telecom@eecs.nwu.edu (TELECOM Moderator) (04/17/89)
The Mexico Telephone Company, a/k/a Telefonos de Mexico, a/k/a Telmex, is likely to go private in the next year or two. The Mexican government is giving serious consideration to selling its controlling interest in that nation's communications network, despite very stiff opposition from the local unions which would prefer to see the existing bureaucracy stay in place. The proposed sale, which is part of a move to upgrade the phone system there -- and it *does* need upgrading -- by allowing more private investment, is part of a growing trend in Mexico to privatize heretofore nationalized industries. The Mexico Telephone Company has spent more than a year planning a $14 billion, five-year restructuring plan which will probably give AT&T and the Bell regional holding companies a role in the improvements. One plan being discussed by the Mexican government is a complete break-up of Telmex. similar to the court-ordered divestiture of AT&T a few years ago. Under this plan, there would be one central long distance company in Mexico, with the government retaining control of it, but privately owned regional firms providing local and auxiliary services. I'm told representatives of the Mexican government have talked on more than one occassion with some folks at Southwestern Bell about making a formal proposal. Likewise, Pacific Bell has been making some overtures to the Mexicans. It will be interesting to see what develops. About two years ago, [Teleconnect Magazine], in a humorous article on the divestiture, presented a bogus map of the territories assigned to each BOC, with Texas, New Mexico and Arizona grouped under an entity called "Taco Bell". :) Any phone company which takes over the Mexican system will be an improvement over the current operation, which has been slowly deteriorating for several years. Patrick Townson