Reforms force break-up of Carlos Slim's telecoms empire

A slimmer empire - billionaire Carlos Slim is to break up America Movil in the face of telecoms reform in Mexico

Mexican telecoms reforms are forcing the break-up of billionaire Carlos Slim's America Movil empire, Latin America's biggest telecoms company.

Mr Slim, one of the world's richest men, says he will bring America Movil's market share below 50%.

Its Telmex fixed line subsidiary has 80% of the Mexican market and its mobile Telcel operation 70%.

The reforms would make America Movil in its present form a dominant player, subject to strict new rules.

They would include being forced to share infrastructure with rivals such as Spain's Telefonica.

In a move aimed at avoiding this, it will present its restructuring to the country's new telecoms watchdog, the Federal Institute of Telecommunications (IFT).

Reforms

The much-delayed legislation reforming telecoms and broadcasting received final approval from Congress on Wednesday, but must still be signed into law by the country's president.

It was introduced by President Enrique Pena Nieto, who took office 20 months ago promising to boost competition in the Mexican economy.

The new rules will also affect Televisa, the world's biggest provider of Spanish-language content, which has more than 60% of the free-to-air TV market.

Although America Movil has not yet said what it would sell off in order to reduce its market share, it has said it will split its infrastructure business and cellphone towers away from Telcel into a separate business.

Mexico's Transport and Communications Ministry said in a statement: "This decision could transform competition in the telecommunications sector, with improved quality and better prices for services to end users."

If America Movil does cut its market share below 50%, it will be allowed into other markets, such as the pay-TV sector, which it is barred from at the moment.