America Movil blinks first, says it will sell assets
Facing the inevitability of new rules aimed at breaking its grip on Mexico's telecommunications industry, Carlos Slim's América Móvil announced that it would sell off "certain assets … to a new and solid carrier independent from América Móvil with experience in the telecommunications sector."
The sell-off will "reduce its national market share in the Mexican telecommunications market under 50 percent in order to cease being a preponderant economic agent under the terms of the Constitution of the United Mexican States and its implementing legislation," an América Móvil press release stated.
The move was voluntary but unavoidable after Mexican legislators approved new laws aimed at breaking up the monopolies that control the country's telephone and media markets in hopes of attracting investments from competitors. It was a given that President Enrique Pena Nieto would sign the legislation into law since it is part of a personal agenda that also includes changing the energy industry.
Industry watchers told The New York Times that the final rules, which put some teeth into a new regulator, the Federal Telecommunications Institute (FTI), were tougher on América Móvil than on broadcaster Grupo Televiso. Indicating billionaire Slim's wide reach, the Times also added the proviso that Slim owns a 17 percent stake in The New York Times Company.
The FTI's power was evident in facilitating América Móvil's move, Columbia University telecommunications expert Eli Noam told the Times.
"This is a really strong group," Noam said.
Mexico hopes to attract about $19 billion to $232 billion in investments from new telecom firms entering the market, of which about $10 billion will be used to provide service through a publicly owned telecom network the government will begin leasing this year.
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