Mexico’s telecoms reform bill has taken its most important hurdle after receiving final approval from congress.
The reforms aim to promote competition by creating a new beefed-up regulator that would be able to declare operators with a market share of…
Mexico’s telecoms reform bill has taken its most important hurdle after receiving final approval from congress.
The reforms aim to promote competition by creating a new beefed-up regulator that would be able to declare operators with a market share of more than 50% dominant and impose asymmetrical regulation.
The Federal Institute of Telecommunications (FIT) would have the power to revoke licences and demand asset sales if telcos do not comply with the new rules.
The bill now has to be passed by a majority of Mexico’s states, but given the bipartisan support for the legislation this is seen as a formality. Congress then has to amend other legislation to implement the bill.
AMX warns of material impact
In an SEC filing America Movil – which controls 70% of Mexico’s mobile market and 80% of fixed-line – has said it expects the bill to materially affect its operations in Mexico. The incumbent anticipates the bill would become effective in roughly its current form, but said that it will depend on how it is implemented. “These effects could be adverse to our interests in significant respects,” it stated in the filing.
However, the company was more upbeat about other aspects of the legislation, including its relaxation of foreign investment.
“We expect that the new institutional framework and enhanced regulatory powers will create an environment that may promote capital investment and technological innovation, increase market penetration and foster growth dynamics in the industry.
“If so, our companies will benefit from a more certain business environment and consistent regulation.”