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July 13, 2009
In late May, the Mexican telecommunications regulator approved the guidelines for the upcoming spectrum auctions in the 1.7GHz and 1.9GHz bands, which are suitable for 3G+ deployments. At that time, we discussed in this blog how not only does the move finally advance the administrative process for granting more 3G+ spectrum licenses, it also incorporates two key elements that will shape the market for years to come:
- The contests are designed to promote the entry of at least one new competitor on a national level; and
- The auctions for both the 1.7GHz and 1.9GHz bands will be carried out simultaneously
These two factors will intensify the competition in the overall mobile communications sector by strengthening two critical competitive forces in any industry: The threat of new entrants and the threat of substitute products.
We believe that because the 1.7GHz and the 1.9GHz bands offer interested parties the chance to enter the same market (mobile broadband services), the licenses are mutual substitutes, and selling them simultaneously makes more sense from a competitive perspective; a simultaneous auction would prevent undesirable practices in the competition for these frequencies, such as speculation, collusion or intentional delays in the overall process.
Also, holding the biddings of both bands together in the same process curbs the threat of injunction from existing spectrum owners, which would likely be aggressive and successful contestants in a first auction.
Say, for example, that spectrum in the 1.9GHz band were offered first. Existing operators with 1.9GHz spectrum would be anxious to bid on and win more of that spectrum. After this first auction was completed, however, the winning bidder would have incentive to harm potential entrants by delaying or blocking the sale of the substitute spectrum (1.7GHz). A delay in the second auction would harm competition and slow the provision of innovative wireless services in Mexico and would be detrimental to consumers. Allowing simultaneous contests for both bands diminishes the threat of anticompetitive behavior, since players that look for spectrum in the 1.9GHz will have the same incentives to proceed as operators that want spectrum in the 1.7GHz band.
— Cesar Jimenez, Senior Analyst
Related content:
From 3G to LTE: Latin America’s Path to Mobile Broadband
Telecom Insider published June 2009
This Insider focuses on mobile network technologies, analyzing their role in building dynamic mobile broadband markets across Latin America. It examines the state of network technology adoption to identify the role of dominant standards in mobile data growth. It also looks at how competitive pressures from CDMA EV-DO and Mobile WiMAX are boosting that growth, and whether strategic decisions by alternative mobile operators could accelerate 4G uptake. The Insider ends with three case studies of specific conditions in and expectations for Brazil, Chile and Mexico.
Latin American Mobile Operator KPI Forecasts
Forecasts published quarterly
Our Mobile Operator Key Performance Indicators Forecast products provide a complete picture of wireline voice and data communications in each of 19 Latin American markets. The Excel output includes five years of historical data and five years of market projections for metrics such as subscription totals, market shares, net and gross additions, prepaid and postpaid subscriptions, business subscriptions, data ARPS, aggregate ARPS, prepaid and postpaid MOU, churn and total service revenue — all broken down for the mobile operators in the respective markets. We believe our Mobile Operator KPI Forecasts are superior because they capture granular data gathered through extensive field research and use a thorough methodology consistently applied to all markets.
Latin America Mobile Demand Forecast
Forecasts published quarterly
Our Mobile Demand Forecast products provide complete pictures of demand trends for 19 geographical markets in Latin America. The Excel output includes five years of historical data and five years of market projections for metrics such as GDP, mobile penetration, subscriptions (by operator, type of package, technology), ARPS and total mobile service revenue (data and voice). The Forecasts are based on extensive field research and use a consistent methodology across all markets, aiming to capture the total spending, from an end-user perspective, on mobile communication services in each market.
Communications Markets in Mexico
Country Intelligence Report published December 2008
Mexico’s communications market generated US$28bn in 2008; we believe it will grow 0.3% in 2009. The mobile segment — 57% of the market at the end of 2008 — will remain the largest revenue source. Aggressive competition and consumer demand will push growth in mobile data, pay-TV and broadband Internet markets higher. This Country Intelligence Report analyzes Mexico’s communications, media and technology industries, including key trends, regulatory pressures and the competitive landscape, making it an excellent complement to our Forecast products.
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