Confidential sources indicate that America Movil SAB de CV (ADR) (NYSE:AMX), a telecommunications company owned by business magnate Carlos Slim, has contracted Bank of America Corp (NYSE:BAC) to oversee and conduct sales of its phone assets. AT&T Inc. (NYSE:T) is one of the potential buyers. Bloomerg.com revealed that the sale is part of a bigger plan to comply with new telecommunication laws that are meant to cut down the company’s dominance in mobile and landline networks.
The pro-competition laws have been enacted to give more room for other companies to penetrate the market. Currently, America Movil SAB de CV (ADR) (NYSE:AMX) controls more than 70% of the country’s telecommunications. The asset sale to other Telecommunication companies will however see the company’s market share drop below 50%, which is the required maximum.
The Wall Street Journal also clarifies that the laws provide strict conditions within which dominant companies have to operate, making it difficult for any company to single handedly control the market.
As the laws take effect and the asset sales concluded by Bank of America Corp (NYSE:BAC), the 20 years dominance in Mexican telecommunications by America Movil SAB de CV (ADR) (NYSE:AMX) will be considerably trimmed.
A former telecom regulator, Mony de Swaan, said that,
“We’re living a new historic phase in the Mexican telecommunications sector, which began with last year’s constitutional reforms, ….; We’re seeing the beginning of the end of a period of almost complete dominance of Mr. Slim.”
Sources privy to the company’s operations have also revealed that the company is looking forward to selling its mobile assets to AT&T Inc. (NYSE:T) since it’s a buyer with proven track record and resource power to invest in the highly demanding market. According to the Slim’s company, their dominance hasn’t been about any undue influence, but simply as a result of lack of substantial investment power by competitors to cope with the market demands, which they believe AT&T Inc. (NYSE:T) possesses.
In a wider scheme for growth to be implemented after the asset sales by Bank of America Corp (NYSE:BAC), America Movil SAB de CV (ADR) (NYSE:AMX) is expected to invest more on television market and expand its operations in European nations and other parts of the world.
Recently AT&T Inc. (NYSE:T) lost its title of the The fastest U.S. Wireless Service Spot.
This article has been written by Victor Ochieng.