Mexico's Congress on Tuesday gave overwhelming final approval to an expansive overhaul of the telecommunications sector, which aims to boost competition in the industry and tame the likes of billionaire Carlos Slim and broadcaster Televisa.
The bill encourages more foreign investment in the telecoms industry and gives regulators the power to stop companies from controlling more than 50 percent of the market, a measure aimed directly at telecoms tycoon Slim and Televisa (Mexico City, Mexico).
But forced asset sales will not be automatic if companies are declared dominant by the competition regulator.
The telecoms overhaul is part of President Enrique Pena Nieto's wider economic reform agenda. He is set to present major tax and energy sector revamps later this year, though the Mexican leader must first settle a political spat with the main opposition parties.
Slim's phone company, America Movil (Mexico City, Mexico), controls some 80 percent of the fixed line business in Mexico and about 70 percent of its mobile market.
Televisa has more than 60 percent of the TV market.
The legislation mandates the creation of a new regulator known as Ifetel to oversee the telecoms market. It also outlines the shape of a new federal competition commission, which will regulate all other areas.
Companies that are fined or told to sell off assets by the new federal competition commission would have the right to lodge appeals to suspend these decisions, a tactic companies have used to fight competition rulings.
However, Televisa and America Movil will be subject to Ifetel, not the federal competition commission, hampering any efforts to contest regulatory rulings.
The measure, which was first presented by Pena Nieto last month, won nearly unanimous approval from the Senate, with 108 votes in favor and three against.
Uncertainty over the final details of the bill has been dragging on the share prices of America Movil and Televisa.
(Writing by Alexandra Alper; Editing by Simon Gardner and Paul Simao)