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Historic Telecom Overhaul Wins Final Approval in Mexican Senate

07 May, 2013

Mexico’s senate has voted to approve legislation that will reform the nation’s telecom market,simultaneously increasing competition and ending the potential for semi-monopolistic practices to take place. 

“Experts say the reform is the biggest effort to transform Mexico’s telecom market in the more than two decades since phone company Telmex was privatized in 1990,” writes The Wall Street Journal. “The bill ends the current limits on foreign investment in fixed-line telephony and television.”

Mexican President Enrique Peña Nieto and the main parties of the opposition first presented the reform bill in early March,seeking to give the state power to “rein in” the current leaders in Mexico’s telecom industry. Billionaire and world’s richest man Carlos Slim’s America Movil controls 75 percent of the nation’s fixed telephone lines,along with 70 percent of its mobile phone and broadband markets,while Grupo Televisa is the world’s largest Spanish-language television network,holding more than 70 percent of the TV market share.

Specifically,Bloomberg reports that the legislation proposes greater regulatory agencies that do not allow companies to gain more than 50 percent of the market share of Mexico’s telecom industry. In addition,foreigners will be permitted to own up to 49 percent of the broadcast networks in Mexico,provided that the outside investors live in countries that also allow foreigners to purchase equal stakes in their own telecom industries.

According to Forbes,the Office of the U.S. Trade Representative’s 2013 National Trade Estimate Report on Foreign Trade Barriers also encourages an increase in foreign investment in Mexico’s telecom industry. Under the new law,the Federal Telecommunications Institute will have six months from the time it begins operations in the first half of 2014 to determine which companies are dominant in their markets and to take steps that will create a competitive environment.