Iusacell and Nextel call off legal wrangling over 2010 auction

7 Dec 2011

Mexican mobile network operators Grupo Iusacell and Nextel de Mexico have reportedly withdrawn lawsuits previously filed relating to the government’s 2010 auction of wireless frequencies in which the latter bagged 30MHz of spectrum in the 1900MHz band. As noted in TeleGeography’s GlobalComms Database, political pressure to overturn the auction result was quick, with calls for regulator Comision Federal de Telecomunicaciones (Cofetel) to reject Nextel’s bid (which was made as part of a joint venture with Televisa, since disbanded). Indeed, Javier Corral, a deputy of the conservative National Action Party (PAN), vowed to try to stop the communications ministry from awarding the block, with the politician quoted in the wake of the sale 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.’ Having bid MXN180.3 million (USD13.33 million) for the concession, the minimum offer allowed, Iusacell, controlled by businessman Ricardo Salinas Pliego, swiftly launched court action, claiming that spectrum caps set by the country’s antitrust regulator in effect meant that Nextel obtained the spectrum unchallenged.

In the latest development in the matter according to MarketWatch, the duo are reported to have reached an agreement under which they will end litigation related to the auction, although no details of this on the terms of the accord have been disclosed. The Secretario de Comunicaciones y Transportes (SCT) meanwhile has welcomed the deal, noting that it should provide legal certainty to the country’s mobile network operators as they look to invest in their respective infrastructures.