Monday, May 17, 2010

Slim Halts Deutsche Telekom, Reliance in Mexico Entry

May 17 (Bloomberg) -- Carlos Slim is likely to keep his dominance over Mexico’s wireless industry as government regulations deter potential rivals such as Deutsche Telekom AG from bidding for airwave licenses this week.

The government designed the auctions to bring more competitors into the mobile-phone market, where the 71 percent share held by Slim’s America Movil SAB has kept prices high for some customers and helped make him one of the world’s richest men. While China Mobile Corp., Reliance Communications Ltd. and Deutsche Telekom showed interest, they had concerns about regulators’ ability to foster competition, said Gonzalo Martinez Pous, a commissioner at the Federal Telecommunications Commission. It’s now unlikely any additional rivals will bid in the auction, he said.

A fifth competitor in Latin America’s second-largest wireless industry would lower prices, cutting into sales and profits at America Movil’s Telcel unit, said Christopher King, an analyst at Stifel Nicolaus & Co. Slim’s dominance, along with the annual fees required for auction winners, scared off potential bidders, he said.

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