By Dave Graham and Miguel Gutierrez
MEXICO CITY, March 22 Mexico's lower house of
Congress gave final approval to a major telecommunications bill
early Friday morning, a reform that threatens to loosen tycoon
Carlos Slim's grip on the phone market and broadcaster
Televisa's dominance of the airwaves.
Following more than 14 hours of at times heated debate,
lawmakers sent the amended bill to the Mexican Senate for its
While the proposal has dampened confidence in Slim's
business prospects, investors are hopeful the Mexican tycoon can
at least partly offset curbs to his phone empire by entering the
Late Thursday night, lawmakers gave general approval to the
bill by a vote of 414 in favor, 50 opposed and 8 abstentions.
Presented by the government on March 11, the reform aims to
boost competition in the telecoms sector by increasing foreign
investment and giving regulators the power to force companies
with a market share above 50 percent to sell assets.
"In our country there is just one territory and it is not
the territory or property of any one telephone company," said
Julio Cesar Moreno, a congressman and member of the leftist
Party of the Democratic Revolution, or PRD, during the debate.
"Neither can we continue being held hostage to monopolists,"
Slim, the world's richest man, controls about 70 percent of
the Mexican mobile phone market and roughly 80 percent of the
fixed-line business through his phone company America Movil.
Shares of America Movil gained 4.3 percent
on the Mexican stock exchange on Thursday, hours before the
lower house of Congress gave its general approval to the reform.
Televisa has about 60 percent of the broadcast
market, and shares of the broadcaster fell 1.5 percent on
Thursday prior to the vote.
The reform has been hailed as the biggest planned shake-up
in decades of the telecoms industry, which critics of Mexico's
economy view as a microcosm of the excessive control wielded by
a small group of people over key sectors.
Lawmakers in President Enrique Pena Nieto's ruling
Institutional Revolutionary Party, or PRI, have said they are
confident the historic bill will pass Congress before the
current session ends at the end of April.
Though Pena Nieto thrashed out the proposal with the leaders
of the main opposition parties, a number of disputed points must
still be resolved before the same bill can pass both chambers of
In the lower house, PRI lawmakers sought to amend the bill
to ensure that Mexico follows a reciprocal approach to opening
up its market to foreign investment. That approach would ensure
that the size of holdings foreign firms can take in Mexico will
not be allowed to exceed the share Mexican firms can hold in
that country's market.
As originally set out, the Mexican reform removes
restrictions on foreign ownership in telecommunications,
eliminating current limits on fixed-line assets.
The bill also envisages allowing foreign investors to take
up to 49 percent ownership of TV or radio broadcasters, pending
a review by a foreign investment commission. Some major
economies do not allow foreign firms such a large holding.
Some opposition lawmakers have also voiced strong opposition
to elements of the bill such as a provision that the president
be consulted on telecommunications concessions. A separate
provision of the bill pledges to create a new independent
regulator for the industry.
Shares in America Movil have been hit by the planned
reform, falling more than 6 percent since the proposal was
introduced at the beginning of last week.
Televisa's stock has also taken a knock, falling 5.6 percent
since the reform proposal was first proposed.
Earlier on Thursday, America Movil said it has obtained the
exclusive broadcast rights in Latin America, except Brazil, for
the 2014 winter Olympic games as well as the 2016 summer Olympic
The announcement boosted some market bets that the company
stands to gain more by entrance into the paid TV sector - from
which it has been barred by Mexican regulators - than it stands
to lose by ceding share of the telephone and internet markets.