MEXICO CITY Jan 16 The fixed-line business of
Mexican billionaire Carlos Slim on Thursday rejected suggestions
that it was divesting assets to avoid tougher regulation after a
judge ordered the company, Telmex, to cease its disposals.
Some analysts and rivals said Telmex was spinning off a unit
holding assets such as fiber optic and telephone poles to get
them off the books of Telmex parent, America Movil.
But Telmex, which has used the law to fight efforts to
impose tougher regulation in the past, denied it was trying to
duck stricter rules and said the spun-off company will hold only
real estate and leasing businesses.
"Telmex is not undertaking any action to avoid regulation
which it has already welcomed and which should benefit the whole
telecommunications sector and consequently the consumer," a
spokeswoman for Telmex said.
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.
The Telmex spokeswoman said she did not have enough
information to comment on the court order.
Shareholders in Telmex agreed to spin off a new company made
up of three units called Alquiladora de Casas, Compania de
Telefonos y Bienes Raices and Renta de Equipo, that it says are
real estate and leasing businesses.
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.
"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
Bestphone spokesman said.
A spokesman for Telmex, which in July informed Mexico's
stock exchange that the divestitures featured the three
companies, whose businesses include real estate and equipment
rental, said the company had confirmed this disclosure.
Government documents in Mexico published online show
environmental and other permit requests for the spun-off
companies to build or operate network equipment.
One of the documents shows Alquiladora de Casas requesting a
permit to build and operate antenna systems.
Another one shows Compania de Telefonos y Bienes Raices
registering a project for expanding telephone lines.
A spokeswoman for Mexico's Federal Telecommunications
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 the transaction
is an effort to lighten the regulatory burden on Telmex.
The assets could be transferred to a real estate investment
trust which could then rent out a network in its entirety or in
part to third-parties including Telmex, Soria said.
The Telmex spokeswoman said the new, hived-off company did
not contain assets intended for providing telecom services.
Televisa is owned by Slim rival Emilio Azcarraga. The
billionaires have frequently fought in courts in recent years.