Mexicans Overpaid Slim-Led Phone Industry $13 Billion a Year
Mexico's phone industry, dominated by billionaire Carlos Slim's carriers, overcharged customers $13.4 billion a year from 2005 to 2009, hurting the nation's economy, according to a report.
Mexico "needs the socioeconomic boost provided by greater access to more efficient communication services, in particular high-speed broadband," the OECD said. Mexico had 10.5 high- speed Internet subscriptions per 100 habitants at the end of 2010, placing it 32nd among the 34 OECD member countries and less than half the average of about 25, the report showed.
Prices for high-speed Internet service in Mexico are the highest in the OECD, according to the report, which used a comparison method called "purchasing power parity" to adjust for economic differences between countries. America Movil Chief Financial Officer Carlos Garcia-Moreno said last year that the method is questionable for comparing specific prices.
Mexico's government has struggled to reduce Slim's dominance of the market, which he began to build by acquiring control of Telmex in a privatization sale in 1990. He pushed Telmex's wireless unit, Telcel, to offer prepaid plans that were accessible for Mexican consumers, building that division into America Movil, which has 242 million mobile subscribers across the Americas.
The companies controlled by Slim, 72, have responded to regulators' actions by using injunctions and appeals to keep rules from being enforced.