There is a reason Mexico’s Carlos Slim Helu is called Midas: he takes investments few would touch and turns them into gold.

Lately, his golden touch has been working north of the border. Slim owns 13.5 percent of MCI Inc. (Nasdaq: MCIP — message board), and last week, when the carrier announced a dividend to shareholders, it meant a $68.1 million payout to Slim as MCI shares rose 16 percent on the news.

Slim’s interest in U.S. interexchange carriers is noteworthy. Not long ago, MCI and AT&T Corp. (NYSE: T — message board) were among the biggest competitive threats to Slim’s Teléfonos de México (Telmex), Mexico’s largest phone company.

But Slim began buying WorldCom (now MCI) bonds in 2002, when the company was mired in bankruptcy and financial scandals and most everyone was planning its funeral. Some think that when the price is right for AT&T, he’ll take a chunk of that as well.

In July, Slim added 390,000 shares of Global Crossing Holdings Ltd. (Nasdaq: GLBC — message board) to his own holdings, through his companies, Orient Star Holdings and Carso Global Telecom. This increased his stake to 19.9 percent (see Slim Can Buy More Global Crossing Shares and Global Crossing Leans on Loans ).

In mid-July, more than three-fourths of Global Crossing’s shares were in the hands of short sellers. But when Slim started buying, the shorts got scared and on July 30, the stock rose 9.3 percent on the news of Slim’s interest.

Short-term gains on dividends and share spikes are one thing. Slim’s long-term -- and yet unknown -- plan for MCI and Global Crossing is another story. „For MCI the fundamentals remain difficult,“ says analyst John Hodulik of UBS Investment Research. „In my opinion, it doesn’t seem that we are reaching any inflection point in terms of the supply-and-demand equation.“

Hodulik says a vulture investor getting into the long-distance carriers has got to be looking at a very long time frame. For now, he says, these companies’ stocks seem to be headed in the wrong direction.

Still, Slim has such a strong record, few will second-guess him, particularly since he made his fortune in telecom.

When he took over the newly privatized Telmex in 1991, he was faced with the prospect of modernizing a company that made customers wait for a year to get a new long-distance phone line. He only had four years to turn Telmex around, since its monopoly was set to end in 1997, when it would compete with AT&T and other U.S. telecom giants. By 1993, Telmex was profitable and Slim’s 20 percent stake soared in value from $1.8 billion to more than $6 billion.

In 1997, Slim bought 3 percent of Apple Computer Inc. (Nasdaq: AAPL — message board), just before Steve Jobs returned and Microsoft picked up a 15 percent stake -- two events that resuscitated the company and sent shares soaring. Among other U.S. holdings, Slim’s companies and his family have stakes in CompUSA, Prodigy (bought by SBC Communications Inc.), Officemax, and Saks Inc.

But how good is Slim’s timing these days? That depends on whether the telecom sector has really hit bottom. „The industry is ready for more restructuring,“ says Mark Jamison, director of telecommunications studies at the University of Florida.

Slim may have bigger ambitions than just turning a cash profit, says John Ryan, chief analyst at RHK Inc.. Ryan says Slim’s interest may be in companies that give him access to the underserved immigrant Latino population in the U.S. and the ever-growing cross-border telecommunications traffic. „I don’t think its just bottom feeding,“ Ryan avers (see Better News on Internet Backbones ).

In July, when Slim resigned from the board of SBC, a position that often put him in conflict with his MCI interests, he gave the seat to his son, Carlos Slim Domit. A Telmex spokesman says Slim senior wants to devote more time to infrastructure, health, education, and environmental issues in Latin America. This year he also handed Slim Domit the reins of Telmex, though he retains the title of honorary chairman for life.

Meanwhile, big Slim hasn’t stopped shopping in Latin America, where he has wide-ranging telecom holdings (see Global Crossing, Telmex in Voice Deal ). This month Telmex bought Embratel (see Telmex Buys Embratel From MCI ).

As telecom value hunters go, Carlos Slim (and family) are always worth watching. „He’s got a pretty strong near-monopoly situation in Mexico, and that kind of gives him a strong profitable base to be a good bottom-feeder here,“ says Eli Noam, director of the Columbia Institute for Tele-Information at Columbia University. „Even in Europe, most of the companies are heavily in debt and can’t make major investments.“

— Marcy Burstiner, special to Light Reading

Mexico City — Latin America’s richest man, Carlos Slim, owns so many companies that Mexico often seems like «Slim World» — and the magnate’s influence is so pervasive that it will probably endure, even as he gives up board positions and hands control of his companies to his sons.

Diners at one of Slim’s hundreds of chain restaurants can use a Slim wireless service to connect to Slim’s Internet provider to do online banking at Slim’s bank, or pay off credit cards for Slim’s department stores.

Outside in the street, vendors in jump suits bearing the name of Slim’s cell phone company — Mexico’s largest — sell prepaid phone cards to passers-by. Slim’s Telefonos de Mexico, or Telmex, also controls about 95 percent of fixed phone lines. Other street vendors sell Slim cigarette brands.

Some Mexico City shopping malls are also nearly one-man shows — many are anchored by his Sears de Mexico stores, and he recently bought out J. C. Penney operations here.

The malls are filled with Slim-owned record stores, sporting goods stores, drug stores, restaurants and bakeries. Even the ATM machines are linked to Slim’s banks.

«We would like a little more diversity, and not such a monopolistic atmosphere,» said Ricardo Benitez, a travel agent relaxing on his lunch hour in a 17th-century downtown courtyard in the shadow of a Slim-controlled office tower.

Slim himself reacts to the idea of himself as a monopolist with laconic humor. «What would that be like, a ’Slim World’? That would be nice,» he said at a 2003 press conference.

But Slim, 64, worth an estimated $14 billion, is gradually lowering his profile, at least technically. In June, he resigned from the board of Texas-based SBC Communications. Earlier, he stepped down as chairman of the board of Telmex; sons and sons-in-law have assumed command of that and other businesses.

Analysts say those board changes are largely cosmetic, after financial markets reacted negatively to reports of Slim’s health problems a couple of years ago.

«It appears to be a strategic, preventative move to calm the markets, to show there will be an orderly transition in the management of his companies,» said Celso Garrido, an economics professor at the National Autonomous University of Mexico. «It’s hard to think of him retiring, and he appears to remain very active in the companies.»

Slim’s office said he wanted to «devote more time to his project for an infrastructure development fund in Latin America.» He says the fund would help revive local economies.

He has also purchased a stake in the huge construction firm Grupo ICA, which would probably get a share of projects in any infrastructure development; his bank is now positioning itself to do the same. So the development fund idea is thus pure Slim: philanthropy with an eye toward strengthening his businesses.

Slim also heads a private-government effort to restore the ancient downtown district and has snapped up dozens of properties there. Some of those who have worked on the project say Slim wants to go down in history as the man who saved the downtown district — and to populate it wall-to-wall with his stores.

Carlos Slim Helu — better known in Mexico as «Slim» — was listed No. 17 on Forbes magazine’s list of the world’s billionaires earlier this year. While making his fortune in Latin America, he has extended his empire to the United States, where he owns major stakes in companies including retailer CompUSA Inc. and networking company Global Crossing.

Like most Mexicans, travel agent Benitez has mixed feelings about life in Slim-world.

«It’s easier to pay bills now,» he said. That’s in part because so many Slim businesses accept payments for other Slim enterprises. «But at the same time, he’s got his finger in too many pies.»

The verdict on Slim’s legacy as a businessman is still out. Arturo Lomeli, who heads AMEDEC, a consumer-defense group, notes «Slim has improved service in some areas, but at a high cost to the consumers.»

Analysts say Slim has used lawyers and lobbying to defend hefty profit margins.

US officials allege Slim’s Telmex was reaping improper profits by charging inflated connection charges for long-distance calls between the two countries, which may have cost consumers $1 billion (R6.33 billion) per year.

The biggest cable television company, in which Slim long held a stake, has been slow to offer high-speed internet access, which would compete with Slim’s telephone-based ISP.

Mexican regulators also have been slow to allow cable television companies to provide telephone service after Telmex complained about competition from them.

«He has probably limited development in some fields with his market power,» Garrido noted. «He’s certainly not one of the big promoters of innovation, and perhaps we don’t have as good services as we could have.»

Slim and his spokesmen refused to comment on those issues.

But teacher Manuel Sanchez, gave a typical view of the inhabitants of Slim World, as he paid a credit card bill at Sears: «We’re just making this man richer every day.» — Sapa-AP