March 16, 2018 / 2:59 PM / in 8 months

Argentina prepares 4G spectrum auction that could raise $800 million: source

BUENOS AIRES (Reuters) - Argentina is preparing to auction 90 megahertz of 4G spectrum to mobile telephone and internet companies in a process that has already attracted interest from Telecom Argentina SA, Telefonica SA and Claro, a government source told Reuters.

A woman uses her mobile phone as she walks on a street in Buenos Aires, Argentina, March 15, 2018. Picture taken March 15, 2018. REUTERS/Marcos Brindicci

The plans come as business-friendly President Mauricio Macri seeks to attract investment to the telecoms sector to boost competition and improve connectivity in the South American country. Since taking office in 2015, he has pushed a change to laws allowing companies to offer multiple telecoms services.

The auction could bring in $800 million in government revenue, the source said. It is expected to consist of 60 megahertz that telecom company Arlink received but later returned, and 30 megahertz held by state telecoms company Arsat.

A spokesman for Argentina’s Modernization Ministry told Reuters there would need to be a change to the law to allow the government to auction off the spectrum currently held by Arsat. That could occur around mid-year, either through a law or a presidential decree, the spokesman said.

Telecom, which recently merged with Argentina’s largest cable television provider Cablevision SA, said in January it would invest $5 billion through 2020 to expand and improve its connectivity infrastructure and communications service.

“We view a government spectrum auction as good and necessary, keeping in mind the huge growth in the use of mobile data, with permanent connectivity demand from users,” Telecom said in a statement to Reuters.

The merged company must return 80 megahertz of spectrum to the state given that it now exceeds the 140 megahertz limit for a single operator. But the government plans to raise that cap, meaning Telecom would be able to participate in the auction.

Spain’s Telefonica SA, the other major player in Argentina’s telecoms market which operates through the mobile phone service brand Movistar, plans to invest close to $2 billion in the country through 2019. Telefonica said in a statement Movistar would be interested in “an eventual auction.”

Claro, owned by Mexican company America Movil plans to invest some $400 million per year through 2020 to improve service to the 21 million customers it has in Argentina.

“Claro has interest in growing and developing the networks that benefit service to its customers, be it through deployment or acquisition of spectrum,” the company told Reuters in a statement.

Reporting by Eliana Raszewski; Writing by Luc Cohen; Editing by Susan Thomas

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