UPDATE 1-Mexican Supreme Court favors Slim's America Movil in telecom reform battle

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MEXICO CITY, Aug 16 (Reuters) - The Mexican Supreme Court on Wednesday unanimously found billionaire Carlos Slim's telecom firm America Movil SAB de CV should not be barred by law from charging its rivals interconnection fees, in a setback to a reform intended to curb the firm's dominance.

The 2014 industry reform, one of Mexican President Enrique Pena Nieto's signature accomplishments, prohibited America Movil from charging other carriers for calls made to customers on its network, even though those firms are allowed to bill America Movil for using their networks.

The Supreme Court said such interconnection rates should be set by Mexico's telecommunications regulator IFT, siding with America Movil, Latin America's largest telecommunications firm by number of subscribers and the crown jewel of Slim's empire.

However, the court also said the ruling would not have "retroactive effects," suggesting that competitors such as AT&T Inc and Telefonica would not have to reimburse America Movil for the time they did not pay. (Additional reporting by Julia Love and Sheky Espejo; Editing by Richard Chang)