Slim's Mexico telecoms sale opens doors to competitors
By Christine Murray
MEXICO CITY, July 9 (Reuters) - Mexican tycoon Carlos Slim's plan to divest a chunk of his most valuable asset, phone company America Movil, could open Mexico's telecoms market as never before to rivals.
After a generation of enjoying a near-monopoly that allowed Slim to become the world's richest man, he plans to sell parts of America Movil to a competitor to avoid new penalty measures to curb the company's dominance.
Companies like AT&T, Telefonica, Virgin Mobile and Grupo Televisa which have varying degrees of interest in Mexico, could benefit from buying parts of America Movil, which has some 70 percent of Mexico's mobile market and is the strongest force in fixed line and Internet.
To avoid penalties, the company must arrive at a share below 50 percent of the overall Mexican telecoms market, as calculated by regulator Federal Telecommunications Institute (IFT) using subscriber numbers and network capacity.
"The trick will be in how they present the plan," Miguel Flores, a former Mexican competition regulator, told Reuters. "They could frame this in a way that they don't lose much share of the market by revenue."
To reach less than half of Mexico's mobile subscribers, America Movil would have to cut ties with around 20 million customers in Mexico, according to a Reuters calculation.
So-called mobile virtual network operators (MVNO) like Virgin, which piggyback on existing telecoms infrastructure to provide services, could be interested in these mobile clients.
Arturo Elias, a spokesman for Slim, told Mexican radio on Wednesday that he thought the company would have to sell around 15-17 percent of the overall phone market to get below 50 percent. America Movil aims to sell to a single buyer, he said. Continuación...