The Federal Telecommunications Institute (FTI) of Mexico has taken a tough stance on three monopolies in the telecommunications and TV industries sector. Phone companies Telcel and Telmex, and Mexican TV firm Televisa were told to open up the industries to competition from foreign and domestic competitors.
The FTI demanded that competitors and companies share their infrastructure, lower the prices they charge for their services, and that the services they offer such as broadband and pay television be widely distributed to diminish their power.
The owner of Telcel and Telmex, Carlos Slim, is Latin America’s richest man, worth about $72 billion in 2013. Through América Móvil, Slim control approximately 80% of Mexico’s landline phone market and 70% of its wireless market through Telcel, an associated company.
Emilio Azcárraga, a TV magnate worth about $2.6 billion, owns Televisa, which controls about 70% of the broadcast TV market and 56% of the cable and satellite markets put together. The new law only allows for up to a 50% market share cap for both TV and telephone companies.
According to a press release by Televisa following the FTI’s ruling, under the new ruling the company will be required to let competitors use its infrastructure in the form of broadcast towers for a fixed rate.
But limits on the use of infrastructure also extend to América Móvil. The company could face competition in the mobile phone business if Mexican authorities auction off high-speed radio spectrum to its other rivals, allowing competitors an advantage against the telecommunications giant.
The IFT was created in 2013 after a push by Mexican President Enrique Peña Nieto to introduce competition and regulation in the TV and telecommunications sectors of Mexico, notorious for their widespread pressures against regulators and other proponents of de-monopolization. Hopefully this is one step forward in the push against the powerful monopolies that have stifled growth in Mexico’s economy for so long.
– Jeff Meyer
Sources: Forbes, The Economist, Wall Street Journal