Carlos Slim to Break Up His Mexican Business Empire
Carlos Slim plans to break up his Mexican business empire after many years of having a monopoly on the telecommunications industry in Mexico.
For several years Carlos Slim and Bill Gates would go back and forth being bestowed with the dubious title of “the richest man in the world.’ Fascinating isn’t it?
Carlos Slim, under pressure from Mexico’s president Enrique Pena Nieto, has announced hIs decision to sell off almost 30 percent of his company’s assets – an amount worth about $20 billion dollars or 1.3 percent of Mexico’s gross domestic product. Although Carlos Slim’s company America Movil serves 292 million cellphone clients in 26 countries, Mexico still represents 35 percent of the company’s sales.
The firm announced its decision in a bitter statement that has Inspired much speculation about the potential buyer, which many business analysts believe could be a foreign company.There are also questions about what Carlos Slim will do with the assets he obtains from the sale. Pay TV seems to be one of his possible new interests and could well be the recipient of his new investments. This industry had been off- limits previously to this telecommunication giant.
Telecommunications regulations are a cornerstone of Pena Nieto’s economic reforms, and affect all companies holding more than a 50 percent market share in audience, traffic, users or subscribers in radio or TV. The Independent Federal Telecommunications Institute (IFT) has drawn up a series of limits for these companies in the hope of correcting the distortion they have creating in the free market. America Movil which owns 80 percent of the landines (Telmex) and serves 70 percent of the country’s cell phone subscribers (Telcel) has served as the model case for these regulatory measures. The Mexican government has limited the company’s freedom to impose certain fees, delayed its entry in the pay-TV sector and ordered it to share its infrastructure with competing operators.
(to be contnued…)
