AT&T biggest spender in Mexico spectrum auction
08 August 2018 | James Pearce
AT&T and Telefonica have come out as winners in the latest spectrum auction in Mexico, according to local regulator the Federal Telecommunications Institute (IFT).
Both firms were awarded frequencies in its recent 2.5GHz spectrum auction, with AT&T taking the greatest share, increasing its holdings in the country by 13%.
AT&T bagged 20MHz blocks of FDD and two 20MHz blocks of TDD spectrum, spending MXN1.4 billion ($76 million) on the bands. The additional spectrum means that AT&T now holds the highest amount of spectrum in the country (surpassing America Movil-owned Telcel) with a 34% share.
AT&T CFO John Stephens spoke about the spectrum acquisition in Mexico during the company’s recent investor call, saying it was being funded from its own spectrum sales, as well as the sale of its data centre assets to Brookfield Infrastructure Partners. AT&T recently unveiled plants to launch NB-IoT services in the country.
The new spectrum, which increases available spectrum in Mexico by 26.5% according to IFT, is seen as key for a number of emerging technologies, including mobile broadband, 5G mobile networks, and the internet of things (IoT).
The other key bidder was Telefonica through it’s Mexican division Movistar. It won the remaining 40MHz of spectrum that was made available by the IFT, with a bid of 700 million pesos ($37.8 million). This gives it a spectrum holding of 17% in the country.
“Telefonica has achieved its goal, obtaining the spectrum it needed ... to address the foreseeable increase in the demand for mobile data,” the Telefonica said in a statement to Reuters.
The winners will have to meet certain obligations including the provision of services in at least 200 of the 557 localities with populations of between 1,000 and 5,000 inhabitants. They also must deliver connectivity to at least ten of the 13 metropolitan areas with more than one million inhabitants.
America Movil and state-backed 4G wholesale project Altan Redes opted not to bid, according to IFT. The licences will generate an estimated MXN44.4 billion over their 20-year term, the regulator claims.
The IFT said: “With the spectrum assigned in this tender, users will be able to have mobile broadband services of higher speed and better quality. There will be new investments in the sector and greater coverage throughout the country, as well as the possibility of deployment of 5G technology.”