Slim’s America Movil, Telmex to Face Rulings on Power

(Bloomberg) -- America Movil SAB and Telefonos de Mexico SAB, the phone companies controlled by billionaire Carlos Slim, will face rulings within months on whether they have too much power, Mexico’s antitrust regulator said.

The Federal Competition Commission’s final decisions will come in the middle of the summer, or between June and August, Eduardo Perez Motta, the agency’s president, said in an interview. He declined to predict what the ruling will be.

A declaration of dominance by the agency would allow Mexico’s Federal Telecommunications Commission to apply harsher regulations to America Movil or Telmex than their competitors have to follow, Perez Motta said. For instance, the commission could set different amounts for the rates the companies are allowed to charge to connect calls, he said.

“The investigations of dominance that the competition commission is doing can be a factor in helping create a regulation that promotes greater efficiency in the market,” Perez Motta said. “We’re on the path to reaching a conclusion.”

America Movil, Latin America’s largest mobile-phone carrier, has 72.5 percent of Mexico’s wireless customers, with 57.5 million at the end of March. Its biggest competitor, Telefonica SA, had 15.5 million Mexican wireless subscribers.

Telmex, as Mexico’s biggest fixed-line phone company is known, had 17.5 million lines at the end of last quarter, or about 85 percent of the market.

The antitrust agency doesn’t designate a company as dominant solely because of its market share, Perez Motta said. The decision is based on factors such as the ability to influence prices in a market, he said.

Substantial Power

Concepcion Rivera, a spokeswoman for Telmex, declined to comment. Luisa Fernanda White, a spokeswoman for America Movil, said she didn’t have an immediate response.

Slim, 69, won control of Telmex in a 1990 privatization sale. The company spun off its wireless unit in 2001 to form America Movil, which now operates in 18 countries. The holdings in the phone companies have helped Slim become the world’s third-richest man, according to Forbes magazine.

America Movil gained 20 centavos to 24.81 pesos in Mexico City trading at 4 p.m. New York time. Telmex rose 5 centavos to 11.03 pesos. Both companies are based in Mexico City.

The antitrust commission issued a preliminary ruling in June 2008 that America Movil’s Mexican unit had substantial power in the market for completing calls. The commission also made a preliminary ruling in July that Telmex had substantial power in originating, carrying and completing local calls and in wholesale leasing of connections.

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