Mexico hits Carlos Slim co. with $7.9 million fine

June 1, 2011 - 2:59 PM

MEXICO CITY (AP) — Mexican regulators hit billionaire Carlos Slim's telephone company with another fine Wednesday, saying Telefonos de Mexico must pay a $7.86 million (91.5 million-peso) sanction for blocking a competitor.

Mexico's anti-monopoly commission said Slim's company, also known as Telmex, refused to connect a subsidiary of Spanish cell carrier Telefonica to Telmex's landline network for seven months in 2007 and 2008.

Telmex controls nearly 80 percent of Mexico's fixed phone lines, and the commission said the refusal to connect Telefonica's GTM subsidiary to that network was a monopolistic practice.

"The behavior was intended to, or had the effect of substantially impeding access" for a competitor," the Federal Competition Commission said in a statement explaining its ruling. "The refusal to provide a connection impedes access to the telephone market and damages free competition, to the detriment of consumers."

The commission said that Telmex had committed the same violation previously.

In April, the commission levied an unprecedented $1 billion (12 billion-peso) fine against Slim's cell carrier, Telcel, for overcharging other carriers to connect calls to its network.

On Friday, Mexico's Communications and Transportation Department denied Telmex's request to offer television services, saying it had failed to fulfill agreements to provide a level playing field in the telephone sector, especially on the issue of connecting competitors to its network.

Telmex is the dominant player in the field, in part because it was a former government monopoly privatized in the 1990s. The company wants to offer television in a bundled service that would also include telephone and Internet, and has said it would appeal the Friday decision.

The permission, if granted, would vastly expand the power of the world's richest man by allowing his companies access to one of the few areas of Mexico's consumer market in which he isn't already involved. Slim's net worth is estimated at $74 billion.

Hours before the latest fine was announced Wednesday, Arturo Elias Ayub, one of Telmex's directors, denied that Telmex had refused to connect rival carriers.

"There isn't one (company) that has requested interconnection with Telefonos de Mexico that hasn't been granted it," Elias Ayub told local media.

Telmex has 30 working days to appeal Wednesday's fine.