Slim's 1990 Telmex takeover turned a state phone utility into a modern network

Telmex had been majority state-owned since 1972, when the Mexican federal government acquired most of its capital stock. As a state utility it was investment-starved: Mexico's telephone penetration lagged badly and the company could not fund the expansion the country needed.

In December 1990 the government sold shares representing voting control to a Grupo Carso-led group fronted by Carlos Slim, with France Telecom and Southwestern Bell as partners; the state sold its remaining stake in a series of transactions beginning in May 1991. Telmex's 1976 concession had been amended in August 1990, giving the new owners a 30-plus-year licence framework with line-growth obligations.

The new owners bet on heavy network investment rather than harvesting the monopoly. Telmex digitised exchanges, expanded long-distance capacity and pushed lines into underserved regions, turning the waiting-list economy of the state era into steady subscriber growth.

By the time of its 2005 SEC filing, Telmex reported fixed lines in service rising from 12.07 million in 2000 to 17.17 million in 2004, and internet access accounts growing from 634,000 to 1.74 million over the same period — the scale base from which Slim built América Móvil, spun off in 2000.

Fixed lines in service grew from 12.1M in 2000 to 17.2M in 2004; internet accounts nearly tripled to 1.74M in the same span.

The 1990 concession amendment gave the buyers regulatory certainty for decades before they committed capital.

Pent-up demand was enormous, so every line added found a paying customer immediately.

Slim's group treated the licence obligations as a growth engine, not a compliance burden.

Local and long-distance integration let Telmex monetise each subscriber across services.

A regulated monopoly with guaranteed line-growth targets can be a compounding machine: buy the concession, invest ahead of demand, and let scale do the work.

Telmex became the cash engine of Slim's empire: it spun off its wireless arm as América Móvil in 2000, which grew into Latin America's largest mobile carrier. Telmex's post-privatisation dominance later drew a WTO case (DS204) over interconnection terms. Slim became, for a time, the world's richest man.