The United States expressed its concern to Mexico about the implications for competition if the Federal Telecommunications Institute (IFT) allows the giant América Móvil, owned by businessman Carlos Slim Helú, to enter the pay television marketthey told Reuters several people familiar with the subject.
On January 12, US officials, including Deputy Trade Representative Jayme White, told staff at the Mexican Ministry of the Economy and the IFT that they weren concerned about the entry of Claro TV from América Móvil into the sector, a source with knowledge of the conversation reported.
The IFT is expected to decide whether to grant América Móvil the concession for pay television on Wednesday, according to an internal document seen by Reuters. Controlled by the family of billionaire Carlos Slim, América Móvil dominates the country’s telecommunications market, and its appearance on the scene could put its rivals, including US companies, under significant pressure. América Móvil and AT&T in Mexico declined to comment. The IFT and the Mexican Ministry of Economy did not comment either.
A statement from the United States government on an official call detailed that White, attached to the Trade Representation of the neighboring nation (USTR, for its acronym in English), discussed on January 12 about the competition in the Mexican telecommunications sector.
IFT officials said at the end of last year that they were considering authorizing América Móvil to enter the mMexican pay TV market, although no decision has yet been made.
If the concession is granted, would have important implications for competitorss, including the US company AT&T, which operates in the country, and the dominant television company Grupo Televisa.
América Móvil already has a 70 percent market share in mobile internet services and more than 62 percent in mobile phone services, according to data from the IFT.
Your Pay TV Income could discourage rivals from investing, said Ernesto Piedras, head of the Latin American market consultancy The CIU, especially if the company offers packaged options for television, internet, mobile telephony and other services.
The competition concerns were addressed during a bilateral meeting to address issues related to the trade agreement between the United States, Canada and Mexico, TMEC, said the source with knowledge of the conversation.
“Understandable concern about the dominance that América Móvil has in various markets and of course it is an issue to address due to its impact on competition that it could have on other agents,” the source said.
“We understand, in the USTR case, the concerns that could come from US companies in Mexico like AT&T,” he added.
USTR spokesman Adam Hodge, when asked if there were any concerns about América Móvil, said that USTR officials “have expressed concern about the fair competition in the Mexican telecommunications sector and they are monitoring Mexico’s implementation of the TMEC commitments.”
To the Slim family company had been prohibited from providing the service in Mexico since the privatization of the company state-owned telecommunications company Telmex in the early 1990s, which later became América Móvil.
Considered a dominant or “preponderant” “agent” by the IFT due to its large market shareUntil now, América Móvil has had the coveted license withheld.
The company is already the largest pay TV provider in Latin America, operating in countries such as Brazil and Colombia, and has been pushing to enter the sector in Mexico.