Telmex 'facing Openreach-type split'

By:
Alan Burkitt-Gray
Published on:

Mexican regulator ‘considering breaking up Carlos Slim’s empire’ by adopting Openreach-like solution

Mexico is looking at an Openreach-type proposal to carve out part of América Móvil’s infrastructure into a separate company, according to reports.

The Reuters news agency says it has a number of sources telling it that the Mexican regulator, the Federal Telecommunications Institute (IFT), is considering the action after deciding previous measures are not effective enough.

América Móvil, controlled by billionaire Carlos Slim, dominates Mexico’s fixed and mobile telecoms business. The fixed-line unit operates under the name Telmex, and it is part of that business that the IFT is looking at, said Reuters.

Slim is now one of the world’s richest people, largely thanks to his ownership of Telmex. América Móvil has interests throughout Latin America and is also the controlling shareholder in Telekom Austria.

One of the agency’s sources compared the move explicitly to the uncompleted action that UK regulator Ofcom is taking against UK incumbent BT. Its last-mile infrastructure division, Openreach, is now a separate company with a separate board, though it is still 100% owned by BT. Ofcom is still considering whether BT should put Openreach into separate ownership, and the regulator is known to be unhappy with how BT appointed the board.

There are rules that are intended to make América Móvil rent out infrastructure to rivals, but competitors are unhappy with their effectiveness. The IFT considered moves to strengthen the separation at its meeting this week, an official confirmed but provided no details.

The Mexican government is known to be unhappy with Slim’s dominance of the mobile market as well as the fixed market. It has awarded a contract to a consortium backed by the World Bank to build a wholesale-only 4G network, Red Compartida.