AT&T unlikely to participate in Mexico’s next network spectrum auction, Reuters reports

AT&T is improbable to enactment successful Mexico’s adjacent auction of frequencies utilized to supply web services, according to a institution root that spoke to Reuters.

Reportedly, the determination is motivated by the precocious costs associated with spectrum usage and the conditions of the Mexican market, which bounds contention and hinder profitability for overseas operators. The quality comes a period aft Bloomberg reported AT&T’s volition to exit the Mexican market.

“With the existent spectrum costs it is precise apt that this auction volition again beryllium near deserted, arsenic happened successful the past auction,” a root astatine AT&T said, adding it was besides precise improbable AT&T itself would beryllium funny successful taking part.

The root said AT&T has repeatedly expressed its concerns to the Mexican government, but its demands person not been met truthful far. Mexico’s Economy and Finance Ministries did not instantly respond to requests for comment.

The upcoming auction, chiefly focused connected the vigor spectrum for precocious services specified arsenic 5G, faces constricted involvement among established operators with a precocious probability that respective blocks volition again beryllium near without bidders, akin to what occurred successful 2021. At that time, astir blocks were near unclaimed owed to precocious prices, discouraging information by large operators including AT&T.

The vigor spectrum is the basal assets for high-quality mobile communications, but Mexico has immoderate of the highest prices successful the region. The wide outgo of spectrum successful Mexico includes archetypal payments for concessions and yearly fees established by the Federal Rights Law, which correspond up to 85% of the full cost. In contrast, the mean for different Latin American countries is lone astir 20%.

In a imaginable telecom assemblage shake-up, AT&T whitethorn beryllium leaving Mexico

The GSMA, a planetary commercialized relation representing mobile operators, has estimated that if Mexico had little costs, astatine slightest 5 cardinal much radical successful the state would beryllium connected to mobile telecommunications utilizing 4G technology.

Due to the precocious costs, Telefónica returned each of its spectrum to the authorities successful 2021, portion AT&T returned portion of its spectrum successful 2022 and different portion successful 2023. This persistent contented prevents tiny players from consolidating their presumption arsenic operators, causes medium-sized players similar Telefónica and AT&T to instrumentality spectrum, and allows ample players similar Telcel genitor institution América Móvil (owned by billionaire Carlos Slim) to beryllium the lone ones who execute profitability.

AT&T arrived successful Mexico successful 2014, erstwhile erstwhile President Enrique Peña Nieto opened the marketplace to competition. AT&T archetypal purchased Grupo Iusacell for US $2.5 cardinal from Mexican tycoon Ricardo Salinas Pliego, earlier acquiring Nextel Mexico’s operations for different US $1.9 billion. But contempt investing much than US $10 cardinal successful Mexico, AT&T hasn’t been capable to situation the dominance of Telcel, which holds 55% of the Mexican telephone bearer market.

With reports from Reuters and La Política Online