(Recasts with analyst comments, background)
By Christine Murray
MEXICO CITY, March 9 Shares of billionaire
Carlos Slim's America Movil slumped on Thursday after regulators
ratcheted up antitrust measures aimed at breaking Slim's hold on
Mexican telecoms, adding uncertainty to the outlook for his
principal cash cow.
America Movil was the cornerstone of Slim's rise to top the
global rich list for several years, but a 2013-14 telecoms
reform imposed tougher antitrust rules on the company and helped
open the door to new competitors.
Long-dominant America Movil said late on Wednesday
that the Federal Telecommunications Institute (IFT) had decided
to step up antitrust measures against it, sending the company's
shares down more than 5 percent at Thursday's market open.
The IFT said America Movil, the largest telecommunications
company in the region, has to separate part of its network
infrastructure into a new entity and that it will be subject to
stricter checks on access to infrastructure.
This could open up its network further to competitors at
lower prices, but it also raises questions about how the
measures will take shape. America Movil now has 65 working days
to present a proposal for its new unit.
"A big thing is the uncertainty it adds," said Carlos
Legarreta, an analyst at broker GBM. "The implementation of this
is surely going to be complicated," he said, adding that a
similar measure against Britain's BT took a year.
America Movil's shares ended down 4.54 percent at 12.63
pesos on Thursday.
Slim's company has also long wanted to get a license to
offer pay television in Mexico, a service it has been banned
from since Telmex's privatization in 1990. But after the new IFT
measures, some analysts thought it would not happen soon.
Intercam analyst Alik Garcia said he did not see the company
getting a license under the current president, whose term in
office ends in November 2018, and that even once approved, it
may not be enough to counter the company's current woes.
"It's a business that doesn't have high margins ... it
wouldn't be a panacea," Garcia said.
A spokeswoman for America Movil did not immediately return a
request for comment.
The IFT also imposed new rules on the dominant broadcaster
and longstanding Slim antagonist Televisa,
including increased accounting transparency, but Televisa shares
rose as analysts thought it could benefit from America Movil's
America Movil holds more than two-thirds of Mexico's mobile
subscriptions and dominates the country's fixed line and
internet services while Televisa has a more than 60 percent
market share of pay TV.
In 2012, a study by the Organisation for Economic
Co-operation and Development concluded that Mexican consumers
were overcharged for phone and internet services; America Movil
disputed the findings.
Since the reforms, U.S. wireless operator AT&T Inc has
entered the market and phone service prices have fallen. But in
broadcasting, changes have been more gradual.
IFT will strengthen oversight of Televisa's
infrastructure-sharing and require it to hand over detailed
information on advertising prices, as well as provide separate
accounts for each part of the business, the broadcaster said in
Televisa said it will consider legal or business actions it
could take in response.
Slim's company was stronger in its criticism of the
regulator and vowed to challenge the decision.
"The modifications and additions to the measures ... confirm
the lack of legal certainty and regulatory predictability in the
sector," America Movil said.
(Additional reporting by Alexandra Alper; Editing by Dave
Graham and Leslie Adler)