Bloomberg News

America Movil, Telefonica, Iusacell Found Dominant by Mexico

November 02, 2011

Nov. 1 (Bloomberg) -- America Movil SAB, Telefonica SA and Grupo Iusacell SA are dominant in Mexico’s market for completing mobile-phone calls, the nation’s antitrust agency concluded, paving the way for tighter regulation of their fees.

The three communications carriers, which together have more than 95 percent of Mexico’s mobile-phone subscriptions, each have “substantial power” in the market for connecting incoming calls from rivals, the commission said yesterday on its website. The ruling concludes a probe that took more than three years after the agency first found the three companies dominant in a preliminary decision.

The ruling would allow Mexico’s Federal Telecommunications Commission to craft rules governing call completion to limit the carriers’ market power. Mony de Swaan, president of the phone regulator, said earlier this year the agency was studying ways to create regulations based on other antitrust rulings on dominance.

An America Movil who can’t be named under company policy declined to comment. A Telefonica official declined to comment and a Iusacell official didn’t respond to e-mail messages.

The antitrust agency’s finding is the sixth such ruling in the past two years against America Movil, Mexico’s largest carrier, which is controlled by billionaire Carlos Slim. The agency found last year that America Movil’s wireless unit was dominant in the market for mobile-phone plans.

In 2009, America Movil’s fixed-line unit, Telefonos de Mexico SAB, was found dominant in the markets for originating, carrying and completing calls and for leasing lines dedicated to a customer’s own internal use.

Rulings Appealed

America Movil, based in Mexico City, has sought appeals on all those rulings and will have the right to appeal the latest findings. The dominance findings issued yesterday are the first by the Mexican agency for Madrid-based Telefonica and Mexico City-based Iusacell, closely held by billionaire Ricardo Salinas.

The dominance findings are separate from antitrust commission decisions this year to assess fines of $1 billion against America Movil and $6.9 million against Telefonos de Mexico, or Telmex, for anticompetitive practices. The antitrust agency has accepted America Movil’s request to review the $1 billion fine. It has already altered the Telmex fine and hasn’t disclosed how it has been changed.

America Movil fell 1 percent yesterday to 17.01 pesos in Mexico City. Telefonica dropped 2.2 percent to 15.38 euros in Madrid.

--Editors: Donna Alvarado, Jonathan Roeder

To contact the reporter on this story: Crayton Harrison in Mexico City at tharrison5@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net


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