Carlos Slim and Telecommunications in Mexico

Carlos Slim is well known in Latin America and abroad as one of, if not the wealthiest CEO in the world. He was even mentioned on the Colbert Report this past week introducing him to the American public as someone who’s net worth trumps that of Mitt Romney as well as that of Donald Trump. This week an OECD report named Slim’s company, Telmex as overcharging Mexican consumers for telecommunications products from 2005 to 2009. Slim argued against the allegations and the numbers presented in the OECD report stating that his company was working within the competitive market that exists in Mexico and did not take any actions that would be deemed as anti-competitive. It is likely a detailed debate will occur over Slim and his companies that may lead to a test of Mexico’s competition laws as well as the reputation of Mexico’s state telecom giant Telmex. We will have to wait and see if Slim wins the day, or if he will be fined. One fine has already been set on Slim’s company, but a challenge in Mexico’s Supreme Court may eliminate this legal measure from being enforced.

Telecommunications giants have been in the position to create a great deal of wealth as new technologies create new boom markets for their products in a commercial environment dependent on new forms of telecommunications. With technology, come many new IP laws to enforce violations of privacy and competition in those new markets as companies jostle for position and form legacies like Nokia and Microsoft. In the EU, stringent laws enforcing consumer protection within the Common Market have set much of the global standard against overly ambitious telecoms giants. Going from competition laws setting records against companies like Microsoft to investigations into companies like France Telecom regarding a series of employee suicides since privatization a few years ago, the EU has set the hard standard against companies that wish to violate competition laws and as well as all other market and labor standards. It is likely that Mexican competition laws will take much of their precedents from that of the EU and US to enforce any violations against Carlos Slim’s business interests, if evidence provides for enforcement to become necessary.

In reality Mexico is likely not the most expensive country for phone services, and there is a great deal of evidence showing that their NAFTA neighbor, Canada has the highest per-capita telecoms charges in the world. A lack of effective competition policies have created a market in Canada where people not only pay a great deal for services, but services are often out of date and ineffective due to a lack of competition in the Canadian mobile phone market. While many developing nations have modern up to date cellular services due to the reduced cost of setting up such systems in places that historically had poor phone access, Canada’s modern economy creates an expensive and outdated mobile phone market that has existed without proper scrutiny from the last few governments. There have been some moves to protect Canadian consumers over the last few years, but until a true measure to help Canadian consumers takes shape it would be a good idea for those like Carlos Slim and other telecoms to enter a Canadian market that sorely needs proper services in their sector for individuals and businesses. A study of the Canadian, European and Mexican telecoms markets would be a useful and interesting study to provide all consumers with a legitimate and fair market for telecoms usage.