Mexcio’s Telephone Market Rings In New Era as Competition Begins
MEXICO CITY — After decades of complaining about poor telephone service, Mexicans finally will be able to do something about it when the country’s telephone market opens its doors to competition starting today.
U.S. telephone giants such as AT&T; Corp. and MCI Communications Corp. have linked up with local partners and are among eight firms vying to beat former monopoly Telefonos de Mexico, better known as Telmex, on its own turf.
The Mexican market, now at 93 million people, has been Telmex’s sole domain for half a century.
Competition at first will target the lucrative long-distance market--a $4-billion-a-year business expected to double by 2000. Local service is also open to competition but probably will not attract rivals for a few years.
“Mexico is an exciting market . . . and we are very bullish about what we will achieve here,†said Dan Crawford, an MCI executive and president of Avantel, a joint venture between the U.S. company and Mexican financial company Grupo Financiero Banamex-Accival.
The new companies are expected to invest more than $5 billion in the next few years, probably the single largest source of foreign direct investment in Mexico this decade.
Although Telmex officially lost its monopoly in August, competitors could only place calls on networks of their own, which they just recently started to build and are in place mostly for bigger, corporate clients.
As of this year, the law requires Telmex to hook up rivals to its giant local network, and hence to millions of customers’ telephones. Telmex will get a connection fee that will decline over a few years as the new firms build their own networks.
For Mexicans, the new companies offer a chance to get back at Telmex after decades of suffering with having lines suddenly die or being billed for calls that were never made.
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