Phones Ring Down Mexico Way

Here in the states they tell us "Bigger is better!" when it comes to mobile phone carriers.  AT&T found out the hard way that there is such a thing as too big, and if you want an example of what lack of competition means to consumers, you have to look no further than Carlos Slim, the world's richest man, and what his domination of Mexico's mobile industry has wrought.

Mexico’s phone industry, dominated by billionaire Carlos Slim’s carriers, overcharged customers $13.4 billion a year from 2005 to 2009, hurting the nation’s economy, according to a report.

The overcharging combined with the potential loss of business caused by high prices equaled 1.8 percent of the nation’s gross domestic product, the Organization for Economic Cooperation & Development said today in a report.

Latin America’s second-biggest economy should eliminate restrictions on foreign investment in telecommunications and should strengthen the powers of its phone regulator, the OECD said. The 70 percent market share of Slim’s America Movil SAB (AMXL) in the mobile-phone business is “extremely high,” the OECD said. 

Yeah.  One guy's company owns 70% of Mexico's entire mobile industry.  As a result,  Mexican mobile users were overcharged to the tune of nearly 2% of the country's entire GDP.  In US terms, that would be like Wal-Mart buying out AT&T, Verizon, and Sprint, then doubling America's mobile phone bills or something and then overcharging us 1.8% of our GDP or so, the equivalent being $270 billion a year, give or take.

You think those kind of numbers would get attention here in the states if one guy had that kind of power here?  And yet that's exactly the endpoint of the GOP model, Mexico today.  Eliminate "burdensome" regulation and oversight and let the market leverage the power of networks and technology, right?  Enough to give one massive conglomerate 70% of the US mobile market share?

Capitalism does have its drawbacks at the extremist end, you know.