Nextel, Televisa partner for upcoming Mexican spectrum auction

Armed with its new equity stake partner, Nextel Mexico officially entered its name into the list of bidders for new spectrum in Mexico.
The iDEN carrier announced earlier this week that it would sell a 30% equity stake in the company to Grupo Televisa for $1.44 billion. Televisa, the largest media company in the Spanish-speaking world, has the option to acquire another 7.5% stake in NII Holdings Inc.’s Mexican subsidiary at the prevailing market value on the third or fourth year after the investment is completed. Televisa’s investment and the other transactions contemplated by the investment agreement depend on the Nextel/Televisa consortium being awarded spectrum licenses and other closing conditions.
The deal will allow Nextel Mexico and Televisa to bundle their services into a quadruple play of wireless, TV, broadband access and fixed telephony services, said Tim Perrott, VP of investor relations and corporate communications at NII Holdings. “It’s a very good match for both companies to ultimately offer a full bundle of services.” NII’s Nextel Mexico unit is a high-growth area of the business, Perrott said. NII also has wireless operations in Brazil, Argentina, Peru and Chile.
Going forward, Nextel Mexico plans to compete in the government’s upcoming spectrum auction, which aims to bring more competition to the Mexican wireless market that is dominated by America Movil subsidiary Telcel. Indeed the Mexican government went as far as to declare Telcel a dominant carrier in the nation, which means it could be subject to stricter government regulation. America Movil said it will protest the declaration.
The auction, which is slated to end in the second quarter of this year, comprises nine spectrum blocks at the 1850-1990 MHz bands and hold another auction for spectrum between 1750 and 1910 MHz bands.
Nextel Mexico, which counts 2.9 million subscribers, is seeking some of the spectrum up for auction in order to build a W-CDMA based network to complement its existing iDEN platform, Perrott said. Nextel Mexico plans to seamlessly integrate its iDEN and future W-CDMA networks. “We will develop a 3G overlay and continue to grow and invest in iDEN.” Perrott said Mexican iDEN users are a fairly diverse group of customers that includes not only traditional PTT business users but also high-end, image conscious users. Motorola is the only company that makes iDEN handsets but offers a variety of devices for sale, Perrott said.