Carlos Slim, the Mexican telecom tycoon who was once the richest man on earth, has dropped to fourth place in Forbes magazine’s most recent billionaire list.
Slim, the son of Lebanese immigrants, is now worth only $50 billion, down $27.1 billion from last year, when he ranked second richest after Bill Gates, according to the publication. He’s this year’s biggest loser on the billionaire list.
He can partly thank anti-trust telecommunications regulations in Mexico. Shares of América Móvil, his wireless services company, have dropped 18% since the beginning of 2015, when the Mexican government started implementing laws too boost competition among telecom providers. The stronger dollar and weakness in Brazil, another big market for the company, made matters worse.
Although América Móvil has businesses in other Latin American countries and the US, Mexico represents about 40% of its earnings before interest, taxes, depreciation and amortization, according to the company’s latest financial statements (pdf.) Its net profit dropped 24% to $35 billion pesos ($1.96 billion) in 2015 compared with the previous year.
For years, América Móvil and its predecessors controlled the Mexican telephone market, accounting for a large share of Slim’s sizable fortune. Slim is also the largest shareholder of the New York Times, and majority owner of Grupo Carso, a conglomerate that includes a major construction company and one of Mexico’s most famous department stores (link in Spanish.)
América Móvil, also one of the largest mobile services providers in Latin America, remains dominant in Mexico. It had 68% of the market (link in Spanish) as of September 2015, according to Mexican telecom regulators.
The new rules have spurred a price war by opening up the Mexican market for companies such as AT&T. They require América Móvil to allow competitors to use its network without fees (Spanish) and mandate free long distance calls. That has pressured profit margins.
Mexican consumers have been the biggest winners, with prices for cell-phone service dropping 17% in 2015 compared with the previous year, according to Mexico’s National Institute of Statistics and Geography.