Mexican Antitrust Authority Fines Telmex, Calls It Repeat Offender
June 01 2011 - 12:53PM
Dow Jones News
Mexico's antitrust commission said Wednesday it has fined
fixed-line phone operator Telefonos de Mexico (TMX), or Telmex,
marking yet another regulatory jab at billionaire Carlos Slim's
communications empire.
The Federal Competition Commission, or CFC, said it has fined
Telmex 91.5 million pesos ($7.9 million) after determining that the
carrier denied interconnection services to an affiliate of Spain's
Telefonica (TEF).
Telmex is a former government monopoly that controls around 80%
of Mexico's fixed phone lines.
The fine comes on the heels of the Mexican Communications and
Transport Ministry's denial last week of authorization for Telmex
to offer television alongside its phone and Internet service.
Additionally, the CFC recently fined Telmex's parent company,
mobile operator America Movil (AMX), $1 billion for anticompetitive
practices involving mobile termination rates. And Mexico's Supreme
Court ruled that America Movil must accept lower interconnection
rates set by the country's telecommunications regulator.
America Movil's Telcel unit services about 70% of the country's
mobile subscribers.
The incident prompting Wednesday's MXN91.5 million fine occurred
over seven months in 2007 and 2008, during which the antitrust
authority said that Telmex denied Grupo de Telecomunicaciones
Mexicanas interconnection to its network in certain localities.
The CFC said it isn't the first time that Telmex has committed
this "monopolistic" offense, and that the operator's substantial
market power enables it to block access to competitors.
"Interconnection service is a necessary component for building a
competitive offering in the phone market," the antitrust authority
said, explaining that companies need to be able to connect their
clients' calls to networks other than their own.
The CFC said that it could have imposed a fine on Telmex that
represented 10% of the company's annual sales, but that it decided
on a reduced fine given the short period of time and limited area
impacted by the offense. Telmex reported sales of MXN113.6 billion
in 2010.
Telmex has 30 working days to ask the CFC to reconsider the
fine.
Telmex L shares were down 1.8% at MXN10.19 in midday trade
Wednesday.
-By Amy Guthrie, Dow Jones Newswires; (5255) 5980-5177;
amy.guthrie@dowjones.com
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