Photo: Mexico's Carlos Slim Accused of Overcharging Mobile Phone Customers by $25.8 Billion ANNUALLY
Billionaire Carlos Slim - the world’s wealthiest person, according to Forbes magazine - slammed an international economic organization’s report indicating a lack of competition in Mexico’s telecoms sector has cost the country dearly.
The Organization for Economic Co-Operation and Development released a study Monday saying the lack of competition in the telecoms sector has resulted in overcharging to the tune of $25.8 billion annually, as well as low penetration rates in services and infrastructure.
“The welfare loss attributed to the dysfunctional Mexican telecommunication sector is estimated at $129.2 billion between 2005 and 2009,” or 1.8 percent of gross domestic product annually, the OECD said.
The study also said the monopolistic practices of Slim’s fixed line company Telmex and wireless giant Telcel - a unit of Latin America’s No. 1 mobile phone company America Movil - have caused the take-up of new services to be slowed and scared off foreign investment.
The estimated (annual) cost to Mexico of $25.8 billion “is totally false,” Slim said in a press conference Tuesday in Mexico City.
“I don’t know what model was used but it’s totally false to say telecommunications cost the country that sum. That’s a fantasy, craziness, a totally exaggerated figure because Telmex and Telcel combined sell a total of $17.5 billion annually,” Slim said.
The revenue figure for the entire sector doesn’t reach that total, the telecom magnate said.
Slim discredited the study by saying it was a “rehashing of many things” and that a serious report should use information updated to 2011 rather than figures from 2007 and 2008.
He also said the fact the study had been commissioned by Mexico’s telecoms regulator Cofetel cast doubt on its validity.
Slim criticized the authors of the study without specifically mentioning Mexico’s Jose Angel Gurria, the OECD’s current secretary-general and Mexico’s former finance and foreign relations secretary, adding that “some people come, pontificate and leave” but “when they were in charge they didn’t solve the problems.”
The OECD said “ineffective competition” and “impaired regulation” had resulted in Telmex and Telcel having an 80 percent and 70 percent share, respectively, of the fixed and mobile telephony market in Mexico.
Slim fired back by saying even those numbers do not justify use of the term “monopoly” because if his companies control 70 percent of the market, that means “competitors have the remaining 30 percent.”