Mexico billionaires battle over telecoms sector

Feb 05, 2012 by Henry Orrego
Carlos Slim (pictured), the world's richest man according to Forbes magazine, received a boost to his dominance of the Mexican cell phone market when the country's competition watchdog blocked a $1.6 billion telecoms deal to link the media empires of two big rivals.

Battles between three Mexican billionaires over control of the lucrative telecoms sector heated up again this week, intensified by international criticism of monopolistic practices.

Carlos Slim -- the world's richest man according to Forbes magazine -- received a boost to his dominance of the Mexican cell phone market when the country's blocked a $1.6 billion telecoms deal to link the media empires of two big rivals.

The deal would have united interests of Emilio Azcarraga, who owns Televisa, the largest media company in the Spanish-speaking world, and Ricardo Salinas, who owns telephone company Iusacell and Mexico's second broadcaster TV Azteca.

But the Federal Competition Commission's board ruled on Wednesday against Televisa's planned acquisition of half of indebted Iusacell.

Both companies said they would contest the decision, and police even intervened to let the commission representatives enter Iusacell's headquarters amid scuffles and shouting.

"It's almost like an episode in the Wild West, where the sheriff can't enter to resolve a fight and the consumers are paying the cost," said Jorge Fernando Negrete, director of Mediatelecom consultancy.

Azcarraga and Salinas have been rivals up to now, as owners of the two main channels, representing some 70 percent of that market.

A proposed tie-up would have united the interests of Emilio Azcarraga (pictured), who owns Televisa, the largest media company in the Spanish-speaking world, and Ricardo Salinas, who owns telephone company Iusacell and Mexico's second broadcaster TV Azteca.

A merger of their interests through mobile phones presents a direct challenge to Slim, who is seeking authorization to enter the cable TV market, also dominated by Televisa.

Although his America Movil -- with more than 225 million clients in 18 countries -- offers "triple play" packages of phone, Internet and television across Latin America, Slim has been blocked in attempts to offer TV in Mexico.

As his rivals fought to take on his cell phone empire, the tycoon refuted a new report from the Organization for and Development arguing that a lack of competition in Mexico's communications industry and high prices cost the country about $25 billion a year.

Slim called the figure a "fantasy" during a press conference Tuesday while questioning the methodology that the OECD used to reach its estimate.

America Movil has 80 percent of Mexico's landlines and 70 percent of the mobile market, as well as 74 percent of Internet access.

"The average market share of the mobile incumbent in OECD countries is roughly 40 percent," the OECD said.

The Mexican Federal Competition Commission's board has ruled against Televisa's planned acquisition of half of indebted Iusacell, part of the business empire of Ricardo Salinas (pictured)

The organization said the report was produced at the request of the Mexican government, which also paid for it.

Slim suggested that one of his foes had commissioned and paid for the report.

Analysts said the tensions underlined the urgency to reform regulations and open the market to new players in the most populous Spanish-speaking country.

"The country faces a big challenge with the arrival of new services like digital television and the need to increase coverage of broadband," said Enrique Melrose, a telecoms analyst and professor at Mexico's ITAM university.

"We all want access to a market... offering television, fixed- and mobile- phones and Internet access in one package."

Until now, Mexico's regulators have fought numerous attempts to block their efforts to enforce competition.

"The authorities have not acted well to slow down the monopolistic practices," admitted lawmaker Javier Corral, from the ruling conservative PAN party.

Corral warned that with a general election due on July 1 politicians were even less likely to upset the powerful tycoons.

Slim, Azcarraga and Salinas "know the power of the media in a pre-electoral environment and are no doubt ready to take advantage of it," Corral said.

Explore further: Making smartphone browsing 20% faster while reducing power consumption by 40%

add to favorites email to friend print save as pdf

Related Stories

Billionaires vie for Mexico's telecom market

May 27, 2011

In one corner: the world's richest man, with a fortune estimated at $74 billion. In the other: two of the biggest media moguls in Latin America, with power to shape public opinion.

Carlos Slim ups stake in NY Times to 8.1 percent

Oct 07, 2011

Carlos Slim, the Mexican magnate believed to be the world's richest individual, has increased his stake in the The New York Times Co. to 8.1 percent, regulatory filings showed Thursday.

Britain feels heat of NTL's Virgin buyout

Apr 04, 2006

Getting more services for less money. That could well be what many British customers will be getting if NTL's buyout of Virgin Mobile works out as planned as they propose to offer mobile, fixed-line, broadband, and television ...

Sprint wants AT&T, T-Mobile deal blocked

Mar 28, 2011

Sprint Nextel, the third-largest US wireless provider, urged US regulators on Monday to block AT&T's $39 billion acquisition of T-Mobile USA, saying it would harm competition.

China probes telecom giants for internet monopoly

Nov 09, 2011

A Chinese government agency is investigating two telecommunications giants for allegedly monopolising Internet broadband services, state media said Wednesday, in an unusual public spat.

Recommended for you

Microsoft beefs up security protection in Windows 10

25 minutes ago

What Microsoft users in business care deeply about—-a system architecture that supports efforts to get their work done efficiently; a work-centric menu to quickly access projects rather than weather readings ...

US official: Auto safety agency under review

13 hours ago

Transportation officials are reviewing the "safety culture" of the U.S. agency that oversees auto recalls, a senior Obama administration official said Friday. The National Highway Traffic Safety Administration has been criticized ...

Out-of-patience investors sell off Amazon

13 hours ago

Amazon has long acted like an ideal customer on its own website: a freewheeling big spender with no worries about balancing a checkbook. Investors confident in founder and CEO Jeff Bezos' invest-and-expand ...

Ebola.com domain sold for big payout

13 hours ago

The owners of the website Ebola.com have scored a big payday with the outbreak of the epidemic, selling the domain for more than $200,000 in cash and stock.

Hacker gets prison for cyberattack stealing $9.4M

17 hours ago

An Estonian man who pleaded guilty to orchestrating a 2008 cyberattack on a credit card processing company that enabled hackers to steal $9.4 million has been sentenced to 11 years in prison by a federal judge in Atlanta.

Magic Leap moves beyond older lines of VR

18 hours ago

Two messages from Magic Leap: Most of us know that a world with dragons and unicorns, elves and fairies is just a better world. The other message: Technology can be mindboggingly awesome. When the two ...

User comments : 0