Third-richest man is gaining

Mexican billionaire Carlos Slim may surpass No. 1 Bill Gates and No. 2 Warren Buffett

Up Close

March 20, 2007|By Marla Dickerson

MEXICO CITY -- Telecom mogul Carlos Slim Helu has built a corporate empire so vast that it's nearly impossible for most Mexicans to go a day without slipping a few pesos into his pocket.

Forbes magazine recently estimated his net worth at $49 billion. That represented a $19 billion increase from 2006, the biggest one-year increase in a decade for anyone on the magazine's annual list of the world's richest people.

Microsoft Corp. co-founder Bill Gates' $56 billion helped him retain the top spot. Investor Warren E. Buffett was again runner-up with $52 billion. But with those tycoon philanthropists increasingly focused on giving away their fortunes, the 67-year-old Slim appears destined to surpass them both.

When Mexicans talk on the phone or use the Internet, they're almost certainly doing it through a company controlled by Slim, who in 1990 bought the old state-owned telephone company Telefonos de Mexico, or Telmex, and turned it into a cash machine.

Profits from that near-monopoly have bankrolled Slim's telecom acquisitions around the region, propelling his America Movil wireless spinoff into the largest provider of cell-phone service in Latin America.

Mexicans buy cigarettes from Slim's tobacco company, apply for mortgages at his bank and buy policies at his insurance firm. Shoppers patronize his department stores, eat at his restaurants and browse for CDs at his music outlets.

Travelers fly his discount airline. Industrialists buy his auto parts, electronics, steel and ceramic tile. The government hires his infrastructure firm to build highways, water treatment plants and oil platforms. More than 250,000 Mexican employees draw paychecks from his companies.

"It's virtually cradle to grave. It's Slimlandia," said George W. Grayson, a Mexico expert at the College of William & Mary in Virginia. "You are engulfed by Slim in Mexico."

The portly Slim has more than tripled his fortune since Forbes published its 2004 list, thanks to a string of acquisitions and the ballooning value of his holdings.

The son of a Lebanese immigrant shopkeeper, Slim to some Mexicans represents the triumph of hustle over heredity in a nation where a few dozen families have held sway for generations. He isn't flamboyant or ostentatious. He has given foreign competitors fits. His ranking among the world's business elite invokes pride in a country that often suffers from a chronic sense of underachievement.

For others, Slim is the outsider who has become the consummate insider, a prime example of the crony capitalism that has benefited the few at the expense of many. Nearly everyone gives Slim credit for being a knowledgeable businessman. He made his first investments as a child and has coolly snapped up assets at bargain prices during periods of economic turmoil.

But critics say his purchase of Telmex was a sweetheart deal that merely replaced a public monopoly with a private one. Studies have shown that Mexicans pay some of the highest telecom rates in the world, which is crippling the nation's competitiveness.

Rivals say Telmex has thrown up numerous roadblocks, including high connection fees that have blocked their market access. Regulators have had little success in leveling the playing field. Slim's companies routinely use Mexico's lumbering court system to stave off authorities' rulings against them.

Still, the constant drumbeat of criticism may be forcing Mexico's monopolists to try to soften their image. Slim, who has ceded most of the day-to-day control of his empire to his sons, recently said he plans to devote most of his time to philanthropy.

But some experts say a kinder, gentler Slim won't make the job of Mexico's antitrust authorities any easier.

"Carlos Slim may start giving away money hand over fist," said Pamela K. Starr, Latin America analyst with the Eurasia Group in Washington, D.C. "But that doesn't mean he won't try to protect his monopoly as long as he can."

Marla Dickerson writes for the Los Angeles Times.

Carlos Slim Helu

Age:

67

Parents:

Julian Slim Haddad and Linda Helu (Lebanese immigrants)

Marital Status:

widowed (wife died in 1999); six children

Education:

Civil engineering degree from the National Autonomous University of Mexico, 1962

Position:

Honorary president of Telefonos de Mexico (Telmex); Grupo Financiero Inbursa (banking and insurance); America Movil (mobile service operator); Grupo Carso; and Carso Global Telecom.

Major companies he owns:

America Movil

(wireless telephone service - 43.2 million clients and revenue in Mexico of $9.95 billion in 2006)

Telmex

(fixed-line telephone service - 18.3 million phone lines and revenue in Mexico of $11.7 billion in 2006)

Prodigy

(dial-up and high-speed Internet - 2.6 million clients in Mexico in 2006)

Sanborns

(department stores and restaurants - 18,500 employees)

Cigatam

(marketer of Marlboro and Benson and Hedges cigarettes)

Sears Roebuck de Mexico

(56 stores in Mexico)

Volaris

(airline - 46 to 48 daily flights)

Grupo Financiero Inbursa

(banking and insurance - $314.2 million in profits in 2006)

MixUp

(CD retailer - 60 stores in Mexico)

[Los Angeles Times]

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.