America Movil Fee Reduction May Set Precedent in Mexico Dispute
Mexican regulators said America Movil SAB, the largest wireless carrier in the Americas, must cut the fees it charges a land-line rival by more than half, a decision that may set a precedent in a dispute over interconnection fees.
America Movil should charge 39 centavos (3.2 cents) per minute this year to connect calls coming from the network of fixed-line carrier Alestra SA, the five-member board of Mexico’s Federal Telecommunications Commission ruled unanimously yesterday. That compared with the 95-centavo rate America Movil has proposed and charges some of Alestra’s competitors.
“The resolution is relevant because it establishes a precedent leading to the creation of public policies for the application of interconnection fees that promote competition between operators,” said NII Holdings Inc., a wireless provider that operates as Nextel in Mexico, in an e-mailed statement yesterday after the decision.
America Movil rivals such as NII Holdings, Grupo Televisa SA (TV) and Grupo Iusacell SA have argued that the mobile-phone carrier should reduce its fees.
America Movil hasn’t received legal notification of the ruling and has no comment, said an official who can’t be named under company policy. America Movil has the right to contest the regulators’ decision.
Under Mexican law, carriers are free to strike their own agreements about the charges they pay to connect calls to each other’s networks. In the case of a conflict such as the one between America Movil and Alestra, the telecommunications agency can act as a mediator.
Rounding Off Charges
America Movil must round off the charges to the nearest second, the telecommunications agency said yesterday, according to an e-mailed statement. America Movil had proposed rounding off charges to the nearest second after the first minute of airtime.
America Movil offered in February to connect calls from land-line and wireless rivals for 95 centavos a minute. Connection fees charged to land-line carriers represent at least 5 percent of Mexico City-based America Movil’s Mexico sales, Chief Financial Officer Carlos Garcia Moreno said during a press conference yesterday before the regulatory ruling was announced.
Reducing the fees that mobile-phone carriers can charge to connect calls could cause the wireless industry to have fewer resources to invest in their networks, Garcia Moreno said.
Alestra is co-owned by Mexican industrial manufacturer Alfa SAB and AT&T Inc. (T), the Dallas-based phone carrier that also has a 9 percent stake in America Movil.
To contact the reporter on this story: Crayton Harrison in Mexico City at tharrison5@bloomberg.net
To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net
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