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America Movil acknowledges that new regulation could be a challenge

Mexico’s recently-approved regulatory reform seemed to be specifically targeted at America Movil’s market dominance, and the operator has acknowledged that the new legislation would have an “uncertain but likely...material” effect on its business.

The legislation is aimed at reducing the market dominance of “preponderant” players, defined in the bill as carriers in the telecoms or television sectors with a market share of over 50%. Subscriber/user numbers, network traffic and capacity usage are all criteria by which the definition is measured.

Such “preponderant” players – including America Movil, which has a roughly 70% share of the mobile market – would face different regulations and rates, and could also be forced to divest themselves of specified assets.

America Movil has noted that while the legislation has not yet been passed, it will likely be approved in “substantially its current form”. This would mean that the legislation’s effect on the operator will very much depend on how the new regulator chooses to enforce it; America Movil has stated that “it would therefore be premature to predict the long-term effects of the bill and the new framework it contemplates”.

The country’s Senate, which approved the original draft of the bill, is now passing judgement on revisions made by the lower house of parliament.

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