Telecom Magnate Carlos Slim's Rise To Power

The wealthy and powerful Slim, a mystery in American telecom circles, is revealed in a lengthy profile in <I>The New Yorker</i>.

W. David Gardner, Contributor

May 29, 2009

3 Min Read

Called the world's richest person by Forbes magazine, Carlos Slim, who has been something of a mystery man in American telecom circles, is less of a mystery today because of a lengthy profile in the June 1 issue of The New Yorker.

A former major stockholder in MCI and CompUSA as well as a director of AT&T precursor SBC Communications, Slim has been a powerful figure in U.S. telecom circles, even as he has dominated Mexico's telecommunications and wireless communications throughout Latin America, including wireless provider América Móvil.

Most of Slim's power core comes from his takeover from the Mexican government of Telmex in the early 1990s, during the presidency of Carlos Salinas de Gortari. While Telmex's business consisted mostly of landlines at the time, Slim thought the company's emergent cell phone business had great potential.

"Cell phones were still a novelty in Mexico," wrote The New Yorker's Lawrence Wright in the profile. "And the few carriers that existed generally had licenses for certain regions and not others. The government tossed into the deal a cellular license that covered the entire country. This turned out to be one of the most precious business concessions ever awarded."

Slim streamlined Telmex with the help of one of his partners, Southwestern Bell, which sent one of its rising executives to work with Slim in 1992. The executive was Randall Stephenson, who today is CEO of AT&T.

According to The New Yorker, Stephenson figured Slim would implement the U.S. cell phone model in which $70 a month per subscriber was typically charged. But Slim wanted to charge just $20 in poverty-stricken Mexico, and that model proved to be successful. América Móvil now has almost 200 million users throughout Latin America and is highly profitable. Slim says that as much as 80% of Latin America's population has a mobile phone today.

"He's probably the most intelligent businessman I've met," Stephenson said of Slim in the article. "You have very few opportunities in life where it is just grow, grow, grow."

Slim was also a pioneer in promoting prepaid calling cards for mobile phone users. That approach is increasingly taking off in the United States.

Slim is not without his critics. According to The New Yorker, Denise Dresser, a writer and college professor in Mexico, has challenged Slim over what she regards as the monopolistic practices and high consumer prices charged by his companies. After she moved back to her native Mexico in 2002 from Los Angeles, she was surprised that she was charged three times as much for telecom gear in Mexico as she had been charged in Los Angeles. Ever since, she has challenged Slim on his business practices.

Recently Slim has made a major investment in The New York Times. According to Forbes magazine numbers, he has fluctuated among Microsoft's Bill Gates and investor Warren Buffet for the title of the world's richest man.

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