Avantel Pushes Its Mexican Phone Service

Avantel, a Mexican telecom company partly owned by WorldCom Inc., plans to spend $200 million this year to move into the local phone market after reaching agreement with Telefonos de Mexico on interconnection fees. Avantel agreed with Telmex in December to set the connection fee between networks at 1.25 cents a minute, down from 3.36 cents a minute last year. The reduction allows Avantel to offer lower rates to customers in its long battle to wrest market share from Telmex, the former state monopoly. Five years after long-distance service was opened to competition, Telmex still controls about 70% of the market. The U.S. government has filed suit against Mexico before the World Trade Organization, alleging lack of competition and weak regulation of the dominant carrier.