America Movil must confirm suitor before selling off network assets, says regulator
América Móvil is anxious to shed some of its wireline and wireless assets so it can gain regulatory freedom, but Mexico's Federal Institute of Telecommunications (IFT) told company owner Carlos Slim that the company can't present a plan until it names a buyer.
The Mexican tycoon wants to break up his domestic subsidiaries Telcel and Telmex as a way to reduce their market share below 50 percent in order to avoid a number of proposed anti-monopoly regulations.
While América Móvil has to get the IFT's approval of any possible sale, the regulator won't hear the conglomerate's plan until it confirms a buyer for the assets.
"The only way the Institute can verify that the person who will receive the assets is independent is to know who it is," said IFT President Gabriel Contreras in a Reuters article.
Both Telcel and Telmex hold large pieces of Mexico's wireline and wireless market segments. According to recent figures from TeleGeography's GlobalComms Database, Telcel controls about 70.6 percent of the Mexican mobile market, while sister company Telmex occupied 64.2 percent of the broadband market and around 59.9 percent of the wireline sector.
Any potential suitor that strikes a deal to purchase América Móvil would begin with a 20.6 percent share of the wireless market, 14.2 piece of the broadband segment and 19.9 percent of the wireline market, becoming the second largest service provider in each of those market segments.
In July, América Móvil announced that it would sell off "certain assets." At that time, the Mexican government said that it wants 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.
America Movil blinks first, says it will sell assets
Mexican telecom overhaul regulation targets Carlos Slim's business
América Móvil's offer for Telekom Austria shares becomes mandatory
AT&T sells off America Movil stake for $5.6B as part of DirecTV deal