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LatAm Wrap-Up: NII Holdings,Telefónica sign 3G network sharing deal

by Roberta Prescott
written by Roberta Prescott Share
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Telefónica has agreed to provide NII Holdings’ subsidiaries in Brazil and Mexico with nationwide voice and data coverage services using the Telefónica’s 3G wireless networks in those markets. NII Holdings operates under the Nextel brand in the two countries, and the agreement with Telefónica aims to expand the areas where Nextel 3G customers can access voice and data services, supporting NII Holdings’ growth strategy.

In a statement, U.S.-based NII Holdings said it will continue to manage its spectrum and network assets separately to provide competing services. Market observers viewed the network sharing deal in Brazil and Mexico as a positive move for both companies. “This is likely to result in a meaningful reduction in 3G [capital expenditures] (and overall cash burn) for NII when the company releases results next month,” wrote Kevin Smithen, managing director for telecom services at the Macquarie Securities Group. “The deal is also is likely to make Telefónica a major creditor to NII going forward, and this could mean that a Telefónica purchase is the end game for NII, even in the case of a restructuring. We believe this could provide a backstop to NII.”

In Brazil, Nextel plans to continue expanding its own network while complying with the coverage requirements imposed by Brazilian telecommunications regulator Anatel. In Mexico, the deal will allow Nextel to increase its network footprint. “Our new agreements with Telefónica will enhance our service offerings by giving us the ability to provide our 3G customers in Brazil and Mexico with services in more areas in those markets,” said Steve Shindler, NII Holdings CEO, in a statement.

Network sharing agreements have not been very popular across Latin America, although Telefónica has made several moves in this direction in recent months. The telecom giant partnered with Millicom to deploy LTE networks in Colombia; made mobile virtual network operator deals with Virgin Mobile in Mexico, Chile and Colombia; and signed an agreement with Iusacell for reciprocal use of wholesale services in Mexico that started in 2012. Last year, Telefónica’s Brazilian operator Vivo and its rival Claro agreed to share 3G and LTE networks; however, the agreement hasn’t been realized yet.

Oi-Portugal telecom merger: The proposed merger between Brazilian operator Oi and Portugal Telecom was approved by the Brazilian competition regulator, Cade, with no restrictions placed on the deal. pt-oi

Chile accepts bids for 700 MHz: Claro, Entel and Movistar have presented proposals for Chile’s 700 MHz frequency band tender. The minister of transport and telecommunications, Pedro Pablo Errazuriz, said this auction represents a new step that will complement previous efforts in 2012, which involved the auction of 2.5 GHz spectrum and starting the LTE deployment process.

Rates for 2.5 GHz: Mexico has established rates for the use of the 2.5 GHz frequency band. According to the local newspaper El Financiero, concession owners in the Federal District will have to pay $1,727 per megahertz, while in the State of Mexico the price will be $1,473 per megahertz.

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Editor, [email protected] Roberta Prescott is responsible for Latin America reporting news and analysis, interviewing key stakeholders. Roberta has worked as an IT and telecommunication journalist since March 2005, when she started as a reporter with InformationWeek Brasil magazine and its website IT Web. In July 2006, Prescott was promoted to be the editor-in-chief, and, beyond the magazine and website, was in charge for all ICT products, such as IT events and CIO awards. In mid-2010, she was promoted to the position of executive editor, with responsibility for all the editorial products and content of IT Mídia. Prescott has worked as a journalist since 1998 and has three journalism prizes. In 2009, she won, along with InformationWeek Brasil team, the press prize 11th Prêmio Imprensa Embratel. In 2008, she won the 7th Unisys Journalism Prize and in 2006 was the editor-in-chief when InformationWeek Brasil won the 20th media award Prêmio Veículos de Comunicação. She graduated in Journalism by the Pontifícia Universidade Católica de Campinas, has done specialization in journalism at the Universidad de Navarra (Spain, 2003) and Master in Journalism at IICS – Universidad de Navarra (Brazil, 2010) and MBA – Executive Education at the Getulio Vargas Foundation.

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