An ever increasing set of problems, including accusations of bribery, sabotage and a communications network so poor that it is severely restricting the nation’s economic prosperity, is facing Mexico’s telecommunications operator Telefonos de Mexico, Telmex. Some observers say the situation is reaching a state of crisis, and that the Mexican government may have to privatise […]
An ever increasing set of problems, including accusations of bribery, sabotage and a communications network so poor that it is severely restricting the nation’s economic prosperity, is facing Mexico’s telecommunications operator Telefonos de Mexico, Telmex. Some observers say the situation is reaching a state of crisis, and that the Mexican government may have to privatise Telmex, or allow private concerns to compete with the state owned telecommunications monopoly, reports The New York Times. For some years, Mexico’s poor communications infrastructure has been blamed for many of the nation’s economic ills; unreliable phone lines have limited the spread of facsimlies and computer transmissions, while according to a recent study, 20% of the country’s 4.4m phone lines and 9m phones are generally out of order, with Telmex facing 12,000 daily complaints about poor services. All this in a country with 80m people and a gross national product of $150,000m, the fourteenth largest in the world. Mexico’s Communications Minister recently announced an injection of $14,000m over five years, but some observers say that no amount of money thrown at floundering Telmex will be able to solve its deep-routed problems. The telecommunications operator is also facing growing protests against corruption and sabotage, including accusations that telephone repairmen are damaging phone lines to increase their own earnings. Repairs should be carried out free of charge, but delays of several months are commonplace, while companies are complaining of an increasingly common coincidence whereby repair trucks appear minutes after a fault has occurred with Telmex employees ready to repair the damage – at a price. In response to the criticisms, some Telmex union leaders claim that foreign businesses are deliberately trying to damage the company’s name in an attempt to strengthen the prospect of private capital having a stake in the country’s telecommunications network; Telmex management adds that the September 1985 eathquake caused the destruction of a large number of lines, and points to the government policy that bars it from charging for Mexico City’s public telephones. Gossip that Xerox Corp is a bid target has resurfaced, with Hanson Plc the name again in the frame, but if Michael Blumenthal is to achieve his ambition of turning moribund Unisys Corp into a company doing $20,000m a year by 1991 or 1992, acquisitions like Convergent Inc and Timeplex Corp are no good – it is going to have to go for something the size of Xerox, and a move for Xerox would make a lot more sense for Unisys than most of the ones that have been canvassed – while a bid for NCR Corp is quite possible it would make absurd industrial logic and the resulting whole would be so much less than the sum of the parts that Unisys would run the risk of receiving a break-up bid itself – because as well as taking it into related areas where it is not presently a player, Xerox would give it a vast new sales network through which it could put many of its own products: the problem is the fact that Unisys is still burdened down with debt, but again Xerox would be a better bet than most big companies because it has a large financial services arm that could be sold to recoup a large part of the purchase price – and after all, Michael Blumenthal was once Secretary of the Treasury.