Nextel executes plan despite spectrum auction delay

The delay in publishing trunking spectrum bidding rules has no affect on digital trunking operator Nextel Mexico's business plan, business development vice president Gustavo Cantu told BNamericas. "Nextel's business plan is based the spectrum it currently has," Cantu said, adding, "The auction could open up the possibility of expanding to places where we don't have a presence." Indeed, Nextel Mexico has actively acquired companies and licenses to boost its spectrum holdings. Parent company NII Holdings said in a filing with US securities regulators on November 10 that Nextel Mexico had acquired analogue trunking operator Delta Comunicaciones Digitales in August for US$39.3mn and obtained licenses in several cities from Servicios Troncalizados for US$9mn. Cantu said Nextel Mexico has also purchased a third company that owned five channels. At the end of the third quarter, Nextel Mexico reported 616,000 handsets in use and operating income of US$37mn. Telecoms regulator Cofetel originally planned to call an auction for a nationwide trunking concession in the 800MHz band in September, with a view to awarding the spectrum before year-end. Sources close to the matter said the draft bidding rules are now in the hands of the transport and communications ministry awaiting final approval. Ministry officials declined to return repeated phone calls asking for comment. Setbacks and delays in awarding new frequency concessions are not uncommon in Mexico. In the case of trunking, authorities have not issued new spectrum in the 800MHz band since the telecoms law of 1995 was passed due in part to bureaucratic inertia. According to Cantu, the trunking spectrum auction was always seen as a lengthy project. "The auction process was always been a project for next year because it is a long process," he said, adding the auction could take five to eight months to close once the bidding rules are published. Select telecoms research director Jose Garces attributed the delay to the government's cautious approach to public auctions in order avoid allegations of wrong doing or irregularities. He doubted the auction would end up in the courts, as have other ministry and Cofetel initiatives. "Once the spectrum is issued, trunking will be better able to compete with cellular operators, who in turn can take advantage of new technologies making it less likely they will turn to the courts [to delay the auction]," he said.