After major reforms to Mexican antitrust regulations designed to limit billionaire Carlos Slim’s control of the telecom industry, his company has approved a move that splits off its cellphone tower ownership into a separate entity.
Shareholders of América Móvil approved on Friday the creation of a new spin-off company, Telesites, that will take control of around 10,800 of América Móvil’s cellphone towers.
Reforms were made to the Mexican Constitution in 2013 to create competition for América Móvil, which is controlled by Slim. The company controlled about 70 percent of Mexico’s mobile market and 80 percent of its fixed-line market.
The Mexican agency created by the reforms, Federal Telecommunications Institute (IFT), declared that América Móvil and multiple subsidiaries were "preponderant economic agents" and imposed additional regulations on them.
Last summer, América Móvil announced it would take actions to reduce its market share to less than 50 percent to shed the IFT label and the regulations that came with it.
América Móvil said the creation of Telesites allows competitors to have access to 90 percent of its cellular towers.
The new company, however, will have the same shareholders as América Móvil, which actually saw its share price increase when the deal was first announced.
Shareholders will receive one share in Telesites for every share they currently own in América Móvil. Its only client will be América Móvil’s cell company, Telcel.
Gabriel Contreras, the head of the IFT, said that if Telesites continues to be controlled by the same shareholders as América Móvil, then neither will be free of the added regulations, according to Reuters.
América Móvil said Slim would control a majority of Telesites for the first two years.
Though Slim’s telecom monopoly is under attack, he is increasing his hold on other sectors of the Mexican economy.
Last month, Slim’s acquisition of Banco Wal-Mart was approved by Mexico’s Federal Commission on Economic Competitiveness, giving his bank access to Wal-Mart’s growing empire in Mexico and Central America.
The regulation is also not slowing Slim’s acquisition of wealth. His current net worth is $74.9 billion, according to Forbes, making him the world’s second richest person. Earlier this year he also became the largest shareholder of the New York Times.