On a recent evening in a central neighbourhood of Mexico City, a well-known academic and acquaintance of Carlos Slim, the Mexican billionaire, tried to summarise what continues to drive the man who for years has been the country’s richest individual. “Power,” he concluded after barely a moment’s thought.
If one measure of power is wealth, Mr Slim might already have reached his goal: Sentidocomún, a respected financial website, this week claimed that Mr Slim was now the world’s richest individual, considerably more wealthy than Bill Gates of Microsoft fame.
Eduardo García, owner of Sentidocomún, calculates Mr Slim’s wealth at more than $67bn (£33bn, €49bn), thanks mainly to the extraordinary second-quarter, 26.5 per cent rise in the share price of América Móvil, the pan-American cellular phone company in which he has a 33 per cent stake.
The increase, argues Mr García, boosted Mr Slim’s personal wealth by an astonishing $10.8bn between April and June alone and now makes him about $8.6bn richer than Mr Gates, whose shares in Microsoft went up 5.7 per cent during the same period.
“If there were any doubt as to who is the richest businessman on the planet – Carlos Slim or Bill Gates – there isn’t any longer,” says Mr García.
In public, at least, Mr Slim – a swarthy, portly man with a chin that more often than not is covered in grey stubble – dismisses such valuations as being of “no real significance”, however. When Forbes, the New York-based magazine, in March claimed that he was the world’s second-richest man, Mr Slim held a rare press conference and said: “I have no more money now than I did 10 years ago.”
“We haven’t really done the calculations,” says Arturo Elías Ayub, Mr Slim’s son-in-law and the communications director of Carso Group, his main holding company. “This has simply come about because of the price of the shares, which luckily and thanks to a lot of hard work have gone up, but they are still the same shares in the same companies that he has had for years.”
Whatever Mr Slim’s exact wealth, there is no doubt that he has come a long way since the day in 1955 when his father, a shopkeeper and landowner, gave him 5,500 pesos with which to start his career.
Born in Mexico City in 1940 to a Lebanese immigrant who had arrived in Mexico after fleeing violence in his native country, Mr Slim soon began to show entrepreneurial flair: according to family members, the young Carlos would use family dinners and get-togethers as an opportunity to flog sweets and cigarettes.
The cash cow in Mr Slim’s extensive business portfolio is Telmex, the former state-owned telecommunications company that he bought in 1990 as head of a consortium that included France Telecom, which he subsequently bought out, and Southwestern Bell of the US.
Today, Telmex dominates fixed-line telephony in Mexico, accounting for more than 90 per cent of the market. It is also extremely profitable: every year it generates earnings before interest, tax, depreciation and amortisation of more than $6bn, and enough free cash flow to pay for its original acquisition price.
In spite of its monopoly of landlines, Telmex was subsequently allowed to enter the wireless market, a business it would later spin off into América Móvil, which Mr Slim controls. The company has increased its subscriber rate by an average of 40 per cent a year since 2000.
Mr Slim’s detractors – and there are many in a country in which roughly half the 105m population lives below the poverty line and in which per capita GDP is only about $7,000 – argue that the Mexican billionaire’s wealth is the product of the monopolistic positions his companies enjoy, particularly in telecommunications.
“He’s become so powerful in Mexico that he’s turned into Big Brother,” says the acquaintance. “Mexicans are angry about monopolies and how much they charge for everything.”
Indeed, a recent report published by the Organisation for Economic Co-operation and Development claimed that Mexico had some of the highest telephone charges of all its members.
Yet analysts say such points of view overlook the fact that Mr Slim has demonstrated time and again an uncanny ability to spot under-valued and under-managed companies and build them up. “He has an incredible knack of knowing when the worst is over and picking the time to buy,” says Damian Fraser of UBS in Mexico City.
For all his money and ability, however, Mr Slim continues to lead a relatively modest life. For years he has shunned the luxury yachts and holiday villas that other Mexican billionaires have flaunted.
He still lives in the same family house he has occupied for decades and even continues to light his Cohiba cigars with disposable plastic lighters. Visitors to his windowless basement office in Mexico City often comment on the broken air conditioning.
Now 67 and a widower – his wife died in 1999 – and with rumours that he might be suffering from heart-related health problems, Mr Slim has promised to boost donations to his charitable foundations from $4bn to $10bn, committing funds for education and healthcare, and planning a network of up to 200 “casas Telmex” across the country to offer free computer and internet access in under-privileged urban areas.
Additional reporting by Richard Lapper