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Mexico writes down cost of wholesale network tender

Following the success of President Enrique Pena Nieto’s regulatory reforms, Mexico has lowered the cost of its proposed tender for a wholesale national mobile broadband network by $3 billion.

The original $10 billion tender has been written down to $7 billion, although this does not affect the requirements for the winner. Whichever firm bids highest will have to build out and run a wholesale network using a 90MHz block of 700MHz spectrum.

Plans for a wholesale network were included in the country’s 2013 revisions to its constitution, with the goal of encouraging competition in a mobile market that was massively dominated by America Movil. The value of the tender has been written down as America Movil’s monopoly has already been reduced, with the operator being forced to sell off assets. Additionally, AT&T has acquired Nextel and Iusacell to establish itself in the market.

Therefore, wholesale access may not be as highly sought after as previously believed. Monica Aspe, SCT’s deputy minister, said: “Mexico’s telecommunications sector is different today to two years ago. The tender for the shared network has to recognise that.”

Due to concerns over low demand, the government is believed to be considering measures that would encourage operators to use the wholesale network. It is not known what these might consist of. Following the unveiling of the wholesale project’s terms in June, the tender is expected to be issued in October.

The project has attracted the attention of several big hitters in the telecommunications industry, with China Telecom stating an interest in Mexican investment. Last year, the SCT turned down an unsolicited bid to build the wholesale network which reportedly had the backing of Alcatel-Lucent and Ericsson.

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