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Unleashing Mexican Economy: Consumer-Driven Competition

Join a discussion on the obstacles holding back the Mexican economy and the importance of competition and consumer rights. Learn how regulation and standard service agreements impact consumers and the need for a fair and transparent marketplace.

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Unleashing Mexican Economy: Consumer-Driven Competition

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  1. ALCONSUMIDOR AC for The Woodrow Wilson Center

  2. WHAT KEEPS HOLDING THE MEXICAN ECONOMY BACK? A DISCUSSION ON COMPETITION AND CONSUMERS ALCONSUMIDOR AC for The Woodrow Wilson Center

  3. Consumption is the sole end and purpose of all production... • …The interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer. • The maxim is so perfectly self-evident, that it would be absurd to attempt to prove it. • But in the mercantile system, the interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production, and not consumption, as the ultimate end and object of all industry and commerce... Adam Smith, The Wealth of Nations, 1776 ALCONSUMIDOR AC for The Woodrow Wilson Center

  4. CONSUMER – DRIVEN COMPETITION:A WIN – WIN STRATEGY ALCONSUMIDOR AC for The Woodrow Wilson Center

  5. ALCONSUMIDOR AC for The Woodrow Wilson Center

  6. HOWEVER… • Alleged market failures in Telecomm Industry: High fixed costs + low marginal costs = Economies of Scale … • Distortions, Market Power • Lack of information GAVE BIRTH TO… ALCONSUMIDOR AC for The Woodrow Wilson Center

  7. …REGULATION Well – meaning Legal Principles to Benefit Users: • Promote fair competition aimed at: • Lower prices • Better quality and variety • Universal serviceEfficient use of Spectrum • Regulated rates for incumbent HOWEVER… ALCONSUMIDOR AC for The Woodrow Wilson Center

  8. = REGULATORY JUNGLE+MARKETPOWER+NO LAW ENFORCEMENT WEAK COMPETITION & CAPTIVE CONSUMERS ALCONSUMIDOR AC for The Woodrow Wilson Center

  9. WELCOME TO THE JUNGLE • Concession Titles: Inefficient instrument • Does not protect Public Interest • Obsolete, unenforceable provisions • Charter of privileges & immunities • Quality of service & reasonable pricing practices beyond surveillance • Lengthy entry barrier • Regulation costs + costly advertising: High prices ALCONSUMIDOR AC for The Woodrow Wilson Center

  10. STANDARD SERVICE AGREEMENTS: DEVIL IS IN THE DETAILS ALCONSUMIDOR AC for The Woodrow Wilson Center

  11. EXCESSIVE REQUIREMENTS • Llenar contrato de servicio • Autorizar investigación de crédito • Si la forma de pago es efectivo: Efectuar el deposito en garantía o pago de rentas adelantadas (donde aplique) • Si la forma de pago es Tarjeta de Crédito cargo:La Tarjeta de crédito debe estar a nombre del contratante.Si al consultar en Buró de Crédito el títular de la tarjeta no se encuentra, como opción se solicita copia del estado de cuenta con antigüedad no mayor a 30 días naturales y límite de crédito según esquema de contratación. Si no cuenta con este documento se acepta el último corte del banco con sello de la institución o el último estado de cuenta del cajero con antigüedad no mayor a 3 días hábiles de la fecha de contratación. En caso de haberse obtenido por Internet debe estar sellado por el banco. La tarjeta de crédito debe calcarse en el contrato de servicio. Se efectúe el cargo de la primera renta, fianza y activación (donde aplique). • Pagaré firmado por el monto que corresponda al plan. • Identificación vigente y oficial con foto y firma a nombre del titular.Se acepta cualquiera de las siguientes opciones:* Credencial de elector con fotografía* Cartilla de servicio militar nacional.* Licencia de manejo nacional (cualquier estado de la república)* Pasaporte (nacional o extranjero)* Visa láser Americana * Cédula profesional* Identificación de la SCT o PEMEX* En caso de ser militares se acepta identificación de la Secretaría de la Defensa Nacional.* En caso de ser extranjero la forma FM2 o FM3 se acepta como identificación. • Es obligatorio que el contratante sea mayor de 18 años. • En caso de que el cliente sea extranjero es obligatorio que presente la forma FM2 o FM3 dependiendo del caso, además debe presentar una TC emitida por un banco nacional, aun cuando pague en Efectivo. • En caso de que el cliente active un plan con Servicio “Telco directo”, incluir Adendum Servicio Adicional Telco Directo, con la firma de aceptación del Cliente ALCONSUMIDOR AC for The Woodrow Wilson Center

  12. STANDARD SERVICE CONTRACTS Consumer concerns • Miniscule printMiniscule print • No supervision of T&C’s • Abusive clauses • No statutory redress • Disproportionate penalties for early termination • Use of personal data ALCONSUMIDOR AC for The Woodrow Wilson Center

  13. STANDARD SERVICE CONTRACTS II • Unrestricted power to modify T&C’s by service providers • COFETEL surrendered approval powers • Locked equipment, outrageous penalties • Confusing bundled sales, rates and deceiving advertising. • Abuse of Credit Bureau threats • Poor customer service post sale. ALCONSUMIDOR AC for The Woodrow Wilson Center

  14. DIGITAL DIVIDE ALCONSUMIDOR AC for The Woodrow Wilson Center

  15. CONSUMERS- TO- BE • Tax to poverty: Higher rates for Rural & Low Income Users • Universal service Far from real. • 2-3 million BB connections for 105 m people • Scarce fiber optic deployments in remote areas • Expensive satellite connections in rural areas • Telemedicine, business, education, commerce, e-government applications left behind. ALCONSUMIDOR AC for The Woodrow Wilson Center

  16. THIS IS WHY WE NEED TO LEAPFROG TO BROADBAND • Public rural telephony (TPR) Per minute rates in pesos • To Local fixed phone $ 1.50 • To Local mobile on-net $ 1.50 • To local mobile off-net $ 4.38 • Domestic L.D. $ 4.08 • International L.D. $ 9.00 • SOURCE: http://www.telcel.com.mx/portal/telcel.portal;jsessionid=HLrpsy4Y116GmGDppmnYTyQJQ4Z2Xl4x8rtdp98GTJww9v2ynfWC!-777516597?_nfpb=true&_pageLabel=GRAL_DespliegueContenidoPage&seccion=68&pathContenido=%2Fcontenido%2Fservicios_comunicacion_negocio.html#rural ALCONSUMIDOR AC for The Woodrow Wilson Center

  17. CRITICAL ISSUES COMPROMISING CONSUMERS ECONOMY & OPPORTUNITIES • High concentration in BroadBand by incumbent. The next monopoly? • Low penetration of BB and • Rounding calls to the next minute • Roaming charges within on-net calls • Opacity in rates & commercial practices • Spectrum made scarce and expensive by Government. Not a wise call. • Interconnection a huge business, curtailing growth ALCONSUMIDOR AC for The Woodrow Wilson Center

  18. YET: SOMEWHERE OVER THE RAINBOW… THERE IS HOPE ALCONSUMIDOR AC for The Woodrow Wilson Center

  19. ORGANIZED CONSUMERS DO MAKE A DIFFERENCE • Consumers at the center of decisions that impact upon their health, safety, economy, wellbeing, foster development. • Consumer organizations are an indispensable channel towards better practices and a genuine democracy. • Empowered consumers can better counterbalance immense power of corporations and Government monopolies. ALCONSUMIDOR AC for The Woodrow Wilson Center

  20. ALCONSUMIDOR: A PIONEER IN CONSUMER EMPOWERMENT • ACCESS TO JUSTICE PROJECT: Introducing Class Actions to seek redress, deter abuses,inhibit harmful practices • LEGAL COUNSEL For a limited number of low income citizens in emblematic cases of abuse or breach of contract. • INFORMATION TO CONSUMERS Help consumers make well informed decisions. ALCONSUMIDOR AC for The Woodrow Wilson Center

  21. A NEW PARADIGM:CUSTOMER SATISFACTION & FAIR PRACTICES • Alconsumidor intends to establish a direct link with carriers & providers to remedy failures, breaches, eliminate overbilling and improve business practices. • Alconsumidor invites carriers to its Transparency program: Contracts, titles, Ethics Codes and Manuals available. • Arbitration sign-up for conflict resolution ALCONSUMIDOR AC for The Woodrow Wilson Center

  22. CONSUMERS PARTICIPATING IN POLICY MAKING • Alconsumidor intends to encourage citizen participation in key policy and rule making processes, so that the voice of Consumers is heard and their rights enforced. • Alconsumidor is placing the Consumer Agenda in the Public Domain. ALCONSUMIDOR AC for The Woodrow Wilson Center

  23. CONCLUSIONS • The incentive system in Mexico is up-side- down in every aspect of public life. • Systemic abuse vouched by impunity will harm both business and people devastating all. • Incentives for fair dealing, fair competition, fair redress and corporate responsibility is a win- win and a sounder way to build larger markets. ALCONSUMIDOR AC for The Woodrow Wilson Center

  24. CONCLUSIONS II • Mexico challenges require active citizen participation. That is the price and the privilege of democracies. • Corporations & Government shall no longer ignore Consumers. Remember we are the ones paying the bills. • Consumer Associations need Recognition and Support from Government and initial funding from non-corporate sources. ALCONSUMIDOR AC for The Woodrow Wilson Center

  25. THANK YOU FOR YOUR KIND ATTENTION www.alconsumidor.org ALCONSUMIDOR AC for The Woodrow Wilson Center

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