The Mexican government’s plan to relinquish its majority control in the national telephone monopoly Telefonos de Mexico, which is notorously inefficient and unresponsive, is tied to a four-year programme to double the number of lines available in the country. As reported, Mexican interests will be required to retain a majority in the company – the state currently holds 56% – but foreign corporate investors are being actively sought to bring a bit of management expertise to the business; however no single foreign investor will be permitted to hold more than 10%. L M Ericsson Telefon AB is said to be favoured for a 10% stake. Foreign investors currently own 25% of the company through American Depository Receipts traded over-the-counter, and the total foreign holding can rise to 49%. The phone line target would raise the number of lines to 20 per 100 inhabitants and bring phone service to every town of more than 500 people. The programme is budgeted at about $10,000m, $7,000m to be generated from the company’s own operations. Ultimately, some certain telephone services, such as those serving isolated tourist resorts and industrial parks might also be opened to competition.
