Nextel Mexico Receives Wireless Spectrum After Legal Battle

Date : 10/02/2010 @ 7:43PM
Source : Dow Jones News
Stock : Nii Holdings, Inc. (PC) (NIHDQ)
Quote : 0.02  0.0 (0.00%) @ 2:05AM

Nextel Mexico Receives Wireless Spectrum After Legal Battle

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The Mexican government on Saturday delivered the spectrum that wireless operator Nextel Mexico won in a July auction, ending a months-long legal standoff with a competitor that sought to block the purchase through the courts.

A consortium formed by Nextel Mexico, the local unit of NII Holdings Inc. (NIHD), and Mexican media conglomerate Grupo Televisa (TV, TLEVISA.MX) won a nationwide block of 30 megahertz in the July auction.

The head of the Communications and Transport Ministry's legal department, Gerardo Sanchez, said at a press conference that the government won 69 cases brought against the auction, and that on Saturday there were no pending court stays impeding the spectrum award.

The delivery was held back by lawsuits filed by Grupo Iusacell, Mexico's smallest wireless phone operator, which said it was opposed to the low price with which the Nextel-Televisa consortium won the block.

Televisa, Mexico's biggest broadcaster, cable, and satellite TV provider, plans to take a 30% stake in Nextel Mexico for $1.44 billion. Nextel will use the spectrum in the 1.7 gigahertz range to build a 3G network, investing MXN19 billion over five years.

Nextel-Televisa was able to submit the minimum bid of 180 million pesos ($14 million) for the spectrum because caps set by antitrust regulators kept existing operators from bidding on the block. It will still pay the government MXN18 billion in spectrum fees over the 20 years of the concession.

All four of Mexico's wireless operators, Nextel, Iusacell, America Movil (AMX, AMX.MX) unit Telcel, and Spain's Telefonica (TEF) won spectrum in two auctions, in which the government awarded bandwidth in the 1.7 gigahertz and 1.9 gigahertz ranges.

Communications and Transport Minister Juan Molinar said the auctions and planned investments by operators represent the biggest expansion of telecommunications infrastructure in years, "which will bring more competition, better services, and progress in telecommunications."

Nextel Mexico President Peter Foyo told Dow Jones Newswires in an interview Friday that the tie-up with Televisa has several benefits for Nextel--both in terms of content and possibilities for offering wireless services to Televisa's cable, satellite TV and telephony customers.

The official expressed dismay at the barrage of lawsuits that had been delaying the award, particularly given the company's small share of the market, in which Telcel has around 70% and Telefonica 20% of the country's 85 million wireless subscribers.

"We have 3 million subscribers, it's not as though we have 50 million," he said.

-By Anthony Harrup, Dow Jones Newswires; (5255) 5980 5176,


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