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 Technology News | March 2006 
Mexican Billionaire Carlos Slim Defends Telephone Rates
 MarketWatch
| | Mexican telecommunications magnate Carlos Slim defended service rates at fixed-line phone company Telefonos de Mexico SA. |
Mexico City - Mexican telecommunications magnate Carlos Slim defended service rates at fixed-line phone company Telefonos de Mexico SA (TELMEX.MX), saying the company has lowered its prices while state energy monopolies have raised theirs.
Slim responded to comments by Bank of Mexico Governor Guillermo Ortiz, who cited concentration in the telecommunications sector as an example of companies limiting competition in the country.
The exchange occurred over two days at a conference on competitiveness organized by the Mexican Congress.
Slim said Telmex has lowered its rates by 59.3% in real terms over the past six years, while electricity rates charged by the state-run power utilities have more than tripled.
In a press release, Telmex cited Slim as saying the company has maintained its market position through investments of $28 billion. He also questioned the concept of "dominance" under which the former state-owned monopoly is regulated.
Slim said 65% of Telmex's customers aren't profitable, and are in areas where competitors don't invest. Telmex competitors only work 7% of the market, the top end, he added.
Mexico's wireline telephone market was opened to competition in the late 1990s, first to long-distance and then to local service.
Mobile telephony has always been open to competition, and America Movil (AMX) unit Telcel, also controlled by Slim, is the market leader with nearly 36 million subscribers, or close to 80% of the total.
Telmex also distributed a list of mobile calling rates for member countries of the Organization of Economic Cooperation and Development showing Mexico, at an average 16 cents a minute, as the fifth-cheapest behind the U.S., Canada, Finland and South Korea. |
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