Mexico’s Supreme Court this week handed south-of-the-border telecom giant America Movil a victory, ruling legislation blocking the carrier from charging interconnection fees to rivals was unconstitutional.
The court’s five justices voted unanimously that such rate rules must be set instead by the country’s regulatory body, the Federal Telecommunications Institute (IFT).
The rules in question were passed by Mexican legislators back in July 2014 as part of a sweeping telecom reform bill meant to break America Movil’s dominant grip and allow new entrants into the market. One of the beneficiaries of that move was AT&T.
The U.S. carrier swooped in soon after the new law passed, snapping up Mexican provider Iusacell in November 2014 and Nextel Mexico in early 2015 for a combined $4.4 billion. AT&T quickly got to work with rebranding efforts in the country, renaming stores and repackaging its offerings there. One of its first moves was to allow Mexican customers to roam using their voice, text, and data in the United States. The carrier at the time said it was planning to invest around $3 billion to expand wireless coverage to 100 million people in Mexico by the end of 2018.
As of the end of the second quarter this year, AT&T said it covered more than 88 million people across Mexico with 4G LTE service, and had a total of 13.1 million subscribers in the country.
AT&T has also been pushing ahead with Internet of Things network deployments in the country. The carrier indicated it plans to deploy LTE-M technology across Mexico by the end of this year.
Thus, the change in fee structures could have a significant impact on AT&T’s business south of the border. The question is, should the carrier be worried?
Perhaps not just yet.
Despite its finding that the 2014 telecom law was unconstitutional, the court determined other carriers won’t compensate the operator for “adverse effects” caused by the rule’s implementation.
The question of future regulation will now be handed off to the IFT to decide – but that body may be inclined to continue with the reform movement.
In an interview with Reuters, IFT Commissioner Adriana Labardini said rivals have “nothing to worry about.”
“It should be very (calming) to know that this will be in the hands of experts,” she commented.
Labardini did not disclose how long it would take for the IFT to come up with new regulations, but the court ruled the interconnection rates set by the IFT will go into effect at the start of 2018.
Filed Under: Industry regulations