Telmex, Sprint to start testing joint venture

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MEXICO CITY -- The joint venture between Telefonos de Mexico (Telmex) and U.S. carrier Sprint is to start test marketing in Tucson in early September after finally winning approval to begin operations.

Telmex-Sprint Communications received the green light from the U.S. Federal Communications Commission (FCC) August 7 after almost a year of delays.

The two carriers first formed TelmexSprint in February 1997 with an eye to the Hispanic market in the U.S. The FCC granted the joint venture a license to offer long-distance services from the U.S., contingent upon the Mexican carrier lowering the tariffs to connect calls originating from the U.S. with its network by almost 52% over the next three years.

In October, the FCC reportedly imposed several conditions, two of which related to Telmex's discriminatory practices in favor of Sprint.

Sprint is the only major U.S. carrier not to enter the Mexican market, favoring instead a technical alliance with Telmex, brokered several years ago.

U.S. carriers AT&T and MCI had challenged the Telmex-Sprint permit, charging unfair market practices and a lack of competition in Mexico, and seeking a greater reduction in the international interconnection charges.

"MCI will continue to work with the FCC and the U.S. government to safeguard competition in international telecommunications and to insure (sic) that U.S. companies are afforded the same rights in Mexico as they now have in the U.S.," MCI said in an August 7 statement.

Telmex-Sprint will offer U.S. residents the chance to order a telephone line for someone in Mexico, for which they will be billed and can pay in the U.S., says Carlos Alazraki, president of the joint venture's ad agency Alazraki y Asociados.

Alazraki has handled the Telmex account within Mexico. The agency had already prepared a campaign for Telmex-Sprint last year that was put on hold when the operations were delayed. That ad campaign was to be rolled out city-by-city in the states of Arizona, Texas, California and Illinois.

Copyright August 1998, Crain Communications Inc.

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