Telmex offer prompts state to tighten monopoly laws

15 May 2007

Ecuador’s President Rafael Correa says his government is preparing to draft a bill to strengthen its anti-monopoly laws as a result of an offer in March by Mexico’s Telmex to buy fixed line and broadband provider Ecuador Telecom (Ecutel), reports BNamericas quoting regional news site Terra. The government fears that Telmex will gain an unfair advantage through tie-ups with Ecuadorian mobile operator Conecel (Porta Celular), controlled by its sister company América Móvil. In a radio interview, Correa claimed that ‘Carlos Slim’s [owner of Telmex] monopolising of the telecoms industry is a danger to Latin America and to Ecuador.’ Correa hinted that Telmex has also shown interest in acquiring state-run firms in Ecuador and the authorities have vowed to investigate whether Telmex could transform Ecutel into a rival capable of taking market share from state-run fixed line incumbents Andinatel and Pacifictel. Ecutel, currently owned by Ecuadorian holding company Emerica Group, won a 3.5GHz WiLL licence suitable for WiMAX services in 2002, and operates a broadband wireless network covering Guayaquil and Quito. It also holds a nationwide fixed line operating licence, but concentrates on the internet and corporate markets; it has around 1,000 local telephony lines in service and a total of around 5,000 subscribers. Telmex has previously indicated that it wants to launch fixed wireless and broadband services in Ecuador, where it currently lacks a presence. The Mexican operator has acquired firms with spectrum concessions similar to Ecutel in other countries and is believed to be looking at WiMAX as the key to competing with incumbent operators.