Nextel seeks fast network launch in Mexico in 3rd quarter

MEXICO CITY, June 15 (Reuters) - NII Holdings' Nextel said on Friday it will make the full launch of its fast mobile network in Mexico in the third quarter, offering downloads of 21 Mbps as it seeks to boost market share in the cell phone market.

Nextel has invested $6 billion since opening shop in Mexico a decade ago, and deploying its new network will cost an extra $1.7 billion, company vice president Gustavo Cantu told Reuters.

"We already had 10 cities with mobile broadband but we launch (nationwide) in September," Cantu said.

With 3.8 million customers in Mexico, Nextel has a fraction of the 67 million paying for mobile services with Carlos Slim, the world's richest man, who dominates the local market.

However, the company has one of the highest average revenues per user (ARPU), at $42. Slim's America Movil registered ARPU of around $14 in the first quarter.

Nextel created a splash in 2010 when it joined forces with broadcaster Televisa to bid for added airwaves in a government auction.

The companies won the auction but soon afterwards found themselves entangled in dozens of court appeals that ruined the viability of their venture, prompting them to part company.

Most of the appeals came from companies owned by media baron Ricardo Salinas, who owns Mexico's No. 2 broadcaster TV Azteca and cell phone company Iusacell, which complained the pair had paid too little for the frequency.

Nextel retained the operating rights for the frequency while Televisa quickly moved towards Salinas, making a $1.6 billion bid for half of Iusacell in April 2011. Regulators approved the deal subject to conditions last week and disclosed details of their decision on Thursday

Nextel has been revamping its networks across Latin America, where it also operates in Peru, Chile, Argentina and Brazil.

According to Cantu, Nextel's overhaul will result in the fastest mobile network in the country.

The company will introduce new handsets and other gadgets this year but the executive declined to give details.

Nextel's launch comes as other telecom companies in Mexico spruce up to better challenge Slim, who is also the top provider of Internet and fixed-line phone services in the country.

Earlier this week, Iusacell and Spain's Telefonica announced plans to share their infrastructure in Mexico.

They plan to test Long-Term Evolution, or LTE - a standard for wireless communication of high-speed data - in some cities in Mexico this year.

America Movil has said it also plans to launch LTE in some Mexican cities in the second half of 2012.