Analyst Angle: Spectrum feast in Latin America

Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.
There is much talk these days about the need for additional spectrum to facilitate the deployment of new technologies. Numerous countries in Latin America, however, seem to be “taking the bull by the horns” and undertaking affirmative actions to facilitate the deployment of new technologies and competition in their wireless markets through spectrum refarming and auctions. In the coming year, spectrum auctions are expected to take place in Brazil, Colombia, Costa Rica, and Mexico. Perhaps more notable in an environment of economic uncertainty is the fact that the upcoming licenses are attracting significant interest from investors.
In Mexico, the long-awaited 3G spectrum auctions were officially launched and tender rules were made available for purchase from January 6-8. In process for several years, the government will auction 30 megahertz in the 1.9 GHz band in eight of Mexico’s nine regions, as well as 90 megahertz nationwide in the 1.7 GHz/2.1 GHz band. In an effort to increase competition, the government is imposing spectrum cap, which will prevent operators from participating in the auctions if their total spectrum holdings for mobile services will exceed 80 megahertz. Despite the fact that the tender rules were only available for purchase during a three-day period, Cofetel announced that 44 companies purchased the rules for the 1.9 MHz band auction, and 49 companies purchased them for the 1.7/2.1 MHz band auction. The high level of interest among potential bidders would seem to indicate significant pent-up demand among existing and potential operators for additional spectrum. The attention from investors is undoubtedly good news for the Mexican government. According to Mexican regulator Cofetel, final bids are due in late May, with contracts to be awarded in late June. On the heels of the 3G auction launch, Cofetel is reportedly already developing plans to auction additional spectrum in the 700 MHz band.
Meanwhile, Costa Rica is preparing to license three new operators to compete with state-owned incumbent provider ICE, making the country one of the last in the region to liberalize its mobile market. Costa Rican regulator Sutel will offer three 60 megahertz concessions, all of which will include spectrum in the 1800 MHz and 1.9 GHz/2.1 GHz bands, and one of which will also include spectrum in the 850 MHz band. In short order, Costa Rica is hoping to move from a monopoly market to a highly competitive 3G market. The auction has already attracted attention from prominent operators in Latin America and the Caribbean, including Am