América Móvil’s rivals AT&T and Movistar have already said they will not participate in the auction if spectrum prices are not revised
According to local media reports, América Móvil’s Mexican subsidiary Telcel has confirmed its interest in bidding for 5G spectrum in Mexico’s upcoming spectrum auction.
“We already have 5G spectrum and we will always be evaluating the tenders called by the regulator,” América Móvil’s Director of Legal and Regulatory Affairs Alejandro Cantu told El Economista.
If the company does want to take part in the auction, it could do so uncontested, with rivals AT&T and Movistar having both said that the prices set by the regulator are too high for them to participate.
The Federal Telecommunications Institute (IFT) first announced its intentions for its latest auction back in February 2022, saying that the tender process had been designed “to assign the greatest amount of spectrum possible and to enable new players in the mobile market to access this resource”.
The auction aims to allocate 70MHz of spectrum in the 600MHz band, a 50MHz block in the 3.5GHz band, and 90MHz in 1.5 GHz ‘L-band’. Additional spectrum in the 800MHz, 850MHz, 1.9GHz, 2.1GHz, and 2.5GHz bands could also be made available, according to the regulator.
However, the auction’s initial proposal was immediately lambasted by the local telcos, who argued that spectrum usage charges were too high to make purchasing the spectrum economically viable.
According to the IFT themselves, spectrum usage charges can be up to 186% higher in Mexico than the international average.
As a result of these high prices, both AT&T and Movistar – despite their scale and the depth of their pockets – have said that they will not take place in the upcoming auction.
The high prices also present a significant barrier to entry for new market players, despite this being the IFT’s stated goal.
An official date for the upcoming spectrum auction has yet to be announced, so operators will be hopeful that the regulator will lower the prices to make the auction more appealing.
That Telcel would be the only player willing to potentially take part in the spectrum tender process should not come as much of a surprise. The operator dominates the Mexican mobile market, with over 80 million subscribers and a market share approaching 70%.
The operator launched commercial 5G services in 18 major cities in February last year and has been expanding coverage ever since. These current services, however, make use of the company’s spectrum in the 2.5GHz band, which was previously used to deliver 4G LTE services.
That said, Telcel does already have 5G spectrum in the form of 100MHz in the 3.5GHz band, half of which it purchased from Axtel in 2020, while the other was transferred from América Móvil’s subsidiary Telmex the same year. Bolstering these holdings with additional spectrum should allow for broader 5G deployment and higher speeds for customers.
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