Court Slams Carlos Slim

Coverage Type: reporting
Mexico City, Mexico

Mexico's Supreme Court dealt Carlos Slim, the world's richest man, a major setback, ruling that his cellphone company can't block competitors by using court injunctions to ignore the rulings of the country's telephone regulator.

The 6-4 vote should create a more competitive landscape in Mexico's cellphone market, which is dominated by Mr. Slim's Telcel, by forcing the company to charge rivals a sharply lower rate to complete calls on its network of 66 million users. Telcel said in a statement that it respects the court's decision. Meanwhile, the various legal actions that the company has brought regarding telecommunications regulator Cofetel's rulings on interconnection rates in previous years will continue their course, Telcel said. Smaller operators such as NII Holdings Inc.'s Nextel Mexico unit argue that the interconnection fees are higher than the fees Telcel charges its own customers for calls within the network and prevent them from offering competitive rates to their own users. Telcel is a unit of America Movil SAB, which has holdings across the Americas. The court decision comes amid a stepped-up effort by the Mexican government to regulate Mr. Slim's telecommunications empire. Just a few weeks ago, the country's antitrust watchdog slapped Telcel with a $1 billion fine for allegedly using high interconnection rates to put the squeeze on rivals—a charge Telcel denied and said it ill appeal.


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