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America Movil to Challenge Ruling Declaring it a Dominant Telco

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Mexico's America Movil has confirmed that it is filing an objection to a regulatory ruling that declared the company to have a dominant position in the local telecoms market.

Such a declaration was widely expected when it was handed out by the newish competition regulator, and allows the telecoms regulator to impose asymmetrical regulations designed to support the smaller networks.

The challenge appears to be based on the wording of the declaration, as the regulator chose to treat America Movil, its fixed and mobile subsidiaries Telmex and Telcel, conglomerate Grupo Carso and banking company Grupo Financiero Inbursa as a single holding entity.

America Movil argues that they are separate companies. Even still, with with a 70 percent market share in the mobile market, America Movil may struggle to persuade the regulators that they are mistaken in their ruling, even if the technical method is overturned.

If the ruling is upheld, then America Movil will be subject to a ban on charging national roaming fees, a mandate for infrastructure sharing and tighter regulation of interconnection fees.

Further action could be taken, but not for another two years. One option open to the regulator is to force the company to sell assets, or some of its customer base to its rivals to bring its market share down to below 50 percent.

The new regulator, the Instituto Federal de Telecomunicaciones (IFT) was created last summer as part of the reform of Mexico's telecom market. The reform granted IFT more powers than the previous telecom regulator had, including antitrust authority. The telecommunications reform is among a wave of measures introduced by Mexican President Enrique Pena Nieto that have included overhauls of education and the energy sector.

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Tags: america movil  Mexico