MEXICO CITY – Billionaire Carlos Slim’s America Movil said on Wednesday that the Mexican telecommunications regulator had stepped up antitrust rules against the company, including ordering it to separate out part of its fixed-line infrastructure.
America Movil, controlled by the family of Slim, has been subject to tougher regulations since 2014 as part of a sweeping sector reform aimed at making the market more competitive.
It said the Federal Telecommunications Institute (IFT) ordered the company to create an independent entity from fixed-line unit Telmex to offer competitors access to infrastructure, confirming a report from February that the change was being considered.
An IFT spokesperson did not immediately respond to requests for comment.
The “functional separation” would be based on a plan presented by Telmex to the IFT for its approval, America Movil said in a statement to the Mexican stock exchange.
After describing what the resolution requires, the company criticized it, said it was analyzing it and that it will challenge the decision.
“The modifications and additions to the measures … confirm the lack of legal certainty and regulatory predictability in the sector,” the company said.
Alexander Elbittar, a researcher with Mexico’s CIDE university who specializes in regulation and competition, said he was not surprised that America Movil will challenge the resolution as a means to keep its legal options open.
While he emphasized that it remains to be seen how Telex will propose to structure the separation, he said the overarching resolution appears to be sound.
“This is a drastic measure but one that has had to be taken in markets that have featured very strong concentration [of market power] for many years,” said Elbittar.
The vote by the IFT was taken last week as part of a periodic review of antitrust rules.
Since the rules came into place, America Movil has seen its home profit margins squeezed from 45 percent to less than 30 percent, but it still holds a wireless market share of almost 70 percent.
CHRISTINE MURRAY