Nextel May Sue Mobile Operators for Failure to Interconnect SMS

Mexican trunking operator Nextel Mexico does not rule out the possibility of suing local mobile operators for damages because of their failure to interconnect short messaging services (SMS), the company's VP of operations Gustavo Cantú told BNamericas.

"There are a lot of legal steps that the company can still take. Nextel can sue the other operators for causing damages and prejudices," Cantú said.

According to Cantú, the antimonopoly commission Cofeco can also recommend fines worth up to 10% of the operators' assets. Nextel is owned by US holding company NII Holdings (Nasdaq: NIHD).

Mexico's telecoms regulator Cofetel ordered the country's four mobile telephone operators in January to provide interconnection of SMS with Nextel by March 12 or else face fines.

However, only Movistar, owned by Spain's Telefónica Móviles (NYSE: TEM), has so far agreed to exchange SMS traffic with Nextel and is currently carrying out tests.

Meanwhile, Telcel, owned by América Móvil (NYSE: AMX), and Iusacell have both obtained temporary suspension orders that exempt them from interconnecting on March 12 until the courts resolve their injunctions against Cofetel's interconnection order.

This week local press reported that a judge had agreed to look at a request by the fourth placed operator Unefón for temporary suspension from obeying Cofetel's March 12 deadline. However, to date there has been no confirmation that the suspension order will be granted in time.

Telcel, Iusacell and Unefón have argued that they should not be obliged to interconnect with Nextel because it does not hold a traditional mobile telephony concession license, but rather a trunking license.

Analysts have previously told BNamericas that the debate about SMS interconnection with Nextel boils down to whether or not SMS should be considered a basic telephony service such as data and voice or an added-value service, such as email.

While article 42 of Mexican federal telecommunications law stipulates an obligation for all concessionaires of public telephony services to interconnect their networks there is no mention that this clause applies to value-added services.

"The consumer wants it [interconnection]. This is an issue of public interest. I hope that the benefit for the consumer takes precedence over commercial interests," Cantú said.

BNamericas.com"

Posted to the site on 8th March 2006