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Mexican Regulator Approves Spectrum Alllocation

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Mexico's telecoms regulator, Cofetel has issued a statement confirming a controversial license and spectrum award to broadcast giant Televisa and its partner NII Holdings, which operates a Nextel branded network.

Several politicians had complained that the recent radio spectrum auction was designed to benefit Televisa by artificially lowering the price it would have to pay for spectrum compared to the incumbent operators.

The regulator's decision still needs to be approved by Mexico's Communications Ministry.

Although Televisa would be a new entrant into the mobile market, and prove a strong competitor in a market that is dominated by America Movil - it is itself a major company that controls around 70% of Mexico's television market. There had been allegations that the government pressured the regulator to be lenient with the company when setting the auction conditions.

Televisa and Nextel were able to secure their allocation in the auction for USD14 million, compared to the USD400 million offered by rivals America Movil and Telefonica in their spectrum bids.

Grupo Televisa has agreed to invest $1.44 billion in cash for an initial 30% equity stake in NII's Mexican subsidiary to jointly fund the 3G spectrum purchases and network build. The investment was contingent upon the consortium (Nextel Mexico and Grupo Televisa) winning rights to use specified amounts of spectrum in the auction.

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Tags: cofetel  nextel  televisa  auction  television  Mexico