1989 and received bids in November 1990. Even though
Slim did not put in the highest bid, a consortium led by his
Grupo Corso won the auction. Instead of paying for the
shares right away, Slim managed to delay payment, using
the dividends of Telmex itself to pay for the stock. What
was once a public monopoly now became Slim’s
monopoly, and it was hugely profitable.
The economic institutions that made Carlos Slim who he
is are very different from those in the United States. If you’re
a Mexican entrepreneur, entry barriers will play a crucial
role at every stage of your career. These barriers include
expensive licenses you have to obtain, red tape you have to
cut through, politicians and incumbents who will stand in
your way, and the difficulty of getting funding from a
financial sector often in cahoots with the incumbents you’re
trying to compete against. These barriers can be either
insurmountable, keeping you out of lucrative areas, or your
greatest friend, keeping your competitors at bay. The
difference between the two scenarios is of course whom
you know and whom you can influence—and yes, whom you
can bribe. Carlos Slim, a talented, ambitious man from a
relatively modest background of Lebanese immigrants, has
been a master at obtaining exclusive contracts; he
managed to monopolize the lucrative telecommunications
market in Mexico, and then to extend his reach to the rest of
Latin America.
There have been challenges to Slim’s Telmex monopoly.
But they have not been successful. In 1996 Avantel, a long-
distance phone provider, petitioned the Mexican
Competition Commission to check whether Telmex had a
dominant position in the telecommunications market. In
1997 the commission declared that Telmex had substantial
monopoly power with respect to local telephony, national
long-distance calls, and international long-distance calls,
among other things. But attempts by the regulatory
authorities in Mexico to limit these monopolies have come
to nothing. One reason is that Slim and Telmex can use
what is known as a recurso de amparo , literally an “appeal
for protection.” An amparo is in effect a petition to argue
that a particular law does not apply to you. The idea of the
amparo dates back to the Mexican constitution of 1857
and was originally intended as a safeguard of individual