By Tomas Sarmiento and Elinor Comlay
MEXICO CITY, March 6 Mexico's telecoms regulator
said on Thursday it would take steps to boost competition in a
market dominated by billionaire Carlos Slim's phone giant
America Movil, exercising far-reaching new powers it
was granted by the government last year.
The Federal Telecommunications Institute (IFT) said it had
determined who is dominant, or has an oversized market share, in
the telecoms and broadcast sectors, even though legislation to
implement the sweeping telecoms reform of 2013 is still pending.
Created by the reform with the power to break up dominant
players, the IFT did not name the companies in question but said
it was it was in the process of notifying the firms concerned.
America Movil has about 80 percent of Mexico's fixed-line
business via its Telmex unit and some 70 percent of the mobile
sector through its Telcel subsidiary.
A spokesman for America Movil said the company had yet to be
notified. Slim's son-in-law Daniel Hajj, the Chief Executive
Officer of America Movil, said last year he expected the company
to be declared dominant.
A source familiar with the ruling told Reuters broadcaster
Televisa, the world's largest Spanish-language
content producer, had been notified of its dominant position.
Televisa has more than 60 percent of the TV market and has long
been accused of wielding too much political power.
The dominance ruling is a key part of the government's
telecoms reform, which has lifted expectations that Mexico might
finally tackle the extraordinary power enjoyed by a select few
companies in Latin America's second largest economy.
The reforms will allow the regulator to apply tougher rules
to level the playing field for smaller competitors.
However, a break-up of dominant companies looks unlikely in
the foreseeable future. The head of the IFT has said it is only
meant to be used as a "last resort" to spur competition.
Still, Congress has yet to approve secondary laws governing
the implementation of the 2013 reform. The secondary legislation
is expected to be presented in the next few days.
Enrique Melrose, a former commissioner of Mexico's previous
telecoms watchdog Cofetel, said it was clear that a decision
appeared to have been made against America Movil and Televisa.
But the fact the secondary laws were still pending could
hamper efforts to shake up the market, Melrose said.
"A legal vacuum could arise because this is about
interpretations of the constitutional reform, and is not based
on the secondary law, which hasn't been voted yet," he said.
According to a draft of secondary laws obtained by Reuters,
the IFT will be able to force phone companies to seek approval
every year for interconnection and infrastructure-sharing terms.
The draft, which could still change, says the IFT will have
sweeping powers to clamp down on dominant players.
A range of offers from the prevailing telecommunications
player, including promotions and discounts, will only be
authorized with the express approval of the watchdog, it says.
NEW TV NETWORKS
The IFT also said it had launched the process for an auction
of concessions to create two new nationwide television networks.
The new networks would weaken the duopoly of Mexico's two
biggest players, Televisa and rival TV Azteca.
Taken together, the two companies control about 95 percent
of the broadcast television market.
The regulator said it would publish details of the auction
on Friday in the government's official gazette.
"For the first time in the history of the country, it will
be possible to realize a tender process to assign new
concessions of free-to-air broadcast television," it said.