Mexico's Telcel Overturns $925 Million Fine in Exchange for Regulatory Changes
Published on: 4th May 2012
Note -- this news article is more than a year old.
Mexico's antitrust commission has rescinded the huge MX$11.99 billion (USD925 million) fine that it had imposed on the country's dominant mobile network, Telcel a unit of Am rica M vil in exchange for an agreement by the company to change its pricing practices.
The agreement will require Telcel to amend its tariffs so that it no longer offers discounted calls to customers on its own network (on-net calls). Due to the company's 70% market share, its rivals had argued that the practice made it difficult to compete with the larger network.
The company will also have to accept a reduction in the mobile termination rates that were imposed by the telecoms regulator, but which it has been fighting to overturn. As the main recipient of MTR revenues, the lower rates will hit it more than its rivals.
The antitrust commission said in a statement that dropping the fine and accepting the regulatory changes would generate USD6 billion in saving for consumers and was preferable to more years of litigation to secure the payment of the fine.
If the company fails to meet its latest commitments, it will have to pay a fine equivalent to 8 percent of its revenues.