Ovum comments: Ifetel declares Telmex and Televisa as dominant in their respective markets in Mexico

Following the news that Ifetel has declared Telmex and Televisa as dominant in their respective markets in Mexico, Luca Schiavoni, regulation analyst at Ovum has the following comment:

“This decision was largely expected, and is the natural consequence of the recent reforms passed by the newly appointed government. In particular, the measures passed with regard to the mobile sector may appear harsh compared to international standards, but they have a justification in the clear lack of competition in that market, with penetration standing still below 90% while other neighbouring countries have boomed in the last few years, and Telmex’s mobile arm consolidating its leading position with more than two thirds of the subscribers base.

“Now that Ifetel has successfully met the deadline to decide which operators are dominant, and to impose the relevant measures, it is urgent that secondary legislation is passed to complete last year’s reform; Ifetel’s powers still need to be defined more in detail, and an updated telecommunications act that reflects the recent constitutional changes is necessary. While it is too early to assess whether the reforms will succeed in giving the Mexican market the competition it badly needs, this is should be seen as a promising start; it may also help attract more foreign investment, which will also play a key role in delivering the necessary growth.”