Mexican telecoms giant América Móvil spent Ps2.1bn (US$117m) for airwaves in the country’s AWS spectrum auction – more than double the amount new rival AT&T will pay – final results have confirmed. Meanwhile, América Móvil has revealed plans to issue unsecured notes due 2024 and 2028, with proceeds to be used for general corporate purposes.
Mexican telecoms giant América Móvil (BMV:AMXL) spent Ps2.1bn (US$117m) for airwaves in the country’s AWS spectrum auction – more than double the amount new rival AT&T (NYSE:T) will pay – final results have confirmed.
América Móvil’s Telcel unit secured airwaves in the 1,700-1,730, 1,760-1,780, 2,110-2,130 and 2,160-2,180 MHz bands, according to telecoms regulator IFT.
AT&T, which entered Mexico last year via its US$4.4bn acquisitions of Iusacell and Nextel Mexico, shelled out Ps1.03bn (US$57.9m) for spectrum in the 1,730-1,755 and 2,130-2,155 MHz bands. Following its acquisition of satellite broadcaster DirecTV, the US telco also has an indirect 41% stake in leading pay-TV provider Sky Mexico, which is 59% owned by Televisa.
Frequencies in the 1,755-1,760 and 2,155-2,160 MHz bands were left unsold.
“As a result of this tender, operators will have more contiguous spectrum, enabling them to provide better mobile services at better prices and greater speeds,” the regulator said.
Announcing the preliminary results of the auction last month, IFT said it would raise some Ps45bn (US$2.5bn) over the next 15 years, taking into account annual spectrum licence fees. Of this, América Móvil would contribute Ps31bn (US$1.7bn) and AT&T Ps12.7bn (US$6.9bn), the regulator noted.
This month, the watchdog is conducting a review of how effective its reforms to reshape the market to curb the dominance of América Móvil’s Telmex, Telcel and Gru
In 2014, Telmex had 80% of the fixed-line market and Telcel 70% of the mobile market. Televisa had 70% of the broadcast TV market and 65% of the cable and satellite market.
AT&T has said it is committed to boosting competition in Mexico and plans to extend its high-speed mobile network to 100 million people nationwide by the end of 2018.
HSBC analysts said in a recent note that they expect AT&T to initially benefit from regulatory support in the mobile market, however, they think this will dry up over the next three years. The analysts, who have valued AT&T Mexico at US$6.4bn, predict that it will have a 20% share of the wireless sector by 2020. However, they do not expect it to become profitable until 2019.
€1.5bn note offering
Separately, América Móvil has piced an offering of €1.5bn (US$1.7bn) of senior unsecured notes, with proceeds to be used for general corporate purposes.
The offering consists of two tranches: €850m of 1.5% seior notes due 15 February 2024 and €650m of 2.125% senior notes due 15 February 2026.
The €850m tranche priced at 99.53% of the principal amount, while the €650m priced at 98.461%.
Settlement is expected on 10 March.
The notes are to be issued under a based indenture dated 28 June 2012 with the Bank of New York Mellon.
The joint bookrunning managers for the offering were Citigroup, HSBC and Sociét
