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Mexico to conduct antitrust probe of telephone industry

From Bloomberg News

Mexico’s antitrust regulators expect to start an investigation into the nation’s fixed-line telephone industry by early next year, a second challenge to the companies that made billionaire Carlos Slim one of the world’s richest people.

Eduardo Perez Motta, president of the country’s Federal Competition Commission, said Tuesday that the agency was reviewing complaints filed this month by Spanish phone company Telefonica against Slim’s Telefonos de Mexico before starting the probe.

The investigation would follow an initiative announced Monday to assess fees that mobile-phone carriers charge rivals for completing calls to their customers, Perez Motta said. Slim’s America Movil controls three-quarters of Mexico’s wireless market.

“We had planned to begin the two investigations simultaneously, but a few days ago we received a few complaints by Telefonica and that implied additional research for us,” Perez Motta said.

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The probes pose a threat to America Movil and to Telefonos de Mexico, or Telmex, which controls about 90% of Mexico’s phone lines. Perez Motta is stepping up efforts to rein in Slim’s market power 17 years after he bought Telmex, a former national phone monopoly.

“This is an unprecedented opportunity in Mexico to promote more competition,” Perez Motta said. Each probe will last about 115 business days, he said.

To reduce phone rates in Mexico, the Federal Competition Commission is encouraging cable television companies to offer telephone service. The agency also said Telmex must connect calls to any new market entrant, as a condition of being allowed to sell pay-TV service.

Perez Motta said the fixed-line probe would focus on whether all carriers were able to connect to Telmex’s customers.

Telmex, based in Mexico City, has repeatedly said that it wasn’t a dominant carrier. The company said in its third-quarter earnings statement that its market share was 21% when cable companies and wireless carriers were included.


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