Carlos Slim unfazed by new Mexican Law aimed towards communications companies

By IVC Post Staff Reporter

Jun 11, 2013 11:51 AM EDT

The world's second-richest man expressed the new law will not hurt the profitability of his company America Movil, the dominant wireless provider in Latin America, most specifically in Mexico.

Three companies are also expected to be hit by the latest update in Mexico's legislation, namely TelCel, TelMex, and Televisa.  The law was formulated to avoid monopoly and to break up the companies. If Slim is relaxed but his investors feels otherwise. America Movil is down by almost 27%. A perceived result of a "significant regulatory overhang" as the new legislation's effect is yet to be determined.

Christopher King a Telecom analyst from Stifel Nicolaus expressed, "Their goal is to reduce his (Carlos Slim's) market share." A possible work-around is seen to put a price cap on Slim's companies, without getting the rest involved and affected by the new law.

Speculations of this possible recourse has been a topic among market-watchers, as Slim has been seen as a quasi-monopolist who takes advantage of his dominant position by increasing prices in the face of more competition. 

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