How much heavy lifting can spectrum policy do?

Spectrum policy has many aspects, but they're not usually considered together. In any country, public debate tends to focus on a single issue at a particular time.

In the UK in recent years attention has focussed on achieving a fair distribution of existing spectrum assets and the new bands shortly coming up for auction. In the US in 2008 it was the opportunity (unrealised!) of creating a “third broadband pipe” in the 700 MHz auction.

And in Mexico, where PolicyTracker has just held its first Latin American Spectrum Conference, the issue of competition is dominating the agenda.

This isn't surprising in a country where Telcel, the largest mobile operator, has a market share of about 70%, making it one of country's uncompetitive sectors which is damaging economic growth, according to several economists. Mexico's mobile market was the most concentrated of the 50 countries recently analysed by Merril Lynch, the president of Mexico's Federal Competition Commission, Eduardo Pérez Motta, told the conference.

Unfortunately in an era of consolidation in the mobile sector the 2010 auctions of 1.9 GHz and 1.7 GHz didn't produce a new entrant, reflecting a common trend around the world. France has just announced that the invitation to bid for 2.6GHz had only produced applications from the current mobile licence holders.

Mexico has 60 MHz of further mobile spectrum it can release and they are hoping this will help to make the market more competitive. However, at the conference Chris Doyle from Apex Economics argued that spectrum policy can only take us so far. In this case the real heavy lifting may have to be done by the competition authorities and so far this has proved problematic in Mexico.

The Competition Commission's attempt earlier this year to impose a $1B fine on Telcel for anticompetitive practices is being challenged in the courts and has yet to be confirmed. The general election due next year makes an early resolution unlikely and the British Embassy's advice to business is that this dispute will last five years.

The Mexican telecoms regulator, COFETEL, is keen to discuss a "paradigm shift" in spectrum policy which would help increase competition and address the data tsunami.This could include MVNOs, infrastructure sharing and spectrum trading, but the question remains: how much can be achieved when the competition issue has not been resolved? 

Martin Sims
PolicyTracker Managing Editor

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Further updates about issues raised during the conference, including the digital dividend in Latin America and the results of liberalisation in Guatemala, will follow on our website shortly. Make sure you don't miss them by taking a trial!