Even though the trio of Morgan Stanley, the World Bank and Eugenio Galdon’s funds (the founder of Spain’s Grupo Multitel) make up the Altan consortium and the only bidder for Mexico’s 700 MHz LTE spectrum, ReTHINK Wireless calls the deal “probably the best hope that this will finally usher in some new thinking in Mexico.”
The spectrum and license to build and operate now will be available for wholesale networks, not MNOs at auction, a step in a direction to make flexible RANs commercially viable before 5G comes to market. In the deal, Altan also gains a 20-year public-private partnership, according to ReTHINK Wireless, to build out and operate a wholesale network at the cost of about $7 billion. Altan said it will cover 92.2 percent of the population in the deal, and the government said that commercial operations of the network must begin by March 31, 2018, and cover 30 percent of the population by that date.
ReTHINK Wireless reported that the deal garners “high hopes” and will “introduce new competition and services to Latin America’s second largest telecoms market.” The site noted, however, that innovation “has been limited by the stranglehold of incumbent America Movil,” whose domination has forced it to diversify. Additionally, the wholesale network part of the deal could support new service providers “such as cablecos, as well as MNOs, or could enable AT&T—which acquired two smaller mobile carriers, Iusacell and Nextel – to extend its capacity.”
Mexico’s secretary of communications and transport, Gerardo Ruiz Esparza, told ReTHINK Wireless that the deal was “an historic moment for the Government of the Republic, society as a whole and the Mexican telecommunications industry.”
There was, however, only one official bidder, as the only other bidder, Rivada Networks, was disqualified after it failed to provide financial guarantees when it submitted its bid, ReTHINK Wireless reported.
Other auctions of note in Mexico include the auction for AWS (1.7 GHz/2.1 GHz) spectrum earlier this year, in which AT&T paid $57 million. America Movil reportedly spent $117 million. ReTHINK Wireless said that the sale “should increase the amount of available mobile broadband spectrum in the country by 29 percent.” The site said that since acquiring lusacell and Nextel Mexico and expanding its network to the tune of $3 billion, AT&T is on track to capture 20 percent of Mexico’s mobile market by 2020. However, analysts at HSBC told ReTHINK Wireless that they do not think AT&T will make a profit in Mexico until 2019. AT&T is currently in third place in the Mexican mobile market, behind America Movil and Telefonica.
November 22, 2016
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