August 10, 2017 / 9:15 PM / a year ago

One Mexican justice sides with Slim's America Movil ahead of key vote

MEXICO CITY, Aug 10 (Reuters) - A Mexican Supreme Court justice on Thursday favored America Movil’s stance that the country’s telecommunications regulator should decide whether it can charge interconnection fees to its rivals, although the issue must still be decided by a full court panel.

Mexico’s 2014 telecom reform bars America Movil from charging other carriers for calls made to customers on its network, even though those firms are allowed to bill America Movil for using their networks.

In a 132-page brief, Minister Javier Laynek Potisek said such interconnection rates should be set by Mexico’s telecommunications regulator IFT, siding with mogul Carlos Slim’s vast cellphone company on a key point.

The case must still be settled by a vote of the full Supreme Court panel, which could take up the matter as soon as Aug. 16.

Laynek also found competitors should not have to reimburse America Movil for past fees, which would deprive the firm of a hefty sum. Nonetheless, shares of America Movil, Latin America’s largest telecommunications firm by number of subscribers, were up about 2.4 percent to 16.14 pesos on Thursday afternoon.

A spokesman for America Movil declined to comment, as did a spokesman for AT&T. A spokeswoman for Telefonica said the company would wait for the court’s final decision before commenting further.

AT&T Mexico, Telefonica and a host of other telecom companies stressed the importance of the reform in a newspaper ad published on Thursday.

“Telmex and Telcel, accustomed to obtaining extraordinary profits, do not want to adapt to the competitive pressure of the other operators and look to scrap the reform,” the companies wrote.

The Supreme Court decision threatens to undercut one of President Enrique Pena Nieto’s signature accomplishments. By tilting the playing field against America Movil, the reform sparked a price war that sharply lowered prices for cell phone service in Mexico.

But Slim’s legal team has steadfastly maintained that legislators stepped out of bounds by creating “asymmetrical” rules meant to handicap America Movil and boost smaller players.

A legal victory for America Movil could have grave implications for the Mexican telecom market, potentially inhibiting further investment, said analyst Ernesto Piedras of CIU.

“The competitors would not have the margins to continue lowering their prices, and Mexico could return again to being a relatively expensive country,” Piedras said. (Additional reporting by Julia Love and Sheky Espejo; Writing by Julia Love; Editing by David Gregorio)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below