Mexico’s high courtroom regulatory authority over America Movil’s “predominant” label
By Cassandra Garrison
MEXICO CITY (Reuters) – Mexico’s Supreme Court ruled on Wednesday in favor of the country’s telecommunications authority on a label designed to curb the dominance of Carlos Slim’s telecommunications company America Movil (NYSE :).
The ruling hits one of the country’s largest corporations in an ongoing battle against the lifting of restrictions.
Mexico’s Federal Institute of Telecommunications (IFT) acted under the constitution when it found in 2013 that the America Movil Economic Interest Group, which consists of Telcel and other subsidiaries, is a “predominant agent” in 2013, the court said in a statement.
That label opened the door to stricter regulations as part of a reform of the country’s telecommunications industry aimed at undoing the dominance of Slim’s telecommunications empire.
The classification and measures that the IFT imposes on the company “are effective in restricting its rights in favor of citizens to reduce asymmetries in network coverage with respect to the various cellular operators,” according to a Supreme Court statement.
An America Movil spokesman said the company was aware of the solution but declined to comment. A spokeswoman for the IFT also declined to comment.
While the ruling doesn’t change the status quo for America Movil, it is a backlash to the giant’s ongoing struggle to shake off the restrictions imposed by the reform, industry experts said.
“It’s a major loss for America Movil and Carlos Slim … all restrictions remain in place,” said Roger Entner, analyst at Recon Analytics.
It could also pave the way for the IFT to impose more restrictions to reduce its power and make it easier for competitors to enter the market.
“It could free the IFT to insist more forcefully that America Movil reduce its market share below 50% by further sharing infrastructure or making other concessions to rivals,” said Andrew Paxton, an economic historian at Mexico’s Economic Research and Education Center (CIDE ).
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