Mexico watchdog focused on telcos; banks eyed too

By Chris Aspin

MEXICO CITY (Reuters) - Mexico's competition watchdog is focused on investigating the telecommunications sector for the moment but is also keeping an eye on the banking and beer industries too.

Federal Competition Commission chief Eduardo Perez Motta told the Reuters Latin America Investment Summit in Mexico City that the ongoing probe into market dominance of the telecoms sector will come up with first rulings around mid-year.

Most of the investigations are thinly veiled probes into companies owned by billionaire Carlos Slim, especially Telmex (TMX.N: Quote, Profile, Research, Stock Buzz)(TELMEXL.MX: Quote, Profile, Research, Stock Buzz), which has about 90 percent of Mexico's fixed lines.

One other ongoing investigation is into interconnection fees in the mobile phone market where Slim's America Movil (AMXL.MX: Quote, Profile, Research, Stock Buzz)(AMX.N: Quote, Profile, Research, Stock Buzz), the largest cell phone company in Latin America, has seven out of every 10 mobiles in Mexico.

Telmex was declared dominant several years ago by antitrust regulators but Slim was able to have that ruling overturned in Mexican courts.

Perez Motta said the probes would return rulings by mid-year. "These investigations are one of the main thrusts of the commission at the moment."

He said if one or more players were found dominant then the Federal Communications Commission, the telecoms regulator, would have to regulate those companies more strictly.

"It is more about regulation than (financial) sanctions," he said when asked if dominant companies could be fined.  Continued...