Mexico slaps fee on cell phone calls

New surcharge will double or triple cost for callers from outside country

November 04, 2006|By James S. Granelli and Alana Semuels | James S. Granelli and Alana Semuels,Los Angeles Times

Starting today, the Mexican government is imposing a surcharge of at least 14 cents a minute to complete international calls to cell phones, doubling or tripling rates callers pay.

"It's going to hurt the average consumer significantly," said Jeff Compton, an executive at Telscape Communications Inc., a Monrovia, Calif., phone company catering to Hispanics.

Gabriel Lasco, 27, a waiter at Maria's Pescado Frito at the Grand Central Market in Los Angeles, knows how to get around the surcharges to call his father in Mexico City. "I guess I'll have to call the house phone now," he said, "but it's so much less convenient."

Carpenter Emilio Ochoa, 26, said he will absorb the cost of calling his family in Jalisco.

"I have to call my family, so I'm not going to stop," he said. "I'm not happy about the price, but what can I do?"

Lisa Pierce, an industry analyst with Forrester Research Inc., said, "Look at who the fees hurt, the people who can least afford them."

The surcharge was imposed by Mexico's equivalent of the Federal Communications Commission as part of an overhaul of the way mobile phone companies bill their customers. For six years, Mexico has been moving toward a system in which the calling party pays all the costs of a call to a cell phone, including long-distance charges. That makes the incoming call free to mobile users.

Mexico's surcharge does not apply to calls made to landline phones in Mexico or to walkie-talkie systems used by some cell-phone users. At least four smaller Mexican cell phone carriers have obtained a court order to block the surcharge.

But the country's largest phone company, Telefonos de Mexico, known as Telmex, said it would abide by the Mexican authority's new fees. The fees are negotiated individually between Mexican phone companies and their counterparts in other countries.

Most of the money collected will go to companies controlled by entrepreneur Carlos Slim, the world's third-richest man with a net worth of $30 billion, according to Forbes magazine. Slim controls Telmex, which has 94 percent of the Mexican landline market, and America Movil, whose Telcel subsidiary has 80 percent of the Mexican mobile market.

AT&T and Sprint have been alerting their customers about the new fee, but customers still unaware of the higher cost "may suffer sticker shock," said Sprint spokeswoman Kathleen Dunleavy. Verizon Communications Inc. will absorb the fee for three months as it notifies customers, spokesman Jonathan Davies said.

Having the caller pay cell phone costs is prevalent in Europe. The trend never caught on in the United States, despite efforts to implement it. On landline phones, the calling party has long paid the freight for the call, but the U.S. mobile market grew up with each party sharing the cost.

International calls to cell phone customers in Europe also have high surcharges: 20 cents a minute for England, 19 cents for Italy and 17 cents for France. Calls to Canadian cell phone users are billed the way they are here.

James S. Granelli and Alana Semuels write for the Los Angeles Times.

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