Mexican legislators on Wednesday passed a sweeping overhaul of the telecommunications industry that officials maintain will help break up monopolies and provide better service and more competition in the TV and telephone market.
Anticipating the approval, Mexican telephone tycoon Carlos Slim -- listed by Forbes magazine as the second-richest man in the world thanks to the near-monopoly he and his family hold -- announced he would sell off part of his empire to avoid a series of regulatory restrictions the new laws impose on any company with more than a 50% market share.
By scaling back his holdings in the telephone industry, Slim will avoid having to share certain assets, such as transmission towers, with tiny companies that government regulators determined were forced to operate at a disadvantage. He also avoids limits on the rates his phone business can charge.
Slim also expects the move to allow him an easier expansion into pay TV and other broadcasting outlets, a long-coveted goal of his, a spokesman for the billionaire said.
“In a way, this decision by Latin America’s largest telecommunications company is a victory for authorities, who for years have tried different ways to reduce its participation in the market,” said the financial website Sentido Comun, which specializes in coverage of Slim.
But the shrewd entrepreneur seems to have found a way not to lose too badly.
In addition, the expanding TV sector could prove a gold mine for Slim and his associates.
The only real opposition came from the left, amid numerous complaints that much of the fine print was being hidden from the public. One component, for example, gives the increasingly powerful Interior Ministry the duty to monitor television and radio broadcasts for fairness. Critics worried that could mark a return to the kind of censorship that existed when Peña Nieto's Institutional Revolutionary Party ruled for most of the last century.
The reform "provides a level playing field, more players and a strong referee" for the telecommunications sector, presidential spokesman Eduardo Sanchez said at a news conference. "And the winners are the 117 million Mexicans who will have better service and more value for their money."
America Movil shares jumped nearly 5% Wednesday on the Mexican Stock Exchange.
News assistant Cecilia Sanchez contributed to this report.