Mexico’s top three political parties have said they will pass a law by April 30 that will give the government the legal power to break up Carlos Slim’s giant telecommunications company, América Móvil SAB,
a
Wall Street Journal
report noted.
Slim and his family own 40% of the company, which controls 70% of Mexico’s mobile phones and 80%of its fixed lines, the article said.
The article noted that the company is also being affected by lower phone service prices in Brazil and Mexico that have reduced its margins. Dutch telecom company Royal KPN NV, which is nearly 30% owned by América Móvil, has declined in value since the company acquired its stake, and Colombian regulators won’t allow the Mexican giant to participate in an upcoming spectrum auction because it is the dominant player in the market. In addition, Mexico is lowering the rates companies pay when a customer uses a competitor’s network, a fee that benefits América Móvil because it owns most of the phone lines.
One silver lining for Slim is that the new law could allow América Móvil to enter Mexico’s television business. But Grupo Televisa, which now has a 70% share of the TV market, could get into the phone business under the new regulations, the
Journal
report noted. (Source:
Wall Street Journal,
March 16-17, 2013.)
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