The head of legal and regulatory affairs at Mexican fixed line operator Telmex has attacked the company’s competitors for ignoring low-income areas in the country.
In an interview with TelecomFinance, Javier Mondragon also defended the company’s recent…
The head of legal and regulatory affairs at Mexican fixed line operator Telmex has attacked the company’s competitors for ignoring low-income areas in the country.
In an interview with TelecomFinance, Javier Mondragon also defended the company’s recent decision to file complaints against several television companies to the Mexican Competition Commission, claiming that Telmex was “suffering from their practices”.
Mondragon said that while competition was strong in the telecoms market for the richest 50% of Mexicans, Telmex’s competitors were not willing to invest in poorer areas. “Our competitors don’t want to go there,” he said.
Telmex is obliged to provide voice services to any settlement with more than 500 inhabitants. He said that Telmex’s competitors would only invest in areas where they would make money, and that this had created a “huge problem” for Telmex.
Mondragon also deflected allegations that Telmex is a monopoly, despite the fact that the operator controls approximately 80% of fixed telephone lines in the country.
He pointed out that other Mexican markets are “highly concentrated”, notably television, where Telmex’s rival Televisa controls around 75% of the market.
Telmex and the mobile operator Telcel are both subsidiaries of America Movil, the regional telecoms giant.
Over the last month, the competitors of Telcel have been calling for more pro-competition regulations and lower interconnection rates.
Mondragon welcomed more competition in the telecoms market, but argued that “competition is a means, not an end”, as the most important aim remained providing good quality services to customers.
He said: “If they [Telmex’s competitors] really mean competition, that’s great. We need it.”
But he also suggested that this should mean investment and providing services, rather than relying on the infrastructure of another company (like Telmex).
Telcel has argued along similar lines that the companies criticising it for charging high interconnection fees have themselves failed to invest sufficiently to create their own infrastructure.
Mondragon dismissed the drive to bring down interconnection rates as “artificial competition,” noting that the rates in Mexico were already lower than those of Brazil.
This follows the Mexican telecoms regulator attempting to bring down interconnection rates to Telcel’s network to Ps0.3912 (US$0.033) per minute, far lower than the Ps0.95 (US$0.08) that Telcel was seeking.
