February 1, 2012 / 12:07 AM / 6 years ago

Mexico broadband project stuck in stalemate

MEXICO CITY (Reuters) - An ambitious private project to unlock wireless access across Mexico appears to be stuck in a stalemate with the developer and the government unable to agree on terms.

At the heart of the debate is 190 megahertz (MHz) of bandwidth owned by MVS Comunicaciones that could be used to deploy a next-generation LTE (Long Term Evolution) network in Mexico.

The bandwidth, briefly used to transmit radio using microwaves in the 1990s, has been dormant for most of the last decade, sparking calls from competitors for it to be put up for grabs again.

“Unfortunately and despite our best efforts, the licensee (MVS) has decided to reject the different alternatives that have been submitted by the government,” communications and transport minister Dionisio Perez Jacome told a news conference.

The recent explosion of data-hungry devices like tablets and smartphones has offered a more obvious market for the use of that bandwidth.

About 12 percent of the licenses in MVS’s entire spectrum holding have come due in recent years, with the rest expiring through 2018.

“Due to the lack of an agreement ... we have continued refusing to renew the expired licences,” Perez Jacome added.

MVS could not be immediately reached for comment.

The company pitched a plan in April 2011 to use the spectrum more efficiently by making it available to just about any player via a proposed joint venture for a high-speed network that would include MVS, Clearwire Corp and chip maker Intel Corp. They would have jointly invested $400 million.

The government has said its review of the case involved multiple scenarios.

One option was to charge MVS a fee to let it claim back the expired licenses, critical to fully operating a national broadband backbone, keep the ones that have not come due and let the company and its partners operate the network.

Another alternative was to leave at least 120 MHz in the hands of MVS and auction the rest of the capacity to other competitors. The most extreme option was to take away all the spectrum from the company and re-auction it in the market.

Perez Jacome did not say on Tuesday what the government’s proposal to MVS was.

The delay on the MVS project comes as authorities scramble to promote competition in a country where tycoon Carlos Slim’s companies have the lion’s share of the phone market and two broadcasters have a near duopoly in Mexican television broadcasting.

A report from the Organization for Economic Co-operation and Development released this week underscored the lack of competition in telecommunications, resulting in significant costs to the Mexican economy and consumers.

Reporting By Lorena Segura; Editing by Phil Berlowitz

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