Slim victory as Supreme Court sides with Telcel in ‘Zero Rate’ interconnection dispute

18 Aug 2017

Carlos Slim-backed America Movil (AM) has confirmed that the Second Chamber (Segunda Sala) of the Mexican Supreme Court of Justice has granted an injunction to its domestic wireless subsidiary Telcel against a series of provisions set out in the Federal Telecommunications and Broadcasting Law (Ley Federal de Telecomunicaciones y Radiodifusion), in relation to the ban imposed on Telcel to charge other carriers for termination services on its network – commonly referred to as the ‘Zero Rate’.

As such, the Federal Telecommunications Institute (Instituto Federal de Telecomunicaciones, IFT) will now determine the interconnection rate that other carriers shall pay Telcel; AM says that this rate will be based on international best practices, cost oriented methodologies, transparency and rationality. Going forward, the new interconnection rate will take effect on 1 January 2018. Rival operators will not be forced to repay interconnection charges to Telcel retroactively, however, the court ruled.

TeleGeography notes that the Zero Rate was imposed on runaway market leader Telcel in 2014, as part of measures to level the playing field for its rivals. As at 31 March 2017 Telcel claimed a 65.6% share of the Mexican mobile market, comfortably ahead of Movistar (23.1%) and AT&T (11.3%).