Although the frequency auction for the next 5G network in Mexico It is not yet finalized, operators continue with strategies that prepare them for when everything is ready. In the case of Telcel, we have learned that they are extremely advanced and have already started with tests and a pilot service for a few weeks.
In addition to this, Telcel reached an agreement with Axtel for the sale of a 50 MHz bandwidth package over the 3.5 GHz spectrum with national scope in Mexico. With this, Axtel cede Telcel nine concession titles for Carlos Slim’s company to use, take advantage and exploit 50 Mhz of the 3.5 Ghz band, which is the one that will be used for 5G in our country.
Telcel is the most advanced in the deployment of 5G in Mexico
After this movement, Telcel already has a total of 100 MHz over the 3.5 Ghz band, which is suitable for new generation or 5G services. We must remember that at the beginning of this 2020 Telmex also transferred 50 Mhz of spectrum to it, this after owning it for twenty years.
The Federal Telecommunications Institute (IFT) authorized Axtel’s transfer to Telcel, although he pointed out that this does not mean that Telcel will keep Axtel users or part of its service. In other words, it is only a purchase of spectrum and, therefore, it does not affect the processes of economic competition in the sector.
Another point worth noting is that these 50 Mhz now in the hands of Telcel can only be used to provide fixed wireless service, and not in mobile service. But be careful, remember that Telcel has 50 Mhz for mobile and now 50 Mhz for landline, which means that Telcel is currently the only provider with the ability to offer 5G service for both home and smartphones..
In October 2019, the IFT granted the first concession licenses after reorganizing the spectrum, therefore granted 50 Mhz to Telmex, AT&T and Axtel. Telmex gave them to Telcel and now Axtel does the same. This means that today the only ones with the capacity to offer 5G services in Mexico are Telcel (with 100 Mhz) and AT&T with 50 Mhz, all on the 3.5 Ghz band.
The commercial exploitation rights for this spectrum come into force in September of this 2020So we could have surprises when we know the first beta versions of the 5G network in Mexico.
As to the 3.5 Ghz band, is today the most requested for the deployment of fifth generation services. Currently it is the one used in Europe, Brazil, China, Japan, South Korea, India and the United States.
In 2021, the IFT plans to tender the 600 MHz bands and the rest of the 3.5 GHz, and here Telcel has no restriction, at the moment, to buy more spectrum. It also gives you the advantage of not participating in the auction, if you wish, and that is that it currently has a spectral holding of 21.7% among all its frequencies, even far from the 35% that is the maximum allowed by the legislation on telecommunications.
The advantage of all this is that AT&T and Telefónica will still have the possibility to acquire spectrum for 5G, since the 3.3 Ghz bands and the coveted 600 Mhz bands are still to be tendered, although the IFT has not yet announced anything specific about them.