Mexican tycoon Carlos Slim held the title of the world’s richest man for the past three years until a new president rolled into town with a vast economic reform agenda.
Mexican President Enrique Pena Nieto’s push to overhaul the telecom industry, a sector dominated by Slim, has weighed down on stock prices of the billionaire’s America Movil SAB telephone empire, analysts say.
Three weeks after the Mexican Congress approved the legislation, and a boatload of US dollars later, Forbes magazine declared on Wednesday that Microsoft Corp founder Bill Gates had reclaimed the wealth throne he bequeathed to Slim in 2010.
Slim’s US$69.1 billion compared to US$69.8 billion for Gates after America Movil shares dropped further — a spectacular reversal of fortune from a little more than a month ago, when Forbes put Slim on top of this year’s rich list with a net worth of US$73 billion.
Jorge Bravo, Web editor of the industry consultancy Mediatelecom, said reaching the top of the list had ultimately backfired on Slim.
“A series of regulations and media effects began against him for being the richest man in the world in a country that doesn’t exactly have his wealth and has a lot of poverty,” Bravo told reporters.
Slim’s spokesman declined to comment.
America Movil owns fixed-line and mobile phone businesses as well as Internet and cable television services in 17 Latin American nations and the US.
In Mexico, his landline firm Telmex controls 80 percent of the industry while his cellphone service, Telcel, holds 70 percent of the mobile market.
Pena Nieto took office in December last year with a pledge to reform key sectors in the country, forming an unprecedented pact with rivals to lock down support.
The telecom bill has yet to become law and the impact it will have on Slim’s dominion remains unclear, analysts said, but it has made investors shy away from America Movil.
The company’s shares closed at 12.54 pesos on the Mexico stock exchange on Friday, down 0.32 percent from the previous day.
“The concern is that the government wants to reduce his dominance with the idea of having more competition in the sector with lower prices,” said Carlos Hermosillo, an analyst at Banorte bank.
Ignacio Cedillo Bravo, an analyst with financial consultancy Bursametrica, said Slim’s other companies — with interests in mining, auto parts and retail — have also been affected by a general drop in Mexico’s stock market, which has fallen 7.29 percent over the past year.
The telecom bill aims to open up competition in the telephone and television market, which is dominated by Televisa, the world’s biggest Spanish-language broadcaster.
Although Slim has tried to break into the television market, Bravo said the reform may not help him because it will have very short deadlines to open new TV stations.
However, he said another reform eyed by Pena Nieto could help the 73-year-old billionaire further diversify his portfolio: An overhaul of the energy sector which could allow more private investment in the state-run Pemex oil giant.
“Among national businessmen who could participate in the energy sector in case the Pena Nieto government decides to open it up, he would without a doubt be one of the main Mexican candidates,” Bravo said.