Mexican legislators push through telecom overhaul
Mexican telecom reform legislation is now on the desk of President Enrique Pena Nieto after the lower house of Congress voted to approve sweeping new laws intended to break up the monopolies controlling the country's telco and broadcast businesses and open those markets to outside competition.
The lower house, by a vote of 318-107, confirmed new regulations that the Senate approved days earlier. Pena Nieto, a fervid advocate of the reforms, is expected to give them his blessing.
The rules, which include strengthening the reach of the Federal Telecommunications Institute (IFETEL), have already created a stir in the market. Conceding the inevitable, the country's largest telecom stakeholder billionaire Carlos Slim said he would break off pieces of his América Móvil company so that it controlled less than 50 percent of the market share, in compliance with the law.
Even with that concession, América Móvil will be a changed business; the new rules require that it share access to its lines with new competitors and limit interconnection fees.
Even as he loses some of his power in Mexico, Slim is considering where to invest in other markets.
A story in Bloomberg BusinessWeek suggests that Slim will be looking at opportunities in other areas of Latin America, with special attention being paid to Brazil, Colombia and Peru. América Móvil also owns pieces of two European carriers, Royal KPN and Telekom Austria. Recently the company paid $5.57 billion for AT&T's 8.3 percent stake in América Móvil. AT&T (NYSE: T) broke up the 24-year relationship between the two companies to avoid any potential conflicts of interest between its proposed acquisition target, DirecTV, (NASDAQ: DTV) and the Mexican powerhouse.
Slim also said low interest rates are spurring future investments.
"The opportunities to invest in our countries is significant," Slim said in an interview covered by Bloomberg. "The money available makes the projects we're working on viable and we're investing in that. We have to take advantage of this great window while it lasts."
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