Altán, Telcel and AT&T operate the radio spectrum in different frequency bands in Mexico.

Commercial use of the spectrum frequency bands requires a concession that the Federal Telecommunications Institute (Instituto Federal de Telecomunicaciones or IFT) bids and awards for a (renewable) period of 20 years. 

Altán 

Generally, the bands are tendered to provide service throughout the territory, but in some cases they may be tendered to provide services by region or locality.

Altán has 100% of the MHz allocated for the 700 MHz band, while AT&T has 100% of the MHz allocated for the 800 MHz band and Telcel has 100% of the MHz allocated for the 2,500 MHz band. 

For the rest of the frequency bands, the MHz are distributed between Telcel and AT&T. 

All operators can participate in the bids. However, the preponderant economic agent (AEP) needs authorization from the IFT to do so.

According to the Federal Telecommunications and Broadcasting Law (LFTR), as long as there is a PEA in the telecommunications and broadcasting sectors, specific measures apply. In order to foster competition and develop viable competitors in the long term, no authorization from the IFT will be required for concentrations between other concessionaires.

This applies even if these concentrations exceed the established threshold. However, certain requirements must be met for this exception to be valid.

Radio spectrum

Operators must pay a fee when obtaining or renewing a concession. This amount is set by the IFT, based on the opinion of the Ministry of Finance and Public Credit (SHCP).

In addition, concessionaires are required to pay annual fees. These fees are determined by Congress, according to the SHCP’s proposal.

The IFT points out that the use of the spectrum in Mexico has a high cost. Annual fees represent 80% of the total cost.

In 2021, Congress increased the amount of annual fees for several frequency bands. It also established annual fees for bands that were previously exempt.

According to the IFT, this increase could have negative effects. It could slow down investments and discourage incumbent operators from participating in bids. In addition, it could create entry barriers for new entrants.

This could impact end-user tariffs and accelerate the spectrum devolution initiated in 2019.