Exclusive: Mexico told to probe Slim phone collusion charges

Sun Feb 12, 2012 11:36pm EST
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By Patrick Rucker

MEXICO CITY (Reuters) - A court has ordered Mexico's competition watchdog to investigate claims of collusion between businesses controlled by telecommunications tycoon Carlos Slim and Spain's Telefonica, according to a court document seen by Reuters on Sunday.

The federal court asked the Federal Competition Commission (Cofeco) to determine whether there was anything improper in Isidro Faine, a vice-chairman on the Telefonica TEF.MC board, also sitting on the board of Slim's financial group Inbursa GFINBURO.MX.

"(It) could possibly mean that the said companies find it easier to make deals ... that reduce competition," the court said in the January 30 document, a copy of which was obtained by Reuters.

The ruling is the latest twist in a legal complaint brought against Slim and Telefonica last year by companies owned by Mexico's two top broadcasting moguls, Emilio Azcarraga of Televisa and Ricardo Salinas of TV Azteca, who are keen to challenge Slim's dominance of the telephone market.

The Organisation for Economic Co-operation and Development has slammed the lack of competition in Mexico and estimates the country's phone and internet users were overcharged $13.4 billion each year from 2005 to 2009.

Azcarraga's Bestphone and Operbes, along with Salinas' Iusacell and Unefon, are among the companies which brought the March 2011 complaint.

Cofeco earlier this month rejected a bid by Televisa to buy 50 percent of Iusacell, citing concerns about the proposed alliance between the two top broadcasters.

Slim's telephone companies dominate Mexico with home phone giant Telmex controlling about 80 percent of landlines while Telcel has 70 percent of the country's mobile phone customers.   Continued...

<p>Chairman of Grupo Carso Carlos Slim of Mexico speaks during an interview with Reuters at the ITU Telecom World in Geneva October 24, 2011. REUTERS/Denis Balibouse</p>