The Federal Institute of Telecommunications declared América Móvil as a “preponderant agent” in 2014. At that time, Carlos Slim’s company had a 66.1% share of the telecommunications market, for which it had to implement a series of measures imposed by the regulatory body to reduce its “high concentration in the market”.
For example, it had to eliminate roaming , stop selling locked cell phones and notify prepaid customers via text message about the services included in their ‘recharge’. In addition, it had to open its infrastructure so that other competitors, such as AT&T, could rent it.
In the first three years there were important advances: by 2017 the company controlled by Carlos Slim went from 66.1% to 60.1% participation, which meant a reduction of 6 points. Analysts then estimated that it would only take eight years to break even in the telecommunications market.
But since that first measurement was made, the effectiveness of the measures to reduce the preponderance of América Móvil has slowed down: between 2017 and 2020, the level of participation was only reduced by just over two percentage points. At this rate, -warns Carlos Hernández, an analyst at The Ciu consulting firm-, it will take up to 20 years to achieve a balance in the sector’s market share.
“After the first review, in 2017, only a decrease of 1.6 pp has been observed. We went from observing 2 pp per year to only 0.4 pp, that is, almost a fifth of the effectiveness of the policies,” Hernández warned. “This means that instead of eight years being required to achieve effective competition, it will take 20 years to be able to reach this desired level.”
The slowdown in the goal limits both the entry of new telecommunications operators to the Mexican market, as well as the growth of already established players, such as AT&T, Telefónica, Altán Redes -the latter houses Virtual Mobile Operators (MVNOs) in its network, such as Bait, Izzi Mobile, Telgen, Yo Mobile-. This, says Radamés Camargo, an analyst at The Ciu, has a direct impact on the supply of services, their quality and price.
The IFT will begin the third biennial review of the asymmetric measures for América Móvil as part of its 2022 Annual Work Plan. Meanwhile, the company controlled by Carlos Slim – who is part of the advisory council of President Andrés Manuel López Obrador and who recently received recognition from the president for the payment of 28,000 million pesos in taxes for the sale of Verizon- seeks to expand in the market with new services.
A few days ago, the IFT modified 18 titles of the concession granted to América Móvil so that its subsidiary Telcel can offer mobile services in 5G, which could give it an advantage over other competitors to increase its user base and revenue. The company is also looking to enter the pay TV business with Claro Video.
The IFT recently voted against the draft resolution for Claro Video’s entry into pay television, however América Móvil still has the possibility of requesting a concession for this segment again. The Ciu analysts pointed out that allowing the company to offer restricted television services would give it greater concentration in the market as it would allow it to bundle several services, such as telephony, internet and television. A possibility that other players in the market do not have.
“We are not seeing the effectiveness of the measures imposed by the IFT… The reviews of these measures are pending and their non-compliance has not been sanctioned,” warned Camargo.
