The Mexican Federal Competition Commission (CFC) has fined the mobile operator Telcel Ps11.891bn (US$1.024bn) for alleged monopolistic practices.
The news was announced by Telcel’s parent company, America Movil, in a statement to the Mexican stock…
The Mexican Federal Competition Commission (CFC) has fined the mobile operator Telcel Ps11.891bn (US$1.024bn) for alleged monopolistic practices.
The news was announced by Telcel’s parent company, America Movil, in a statement to the Mexican stock exchange on Friday.
America Movil said that Radiomovil Dipsa, Telcel’s official name, had been notified on Friday of the CFC’s decision.
It said that the fine was for alleged monopolistic practices in the market for the termination of calls from mobile phones.
America Movil added that both itself and Telcel would be analysing the scope, legal basis and rationale for the resolution with the intention of bringing to bear each and every one of the possible defensive measures.
The Mexican newspaper El Economista reported yesterday that this fine represented the highest ever meted out by the Mexican competition authority.
The newspaper also suggested that Telcel currently controls around 77% of the Mexican mobile market.
The fine is reportedly so high because Telcel had been fined for such practices in the past and had then relapsed into them again.
The CFC, America Movil and the press spokeswoman for Telcel were unavailable for comment before the press deadline.
The news comes after months of legislators and regulators calling for more competition in the Mexican telecoms market.
In early March, the CFC announced proposals to introduce more pro-competition legislation on interconnection fees and suggested legal reforms that would strengthen the capacity of the Mexican telecoms regulator, COFETEL, to regulate competition in the market.
This came after a group of 25 companies reportedly wrote to the government calling for the introduction of pro-competition regulation and saying that they were not willing to pay interconnection fees to Telcel.
On 16 March, COFETEL ruled that the interconnection rate on Telcel’s mobile network should be Ps0.3912 (US$0.03), far lower than the Ps0.95 (US$0.08) that Telcel had reportedly been looking for.
On 23 March, Telcel presented a set of complaints to the CFC about alleged monopolistic practices from several companies: Grupo Salinas, Grupo Televisa, the National Chamber of the Cable Telecommunications Industry (CANITEC) and several of its affiliates.
These complaints were dismissed by the companies involved.
Luis Mancera, the VP of Telecom Legal and Regulatory Affairs at Grupo Televisa, said that Telcel’s action “has absolutely no merits and it’s intended to create smoke on the real issue at hand”, namely the interconnection rates.
Telcel could also be facing much stiffer competition in its domestic market in the years ahead.
Last week, Grupo Televisa announced that it had agreed to acquire a stake of 50% in the mobile operator Iusacell.
Taking into account the work of its subsidiaries in cable TV, fixed-line telephone and internet services, this move into the mobile market could potentially allow Grupo Televisa to become a quadruple-play provider.
This could give it a competitive advantage over America Movil, which has so far not been allowed to enter into the television market, where Grupo Televisa controls 75% of the market.
