Mexican 4G spectrum auction attracts only two bidders

Mexican 4G spectrum auction attracts only two bidders

All 1700MHz/2100MHz AWS and 1900MHz PCS frequencies went unsold at the latest auction of unused 4G frequencies in Mexico.

The auction generated a total of MXN1.35 billion (about $65.6 million), with AT&T Mexico and Telcel the sole winners of selected spectrum blocks and, apparently, the sole bidders.

Mexican press reports say that AT&T offered the biggest total bidding commitment – some $52.5 million for 800MHz spectrum in various regions of the country. Telcel reportedly offered a more modest $13.1 million for a block of 2.5GHz spectrum. 

According to news site Bnamericas, the reason that Mexico's spectrum tender didn't excite the market was that the prices were artificially high. These spectrum costs are established in the federal law on rights but set a barrier that may be too high to encourage the entry of new participants.

Another potentially off-putting factor is high fragmentation of the blocks.

However, the auction process is far from over. The Instituto Federal de Telecomunicaciones (IFT) cleared the 600MHz band for mobile use as long ago as 2018 and many commentators have been waiting with interest to see when it will be offered.

There’s no doubt that the planned tender for both the 600MHz and 3.5GHz bands will be greeted with more enthusiasm, most obviously because such an auction would have a role in enabling 5G deployment, making it a more enticing prosect.

However, it’s not yet clear when this auction will take place. It was reportedly scheduled for this year but next year now seems more likely. 

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