Carlos Slim’s America Movil Drops After AMLO Puts Conditions on Concession

(Bloomberg) -- Shares of billionaire Carlos Slim’s America Movil SAB declined after President Andres Manuel Lopez Obrador suggested the company may have to make some compromises to complete the renewal process for the concession for its Telmex unit. 

When asked about the renewal process Thursday, the president said that he might ask Telmex to offer better prices or increase network coverage in remote areas as part of a 2023 review, though he wouldn’t cancel a concession of Telmex’s size so close to the end of his term in 2024. His comments helped push the company’s U.S.-traded shares down 2.9%, the most since Sept. 17. 

Mexico’s telecom regulator, IFT, took exception to Lopez Obrador’s comments, saying they “don’t correspond with the facts or the applicable law.” Extension of the government concession that allows Telmex to operate was already granted back in 2016 and any technical or regulatory conditions that are required to be set in 2023 will be “exclusively” determined by IFT, it said.

At his daily press conference Thursday, Lopez Obrador had said his administration “can keep the concession looking for compromises that will benefit people whether in prices or by increasing the network so everyone has Internet.” 

America Movil, which declined to comment, and Telmex are among the most regulated companies in Mexico after a 2013 telecommunications reform deemed the telecom giant a dominant market player.

©2021 Bloomberg L.P.