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America Movil takes legal action against Mexico’s “unfair” competition reforms

America Movil takes legal action against Mexico’s “unfair” competition reforms

America Movil has brought a legal challenge against Mexico’s 2013 mobile market reforms, which were largely aimed at reducing the market leader’s overwhelming dominance in the sector.

A statement from Carlos Slim’s company claimed that some of the reforms had unfairly targeted the company and had resulted in it losing its rights to “cost recovery, economic stability and financial balance.”

The Supreme Court is mulling over repealing certain aspects of the sweeping reforms, which were introduced in 2013 in an attempt to create a more level playing field in Mexico’s telecoms industry, where competition was stymied by America Movil’s dominance, driving costs up for consumers.

However, the market leader has argued that it was the victim of asymmetrical rules that allowed rival operators to charge America Movil for connecting calls to their networks, but not vice versa. The company’s statement claimed that “asymmetrical does not mean free”, and described the enforced “zero-rated” connection rules as going counter to the regulator IFT’s intentions, as well as subverting the rights of its Mexican units Telmex and Telcel.

The Supreme Court appears to be in no hurry to reach a decision on the reforms, but reports have suggested that a ruling could be made this year. If America Movil’s complaints are upheld, it could be entitled to over $800 million in back payments.

Mexico’s telecom reforms were aimed at encouraging competition, and prompted US operator AT&T to enter the market by acquiring two smaller Mexican players, Grupo Iusacell and Nextel Mexico. However, America Movil’s market share is still equivalent to around two thirds.