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Telecom Reforms a Positive Sign for Investors in Mexico Real Estate

21 March, 2013

As reported by BusinessWire,Zacks,Reuters and Daily Finance,the current proposed telecom reforms in Mexico are expected to be a positive sign for high yield investors for a variety of reasons. For example,the reforms could level the playing field and open up the telecommunications companies located in Mexico real estate to foreign ownership.

“Mexican President Enrique Peña Nieto sent a bill to the Mexican Congress which,if it becomes law,would bring about major reforms in the Mexican telecommunications industry,” writes BusinessWire. “These proposed reforms are the latest in a recent series of encouraging signs that we have seen coming out of Mexico.”

According to Reuters,a committee in the lower house of Congress recently approved the reform bill with no changes,which is an excellent sign that it will ultimately be passed into law. In part,the reforms will limit the control of Carlos Slim’s America Movil and the broadcaster Televisa,which currently have a firm grip on the mobile phone and broadcasting markets,respectively. In fact,America Movil controls nearly 70 percent of the mobile phone market in Mexico,while Televisa has around 60 percent of the nation’s broadcasting market in its grasp.

“The constitutional reform will allow foreign companies greater participation in Mexico’s phone and television markets and could force players with a market share of over 50 percent to sell assets,” writes Reuters.

More specifically,the government is seeking to reform the wireline and wireless phone segments,as well as the cable and satellite TV segments of its telecommunications market,which is currently very monopolistic in nature. According to Zacks,by increasing competition and encouraging other operators to gain market share,it should reduce the overall cost of telecom services in Mexico.

“The movement towards reform at this early stage in President Peña Nieto’s administration should be seen as an encouraging step in opening up the competitive landscape to potentially more foreign ownership,” writes Daily Finance.