Mexico's wireless spectrum auction falls short; telecom evolution isn't taken into account, experts contend

By Elizabeth Ferguson
CNNExpansión.com

The long-awaited tender for wireless frequencies is intended to generate greater competition in the telecommunications sector. But, so far, it is unclear which companies might gain market share and how consumers would benefit.

Mexico on Monday launched an auction for blocks of frequencies for wireless telephone with a spectrum totalling of 120 MHz with the aim of giving new players entry to the wireless market dominated by giant America Movil controlled by billionaire businessman Carlos Slim.

Yet the rules do not provide a glimpse into what will happen when 3G technology evolves, telecom experts noted on Tuesday.

3G refers to the third generation of mobile telephony (that is, cellular) technology. The third generation, as the name suggests, follows two earlier generations.

The International Telecommunications Union (ITU) defined the third generation (3G) of mobile telephony standards – IMT-2000 – to facilitate growth, increase bandwidth and support more diverse applications.

Bids in Mexico's auction will be for a concession that covers 20 years without taking into account developments of new 4G technologies, which already are in development around the world and could begin to be implemented in about two years, according to International Telecommunications Union.

4G technologies could work with Internet applications, combining them with tools like Wi-Fi or WiMax, according to the Wireless World Research Forum.

"The agony is prolonged, because we have not seen anything new, especially in the case of investors who will have to wait two months for the next step," said Erasmo Rojas, a regional director at 3G Americas.

There also are no specifics on the range of the spectrum, he noted.

"The Federal Competition Commission (CFC) considered 80 MHz. The Federal Telecommunications Commission (Cofetel) and the Ministry of Communications and Transport (SCT) considered 90 MHz. But we don't know the bandwidth," he said. "In addition, its unclear if there's is 40MHz set aside for any new entrant."

The top of the range might be key to which companies will enter the competition and how they will structure their bids, he said.

Winners will not be selected until the second quarter of 2010.

www.cnnexpansion.com/negocios/2009/11/24/licitacion-de-espectro-prolonga-agonia