Carlos Slim plans breakup of America Movil (AMXL). Stock climbs.

Billionaire Carlos Slim is planning to breakup wireless provider America Movil (AMXL). Mr. Slim is making the move as the Mexican government passes harsh antitrust laws.

|
Allison Joyce/Reuters/File
Carlos Slim, Mexican tycoon and founder of Fundacion Carlos Slim, attends a discussion regarding megacities at the Clinton Global Initiative in New York, September 20, 2011. Mr. Slim is planning to breakup America Movil SAB because of antitrust laws.

Billionaire Carlos Slim announced Tuesday that the Mexican wireless provider America Movil (AMXL) sell some of its assets to lower its market share in an attempt to avoid Mexico's harsh new antitrust laws. 

America Movil currently controls 70 percent of Mexico's mobile market with 272 million mobile customers and 70 million landline, broadband, and television customers. The company will sell off enough assets to bring its share of the telecom sector below 50 percent, which is the threshold of regulation. The company’s board announced they will sell some assets to another company that could boost investment in the telecom sector, according to Reuters

Exactly what assets will be sold isn’t known, but the company said it plans to sell mobile towers and related infrastructure to be operated by a separate company, according to the Wall Street Journal.

Mr. Slim’s announcement came as Mexico’s lower house was approving the final details of a constitutional reform passed last year to shake up the stagnate telecom industry. In March, the regulatory committee Federal Institute of Telecommunications (IFT) found that America Movil was dominate because it controlled more than 50 percent of the market and would be subject to some of the toughest regulations in the company's history.

“The message is clear: They’re reacting to the regulatory pressure,” Julio Zetina, an analyst at Vector Casa de Bolsa SA in Mexico City, told Bloomberg News. “I’m surprised they have made a decision like this, and so quickly.”

Slim, who is the world's second wealthiest man, bought the state owned Teléfonos de Mexico in 1990. He is currently worth $75.9 billion. America Movil, valued at $73 billion, has lost $17 billion in market value since 2012, when Mexican President Enrique Pena Nieto, who said during the election that he would increase competition in the telecommunications market, took office.   

"We're living a new historic phase in the Mexican telecommunications sector, which began with last year's constitutional reforms," former telecom regulator Mony de Swaan told the Wall Street Journal. "We're seeing the beginning of the end of a period of almost complete dominance of Mr. Slim."

Juan Pablo Adame, a member of Mexico's lower house, told the Wall Street Journal that America Movil's announcement "does away with the myth that [the bill] wasn't going to create competitive conditions. It's the first big success of the reform."

By noon on Wednesday, the company's stock was up almost 5 percent.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Carlos Slim plans breakup of America Movil (AMXL). Stock climbs.
Read this article in
https://www.csmonitor.com/Business/2014/0709/Carlos-Slim-plans-breakup-of-America-Movil-AMXL-.-Stock-climbs.
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe