Will 2014 Be The Year Mexican Tycoon Carlos Slim's Telecom Empire Crumbles?

Jan 6 2014, 12:58pm CST | by

Will 2014 Be The Year Mexican Tycoon Carlos Slim's Telecom Empire Crumbles?
Photo Credit: Forbes Business

2014 could be the year that Mexican tycoon Carlos Slim sees his telecom empire disintegrate. At the end of 2013, Mexico’s Federal Telecommunications Institute (IFT) said the process of opening up Slim’s monopoly on the phone market has begun, Mexican media and U.S. business wires reported.

The IFT, a newly created regulatory body, said in its first quarterly report that it has started the procedure whereby América Móvil (NYE:AMX), the dominant telephone operator (controlled by Carlos Slim), would have to share with other operators the so-called “last mile” of its network that connects phone and Internet directly to customers.

América Móvil, the largest mobile phone network operator in the Americas,  currently controls 80% of Mexico’s landline phone market through Telmex, and 70% of the wireless market, through affiliate Telcel.

The IFT, an independent regulatory panel, was created in 2013 as part of a far-reaching telecom reform bill designed to boost competition in Mexico’s telephone and television industries, currently control by Slim and fellow billionaire Emilio Azcarraga Jean, CEO of  Grupo Televisa (SAB). Televisa captures close to 70% of Mexico’s broadcast television audience. The new law sets a market share cap for both telephones and TV of no higher than 50%.

The IFT recently told América Móvil and Grupo Televisa that they were placed under preliminary review to determine whether they are dominant players in the telecom sector.  The IFT has until March 9 to issue its final findings.

But while it is widely expected that the new regulations will force Slim to give up his hold on the telephone industry, he is also expected to make a strong bid to enter broadcast television, a long-time ambition.  Slim is very likely to compete for one of the two private TV networks that will be created under the new telecom law.

In anticipation, América Móvil has made a series of moves that have given it a foot in the door into television. In March 2013, América Móvil obtained the exclusive rights to the 2014 Winter Olympic Games in Sochi, Russia, and the 2016 Summer Olympic Games in Rio de Janeiro for all of Latin America (with the exception of Brazil). América Móvil left the option open to resell the rights not only in Mexico but in any of the 18 Latin American countries where, with more than 200 million users, it dominates telephone, broadband and paid TV.

In November 2013, América Móvil agreed to sell the exclusive rights to broadcast the 2014 Winter Olympics in Mexico to government-owned Canal 22, which has a small audience compared to Televisa. Industry analysts said that the deal is a way for Slim to gain access to open TV broadcasting without having to depend on rival companies Televisa, the world’s largest Spanish language broadcaster, and TV Azteca.

This piecemeal approach puts Slim closer to expanding his business empire into paid TV broadcasting in Mexico, which América Móvil has so far been barred from doing by regulators. Shares of América Móvil fell 12% in the months surrounding the Mexican Congress’ passage of the bill to limit the billionaire’s market dominance. In the medium term América Móvil could end up gaining more by accessing the TV sector than it stands to lose by having its telephone monopoly power restricted.

Slim is the world’s second richest man. Forbes currently estimates his net worth at $72 billion, a drop from Forbes $73 billion estimate in March 2013.

Twitter: @DoliaEstevez

Source: Forbes Business


Don't miss ...


<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.


blog comments powered by Disqus

Latest stories

Global entrepreneurship summit boost for SMEs
Marrakech, Nov 22 (IANS) Nine agreements were signed between the Moroccan General Confederation of Enterprises (CGEM) and several small and medium enterprises (SMEs) as well as between major Moroccan banks and start-ups at the 5th Global Entrepreneurship Summit (GES 2014) held in Morocco.
NASA's flying saucer among 'Best of What's New'
Washington, Nov 22 (IANS) NASA's Low-Density Supersonic Decelerator (LDSD), a spacecraft that aims to facilitate the safe landing of future Mars missions, has earned a place in the the Popular Science magazine's "Best Of What's New" list.
Indian helping to light up Gambia (Diaspora Feature)
Banjul (Gambia), Nov 22 (IANS) Like many Indians who are proving to be philanthropists around Africa, Ram Mohan has set up a social business called Comafrique Intelizon Initiative and has embarked on the replacement of candles in villages in the Gambia with solar lights from India.
Leopards in human areas not conflict animals: Study
New Delhi, Nov 22 (IANS) Leopards in human areas are not always "stray" or "conflict" animals but residents with strategies to thrive in human dominated areas, says the first GPS-based study of leopards in India.

Latest from the Network

Messi scores hat trick, becomes all-time highest scorer in La Liga
Madrid, Nov 23 (IANS) FC Barcelona superstar Lionel Messi scored a hat trick in a 5-1 triumph against Sevilla at the Camp Nou Saturday, to become the all-time highest scorer in La Liga history. Messi scored his first...
Read more on Sport Balla
'Unbreakable Kimmy Schmidt' series moves from NBC to Netfilx
Los Angeles, Nov 23 (IANS) Actress Tina Fey and Robert Carlock starrer comedy series "Unbreakable Kimmy Schmidt" has been taken over by online streaming service Netflix from NBC. According to Deadline magazine,...
Read more on Celebrity Balla
US and Turkey discuss possibility of regime change in Syria
Istanbul, Nov 23 (IANS) US Vice President Joe Biden met Turkish President Recep Tayyip Erdogan in Istanbul Saturday and discussed the possibility of a transition of power in Syria. "On Syria, we discussed ... not only...
Read more on Politics Balla
US condemns Kenya bus attack, terms it 'horrific'
Washington, Nov 23 (IANS) The US condemned "in the strongest terms", the attack on a bus in Kenya that killed 28 people, terming it as "horrific". The US extends its deepest condolences to the families and loved ones...
Read more on Politics Balla
Heidi Montag wants to age gracefully
Los Angeles, Nov 23 (IANS) Singer Heidi Montag, who has undergone ten cosmetic procedures, says she wants to "age gracefully". The 28-year-old singer discussed about her wish with Extra, reports contactmusic.com. The...
Read more on Celebrity Balla
Kourtney Kardashian hints at Scott Disick split
Kourtney Kardashian has hinted her relationship with Scott Disick is on the rocks. The reality television star has been dating the 31-year-old hunk since 2006, but posted quotes from the Disney film 'Lilo & Stitch'...
Read more on Celebrity Balla
Kelly Brook engaged again?
Kelly Brook has sparked rumours that she is engaged again. The model - who will turn 35 on Sunday (23.11.14) - was seen sporting a huge jewel on her ring finger at the Teens Unite Charity Ball at Underglobe in London...
Read more on Celebrity Balla
Heidi praises Spencer for 'best 8 years of my life'
Heidi Montag has praised Spencer Pratt for the ''best 8 years of my life (sic)''. The former 'The Hills' star gushed over her beau in a message online on Friday (21.11.14) to celebrate their sixth wedding anniversary....
Read more on Celebrity Balla
Bahrain sees 51.5 percent voter turnout in national elections
Manama, Nov 23 (IANS) Bahrain registered 51.5 percent turnout in the parliamentary and municipal elections Saturday, notwithstanding the opposition's call to boycott the elections. "The turnout today was 51.5 percent...
Read more on Politics Balla
Black Friday 2014 Sales and Deals for 11/22
Friday was already a wild Black Friday 2014 sales day with $115 40-inch TVs and other hot doorbuster deals that Walmart matched. Saturday has not these dramatic deals like on Friday. There are still though plenty of...
Read more on Black Friday Countdown