November 11, 2013 / 10:09 PM / 5 years ago

Mexico to identify possible telecom antitrust targets 'very soon'

MEXICO CITY (Reuters) - Mexico’s new telecommunications watchdog said on Monday it may identify this month which companies dominate the local market, likely paving the way for tougher regulation against telecom company America Movil and broadcaster Televisa.

Mexican billionaire Carlos Slim looks on before he gives a speech at Mexico's school of engineers during an event to mark the 50th anniversary of his engineering degree, in Mexico City May 28, 2013.REUTERS/Henry Romero

Gabriel Contreras, president of the Federal Telecommunications Institute (IFT), said the watchdog would in the near future inform the companies it had determined to be dominant, adding that it could be as soon as this month.

“We’ll be notifying the players very soon that according to our information ... could be predominant economic agents,” Contreras told reporters in Mexico City.

Billionaire Carlos Slim’s telecommunications company, America Movil, controls 70 percent of the mobile phone market, and about 80 percent of the fixed-line business, while Televisa has more than 60 percent of the TV market.

Nurturing competition in the telecom industry is one of the main priorities of President Enrique Pena Nieto, who earlier this year pushed a reform through Congress that gives the regulator sweeping powers to shake up the market.

The reform stipulates that players with a market share of more than 50 percent will be declared “predominant.”

Those companies can be subject to a range of measures aimed at leveling the playing field in Mexico, where much corporate power is concentrated in very few hands.

Lawmakers in Congress say they expect both America Movil and Televisa to be declared dominant in Mexico by IFT.

Contreras did not say who would be declared dominant, but when asked whether fair conditions in Mexico existed before the IFT took shape in September, he said: “The answer is no.”

The IFT has until March 9 to decide which measures to apply to dominant players, during which time the companies in question can argue their case against tougher regulation.

America Movil, which in Mexico provides mobile services with the Telcel brand and fixed lines under the name Telmex, has already said it expects to be declared dominant.

Those companies may be subject to asymmetric regulation, forced to share infrastructure with competitors - and may even be broken up by the IFT, according to the new laws.

The idea was to order breakups as a last resort, Contreras said, adding that secondary legislation to implement Pena Nieto’s reform would set out conditions for using that option.

Contreras noted that companies did not have to be declared dominant for the IFT to order them to divest assets, nor does the regulator have to wait until March 9 to apply anti-trust measures.

The secondary laws are due to be passed by early December.

Slim and Televisa have spent years battling efforts to impose tougher rules on how they operate, using legal injunctions and appeals to thwart regulators. Much of that legal cover has been swept away by the new reform.

Reporting by Dave Graham; editing by Matthew Lewis

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