Televisa/NII joint venture sole bidder for nationwide 1700MHz spectrum

26 Jul 2010

Having been confirmed as one of three provisional winners in the Mexican government’s auction of spectrum in the 1900MHz band, the joint venture between local media giant Grupo Televisa and Nextel Mexico, a unit of NII Holdings, has emerged as the sole bidder for a nationwide concession in the sale of spectrum in the 1700MHz band. In the state’s second wireless spectrum auction the Televisa/NII JV offered the minimum bid of MXN180.3 million (USD14.1 million) for 30MHz in each of the country’s nine mobile operating regions. As part of its tie-up with Nextel, Televisa has said that it will invest around USD1.4 billion in the mobile unit if the duo claims enough spectrum to launch their own 3G network. Political pressure has, however, begun to mount, with calls for the regulator, the Comision Federal de Telecomunicaciones (Cofetel), to reject Televisa and Nextel’s bid; Javier Corral, a deputy of the conservative National Action Party (PAN), vowed to try to stop the communications ministry from awarding the block to Nextel and Televisa, local news source Reforma, which quoted the politician as saying: ‘(Communications Minister Juan) Molinar is selling the spectrum at a bargain price. If the spectrum tender goes through under these conditions, it will be a national theft.’

Mexico’s largest mobile network operator by subscribers, Telcel, a subsidiary of America Movil (AM), bid MXN3.79 billion for 21 blocks of 10MHz in all nine regions, while the local unit of Spanish telecom giant Telefonica offered MXN1.27 billion for six 10MHz blocks in six regions. According to the Wall Street Journal, AM expects that its aggressive play for additional spectrum will allow it to launch 4G services, although it has yet to set a date for the introduction of new technologies. ‘We don’t know exactly when, but we are reviewing when it would be good for [Mexico unit] Telcel to start putting in that infrastructure. It would be an alternative to increase the data side of our business, which is growing a lot,’ AM chief executive Daniel Hajj noted. For Telefonica however the acquisition of additional spectrum is likely to allow it to finally launch a nationwide 3G network, something it has been unable to do as of yet due to its lack of spectrum.

As reported by CommsUpdate last week, the Mexican authorities completed a separate auction for frequencies in the 1900MHz band last week, with the combined bids for that spectrum reaching MXN2.98 billion; Telefonica bid MXN2.76 billion for 30MHz of spectrum in the Mexico City area, while it also committed a further MXN100 million for additional frequencies in other areas of the country, acquiring 14 10MHz blocks of spectrum in total. Mobile operator Iusacell meanwhile submitted the highest bids for blocks of spectrum in most other areas of the country, offering a total of MXN65.4 million for nine 10MHz blocks, while the NII/Televisa pairing will spend MXN48.3 million on one 10MHz block.