As with all businesses, competitors are bound to arise and put up challenges a company has to face. In terms of telecommunications, the rates of its services are the main point that consumers weigh in choosing their service provider. This is the main reason why competitors in the telecommunications market aim to have the lowest rates with the best services.
This is also why issues may arise from services providers between countries. Back in 2002, a complaint was filed by the United States of America regarding Mexico’s long distance rates. According to the rules, US carriers had to connect first with a Mexican network for the user to terminate the long distance call. Also, Telmex which is the leading telecom company in Mexico has the power to negotiate the rates of termination and lastly, it did not allow US carriers to have lease lines to end calls. Common end point is the rates turn out to be higher.
This dispute was solved with the aid of the World Trade Organization or WTO. Based on the evaluation, Mexico was found to have violated its obligations. It despoiled its commitment to make sure that the basis for connection by US operators was cost-based. Also, it was not able to prevent Telmex from engaging in acts considered to be under anti-competitive. Lastly, it also did not keep its obligation to ensure that Mexican lines are available to be leased to United States carriers who are currently employed or working in Mexico. Due to this, US carriers were unable to provide adequate resale services.
To remedy these problems, both parties agreed to have a compromise and have a mutual agreement. The telecom competition exists and it is very stiff, especially in terms of aspects that can have a great effect on the country’s economics.