Mexico proposes regulatory reform

Mexico could be on the verge of a major reform of its telecoms sector after the country’s three main political parties agreed to support proposals for a much stronger regulatory regime.

The Mexican telecoms market is dominated by operator group America Movil, which is owned by Carlos Slim, the world’s richest man according to Forbes Magazine. The firm’s wholly owned subsidiary Telmex has close to 70 per cent of Mexico’s mobile subscribers, according to research firm Ovum. However, the new proposals aim to lift foreign investment limits in the telecommunications industry and create a stronger, more independent regulatory body.

According to Luca Schiavoni, policy & regulation analyst at Ovum, the proposal is something the Mexican telecoms sector urgently needs, and directly addresses the problem of the lengthy and confusing regulatory process that the industry faces at present.

“As Ovum’s recent Regulatory Scorecard 2013 shows, Mexico ranks poorly across the board compared to neighbouring countries as a result of an unclear regulatory framework in which multiple bodies come together to create regulation, slowing down the process and often overlapping or conflicting one another,” he said.

He added that the creation of a regulatory body able to decide autonomously and apply different measures to each operator is very likely to help the sector become more competitive.

“Mexican telecoms markets are highly concentrated, and this has affected users’ uptake and ability to benefit from lower prices both in the fixed and mobile sectors. Mexico is a rank outsider compared to other Southern and Central American countries which generally have good levels of competition in mobile; concentration has also resulted in a recent slowdown in mobile penetration.”