While Carlos Slim is working hard to take the title of the world's richest man away from Bill Gates (according to recent estimates in Forbes Magazine), his telecom fortunes are now coming under greater scrutiny. This week, the Federal Competition Commission (CFC), Mexico's antitrust commission, has accused his fixed-line company Telmex of dominating the markets it serves. One possible outcome of this investigation is that the Federal Competition Commission (CFC) could force the telco to lower its service rates.
Slim, which acquired Telmex and its mobile subsidiary America Movil in the early 1990s, has made the incumbent telco a household name throughout all of Latin America. In July, the CFC reported that Telmex dominated 191 local telephone service markets. It appears that Latin America's major cable operators, a list that includes the Yoo alliance (Empresas Cablevision SAB, Cablemas SA, TVI, and Megacable Holdings SAB), Axtel, Alestra and Maxcom, are the only service providers that pose a credible competitive threat to Telmex.
Some analysts, however, believe nothing will come of the agency's inquiries. Jose Manuel Mercado, a consultant at Frost & Sullivan in Mexico, said in an interview with Telecom Engine that the CFC lacks the ability to put its words to action. "It's clear for the entire sector that they don't have the legal ability to clearly stop Telmex's dominant position," he said.
- Telecom Engine has this article
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