mexbiznews's blog

By Anthony Harrup and Nicholas Casey
Wall Street Journal

The monopoly powers of two of Mexico's richest businessmen, one being Carlos Slim, are coming under fire with a broad set of new laws that aim to open up the telecommunications and television businesses to competition.

The plans, announced on Monday by the president, are aimed principally at Slim's telephone giant, América Móvil, and Mexico's leading broadcaster, Grupo Televisa, which each control 70 percent of their respective markets.

The proposal calls for the creation of a new telecommunications regulator that would be able to order asset sales by companies that dominate a market, and limit companies' ability to stall competition through endless litigation.

Creating a new competitive environment out of scratch could prove difficult for Mexico, where entrenched companies have strong ties to consumers. Televisa already produces a raft of Mexico's most popular programming, from news shows to daytime soap operas, making it that much harder for new entrants to grab viewers' attention.

Any new telecom entrant, meanwhile, would have to invest billions of dollars to get started.

"Competition unleashes investment and innovation, fostering economic and social dynamism," said Mexican President Enrique Peña Nieto in a speech Monday in which he compared opening the country's telecom industry to battling illiteracy and building roads. The reforms, he said, "represent challenges for the businesses of this sector, but they also open new opportunities."

Carlos Slim, the world's richest man, has long had a grip on Mexican consumers' phone bills. His América Móvil controls 70 percent of Mexico's 100 million mobile phone subscribers. His fixed-line phone company, Telmex, controls more than 70 percent of Mexico's land lines.

Televisa, meanwhile, is the biggest TV broadcaster in the country with three cable-TV units as well as the larger of the country's two satellite television services. Televisa is controlled by Emilio Azcárraga.

online.wsj.com/article/SB10001424127887324096404578354543917674044.html

By Michael O'Boyle and Dave Graham
Reuters

Mexico's government has threatened the country's telecommunications giants with forced asset sales, unveiling a plan to loosen billionaire Carlos Slim's hold on the telephone market and curb broadcaster Televisa's dominance of the airwaves.

The long-awaited bill seeks to shake up the telecoms sector by allowing increased foreign ownership of media and phone companies, and giving regulators the power to make players controlling more than 50 percent of the market sell assets.

"The purpose of these measures is to free up the sector's potential, and do it as quickly as possible," President Enrique Pena Nieto said as he presented the plan on Monday.

Flanked by the leaders of Mexico's main political parties, Pena Nieto said the reform would allow companies to grow, but added they would have to do so with innovation and investment, by improving prices and the quality of their service.

Previous governments have failed to curb the power of Mexico's telecoms and media tycoons, and fostering more competition in the industry is seen as a crucial yardstick of the new government's ability to unlock the economy's potential.

Pena Nieto's government, which took office in December, negotiated the reform bill with leaders from the main opposition parties after the two forged an accord with the president in December called the Pact for Mexico.

However, the planned reform might still face a tough road in Congress, where Pena Nieto lacks a majority.

www.reuters.com/article/2013/03/12/us-mexico-telecoms-idUSBRE92A11S20130312

By Anthony Harrup and Juan Montes
Wall Street Journal

The government of Mexican President Enrique Peña Nieto launched a wide-ranging proposal to overhaul the country's telecommunications and broadcast markets, bringing together political forces to challenge the dominance of telecommunications giant América Móvil and leading broadcaster Grupo Televisa.

With a stronger authority and limits on the concentration of market power, "telecommunications in Mexico will fulfill their role as a driver of the economy," Communications and Transport Minister Gerardo Ruiz Esparza said Monday at an event in which Peña Nieto presented the plan, accompanied by congressional leaders and members of his Cabinet.

The proposal includes the creation of a new telecommunications regulator with significantly greater powers to oversee two crucial sectors that have been dominated by a handful of players for decades. Such lack of competition has slowed down economic growth for years, analysts say.

The proposed changes, which still have to be approved by Mexican legislators, come amid a broader effort by Peña Nieto to reassert the power of the Mexican state against powerful special interests.

The overhaul plan was drawn up under a pact that Peña Nieto signed in December, just one day after taking office, with leaders of Mexico´s three main political parties. The so-called Pact for Mexico includes commitments to pursue a wide range of political and economic reforms, such as ambitious changes in an education system controlled by a powerful trade union and an inefficient energy sector that is in state hands.

"What we are seeing is something like a coalition government far from that old-style imperial presidency, where the opposition is pushing the ruling party to break with interest groups," said political analyst José Antonio Crespo, who described the proposal as the sign of a new era in Mexico.

The new telecommunications regulator, the Federal Telecommunications Institute, will replace the existing telecommunications regulatory commission Cofetel and would be able to order asset sales by companies that are determined to be dominant.

"This is going to change very rapidly the reality of the market, and increase competition in the country," José Luis Peralta, a commissioner at current regulator Cofetel. The new regulator "is being given lots of teeth," he added.

online.wsj.com/article/SB10001424127887324096404578354543917674044.html

The Canadian Press

World Baseball Classic officials say fighting has no place in baseball, but they are hoping players involved in an ugly brawl between Canada and Mexico have learned their lesson.

Officials decided not to take any further action against three Canadian and four Mexican players ejected in Canada's 10-3 rout of Mexico on Saturday, though the organization was expressed their distaste for the chaos that marred the ninth inning of the game.

"We are extremely disappointed in the bench-clearing incident that marred the conclusion of (Saturday's) game between Canada and Mexico. The episode runs counter to the spirit of sportsmanship and respectful competition for which the World Baseball Classic has stood throughout its history," World Baseball Classic, Inc., said in a statement.

"Because at least one club — and potentially both — will not advance to the second round, WBCI has determined that disciplinary measures would not have a meaningful corrective impact. Thus, discipline will not be imposed beyond today's seven game ejections. It is our firm expectation that the members of Team Mexico, Team Canada and all the tournament's participating teams will learn from this incident and set a better example — one that befits the sport they share — in the future."

Canada was sent home Sunday after a 9-4 loss to the United States. A win would have moved Canada into the second round of the WBC for the first time.

www.globaltoronto.com/no+further+discipline+for+canada+mexico+after+brawl+at+wbc/6442825496/story.html

 By Eric Martin & Nacha Cattan
Bloomberg

Mexico’s central bank cut its benchmark interest rate for the first time in three and a half years after inflation held within its target range for a third month and economic growth slowed.

Banco de Mexico reduced the overnight lending rate by 50 basis points to a record-low 4 percent, a move forecast by just seven of 25 analysts in a Bloomberg survey. The rest projected the rate would stay on hold.

Latin America’s second-largest economy was the only nation in the Group of 20 to leave borrowing costs unchanged and refrain from buying bonds to ease monetary conditions since July 2009.

Mexico’s inflation rate fell within the central bank’s 2 percent to 4 percent target range for the first time in six months in December as egg prices dropped and an increase in chicken prices eased following the end to a bird flu epidemic.

While overall inflation rose to 3.55 percent in February from a 15-month low of 3.25 percent in January, core inflation, which excludes more volatile items like energy and agriculture prices, has been within the bank’s range since April 2010.

“The policy for containing inflation has worked,” Rafael Camarena, an economist at Grupo Financiero Santander Mexico SAB who forecast a 0.5 percentage point reduction, said in an interview before the decision. “Inflation expectations have remained anchored for a long time, within the bank’s target range. And a third element, though not necessarily within the bank’s mandate, is the economy has been showing signs of deceleration.”

Industrial production and retail sales fell in December, the first reduction in both indicators since Mexico emerged from the 2009 recession. Mexico’s growth, which exceeded Brazil’s the past two years, will match Latin America’s biggest economy this year, slowing to 3.5 percent, the least since 2009, from 3.9 percent in 2012, according to the median forecast of economists surveyed by Bloomberg.

Mexico’s peso, which rallied 8.4 percent against the dollar last year, the most among 16 major currencies tracked by Bloomberg, has strengthened a further 0.7 percent this year through yesterday. Yields on Mexico’s fixed-rate government bonds due in 2024 have dropped 46 basis points, or 0.46 percentage point, to 4.96 percent. Yields on interbank futures have been showing traders betting on a rate cut since the end of January after policy makers on Jan. 18 signaled a reduction would be “advisable” should inflation continue to slow.

www.bloomberg.com/news/2013-03-08/mexico-central-bank-cuts-key-rate-for-first-time-since-2009.html

 Deutsche Welle

An increasing number of women farmers in Mexico are battling drought, gun-carrying gangs and a struggling domestic agricultural market. Despite recent efforts to support family farms, they are facing an uphill battle.

Apolonia Alvarez walks with a powerful stride towards her corn field, near the town of Izucar de Matamoros, in the southern central Mexican state of Puebla.

The 54-year-old farmer rents just a little more than 60 square meters of a corn plot in this poor area. Right now, it's in a sorry state. The earth is dusty and bare and most of the stalks lie dying in the hot midday sun.

"My corn almost didn't grow at all this last summer," she says. "The rain stopped when the crops were still very, very small."

The mother of four tries to support her family with the corn she grows here, but, this past year she has only been able to harvest a few sacks of corn. When the crop fails, Alvarez supplements her income by doing small jobs for other people instead.

"I'm by myself. When I can I sometimes help to wash or iron other people's clothes, but I only earn about 50 pesos," she tells DW. Fifty pesos is equal to about three euros ($4).

Alvarez used to live in the state of Guerrero, but she and her family left when gun-carrying gangs made it too dangerous to stay. This state is now among the most unstable regions in the country due to gangs, who are fighting over control of the local drug trade.

A few years ago, Alvarez's husband went to the US, where he now works in the construction industry. That is a common story in Mexico. Many rural men are moving to cities in mexico or the USA in search of work, due to the lack of support for rural areas by the Mexican government.

www.dw.de/mexicos-rural-women-fight-drought/a-16653191

By Elinor Comlay and Dave Graham
Reuters

Mexico's phone and television markets, long dominated by Carlos Slim and his rivals, are facing a game-changing shakeup that could be announced in days, according to one of the political leaders tasked with drafting the reform.

"This (reform) changes the whole board game," Gustavo Madero, chairman of the conservative opposition National Action Party (PAN), told Reuters in an interview.

The leaders of President Enrique Pena Nieto's Institutional Revolutionary Party (PRI) and Mexico's two main opposition parties are currently preparing the telecoms reform, which should be brought to Congress in days, not weeks, Madero said.

Slim, the world's richest man, controls about 70 percent of Mexico's cell phone market and about 80 percent of the fixed lines through his phone giant America Movil.

Televisa, controlled by media tycoon Emilio Azcarraga, has about 60 percent of the broadcasting market, while Ricardo Salinas' TV Azteca has most of the rest.

"There's no other country that I know in the world - perhaps the communist countries - where so few hands have so much control over the broadcasting media," said Madero.

www.foxbusiness.com/news/2013/03/06/mexico-game-changing-telecom-reform-due-in-days-party-leader/

Reuters

Mexico announced a new program aimed at buoying the country's battered homebuilders by promising to put up billions of pesos to back commercial credit to the industry.

The 15 billion pesos ($1.2 billion) fund "will favor a healthy flow of credit for the construction of new homes," said Deputy Finance Minister Fernando Aportela, speaking a press conference in Mexico City on Wednesday.

Under the program, the government would guarantee losses of up to 30 percent of the total amount loaned to homebuilders this year, to the tune of 15 billion pesos. That sum represents 40 percent to 50 percent of all the money loaned to the sector last year.

In exchange for the guarantee, banks would pay a premium, though the government did not detail the amount.

The news boosted shares in Mexican homebuilders, whose earnings have faltered in the last two years as the government adopted policies favoring pricey urban high-rise and sustainable development. Many homebuilders have large land holdings outside cities that have lost value thanks to the new policies.

But Arianna Gonzalez, an analyst at Signum Research in Mexico City, said the jury is still out on whether the indirect support will induce Mexico's famously cautious banks, which are still mindful of the 1994-95 banking crisis, to lend.

"I'm very skeptical of the effect (the program) can have," Gonzalez said.

She explained that instead of direct government support to lenders, the program is based on "triangulation" through commercial banks, and merely replaces another program that offered a 6 percent government guarantee to homebuilders.

www.reuters.com/article/2013/03/06/mexico-homes-idUSL1N0BYCBQ20130306

 By Dudley Althaus / Global Post

Burly as a linebacker, Rogelio Elizondo remained dry-eyed as he described scouring websites devoted to Mexico's gangland savagery, hoping to somehow recognize his long-missing son amid photos of fresh victims or decayed remains pulled from clandestine graves.

It’s a task to which he's turned after other options faded for finding the 23-year-old engineering student, also named Rogelio, who disappeared nearly two years ago on a trip near the South Texas border. “You start to assimilate it, little by little.”

Mexicans by the tens of thousands — precisely 26,121, by the government's latest tally — have vanished in the six years of criminal hyper-violence that have battered much of the country, especially communities near the US border.

Now under sustained pressure, President Enrique Peña Nieto's new administration and key state governments have promised to focus on finding the missing and prosecuting their tormentors.

Although victims’ advocates say they’re jaundiced by years of empty promises and useless investigations, some are allowing themselves a measure of optimism.

“We've begun to see the government taking things seriously," said Consuelo Morales, a Roman Catholic nun who directs the advocacy group Citizens in Support of Human Rights, or CADHAC, in Monterrey, capital of the state of Nuevo Leon that borders the United States. It has documented more than 1,000 disappearances in the past four years.

www.globalpost.com/dispatch/news/regions/americas/mexico/130304/mexico-missing-drug-war-US

By Gabriel Stargardter / Reuters

Two Mexican mining magnates have moved up Forbes' annual list of the world's richest, headed once again by compatriot Carlos Slim, underscoring the challenge the new government faces to narrow the wealth gap and pull millions out of poverty.

Slim's fortune - from an empire that stretches from telecoms to retail, to mining and banking - rose nearly 6 percent to $73 billion in 2012. The tycoon topped the list for the fourth year in a row, ahead of Microsoft founder Bill Gates.

The wealth of Alberto Bailleres, the second-placed Mexican on the 2013 list at No. 32 and chairman of mining group Industrias Penoles, grew 10.3 percent to $18.2 billion.

And fellow miner and low-profile head of Grupo Mexico German Larrea, 59, who came in at No. 40, added 17.6 percent to his fortune to reach $16.7 billion.

Forbes included 12 other Mexicans, from No. 179 to No. 1,107, on the list.

Around half of Mexico's 115 million people live in poverty. More than 12 million Mexicans joined the ranks of the poor between 2006-2010, according to government data. A study published in 2012 by the International Labour Organization put the average Mexican salary at $609 a month.

Inspired by the anti-poverty successes of former Brazilian President Luiz Inacio Lula da Silva, new President Enrique Pena Nieto campaigned on a pledge to lift 15 million Mexicans out of poverty.

thestar.com.my/news/story.asp