America Movil S.A.B.
), the undisputed leader in the Mexican telecom market, has
decided to file an injunction against the recent ruling of the
Mexican antitrust regulator classifying it and its group of
companies as a "preponderant economic agent" in the Mexican
telecom market. America Movil is currently a Zacks Rank #3 (Hold)
Earlier this month, Mexican regulatory authority the Instituto
Federal de Telecomunicaciones (IFT), identified telecom behemoth
America Movil and broadcasting giant
Grupo Televisa S.A.B.
) as the dominant players in the respective markets.
America Movil's wireline division, Telmex, currently control
around 80% of the Mexican market, whereas its wireless division,
Telcel, holds about a 70% market share. Other major wireless
operators in Mexico include
NII Holdings Inc.
The regulator considered America Movil and its fixed and
mobile subsidiaries Telmex and Telcel, conglomerate Grupo Carso
and banking company Grupo Financiero Inbursa as a single holding
However, the company countered the ruling by stating that all
the companies are separate entities and for that the parent
company cannot be judged as dominant. The IFT wants to restrict
the maximum hold of a company in a market to 50%.
As stringent measures, IFT will ban America Movil from
charging national roaming fees. Further, the company will have to
share its infrastructure with other operators particularly in the
local loop (last mileage) segment. Interconnection fees levied by
America Movil will also be closely monitored.
The new telecommunications industry reform bill of the Mexican
government may pave way for Televisa to capture a large chunk of
the wireless market share. The new regulations will also allow
America Movil to enter the broadcasting market of Mexico, which
has been controlled by Televisa for a long time. However, the
proposed regulation will defer America Movil's television
expansion plans for at least two years.
The government of Mexico has decided to reform its
telecommunications sector, predominantly the wireline and
wireless phone segments and the cable and satellite TV segments.
The telecommunications sector in Mexico is highly monopolistic
with one or two companies dominating the market.
The Mexican government, however, intends to increase
competition by encouraging the entry of new operators. This in
turn will reduce the price of telecom and broadcasting
AMER MOVIL-ADR (AMX): Free Stock Analysis
NII HLDGS-CL B (NIHD): Free Stock Analysis
TELEFONICA S.A. (TEF): Free Stock Analysis
GRUPO TELEVISA (TV): Free Stock Analysis
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