The Mexican government said Thursday it would rule within 15 working days on billionaire Carlos Slim's contentious request to offer television services through his telephone company. A court had ordered Mexican regulators to respond.
The permission, if granted, would vastly expand the power of the world's richest man by allowing his companies access to one of the few areas of Mexico's consumer market in which he isn't already involved. Slim's net worth is estimated at $74 billion.
The ruling, announced by Telefonos de Mexico late Wednesday and confirmed by the Communications and Transportation Department, said the regulatory agency had already given tacit approval to Telmex's long-standing request to offer pay television as part of a "triple play" service that would also include telephone and Internet.
The court's ruling does not say whether the permission should be granted, but orders the Communications and Transportation Department to thoroughly explain and justify any decision it makes, the department's legal director, Gerardo Sanchez, told Radio Formula on Wednesday.
Sanchez added that officials have three options: deny the request, approve it with conditions, or approve it in exchange for a concessionary payment.
Telmex shares rose 5.1 percent in trading Thursday after the ruling was announced. The court's decision comes amid a dispute between Telmex and competitors, who claim the firm quashes competition.
Telmex controls almost 80 percent of Mexico's fixed phone lines, and offers Internet service. Slim's company Telcel controls about three-quarters of the cellphone market.
Competitors say that Telmex has failed to comply with fair-play rules on rates it charges to connect other carriers' calls to its network. They also fear Slim would use the vertical integration of telecom and TV services to strengthen his already overwhelming market domination, as well as his interests in construction and retail.
And they worry officials might not charge Telmex concessionary fees commensurate with the huge increase in the value of the company if it is given rights to transmit television.
In April, Mexico's antitrust agency levied a $1 billion (12 billion-peso) fine against Telcel and ordered it to stop unfair practices.
The Federal Competition Commission says it found that Telcel engages in "relative monopolistic practices" by overcharging competitors to connect calls to Telcel users.
A statement issued Sunday by the agency says the fine against Telcel is the maximum penalty possible 10 percent of the company's assets. It gave Telcel 30 days to say how it will change its practices.
Slim's telecom company, America Movil, revealed the fine April 15. It said it was studying all options for appeal.