Mexico senate approves telecom reform
After a marathon all-night debate, Mexico’s Senate approved a bill establishing the legal framework for a sweeping reform of the telecoms and broadcast sector aimed at curbing the dominance of phone mogul Carlos Slim and TV giant Televisa.
The bill, finally endorsed by 85 votes to 12 after a string of objections stretched the debate to 17 hours, now passes to the lower house where it is expected to be approved early next week.
That would bring to an end months of delays to one of the main planks of the reform agenda by President Enrique Peña Nieto.
The telecoms overhaul – the bill will enact a constitutional reform passed last year – has sparked the ire of Mr Slim but is designed to boost competition in a high-profile sector that has long escaped reform efforts.
The curbs to Mr Slim’s América Móvil telecoms empire – comprising both fixed-line operator Telmex and the Telcel cellphone service which have some 80 and 70 per cent of their respective markets – are clear: he will have to allow interconnection services to other phone companies for free, something his company has thundered is “confiscatory”.
Much of the debate in recent days however has revolved around whether the limits on Televisa, whose media machine is widely considered to have favoured the re-election of the ruling Institutional Revolutionary Party, are in fact tough enough.
Earlier this year, the telecoms regulator, IFT, declared both Mr Slim’s companies and Televisa dominant players in the telecoms and broadcast sectors. But some senators had wanted to narrow the definition to “services” rather than “sectors”, arguing that Televisa could otherwise boost its market share in the pay-TV sector without facing curbs.
Televisa has more than 60 per cent of the free-to-air TV market and, if its cable and satellite businesses are counted together, is also the biggest pay TV player. However, it was not declared dominant in the pay-TV niche by the regulator. In the end, the definition by sector was maintained in the bill.
There was no immediate reaction from either Mr Slim’s camp or from Televisa, controlled by mogul Emilio Azcárraga to approval of the bill, which has been delayed in Congress by more than six months.
The government says the reform, which, for example, eliminates long-distance phone charges from 2015, will save consumers nearly 20bn pesos ($1.5bn) a year.
The delay in passing the telecoms secondary legislation has had a knock-on effect on approval of laws to regulate the energy sector, the centrepiece of Mexico’s reform agenda. Those measures are now not expected to be passed until early August.