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Mexico's Telecom Regulator to Sell Wireless Licenses in 2Q

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MEXICO CITY (Dow Jones) The Mexican government has authorized telecommunications regulator Cofetel to sell wireless licenses starting in the second quarter as part of a larger spectrum auction program aimed at boosting competition in the sector, officials said Monday.

"The 2008 auction program, which Cofetel and the SCT have worked on together, is the most important program in the history of telecommunications in our country, due to the amount of spectrum available for mobile and fixed (telephony) services," Communications and Transport Minister Luis Tellez said at a press conference.

Tellez said the Communications and Transport Ministry, or SCT, has recommended that Cofetel complete the first auction, of 1900 megahertz mobile telephony licenses, within the next 45 days, and finish the other auctions within 180 days.

Mexico's telecommunications industry is dominated by wireless carrier America Movil and fixed-line telephone company Telefonos de Mexico, or Telmex, both of which are controlled by billionaire Carlos Slim.

America Movil's Telcel unit had about 73% of the country's 68.7 million mobile users at the end of last year, with the rest of the market divided among Spain's Telefonica, Grupo Iusacell and Nextel Mexico, a unit of NII Holdings.

Telmex, which has about 17.8 million lines, still controls about 90% of the country's fixed lines even though that business has been open to competition for more than a decade.

"Consumers are going to have more and better options to access fundamental services like broadband, and the frequency bands are going to permit the entrance of new players," Tellez said.

Cofetel President Hector Osuna said at the conference that his agency would do its best to meet the auction deadlines but that much will depend on other government bodies involved in the process.

The Federal Competition Commission still has to sign off on the bidding rules, including possible restrictions on existing operators, while it's up to the Finance Ministry to establish the minimum bid prices, Osuna said.

"We hope to obtain an important amount of resources above $1 billion, substantially above $1 billion, for all of the frequencies," Tellez said.

The SCT has given Cofetel the go-ahead to sell three 10MHz blocks in the 1900MHz band in eight of the country's nine mobile telephony regions to be used for fixed wireless and mobile telecommunications services.

Cofetel will also offer spectrum in the 1.7GHz-2.1GHz band for third-generation mobile telephony services, which include high-speed Internet and streaming video, in all nine mobile telephony regions.

Tellez said enough spectrum in that band will be available to support at least one new mobile operator and that several investors have expressed an interest in bidding.

The remaining auctions are for spectrum in the 3.4GHz-3.6GHz and 3.6GHz-3.7GHz bands, which can be used for wireless broadband technologies like WiMax, and spectrum in the 70GHz-80GHz band for fixed-wireless broadband connections.

SCT has also approved the sale of spectrum in the 410MHz-430MHz band for signaling services for inter-urban trains.

-By Ken Parks, Dow Jones Newswires; 52-55-5080-3453; ken.parks@dowjones.com

(END) Dow Jones Newswires

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Tags: telefonica  grupo iusacell  telcel  iusacell  nextel  cofetel  fixed wireless  competition commission  auction  telefonica,  Mexico