Mexico telecom law should cut Slim market share below 50 percent: lawmaker

Thu Oct 10, 2013 5:44pm EDT
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By Dave Graham

MEXICO CITY (Reuters) - Mexico's new telecoms reform should be able to reduce tycoon Carlos Slim's share of the local mobile phone market to less than 50 percent in the next five years, an influential opposition lawmaker said on Wednesday.

Slim, who controls around 80 percent of Mexico's fixed line business and about 70 percent of the mobile sector, could be forced to divest assets according to a constitutional reform passed earlier this year.

The law, broadly backed across the political spectrum in Mexico, targets Slim's giant phone company America Movil (AMXL.MX: Quote) and rival Emilio Azcarraga's broadcaster Televisa (TLVACPO.MX: Quote), powerful symbols of the power wielded by a select group of families over Latin America's second biggest economy.

The government is now drawing up secondary legislation to implement that reform, and Javier Lozano, head of the Senate's transport and communications committee, said Mexico would have all the tools needed to radically change the market.

Congress is due to begin debating the secondary laws in coming weeks and some analysts are concerned lobbying by Slim and his fellow moguls could blunt the impact of the reform.

However, Lozano, one of the most influential telecoms experts in Congress and highly critical of parts of the original bill, did not believe the reform would come undone.

The reform created a new telecoms regulator known as Ifetel, which will be able to force Slim to share infrastructure with rivals, and, if necessary, break up his local operations to spur competition.

"With these instruments at hand, there have to be very visible changes in the medium term," Lozano, a member of the conservative National Action Party (PAN), said in an interview.   Continued...