The agency that regulates the telecommunications market in Mexico, COFETEL, renewed existing long-distance concessions at a meeting this week but didn't modify the interconnection rates that telco Telmex charges other long-distance carriers to access its network. The rates, which some competitors claim are too high, have been a source of controversy for several months and were criticised last month by the United States Trade Representative (USTR.)
COFETEL, which stands for Comisión Federal de Telecomunicaciones, does plan to review in the future its norms for the provision of international long-distance service, including the issue of the interconnection charges that foreign carriers have to pay, according to a statement issued on Wednesday.
AT&T and MCI Communications have complained loudly in recent months that Telmex is charging them outrageously high surcharges and access fees. AT&T’s entry into the Mexican long-distance market is a joint venture called Alestra, while MCI’s is called Avantel. MCI has said it is holding on to $US900 million it planned to invest in Avantel until Telmex lowers its access fees.
Meanwhile, the USTR Charlene Barshefsky in April issued a statement saying Telmex’s surcharge on inbound international calls is "discriminatory" and added that her office is contemplating taking its complaints to the World Trade Organisation (WTO.)
COFETEL also said it plans to crack down on carriers that engage in slamming, or the switching of customers to a different carrier without their consent, and in by-passing, which is the routing of international calls though unauthorised ports, among other things.
On a related note, Telmex announced that its revenues climbed 11.2% in the first quarter of 1998 to 16.65 billion Mexican pesos ($US1.96 billion) from 14.98 billion Mexican pesos in the first quarter of 1997.
Telmex had a net income of 3.52 billion Mexican pesos in the first quarter of this year, a 4.7 drop compared to net income of 3.69 in the first quarter of 1997. Its cellular service subscriber base rose almost 70% in the first quarter this year compared to the same quarter last year, and its local phone service revenue increased by 41.2%.
However, the new competition cut into Telmex’s long-distance revenues, which fell 29.6% in international long-distance calls and 13.9 percent in national long-distance calls in the first Q1 1998 compared with the same quarter last year, the company announced last week.