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Mexico's Telcel deemed dominant, faces tougher regulation

updated 08:05 pm EDT, Wed March 28, 2012

Telcel to face pro-competition restrictions

Mexico's Federal Competition Commission ruled late Tuesday that Telcel was a dominant company and would face extra regulation. The unanimous vote observed by Dow Jones rejected an appeal while simultaneously flipping an earlier decision that lusacell and Telefonica's Movistar were also dominant in the country. Their ability to negotiate deals wasn't as powerful given their smaller influences in Mexico, officials decided.

It was too soon to determine what regulations would take effect, although Telcel would likely face rate plan controls and be held to a higher standard for coverage.

Telcel is part of America Movil, the telecom giant headed by Carlos Slim, and counts Mexico's dominant landline phone company Telmex among them. It has about 70 percent of the market where Telefonica, despite being larger elsewhere, has just 20 percent. Lusacell is much smaller at five percent.

Mexico's decision follows just months after AT&T dropped its T-Mobile bid, a buyout that would likely have given it a majority of the US cellular market. The FCC and Department of Justice were both concerned that a lack of competition would see high rates and tougher times getting high-end devices.




by MacNN Staff

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