In Mexico, where a brand-new regulatory authority has been created, and where intent to intervene in the communications and television markets has been clear, the Federal Telecommunications Institute (IFT) has notified America Movil that it will be investigated as part of IFT’s examination of market dominance in telecom and TV broadcasting.
Since America Movil has 70 percent market share, the investigation undoubtedly will find that America Movil is a “dominant provider,” and then will face restrictions intended to benefit competitors, in both fixed line and mobile realms.
Actions could range from regulating America Movil more heavily than its rivals, forcing America Movil to unbundle its network or sell assets.
In fact, asset sales already are on the agenda in Brazil, where the Brazilian antitrust authority Cade has ruled that Spain's Telefonica, which owns stakes in two firms operating in the Brazil mobile market, must sell its stakes in TIM Participações SA or seek a new partner for Vivo, Brazil's largest mobile phone carrier and part of Telefonica Brasil.
Cade believes Telefonica, which generates most of its growth from South America, has
too much market share, and is acting to force Telefonica to reduce its presence, since Telefonica has equity stakes in two of the four leading mobile service providers in Brazil.
Telefonica owns all of Vivo and has indirect ownership of TIM Participacoes.
At the moment, Vivo and TIM Participacoes have more than 50 percent market share in the Brazil mobile market.
Vivo has 29 percent share of subscribers, TIM has 27 percent, America Movil has 25 percent and Oi has 19 percent.
Telefonica owns 66 percent of the firm that in turn owns 22.4 percent of Telecom Italia, which further owns TIM Participacoes.
Cade also does not want the number of competitors in the Brazil mobile market to be reduced.
That might prohibit America Movil, Oi and Vivo making a joint bid, then breaking up TIM Participacoes between them. That might suggest an opportunity for a new contestant to enter the Brazil mobile market.