Bloomberg News

America Movil Nears Mexico Fee Accords as Telefonica Resists

December 14, 2011

Dec. 13 (Bloomberg) -- America Movil SAB is nearing agreements with Mexican cable-television carriers on the fees to connect calls to its network, even as its top mobile-phone rival, Telefonica SA, calls for new rules on such charges.

America Movil, with 70 percent of Mexico’s wireless subscribers, is completing deals with fixed-line carriers, including the cable-TV providers, said Alejandro Cantu, the company’s general counsel. The Mexico City-based wireless company already has agreements with NII Holdings Inc. and Marcatel SA to charge 39 centavos (3 cents) a minute to connect calls from their users.

The accords, which call for the charges to fall to 31 centavos by 2014, are meeting resistance from Telefonica. The Madrid-based carrier, with 21 percent of the market, said last week it had asked the Mexican government to force America Movil to charge less than its rivals for the connections until the larger carrier’s market share is reduced.

“They want to finance their investment plan with subsidies from the competition,” Cantu said of Telefonica in a telephone interview Dec. 9. “That doesn’t contribute to healthy competition.”

A Telefonica official, who can’t be named under company policy, didn’t immediately respond to phone and e-mail messages today.

Telefonica has proposed that each wireless carrier be allowed to calculate the fees it charges to connect calls from fixed lines, Juan Abellan, president of Telefonica’s Mexico unit, said last week. Fees would be based on the cost of the operation, instead of having a default price set for all carriers, he said. America Movil, with lower costs because of its larger size, would have to charge less than its rivals.

Cantu declined to name the phone and cable companies that America Movil is negotiating with, because the agreements aren’t complete.

--Editors: Jeffrey Tannenbaum, Niamh Ring

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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