Telmex says plenty room for competition in Mexico
Reuters, Friday, July 23, 1999 at 18:54
MEXICO CITY, July 23 (Reuters) - Telmex Chairman Carlos
Slim lashed out against criticism that the huge telephone
company is not sufficiently regulated, and that the Mexican
telecommunications market is not open to competition.
Speaking at a Thursday lunch for reporters, Slim said the
Organization for Economic Cooperation and Development, which is
working on a report on the Mexican telecommunications industry,
had been manipulated by Telmex competitors.
In a draft issue of the report presented to a forum in
Paris in March, the OECD said Mexico's telecommunications
regulatory agency Cofetel could not regulate Telmex effectively
because of loopholes in the 1995 Federal Telecommunications
Law.
The draft report also said there were barriers to
competition in Mexico, that the rates Telmex charges
competitors to use its network were high, and the fact that
Telmex was not meeting a government-established goal to expand
telephone coverage in this country where only about one out of
ten people has a phone.
Industry sources expect the final version of the OECD
report to come out later this month, or in August.
Telmex, a former state company bought by Slim in 1990, is
the star company on the Mexican stock market and the largest
provider of local phone service, long distance service, and
cellular telephones in Mexico. Equity analysts say the company
has been very savvy in handling regulatory issues in Mexico.
Slim, considered by Forbes magazine as the richest man in
Latin America, said draft versions of the OECD report contain
"absurd things and make Telmex look like the costliest network
in the world. That is a manipulation by one of our
competitors."
Slim said Telmex was well on its way to expanding telephone
coverage in Mexico, and announced a plan that he said would
expand the number of Telmex cellular and conventional phone
lines to 20 million from 13.5 million over the next 18 months.
He called the OECD report "a big old document that wants to
say that Telmex should be done away with."
He said Telmex's major long distance competitors Alestra,
part-owned by AT&T Corp. (NYSE:T), and Avantel, part-owned by MCI
WorldCom (NASDAQ:WCOM), had no reason to complain about lack of
competition in the Mexican market since they had grabbed some
25 percent to 30 percent of the long distance market in the
last two years.
"The important thing is to allow competition, not give away
the market," he said. "They want the market given to them."
mexicocity.newsroom@reuters.com))
Copyright 1999, Reuters News Service
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