Mexico Antitrust Agency Sets 35MHz Mobile Spectrum Limit

MEXICO CITY -(Dow Jones)- Mexico's federal antitrust agency said Wednesday it will limit the amount of radioelectric spectrum that wireless phone operators can accumulate, in an effort to encourage the entry of new participants in the market.

In a press release, the Federal Competition Commission, or CFC, said that a single operator can only accumulate up to 35 megahertz of spectrum in any one region.

The opinion by the antitrust commission comes as the Federal Telecommunications Commission, or Cofetel, plans to receive bids next week for spectrum in the 1900 MHz frequency band.

Mexico's four PCS wireless operators are America Movil SA (AMX), Grupo Iusacell SA (CEL), Unefon SA (UNEFON.MX) and Spain's Telefonica Moviles SA (TEM).

The CFC said it's seeking to avoid concentrations that have a negative effect on the efficiency of the wireless market, which in turn has a direct impact on the country's economic competitiveness.

It said new participants, NII Holdings (NIHD), which operates trunking services under the Nextel name, fixed-line companies Axtel and Maxcom, and Cingular (CIW.XX), could acquire from 20 MHz to 30 MHz, depending on the region.

They could acquire more if existing operators don't accumulate their maximum allowed, or if the newcomers bid higher than existing operators, the CFC added.

In a report in November, UBS Investment Research said the auction will be "the last chance for a while that operators have to get new 'real estate' to support their subscriber growth plans."

Cofetel will auction four blocks of 10 MHz in each of the country's nine regions.

According to Cofetel data, Telcel has 18.4 MHz in each of the regions, including 8.4 MHz leased from Unefon. Telefonica Moviles, which operates under the Movistar brand, has 30 MHz in five of the regions and 10 MHz in another four. Unefon has 30 MHz in all nine regions, and Iusacell has 10 MHz in two regions.

-By Anthony Harrup, Dow Jones Newswires; (5255) 5080-3450, anthony.harrup@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 6th January 2005