Mexicans overcharged billions a year for phone, Internet

By on January 31, 2012, 6:30 PM

A new report alleges that billionaire Carlos Slim's telecommunication companies have overcharged Mexican phone and Internet customers $13.4 billion a year between 2005 and 2009. Released Monday by the Organization for Economic Co-operation and Development (OECD), the study claims that Mexico's economy is being negatively affected by Slim's price-gouging telecom empire, which includes about 80% of the nation's landline subscribers via Telmex and 70% of cellular users through America Movil.

Among the OECD's 34 members, Mexico is said to have the lowest per capita public investment in telecom infrastructure while Slim's operations have disproportionally high profits. In 2008, Telemex had a 47% profit margin, while the average for nations including the United States, United Kingdom and Canada was 28%. In one example, the OECD noted that Mexicans traveling in another OECD country would pay $8.65 to make a three-minute local call versus the $6.76 average for other participating nations.

The report also found that Mexico's broadband speeds are slower and pricier than the OECD average. By overcharging subscribers, Slim has purportedly cost the Mexican economy $129 billion over the five years, or nearly 2% of the country's annual GDP. Mexico "needs the socioeconomic boost provided by greater access to more efficient communication services, in particular high-speed broadband," the OECD said.

"The poor development of telecommunication infrastructure in Mexico is due in large part to [a] lack of effective competition and the resulting high level of market concentration," the report continued. "This is a critical study...that exposes the weakness of the telecommunications sector in Mexico," said Dionisio Perez-Jacome, minister of Communications and Transport during a press event about the findings.

The OECD uses a comparison method called "purchasing power parity" to account for economic differences between countries, but Slim says "It's difficult to compare a country with $1,000 per capita with countries with $40,000."It's not that the lower broadband impacts GDP growth, it's that the lower rate of growth affects the broadband." He added that the OECD's data is a "fantasy" and "pulled out of thin air."




User Comments: 21

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herpaderp said:

He doesn't look so slim....

Ranger12 Ranger12 said:

I wouldnt trust a guy with a name like Carlos Slim who, as herpaderp pointed out, is not in fact slim.

Cota Cota said:

herpaderp said:

He doesn't look so slim....

That word refers to his...

Brain.

This is the kind of guy who is able to run a monopoly on the phone company legally.

ramonsterns said:

Haha, time to fusillade!

EEatGDL said:

Being myself mexican I hate that guy and yes, you don't have to do a study to see he's stealing you. We changed from his company to a smaller company 5 years ago when we were paying $39 USD equivalent a month for 100 local calls [phone only]. We changed to the cable company that back then offered 2 Mbps internet, unlimited local calls and basic TV cable service for $54 a month. Today the same company offers us 10 Mbps internet, ultd local calls and digital TV cable service with HBO and that stuff for $85 a month; vs. Slim's offering 5 Mbps, "unlimited" local calls and basic satellite TV for $90. You know, is hard to stick to the smaller companies because of infrastructure limitations (area coverage) and you pay more for example on cellphone calls if you call from other company to Slim's telcel. I convinced my dad back then but is hard to convince a whole family and friends to try supporting the competence, specially on cellphones companies.

AmpFeare said:

why u removing my posts, u mad cuz im right or something

cliffordcooley cliffordcooley, TechSpot Paladin, said:

why u removing my posts, u mad cuz im right or something
Could have been because your post was racist and set yourself above all.

Guest said:

his guy is the richest man on earth and he wont do anything for his country, you know the ppl in mexico are lazy, they want everything on their hands without effort, they dont make research or have the habit to gather information, thats why this fatso has so much power buz telmex and telcel are not their only companies he has a lot and he own the country, every mexican its his client in some way... he also claims that every year he reduce the cost of the telmex services but yes he does that only to get the equivalent of some years ago with other countries....UNBELIEVABLEEEEEEE!!!!! only in MEXICO!!!

Guest said:

yes he owns...telmex(phone company), telcel(cellphone company), sanborns(Stores of everything and restaurants),Inbursa( Bank) , Saks Fifth Avenue (partner and stores), Malls and partnership with dish tv, plus 3 of his 6 sons manage their business...so i think that mexico its pretty fu-ck-ed with this guy

The goverment tried to stop it with the fiber optics and the tripleplay thing , but its almst imposibble...they are just buying time...he will manage to get those services

ramonsterns said:

Guest said:

his guy is the richest man on earth and he wont do anything for his country, you know the ppl in mexico are lazy, they want everything on their hands without effort, they dont make research or have the habit to gather information, thats why this fatso has so much power buz telmex and telcel are not their only companies he has a lot and he own the country, every mexican its his client in some way... he also claims that every year he reduce the cost of the telmex services but yes he does that only to get the equivalent of some years ago with other countries....UNBELIEVABLEEEEEEE!!!!! only in MEXICO!!!

Posting as a guest does not exempt you, I'm afraid.

AmpFeare said:

cliffordcooley said:

why u removing my posts, u mad cuz im right or something
Could have been because your post was racist and set yourself above all.

i clearly stated it wasnt and told anyone who thought it was to look up the facts. u faild that step

AmpFeare said:

all i did was state facts about a race. the reason it pissed ppl off was because it was true.

cliffordcooley cliffordcooley, TechSpot Paladin, said:

i clearly stated it wasnt and told anyone who thought it was to look up the facts. u faild that step

I know what you posted, I disagree, and personally think it was arrogant and extremely selfish of you to think that way.

BTW, you failed to stay on topic (had nothing to do with America).

Guest said:

Well if you ask me back here in Kenya the Biggest Mobile network is one of the most expensive, unless he forced people to join his network that would be the illegality ... so he got rich by over charging people, can we start listing other cooperates that do the same? you will be shocked at how long the list will be

Guest said:

No wonder this guy came and over took Bill Gates in only a matter of months. **** when I first saw his assets, he only had like 0.5 billion dollars more than Bill Gates but after a few weeks or so, he had like more than $60 billion worth of fortune. I mean how the hell does he get $10 billion in a few months?

The only thing I could think of was drugs. This guy sells drugs but I was proved wrong. Turns out he controlled and over charged people in Mexico.

Guest said:

This post is biased . On one hand you criticize the guy carlos for overpricing and on the other hand you praise another guy for doing exactly the same "evil" thing for 20 years (steve Jobs)

EEatGDL said:

The only thing I could think of was drugs. This guy sells drugs but I was proved wrong. Turns out he controlled and over charged people in Mexico.

There was a political cartoon in a newspaper some years ago, where a reporter was asking Slim if he really was mexican, Slim then answered back: "No man, Mexico's mine".

tonylukac said:

@Guest: I'm sure the people in Mexico are not lazy. Just last summer our Hispanic gardeners moved about 10 tons of rocks to our condo pond in 24 hours and repeated the same thing the next day. I now see how the pyramids were built.

Relic Relic, TechSpot Chancellor, said:

That's what monopolies do and unfortunately for the people the government is likely busy with more pressing issues =/.

Guest said:

That dude in the picture LOOKS greedy!

princeton princeton said:

You guys kept misspelling Canada as Mexico.

and Canada was 28%.

That's a load of bullshit and everybody knows it. The profit margins on providers here are huge. Rogers price hiked their internet plans after the DOCSIS 3.0 upgrade that barely costed them anything, and you pay $10/GB for LTE data.

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