Nextel Mexico, the local unit of Virginia-based NII Holdings Inc., and Mexican group Iusacell, controlled by businessman Ricardo Salinas Pliego, have agreed to withdraw lawsuits and end litigation related to an October 2010 spectrum auction. In statement, carriers said that “in order to create an environment that encourages healthy competition in a sector fundamental that is fundamental to national development, both Nextel Mexico and Grupo Iusacell agreed that both sides will withdraw their legal recourses related to Auction 21.”
Companies are thus responding to the Federal Government’s call of continuing to work under the premise of promoting the convergence, competition and coverage.
In November, a Mexican court ordered the Ministry of Communications and Transportation to revoke the mobile concession awarded in October 2010. The local unit of Latin American digital trunking operator NII Holdings had been awarded 30 megahertz in the 1.7 GHz band in a consortium with Mexican media giant Televisa.
On Nov. 14, Judge Alfredo Cid GarcÃa ruled that Nextel-Televisa violated the so-called auction 21 basis. The Comision Federal de Telecomunicaciones, or Cofetel, noted that Telcel and Movistar paid almost 20 times more for the same frequencies compared with what Nextel-Televisa paid.
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Nextel will use the nationwide band of 30 megahertz to develop its 3G network. In Mexico, Nextel has already launched 3G services but only with wireless broadband. Full service, including push-to-talk and voice, are expected to be available during the second quarter of 2012.
Iusacell argued that the spectrum caps set by the antritrust regulator meant that Nextel obtained the spectrum unchallenged with the minimum bid.
In June 2010, it was announced that a joint venture between Nextel and Televisa had successfully bid U.S. $3.8 million (48.3 million Mexican pesos) for one 10 MHz block of 1900 MHz spectrum. Later that month, the duo emerged as the sole bidder for the nationwide concession in a 1700 MHz spectrum auction, offering the minimum bid of $13.1 million for 30 MHz in each of the country’s nine mobile operating regions.
The media company Grupo Televisa SAB (TV, TLEVISA.MX) then pulled out of a deal to take a stake in Nextel and later agreed to buy a 50% stake in Grupo Iusacell for U.S. $1.6 billion.
Cofetel tried to reject the bid, but at the end the joint venture received its concessions in October 2010. During the process, the Iusacell group sought to block the sale on the grounds that the Nextel-Televisa was paying too little for the frequencies.
Analysts said that this fact might not delay the 3G launch.
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