Slim defends Mexican turf as Televisa, Telefonica step up competition
By Crayton Harrison
Bloomberg
Carlos Slim is facing the Mexican government’s biggest effort in years to bring more competition to the wireless market dominated by his America Movil. The billionaire is likely to turn back the challenge, analysts say.
Grupo Televisa and Telefonica plan to offer wireless high-speed Internet across Mexico for the first time after winning airwaves in a government auction, the nation’s first since 2005. The companies also won the right this year to use public fiber-optic lines to fortify their networks and compete against America Movil.
While those new assets might bring Mexicans lower prices for mobile phones and services such as Web access, they’re unlikely to do real damage to Slim’s profits in Mexico, said Richard Dineen, an analyst at HSBC Holdings.
“Their budget for various activities, whether it’s engineering, investment, marketing, is often equivalent to the summed budgets of their competitors,” Dineen said in an interview. “That is a formidable competitor.”
Through March, the Mexican unit, called Telcel, had 71 percent of Mexican phone subscribers, while Telefonica, its next-biggest rival, held 21 percent. Telcel’s share of the market was the largest of operators in 50 countries studied by Merrill Lynch in a report released in April.
