Mexican businessman Carlos Slim is now said to be the world’s richest man. He is Latin America’s leading business mogul, acquiring telecommunication assets and banking and retail businesses throughout the region and beyond. His massive increase in wealth in recent years should further increase public scrutiny of Slim and his business empire, particularly within Mexico.
For several years Carlos Slim has been Latin America’s most visible business leader. He is best known for his telecom business, which controls an increasing share of the region’s fixed-line, Internet and wireless markets, and has blossomed thanks to a series of acquisitions. In Mexico, Slim’s most important market, his telecom empire has faced criticism for high costs. Slim-owned company profits also benefit from his minimalist management style that prioritizes high profits and low overheads.
Slim’s telecom empire essentially consists of two companies. In 1990 he acquired Telefonos de Mexico, Mexico’s main telecommunications company and until then a government monopoly. Slim and his minority partners (SBC Communications and France Telecom offered the highest bid in the privatization process and got control of Telmex for what turned out to be a bargain price of $1.7 billion. Probably more important than the price was a flawed concession, which has allowed Telmex to challenge successfully in the courts attempts from the Federal Competition Commission to limit its quasi-monopoly powers. It now controls about 20 million lines and manages over 85% of the Mexican market.
On the few occasions that Telmex made concessions to competition it has been as a result of pressure from the U.S. government. Slim not only quickly modernized the company, adding new services, but also exploited its market dominance. As a result, Telmex’s worth, and his wealth, skyrocketed.
In 2001, Telmex created America Movil. Since then, the company has expanded into more than a dozen countries in Latin American and the Caribbean via a series of acquisitions from companies such as France Telecom and BellSouth. Today, the company is Latin America’s largest mobile operator. Its largest unit is Mexico’s Telcel, a market leader. America Movil also owns Telecom Americas, a holding company that includes stakes once held by Bell Canada and SBC Communications, and enjoys major holdings in Brazil.
America Movil’s main rival in Latin America is Spain’s Telefonica. In Mexico, Telefonica remains a distant second to Telmex.