Thursday, April 30, 2015

América Móvil Not Selling Frequencies or Infrastructure

Mexican mobile operator América Móvil has no plans to sell frequencies or infrastructure to reduce its dominant position in the country’s market, CEO Daniel Hajj told investors in a conference call. Hajj also said that the operator will analyze the new configuration of the Mexican telecom market with the entry of U.S. operator AT&T with the announced its acquisition of operators Iusacell and Nextel. “We’re reviewing exactly how the market is going to be in Mexico and then we’re going to decide what we’re going to sell to reduce our market share in order to avoid being a preponderant player,” Hajj said. “We are interested in divesting and reducing our market share but we do not know exactly how we want to do it.” On 17 April, shareholders of América Móvil approved the company’s plans to spin off some of its mobile infrastructure in Mexico into the new company Telesites, which would be listed separately on the stock market.

In July, América Móvil announced that it would break up its assets in order to bring its market share below the 50 percent level required by Mexican regulator to avoid a ruling of dominance. However, since then it has not presented a concrete plan to achieve that. Spinning off infrastructure into a separately listed company will not in itself reduce dominance, and Hajj’s remarks show that the company is still quite far from deciding how to proceed in Mexico’s new regulatory climate. This wait-and-see approach is understandable in light of the current uncertainty as to how AT&T’s acquisitions will play out in the marketplace. 

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