Carlos Slim is the richest man in the world with a fortune of $69 billion – wealthier than Bill Gates and Warren Buffett.1
- Slim's company, America Movil (comprised of Telemex and Telcel), has nearly 75 percent of the TOTAL Mexican telecommunications system – from telephone landlines to mobile telephone services.2
- According to the January 2012 Organizations for Co-operation and Development (OECD) study “Review of Telecommunications Policy and Regulation in Mexico,” the country has a tremendous poor, rural population that could increase their socio-economic status given access to resources such as broadband.3
- It has been consistently proven throughout developing countries that access to services like mobile banking provides a route out of poverty.
- To date, Slim's telecommunications empire has overcharged billions and billions of dollars to Mexicans, especially to the rural poor. Carlos Slim price gouged Mexican customers a total of $13.4 billion each year from 2005 to 2009 for basic telephone and Internet service according to the OECD study.
- Slim's price gouging cost the Mexican economy $129 billion or about 2 percent of the country's total annual GDP.4
- The five-member CFC voted unanimously to let regulators proceed with rules to target Telcel's prices and call quality.
- This latest action in one in a series beginning in 2011, when the CFC deemed Telcel “too dominant” in the mobile call termination game. The CFC served the phone outfit with an 11,000,000 pesos fine (around $864,000) for monopoly practices. The 2011 ruling allowed the CFC “to cut by more than half the fees Mexico City-based America Movil can charge to complete incoming calls to its users.”5
- Referencing these monopolistic practices, Mexico's Central Bank Governor noted “in unusually bold language... that successfully promoting an agenda of economic or 'structural' reform could see the country reach growth rates in excess of 5 percent a year – more than double the annual average over the last decade.”6
- The country's poorest are disproportionately hurt by the price gouging, coupled with the unreliable and poor services. Carlos Slim's monopolistic interests resulted in Mexico ranking LAST in public investment in telecommunications (#34 out of #34) while Slim's company Telemex had a profit margin of 47 percent – one of the highest of the 34 countries.7
- According to the OECD report, Mexico loses 2.2% of its gross domestic product each year because of astronomically high cellphone rates, low Internet penetration, and mediocre connectivity.
- Mexico has 10 percent as many wireless Internet subscribers per 100 inhabitants as Turkey. Its cellular phone rates are by far the most expensive in the OECD. Relative to other OECD countries, Mexico is ranked last in terms of investment in telecommunications per capita; but, says the study, “profit margins of the incumbent nearly double the OECD average.”8
While the recent CFC holding is an important ruling, more must be done to end the crippling effect Slim's monopoly has on Mexico's poor and the entire nation's economic development.