AT&T (NYSE: T) paid $57 million for spectrum in Mexico's auction of airwaves this week, but the carrier was far outspent by the country's dominant wireless carrier, America Movil.
Carlos Slim's mobile operator shelled out $117 million to the Mexican regulator Federal Telecommunications Institute (IFT) during the auction of frequencies in the ranges of 1710 MHz to 1780 MHz and 2110 MHz to 2180 MHz. The auction began last month and reportedly could increase the amount of available mobile broadband spectrum in that country by 29 percent.
IFT said the auction provided each carrier with more adjacent spectrum, according to a Reuters report.
America Movil claims roughly 70 percent of Mexico's fixed-line and mobile telecom services, but the Mexican government has introduced regulations aimed at spurring competition in the market. AT&T has moved aggressively to capitalize on those new policies, spending $4.4 billion last year to acquire operators Iusacell and Nextel Mexico. The second-largest U.S. operator also vowed to spend $3 billion to cover 100 million people in Mexico with LTE by the end of 2018.
AT&T rebranded its Mexican mobile operations under its own name in August, and launched service in October in six new markets. The carrier sees an opportunity to provide 4G services to users who don't yet have access to LTE. Roughly 35 percent of POPs in Mexico were covered with LTE as of one year ago, according to GSMA Intelligence, while 95 percent had access to 3G.
AT&T's prospects south of the border are uncertain, however. HSBC recently predicted that whatever benefits AT&T has seen in that market are likely to shrink or even disappear over the next few years. The financial services company predicted AT&T will claim 20 percent of Mexico's mobile market by 2020, seeing an ARPU of $14. And it said the carrier isn't likely to generate profits in the country until 2019, one year later than AT&T has predicted.
- see this Reuters report
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