Mexico’s dominant telco America Movil (AMX) and largest pay-TV provider Televisa have both said they have received writs from regulator the IFT informing them that their level of market power is under investigation.
The IFT is trying to determine…
Mexico’s dominant telco America Movil (AMX) and largest pay-TV provider Televisa have both said they have received writs from regulator the IFT informing them that their level of market power is under investigation.
The IFT is trying to determine whether the companies are “preponderant economic actors” in their respective sectors.
When the IFT was formed earlier this year, it was given the power to declare telcos and broadcasters with more than 50% market share dominant. After a company has been defined as dominant, regulatory measures can be imposed to address the perceived imbalance in the sector.
AMX has a reported 70% of the fixed-line and mobile markets, while Televisa has roughly 70% of the television broadcast market and is Mexico’s largest satellite-TV and cable operator.
The IFT has the power to enforce asymmetrical regulations on operators and can go as far as revoking licences and forcing asset sales if companies do not comply with its pro-competition measures.
However, AMX and Televisa may be allowed to grow in each other’s markets. Televisa already owns half of Mexico’s third largest mobile provider Iusacell. It has struggled to make headway in a market dominated by AMX’s Telcel and only has 6% market share.
Meanwhile AMX has been trying to get into television for years in a bid to expand its offering, and the market reforms give it that opportunity. Its previous attempts to enter pay-TV have been stymied by regulators. AMX has already acquired the rights to broadcast the 2014 winter Olympics and the 2016 summer Olympics in all of Latin America apart from Brazil.
The IFT was created earlier this year on the back of bipartisan reforms, which were signed into law by Mexico’s president Enrique Pena Nieto in June. The IFT has until early March to decide which operators to label as dominant and apply pro-competition measures.
