Increasing pressure on America Movil.
Mexico's mobile phone services are dominated by America Movil's Mexican brand, Telcel, but several factors are coalescing that will see much greater competition soon. Legal reforms enacted by President Enrique Pena Nieto's administration to liberalise the telecommunications sector during 2013-14 are starting to have a significant effect. Although Telcel's market power is considerable, regulatory authorities seem determined to ensure that the market becomes more competitive.
With Telcel the only major domestic company remaining, increased competition should attract significant foreign direct investment.
Such investment could improve phone and internet coverage in rural areas, potentially helping to reduce regional socioeconomic inequalities.
Should regulations continue to squeeze Telcel in Mexico, America Movil may look to expand its operations abroad.
