Mexican President Enrique Peña Nieto

Potentially drastic changes will be made to increase competition among communications companies

Mexican President Enrique Peña Nieto has signed into law some pretty strong legislation that aims to cut down on the monopolistic practices of telecom companies in the country. Taking aim at companies such as América Móvil and Grupo Televisa, the law creates a new regulator agency, called Ifetel, that will oversee placing regulations on large companies in the sector to promote competition. Currently, América Móvil is far and away the largest mobile carrier in Mexico with nearly 70-percent of all mobile subscribers. New regulations will aim to limit the amount América Móvil can throw its weight around against the rest of the industry by eliminating its ability to have exclusivity for device launches and even setting rates for calls between carriers so that the incumbent network pays more to complete them.

The legislation goes so far as to give the government the power to force companies to sell off assets to reduce their advantage in the marketplace. Some may think these regulations are drastic, but given the telecom landscape in the country Peña Nieto sees it as the right thing to do. Competing carriers such as Telefónica -- which has approximately 20-percent market share -- are happy to see any progress made towards leveling the playing field.

Source: WSJ


Reader comments

President Peña Nieto signs law to reform Mexican telecom industry


What's wrong with Socialism? What's makes capitalism so great? To me, both are the same; one extreme end to another!

Canada is a really good example of Capitalism at fail.... Look at our mobile industry which hijacked our rights!


There is no need for government to intervene.

People will vote with their wallets, and not just capitalism, but FREE ENTERPRISE, will allow another company to rise up and give the people what they want if they're not happy with what they're getting for what they're paying.

Quit bitching about big companies making "too much money". That's like someone living in poverty saying "You make too much money" even though you only make 20-50k a year. So what if they make a lot of money? They have every right to, and to be honest, if they earned it they deserve it. Last time I checked, none of us poured everything we had to go into business and make the same sacrifices they made to build the businesses they have.

Go into business yourself if you're not happy and create/provide something better. If you don't, then don't complain.

Pure capitalism inevitably leads to monopolies, like what you have in Mexico.

This is an example of a government doing what a government is supposed to do, look out for its people.

how does pure capitalism lead to monopolies? If the thing you are making or doing is making tons of cash, don't be surprized when others start doing the same thing.
The issue with Mexico, i'll take a stab in the dark and say that Mexico's telecoms industry was once state owned then flogged off to somebody with very good government connections and lots of money already. Then a government looking for popularity reregulates to, if not buy votes but at least lessen the anger.

Ask the Rockefellers. Or Ma Bell.
No regulation (which is what pure capitalism is) ends up eventually leading to a point where one, or very few, companies have so much money and influence in an industry that they control the market completely and are able to fix prices, control completely what products and services consumers get and squash anyone who tries to compete against them.

they have a ton of money because they are the most successful, old man Rockefeller bought down the price of heating oil from 35 cents a gallon when he started out to 3 cents when he was targeted with an antitrust suit. the only people complaining, were his competition. The major complainer Ida tarbell wrote for Mcclure's magazine bitterly complained about Rockerfeller at length but didn't point out that her brother was the company secretary for a failing competitor. yes Rockefeller brought out a lot of other refineries (usually a knock down price) however that meant enterprizing people started building refineries to get him to buy them.

you are wrong. Rockefeller was a ruthless business man. a genius nonetheless. he pushed down small start ups by using his connections to stop bank loans or increase raw material costs. Competition was removed at all cost even bribing city officials..


I don't think the word means what you think it means.

Government regulation does not equal socialism. Capitalism needs to be regulated to protect the customers. People love to point to GSM and how it works everywhere. That is a great example of a beneficial regulation. It's just too bad they used TDMA as the base voice tech.

Hey Joe.... why dont you grave an history book and learn before even speak (write).

Do you know the history of standard oil? or ATT&T? so pleace... log off and go learn.

Normally I stay out of these discussions because words like socialism and capitalism, names like Rockefeller and other "big bad corporations" all get used incorrectly by folks left and right, but you really need to correct your spelling before addressing anyone as to how learned they maybe...

That's the dumbest comment ever to make it's way to AC. If you have a problem with socialism might I suggest you refuse the help of the police, fire department, schools, etc. the next time you're in need. You have a problem with choice it seems. So it's more fair that one company control the entire industry? So we should have McDonalds as the only fast place to buy food in the world. Sure, why not! Let all the banks become one also! Great! We only need one telephone company. I guess you're too young to remember Ma'Bell. But that's okay. Too big to fail... Greed can only go so far before it destroys the rest of the world.

JOE H: You are one ignorant bastard. You should have abstained from commenting since this does not concern you. It is a foreign country conducting its affairs and who are you to question their policies? You probably don't even vote in your own country, wiseguy.

Well this are good news for Mexico. I currently have an S4 from America Movil (Telcel) that i unlocked it to move on to Iusacell that have better data plans and rates! Screw You Telcel!!!!!

Was the richest.. Bill gates took back that spot about a month a go or so.. but it was because of rumors of this new law was going to kick in that he loss. Now hes going to loose even more money.. HE must really be pissed off at the president right now..

btw.. you guys got to google all the crap they talk about this president alot of it is hilarious..

But back to topic.. Its great that he is doing this the rates in mexico for cellphones are extremely high... Verizon kind of seems cheap compared to them..

That is good news... maybe so long as Mexico does not repeat the error America did when they broke up AT&T.

I don't think that's the right way to do things. Legislate to make sure they can't use their power to gain more power, but shouldn't be forcing them to sell off.

On the other hand, I do think the U.S. and other governments should have come down on MS like a ton of bricks. MS Orifice is the biggest piece of crap office suite in existense. (Except for Access.) Should have forced them to give Office to WordPerfect or Lotus, and take their suite in exchange.

as a Mexican i must add that this new law will make things better for us as costumers, the prices for plans are just freakin crazy.

and of course Mr. Slim owns the market right now so we expect some competition in here.

and yes the president is a douche....