America Movil SAB de CV (ADR) (NYSE:AMX), the Mexican telecom giant has been notified lately by the Mexican telecom regulator that even though the company chooses not to sell of its assets proportionately, it would not be booked with tougher rules imposed that would make business difficult for Carlos Slim’s AMX.
The nitty gritties about asset sale and that the regulator would not impose punishments by incorporating tough rules to stand, was disclosed by the head executive of the Mexican telecom regulator in an interview conducted on Friday.
America Movil Was Asked To Reduce Its Share In Assets
Last year, Mexican Congress had pondered rationalizing a plenitude of reforms that are ought to sweep the telecom sector, in order to duly curb the dominance of AMX in the telecom industry. The telecom sector regulator’s decision urged the Mexican telecom giant America Movil SAB de CV (ADR) (NYSE:AMX) to come down with a prompt decision in June that the company need to sell off a large chunk of its assets such that the net market share for AMX reaches below 50 per cent benchmark.
Tough Rules Wouldn’t Be Imposed, As Of Now
In March 2016 a revision of the telecom rules and the performances of myriad of telecom companies would be analysed for further action by the regulator. President of Federal Telecommunication Institute, Gabriel Contreras stated on Friday that if the company fails to sell off the assets shortly, this would not prompt any tough regulations imposed on the company, necessarily during the March 2016 revision.
The Premise Behind Asset Sell Off
Contreras defended Mexico Congress’ decision to come forth with a measure to sweep the telecom regulations and incorporate new rules of substance – valid for the amelioration of the economy on a broader perspective. He added that AMX may be a large operator, but size is of no concern. The idea is in a market of competitions, amassing a large chunk of it, harbouring the power and then going forward abusing it should be avoided.