Mexican telecoms regulator asks incumbents to modify functional separation proposals

The Instituto Federal de Telecomunicaciones (IFT), the Mexican telecommunications regulator, has asked the incumbent America Movil-backed fixed line operators Telmex and Telnor to modify their respective ‘functional separation’ proposals in order to comply with regulatory measures approved in March 2017.

Functional separation implies the creation of a new wholesale company (owned by America Movil), separate from the incumbents’ retail business operations. The aim of functional separation is to eliminate, so as far as possible, the risk of distortion of competition by non-price discrimination, which might otherwise arise due to the same company owning both the wholesale and retail divisions businesses . The new company will offer (as a minimum) wholesale access services to Telmex’s access network, including the civil infrastructure and local leased lines, both to Telmex’s own retail division and its competitors in non-discriminatory terms.

Telmex and Telnor have 30 working days (from 4th October) to submit revised functional separation plans.

Frontier regularly advises organisations and regulators on competition and policy issues in the telecommunications and media sectors.

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

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