Mexico to reclaim and auction 2.5GHz spectrum
Faces delays and probable legal challenges as it looks to wrest licences from current holders and sell for LTE
Published: 13 August, 2012
The tortured saga of Mexico's 2.5GHz spectrum is close to resolution, though it may still take years to free up the band entirely for LTE usage. The country's communications ministry has ruled that it will not renew the 2.5GHz licences currently held by various groups including local broadcasters, but will reclaim the spectrum and auction it for 4G.
As in some other markets in the Americas, the release of 2.5GHz spectrum has been complicated because the band was previously used for MMDS services, which included some broadcasting and wireless broadband. Although 2.5/2.6GHz is one of the most global bands earmarked for 4G, in these countries it is not virgin spectrum as in Europe. In Mexico, according to communications minister, Dionisio Perez-Jacome, there are 11 holders, which will now have to forfeit their holdings when their licences expire.
The largest of these is MVS Comunicaciones, which has 42 MMDS licences covering large parts of the country. MVS has made several attempts to use its spectrum for broadband wireless and media services, with WiMAX build-outs in some markets. A proposed joint venture with Clearwire fell apart because of uncertainty over whether MVS would be allowed to keep its spectrum, however. Meanwhile, MVS had moved TV services from 2.5GHz and into its satellite venture with Echostar, Dish Mexico.
MVS has spent years battling to keep 190MHz of its frequencies, with its latest proposal being to create a wholesale network to kickstart TD-LTE and provide a 4G platform for smaller players. This would have mirrored similar projects in the US, Russia and elsewhere, but these have almost always proved complex and politically charged.
Mexico has therefore chosen a somewhat simpler route, but not one without problems - not least that while some of the licences have already expired, others last until 2018; and some existing holders may mount legal challenges against the decision.
Once the ministry gets beyond these obstacles, it will auction the spectrum, and will allow existing cellcos as well as new entrants to participate. It will certainly be expecting higher returns than those reportedly offered by MVS in a last ditch attempt, earlier this year, to keep some of its holdings. It is said to have offered $340m for 10-year rights to 140MHz of its current spectrum.