Critics Use "The Simpsons" to Slam Phone Companies of Mexico's Carlos Slim

| Apr. 7, 2011 |

Published by Minyanville

World’s richest man Carlos Slim’s feud with broadcasters took a farcical turn this week with full-page adverts taken out in many Mexican newspapers entitled "The Slimsons."  Parodying The Simpsons, the adverts slam the cost, reliability and general services offered by Slim’s telephone companies, operated by America Movil (AMX) and including Telmex, Grupo Carso and Telcel.

The advert features four cartoon characters in the clouds with captions reading: “In Slimlandia—clients get quality service," "telephone charges are low," "connection speeds are infinite," and "your mobile always works."  However, a despondent-looking man below says: “Not in Mexico.” It is unknown who backed the adverts which are simply signed off "Todos los Mexicanos" ("All the Mexicans").

The feud erupted in February when Slim pulled advertising from Televisa (TV) as he claimed they had put rates up 20%. Televisa claimed this was standard practice. Another firm, TV Azteca, then refused to sell Slim’s companies advertising space unless they cut connection charges for TV Azteca’s telecommunications arm. (See Mexico: World's Richest Man Has Busiest Week Ever.)

Regulator Coftel ruled last month that the rate for connecting calls between Telcel and fixed-phone-line company Alestra must be no more than $0.03 per minute. This failed to resolve the dispute, however, with "todos los Mexicanos," who launched television adverts showing angry cellphone users swearing at Slim’s telephone services in front of his recently opened art museum.

As always, Slim has not let the attack damage his business empire. America Movil expects to double the number of paying television customers in Latin America to 22m by the end of 2013, hoping to add 3m in 2011, 3.5m in 2012 and another 4.5m in 2013. The company operates in 16 of 18 Latin American nations, having picked up 11m paying customers in the last two years. It is looking to Brazil and Colombia for spearheading the ambitious growth.

Slim will be annoyed, however, that Televisa is to buy a 50% stake in cellphone operator Grupo Iusacell, giving the company a foothold into Slim’s traditional market. The deal is thought to be worth $1.6 billion.

Following the resignation of attorney general Arturo Chávez Chávez late last week, president Felipe Calderón wasted no time in appointing his successor. Marisela Morales will take over having received praise from US Secretary of State Hillary Clinton as well as Michelle Obama. She will be the first woman to take the post, and is hoping to have more success than Chávez who failed to slow the drug violence that's plagued the country since Felipe Calderón took power in December 2006.

Yet again, questions are being asked as to whether that drug violence is hampering tourism in a country that relies so heavily on that industry. With cartel killings in beach resorts such as Acapulco, a hand grenade thrown into a popular Guadalajara nightclub, as well as muggings and shootings near a Mazatlán port frequented by cruise ships, the San Francisco Chronicle asks whether Mexico is a safe tourist spot for Americans.

The industrial heartland of Monterrey—home of Cemex (CX) and General Electric (GE), as well as many of Mexico's and the United States’ biggest companies—has seen a huge flight of capital as businesspeople move out fearing for their safety. The US State Department has ordered all personnel to take their children out of the city while government officials in Guadalajara are banned from traveling after dark.

While not all destinations are affected by the drug violence, tourists aren't distinguishing between regions of Mexico and are put off the country as a whole by news of violence, according to industry insiders.

Money laundering is being targeted by authorities, who this week announced plans to reward people who report suspicions of the crime with up to 25% of any funds or assets seized. Around $10 billion is suspected to flow through Mexico every year, possibly linked to drug trafficking.

State oil company Pemex is to invest $1 billion in pumping equipment for use in the Bay of Campeche. The five-year project will be tendered “through an international competitive bidding process,” said the company in a statement. Meanwhile, the company has discovered an oil field in the state of Tabasco. The field could provide 3,700 barrels per day of petroleum as well as 8m cubic feet of natural gas.

Mexico plans to sell $500m more of its 6.05 percent debt due in 2040 today. This is the second such dollar bond sale by authorities in 2011. In February, the country issued $1 billion of 5.125% bonds due in 2020.

Peru celebrated the signing of a free trade agreement with Mexico this week, its tenth such international pact. Outgoing president Alan García said that trade between the two countries was worth $413m in 2010.