U.S. telecommunications companies are pressing the Mexican government to see that Telefonos de Mexico (Telmex) renews negotiations on the technical details of how it will interconnect with its future competitors in long-distance dialling.
The mammoth Telmex, which abandoned technical discussions last month, must have an interconnection scheme in place by August. Its exclusivity on long- distance service expires Jan. 1, 1997.Six joint ventures already have been authorized to provide long-distance service, including U.S. giants Bell Atlantic, AT&T, Sprint and MCI.
Telmex and the multinational partnerships had been working with the Communications and Transport Secretariat - under two separate advisory committees - to create new numbering and signalization schemes.
Mexico uses seven-, six- and five-digit numbers in different parts of the country. The new entrants and Telmex must also agree on a common signalization scheme that allows them to interface in the call-switching process.
Telmex walked away from the discussions in early December after deciding they were not in its best interest. On Dec. 20, the six concessionaires for long-distance service formed an association known by the acronym Actel to collectively lobby on policy issues and pressure Telmex to return to the table.
On Thursday, Mexican newspapers quoted Telmex officials as saying that it's the government's responsibility to create new policies. The communications ministry did not return calls for comment.
The concessionaires want government regulators to either get Telmex back to the bargaining table or stop refereeing and take a lead role in developing numbering and signalization plans.
"What's most critical is that the issues get decided so that people go about programming their switches," said Robert Lacy, director of regulatory policy for Avantel, a joint venture between MCI and Mexico's largest bank Banamex. "We're not at a drop-dead point, but it's very essential that the committees be re-established by the end of January."
Avantel has already built 2,000 kilometers (1,242.7 miles) of conduit and is nearing the point where engineers can do little more if technical issues like signalization are not resolved. That would mean August deadlines would not be met.
The delays also are important because they put off talks on even more difficult issues, such as the cost to competitors of interconnecting with Telmex and the issue of equal access.
Various industry sources said Telmex walked out, among other reasons,
because it insists it has proprietary rights over the national long-distance dialing pattern.
"Their position is that only Telmex has the right to use those numbers. No one else can use those numbers," said one U.S. executive. "Our position is this is not pro-competitive."
Telmex's actions do not surprise many executives, who said that monopolies seldom give up power gleefully. Telmex has many weapons in this war, they said, including Mexico's court system. A legal battle could delay any settlement well beyond the August interconnection and January start dates.
The concessionaires, too, have some leverage. Mired in economic crisis and forced to impose austerity programs shouldered by the citizenry, the Mexican government must keep foreign investors happy if it is to continue to attract much-needed investment.
Mexican regulators, however, must balance the needs of foreign investors against the reality that Telmex is the bellwether stock on the Bolsa, Mexico's stock exchange, and the most important Mexican stock traded on the New York Stock Exchange. Where Telmex goes, so goes much of the Mexican economy.
"It's something they have to be very careful with," conceded Purificacion Carpyntiero, director of strategic development for Grupo Iusacell, a partnership between Bell Atlantic and Mexico's Iusatel.