Mexico took steps to promote competition in the nation’s fixed-line phone service sector with the issuance of rules last week that require Telmex—Mexico’s dominant phone service provider—to grant rivals cheaper and easier access to the Telmex network. Although the government terminated Telmex’s status as a monopoly carrier ten years ago, the company continues to control more than 90% of Mexico’s local exchange market, and is alleged to have successfully blocked access to its network through overcharges and contract terms that prevent rivals from establishing a competitive foothold. In recent years, however, cable operators that offer voice and Internet services have made competitive inroads against Telmex, which, last Monday, reported a 55% slump in fourth-quarter earnings. Indicating that his company is likely to challenge the new regulations in court, Telmex CFO Alfonso Cerezo told analysts that the government’s directive would force Telmex to slash investment plans for 2009 by one-third. A spokesman for MCM Telecom, a start-up phone service provider in Mexico City, welcomed the rules as “a well-intentioned step to improve competition,” but stressed: “this country is going to need more.”