Telmex and Telcel did not use FreedomPop and Dish to sell four-game “packages” in Mexico

An investigation of Federal Telecommunications Institute (IFT) decides that there are no elements to demonstrate that the companies Telmex Y Telcel intended to market directly or indirectly packaged internet, video and fixed and mobile voice services throughout the national territory, to the virtual mobile phone FreedomPop start reselling voice minutes and text messages from Telcel in 2017, while Telmex continued invoicing the services of Dishes on pay-TV as it has done since 2007.

The investigation of IFTwith files AI / DE-001-2018 and UCE / CNC-003-2016, and definitively closed with the last month of 2021, acknowledges that the operations so that, e.g. FreedomPop voice and data capacity of can commercialize Telcel In the mass market, there was the transfer of assets from one company to another, but only with the aim that in practice the mobile and internet service could be provided to the end user and this did not mean that Telcel The Telmex So they took control FreedomPop or Dish actions, so there was no violation of the legitimacy defended by the Federal Law of Economic Competition (LFCE), in its sections 54, 56, 62, 65 and 86.

The Investigating Authority, entity of the IFT which launched the investigation in 2018 following a complaint from competitors of Telmex Y Telcelsaid he also did a thorough review of the contracts that allow it FreedomPop resale mobile internet, SMS and voice minutes from Telcel’s network; and that it also reviewed the then recent agreements between Dish and Telmex to clarify whether there was a clue in any of the clauses of those documents that would indicate the intention of the companies to America Movil (AMX) for marketing in this way a kind of quadruple play packages in Mexico, a possibility that Telmex is denied by concession title and it is an obstacle to Telcel as long as its name means predominantly economic agent of telecommunications.

After evidence has been found of a direct or indirect provision of now prohibited services, such as the pay-TV service of the Telmex or with the control of Telcelthe Investigating Authority would have continued the investigation and the result, in the worst case, would have been a revocation of the concession for the offending companies.

On 2 May 2018, the companies Cablemás, Cablevisión, Novavisión and Corporación de Radio y Televisión del Norte, all related to the Televisa group, lodged a complaint with the IFT that the companies Comband, Videomol, Cofresa, Telinor, FPMX, FreedomPop EU, Variv, TV Inalámbrica Telcel, Telmex and Telnor, among others and in turn belong to MVS Comunicaciones and América Móvil, in each case, market competition with the realization of relative monopolistic practices, in addition to illegal concentrations.

Initially, the complainants accepted Telcel gave preference to FreedomPop in the resale of wholesale capacity, a commercial practice that appears to be collapsing as Telcel sold voting minutes to FreedomPop below the prices set by other wholesalers for their retail customers.

And it was also presumably an application of other cross-subsidies between all those companies, actions that eventually allowed FreedomPop becomes the virtual mobile operator with the highest growth in Mexico in less than two years, while the suspicion of illegal concentrations through an indirect participation of the companies of America Movil in the video and television industry, which would then mean a violation of concession titles and the asymmetric regulation of overweight introduced since March 2014.

The complainants also argued that the alleged illegal concentrations in which the companies of AMX Y MVS for what FreedomPop capacity sold by Telcel exceeded the asset value threshold of 1,314.5 million pesos, a sufficient amount required to notify the IFT of these actions, but which has not been reported to the government.

“Although there are contracts between the MVS companies and the companies belonging to América Móvil, the said contracts establish a strict commercial relationship, including the provision of wholesale services to virtual mobile operators and do not involve an accumulation of assets or shares between the parties. whether the change in the control of a company, and a scheme of contracts, payments and incentives by which a concentration is carried out, is not identified. Therefore, it is concluded that these contracts do not constitute a concentration individually or as a whole “, the Investigating Authority decided (AFTER THE).

“There are no elements that make it possible to identify a commercial offering offered by Dish or Telmex, which includes fixed telecommunications services, limited television and mobile telecommunications services in a packaged form,” the IFT noted.

The IFT also excluded FreedomPop was able to gain an advantageous position over other virtual mobile operators due to Telcelas that telephone company also entered into wholesale capacity agreements with companies other than Telcel or companies of the economic group America Movil.

The vote in favor of closing the files was unanimous, as the five current IFT commissioners voted in the same direction.

Since November 2017, Dish de MVS Comunicaciones has entered the mobile phone market through a commercial alliance with the virtual mobile phone operator FreedomPop and from the Telcel network. The satellite pay-TV system therefore wants to win and retain customers, rewarding them with a mobile phone with 100 free minutes of voice, plus 100 text messages and 100 megabytes of mobile navigation with another 100 megabytes more for social networking.

According to the IFT, FreedomPop By 2021, it had about 1.4 million cellular customers, a figure that made it the first brand among virtual cellular operators, with nearly 40% of the market in that segment.


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