Telefónica has agreed to provide NII Holdings’ subsidiaries in Brazil and Mexico with nationwide voice and data coverage services using the Telefónica’s 3G wireless networks in those markets. NII Holdings operates under the Nextel brand in the two countries, and the agreement with Telefónica aims to expand the areas where Nextel 3G customers can access voice and data services, supporting NII Holdings’ growth strategy.
In a statement, U.S.-based NII Holdings said it will continue to manage its spectrum and network assets separately to provide competing services. Market observers viewed the network sharing deal in Brazil and Mexico as a positive move for both companies. “This is likely to result in a meaningful reduction in 3G [capital expenditures] (and overall cash burn) for NII when the company releases results next month,” wrote Kevin Smithen, managing director for telecom services at the Macquarie Securities Group. “The deal is also is likely to make Telefónica a major creditor to NII going forward, and this could mean that a Telefónica purchase is the end game for NII, even in the case of a restructuring. We believe this could provide a backstop to NII.”
In Brazil, Nextel plans to continue expanding its own network while complying with the coverage requirements imposed by Brazilian telecommunications regulator Anatel. In Mexico, the deal will allow Nextel to increase its network footprint. “Our new agreements with Telefónica will enhance our service offerings by giving us the ability to provide our 3G customers in Brazil and Mexico with services in more areas in those markets,” said Steve Shindler, NII Holdings CEO, in a statement.
Network sharing agreements have not been very popular across Latin America, although Telefónica has made several moves in this direction in recent months. The telecom giant partnered with Millicom to deploy LTE networks in Colombia; made mobile virtual network operator deals with Virgin Mobile in Mexico, Chile and Colombia; and signed an agreement with Iusacell for reciprocal use of wholesale services in Mexico that started in 2012. Last year, Telefónica’s Brazilian operator Vivo and its rival Claro agreed to share 3G and LTE networks; however, the agreement hasn’t been realized yet.
Oi-Portugal telecom merger: The proposed merger between Brazilian operator Oi and Portugal Telecom was approved by the Brazilian competition regulator, Cade, with no restrictions placed on the deal. 
Chile accepts bids for 700 MHz: Claro, Entel and Movistar have presented proposals for Chile’s 700 MHz frequency band tender. The minister of transport and telecommunications, Pedro Pablo Errazuriz, said this auction represents a new step that will complement previous efforts in 2012, which involved the auction of 2.5 GHz spectrum and starting the LTE deployment process.
Rates for 2.5 GHz: Mexico has established rates for the use of the 2.5 GHz frequency band. According to the local newspaper El Financiero, concession owners in the Federal District will have to pay $1,727 per megahertz, while in the State of Mexico the price will be $1,473 per megahertz.
More Latin American news:
- Caio Bonilha has resigned as president of the Brazilian public telecom firm Telebras. Francisco Ziober Filho has taken over as temporary president of the firm.
- Competition in Panama’s mobile market is expected to intensify through 2018 as the market moves toward saturation with a mobile penetration rate of 185.7% in 2013, according to a new report from Pyramid Research.
- Technicolor announced a global partnership with Telefónica as its strategic satellite set-top box provider to support the mass launch of Telefónica’s HD services campaign, kicking off in Latin America. The initial launch will include Brazil, Chile, Peru and Colombia. As part of the agreement, Technicolor will also provide support to extend these services to Telefónica’s Peruvian cable customer base.
- The Digicel CEO in El Salvador, José Antonio Rodriguez, announced that the operator is developing a master investment plan of $45 million that will last until 2015.
- Liberty Global announced the creation of an independent company designed to aggregate its divisions in Chile and Puerto Rico. The company, which owns 80% of VTR, also announced a $1.4 million bond issue for VTR Chile. Liberty is to deliver a separate capital structure with which it will be able to grow operations through potential acquisitions in the region.
