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UPDATE 2-Mexico to launch wholesale mobile network tender on Friday
January 29, 2016 / 1:44 AM / in 2 years

UPDATE 2-Mexico to launch wholesale mobile network tender on Friday

* Project was meant to be launched by 2014 in sweeping reforms

* Looks to curb dominance of Carlos Slim’s America Movil network

* Aims to boost low levels of cell penetration, network cover (Updates with interview)

By Christine Murray and Tomás Sarmiento

MEXICO CITY, Jan 28 (Reuters) - Mexico will launch on Friday a long-delayed tender for one of the largest infrastructure projects under President Enrique Pena Nieto, a wholesale telecoms network that will cover most of the country.

The project, which was meant to be launched by 2014, is part of a sweeping telecoms reform aimed at curbing the dominance of Carlos Slim’s America Movil and improving Mexicos low levels of cell phone penetration and network coverage.

It offers the winner cheap use of high quality spectrum in the 700MHz band and a 20-year public-private partnership contract to build a 4G LTE mobile network that operators and virtual network operators can rent.

“Its a change in the rules of the game,” telecoms minister Monica Aspe said in an interview late on Thursday.

However, in a move unlikely to please operators America Movil, Telefonica and AT&T, the winner will not be able to sublet spectrum, Communications and Transport Minister Gerardo Ruiz Esparza said on Thursday.

The network would have to cover a minimum of 85 percent of the population, he added. About 45 percent of Mexicans have mobile broadband subscriptions, regulator IFT says. Just 22 percent of all mobile data goes through 4G LTE networks.

The government estimates that 85 percent coverage would require an investment of around $3.5 billion, while 95 percent would cost around $7 billion.

To help speed the rollout and cut costs, the federal government aims to make thousands of sites on its buildings available for rent to the telecoms industry in 2016, Aspes team said.

The network could also rent infrastructure from the likes of America Movil spin-off Telesites and American Tower , rather than compete with them, Aspe said.

However, in order for the network to be profitable, mobile operators, which in private have been largely skeptical of the project and would prefer to have had the spectrum sold in an auction, will need to agree to be clients of the network.

Aspe said the ministry had held talks with the operators and she believed it was “natural” they would be interested in using it.

There is no limit on anyone participating, but operators will have to pass a competition test and another to check they do not have “influence” over the network.

Companies or consortia would have to submit to those tests in mid-May, Aspe said. (Reporting by Christine Murray and Tomas Sarmiento; Editing by Simon Gardner and Clarence Fernandez)

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