim, or any other Mexican enterprise,” Calderon said. “But at the same time, I am the authority and I need to regulate the market in order to avoid monopolistic practices.”

Calderon has led an antitrust crackdown since taking office in 2006 in a bid to make Latin America’s second-biggest economy more competitive. In addition to tougher legislation, the Supreme Court ruled this month that Slim’s wireless carrier and biggest company by market value, America Movil SAB, can’t use injunctions to stave off cuts in the fees it charges competing carriers to connect calls. The ruling may let rivals reduce prices for consumers.

Regulators have also stepped up efforts against Slim’s dominance in Mexico by focusing on the connection fees America Movil charges. In the past month, the country’s antitrust agency issued a $1 billion fine for anticompetitive practices in that market, and the phone industry regulator ruled in favor of rivals seeking lower fees. America Movil said it plans to appeal the antitrust ruling.

Interconnection Fees

America Movil is the largest wireless carrier in Mexico, with 71 percent of the market’s subscribers, ahead of Telefonica SA’s 21 percent. Grupo Iusacell SA and NII Holdings Inc. are the other two competitors in Mexico’s wireless market.

America Movil has asked competitors to pay a rate of 95 centavos a minute this year when their customers call America Movil customers. The Federal Telecommunications Commission has set a rate of 39 centavos for three companies -- Grupo Televisa SA, NII Holdings Inc. and Alestra SA -- that have sought its intervention in pricing disputes.

Telefonos de Mexico SAB, a unit of America Movil, is the largest land-line carrier in Mexico, with about 80 percent of phone lines and 70 percent of high-speed Internet connections. Telmex’s competitors include fixed-line carriers Axtel SAB and Maxcom Telecomunicaciones SAB and cable companies such as Megacable Holdings SAB and Televisa.

Telmex gained 0.4 percent to 10.45 pesos in Mexico City at 12:06 p.m. New York time, adding to this year’s gain of 4 percent. America Movil rose 0.8 percent to 30.49 pesos. The stock is down 14 percent this year.

Arturo Elias, a spokesman for Slim, said he was reviewing the statements from Calderon and had no immediate comment.

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Mexican President Felipe Calderon said antitrust legislation he signed yesterday aims to end monopolistic behavior by big companies including ones in the telecommunications industry owned by billionaire Carlos Slim. Calderon, in an interview with Bloomberg television in...
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