Mexican Feds Hit Mobile Phone Provider With $1 Billion Phone Bill

Mexico’s Federal Competition Commission has whacked Telcel – Mexico’s largest mobile phone provider – with a $1 billion fine for using “substantial market power” to unfairly increase its competitors’ costs.

According to the Commission, Telcel charged its competitors interconnection fees for calls terminating on its network that were higher than fees paid for calls made within Telcel’s network.

The fine constitutes roughly 10% of Telcel’s assets, the largest permitted under Mexican law for repeat offenses.  The Commission’s 3-2 vote in favor of the fine follows an investigation of charges filed in 2006 by Telcel’s smaller competitors, including Axtel, Alestra, Marcatel, Megacable, Protel, and Telefonica.  Under the ruling, Telcel has 30 days to provide the Commission with a plan to ensure that Telcel ceases its anticompetitive practice.

Telcel is owned by one of the world’s largest mobile phone providers, America Movil, which in turn is controlled by Carlos Slim, purportedly the wealthiest person in the world.  Telcel has stated that it will seek reconsideration by the Commission and may also seek relief in the courts.