Mexico (2) -- Analyses -- 2011

Carlos Slim, Telmex and America Movil

2.02.2011

The intyerests of Slim in telecommunications are related to Telmex and America Movil.
Telmex is a telecommunications company headquartered in Mexico City that provides telecommunication products and services in Mexico, Argentina, Brazil (Embratel) and other countries in Latin America. In addition to traditional fixed-line telephone service, Telmex also offers Internet access, data, hosted services and IPTV. Telmex owns 90 percent of the telephone lines in Mexico city.
Telmex was founded in 1947 when a group of Mexican investors bought Swedish Ericsson's Mexican branch. In 1950 the same investors bought the Mexican branch of the ITT Corporation thus becoming the only telephone provider in the country. In 1972 the Mexican government bought the company, turning it into a government monopoly.
In 1990, Telmex was bought by a group of investors formed principally by Carlos Slim, France Telecom, and Southwestern Bell Corporation, whose tender was the largest. However, controversially, the payment itself took place over the course of the next several years, using money earned by the phone service.
After privatization, Telmex began investing in new modern infrastructure, creating a nationwide fiber optic network, thus offering service to most of the country. In 1991, the Mexican government sold its remaining stock in Telmex.
In 2000, Telmex spun off their mobile unit, creating America Mobil, which controls Radio Mobil Dipsa and would be free to develop as its own business as an independent entity. It started with 80% of the mobile market. Some people incorrectly continue to believe that America Mobil is part of Telmex. Instead, both are sister companies under parent Carso Global Telecom. Carso Global Telecom is itself a sister conglomerate of Grupo Carso.
After spinning off America Mobil, Telmex started an expansion plan, which started with the purchase of Guatemala's Telgua. Later, Telmex bought former state owned phone companies in Central America, and began operations in the USA with Telmex USA.
In December 2007, Telmex transferred its Latin American and yellow pages directory businesses to a new, separate entity, Telmex Internacional.
In January 2010 America Movil, the largest mobile phone company in Latin America, made an offer to buy Telmex and Telmex International in order to better compete against Spain's Telefonica. The acquisition was approved by the CFC (Comision Federal de Competencia) Antitrust Office in Mexico on February 11, 2010.
America Movil was once the mobile arm of Telmex, but in 2001 America Movil was split off and grew larger than the former parent company.

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