Tags: carlos slim | mexico | america movil | antitrust rules

Mexico's New Antitrust Rules Batter Shares in Slim's America Movil

Image: Mexico's New Antitrust Rules Batter Shares in Slim's America Movil
(AP)

Thursday, 09 Mar 2017 02:11 PM

Shares in Mexican billionaire Carlos Slim's telecoms company America Movil slumped on Thursday after regulators cranked up antitrust measures, forcing it to reorganize and separate some infrastructure into a new unit.

America Movil was the cornerstone of Slim's rise to top the global rich list for several years, but a 2013-14 telecoms reform imposed tougher antitrust rules on the firm and helped open the door to new competitors and shake up the oligopoly.

The long-dominant America Movil said late on Wednesday the Federal Telecommunications Institute (IFT) had decided to step up antitrust measures against it, sending the company's shares down more than 5 percent at market open.

The IFT said on Thursday that America Movil, the largest telecommunications company in Latin America, would have to separate part of its network infrastructure into a new entity and that it would be subject to stricter checks on pricing.

This raises the regulatory burden and cost on America Movil, and could open up its network further to competitors at lower prices. The company's shares later pared some of their earlier losses, but were down 4.6 percent at 12.62 pesos.

The IFT also imposed new rules on the dominant broadcaster and longstanding Slim antagonist Televisa, including increased accounting transparency, but shares in the company rose as analysts thought it could benefit from America Movil's woes.

America Movil holds more than two-thirds of Mexico's mobile subscriptions and dominates the country's fixed line and internet services while Televisa has a more than 60 percent market share of pay TV.

In 2012, a study by the Organization for Economic Co-operation and Development (OECD) concluded that Mexican consumers were overcharged for phone and internet services, although America Movil disputed the findings.

Since the reforms, U.S. wireless operator AT&T Inc. has entered the market and phone service prices have fallen.

Slim's company was stronger in its criticism of the regulator than Televisa and vowed to challenge the decision.

"The modifications and additions to the measures ... confirm the lack of legal certainty and regulatory predictability in the sector," America Movil said.

IFT will strengthen oversight of Televisa's infrastructure-sharing and require it to hand over detailed information on advertising prices, as well as provide separate accounts for each part of the business, the broadcaster said in a statement.

Televisa said it will consider legal or business actions it could take in response.

© 2017 Thomson/Reuters. All rights reserved.

   
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Shares in Mexican billionaire Carlos Slim s telecoms company America Movil slumped on Thursday after regulators cranked up antitrust measures, forcing it to reorganize and separate some infrastructure into a new unit.
carlos slim, mexico, america movil, antitrust rules
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2017-11-09
Thursday, 09 Mar 2017 02:11 PM
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