The world\u2019s richest man, Mexican telecom tycoon Carlos Slim, has drawn criticism from the U.S. trade office over his monopoly which it says has stifled foreign investment and competition that could otherwise improve services and increase industry revenue.<\/p>\n
The Office of the U.S. Trade Representative pointed out in its 2013 National Trade Estimate Report on Foreign Trade Barriers that Slim\u2019s America Movil (NYSE:AMX), the parent company of landline service provider Telmex and wireless carrier Telcel, \u201cdominates both the fixed and mobile segments of the Mexican telecommunications market.\u201d<\/p>\n
In 2012, Telmex accounted for 80 percent of landline customers and Telcel held 70 percent of Mexico\u2019s wireless subscribers.<\/p>\n
The OUTR added that Slim has been able to maintain \u201cmarket dominance\u201d over Mexico\u2019s telecommunications sector due to weak regulations and a dysfunctional legal system to address such concerns.<\/p>\n
\u201cEnhancing competition in Mexico\u2019s telecommunications sector continues to be a challenge,\u201d the report said. \u201cA combination of weak regulatory oversight and an inefficient court process has meant that disputes involving this carrier with respect to the terms of competition in the market have lingered for years.\u201d<\/p>\n
In particular, the report emphasizes the need for La Comisi\u00f3n Federal de Telecomunicaciones (Cofetel), the federal industry regulator, to have greater autonomy and authority to regulate prices and termination fees, adding that Slim\u2019s companies have consistently blocked such efforts through the courts, though it did not account for the impact of a decision last October by Mexico\u2019s Supreme Court that allows Cofetel to set interconnection rates between competing companies, making it easier for customers to switch service providers.<\/p>\n
The report did mention the ruling, describing it as \u201ca major step forward\u201d which \u201cshould result in smoother implementation of such orders in the future.\u201d<\/p>\n