Mexico watchdog weighs if America Movil, Televisa dominate sector

Thu Dec 5, 2013 5:08pm EST
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MEXICO CITY (Reuters) - Giant Mexican telco America Movil and broadcaster Televisa, the two companies likely to be most affected by the country's telecoms reform, said on Thursday the regulator has told them it was determining whether they are dominant players in the sector.

The notifications are the first step in a process mandated by a telecoms reform passed by Mexico's Congress earlier this year that gives the new Federal Telecommunications Institute (IFT) powers to clamp down on dominant players and spur competition.

Televisa, the world's largest producer of Spanish-language content, said in a regulatory filing it was analyzing the news and preparing an official response.

America Movil, the telecoms behemoth controlled by Mexican billionaire Carlos Slim, later said that it and its subsidiaries, including fixed-line operator Telmex, have also been placed under review by the watchdog and asked to hand over information about the size of the market.

America Movil said it had received a notice "related to the beginning of a process toward the probable determination of being a dominant economic agent in Mexico's telecommunications market.

The company had already said it expects to be declared dominant.

America Movil shares ended down 1.69 percent at 14.55 pesos ($1.12) before the company disclosed the review. Televisa's shares closed down 2.1 percent, having fallen more than 3 percent earlier on the news.

On Wednesday, the IFT said it had informed unidentified companies it will assess for tougher regulation.

Under the new rules, the IFT has powers to break up telecoms companies that are found to be impeding competition, although those powers are only intended to be used as a last resort.   Continued...

Mexican billionaire Carlos Slim walks on stage for an event of the Fundacion Telmex Mexico Siglo XXI (Telmex Foundation Mexico XXI Century) in Mexico City September 12, 2013. REUTERS/Bernardo Montoya