Telmex to create division targeting rural areas

Telmex (NYSE: TMX) has decided that the best way to serve its rural customers would be to develop a new unit called Telmex Social that focuses entirely on that market.

Through the new plan, which requires approvals from the Secretario de Comunicaciones y Transportes (SCT) and other regulatory bodies, Telmex said that Telmex Social will serve areas of Mexico "in which there is no economic interest of any competitor."  

Bloomberg reports that Telmex is considering either spinning off Telmex Social as a separate company or creating two units of a holding company.

Telmex may be Mexico's largest service provider, but the service provider said that rural and low-income telephone lines require "significant investments" to run and maintain.

However, the move is seen by some as a way to convince Mexico telecom regulators to allow it to offer IPTV services and triple play bundles so it can compete with the country's dominant cable operator Televisa, which has found success in delivering bundled offerings to consumers.

For more:
- Bloomberg has this article

Related articles:
Telmex Q4 net profit dips with higher tax bill
Wireline in the fourth quarter 2010
Carlos Slim to increase Mexican telcos spending in 2011
Cofetel wants Telmex to reduce phone service prices further

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