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Televisa, NII to Get Airwave Ruling in Three Weeks, Mexican Regulator Says
Grupo Televisa SA and NII Holdings Inc., seeking to challenge America Movil SAB in Mexico, will learn within three weeks whether their bid for mobile-phone airwaves will pass muster with regulators.
The government’s airwave auction appears to have met its goals of boosting competition and providing capacity to the wireless industry, Mony de Swaan, president of Mexico’s Federal Telecommunications Commission, said yesterday in an interview. The agency must review the results carefully, in part because Televisa and NII would get airwaves at a discount, he said.
NII, which operates the Nextel brand in Latin America, needs the airwaves to cement its partnership with Televisa, the world’s largest Spanish-language broadcaster. Televisa plans to spend $1.44 billion to buy one-third of NII’s Mexican unit if the wireless company gets the spectrum.
“The ultimate end of these tenders was to foment competition: Were those conditions satisfied? I think so,” de Swaan said by phone from Mexico City. “But I frankly reserve my position until I discuss it with my colleagues and we arrive at a collegial conclusion.”
The agency must deliberate carefully, because it will probably have to defend its decision in court if companies challenge the ruling, he said.
Televisa gained 27 centavos to 47.88 pesos at 2 p.m. New York time in Mexico City trading. Reston, Virginia-based NII gained 40 cents, or 1 percent, to $39.58 in Nasdaq Stock Market trading.
Chosen Leader
De Swaan, 40, was named by President Felipe Calderon as one of the telecommunications agency’s five commissioners in June, replacing Hector Osuna. The commissioners, who vote among themselves to elect a president, chose de Swaan earlier this month.
The auction of 90 megahertz of airwaves in the 1.7 gigahertz band drew four participants, including the NII- Televisa partnership. America Movil, Latin America’s largest wireless carrier, spent 3.79 billion pesos ($298 million) to place the top bids on 20 megahertz of spectrum across the country and an additional 10 megahertz in three regions.
Telefonica SA, Mexico’s second-biggest wireless carrier after America Movil, spent 1.27 billion pesos to get 10 megahertz of spectrum in six regions. Grupo Iusacell SA, the third-biggest wireless operator, didn’t place any high bids.
NII, Mexico’s smallest wireless carrier, and Televisa offered 180 million pesos for 30 megahertz of spectrum nationwide, the same amount of airwaves America Movil and Telefonica spent a combined 5.1 billion pesos to acquire. NII and Mexico City-based Televisa were able to win the airwaves with a much lower offer because they were the only qualified bidders for that piece of spectrum under rules that capped the total airwaves each participant could own.
Not Frightened
The difference in prices “doesn’t necessarily frighten me,” de Swaan said. Including annual payments required by Congress, NII and Televisa will pay 18.3 billion pesos over 20 years for the airwaves it’s acquiring. America Movil and Telefonica will pay a total of 23.2 billion pesos in the same two-decade span.
“Sometimes this kind of difference is desirable,” de Swaan said. “That’s simply because there are different network investments, because there are different economies of scale and because part of the intent of these tenders was precisely to promote the entry of a new participant in the industry.”
NII, which has 3.6 percent of Mexico’s mobile-phone subscribers, said this week it plans to spend 18.9 billion pesos over six years to upgrade and operate a new mobile-phone network capable of high-speed Internet downloads, offering consumers technology that is now available only from America Movil and Iusacell.
Mobile-Phone Market
America Movil had 71 percent of Mexican mobile-phone customers at the end of March, followed by Telefonica’s 21 percent and Iusacell’s 4.4 percent.
Televisa said it intends to package the video, Internet and phone services offered by the satellite and cable companies it controls with NII’s wireless plans to attract Mexican consumers. If the companies are awarded their airwaves, they would begin offering plans together by the end of this year, Gustavo Cantu, a vice president of NII’s Mexico unit, said this week in an interview.
Each commissioner of the telecommunications agency must decide whether to void the auction results or approve them, and each will have to offer a rationale for his vote, de Swaan said. The agency won’t retroactively change the auction rules, since that would “send an awful message” to investors in Mexican companies, he said.
To contact the reporter on this story: Crayton Harrison in Mexico City at tharrison5@bloomberg.net
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