June 17 EST: Mexico’s telecom watchdog just sent a message—and it’s aimed squarely at Telcel, the country’s mobile heavyweight.
The Federal Telecommunications Institute (IFT) on Monday hit the América Móvil subsidiary with a 1.78 billion peso fine (about $93.6 million), citing monopolistic practices tied to how the company sells SIM cards through convenience store chains.
According to the IFT, Telcel used its dominance to push competitors out of a key retail channel—convenience stores—limiting consumer access to alternative mobile options. The fine is one of the biggest the regulator has ever issued and lands in a telecom market already under the microscope for its lack of real competition.
Same Playbook, New Enforcement
This dates back to a 2021 investigation, triggered by a competitor’s complaint. The IFT says Telcel systematically blocked other carriers from selling SIM cards at major chains where a large portion of prepaid mobile activity happens.
The accusation isn’t subtle: market exclusion. If you’re Telcel and control most of the shelf space, it doesn’t just hurt smaller players—it narrows the market before the customer even makes a choice.
Telcel flatly denies the claims, calling the ruling “arbitrary,” “disproportionate,” and based on a “biased investigation.” They’ve already signaled plans to fight the penalty in court. And if past experience holds, that fight could drag out for years.
Bigger Than a Fine
There’s more at stake here than just a nine-figure fine. This is about whether regulators in Mexico have the teeth—and political will—to challenge Carlos Slim’s telecom empire.
Telcel still commands around 60% of the mobile market, despite nearly a decade of reforms aimed at breaking América Móvil’s grip. Those reforms brought in players like AT&T and Telefónica’s Movistar, but actual market share hasn’t shifted much.
The IFT’s move shows they’re willing to revisit enforcement tools that were gathering dust. It’s not just about pricing anymore—it’s about access, visibility, and how infrastructure and distribution can be leveraged to shut out competitors.
For Telcel, that means the rules have changed. For investors, it’s a fresh regulatory overhang.
Retail: The Last-Mile Battlefield
Why focus on convenience stores? Because that’s where prepaid mobile plans live and die. In Mexico’s mobile landscape, physical distribution still matters. Many customers top up balances at the register or buy SIM cards on the go.
Locking down those spaces gives incumbents a serious edge. If competitors can’t get in the door—or on the shelf—it doesn’t matter how good their pricing or service is.
Telcel’s legal team will argue that exclusivity contracts are standard commercial practice. Regulators clearly see it differently—especially when the dominant player is the one signing those deals.
What’s Next
Telcel will appeal, and the process won’t be quick. Mexico’s competition framework allows for layers of review, from administrative challenges to constitutional appeals. The actual payment of the fine could take years.
Still, the signal is immediate. The IFT is watching more than interconnection fees and headline rates. It’s watching how business is done, and how that affects consumer choice.
For now, smaller players may see this as a green light to push for better access and challenge Telcel’s market practices more aggressively. For América Móvil, the bigger concern isn’t the $93 million—it’s the precedent.
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A Wall Street veteran turned investigative journalist, Marcus brings over two decades of financial insight into boardrooms, IPOs, corporate chess games, and economic undercurrents. Known for asking uncomfortable questions in comfortable suits.
