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Mexican reform bill approved by lower house of Congress

Mexico’s lower house of Congress has approved a bill submitted by the country’s president, Enrique Pena Nieto, which outlines proposals for major reforms to Mexican telecom sector. The reforms are aimed at challenging larger firms which are essentially monopolising the market - specifically America Movil, which has around a 70% share of the mobile sector and 80% of the fixed-line market.

Under the proposals, a new regulator geared towards encouraging competition would have the ability to force any company to sell assets if it was deemed to have a ‘dominant’ (over 50%) share of the market.

Although the bill is apparently aimed at reducing America Movil’s dominance, the new proposals could pave the way for the telecom provider to move into the pay-TV sector which is currently monopolised by Televisa – a fellow target of the proposals. As a result of this, strategist consultancy MetAnalisis believes that “America Movil will end up with more profits than losses [as a result of the proposals]”.

The reforms would also allow greater foreign ownership of telecommunications companies, opening up the fixed, TV and radio sectors for investment from overseas firms. They would be able to hold stakes of up to 49%.

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