MVS claims its rejected spectrum renewal bid was worth USD340 million

8 Mar 2012

Mexican media company MVS Telecomunicaciones has claimed that it offered the government USD340 million with a view to retaining around three quarters of the spectrum that it currently holds, Reuters reports. MVS vice-president Jose Antonio Abad was cited as saying that the financial offer had been made in the company’s most recent bid to keep its frequencies, submitted to the state in November last year. It is understood that in return for the USD340 million it offered, MVS sought to retain use of around 140MHz of its 190MHz spectrum in the 2.5GHz band for an initial period of ten years.

The claims come just a week after the government confirmed it had rejected MVS’ latest offer to renew a block of its frequency holdings, with around 15% of the would-be operator’s spectrum having expired; the remainder of the company’s spectrum is due for renewal at various stages over the period to 2018. Mr Abad noted that MVS’ latest renewal proposal had, in fact, included the return of a 50MHz block of spectrum which could have been re-auctioned by the government. In response to the state’s decision to reject the renewal bid, the executive argued that it was a cost-motivated decision, noting: ‘The price was too low … and that they [the communications ministry] were at risk of being accused of giving away the bandwidth for pennies.’ Previous estimates by Mexico’s finance ministry are reported to have put a price tag of around MXN39 billion (USD3 billion) for the retention of MVS’ entire spectrum holding.

Meanwhile, in separate but related news, Dow Jones Newswires is reporting that MVS has apportioned some blame on local broadcast giant Televisa for its role in the row over its 2.5GHz spectrum. With MVS having reportedly taken out full-page advertisements in a number of local newspapers, it has claimed that Televisa was ‘obstructing competition’ by requesting in 2008 that authorities reassign the disputed 2.5GHz spectrum. MVS has argued that Televisa’s call for the spectrum redistribution was prompted by the former’s launch of satellite TV service ‘Dish Mexico’ in partnership with Echostar Corp, a service which competes directly with Televisa’s ‘Sky Mexico’ satellite service. Responding to the claims, Televisa for its part has argued that MVS is using ‘supposed conflicts with Televisa as an excuse to cover up its legal and business deficiencies,’ while adding that the 2.5GHz band is being refarmed worldwide ‘precisely so that there should be more competition and not monopolies like the one MVS wants to set up’.

As previously reported by CommsUpdate, in April 2011 MVS Telecomunicaciones revealed plans to roll out a new nationwide local mobile broadband network that it claimed would allow the country’s citizens to access high speed internet services more easily and at lower costs. At that date it was claimed that a consortium comprising MVS, US-based wireless operator Clearwire Corp, chipmaker Intel Corp and Mexican fixed line operator Alestra were prepared to invest approximately USD400 million in rolling out the new infrastructure using MVS’ frequencies in the 2.5GHz band. With the new network expected to be based on Long Term Evolution (LTE) technology, MVS had said that the proposed infrastructure would be unique in Mexico, as it would be designed, built and operated by an independent company, and open to all communications service providers, with initial coverage of around 55 million potential users expected.