DavidE
Ultra Nomad
Posts: 3814
Registered: 12-1-2003
Location: Baja California México
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Mood: 'At home we demand facts and get them. In Mexico one subsists on rumor and never demands anything.' Charles Flandrau,
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He Got Too Greedy And Forgot To Slop The Hogs
A CUT N PASTE
By Tomas Sarmiento and Christine Murray
Related Stories
In twist, Mexico says non-telecom Slim firms dominate telecoms Reuters
Mexican tycoon Slim's Grupo Carso designated 'dominant' in telecoms Reuters
Mexican tycoon Slim's bank Inbursa designated 'dominant' in telecoms Reuters
Mexican telecoms bill to raise pressure on Slim: draft Reuters
[$$] Mexico Takes Bold Measures to Rein In Telecom, TV Giants The Wall Street Journal
MEXICO CITY (Reuters) - Mexico's telecommunications watchdog unveiled a slew of regulations on Friday to claw back the massive telephone business of
billionaire Carlos Slim, but said it would not order a break-up of his companies for now.
Mexico is trying to open up its phone and TV industries to more competition following last year's passage of a major telecoms reform that targets the
vast market shares enjoyed by Slim and the country's no. 1 broadcaster, Televisa.
Slim's America Movil controls about 80 percent of Mexico's fixed-line business via its Telmex unit and some 70 percent of the mobile sector through
its Telcel unit. Customers have long complained about high prices and shoddy service.
As was expected, the Federal Telecommunications Institute (IFT) declared America Movil "dominant", and therefore needs to be subject to tougher
regulation. That will include banning the company from charging national roaming fees.
The IFT also declared that Slim's bank Inbursa and conglomerate Grupo Carso were dominant in telecommunications because they were part of a group with
the same "economic interests" as America Movil.
"The measures also prevent evasion of regulation through a subsidiary," said Gabriel Contreras, head of the IFT, which has sweeping powers to regulate
the market, including the authority to break up companies found to be impeding competition.
Contreras noted the measures would in general be implemented within 30 days. But he said no break-ups were planned "at this time", and that they would
only be ordered as a last resort.
The IFT said its anti-trust measures would be reviewed after two years, whereupon it could opt to take stronger action against dominant players, or
ease the regulatory burden.
It was not immediately clear whether the IFT could or would order tougher measures before the two years were up.
The regulator also imposed measures including infrastructure sharing and regulation of interconnection fees, and prohibited Slim from acquiring
exclusive rights to broadcast in Mexico high-profile events such as the soccer World Cup finals.
Last year, America Movil secured rights on all media platforms to broadcast the 2016 Olympics in Rio de Janeiro.
America Movil shares were flat most of the day, but closed 1.57 percent lower. They are down 15 percent this year compared with an 8.9 percent fall in
Mexico's IPC index.
Both Inbursa and Grupo Carso said they were analyzing the IFT's decision and considering their response. Inbursa shares closed down 0.74 percent,
while Grupo Carso fell 0.91 percent.
The rulings on Carso and Inbursa surprised many analysts, who said it meant the IFT was serious about reining in Slim.
"They are saying 'I'm blocking Slim wherever I can'," said Gerardo Roman, head of stock trading at the Actinver brokerage in Mexico City.
Slim has long aspired to penetrate the lucrative pay TV market, where he has a big presence in most of Latin America. But he has so far been barred
from the domestic market.
Earlier on Friday, Televisa, which controls more than 60 percent of Mexico's TV market, and which has long been accused of wielding too much political
power, said it will be forced to share infrastructure.
GOLD MINE
Slim struck gold when Mexico privatized its telecoms industry in the early 1990s, using money generated by his phone business to build a vast
corporate empire spanning mining to retail that gave him one of the world's largest fortunes.
The IFT's dominance rulings are part of a larger telecommunications overhaul and a key milestone in driving competition in Mexico's telecoms and
broadcasting sectors.
They have raised expectations that Mexico might finally tackle the extraordinary power enjoyed by a few companies in Latin America's second-largest
economy.
Nevertheless, the so-called secondary laws to implement last year's telecoms bill have yet to be passed, which could create scope for a legal battle
over how to interpret the reform.
Both Slim and Televisa were highly effective in using legal injunctions to thwart efforts to regulate them in the past.
Televisa said the IFT also ruled that the company cannot hold a stake in a dominant telecoms operator. Its shares extended losses following the
announcement, ending the day more than 2 percent lower.
"All of the resolutions and actions from the IFT affect Grupo Televisa in many areas associated with its (TV and pay-TV) businesses," the company
said.
Earlier on Friday, the IFT detailed the bidding process for concessions to create two new national television networks that would weaken the duopoly
of Mexico's two biggest players, Televisa and TV Azteca.
Together, the two broadcasters control about 95 percent of the broadcast television market.
The Ve Por Mas bank said the IFT decision was bad news for Televisa because it would dent revenue, restrict potential new business and create more
competition since the company would be forced to share its infrastructure with rivals.
Shares of TV Azteca, which stands to benefit from the reform, were up more than 3 percent at 8.15 pesos.
($1 = 13.1454 Mexican pesos)
A Lot To See And A Lot To Do
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monoloco
Elite Nomad
Posts: 6667
Registered: 7-13-2009
Location: Pescadero BCS
Member Is Offline
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Two Of Carlos's Yachts
As seen recently at Marina de La Paz:
"The future ain't what it used to be"
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DavidE
Ultra Nomad
Posts: 3814
Registered: 12-1-2003
Location: Baja California México
Member Is Offline
Mood: 'At home we demand facts and get them. In Mexico one subsists on rumor and never demands anything.' Charles Flandrau,
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This is a super good example of just how greedy the PRI has gotten. Slime lost influence with Telemisery over the politicos, did not slop enough
grease on PRI wheels and now he pays the price.wanna bet on how many DOZENS of Slime's lobbyists will be in PRI headquarters Monday morning? Them
briefcases ain't carrying TelCel applications amigo.
A Lot To See And A Lot To Do
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