Mexican President Felipe Calderon: We are Aiming at Telecom Companies

Two publicly-traded Mexican companies — Telefonos de Mexico (NYSE:TMX) and AMX (NYSE:AMX) — experienced selling pressure as Mexican President Felipe Calderon spoke to Bloomberg TV. Calderone said that Carlos Slim’s telecommunications companies would be the focus of the new Mexico (NYSE:EWW) Antitrust Law.

On the Mexico Antitrust Law Calderon signed yesterday in Mexico City:

 

“Not only for Telmex (NYSE:TMX), or any big enterprise in Mexico, for anyone, that we are acting in favor of competition and I do believe free markets. In order to do so, we are re-enforcing the authority of the antitrust agencies in Mexico….That is the message. We want a very competitive economy in Mexico.”

On whether Carlos Slim represents the kind of monopolistic practices he’s going after:

“I think it’s very sensitive. Even his name [Carlos Slim] is very sensitive for a lot of people.”

“I think that the enterprises that [Carlos Slim] used to participate in are very big enterprises, with a lot of good practices, but also we have a market in which we need to fix a lot of the oligopolic or monopolic behavior including some in the telecommunications sector.”

“I really respect Carlos Slim or any other Mexican enterprise, but at the same time I am the authority and I need to regulate the market in order to avoid monopolistic practices, and this antitrust regulation that I signed yesterday is precisely in this direction. It’s a very good regulation.”

We are in favor of more participants in the telecommunications sector.  In the past, there used to be probably one single enterprise but today we have four big players in the market…there is a reduction in 75% of the cost in telecommunications due to competition so we are working really hard in favor of the free market and that will be a really important structural reform in the Mexican economy.”

 

On state-owned petroleum company Pemex’s new contracts w/ private companies:

 

“Yes, the new contracts authorized under the new law that Congress approved allow Pemex to make flexible contracts with private companies in order to increase oil and natural gas production in the future.  Of course, we need to modernize the company.”

“The good news is that last year, Pemex stopped the reduction in oil production for the first time in probably six years.  So we are expecting to increase oil production in the future and these contracts will help Pemex to work in that direction.”

Calderon on when he will introduce energy reforms:

 

“That will depend on the ascension of the Congress and the political environment.  I would like to do so, of course, before the end of my administration.  I want to establish a new effort in order to modernize Pemex.  I am looking seriously at the experience of Statoil in Norway or Petrobras in Brazil.  There is a change.  People in Mexico and Congressmen in Mexico should understand that the only alternative for the future of oil is modernizing Pemex through a new legislation and I will try to do so probably in the next session of the Congress.”

On opening up shares of Pemex:

“That could be an alternative.  But today we have an alternative called ‘bonos soberanos’ in which we are trying to introduce Pemex to the market.  It is a very careful step that we plan to take very soon.”

On President Obama’s upcoming speech today on immigration reform:

“The right thing is to pass this comprehensive immigration reform.  I know how difficult it is for President Obama to do so with the composition of the Congress, however, I really applaud his personal effort in order to solve the problem, not only of millions of people living in the shadows but also a problem for the American society and economy.”

On whether Obama should set a firm timeline for immigration reform:

“Of course, as President and as Mexican, you would like to see the problem fixed as soon as possible. But I realize the difficulties in political terms to do so. I understand that.”

“[I would like to hear] this personal commitment [from Obama] in order to push again in favor of reform is very good news for us.”

On President Obama’s pledge earlier this year to reduce drug violence /trafficking:

“We are working together, that is true.  I really express my gratitude to President Obama and his team for the effort. However, there are a lot of things that we must do together.”

“The most important is to realize is that this is not a Mexican problem, it’s a common problem we need to fix together. Probably the most important thing is to reduce the flow of weapons from the United States to Mexico, as the flow of drugs from Mexico to the United States.”
It’s not only a problem of drugs, but also it’s a problem of organized crime that is threatening the lives of people and we are fighting against that.”

“Finally…to end this duality…on the one hand, there are a lot of the states allowing the use of marijuana and other drugs for instance, and in the other [Mexico] we are enforcing the law in the states of Mexico. What could be the right policy for that? We need a clear definition for policy makers here in the States in order to address the problem in the future.”

On his planned meetings with protest organizers in Mexico City this upcoming weekend, to address anger over deaths in the drug wars:

“I’m absolutely open to listen [to protest organizers]. Of course, I want a Mexico (NYSE:EWW) without violence and without criminals. But in fact I’m working in favor of that. I’m working in favor of a peaceful Mexico.”

“I want to listen to them and listen [if] I need to change the strategy…Yes, it’s symbolic but it’s also a real gesture because I want to listen to them. I’m really looking for alternatives. If you have a serious alternative, please talk with me. At the very end, what we must do is fight the criminals. Stop them.”