Nextel and Telcel agree to interconnect SMS

14 Nov 2006

Digital trunking operator Nextel de Mexico has signed an agreement with rival Radiomóvil Dipsa (Telcel) to interconnect SMS services, Telcel’s parent company América Móvil said in a statement. The two operators are now engaged in interconnection testing and expect SMS exchange to be fully operational by the end of the year.

According to TeleGeography’s GlobalComms database, the entrance of Nextel in the Mexican mobile market has been a contentious issue. Nextel was the first operator licensed to provide push-to-talk (PTT) services in the country, and it launched wireless PTT over an iDEN network in August 1998. However, cellular operators have long complained that Nextel is illegally operating as an effective rival to themselves without holding the required concession. In response, all four traditional cellcos began rolling out PTT services of their own, despite not having specific permission to do so, leading to censure from Cofetel in March 2005. The regulator’s intervention led to the cellular operators retaliating by refusing to interconnect text messages sent by Nextel users to their networks – something first requested by Cofetel in 2003. Nextel appealed to the competition watchdog, the Comisión Federal de Competencia (CFC), which in turn led Cofetel to order the four to implement SMS exchange by 12 March 2006. TMM was the only company to comply with the order, and Telcel, Iusacell and Unefon continued to argue that they should not be obliged to interconnect with Nextel because it does not operate a traditional GSM or CDMA mobile telephony network. This led Nextel to request that Cofetel revoke the operating concessions of the trio, for which it again received the backing of the CFC, which ruled that Telcel was violating article ten of Mexico’s competition law and abusing its dominant market position. Iusacell has referred its case to a local arbitration tribunal which has initially ruled in its favour and said that it did not have to adhere to Cofetel’s order, pending further study of the case; Nextel is preparing an appeal via a higher court.