Cofetel considering measure to limit Telecel’s dominance

15 Jul 2011

Latin American telecoms giant America Movil (AM) could be forced to alter the price it charges for its mobile voice services, Bloomberg reports citing comments made by the president of Mexico’s Comision Federal de Telecomunicaciones (Cofetel). With the regulator examining the dominance that AM’s local wireless subsidiary Telcel, Cofetel president Mony de Swaan noted: ‘When one operator has 72% of the mobile phone market and there are practices to displace others, you have to do something to benefit competition and the consumer … We have to be extremely cautious in mobile telephony and its fees for users or we could generate distortions.’ The head of the regulator has suggested that there are two options open to it, those being to either increase or decrease the cost of services to end users, noting that while the latter of the two may prove popular with customers it would likely lead to an increase in market share for Telcel. On the other hand, an increase in prices, de Swaan said, could prompt customers to move to rival cellcos such as Telefonica-owned Movistar or Iusacell, although there remained a risk that alternative operators could simply increase their own prices.