Why Carlos Slim’s mobile phone behemoth can’t be taken on head first
Giant AT&T couldn’t do it—but a few telecoms newcomers might just.
This free article is part one of a two part series on the Mexican mobile sector. Click here for part two.
For years, América Móvil—the holding company behind Telcel, Mexico’s largest mobile operator—dominated with the strength of a monopoly. It was this telecom empire that made Carlos Slim the richest man on Earth from 2010 to 2013. But that last date was the year in which the Mexican government instituted one of the country’s most successful reforms of the 21st century.
This constitutional change brought competition to the telecom sector and with it free roaming, falling prices, and better coverage. Today, all these victories may be on the verge of rolling back.
The reasons aren’t necessarily that the reforms were rescinded but that their success was destined to be temporary. “The telecoms law has fulfilled its purpose and it is now working against broader trends,” Jorge F. Negrete—former consultative council member of Mexico’s telecoms regulator (IFT) and now chairman of DLP Group, a digital and telecom consultancy—told The Mexico Political Economist.
This anti-trust reform sought to quash a single company’s dominance through regulation. But, try as the regulators might, the mobile sector famously tends towards concentration, with its enormous fixed costs and economies of scale, allowing the biggest to grow larger at the expense of the small.
Yet, when not faced with competition, the incentive to give customers little while charging them as much as possible can prove irresistible. This was the status quo in Mexico was before the year 2013. It is what threatens to happen again if new ways of competing with América Móvil’s empire are not soon conjured up.
América Móvil did not answer requests for comment by time of publication.
Telcel: The corporate genius behind the building of an empire
Just because telecoms tend towards monopoly doesn’t mean that América Móvil didn’t build its hold over Mexico (and then the rest of Latin America) with great skill. Time and again, the company’s Mexican provider, Telcel, used crises and challenges to take over more market share.
Slim bought Telmex from the Mexican government as a State-owned landline company in 1990—some say, on the cheap. Telcel emerged as a small embryo within Telmex. Four years later, the Tequila Crisis of 1994 gutted the peso and forced the nascent mobile industry to compete more intensely for an impoverished market.
The leader back then, Iusacell, opted to milk its richer clients. Telcel went the other way. To take over the Mexican middle class it created a new way of onboarding customers: The pre-pay service.
Pre-paid plans were a stroke of genius by allowing less wealthy customers to pay as they went while charging them more overall than their fixed plan counterparts. The strategy worked and soon, across Mexico, the majority of the population was on pre-pay. Even in 2023, over 82% of Mexicans were still on the sort of pay-as-you-go plans invented by Telcel.
Arguably though, it was América Móvil’s corporate innovations which truly allowed it to dominate:
Sure, América Móvil inherited a great starting advantage from the enormous network it had bought off the government in 1990—the cable and comms towers of the Telmex landlines would become the backbone of Telcel’s mobile network. However, it is also true that the company thrived by becoming obsessed with corporate frugality.
América Móvil became what was known as a low-budget telco. A mobile company contrasting with other telecoms providers for its lean vertical structure, avoiding having an army of overpaid regional execs. This was all in service of lowering costs and increasing investment. Crucially though, this was done not necessarily to provide better or cheaper service, but rather to create an incredibly profitable company. It was this period that saw Carlos Slim become the world’s richest man.
Frugality also allowed Telcel to tighten its grip across the whole of Latin America by building the largest network in the region. “They are fanatical about building infrastructure,” said Negrete. It helped that América Móvil is and was a family-owned business. It had no dividends to pay to demanding shareholders; just a maniacal focus on reinvestment.
The strategy worked perfectly and at the expense of Mexicans who paid extortionate amounts for comparatively low bandwidths when contrasted with the rest of the region. Slim became a literal textbook case of corporate extractivism and competition-repressing expansion.
The 2013 Telecoms Reform: Won every battle, lost the war
When a bill was proposed to open up telecoms to competition and give anti-trust regulators some teeth, there was really only one company in the mobile services sector at which it was targeted.
When the telecoms law came into force it seemed to be working exactly as designed. Telcel finally faced a worthy competitor with the entry of AT&T into the Mexican market in 2015. The contender from the US immediately bought up minor mobile players like Iusacell and Nextel for $4.4 billion dollars—69% AT&T’s entire 2014 income.
AT&T Mexico became a giant. Within 10 years it has become the Spanish-speaking world’s second largest mobile provider—after Telcel, of course.
With this came benefits for customers. Calls went from being long distance when ringing the town next door, to Mexicans being able to use their phones across North America for the same price as if they were at home. Costs went down and service improved. And, though regulation applied chiefly to stall Telcel’s dominance, it forced the company to increase its quality, pushing its competitors to try to keep up. A virtuous cycle.
For a while it all seemed like regulation done right. But if anything, this best case scenario exposed the crucial problem with the pure regulatory approach to the telecoms sector.
The effect of the anti-trust regulation didn’t put the expected dent in Telcel’s market share. In 2014, Telcel had almost 70% of mobile market share. By the end of 2025, it retained over 66%. América Móvil’s broader coverage and bigger network allowed it to compete more effectively for customers. And, slowly but surely, through sheer attrition, the competition started to tap out.
Telefónica—Mexico’s third biggest provider—dismantled its physical infrastructure in 2019 to become a virtual mobile operator on the AT&T network. In 2025 announced its departure from the Mexican market altogether. The number of telecom operators, which had boomed since 2014, started to collapse precipitously from 2022.
Ultimately, with the 2013 telecoms law, the symptoms of competition were expressed—lower prices, better services—but the chief aim of introducing competitors—to reduce market dominance by one company—was not. This was its fatal flaw. As Telcel’s competition has fizzled out, one is now left to wonder whether its benefits will too.
The good news is that there is one big contender left—AT&T. The bad news is, it might be leaving Mexico too.
AT&T: Too big to succeed
Late last year, growing rumours that AT&T was also planning a departure started gathering steam. If it left, it would leave América Móvil as virtually the only private mobile operating network in the country.
Of course, legally, another company—other than one owned by Carlos Slim—would have to buy AT&T’s Mexican operations. The question is whether they’d be able to do any better than a large US-backed telecoms behemoth. The answer, perhaps surprisingly, is yes.
AT&T isn’t considering a departure because it is failing in Mexico; it is doing so because it is not succeeding fast enough for its parent company in the US.
AT&T has done what virtually no similar company has managed elsewhere else. Within a decade, it has secured 25 million customers and, despite intense early investments, is now profitable. It has not been enough.
Mexico makes up less than 3.5% of AT&T’s global operating revenue. And across the world, telecoms companies are consolidating. Just as Telefónica is leaving Hispanic America to consolidate in Europe and Brazil, AT&T is considering defensive moves across its main market in the US. For Mexico to be a success, the company would have to try to match América Móvil’s investment and, in truth, AT&T Mexico is too small for the company’s investors to spend too much time and money caring about it.
“As mobile internet technologies evolve—from 4G, to 5G, and upcoming generations—the investment cycle is shortening, challenging the operator’s investment returns,” Daniel Ríos Villa, Assistant Vice-President of External Affairs and Sustainability at AT&T Mexico, told The Mexico Political Economist.
A smaller contender, however, may be just the right size and be invested enough in the Mexican market to buy AT&T’s Mexican operations and pour their soul into competing with Telcel.
Make no mistake, if a competitor the size of AT&T were to leave Mexico, there would be little to stop Telcel from rolling back services that Mexicans have become accustomed to. These might include the reinstatement of roaming fees across North America, instituted initially by AT&T. But a new competitor may bring other perks to the table. And this new contender will almost certainly be a novel beast.
As it becomes clear that the Mexican (as well as global) mobile market is consolidating, new contenders may not look like the old telecoms companies that burst into the fray back in 2013. Instead of other phone companies, expect the unexpected to start eyeing up the Mexican mobile market—from travel influencers to a debt-laden electricity company.
“In a world of 6G, we are no longer talking about telcos,” said Negrete. “Telecommunications companies no longer exist. They are now digital infrastructure companies—tech-cos.”
More on their rise and whether or not they’ll be able to take on Slim’s América Móvil next week, in part two.