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Mexico slammed for phone rates

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The Office of the U.S. Trade Representative this week released its yearly review of telecom agreements negotiated with trading partners. In what is becoming an annual ritual, American officials once again reserved special criticism for Mexico’s telecom market.

USTR is upset about a new system for terminating international long distance calls to Mexico that shifts all the costs to U.S. callers. But what really has them steamed is that Mexico’s carriers negotiated interconnection rates even higher than those recommended by the Mexico’s Federal Telecommunications Commission, known as COFETEL. The upshot is that U.S. carriers will end up paying $124 million more between 2007 and 2010 than they would have if the COFETEL rates had been implemented, according to USTR.

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The report noted that Telcel, which dominates Mexico’s wireless service, charges U.S. carriers up to 71% more to terminate calls on its network than it charges its own retail customers.

Experts have cited Mexico’s telecom market as one of the least competitive and most expensive in the world. Giant Telmex controls more than 90% of the nation’s fixed lines while Telcel’s share of the mobile market is nearly 80%.

Both companies are controlled by Carlos Slim Helu, the world’s second richest man, with a fortune estimated at $53.1 billion by Forbes magazine.

Posted by Marla Dickerson in Mexico City

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