América Móvil suffers as reforms sink in

Shares in Carlos Slim’s América Móvil fell sharply as investors saw tougher competition ahead in the home market of Latin America’s biggest telecoms operator.

The fall comes as Mexico’s new centrist administration announced a sweeping proposal to place strict limits on the country’s largest telecoms and broadcasting companies. The plan, which aims to introduce more competition, consists of creating a strong regulator with the power to classify as “dominant” any company in those sectors with more than 50 percent of the market. The regulator would then be able to impose an arsenal of measures on dominant companies from asymmetric regulations and pricing to favor smaller players to, in some cases, even forced asset sales. At the same time, the changes would make it much harder for companies to sidestep regulations or fines by using the courts – a common practice until now. América Móvil, the mobile operator that the 73-year-old Slim spun off from his Telmex fixed-line company in 2001, now controls about 70 percent of Mexico’s mobile telephone market. Telmex controls about 80 percent of all fixed-lines.