Telmex: From SME to Multilatina - Case Study Example

The company came into being in 1947 when some investors that were Mexican purchased the Ericsson branch that was operating in Mexico and later on also bought the Mexican branch of the ITT Corporation which then made them the only telephone provider that existed in the country. In 1972 the government of Mexico bought the company and consequently made it a government monopoly which later sold it controversially to another group of investors in 1990 who did not pay for it immediately but did so over a number of years using the revenue that came from the company’s operations.

After the company was privatized, it began to invest in new modern infrastructure by creating a fiber-optic network that was worldwide and therefore making their services available to most of the country. Even after its privatization, the company still remains a quasi-monopoly although there are a few other telephone companies that have their operations in Mexico that include Alestra that was formerly AT&T, Axtel, Maxcom, and Cablecom. Telmex had no market presence in the country of its origin in the early 1990s and the company had to resolve to form a subsidiary that was mandated to provide mobile communication which offered services under the title Telcel where it started out in a distant second in the offering of the mobile services.

The company started offering the first prepaid mobile phone plans and the success that came out of this was what made the company grow and become a leader in the mobile market within two years. In the mid-1990s the company ventured into the internet sector and started offering internet access as an internet service provider (ISP) while using the brand Uninet which changed to Telmex Direct Personal Internet. As the company covered the whole country with their services, it was able to become the leading internet service provider at that time in Mexico.