AM must confirm buyer before presenting plan to IFT

14 Aug 2014

Reuters writes that the head of the Federal Institute of Telecommunications (IFT) has told Mexican tycoon Carlos Slim that he cannot present a plan to sell off a chunk of America Movil’s (AM’s) assets to the regulator without having an independent buyer lined up. Slim is looking to break up domestic operators Telcel and Telmex to reduce AM’s market share below 50% and thereby avoid tough new anti-monopoly regulations. For AM to avoid the new measures the sale must be approved by the IFT, but the watchdog is refusing to hear the plan until a buyer has been confirmed, as it would not be able to verify the purchaser’s independence.

According to TeleGeography’s GlobalComms Database, as of 31 March 2014 AM subsidiary Telcel controlled 70.6% of the Mexican mobile market, while sister company Telmex occupied 64.2% of the broadband market and around 59.9% of the wireline sector. As such, if a newcomer strikes a deal to buy AM’s surplus operations, it will start life with a 20.6% mobile market share, a 14.2% slice of the broadband segment and 19.9% of the fixed line market – automatically making it the second largest operator in each of those markets. Industry insiders have estimated the spun-off assets to be worth in the region of USD10 billion.

Mexico, America Movil (AM), Radiomovil Dipsa (Telcel), Telefonos de Mexico (Telmex)