IFT publishes methodology to assess economic replicability of retail tariffs in Mexico

The Mexican telecoms regulator, Instituto Federal de Telecomunicaciones (IFT) has today published the final methodology and models which will be used to assess the economic replicability of retail tariffs in different market segments of the telecommunications sector. Frontier advised the IFT during the whole process, including the market consultation phase.

Economic replicability tests seek to ensure that telecommunication operators can compete at a retail level by using regulated wholesale services owned by the Preponderant Economic Agent (the ‘Agente Económico Preponderante’, AEP). The tests aim to avoid the phenomenon of so-called ‘margin squeeze’, in which the AEP sets upstream and downstream prices at levels which make it unprofitable for other firms to enter the market at all, or only in a way which precludes effective competition with the AEP.

The segments covered by the replicability tests in IFT’s publication include mobile services, fixed voice services, fixed internet services and leased line services.

Frontier regularly works with regulators and regulated firms in the telecoms sector across Europe, Latin America, Africa, Asia and the Middle East.

For more information, please contact Julia Caldano on j.caldano@frontier-economics.com, or call +34 91 343 2350.

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