The auction by the Mexican government of nine blocks of mobile frequencies ranging from 1.9Hz to 1.7GHz is hotting up, as the process reaches stage 3 – the final stage of economic bids.
Cofotel, the Mexican telecoms regulator, started the process in…
The auction by the Mexican government of nine blocks of mobile frequencies ranging from 1.9Hz to 1.7GHz is hotting up, as the process reaches stage 3 – the final stage of economic bids.
Cofotel, the Mexican telecoms regulator, started the process in January and the value of bids for this tranche of the auction, including frequencies between 1850Hz and 1990MHz, has already reached seven-and-a-half times the Ps720m (US$54.9m) minimum price. Cofetel announced it had received bids of Ps5.49bn (US$418m) for tender 20, including 1,850-1,919MHz and 1,930-1,990MHz bands. It also received bids of Ps3.9bn (US$296m) for tender 21 for 1,710-1,770MHz and 2,110-2,170MHz frequencies.
The regulator suspended the auction until 8 July to allow bidders to adjust their economic guarantees – or deposits – to the new amounts offered. This stage allows bidders to see how much has been bid, but the origin of the bids remains ‘blind’, so no one knows who is actually making it.
Tender 20 had a number of prequalified participants, including Telcel of America Movil, Spanish operator Telefonica, mobile company Lusacell and a consortium of Nextel and Televisa, Mexico’s biggest broadcaster. The tender 21 auction included Avantel, Telcel, Telefonica, Nextel-Televisa and Lusacell.
The eventual winners will get nationwide coverage and secure the necessary bandwidth frequency to support 3G wireless services, enabling a wider range of advanced services including high-speed transmission of voice, data and video.
The auction process will provide a welcome windfall for the Mexican government, as well as possibly break the stranglehold that Telcel has in Mexico, it being the only 3G provider and controlling 72% of the market. Spanish telecom giant, Telefonica Movistar is the second-largest player in the Mexican wireless market, with 20% share. Movistar is desperately seeking more bandwidth capacity to roll out 3G services in Mexico City, which will enable it to more effectively compete with Telcel.
It is also hoped that the auction will boost mobile phone demand in Mexico, driven by wider access to 3G-enabled advanced data applications. This will help operators to lure subscribers by offering premium applications on a high-speed network, thereby creating opportunity to boost data revenue growth.
Cofotel has not announced when the auction will close. However, Ernesto Piedras, a telecom analyst with Competitive Intelligence Unit told BNamericas: “Obviously as we see the increase in offers starting to become smaller and smaller, we will know when we’re reaching the end of negotiation. But for now, the increases continue to be significant.”
