America Movil Joins Battle Against Mexico's Spectrum Caps

MEXICO CITY -(Dow Jones)- Mexico's biggest wireless phone service provider, America Movil SA (AMX), joined its main rival Wednesday in challenging radio spectrum limits set by the country's federal antitrust agency.

The Federal Competition Commission, or CFC, last week ruled that wireless operators in the country can accumulate no more than 35 megahertz at the 1900 MHz bandwidth in any one of the country's nine wireless regions.

The ruling affected this week's auction by the Federal Telecommunications Commission, or Cofetel, of four blocks of 10 MHz in each of the regions, since it limited both America Movil's and Telefonica Moviles' ability to bid.

Telefonica Moviles sought a court injunction against the caps last week, since they would keep the company from seeking more bandwidth in Region 9, which includes Mexico City with its 20 million inhabitants.

Telcel, which has about 27 million of the country's 35 million mobile phone subscribers, already has 18.4 MHz in each of the nine regions, and would be limited to acquiring a single block in each. Telefonica Moviles, the country's No. 2 operator with 4.5 million subscribers, has 30 MHz in five regions, including Region 9, and 10 MHz in four others.

Telefonica argued that the 35 MHz cap changed the rules for bidding set by Cofetel, which limited operators to a combined 65 MHz in the 1900 and 800 bandwidths.

Despite the legal challenges, both companies began bidding Monday when the auction, which is expected to last a week through seven rounds, got under way.

Also bidding in the auction are Grupo Iusacell SA (CEL), and NII Holdings (NIHD), which operates trunking services at the 800 MHz band under the Nextel name.

The CFC said the purpose of the bandwidth limits is to encourage the entry of new players into the wireless market.

Fixed-line companies Axtel and Maxcom, and Cingular (CIW.XX), qualified to participate in the auction but didn't bid.

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

(END) Dow Jones Newswires "

Posted to the site on 13th January 2005