New trends in the Latin American telecommunications market: Telefonica & Telmex

This paper illustrates how the telecommunications sector in Mexico has grown considerably but that it still lags behind in terms of access and prices, compared to other countries with similar economic conditions. This paper identifies the welfare costs that may be associated with a "National Champions" policy pursued in Mexico compared to that of Brazil. The policy outcomes of these national strategies appear to support the philosophy of competition leading to higher welfare gains. In terms of welfare gains, Brazil has lower tariffs and a higher penetration than Mexico. It is, however, important to consider the fact that some of the firms operating in Brazil faced bankruptcy and this may indicate weakness in the model.