Mexican Mobile Companies End Legal Disputes Over Spectrum

Date : 12/06/2011 @ 10:51AM
Source : Dow Jones News
Stock : Grupo Televisa S.A. (TV)
Quote : 26.21  0.11 (0.42%) @ 4:03PM

Mexican Mobile Companies End Legal Disputes Over Spectrum

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Mexican mobile-phone companies Grupo Iusacell SA (NUGPF) and Nextel de Mexico agreed to withdraw lawsuits filed over a 2010 government wireless spectrum auction, ending more than a year of legal wrangling.

Nextel de Mexico, the local unit of Virginia-based NII Holdings Inc. (NIHD), said in a statement it reached an agreement with Grupo Iusacell to end litigation related to the auction, in which Nextel won a nationwide band of 30 megahertz that it's using to develop its 3G network.

Iusacell, controlled by businessman Ricardo Salinas Pliego, disputed the 2010 auction and took court action, arguing that the spectrum caps set by the antritrust regulator meant that Nextel obtained the spectrum unchallenged with the minimum bid.

Regulators defended the caps as a way of evening out the amount of wireless spectrum available to competitors, although the intention of luring a fifth player into the market was unsuccessful and another 30-megahertz block of spectrum went unassigned.

At the time of the auction, Nextel bid jointly with broadcasting and media company Grupo Televisa SAB (TV, TLEVISA.MX), but Televisa then pulled out of a deal to take a stake in Nextel and later agreed to buy a 50% stake in Grupo Iusacell for $1.6 billion.

Salinas Pliego also controls television company TV Azteca SAB (AZTECA.MX), which competes with Televisa in the free-to-air broadcast market. The tie-up with Iusacell gives Televisa entry into the mobile market, as it already offers triple-play service--phone, Internet and television--through its cable businesses.

The Communications and Transport Ministry welcomed the agreement, saying in a statement it gives legal certainty to operators as they invest in their networks.

Iusacell and Nextel compete with Mexico's largest mobile company Telcel, which is a unit of telecommunications heavyweight America Movil SAB (AMX, AMX.MX), and with the local unit of Spain's Telefonica SA (TEF.MC, TEF).

-By Anthony Harrup, Dow Jones Newswires; (5255) 5980-5176, anthony.harrup@dowjones.com

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