Mexican President Peña Nieto is to sign into law the country’s new telecommunications’ reform bill that will open up its telecoms, media and satellite industries to foreign direct investment and curtail some of the power of its dominant…
Mexican President Peña Nieto is to sign into law the country’s new telecommunications’ reform bill that will open up its telecoms, media and satellite industries to foreign direct investment and curtail some of the power of its dominant players.
Following approval from congress at the beginning of May, the president of the Permanent Commission declared the reform constitutional on 23 May paving the way for the country’s new president to sign it into law.
The bill includes a provision that will get rid of the current 49% threshold for direct foreign investments in companies within the telecommunications industry as well as the ban on any foreign investment in the broadcast sector.
Instead, the bill intends to allow unlimited foreign direct investment in telecommunications companies, including satellite operators, and up to a 49% stake in broadcast stations.
In addition, the government is considering new public private partnerships in order to improve the country’s telecoms and broadband networks.
Studies from the Mexico business council, the Consejo Coordinador Empresarial, have reported that the reform will generate a 300% increase in telecommunications’ investments, reaching an estimated US$10bn per year.
Other elements of the bill include imposing limitations on both national and local media ownership consolidation, widely seen as a direct response to the ever burgeoning media and communications empire of Mexico’s richest man Carlos Slim.
The communications regulator, the Federal Telecommunications Institute (FTI), will have new antitrust powers to scrutinize media monopolies, consolidation and uncompetitive practices and force mandatory divestments as applicable.
How and when the FTI will decide to impose such restrictions will be clarified in a secondary law that is currently being discussed.
The bill is part of a sweeping reform package that President Nieto promised on taking power in December 2012. He has since held a series of talks with opposition parties to get some consensus on the reforms, although there were some doubts over whether it would get through congress where Nieto’s Institutional Revolutionary Party (PRI) lacks a majority.
