Mexico Fines Telcel $93M Over Oxxo SIM Card Exclusivity Deal

Mexico’s telecommunications regulator has fined Telcel, a subsidiary of America Movil (NYSE:AMX), 1.78 billion pesos ($93.6 million) for engaging in anti-competitive practices. According to the Federal Telecommunications Institute (IFT), Telcel struck exclusive agreements with convenience store giant Oxxo, owned by Femsa, to restrict the sale of rival SIM cards.

The IFT launched its investigation in 2021 following a competitor’s complaint. The regulator concluded that Telcel incentivized Oxxo and IMMEX, another Femsa subsidiary, to exclusively sell Telcel SIM cards, thereby violating fair competition laws in the Mexican telecom market.

In addition to Telcel’s hefty fine, the IFT also penalized Oxxo and IMMEX with 19.5 million pesos for participating in the arrangement. The move underscores the regulator’s commitment to promoting market competition and curbing monopolistic behavior in Mexico’s telecom industry.

America Movil, controlled by billionaire Carlos Slim’s family, has denied the allegations, calling the IFT’s findings “biased” and “unsupported by evidence.” The company announced plans to challenge the ruling through all available legal avenues. Similarly, Femsa issued a statement rejecting the resolution, saying it misrepresents its open and diverse retail model and confirmed its intent to contest the decision legally.

The penalties come amid growing scrutiny of America Movil’s market dominance. Telcel remains Mexico’s largest mobile operator, making the outcome of this legal battle significant for the future of telecom competition in the country.