Mexico to identify possible telecom antitrust targets 'very soon'

Reuters

* Telecom reform a priority of President Pena Nieto

* New laws make it harder for dominant players to fightregulator

* Companies with 50 pct-plus market share will be deemed"predominant"

MEXICO CITY, Nov 11 (Reuters) - Mexico's newtelecommunications watchdog said on Monday it may identify thismonth which companies dominate the local market, likely pavingthe way for tougher regulation against telecom company AmericaMovil and broadcaster Televisa.

Gabriel Contreras, president of the FederalTelecommunications Institute (IFT), said the watchdog would inthe near future inform the companies it had determined to bedominant, adding that it could be as soon as this month.

"We'll be notifying the players very soon that according toour information ... could be predominant economic agents,"Contreras told reporters in Mexico City.

Billionaire Carlos Slim's telecommunications company,America Movil, controls 70 percent of the mobile phonemarket, and about 80 percent of the fixed-line business, whileTelevisa has more than 60 percent of the TV market.

Nurturing competition in the telecom industry is one of themain priorities of President Enrique Pena Nieto, who earlierthis year pushed a reform through Congress that gives theregulator sweeping powers to shake up the market.

The reform stipulates that players with a market share ofmore than 50 percent will be declared "predominant."

Those companies can be subject to a range of measures aimedat leveling the playing field in Mexico, where much corporatepower is concentrated in very few hands.

Lawmakers in Congress say they expect both America Movil andTelevisa to be declared dominant in Mexico by IFT.

Contreras did not say who would be declared dominant, butwhen asked whether fair conditions in Mexico existed before theIFT took shape in September, he said: "The answer is no."

The IFT has until March 9 to decide which measures to applyto dominant players, during which time the companies in questioncan argue their case against tougher regulation.

America Movil, which in Mexico provides mobile services withthe Telcel brand and fixed lines under the name Telmex, hasalready said it expects to be declared dominant.

Those companies may be subject to asymmetric regulation,forced to share infrastructure with competitors - and may evenbe broken up by the IFT, according to the new laws.

The idea was to order breakups as a last resort, Contrerassaid, adding that secondary legislation to implement PenaNieto's reform would set out conditions for using that option.

Contreras noted that companies did not have to be declareddominant for the IFT to order them to divest assets, nor doesthe regulator have to wait until March 9 to apply anti-trustmeasures.

The secondary laws are due to be passed by early December.

Slim and Televisa have spent years battling efforts toimpose tougher rules on how they operate, using legalinjunctions and appeals to thwart regulators. Much of that legalcover has been swept away by the new reform.

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