New Orleans Spending any day in Mexico City with Suyapa Amador, head organizer of ACORN Mexico, involves at least one and sometimes two and three stops at local stores to buy minutes for her cell phone. Thanks to the virtual monopoly that Telcel, a subsidiary of America Movil owned by gazillionaire Carlos Slim Helu, not only is there never a way to get around this problem, but the time is expensive as well especially compared to other emerging markets like India and Kenya. There is no question that Carlos Slim has found the way to huge personal riches, but he has done so at the expense of the people of Mexico especially the poorer families.
There may finally be hope for all of us, though it could still take years to arrive. The Mexican Congress finally has passed an anti-monopoly bill. There have been some favorable Mexican Supreme Court decisions where they actually ruled against the mega-monopolist. The anti-trust folks with the Federal Competition Commission in Mexico actually assessed a $1 billion dollar fine against his companies, though it is being appealed of course. All progress!
Statistics reported in the New York Times (where Carlos Slim is the #2 largest shareholder!) are hard to ignore:
- Mexico telephone service almost the most expensive compared to 34 countries in the O.C.E.D.
- Slim’s stranglehold in broadband means that Mexican connectivity is at the bottom of the list and falling even farther behind similarly sized economies like Argentina and Brazil.
In an great example of the “more things change, the more they stay the same,” Slim’s rationalization for his monopoly pricing is exactly the same that AT&T and the Bell System argued before their breakup in the USA: they are forced to subsidize rural service which they contend is a money loser. Of course the additional irony is that even though Slim’s outfits may be spending money on hanging line and digging cable in the countryside most folks can’t afford to do much more than yell to their neighbors out there, since they can’t afford the phone or the call.
Let’s hope the clock is finally ticking for Carlos Slim and his Mexico telephone monopoly. As the world’s richest person with $74 Billon in wealth, putting an end to this will still leave him rich as Croesus, so no tears need be shed even on Wall Street.