Mexico Readies For Telecom Boom As Monopolies Are Scrapped

Mexico has been in news since Enrique Peña Nieto took over the reins of the country. One of the agenda of his government was to free the grip of few companies on the Mexican economy. Mexico’s oil and telecom sector were two of the biggest sectors which were monopolized.

Teleocm sector in Mexico has been dominated by Mexican billionaire Carlos Slim who owns Telmex, AméricaMóvil and has business interests in real estate also.

Earlier this month, proposals have been made by the President which will dramatically open up the telecom as well the television broadcast business to more competition. These laws will affect the status quo of the Carlos Slim’sAméricaMóvil and GrupoTelevisa which control 70% of the broadcast business in Mexico.

Though, these laws can severely dent the fortunes of the Slim’s conglomerate, Mexico stands to gain a lot more in terms of greater choice and competitive pricing.

Under the new laws proposed, a telecom regulator will be created what will be able to order the sale of assets by monopolies and also limit dominant businesses’ ability to thwart competition by entangling them in court cases.

The laws will be easier to pass but the main stumbling block will be for the new entrants to lure consumers away from the brands which are deeply entrenched in their minds and hearts. Such is the complete dominance of AméricaMóvil that for Mexicans it will be a big decision. Still bigger will be the challenged posed to the new competition which will need to invest billions of dollars in setting up the infrastructure and marketing its products. Telecom infrastructure entails huge costs which coupled with difficult conditions in Mexico will mean that not many global giants will be making a beeline of the country anytime soon.

Same is the television broadcasting market where GrupoTelevisacurrently produces many of the Mexico’s top most programs. Grabbing eyeballs by producing new shows by the new broadcasters will be a tough task. Industry experts believe that GrupoTelevisa will continue to retain its numerouno position for many years even as other broadcasters will be able to take a slice of the pie. GrupoTelevisa is headed by Emilio Azcárraga. TV is a very popular medium of entertainment in Mexico and shows like NuestraBelleza México notch up high ratings every year.

All eyes are on Mexico as it unveils its new set of reforms which are aimed up at opening the Mexican economy to new competition from both inside and abroad. Domestic entities will face their toughest competition and it is yet to be seen how well they will adjust to the new regulatory setup and competition. Industry experts predict a heavy churning in the economy as the current incumbents will face the new contenders to the throne with a level playing field. Mexico’s economy stands to gain a lot from these measures as more foreign investment will come boosting the infrastructure and improving efficiencies.

Exciting times are here for the Mexico’s economy which has so far faced the world recession by strongly outperforming in the real estate and tourism sector. Mexico’s beach destinations received millions of tourists from all over the world brings much needed dollars.

Leave a Reply