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News

Mexican Sell-Off

(11 Jan 2010, BWCS Staff)

Following the Mexican government's announcement last week that it is to finally push ahead with its auction of radio frequencies, more than 90 companies have reportedly acquired the bidding documents. The sheer number of applicants is a good indicator of the pent up demand in Mexico for the right to compete with America Movil's Telcel and the Telefonica-backed Movistar which between them dominate the market for mobile services south of the Rio Grande.

Mexico's national telecoms regulator, Cofetel, said recently that it plans to award licences by June this year, following the submission of bids on the 25th May 2010. The regulator plans to sell nine blocks of frequencies in the 1,850MHz - 1,990MHz range across eight of the country's nine wireless operating regions including the capital, Mexico City. A second auction will see Cofetel sell off seven blocks of frequencies in the 1,710MHz and 2,170MHz band, which will cover all nine operating regions.

The frequency sale was first announced three years ago but has been repeatedly pushed back due to disagreements between Cofetel, the Federal Competition Commission and the Mexican Communications and Transportation Ministry. The auction is aimed at allowing new companies to finally compete in the mobile market, while at the same time fostering growth in the incumbent operators.

Telcel currently accounts for 72% of the Mexican market for mobile services while its nearest rival Movistar has a 20% share. Movistar is currently trying to gain bandwidth for a roll out of 3G services in the capital Mexico City. While the two big guns are expected to dominate the bidding the swarm of interested companies include some notable possible competitors including the country's largest media company Grupo Televisa as well as smaller mobile operators such as Grupo Iusacell and NII Holdings. Also included in the mix will be GTM, Multivision, Avantel, Axtel, Pegaso, Cablevision, MegaCable, Alcatel, Marcatel, Maxcom, Grupo Elektra, Operadora Unefon and Motorola.

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