Telefonos de Mexico Denies Claim It Plans to Split Up

Mexican fixed-line phone company Telefonos de Mexico denied reports that it is seeking to split up the company ahead of impending regulatory decisions on how to increase competition in the market.

The fixed-line unit of America Movil, controlled by billionaire Carlos Slim, responded to comments by the head of the telephone workers union, who told the Milenio newspaper that the Telmex board of directors and the government had received a request for Telmex to split up the company. Union chief Francisco Hernandez Juarez said Telmex, a former state monopoly that was privatized in 1990, wants to hand back to the government several million low-revenue customers to avoid economic sanctions as the country's dominant fixed-line operator. In a response, Telmex said it hasn't requested any split of the company, either to its board of directors or the Communications and Transport Ministry. Telmex said that in 2013, it spun off assets of three affiliates that have operations in real estate and leasing of equipment, but aren't connected to telecommunications services. The Federal Telecommunications Institute, set up in 2013 under an overhaul of the country's telecommunications laws, is in the process of determining dominance in the telephony and broadcast markets with the purpose of applying measures to guarantee competitive conditions. Those measures could include asymmetric regulation, such as forcing dominant companies to charge less than they pay for completing calls on rival networks, securing cheaper access to the Telmex network for its competitors, or even forcing asset sales.