Anyone who has visited South America will surely have implored the ancient gods of finance that the region be allowed to regain control of its own destiny. Carlos Slim, the fourth richest man in the world, is intent on doing so through the combined investment of Telmex and América Móvil. Up against it stands Telefónica, the Spanish company whose approach to the market is not so unlike that of the conquistadors some five centuries ago.

By and large the economies of the region have behaved lamentably. Yet for reasons that I am at pains to explain, one remains desperate for them to succeed. Seen thus, the region’s telecom sector does not need the involvement of Telefónica – or at least not its involvement in some glorified form of post-imperial pan-Hispanic isolation. Carlos Slim is a more durable if radical alternative.

Sadly, radical alternatives tend to be short-lived in the region. The fact that US carriers have withdrawn from the region is, tectonically, favourable to the home-grown player. While battle commences, its is likely to be confined to the region unless an emboldened Carlos Slim sets his sights on North America’s Spanish-speaking minority. What was the last company to attempt that? You guessed it, Telefónica.

Rights, wrongs and Richter scales
Techtonix scale/short term: 3/10. Starting from a low base.
Techtonix scale/mid term: 6/10. Pent-up demand being met, leading to soaring growth.
Techtonix scale/long term: 5/10. Few opportunities beyond its continental boundaries.
Jim Chalmers

Tomorrow: CEE/CIS nations look set to struggle.