Mexico Advances Telecom Law to Challenge Slim’s Dominance

An overhaul of Mexico’s telecommunications industry is one step closer to becoming law and may force billionaire Carlos Slim’s América Móvil to break up or face penalties for dominating the phone business.

Mexico’s lower house is set to debate the bill that was passed by the Senate after more than six months of delays and legal challenges. An extraordinary session to discuss and approve the bill will be requested, and the law could be passed very soon, Manlio Fabio Beltrones, head of the ruling Institutional Revolutionary Party in the lower house, said. If approved, it would then require the endorsement of President Enrique Peña Nieto, who has spearheaded the push for the sweeping legislation.

fter 17 hours of debate, the Senate on July 5 passed the bill that supporters say will help spark new competitors to take on América Móvil along with billionaire Emilio Azcarraga’s Grupo Televisa, which has dominated the broadcast industry for decades. In addition to restrictions on prices and requirements to share infrastructure, the law also lets such dominant companies propose their own breakups to reduce their market share.

“With more investment we will have more competition, more quality and options of service and accessible prices for users,” Beltrones said. “It’s urgent that we approve this reform.” The companies will face the harshest penalties they’ve ever encountered if they violate the new rules. The bill calls for fines of as much as 10 percent of Mexican annual sales -- and double for repeat offenses. América Móvil got 299 billion pesos ($23 billion) in Mexican revenue in 2013, while Televisa had about 70 billion pesos.