Asymmetric regulation and “preponderance”

 Developments on competition in Mexican Telecommunications

More than two and a half decades had to pass for the long-desired fostering of effective competition to become the central subject of the sectorial and regulatory policy strategy in Telecommunications and Broadcasting. Although the telecommunications industry in Mexico opened to competition more than 25 years ago, it still shows high concentration in all its segments, which allows the preponderant economic agent to display monopolistic behaviors.

The importance of the effective implementation of asymmetric measures applicable to it, in conjunction with a new regulatory framework focused on the promotion of competition, lies on having a balance between the economic agents that conforms the market.

In that way, changes in the configuration of markets can be materialized, and translated into better conditions in terms of competition, quality and coverage as well as affordable prices of services for the benefit of society as a whole.

With the effective application of asymmetric regulation, the achievement of these positive effects can be foreseen, benefiting operators and, especially, consumers.

However, two years after the regulatory framework came into force, conditions of effective competition have not materialized in the various markets in which the preponderant agent operates.

During the instrumentation phase of “preponderance”, we find a partial fulfillment of these measures. The ineffectiveness in the application of preponderance results in a breach of the regulation associated to this legal concept.

Market figures for the first quarter of the year indicate an insignificant reduction in the market share of the incumbent operator in terms of fixed accesses (telephony and broadband), mobile lines and revenues. While in the case of fixed revenues, its contribution to the total generated by the segment has increased, even after asymmetric regulation was applied to this operator.