Mexico telecoms watchdog informs targets of antitrust push

MEXICO CITY Thu Dec 5, 2013 12:28am EST

MEXICO CITY Dec 4 (Reuters) - Mexico's telecoms industry watchdog said on Wednesday it has informed the companies it will assess for tougher regulation, likely the first step in taking measures against phone giant America Movil and broadcaster Televisa.

The Mexican government has so far focused its drive to boost competition on the telecoms sector, which has become a potent symbol of entrenched interests in the country.

America Movil, controlled by multi-billionaire Carlos Slim, has roughly 70 percent of the Mexican mobile phone market, and about 80 percent of the fixed-line business. Televisa meanwhile has more than 60 percent of the TV market.

Earlier this year, Congress passed a reform that gives the new Federal Telecommunications Institute (IFT) sweeping powers to impose anti-trust measures on dominant players.

IFT president Gabriel Contreras said at an event in Mexico City that the companies who could be subject to the new regime had been notified. He declined to name them because it is up to the companies to identify themselves in the process.

President Enrique Pena Nieto's reforms gives the IFT the power to break up telecoms companies that are found to be impeding competition. However, Contreras said last month that option is only intended to be used as a last resort.

The IFT can also apply a range of other measures to spur competition, including forcing dominant players to share infrastructure or creating a price regime to aid smaller rivals.

The IFT has until early March to determine which firms are "predominant" and America Movil had already said it expected to be targeted under the new legislation. It is widely anticipated that Televisa will be subject to a tougher regime too.

Two officials at America Movil said they did not know if the company had been notified by the IFT and two others did not immediately respond to requests for comment.

A Televisa official said a process of information exchange had begun with the IFT over the issue of predominance.

America Movil and Televisa have spent years battling efforts to impose tougher rules on how they operate, using legal injunctions and appeals to thwart regulators. Much of that legal cover has been stripped away by the new reform.

The companies can present their own cases against being labeled predominant and they are expected to put forward a range of arguments to blunt the regulator's efforts.

Secondary legislation to implement the telecoms reform has been delayed, giving the likely targets more time to prepare their defences. Congress is expected to begin looking at the secondary legislation in February.

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