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UPDATE 1-Pressure rises in Mexico to reject spectrum bid
July 22, 2010 / 10:42 PM / in 7 years

UPDATE 1-Pressure rises in Mexico to reject spectrum bid

* Ruling party deputy threatens to challenge auction

* One commissioner defends process

* Televisa-Nextel venture to challenge Slim’s operator (Adds commissioner’s comment, byline)

By Noel Randewich and Tomas Sarmiento

MEXICO CITY, July 22 (Reuters) - Political pressure mounted on Thursday for Mexican authorities to reject a bid by broadcaster Televisa and its partner Nextel for a block of wireless spectrum in an auction meant to improve competition.

The Nextel-Televisa venture was the only bidder for the 30 MHz nationwide block in the 1.7 GHz band with a bid of $14 million, raising eyebrows because the amount is only a fraction of the $400 million America Movil and Telefonica offered when they competed for other blocks of spectrum. But one regulator defended the spectrum auction’s structure.

Javier Corral, a deputy from President Felipe Calderon’s conservative ruling party, vowed to try to stop the communications ministry from awarding the block to Nextel and Televisa, according to a published report. Corral has said previously that the media giant is favored by the government.

“(Communications Minister Juan) Molinar is selling the spectrum at a bargain price. If the spectrum tender goes through under these conditions, it will be a national theft,” daily Reforma on Thursday reported Corral as saying.

Corral was not available to comment.

The auctions are at the center of the government’s push to stoke competition in an industry long dominated by Mexican billionaire Carlos Slim. His America Movil (AMXL.MX) is the leading wireless operator in Mexico, with Spain’s Telefonica (TEF.MC) a distant second.

Telecom regulator Cofetel is evaluating the bids in the 1.7 GHz auction, a band useful for fast-growing data services, and its decision will have to be approved by the communications ministry.

Gonzalo Martinez, one of five voting commissioners at Cofetel, told Reuters that Corral and other critics were missing the point of the frequency auction.

As the bids stand, spectrum in the 1.7 GHz band would be reasonably well distributed between America Movil, Telefonica and the Nextel-Televisa venture, he said.

“A regulator’s goal is to put the spectrum in the hands of competitors to create better conditions of competition,” said Martinez. “If we reduce everything to who paid more, I think we’d be we sullying the tender’s objectives.”

The venture of Nextel, controlled by NII Holdings (NIHD.O), and Televisa (TLVACPO.MX) was the only group eligible to bid for the 30 MHz nationwide block because of rules capping the amount of spectrum any one operator can own.

Leftist opposition Sen. Carlos Sotelo threatened to summon Cofetel’s commissioners to the Senate to explain how the auction process was defined, Reforma said. Sotelo could not be reached for comment.

Corral has made a name for himself fighting against legislation seen as favorable to Televisa, which is the main source of news for most Mexicans, although he has often been at odds with others in his party. (Reporting by Noel Randewich and Tomas Sarmiento; editing by Gunna Dickson and Carol Bishopric)

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