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IFT: América Móvil Must Break Up and Branch Out

According to experts in the matter, this move will entail more than an accountancy separation
By The News · 09 of March 2017 16:34:31
Ifetel issued a resolution compelling América Móvil to share its infrastructure with its competitors, MÉXICO, D.F., 08MARZO2014.- Ifetel ordenó a las subsidiarias de América Móvil, Telmex y Telcel, compartir su infraestructura con sus competidores, desagregar su red y atender diversas medidas asimétricas en materia de interconexión, roaming y comercialización de servicios.FOTO: ISAAC ESQUIVEL /CUARTOSCURO.COM, photo: Cuartoscuro/Isaac Esquivel

The Federal Telecommunications Institute (IFT) issued a notification to América Móvil to create a new company to manage Telmex’s existing infrastructure in order to put it on an even playing field with its competitors. The IFT claimed that access must be granted without discrimination and in equal status to all involved parties. This decision stems from a resolution for preponderant economic agents from the regulating institution.

According to experts in the matter, this move will entail more than an accountancy separation. On one hand, the new company will manage the service capacity in its network and how these are shared; on the other hand Telmex will be an internet and phone services provider. The plan to achieve the separation must be submitted to the IFT for approval.

Gabriel Contera chair of the Instituto Federal de Telecomunicaciones. Photo: Cuartoscuro/Moisés Pablo

América Móvil must comply with equivalence principles in order to “match” essential supplies and insure technical and economic replicability for its competitors. These terms must be met for all players in mobile, landline and internet services.

Technical and economic replicability also encompasses passive infrastructure such as posts, wiring and ducts, as well as the effective dismantlement of the local network of landlines which is made up of the same kind of infrastructure.

Furthermore, Telcel must set the same terms to wholesale services rendered to Operadores Móviles Virtuales (OMV), the model under which Virgin and Qbocel operate in the local market – not necessarily costumers of América Móvil.

The IFT also included ex ante and ex post regulations to oversee both the creation of the company and its rates.

América Móvil claimed they will challenge the resolution on grounds that it is not based on a comprehensive assessment in terms of competition.