Firm owned by wealthiest man in the world fined $1bn
THE world's wealthiest man, mobile phone billionaire Carlos Slim, was yesterday hit with a $1bn (€685m) fine for anti-competitive practices.
Mexico's anti-monopolies watchdog confirmed last night that it imposed the massive fine against the Mexican mobile phone subsidiary of tycoon Carlos Slim and ordered it to stop unfair practices.
The Federal Competition Commission said it found that Mr Slim's Telcel business engaged in "relative monopolistic practices" by overcharging competitors to connect calls to Telcel users.
Named the richest man in the world by 'Fortune' magazine, Mr Slim (71) also controls Mexico's dominant landline phone company, Telmex.
He is estimated to be worth $74bn (€50.7bn), with holdings in communications, retail, manufacturing, oil and construction. Some of his companies have come under various allegations of monopolistic practices in the past.
The fine against Telcel is the maximum penalty possible -- 10pc of the company's assets because it is a repeat offender, the agency said in a statement.
It gave Telcel 30 days to say how it would change its practices. Telcel also has 30 days to appeal.
Mr Slim's telecom company, America Movil, revealed the fine on April 15. It said it was studying all options for appeal.
A commission official said the fine was the largest levied by the 18-year-old watchdog agency and was made possible by a 2006 reform that raised fines for repeat offenders.
The agency's statement said Telcel charged competitors higher interconnection rates to call Telcel users than it did to connect calls between its own clients.
The interconnection rate was even higher than the full price Telcel charged users to make a phone call, the commission said.
Telcel engaged in relative monopolist practices "by abusing its substantial power in the market to unfairly displace its competitors and thus affect the competition process in the landline and mobile phone markets, hurting the consumer", the statement said.
The commission said that in setting the fine it took into account the seriousness of Telcel's practice, how intentional it was, the duration of the practice and Telcel's share of the market.
The decision resulted from an investigation begun in 2006 at the request of competitors.
"The competition problems associated with high interconnection fees in Mexico generate losses of $6bn (€4.1bn) each year to consumers," the commission said.
Telcel's parent company, America Movil, is the largest provider of wireless telephone service in Latin America, with 225 million subscribers. Its 2009 revenue totalled $30bn (€20.5bn).
America Movil accounted for around $49bn (€33.5bn) of Mr Slim's wealth by the end of 2010. His corporate holdings at February 2011 have been estimated at $74bn (€50.7bn) and from these estimates he is the wealthiest person in the world.