ATT warned since July that bidding for radio spectrum is not viable

Before the call for the IFT-12 tender was launched, the ATT company informed the Federal Telecommunications Institute (IFT) that there are no favorable conditions to carry it out, according to a letter dated July 1, 2024 and published in the IFT online site, in response to the public consultation to grant the concession.

On December 19, the IFT published the call to assign 2,223 blocks of radio spectrum that allow providing wireless access services in different frequency bands; However, the government stated that there are concessions that will not proceed because they do not comply with social coverage.

In the document, ATT stated that the spectrum auction is not viable due to its high cost, which has led two operators to return it; This, coupled with the evident lack of demand in previous tenders.

Bidding spectrum at this time would result in greater concentration in Mexico’s mobile marketAntonio Díaz Hernández mentioned in the letter, in his capacity as legal representative of ATT Comunicaciones Digitales.

The document mentions that the total spectrum price, which includes the initial payment plus annual fees, is between 88 and 96 percent above the international average.

The letter details that the same IFT, in its Market Study on the costs of the radio spectrum for mobile services in Mexico, has warned that the high cost of the spectrum constitutes a barrier to entry and expansion, since it limits participation in tenders, since rights payments are unsustainable for smaller operators and prevent them from being able to compete effectively in the provision of mobile services.

It is evident that spectrum allocation requires careful evaluation of those services that offer the greatest value to society.ATT stated in the general comments of the document. Broadcasting, terrestrial wireless networks, private networks, satellite networks and other applications require more spectrum to develop, but not all generate the same benefit for society.indicated the telecommunications firm.

It is important that this growth in the supply of radio spectrum is carried out by avoiding situations that affect the future growth of the sector, since an unfortunate decision in the allocation of spectrum will affect the sector for the next 20 years.he warned.

He explained that it is important to analyze the opportunity and economic environment in which the auctions are carried out and that the limits or caps implemented by the IFT prevent spectrum hoarding.

Asked about this, the IFT said that This is an issue that must be discussed by the plenary session and we will inform you about the decision in due course..