Telefónica Mexico given record fine over quality

Mexico's telecommunications regulator on Monday fined a unit of Spain's Telefónica, a record 410.9 million Mexican pesos ($25 million) for not complying with quality controls.

The Federal Telecommunications Institute (IFT) said the fine was imposed in response to the high number of dropped calls by Pegaso, owned by Mexico's No. 2 wireless operator Telefónica , and was the largest sanction in its two-year history. The company said it would contest the fine, that it described as "unfair and disproportionate."

The IFT was formed as part of larger reforms to the country's telecoms sector in order to curb the power of billionaire Carlos Slim's América Móvil, lower prices and improve quality.

The IFT voted 5 to 2 to impose the fine after hearing Pegaso's arguments. It said the company had 15 days to contest the decision.