Mexico To Issue Tender For Nationwide Trunking Services

Mexico’s telecom regulatory authority, the Federal Telecommunications Institute (IFT), has launched a call for expressions of interest in a total of 21 blocks of wireless frequencies for trunking services across the country. The frequencies will be within the spectrum band of 400-450 MHz.

Of the 21 blocks, three are reserved for national trunking services and the remaining for regional trunking services, equivalent to two per Mexican region. The regulatory body is expecting to collect a minimum reference value of MXN 2.49 million from the tender.

The 400-450 MHz spectrum bidding process will be open to all three national wireless carriers in Mexico, including America Movil SAB (NYSE:AMX) , Telefonica SA (NYSE:T) and AT&T Inc. (NYSE:T) . Additionally, leading telecom equipment manufacturers and distributors, such as Nokia (HE:NOKIA) Corp. (NYSE:NOK) , Ericsson (BS:ERICAs) AB (NASDAQ:ERIC) , Huawei Technologies, Steren and RadioShack are likely to take part in the bidding.

Earlier this month, the IFT also started public consultations for the upcoming auction of wireless spectrum in the 2.5GHz (2500-2690MHz) frequency band. The regulatory body has decided to auction a total of 120MHz spectrums on the 2.5GHz band in six blocks of 20MHz each. This will include four for FDD-LTE services and two for TDD-LTE. The concessions will be for 20 years and the minimum value of each block will be MXN 350 million.

Mexico is the largest economy in the Latin American region, with a growing middle class population that is eager to spend more on high-speed wireless networks for optimal use of smartphones and tablets. Also the wireless penetration rate is relatively lower in the country compared with that in the United States. We, therefore, expect increased competition in this market.

AT&T, Telefonica, Nokia and Ericsson currently carry a Zacks Rank #3 (Hold) while America Movil has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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