Saturday, January 28, 2023

AT&T creates a golden opportunity for smaller operators to buy spectrum in Mexico

Local and regional telecommunications service providers will monitor that the new practices are used federal telecommunications institute (IFT) may support their chances of obtaining frequencies in bidding for frequencies radioelectric spectrum In the short run, after the operator AT&T Bidding in the 800 MHz band created a new price benchmark with frequencies to be achieved in 2021.

In that year, the ift A portfolio of different blocks of spectrum has been put up for tender in terms of size and coverage, and also relates to radioelectric bands of different technical nature. For example, at 800 and 850 MHz; at 1.9 GHz, at 1.7/2.1 GHz and at 2.5 GHz.

Two participants participated in the so-called IFT-10 spectrum auction: Telcel and AT&T, and the latter bidder bought two frequency packages. Tamaulipas is one of AT&T’s spectrum lots to provide services to various municipalities in the states of Nuevo León, Coahuila, Chihuahua, Durango, Sonora, Sinaloa and Baja Californias. The other package allowed AT&T to strengthen its cellular coverage in Mexico City and in 56 municipalities in the state of Mexico.

is that AT&T acquired spectrum frequencies located between 814 and 824 MHz and 859 and 869 MHz in order to improve the quality of its services from those bands, but IFT acquired spectrum blocks “A1” and “A9.01”. identified as spectrum, and which, because of their size, defines them with an assessment of the scope of the basic service area or ABS, a different geographical dimension from the criteria that have been used in previous spectrum tenders nationally and, where appropriate, regionally Everything is measured on the level; But even then, they were still too expensive for local operators who wanted their own frequencies to carry telephone and internet connectivity.

In Mexico, 71% of residents will have an internet connection in 2021 and cell phones are slated to reach 98% penetration in 2022, but the remaining 2% are located in populations that are difficult to access or that are economically unviable There are operators, large or small, to invest in and service networks, as buying spectrum is unaffordable and annual royalty payments alone account for 92% of all money a concessionaire pays to the state while holding a concession for frequencies.

Along with the ABS, the sectoral authority also takes into account parameters such as the population size of municipalities, their connectivity and their economic performance, to enable a spectrum valuation that is closer to market reality. Telecom industry at the national level. Municipalities.

AT&T, an operator that has found it makes sense to buy this type of frequency to improve the quality of its services in the municipalities of all those states, offered 1,080 million 852,000 pesos, about 56.9 million dollars, in 2021, two Opportunity to exploit 20 MHz frequencies for twenty years in services such as mobile Internet and cellular voice with greater coverage by allowing each for frequency packages.

By accepting the AT&T criteria set by IFT in the 2021 tender and submitting to the Federal Treasury the consideration of 1,080.5 million pesos promised for its frequencies, the operator created a benchmark that the Federal Telecommunications Institute recently set for 2022. Used with others in December. To redefine the economic parameters that it sets for renewal of concession titles of operators who already have frequencies in 800 MHz and it will now also use them for local and regional operators who are less financially sound Interested in buying radio band in upcoming with strength. Due to the heavy tax burden imposed by the Ministry of Finance and the Chamber of Deputies for the use of the spectrum in Mexico, frequency tenders were only able to place three of the 41 available frequency packages on the market following the unfortunate IFT-10.

The Federal Telecommunications Institute plans to compete for spectrum frequencies in 2023 for the first 5G tender in Mexico. The frequency basket that IFT offers to the market includes 600 MHz, 3.5 GHz, and 1.5 GHz signals; And the regulator is also planning to tender the bands of 1.9 GHz, 1.7/2.1 GHz, 800/850 MHz and 2.5 GHz, which can be tendered under Basic Service Area or ABS model, so that more number of such Interested parties may participate. In what will be the IFT-12 tender, mainly regional and local participants.

The IFT Radio Spectrum Unit is confident that using an ABS-based bidding mechanism will generate IFT-12 with a star and a large number of smaller operators will buy the band, as AT&T has recently received renewals to meet such criteria. have benefited from. of other subsidized titles already in the 800 and 850 MHz bands, and with coverage in locations in Nuevo León, Michoacán, Coahuila, Tamaulipas, Hidalgo, Adomex, Veracruz, Querétaro, CDMX, Jalisco, Nayarit, Colima and some highway routes that Connects the nation’s capital to the Gulf and the Mexican Pacific.

(what AT&T bought in 2021) worked to determine the value of the 800 and 850 MHz bands, as it was the result of a public bidding process that was open to anyone,” according to the IFT’s Radioelectric Spectrum Unit. said director Alejandro Navarrete.

Economic criteria for buying radio bands in Mexico according to previous tenders and which the industry qualifies as “rude”, proposed that IFT buy 800 MHz to keep its 800 and 850 MHz bands for another twenty years. Considered over a million pesos. , and that’s not counting annual royalty payments here right now.

But after AT&T set a new price benchmark in the market with the IFT-10 tender in 2021, the authority wrote up a new idea for the company to keep its frequencies.

“And the same methodology that was proposed finance secretary This is the same for AT&T that was also proposed for Telcel. We are giving equal treatment to all companies,” said Alejandro Navarrete.

“AT&T didn’t win the national band back then; The ABS reference was used to span these frequencies, as this was what AT&T won regionally in CDMX (…). Smaller companies, and all look for options that make bidding for blocks more attractive, as there are many smaller operators that express intent to hold their spectrum to bring services to smaller populations.

Nation World News Desk
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