América Móvil announces asset sale to placate Mexican regulators

Mexican telco giant América Móvil has announced it will dispose of a bunch of its Mexican assets in order reduce its overall share of the Mexican mobile market, and thus avoid special regulatory restriction that have come into effect on the back of new laws.

Scott Bicheno

July 9, 2014

2 Min Read
América Móvil announces asset sale to placate Mexican regulators
Carlos Slim needs to dispose of some assets

Mexican telco giant América Móvil has announced it will dispose of a bunch of its Mexican assets in order reduce its overall share of the Mexican mobile market, and thus avoid special regulatory restrictions that have come into effect on the back of new laws.

The label América Móvil is keen to avoid is “preponderant economic agent”, which seems to be regulator-speak, with some meaning possibly lost in translation, for monopolist. Ovum’s WCIS service says América Móvil owned Telcel accounts for 70% of Mexican mobile subscriptions, while TelMex, which América Móvil acquired in 2010, is even more dominant in fixed line. Such large market shares now bring with them ‘asymmetric’ regulatory scrutiny and measures.

The threshold for being considered a preponderant economic agent is thought to be 50% market share, so it looks like Carlos Slim, the majority owner of América Móvil and one of the richest people in the world, will have to do some pretty serious disposal of assets in order to get on the right side of the regulatory line in the sand.

Here’s what América Móvil had to say on the matter in a recent filing: “The Board of Directors of América Móvil decided upon the sale of certain assets to a new and solid carrier independent from América Móvil, with experience in the telecommunications sector, with sound economic and technical resources, being a real option to participate in this capital intensive sector, to overcome the obstacle of the insufficient investment made by our Mexican competitors.”

As ever with corporate announcements this was full of nuance, with caveats such as “solid”, “experienced”, “sound” and “capital intensive” all implying that it will be very selective about who it flogs its kit to, and that just might drag the process out somewhat. But to infer that this whole situation is the fault of underinvestment from competitors, the largest of which is a fraction of the size of América Móvil, is a tad cheeky.

About the Author

Scott Bicheno

As the Editorial Director of Telecoms.com, Scott oversees all editorial activity on the site and also manages the Telecoms.com Intelligence arm, which focuses on analysis and bespoke content.
Scott has been covering the mobile phone and broader technology industries for over ten years. Prior to Telecoms.com Scott was the primary smartphone specialist at industry analyst Strategy Analytics’. Before that Scott was a technology journalist, covering the PC and telecoms sectors from a business perspective.
Follow him @scottbicheno

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