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Fighting giants: Enrique Pena versus Carlos Slim

Monday, March 17, 2014

Mexican President Enrique Peña wants Mexico’s leading telco to shrink.

He also wants to increase competition in the television sector.

Competition would create opportunities for new companies.

At the same time, there would be stress involved in disassembling parts of Telcel (only in Spanish), whose telecom operations dominate Mexico, as well as those of Televisa (only in Spanish), Mexico’s biggest broadcaster.

In the telecom sector, re-sellers could play a bigger role.

So could telcos.

An attractive market, Mexico ranks 14th in the world in number of cellphones, as well as in cellphone penetration.

Mexicans have close to 100 million cell phones, equal to 83 phones per 100 persons.

Telcel currently has nearly three quarters of Mexico’s mobile market, and four fifths of landlines.

At the same time, Telcel is part of América Móvil, which as Latin America’s biggest telco generates significant income for Mexico.

Carlos Slim controls América Móvil.

The television conflict may be easier to solve.

Televisa, controlled by Emilio Azcarraga, currently has 55% of combined cable and satellite TV services, for which consumers pay, along with 70% of Mexico’s broadcast market.

But Mexicans increasingly connect digitally to free programming, which includes news, series, sports and movies, with no need for a traditional network.

Peña wants to put a 50% limit, on the share which any company can have of either the telecom or television sector.