Image from: AFPYet again, the international community and a recent OECD report slammed Mexico’s billionaire telecoms mogul Carlos Slim for allegedly controlling and stunting competition in the Mexican broadband and mobile telecommunications market. As a devoted follower of the global services industry, I can’t help but feel a mild disdain for the man that seems to selfishly and artificially keep Mexico’s communications costs high and quality poor, for the sake of making a buck.
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Then again, part of this scorn must have something to do with how the American media loves to portray Mr. Slim as a cutthroat swindler. Statements like “Carlos Slim is at it again”, referring to a comment made on CNBC when America Movil bought out ATT’s stake in Telmex last year. Or the recent and soon to be iconic picture published by the American Free Press of Mr. Slim brazenly holding up a bill of money at a press conference.
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Images like this remind of the good ol’ days when the Duke boys Bow and Luke Duke used to merrily evade Rosco P. Coltrane the bumbling sheriff of Hazzard County and right-hand man of the corrupt and infamous county administrator, Jefferson Davis "J.D." Hogg ("Boss Hogg"). Yes, Mr. Slim is extremely rich and from experience I know that Telcel can drop a phone call or two, but it still doesn’t seem right that billionaires like Bill Gates and Warren Buffet get hailed as sophisticated heroes of American capitalism, while Mr. Slim gets knocked down to ‘mafiesque’ status.
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I decided to do a little bit of digging to find out more about the man behind the broadband, and about his company. It turns out that Mr. Slim isn’t necessarily the shallow fat-cat that we often imagine when picking up the paper. Here are a few interesting facts/points that might make you think differently about Carlos and his telecoms empire:
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1. By birth he is Mexican but by blood he is Lebanese and speaks Arabic. His father immigrated to Mexico at the turn of the century and his mother was born of Lebanese parents that opened up Mexico’s first Arabic-language magazines. Their climb up the Mexican social ladder is a true rags-to-riches tale of immigrants that worked their butts off to position themselves and children into the higher rankings of Mexican society.
2. Carlos studied engineering at the National Autonomous University of Mexico, while simultaneously teaching algebra and linear programming. Bill Gates dropped out of school to start Microsoft and didn’t get his honorary degree from Harvard until 2007. It also didn’t hurt that Bill had the full faith and financial backing of his parents that had direct connections to IBM.
3. It’s true that Carlos has been shunned for cornering the Mexican telecoms market –even by the Mexican government which commissioned the OECD study – but he’s not the first billionaire to use his financial muscle to make deals. Even the often cuddly Warren Buffet – aka the Oracle of Omaha – has a darker side with some questionable dealings with Goldman and Sacs and the US housing market crash.
4. The guy has also given back having worked alongside famous ‘do-gooders’ like Bill Clinton and Bill Gates. He’s opened up museums, sporting events, health centers, and other projects that earned him an honorable mention in Forbes’Biggest Givers Award, after donating four billion dollars to his foundation.
5. Carlos recently announced that Telmex and America Movil could dump as much as $13.9 billion dollars to improve Mexico’s and Brazil’s telecoms infrastructure. True, these two companies control over 70 percent of the market in Mexico, but I wonder whether a bunch of smaller carriers would have the impetus to throw down that type of investment. And back to those dropped calls, telecoms analysts have said that what Mexico needs right now are more towers and fiber optic lines. Perhaps the Mexico market is paying a premium for that kind of decision making power, but try convincing 5 separate phone companies to invest in infrastructure for a user base that is already accustomed to spotty coverage, and let's see how far you get with that.
6. When it comes to political corruption in Mexico, it’s been a bigger problem at the state and local levels – as is usually the case in any country. Having spoken with multinational call center and captive center operators, they’ve expressed concern over the breakup of Telmex and America Movil, saying that a bunch of smaller local companies would likely translate into higher operations costs, which would be passed on to consumers.
