Cofeco confirms Telcel’s dominant status in mobile termination sector

28 Mar 2012

An appeal by Mexican telecoms giant America Movil (AM) against a ruling that it is dominant in the market for mobile call termination has reportedly been rejected by the local antitrust authority, the Comision Federal de Competencia (Cofeco). According to Dow Jones Newswires, the appeal was rejected unanimously, and it is thought that the development could now open the way for local telecoms regulator Comision Federal de Telecomunicaciones (Cofetel) to apply asymmetric regulation on the company’s wireless unit Telcel. Indeed, such a move would echo the steps taken by Cofetel last week, when it set out new regulations requiring Telefonos de Mexico (Telmex), the country’s fixed line incumbent and also a subsidiary of AM, to incorporate price and quality controls on wholesale services it sells to competitive service providers. The watchdog argued that the new rules were designed to prevent a dominant service provider such as Telmex from ‘engaging in conduct that hurts the development of equal competition, or hurt consumers through the fixing of arbitrarily high prices in services offered’.

Alongside its ruling regarding Telcel, Cofeco also confirmed that it was overturning decisions made last year which related to the dominance of two other cellcos with regards to mobile termination – Iusacell and Movistar Mexico. In reversing the previous rulings the commission claimed that the initial decision had failed to take into account the disparity in the power of negotiation, given the smaller size of the two operators’ respective networks. Unlike the Telcel ruling, however, Cofeco’s vote on overturning the dominant status for the other two operators was not unanimous.