Desregulation of Mexico's Telco market would encourage acquisition strategies

Mexican senators could vote next week on a proposal to remove foreign-investment limits in fixed-line telephone companies, which would be a blow to market leader Telmex, controlled by tycoon Carlos Slim.
With an eye to making Mexico's economy more competitive, President Felipe Calderon has urged lawmakers to remove limits on foreign investment in Mexican fixed-line telephone companies.
Proponents of the bill being discussed in the Senate say it would increase competition against Telmex, which has 85 percent of Mexico's fixed-telephone lines.
Letting foreign investors take controlling positions in fixed-line telephone and Internet operators could make smaller companies like Axtel, Megacable and Maxcom acquisition targets for international players like Spain's Telefonica.