IFT orders ‘functional separation’ of Telmex, Telnor

6 Mar 2018

The Federal Telecomunications Institute (Instituto Federal de Telecomunicaciones, IFT) has ordered America Movil (AM)-backed fixed line operators Telmex and Telefonos del Noreste (Telnor) to work towards a ‘functional separation’ of their retail and wholesale businesses within a two-year time-frame. The decision – which relates to Telmex’s Agente Economico Preponderante (AEP, or preponderant economic agent) status – means that AM must create a wholesale business unit to provide other concessionaires with voice and broadband access, intercity and international long-distance dedicated-links and access to certain passive infrastructure services, including the shared use of towers.

AM notes that the new entity will be a direct subsidiary of Telmex and will receive the necessary assets and employees to provide the unbundled services, although its board of directors have resolved not to subsidise or finance the new company. The functional separation was ordered by the IFT on 27 February 2017, following a biennial review of the effectiveness of the asymmetric regulation imposed on the AEP.

Telmex offers services on a nationwide basis, while Telnor operates in the north-western state of Baja California.