Mexico regulator to slash Telmex rural fees

MEXICO CITY: Mexico's telecom regulator has slashed connection fees that Carlos Slim's fixed-line giant Telmex may charge on long-distance calls, the company and regulator said on Thursday.

Calls destined for rural and suburban communities where Telmex is the only operator will see their connection fee drop by 95 per cent and so reduce call fees in nearly 200 phone zones.

Telmex had broad power to set call rates in those areas but the decision will slash the charge per minute from 75 centavos to 4 centavos, the company said, confirming a Reuters story from two days earlier.

Telmex will also have to reduce interconnection fees for long-distance calls inside the country by 65.8 percent, lowering those rates to 3.951 Mexican cents from 11.55 Mexican cents, the company said.

Telmex executives said that they could not immediately say how much the decision would hurt the company's bottom line but the company plans to challenge the decision in court.

Cofetel, the telecom regulator, said that the lower call tariffs would bring Mexico in line with other developed counties and "generate conditions needed for healthy competition in the sector."

Telmex so opposed the change that the company's patron, tycoon Carlos Slim, personally appeared before regulators last week to press the case that the company needs those higher revenues to invest in rural areas, said sources familiar with the meeting.