Slim to trim assets in the face of tough pro-competition laws

9 Jul 2014

Mexican billionaire Carlos Slim’s America Movil (AM) has announced plans to sell assets in Mexico, with a view to lowering its market share, in order to cease being a ‘preponderant economic agent’. The move comes at a time when Mexico’s Congress is busy passing new laws to overhaul the telecoms sector and bolster competition. The telco notes that as-yet unspecified assets ‘must be sold at market conditions at their commercial value’. Further, all of the company’s base stations, including towers and related passive infrastructure, ‘will be separated from Telcel for their corresponding operation and commercialisation to all interested parties’. Slim’s company has frequently argued that the difficulties rivals face in competing with America Movil are down to their lack of investment. The company’s statement continues: ‘America Movil’s investments in Mexico and Latin America have been instrumental in the expansion of its telecommunications network and services, and have resulted in America Movil having the most advanced technology. These investments have resulted in important and continuous productivity increases which have been passed on to our clients.’ America Movil said its board approved the measures to cut its market share to less than 50%, which is the threshold for dominance under the new telecoms laws. According to TeleGeography’s GlobalComms Database, as of 31 March 2014 America Movil subsidiary Telcel controlled 70.6% of the Mexican mobile market, while sister company Telmex occupied 64.2% of the broadband market and over 90% of the wireline sector.