Ekofon becomes Mexico’s first long-distance service reseller

3 May 2006

Mexican firm Ekofon has become the country’s first reseller of long-distance minutes, according to BNamericas citing newspaper Reforma. Ekofon launched pre-paid card services last month, offering domestic and international long-distance (DLD and ILD) calling to the US, Canada and Europe from MXN1 per minute. It aims to capture 2% of the long-distance market within five years, during which time it will invest USD4 million.

The entrance of long-distance resellers has been much delayed by an argument over ILD interconnection fees. Telcos in the US have long insisted that fixed line incumbent Telmex should not have an exclusive right to negotiate ILD termination charges, but Telmex claimed that its business was being severely affected by illegal call routing and said it could not afford to lower connection rates any further. Finally, in March 2004 the World Trade Organisation ruled that the Mexican government was acting illegally by allowing Telmex exclusivity in negotiating interconnect rates, claiming the country was failing to honour free trade pacts. Three months later the Secretario de Comunicaciones y Transportes (SCT) altered the legislation covering ILD services to allow other Mexican operators to enter negotiations to set international call termination charges, paving the way for the introduction of resellers for the first time.