Anticompetitive Policies Slow Mexico’s Spectrum Operators: CIU
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Anticompetitive Policies Slow Mexico’s Spectrum Operators: CIU

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Emilio Aristegui By Emilio Aristegui | Junior Journalist and Industry Analyst - Tue, 01/24/2023 - 15:17

The Competitive Intelligence Unit (CIU) deemed Mexico’s spectrum policy as “anticompetitive,” as an industry analysis indicates that high operating costs continue to slow down the country’s spectrum deployment. 

CIU argues that AT&T returned frequencies in the 850 MHz and advanced wireless services (AWS) bands for a second consecutive occasion in Mexico City, Guadalajara, Baja California, Baja California Sur, Sonora and Sinaloa. CIU’s analysis attributed the return of the frequencies to high annual payments, changes to the government’s cost structure and the migration to new business models, among other reasons. “Spectrum is an essential resource for mobile telecommunications operators, but they face a heavy use charge in Mexico,” explained CIU via a press release. 

Currently, operators allocate 90% of their budget to pay for the spectrum, while in other developed countries these costs represent only 5%, according to CIU. Other Latin American countries such as Brazil, Colombia, Ecuador and Panama, have developed more advanced structures that provide public and transparent mechanisms, argues the organization. The heavy cost structure has become a major obstacle to competition. 

Back in 2020, Telefónica Movistar returned several frequencies within the 800 MHz band and 1.9GHz, reports El Economista. The Federal Institute of Telecommunications (IFT), via its Radioelectric Spectrum Unit, reported that the return of this and other frequencies represents a loss of over MX$4.6 billion (MX$244 million) per year, according to CIU. In 2022, América Móvil (Telcel) and AT&T earmarked MX$18 billion (US$95.7 million) to pay the rights for the use of the spectrum, which severely affected their revenue, reports the organization.

“For this reason, AT&T has chosen to return frequencies to continue with its investment rate for the development of its networks, especially 5G. However, the continuation of a predatory cost policy for the use of the spectrum threatens the achievement of this objective,” explains CIU. 

America Móvil is currently working with Telxius in a project that aims to connect Guatemala and the US through an ultrahigh capacity submarine cable link. The cable link project is scheduled for 2025 and will measure 197,000km, the largest in the region, as reported by MBN. 

Photo by:   Image by AlbertoAdan from Pixabay

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