High fees deter operator interest in Mexico’s 5G spectrum auction

The bidding will take place in 2025.

High spectrum fees deterred operator interest in Mexico’s 5G auction in 2025, GlobalData reported. 

The Federal Telecommunications Institute announced this is to drive 5G expansion. However, this is met with caution due to high annual fees. 

“The proposed auction combines ‘fresh spectrum’ in the L-Band and 600 MHz, and ‘leftovers’ in the 800 MHz, 1.7/2.1 GHz, 1.9 GHz and 2.5 GHz bands, some of which were actually licenses returned by Telefonica and AT&T due to prohibitive annual fees,” Jesus Romo, Research Director at GlobalData, said.

“The 3.5 GHz band is excluded from this auction, but Telcel and AT&T Mexico already own licenses in this range.”

The IFT's decision to offer most of the spectrum in local blocks, except for the L-Band and a single 10 MHz block of the 600 MHz band, indicates a strategic move towards smaller geographical markets. 

“This segmentation could result in lower spectrum fees for winners, as fees are determined by bandwidth held and coverage area. Spectrum fees was a factor in Telefonica’s decision to return all of its mobile spectrum in Mexico,” he added.

“Spectrum fees are set by the Mexican Legislative Branch, with input from the Executive, and is not likely to be reduced in the short-term, especially during an election year.”