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Mexico telecoms reform hits world’s richest man

By Padraig Reidy / 28 March, 2013

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A new telecommunications reform that was presented in Mexico by the government of Enrique Peña Nieto has been heralded worldwide.  The reform bill seeks to amend the Mexican Constitution and will open the telephony and television industries. The changes had been recommended last year by the Organisation for Economic Cooperation  and Development, which said the lack of competition in the telecommunications sector cost Mexico $25 billion dollars a year and offered among the highest prices in the world to consumers.

The Mexican Congress’ lower house approved the law on Thursday March 21 and the Mexican Senate is expected to approve it in April.  The version approved opens radio, television and telecommunications to foreign investment.  The reform was presented to Congress in February, a feat reached by the Pact for Mexico, a multi-party front that seeks to introduce major reforms in the country. In the Mexican Congress, the bill was revised considerably by legislators. For instance, at the onset, the proposal would have allowed 100 per cent foreign investment in radio, television and telecommunications.  But after two weeks of congressional tinkering, the law was restricted. In the approved version of the bill, foreign investment in radio and television is now limited to 49 per cent, although it could be higher — if the foreign company is from a country that offers reciprocal treatment to Mexicans. Fixed line telephony and cellular phone is set at 100 percent. The bill will impact Carlos Slim, now owner of Telmex, a fixed line telephony company that controls most of the country’s fixed lines, and Telcel, the country’s largest cellular telephone company.

The multi-milllion dollar open, non-cable television spectrum in Mexico is controlled by two media giants, Televisa and Azteca Television, which have controlled open waves for several decades.

The bill also creates a new regulatory body that will be functioning in 2014.

Critics such as Ernesto Villanueva welcomed the bill’s recognition of community radio in Proseco Magazine, but worried about the future of such local media, because the law does not permit them to seek publicity.  The World Association of Community Radios, AMARC, urged the Mexican Congress to protect the rights of marginalised communities.

When asked his opinion about the reform, Carlos Slim, the world’s richest man, according to Forbes, said he welcomed the reform which will improve broadband, telephone and television and radio industries in Mexico. Since the reform was made public, stock prices for America Movil, Slim’s company plummeted causing $6 billion dollars in losses.

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About Padraig Reidy

Padraig Reidy is the editor of Little Atoms and a columnist for Index on Censorship. He has also written for The Observer, The Guardian, and The Irish Times.

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