Related News:
NII Expects to Obtain Mexico Airwaves Even After Rivals Criticize Auction
NII Holdings Inc. said it expects to receive mobile-phone airwaves in Mexico even after competitors including America Movil SAB criticized the government’s handling of an auction of wireless spectrum.
NII, which bid jointly with Grupo Televisa SA in Mexico’s auction, is waiting for the telecommunications regulator to sign off on its bid for 30 megahertz of airwaves that cover the nation. NII and Televisa were able to spend a fraction of the money America Movil had to bid in the auction because of rules that limited each company’s total spectrum holdings.
NII, which uses the Nextel brand to sell wireless service in Latin America, needs the airwaves to get a planned $1.44 billion investment in its Mexican unit from Televisa, the world’s largest Spanish-language broadcaster. The companies aim to share network resources and marketing expenses to promote NII’s wireless service.
“We expected the rules that were set for that auction would be adhered to and we would receive our spectrum,” Chief Executive Officer Steven Dussek said today on a conference call. “In terms of the competitors making noise about that, yeah, obviously they are.”
NII, based in Reston, Virginia, fell 71 cents, or 1.9 percent, to $37.70 at 4 p.m. New York time in Nasdaq Stock Market trading. It has gained 12 percent this year.
Competitor Criticism
NII plans to begin building a network capable of high-speed Internet downloads with the airwaves and could begin offering the service in some of Mexico’s biggest cities as soon as a year after it gets the airwaves, said Tim Perrott, the company’s vice president of investor relations.
The Federal Telecommunications Commission, the Mexican agency responsible for the auction, should require NII and Televisa to pay more for the airwaves or should void the auction results, Alejandro Cantu, general counsel for America Movil, said in an interview. If the agency awards the spectrum at the price NII and Televisa bid, America Movil may challenge the ruling in court, he said.
“We welcome competition. This is not a matter of competition,” Cantu said today by telephone. “This is a matter of fairness.”
Grupo Iusacell SA, the third-biggest Mexican wireless carrier after America Movil and Telefonica SA, has challenged the auction rules in court. NII is the smallest of Mexico’s four mobile-phone carriers.
Only Bidders
NII and Televisa bid 180 million pesos ($14.2 million) for 30 megahertz of nationwide spectrum, the same amount of airwaves America Movil and Telefonica spent a combined 5.1 billion pesos to acquire. NII and Televisa were the only qualified bidders for the nationwide block, allowing them to win it with the minimum required bid.
The difference in prices “doesn’t necessarily frighten me,” Federal Telecommunications Commission President Mony de Swaan said in an interview last week. 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.
De Swaan said on July 22 he expected the telecommunications agency to rule on the auction results within three weeks.
NII today reported second-quarter net income of $75.5 million, or 44 cents a share, down from $134.3 million, or 79 cents, a year earlier. The company, which also operates in Brazil, Argentina and Peru, said it expects to add as many as 1.53 million subscribers this year, up from a February forecast of up to 1.38 million.
To contact the reporter on this story: Crayton Harrison in Mexico City at tharrison5@bloomberg.net
Rate These Stories
Rate this Page