Mexico Raises MXN 44 bln in 2.5 GHz Auction; Telefonica, AT&T Winners

Mexico’s telecommunications regulator IFT said it awarded 120 MHz of spectrum in the 2.5 GHz band for use in LTE and 5G services to AT&T and Movistar (Telefonica), the only two participants in the auction. The 20-year licences, sold in six blocks, are expected to generate a total of MXN 44.4 billion for the Mexican state over their lifetime, IFT said in as statement.

AT&T agreed to pay MXN 1.4 billion (EUR 65 million) for two FDD blocks and a further two TDD blocks, while Movistar will pay MXN 700 million for two FDD blocks. These amounts matched the minimum MXN 350 million bid set per block.

The Mexican state will receive MXN 2.1 billion directly from the sales of licences from the IFT-7 auction, plus MXN 42.3 billion in spectrum usage rights, to be paid in annual instalments, IFT said. The companies have 30 days to pay the licence fees, after which the official award will take place.

Under the terms of the licence, the winning candidates are required to provide services via the 2.5 GHz band to at least 200 of the 557 Mexican localities with 1,000-5,000 inhabitants lacking mobile coverage and to cover at least 10 of country’s 13 metropolitan areas with more than 1 million inhabitants. The companies must also cover roads serving five designated economic zones within four years at the latest.

IFT said the new licences will boost Mexico’s mobile broadband capacity by 26.5 percent, with AT&T increasing its stock of spectrum by 13 percent and Movistar by almost 7 percent.

Among the original five companies that expressed an interest in bidding for the spectrum, Telcel (America Movil), which already had 2.5 GHz capacity, pulled out of the auction criticizing the conditions of the tender and the Altan Redes consortium withdrew in order to focus on developing in the 700 MHz band. – Telecompaper