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 Tuesday, March 15, 2011

Mexican fixed line incumbent Telefonos de Mexico (Telmex) has unveiled plans to break its fixed line voice operations apart, revealing it aims to form two separate companies, one of which will exclusively serve rural areas, the Wall Street Journal reports. Under the telco’s proposals, which will require the approval of the Secretario de Comunicaciones y Transportes (SCT) and other regulatory bodies, Telmex intends to create a new company, Telmex Social, to service rural regions and those areas of the country ‘in which there is no economic interest of any competitor’. The new company, Telmex said, would continue to pay the same interconnection rates to competitors as the enlarged operator currently does.

The move, it is thought, is in part aimed at countering criticism of Telmex’s dominant position in the fixed line voice sector; it currently has a market share of around 80%.

Further, it is also believed that Telmex, which is controlled by Mexican billionaire Carlos Slim, hopes that the decision to split its operations will prompt the relevant regulatory bodies to allow it to offer IPTV services and triple-play bundles, which would allow it to compete directly with the country’s main cable TV operator Televisa, which already offers such packages.

Source: TeleGeography