Carlos Slim's Telmex (NYSE: TMX) was dealt yet another blow this week as Mexico's telecom regulator the Federal Competition Commission (Cofeco) has levied a $7.86 million fine on the telco for blocking access to its wireline network from Telefonica's (NYSE: TEF) Mexican subsidiary Movistar.
In issuing the fine, Cofeco said that Telmex's action "was intended to, or had the effect of substantially impeding access [for a competitor] and that "the refusal to provide a connection impedes access to the telephone market and damages free competition, to the detriment of consumers."
Not surprisingly, Telmex quickly refuted the allegations. Arturo Elias Ayub, one of Telmex's directors, said that "there isn't one (company) that has requested interconnection with Telefonos de Mexico that hasn't been granted it."
The telco now has 30 days to repeal Cofeco's fine.
At a time when Telmex's competitors are freely offering triple play services, Cofeco's latest fine couldn't come at a worse time for Telmex, whose TV service application was rejected due to concerns that the telco failed to meet necessary interconnection requirements for competitive carriers.
Making matters worse, Telmex's wireless brother Telcel now has to pay a $1 billion fine for allegedly overcharging competitors to get access to its network.
- TeleGeography has this article
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