Mexican Telecom Giant América Móvil Receives Regulatory Evaluation Notice

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Mexico’s largest carrier, América Móvil SAB is under scrutiny from the Federal Telecommunications Institute (IFT). Telcel, otherwise known as Radiomovil Dipsa, was notified that the IFT will evaluate “the stringent measures that were imposed on the company on March 2014,” when the Mexican government implemented drastic telecom reforms, according to Zacks.

Zacks noted that América Móvil’s Telmex and Telcel divisions control almost 68 percent of the market in Mexico. The IFT restricted the maximum hold to 50 percent. Additionally, the IFT banned América Móvil from charging national roaming fees, and the company “will now have to share its infrastructure with other operators particularly in the local loop (last mileage) segment” Zacks reported.

América Móvil has taken steps, according to Zacks, to avoid stricter regulation: 

  • In December 2015, Telesites was created as a new wireless tower division, “likely to divest non-core wireless and fixed-line assets in the future.”
  • In November 2015, the company received approval from the IFT regarding the prices it can charge as interconnection fees.
  • In July 2016, Telmex decided to gradually lower its rates for calls from land lines to mobile phones by about half by 2018, a decision that “reflects its compliance with regulations.”
  • Over the next three years, the company will invest $6 billion in the Mexican telecom market.

 

AT&T also delved into the Mexican market in 2015, with the acquisition of Grupo Iusacell and Nextel de Mexico. As a result, 4G LTE services are now available in 12 Mexican cities. AT&T plans for services to reach 75 million Mexicans by the end of the year.

IFT approved Grupo Televisa S.A. to become a wireless provider, but there is no report on when it will happen.

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