Bloomberg News

America Movil Dominance Ruling Upheld by Antitrust Agency

March 27, 2012

Billionaire Carlos Slim’s America Movil (AMXL) SAB is dominant in Mexico’s market for completing mobile- phone calls, the nation’s antitrust agency ruled, rejecting an appeal by the wireless carrier.

The unanimous decision, a summary of which was posted by the Federal Competition Commission on its website today, lets regulators proceed with rules to target the company’s prices and call quality. The Federal Telecommunications Commission approved regulations last week to govern America Movil’s Telefonos de Mexico unit after a similar ruling on wholesale lines.

Mexico’s government is seeking to reduce America Movil’s 70 percent share of the country’s mobile-phone market. Last year, the telecommunications commission cut by more than half the fees Mexico City-based America Movil can charge to complete incoming calls to its users.

The competition commission in its ruling today also overturned a decision last year finding Grupo Iusacell SA (CEL*) dominant for completing wireless calls on its own network. A finding that Telefonica SA (TEF) is dominant in the same market was partially reversed, applying to only some of the company’s units, the agency said.

The decisions mean the government won’t be able to apply specific rules to Telefonica and Iusacell, the antitrust agency said in a statement. The vote was 3-2 on the Telefonica decision and 4-1 on Iusacell, the commission said.

Telefonica, based in Madrid, has 21 percent of Mexico’s mobile-phone market, while closely held Iusacell has about 5 percent.

A Telefonica official who asked not to be named because of company policy declined to comment. Officials of America Movil and Mexico City-based Iusacell had no immediate comment.

America Movil rose 0.2 percent to 15.66 pesos in Mexico City. Telefonica fell 0.8 percent to 12.48 euros in Madrid.

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

To contact the editor responsible for this story: Ville Heiskanen at vheiskanen@bloomberg.net


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