Mexico’s telecom regulator, the Federal Telecommunications Institute (IFT), introduced the surprising cancellation of the IFT-12 multi-band tender for 5G spectrum.
This choice got here proper earlier than the bidding course of was set to start, with potential contributors having been invited to specific curiosity since January 27. The public sale was poised to supply roughly 2,223 blocks of spectrum throughout varied bands, together with 600MHz, 800MHz, 2.5GHz, L-band, AWS, and PCS.
The IFT revealed that it had acquired a directive from the Digital Transformation and Telecommunications Company to halt the tender. This transfer aligns with broader reforms beneath the Sheinbaum administration, which embrace the consolidation of unbiased regulatory our bodies’ features into different authorities entities.
The telecom trade in Mexico, together with the IFT, has lengthy advocated for decreased frequency utilization charges. These charges are a few of the highest within the area and have been a major barrier to funding in spectrum and community protection by operators. The final spectrum public sale in Mexico, performed in 2021, noticed solely about 10% of the obtainable spectrum being bought. Notably, Telefonica (NYSE:TEF) returned all of its spectrum to the state, whereas AT&T (NYSE:T) decreased its holdings.
Analysts from Jefferies commented on the cancellation, noting that it was not fully shocking given the continued regulatory reforms. They identified that the absence of the public sale is more likely to negatively affect the event of the sector and funding in community protection.
Moreover, Jefferies anticipates that this improvement will solidify the market place of America Movil (NYSE:AMX)’s Telcel, which already has a major lead in community protection over its rivals.
Telcel, which has already rolled out 5G in its major markets, has restricted want for added spectrum within the close to time period, with solely minor necessities in nations like Ecuador and Costa Rica, and a few further spectrum wanted in Argentina.
Given its low debt ranges and lack of mergers and acquisitions on the horizon, Jefferies tasks that America Movil will possible ramp up its share buyback program.
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