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