Markets
AMX

America Movil and AT&T Granted 4G Concession in Mexico

A generic image of a person on their laptop
Credit: Shutterstock photo

Mexican telecom regulator, the Federal Telecommunications Institute (IFT or Ifetel) recently granted concessions for the 1710-1780 MHz/2110-2180 MHz AWS frequency bands to America Movil SAB AMX and AT&T Inc. T . On Feb 15, 2016, the IFT opened an auction for 80 MHz of wireless spectrum across various Advanced Wireless Services (AWS) bands. America Movil and AT&T emerged as the two winners of the spectrum auction.

Of the total spectrum sold, 30 MHz were for AWS-1 bands (1710-1725 MHz/2110-2125 MHz) while 50 MHz were for AWS-3 bands (1755-1780 MHz/2155-2180 MHz). Notably, AWS spectrums are highly coveted for the deployment of 4G LTE (Long-Term Evolution) networks.

America Movil paid 2.1 billion Mexican Pesos (approximately $117 million) followed by AT&T Inc. (T) which paid 1.03 billion Mexican Pesos (approximately $57.4 million). America Movil got licenses for the 1710-1730, 1760-1780, 2110-2130 and 2160-2180 MHz bands, while AT&T got licenses for the 1730-1755 and 2130-2155 MHz bands.

The concession will enable auction winners to have contiguous blocks of spectrum, which will provide wireless operators higher data transfer speeds whereby they can offer better mobile services. The IFT is looking to collect $2.5 billion over the next 15 years from this spectrum auction, including initial bids and yearly payments for spectrum licenses.

In 2014, the government of Mexico introduced reforms within its telecommunications sector, which intensified competition. The incumbent telecom operator America Movil currently controls a market share of nearly 68%. Importantly, the IFT seeks to restrict the maximum hold of a company in the market to 50%. Another existing operator -- Telefonica S.A. TEF -- holds a nearly 20% market share.

In 2015, AT&T, the U.S. telecom behemoth, entered the Mexican telecom industry with the acquisition of Grupo Iusacell and Nextel de Mexico. Mexican cable MSO (multi service operator) Grupo Televisa S.A. TV also received a go-ahead from the IFT to enter the wireless space. However, the company is yet to take any decision in this regard.

America Movil currently carries a Zacks Rank #5 (Strong Sell) while AT&T carries a Zacks Rank #3 (Hold).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

AT&T INC (T): Free Stock Analysis Report

TELEFONICA S.A. (TEF): Free Stock Analysis Report

GRUPO TELEVISA (TV): Free Stock Analysis Report

AMER MOVIL-ADR (AMX): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

AMX TV TEF T

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More