The Company was established on June 24th 1996 as a result of the division of GCarso agreed by the Stockholder Extraordinary General Meeting held on April 30th 1996, whose purpose was separating, within the Company, the ownership of Telmex shares from those of other enterprises whose main activity was developed in the telecommunication industry, including the rights of various option agreements for sale and purchase of ADS representing Telmex shares.
The Company was established with an equity of $16'649,046.00 Mexican Pesos, of which $5'437,880.00 Mexican pesos constitute its share capital (Back Valued Figures).
The main assets of Telecom up to December 31st 2007 are represented by the investment in shares of Telefonos de Mexico, S.A.B. de C.V. and subsidiaries (hereinafter, Telmex International) and other enterprises involved in the telecommunication industry.
Up to December 31st 2007, Telecom owns 50.02% of the total outstanding shares of Telmex and Telmex International. From this percentage, Telecom owns 71.29% and 71.16% of de voting stock up to December 31st 2007 and 2006, respectively. Also, indirectly, through de Empresas y Controles en Comunicaciones, S.A. de C.V. (subsidiary company), it owns 5.40% of the 2007 outstanding shares of Telmex and Telmex International.
On July 25th 2000, the Board of Directors approved the merger of the Company, as the Merging Company, with GT2000, as the merged company, which was an enterprise owning shares of Telmex and was established as a result of the division of Grupo Financiero Inbursa, S.A. de C.V. On December 20th 2000 the merger was completed, and the Company issued additional capital so as to exchange one “A” series share of the Company by 6.83453 shares of GT2000.
During the Stockholder Extraordinary General Meeting of December 21st 2001, the merger of the Company, as the Merging Company, with Banesci2000, S.A. de C.V. and Inveresci2000, S.A. de C.V., as the merged companies, was agreed. As a result of the aforementioned merger, 967 "A-l" series shares were issued representing the minimum fixed capital of the Company, which were delivered to its shareholders.
In September 2000, Telmex announced the division of the mobile phone business and most of its international investments to create AMX, to which Telmex transferred some of its assets, liabilities, and capital, mainly related to the wireless business and various international investments. The purpose of such division was the creation two companies with different administrations, each of them focused on its business, so as to capitalize in a fast and efficient way the challenges and opportunities that could arise in its respective market. Accordingly, Telmex shareholders received the same number of AMX shares to the number of Telmex shares they previously had.
Once the AMX registry processes were approved by the Mexican and foreign authorities, their shares of the L and A series, as well as their ADS's, went public in the stock exchanges of Mexico, New York and Madrid during the first quarter of 2001.
The Company and SBS had celebrated a trusteeship agreement with Banco Internacional, S.A., Institucion de Banca Multiple, Grupo Financiero Bital, whose equity was represented by stocks representing Telmex share capital, which has been settled by the parties.
Subsequently, SBC signed two trusteeship agreements with Inbursa, to which it contributed stocks representing share capital of both Telmex and AMX, and which are still effective. In addition, at the begging of 2001, the Company converted the ”L” Series Non-Voting Shares of Telmex into “AA” series shares.
In order to separate from the Company the ownership of the AMX shares (whose main activity is performed in the wireless telephone industry and various international investments), the Company decided the division by a shareholder extraordinary general meeting held on November 30th 2001. As a result of the division, on December 5th 2001, America Telecom was established, and as of that date, each one of the enterprises functions independently and with enough capacity to manage its own assets.
Once the Company’s Division was authorized, as the dividing company, and America Telecom, as the divided company, the main investment of the company was focused on Telmex, representing 99% of the assets.
In compliance with the resolutions adopted in the Extraordinary General Meeting of the Company’s shareholder, when the division was agreed, in the month of May 2002 the bonds that were issued by the divided company, America Telecom, were delivered. The Company’s shareholders received one share of the America Telecom’s paid share capital for each share constituting the share capital of the Company. Regarding shares deposited in Indeval, this process was carried out in accordance with the applicable legal and administrative dispositions.
By virtue of the foregoing, the division process was settled with the total separation of the shares issued by AMX, and which were owned by the Company. The shares of the Company and of America Telecom are sold independently in the Mexican stock exchange (BMV) as of May 2nd 2002, when the division took effect, at a price of $14.32 for the Company and $8.00 for America Telecom.
In the Extraordinary Meeting of Telmex Shareholders, held on December 21st 2007, the division of the enterprises operating in Latin America was approved, as well as the operations of telephone directories (Yellow Pages). The division was carried out through the establishment of Telmex International, to which the assets, liabilities and equity of most of the subsidiaries operating abroad and the Yellow Pages operation were transferred. The division took complete effect, in accounting and fiscal terms, as of December 26th 2007, when Telmex International was legally established and by which Telmex stopped having control over the aforementioned subsidiaries.
Telecom through its subsidiary Telmex International renders telecommunication services, including voice, data, and data transmission, Internet access and comprehensive telecommunication solutions by means of its subsidiary companies in Argentina, Brazil, Chile, Colombia, Ecuador, and Peru, as well as services related to Yellow Pages in Mexico, USA, Argentina and Peru.
Telecom through its subsidiary, Telmex, renders telecommunication services mainly in Mexico, which include local telephone system, national and international long distance, interconnection of clients with the users of mobile networks (‘caller-pays’), as well as interconnection to Telmex local network of the national long distance operator’s networks, of mobile phone companies and of local service operators, access service and data communication to corporate networks and Internet. Also, other income is obtained through equipment sale.
