Axon’s Study on on-net/off-net prices fuels debate on Mexico’s Telecoms Reform

Telefónica Mexico has commissioned Axon Consulting to carry out an independent study to explore the impact that current pricing practices have on the Mexican mobile market, paying particular interest to the discrimination between on-net and off-net calls.

The potential effects and economic rationale of on-net/off-net price discrimination by dominant operators has been widely explored in academic literature. However, to the best of our knowledge, this is the first time that the effects of specific pricing practices and price plans on the consumers and competition have been assessed in a quantitative manner.

Axon Consulting’s report has been appreciated by policymakers and industry specialists. In an article published in the national press on March 17 2014, Senator Gerardo Florez described the study as ‘rigorous and solidly built from a methodological point of view’.

On 24 March, President Peña submitted to the Mexican Senate the much anticipated draft secondary law for Telecoms Reform for its debate and eventual approval. The draft secondary law incorporates a provision forbidding the so-called ‘preponderant’ operator to discriminate between on-net calls and off-net calls.

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