Mexico’s richest man confronts the government that helped make him rich

MEXICO CITY — All is not well in the kingdom of Carlos Slim, reports The New York Times (which itself is partially owned by the Mexican billionaire).

For more than 25 years, Slim has dictated the terms of Mexico’s telecommunications industry and built an empire, making him one of the world’s richest men.

Mr. Slim and his family are billionaires 50 times over. He has stood at the very top of the Forbes World’s Billionaires list — more than once. His flush years in Mexico enabled him to span the Americas with companies that touch nearly every facet of modern life: telecom, banking, construction, retail and media, among others.

Carlos Slim and Miguel Mancera, Mexico City mayor. (File photo)

But at home in Mexico, the game is changing. And there is not much he can do about it, analysts say.

Determined to bring his dominance to an end, leaders from Mexico’s three biggest political parties have put aside their own animosities in recent years, meeting in secret sessions to chip away at Mr. Slim’s domain.

Now, the plan they concocted to increase competition in the telecommunications industry, signed into law two years ago, is starting to bite.

Profits for Mr. Slim’s flagship company, América Móvil, are in steep decline, falling 24 percent in 2015 and almost 44 percent in the first six months of this year, compared with the year-earlier periods. A closely watched metric of profitability on Wall Street has also fallen, and the company’s stock has dropped by 39 percent in the past year.

In its quarterly report last month, the company acknowledged that increased competition was crimping profits in Mexico. Under the new law, it must submit to special rules as the dominant phone company. It cannot charge fees to its smaller competitors when their users call into its network and it must share its infrastructure, including cell towers, all of which Mr. Slim says forces him to subsidize behemoths like AT&T.

“What has changed the most and is most relevant here is the authorities, and their attitude toward this empire,” said Ernesto Piedras, the director general of the Competitive Intelligence Unit, a consulting and research firm. “This is the first time Slim does not have a copy of all the keys.”

Regulators in Mexico, sometimes against their government’s wishes, had tried for decades to rein in Mr. Slim’s dominance, finding themselves thwarted at every turn.

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Source: nytimes.com

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