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What Can Telecoms Learn From the Worlds Richest Man?

Carlos Slim is the world's richest man; Bill Gates is now number two.

Mexican telecoms Carlos Slim is now the world's richest man, according to the latest Forbes Rich List pushing Bill Gates into second place.

Slim is now worth $53.5bn, thanks mainly to his stake in America Movil. Gates is second with $53bn in the bank - boosted by a 50 per cent rise in Microsoft's share price which added $13bn to his cash pile this year.

So Who Is Carlos Slim

Carlos Slim (born January 28, 1940), is a Mexican businessman largely focused on the telecommunications industry.

Slim has a substantial influence over the telecommunications industry in Mexico and much of Latin America. He controls Teléfonos de México (Telmex), Telcel and América Móvil companies. Though he maintains an active involvement in his companies, his three sons-Carlos, Marco Antonio and Patrick Slim Domit-head them on a day-to-day basis.

Telecom leadership

Slim gained notoriety when he led a group of investors that included France Télécom and Southwestern Bell Corporation in buying Telmex and Telnor from the Mexican government in 1990 in a public tender during the presidency of Carlos Salinas. Telmex is the dominant telephone company in Mexico controlling 90 percent of the telephone lines The mobile company, Telcel, which Slim also controls, operates almost eighty percent of all the country's cellphones. These operations have financed Slim's expansion abroad.

America Movil was established in September 2000 as a spin-off from Telmex has expanded using acquisitions to compete in the Latin American wireless market.
Over the past five years, his wireless carrier América Móvil has bought cellphone companies across Latin America, and is now the region's dominant company, with more than 100 million subscribers. 55% of America Movil is owned by Carlos Slim and his family. Slim's son, Patrick Slim Domit, became chairman in 2004. In addition, AT&T (T) owns an additional 23% of the company. América Móvil (AMX), which is the fourth largest mobile network operator in the world and the largest corporation in Latin America.

The Mexican magnate's rising fortune has caused a controversy because it has been amassed in a developing country where per capita income does not surpass $14,500 a year, and nearly 17% of the population lives in poverty. Critics claim that Slim is a monopolist, pointing to Telmex's control of 90% of the Mexican landline telephone market. Telmex, which is 49.1% owned by Slim and his family, charges among the highest usage fees in the world.

Although he was rich before entering the Telecoms arena in 1990 it is telecoms that have driven his wealth and there is considerable heated debate about the manner of his entry. His supporters, who seem to be in the minority, claim that he simply went along with the corrupt president Salinas because he had no option whilst the majority hold that he bribed his way into the deal that made him. His reluctance to consider charitable donations to help the poor because he believes they should help themselves does nothing to improve his position.

What Can We Learn

Carlos Slim found himself facing a huge opportunity in 1990 and went for it in a big way. Having made the vital break through he has driven the business forward with acumen and ability. His one big bet has succeeded spectacularly and he has not faltered since.

If we compare his performance with that of BT who had a 7 year start with a virtual fixed line monopoly and a mobile company we see how Slim's clear strategy and vision have delivered whereas BT's muddle have lead to the destruction of value. Today Slim alone is worth two and half times the whole of BT.

So in the next big challenge for the telecoms industry - VoIP - who is going to succeed? It seems to me that the only thing that is going to stop Mr Slim embracing and profiting from the technology is the grim reaper himself and let us hope that event is some way off. In the mean time he is destined to make the world of telecoms a livelier and, for him at least, a richer place.