The Mexican telecom regulator, Instituto Federal de Telecomunicaciones (IFT), has today announced the parameters of the retail price cap for the incumbent fixed telephony operator Telmex for the period 2015 to 2018. Frontier (Europe) acted as Telmex’s independent referee in the arbitration panel (comprising IFT, Telmex and a mutually-agreed third party) which reached the decision.
Based upon the Terms of Reference of the arbitration, Frontier’s analysis for Telmex used a 10 year cash-flow financial model to estimate the ‘X’ factor used to determine the level of the price cap. The final decision was that Telmex will have to reduce the average price of a basket of fixed telephony services (including installation fees, monthly line rental and call prices) by 1.39% per year between 2015 and 2018.
Frontier regularly advises private and public sector organisations in the telecommunications sector.
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