Thursday, January 21, 2010

Role reversal, America Movil purchasing its parent company, Telmex..

by Karen Coppock

Interesting news this morning from Mexico, the GSMA reports that America Movil - a mobile network operator in Latin America will be merging with Telmex - a fixed line operator in Mexico. What is interesting about this story is the fact that Telmex is America Movil's parent company - it established America Movil (then called Radio Movil Dipsea) in the mid-1990s. Telmex subsequently spun Radio Movil Dipsea off into its own entity, which became America Movil.

Given that both America Movil and Telmex are owned by the Carso group of companies, a merger is not too surprising. What is interesting is the transition of power from the mammoth fixed line operator to the mobile operator. When I worked in the telecom industry in the mid-1990s, Telmex was king. Now the tides have shifted and America Movil is the dominant player with operations across the region. This is just one more indication of the importance of mobile networks in emerging markets.

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