Mexico’s most recent spectrum auction has awarded the winning bidder with a nationwide allocation of 30MHz in the 1710MHz to 2170MHz frequency band. The winning bid was placed by a partnership between the media company Grupo Televisa and the mobile operator NII Holdings (Nextel).
Although the bid is yet to be officially cleared by the government, no issues are anticipated and commercial rollouts are expected to commence within the next year. The frequencies awarded by the licence will allows the partners to offer 3G services at a level which will enable them to compete with the market lead America Movil.
While the 3G market is currently dominated exclusively by America Movil, it is widely believed that a 3G launch from the second-place operator Telefonica is imminent, with a unit of the Spanish operator winning six 10MHz blocks with a MXN1.27 billion bid. America Movil has stated its intent to stay ahead of its rivals through the launch of NGN technology such as LTE.
However, the auctions have courted controversy from certain quarters, with many observers noting that the partnership was able to win the spectrum band with a surprisingly low bid due to lack of competition – it was, in fact, the only bidder which qualified to bid for the nationwide block. Although a significant number of global operators - among them China Mobile, Reliance Communications and Deutsche Telekom – were interested in bidding, concerns over their ability to compete effectively with America Movil stymied their efforts.
The partnership will reportedly pay MXN180.3 million, which equates roughly to US$14.3 million, for its spectrum – a massively lower figure than the MXN3.8 billion that America Movil pays for 20MHz nationwide, with three regions benefiting from an additional 10MHz.
As part of the criteria for the follow-up agreement after winning the bid, Televisa will acquire a 30% stake in Nextel Mexico – the Mexican operating branch of NII Holdings.
