Background on Telcel and its Relevance
Telcel, a subsidiary of America Movil and controlled by Carlos Slim, is one of Mexico’s leading telecommunications companies. It offers mobile services under the Telcel brand and has a significant market share in Mexico. The company’s operations impact millions of consumers, making its actions and regulatory compliance crucial to the telecommunications sector.
IFT’s Monopolistic Practices Investigation
The Instituto Federal de Telecomunicaciones (IFT) initiated an investigation into Telcel’s alleged monopolistic practices in the sale of SIM cards through convenience store chains, including Oxxo, 7-Eleven, Extra, and Circle K. These chains collectively dominated 93% of the market in 2023.
IFT’s Decision and Fines
The IFT determined that Telcel engaged in monopolistic practices nationwide and fined Radiomóvil Dipsa (Telcel’s parent company) 1,782.6 million pesos ($93.81 million USD), equivalent to 3.03% of its projected first-quarter 2025 revenue.
IFT also fined Oxxo 19.5 million pesos and IMMEX (Impulsora de Mercados de México) 19.5 million pesos, totaling 1,821.6 million pesos ($95.80 million USD) across the three companies.
Telcel’s Response
Telcel described the fine as disproportionate and biased, claiming it was based on statements from a competitor and an investigation lacking evidence. The company plans to challenge the fine through all available legal means.
Investigation Details
The IFT investigation began in August 2021 following a denunciation by competitor AT&T. The investigation focused on potential monopolistic practices in SIM card distribution and sales through convenience store chains, including Oxxo, Circle K, and 7-Eleven. These chains operated approximately 31,664 stores by mid-2025 and generated around 230 billion pesos annually.
The investigation was based on Articles 54 and 56, Fraction I, of the Federal Competition Law regarding exclusive commercialization or distribution of goods and services. Telcel had an IFT hearing on May 21, 2025, regarding this investigation.
Previous IFT Actions Against Telcel
In September 2024, the IFT fined Telcel 90.66 million pesos for engaging in relative monopolistic practices. The IFT had discovered Telcel offering various incentives, such as discounts and commercial benefits, to distributors who stopped selling other companies’ phones and SIM cards in Colima, Jalisco, and Michoacán markets to focus on Telcel products and services.
The IFT also scrutinized the commercial practices of mobile communication companies in Oxxo, 7-Eleven, Circle K, and Grupo Modelo distribution channels, as well as autoservicios and department stores like Walmart, Soriana, Suburbia, Liverpool, and Coppel. This suggests additional fines may be imposed on other companies besides Telcel.
Key Questions and Answers
- What is the IFT? The Instituto Federal de Telecomunicaciones (IFT) is a Mexican regulatory body responsible for overseeing and enforcing competition in the telecommunications sector.
- Who is Telcel? Telcel is a leading telecommunications company in Mexico, offering mobile services under its brand and controlled by Carlos Slim’s America Movil.
- What were Telcel’s alleged monopolistic practices? Telcel was accused of engaging in monopolistic practices by dominating SIM card sales through convenience store chains, limiting competition and consumer choice.
- What fines were imposed by the IFT? The IFT fined Telcel 93.81 million USD, Oxxo 3.45 million USD, and IMMEX 3.45 million USD, totaling 95.80 million USD across the three companies.
- How did Telcel respond to the fines? Telcel described the fine as disproportionate and biased, planning to challenge it through legal means.
