Wireless spectrum likely to be auctioned by year-end

21 Jul 2009

Bloomberg is reporting that Mexico’s Comision Federal de Competencia (Cofeco) is aiming to have settled on the rules for the allocation of new wireless spectrum by the end of August 2009. The competition watchdog aims to have finalised plans for the allocation in a bid to allow telecoms regulator Comision Federal de Telecomunicaciones (Cofetel) to move forward with auctioning the concessions before the end of the calendar year. It is expected that spectrum allowing at least one new wireless operator will be made available, with frequencies suitable for both 2G and 3G services likely to be up for grabs. The Mexican authorities are keen to increase the number of competitors in the sector in order to increase pressure on dominant cellco Telcel, a subsidiary of the America Movil group. Existing operators are also expected to bid for new spectrum, with Telefonica Moviles Mexico a likely bidder, as it requires more spectrum to offer high speed services in Mexico City. Other potential bidders could include fixed line operator Axtel and cable TV provider Televisa. In total 120MHz of spectrum in the 1.9GHz and 1.7GHz bands is expected to be made available, with the sale likely to generate as much as USD1.5 billion.

In related news it is also understood that Cofeco is close to completing its study of whether Telcel, or indeed any other mobile operators, hold a dominant position in the sector. The investigation is likely to be concluded by mid-September, and follows similar studies of the wireline sector which Cofeco completed earlier this month that found America Movil’s Mexican fixed line arm, Telmex, was dominant in the local transit and leased line markets.