| | |  Business News | November 2009 
Mexico Sets Airwave Auction Rules After Two-Year Wait
 Crayton Harrison - Bloomberg
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November 23, 2009
 |  | The auction may give Grupo Televisa SA, Megacable Holdings SAB and Axtel SAB the chance to enter the wireless industry in Mexico. |  | | |
Mexico’s government laid down rules for an auction next year of mobile-phone airwaves that could introduce new competition for America Movil SAB, the country’s leading carrier.
Full technical guidelines for the auction will be available in early January and bidders must win approval from Mexico’s antitrust agency to participate, according to rules published today in Mexico’s federal gazette. Participants will bid on airwaves suitable for third-generation mobile services, which can include Web browsing and video downloads.
The auction may give Grupo Televisa SA, Megacable Holdings SAB and Axtel SAB the chance to enter the wireless industry in Mexico, where America Movil has about 72 percent of subscribers. Regulators said in October 2007 they planned to auction the airwaves within three months, a deadline that was repeatedly delayed as officials wrangled over the technical rules.
Mexican carriers Telefonica SA and NII Holdings Inc. also may bid to add capacity so they can offer 3G services to challenge America Movil.
The federal gazette didn’t provide more information on the timing or minimum bids for the auction. Gonzalo Martinez Pous, one of the telecommunications agency’s five commissioners, said last month that auction winners may be announced by mid-2010.
Regulators have said they designed the auction to encourage new participants in the wireless industry, while giving current competitors the opportunity to expand capacity as more Mexicans begin using wireless Internet connections.
Out of 120 megahertz of spectrum in the auction, half will be allotted for two nationwide blocks of spectrum each containing 30 megahertz, which is enough to establish a network capable of phone calls and Internet access, according to documents the telecommunications agency distributed last month.
The government is limiting the amount of spectrum each wireless carrier can own, rendering Mexico City-based America Movil unable to acquire one of the nationwide blocks. Madrid- based Telefonica would also be ineligible for the national blocks because of the limit, according to data from Mexico’s antitrust commission.
America Movil and Telefonica both seek to acquire more 3G airwaves as they look to data services such as Web downloads as a faster source of growth than phone calls.
To contact the reporter on this story: Crayton Harrison in Mexico City at tharrison5(at)bloomberg.net
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