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HomeChannelsBusinessExclusive: Mexico considered forcing Slim to separate America Movil fixed unit – sources

Exclusive: Mexico considered forcing Slim to separate America Movil fixed unit – sources

By Christine Murray
| MEXICO CITY

MEXICO CITY Mexico’s telecoms regulator has discussed forcing billionaire Carlos Slim to legally separate his fixed-line company Telmex from his wireless business, three people familiar with the matter said.

On Monday evening, the regulator’s seven-person board voted on whether to toughen, maintain or loosen rules against America Movil (AMXL.MX) and broadcaster Grupo Televisa (TLVACPO.MX), according to the three people, who declined to be named as deliberations were not public.

Reuters could not confirm whether they voted on the issue of forcing Slim’s company to separate Telmex, however, two of the sources said they expected the proposal was on the table.

Spokespeople for America Movil and Televisa declined to comment.

A spokesman from the regulator confirmed there was a board meeting on Monday but declined to comment further.

The measure, which was considered internally in recent weeks and months, would be a strong signal that the Federal Telecommunications Institute (IFT) does not believe current antitrust measures against the company are enough to generate competition.

Competitors complain that current rules intended to make America Movil rent out infrastructure to rivals are not working. A move to legally separate the company would go a step further in prizing open its network to others.

The proposal would not force America Movil to sell anything, but it would have to separate its fixed-line unit into a different legal entity, with certain independence in decision making, one of the sources said.

“The devil’s is in the detail,” said Elisa Mariscal, an adjunct professor at Mexico’s CIDE University. “It can sound strong but the issue is how its implemented.”

An announcement on the dominance rules is expected within days of the vote on Monday, and more than three years after Mexico’s president pushed through reforms designed to curb Slim’s dominance of the local telecommunications market.

The IFT first has to notify the companies of their vote.

A similar measure was proposed by British telecommunications regulator Ofcom to force BT (BT.L) to legally separate its broadband division Openreach, one of the people said.

Both Slim’s America Movil and broadcaster Grupo Televisa, the country’s dominant broadcaster, have been facing a review by the IFT over whether limits placed on them in 2014 have been creating a more even playing field.

Earlier in February, Francisco Hernandez, leader of the telephone workers union at Telmex, posted a video of himself in which he said he had heard the company was considering splitting itself in two, and that the union did not agree. (vimeo.com/204419822)

(Reporting by Christine Murray; Editing by Frank Jack Daniel and Bernard Orr)

Reuters