| MEXICO CITY
MEXICO CITY Jan 16 A judge has ordered
billionaire Carlos Slim's fixed-line phone company Telmex to
stop divesting assets, which rivals and analysts believe is part
of a strategy that could allow him to circumvent regulation.
Analysts believe Telmex is spinning off a unit that holds
assets such as fiber optic and telephone poles to get them off
the books of Telmex parent America Movil.
Once the assets are outside of America Movil, they could be
factored out of regulation that might force Slim to give up some
of the power he wields in the local phone market, they say.
America Movil has around 70 percent of the mobile market and
80 percent of the fixed line business in Mexico. Weakening the
company's hold on the market was one of the principal aims of a
sweeping telecom reform the government passed in June.
The law includes provisions that could make America Movil
share its network at cost or even sell assets.
Under a court order issued on Jan. 7, first reported by
local newspaper El Financiero and seen by Reuters, Telmex must
now halt plans announced in July to divest certain assets. A
court spokeswoman declined to comment on the order.
Shareholders in Telmex, which is part of Slim-controlled
America Movil, agreed to spin off a new company made
up of three units that company spokespeople said then were real
estate businesses and not related to its phone network.
But Bestphone, owned by broadcaster Grupo Televisa
, believes the assets are vital to Slim's network
and the spin-off should have been reported to regulators.
"The divestitures, as far as we are aware, were not reported
to telecom authorities and that should have been done by law,"
said a Bestphone spokesman.
"Bestphone is very concerned that the spin-offs are a ploy
to avoid the telecom reform, in particular an effort to avoid
important aspects such as interconnection (between phone
companies), which would reduce costs to consumers' benefit."
A spokeswoman for Mexico's Federal Telecomunications
Institute (IFT), the country's telecoms watchdog, did not
immediately respond to a request for comment.
When asked about the spin-off in July, America Movil Chief
Executive Daniel Hajj told a conference call: "These are
businesses focused more on real estate and leasing... this
proposal is not connected with the telecom business of Telmex."
Gerardo Soria, president of legal consultancy the Institute
of Telecommunications Law, said he believes that what now seems
like a bizarre corporate transaction is in fact a cleverly
thought-out effort to avoid regulation.
"The next step, once the market has assimilated the idea
that Telmex is creating a real estate business, is to transfer
those assets - that is, cabling, fibre optics, copper wiring -
to a Real Estate Investment Trust (REIT)," Soria said.
A REIT could then rent out the network in its entirety or in
part to third-parties including Telmex, Soria believes.
"Then, when the regulator tries to unbundle the network,
Telmex will be able to say it doesn't have it, the network is
part of a REIT, and Telmex is paying market-value for the REIT's
assets," Soria said.
A spokesman for Telmex, which in July informed Mexico's
stock exchange that the divestitures included three companies
called ALDECA, CTBR and RESA whose businesses include real
estate and equipment rental, said the company confirmed this
disclosure and had no comment on the court order.
He also declined to comment on the REIT idea.
Televisa is owned by Slim rival Emilio Azcarraga. The
billionaires have frequently fought in courts in recent years.