Another Delay In Mexico 4G Shared Network Tender Results

Mexico’s telecom regulatory authority, the Federal Telecommunications Institute (IFT) has delayed the declaration of the names of the winners of its 700 MHz nationwide shared broadband network for the second time.

Mexico's Secretariat of Communications and Transport (SCT) was supposed to declare the tender winners on Aug 24, 2016. Last month, the government institute postponed it to Sep 28. The SCT cited the number of tenders and the complexity of queries and requests for clarification submitted by the bidders as the primary reason for the delay.

Recently, the IFT further delayed the date to Nov 17. The regulator said the latest delay was partly the result of a consultation between the SCT and the auction bidders and partly a request from the banks backing the scheme. The IFT stated that interested bidders can submit their bids latest by Oct. 20, and the contract will be signed upon meeting the necessary criteria by auction winners. The last day of signing the contract is Jan 27, 2017.

In 2014, the Mexican government had undertaken a massive project of shared wireless network to instil competition in the highly monopolistic telecom industry. The idea was to facilitate small-scale telecom operators to use this state-owned network for their wireless coverage instead of installing their own network, which tends to be a highly capital intensive process.

However, in May 2015, the government of Mexico slashed its planned expenditure from $10 billion to $7.5 billion for the proposed deployment of the nationwide wholesale mobile network over the next 20 years. The primary reason for the cut in planned expenditure was the government’s belief that 12,000 mobile towers should suffice for the installation of this network as against 20,000 estimated earlier.

The SCT opened the tender for the proposed wholesale shared mobile network project as early as Mar. 2015. However, the auction finally materialized on Jan 29, 2016. The SCT had decided to auction at least 90 MHz of spectrum within the 700 MHz-band to cover at least 85% of the population by 2018. Over the past three years, Mexico witnessed a surge in mobile broadband penetration from 22% to 57%.

In Jul 2015, the SCT announced that it received 39 tenders from interested parties. Various leading telecom infrastructure equipment developers with global operational experience offered bids for the state-owned mobile network project. Notable among them were Ericsson (ST:ERICAs) AB (NASDAQ:ERIC) , Nokia (HE:NOKIA) Corp. (NYSE:NOK) , Cisco Systems Inc. (NASDAQ:CSCO) , Motorola Solutions Inc. (NYSE:MSI) , China Telecom Corp. Ltd. (NYSE:CHA) , Alestra, and Huawei Technologies Co. Ltd.