Mexico Telecom Monopoly Ruling: Billionaires Carlos Slim, Azcarraga To Open Market
For many years, the companies headed by Mexican billionaires Carlos Slim and Emilio Azcarraga raked in enormous profits; their phone companies Telmex and Telcel along with the giant television network, Televisa, were the only ones controlling the market. However, the Federal Telecommunications Institute (IFT) has declared that these respective markets will be opened up for domestic and foreign competitors. This means that the profits they have been taking in over the years will be divided amongst other competitors who will start putting up their own businesses.
This ruling ensures that a monopoly will no longer take place in Mexico; it will increase competition, force the companies to share their infrastructure, and eventually lower the prices for the people. This will also allow wider access to better services.
Before this act was in place, América Móvil, the largest telecom conglomerate headed by Slim owned and controlled 80 percent of Mexico's landline via Telmex. The company also owned 70 percent of the wireless market via Telcel. On the other hand, Azcarraga owned 70 percent of broadcast television. He owned 56 percent of all cable and satellite connections. With this new law in place, they can no longer control of over 50 percent of the total market.
Following these changes, América Móvil issued a statement saying that they will analyze various aspects of the law to see how it would affect business operations. Televisa had a similar reaction as the law requires them to share their broadcast towers to competing companies for a fixed fee and to make public the advertising prices.
In line with the IFT ruling, the agency has said that it is opening bidding for two new national television broadcasting networks. Bidders will have until June 17, and results will be decided by Sept. 9. Televisa and TV Azteca are disallowed from bidding. However, Slim, who has not run a broadcasting company, is expected to bid for one of the two networks.
The IFT ruling was met with negative comments from the businessmen, but was hailed by the people and even the White House.
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