America Movil has reacted strongly to the latest attempt by Mexican telecommunications regulator IFT to curb its dominance of the sector, vowing to challenge the new rules in accordance with applicable law. In its delayed review of the 2014 ruling declaring America Movil a "dominant agent" in the telecommunications sector, the IFT ordered the company's Telcel, Telnor and Telmex units to limit a number of charges, above all the fees payable for unlocking smartphones if customers cancel their postpay contract. Such fees can no longer be charged to customers who have been with the operator for at least 6 months.
Additional new rules include notifying customers when a promotional period ends, ending surcharges for out-of-network roaming and providing further details and reports for the watchdog’s regular economic replicability analysis. In a previous review of the dominance provisions, the IFT ordered a “functional separation” of Telmex’s fixed line retail and wholesale divisions with a view to boosting competition in the sector, a decision America Movil is still challenging.
In a statement, America Movil said the IFT’s latest decision “is not based on an integral evaluation in terms of competition of the different markets in the Mexican telecommunications sector,” adding that the new rules do not take into account “the profound changes in the Mexican telecommunications sector within six years from the imposition of the asymmetric regulations and the effective competition that exists in fixed and mobile services”.
However, six years after the imposition of the first antitrust curbs, the company’s Telcel unit still continues to dominate the Mexican mobile market, accounting for over 70 percent of the country’s revenues, ahead of rivals AT&T Mexico with 19 percent and Telefonica’s Movistar unit with 9 percent. In terms of customers, Telcel had 77.2 million at the end of Q1, compared to Movistar’s 25.5 million and AT&T’s 19.2 million.
