Mexico: IFT approves America Movil wholesale prices

AMX the undisputed leader of the Mexican telecom market, recently won approval from Mexican telecom regulator Federal Telecommunications Institute (popularly known as IFT), regarding the prices the company can charge as its interconnection fees.

Notably, interconnection fees are the prices that a carrier is allowed to charge other telecom operators or mobile virtual network operators with, to connect to its network. Large telecom operators generally have vast networks across the nation. Smaller operators or MVNOs, at times, share this network to offer their services without deploying their own network. For this, these small-sized service providers need to pay certain stipulated fees to their larger peers.

In 2014, the government of Mexico introduced reforms within its telecommunications sector. The IFT identified America Movil as the dominant player in this market. The company’s wireless division, Telcel, holds about 70% of the market share. Notably, per the reformed norms, the IFT restricts the maximum hold of a company in the market to 50%.

As part of these reforms, the IFT also banned America Movil from charging national roaming fees. Further, the company will have to share its infrastructure with other operators particularly in the local loop (last mileage) segment. Interconnection fees levied by the company had been under close scrutiny as well.

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