IFT will hold an auction for 5G networks in January 2025, despite uncertainty

In January 2025, the Institute will launch the Call and Rules for the IFT-12 Tender in the Official Gazette of the Federation (DOF) where Ideal spectrum for the development of 5G will be auctioned and strengthen 4G coverage in the country. Interested operators will have until the 27th of the same month to express their interest, but the regulator highlighted that the bases are already available on its official website.

The IFT-12 spectrum tender is of utmost importance for the telecommunications sector as well as for Mexicans. Placing higher frequency bands translates into greater penetration and improvement of internet and telephone services, as well as a greater offer to reduce market concentration and, in the process, generate a digital ecosystem for nearshoring.

Tender No. IFT-12 seeks to place 2,223 blocks of radio spectrum in the 600 MHz, 800 MHz, 1500 MHz bands on the market; 2.1 GHz (AWS Band), 1.9 MHz (PCS Band) and the 2.5 GHz band, among others.

The auction plans to be carried out in a maximum of three phases. In the first part, participants will acquire up to 20% of the spectrum for mobile services. The second phase stipulates that if spectrum remains available from the first round, the limit will be increased to 30% of the spectrum in low bands and up to 30% of the spectrum in all bands, with an additional limit of 35% of the spectrum per band. in the corresponding geographic region in each of the Blocks of interest, as well as at the national level.

For the third round of the bidding, it is contemplated that if there is spectrum available at the end of the second phase, participants will be able to acquire up to 35% of the spectrum in low bands and up to 35% of the spectrum in all bands in the geographical region. corresponding to each of the blocks of interest (APS, cellular region and/or national), as well as at the national level, maintaining the maximum limit of 35% of the spectrum per band.

The IFT has also incorporated incentives for operators to participate in the auction. The regulator decided to integrate reductions of 25% to 40% for the amounts of compensation, depending on the amount of spectrum assigned and the market participation of the interested parties. These incentives seek to encourage competition and the offer of services at competitive prices for end users.

With the incentives, the IFT seeks to avoid the negative results of the IFT-10 and 11 tenders where the strip blocks to be auctioned were practically deserted. In IFT-10 of the 41 blocks that were sought to be tendered, 38 were left without being acquired. While the IFT-11 of the 751 spectrum blocks that were auctioned, only 92 were assigned, leaving 659 deserted.

Telecommunications operators have reiterated that the costs of the spectrum make its acquisition unfeasible, which is why for three years they have decided not to buy radio bands. But the IFT hopes that the new tender and with the payment incentives, will be attractive for companies in the sector, and even for other industries.