America Movil (AMX) has praised parts of a proposal for the reformation of Mexico’s telecoms regulation while not commenting on other aspects that would have a negative impact on the Mexican incumbent.
Earlier this week Mexican president Enrique Pena…
America Movil (AMX) has praised parts of a proposal for the reformation of Mexico’s telecoms regulation while not commenting on other aspects that would have a negative impact on the Mexican incumbent.
Earlier this week Mexican president Enrique Pena Nieto put forward plans to increase competition among operators.
In a statement AMX singled out plans to scrap the cap on foreign investment in telecoms. America Movil said this would help meet the investment requirements of the sector, while also pledging to continue investing itself. It also commended efforts to give Mexicans better access to information technologies and promote free speech.
However, the reforms could prove costly for the telco as it aims to curb the dominance of the Carlos Slim-controlled monopoly, which boasts 70% of the mobile market and 80% of fixed-line.
The plans advocate a stronger regulator, the Federal Institute of Telecommunications (FIT), which would have the power to force asset sales by companies with market shares above 50%. Special regulatory courts would also be introduced for settling competition disputes.
America Movil’s statement did not provide comment on those aspects of the proposed regulation.
On the back of the regulatory proposal AMX’ shares dropped by more than 3% in trading on 11 March.
Meanwhile the stock of troubled fixed-line operator Axtel jumped by almost 8%, which could be linked to the liberalisation of foreign investment legislation.
The bill will have to pass through Mexico’s congress, where the president’s Institutional Revolutionary Party does not have a majority.
