Telmex's dominant power means facing tighter regulations

Telmex (NYSE: TMX) may still hold the title as Mexico's largest telco, but that position could come with the price of tightened regulatory scrutiny.

Cofeco, Mexico's competition commission upheld an earlier ruling that America Telmex and Telcel were dominant in their respective sectors. The regulator's new statement follows a protest launched by tycoon Carlos Slim's America Movil (NYSE: AMX), the parent company of Telmex.

In delivering its decision, the regulator said that "telecom regulator Cofetel is now able ... to set asymmetrical regulation for (interconnection) fees, quality of service or information to those companies that Cofeco has declared dominant."

While Telmex did not say whether it would repeal Cofeco's latest decision, it is another blow to the service provider at a time when it's trying to gain regulatory permission to launch a video service to stay on a competitive footing with cable operators and other telco competitors such as Iusacell. In May, the Mexico's Communications and Transport Ministry rejected Telmex's TV service application.

For more:
- Reuters has this article

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