The twisted saga of Mexico’s 2.5GHz TDD spectrum is finally nearing resolution. The government says it has come to a deal with existing licence holders in this band, in order to recover 190MHz of frequencies which can then be reassigned for LTE roll-out, removing a significant roadblock to 4G in one of Latin America’s biggest economies.
The transport and telecoms ministry says that, after years of negotiations and delays, nine of the 11 licence holders, which are mainly in the fixed wireless and television spaces, have voluntarily surrendered their spectrum, which will open up a total of 130MHz for auction. The remaining two holders, which account for 60GHz, have had their concessions renewed for a further 15 years.
One of those giving up its frequencies is MVS Multivision, the biggest holder with over 140MHz. This firm has been at the heart of the controversy, and it previously aimed to be a 4G provider itself, first with WiMAX and later with TD-LTE.
The reclaiming of the spectrum is part of the government’s policy to boost competition in mobile and fixed telecoms, and in TV, in a country which is completely dominated by incumbent America Movil (which has 70% mobile share and 80% fixed).
The 2.5GHz spectrum may still take several years to clear, auction and repurpose. The new deals come over a year after the ministry ruled that it would not renew the existing licences but would use the frequencies to expand wireless broadband capacity. 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.
The largest of Mexico’s legacy licence holders is MVS Comunicaciones, which has 42 MMDS concessions 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, and last year it said it wanted 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 therefore chose the somewhat simpler route of starting from scratch in most of the band. It says 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, in early 2012, to keep some of its holdings. It is said to have offered $340m for 10-year rights to 140MHz of its current spectrum.