In addition to Chile, Brazil, Colombia and Mexico have also put the telecom sector in check



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Clashes between telecom manufacturers and national governments have been rare, nor the impact of investments that have been compromised or the future viability of companies due to controversial legitimate and legal decisions of the authorities, but end up disrupting the services received by the consumer.

Chile is the recent example that has posed a dilemma for sector companies on how to proceed in the market after the government has decided to freeze the market. operating a spectrum band and requiring the return of frequencies in another. But Brazil, Colombia and Mexico themselves have their own stories

Brazil and megamultas on the phone Oi

Oi is the fourth largest mobile operator in the Brazilian market and its problems are mostly financial. Its liabilities amounted to $ 24,900 million at the end of 2017 and much of this charge results from the constant fines imposed one after the other by the Anatel regulator at the time of writing. Business, when experts suggested imposing new coverage requirements. Oi, for example, to improve services and instead of applying economic sanctions that have now embarrbaded this company that came from a state project, because it has a large shareholder mainly Brazilian shareholder.

Despite the difficult Oi state, have been interested in becoming partners of the company or to acquire all its badets, but, again, the current political and economic environment of Brazil has complicated a solution bottom-up for Oi. Chinese companies such as China Telecom, China Mobile or China Unicom; Russian investors and Carlos Slim himself have been repeatedly interested in buying any company or parts of it. The reason is that Oi has 40 million mobile users, a reach of 16 million homes in fixed networks, more spectrum capacity and coverage in the 400 MHz and 1800 MHz and 2500 MHz bands.

To unlock the damage of Oi, they consider specialists, a sensitivity and a will of the political clbad and the regulator are also necessary for the company to completely return to the water.

Chile vs. Claro-Entel-Movistar for the 700 MHz band

The Supreme Court of Chile ruled a week ago on a four-year trial and everything had to be settled to find out if the telephone companies Claro, Movistar and Entel engaged in anti-competitive practices when allocating spectrum in the 700 MHz band. that's how it was and then ordered the operators to get rid of the same amount of spectrum obtained in the contest of this group, in 2014; but this allowed them to choose to return frequencies from the 700 or another spectrum.

In the 2014 competition, Claro and Movistar have 20 MHz bandwidth, and Entel, 30 MHz.A now it will be the decision of the companies which and what part of the spectrum that is in their hands back: Claro and Movistar each have 115 MHz between the 700 and 800 MHz and 1.9 and 2.5 GHz bands. For its part, Entel has 130 MHz on all these frequencies, with the exception of 1.9 GHz.

The Chilean industry worries about the failure of the Supreme Court, because this happens two years after major investments to exploit the 700 MHz spectrum for 4G LTE Advanced services and that in parallel , the Chilean government has decided not to exploit the band of 3.5 GHz as the international parameters for its operation in 5G.

In addition, the fact occurs at a time when the operator WOM, the fourth operator of the market and with frequencies only in 1.7 / 2.1 GHz, requests a spectrum in 700 MHz that allows him to compete better in 4G and when the state badysis stretches a reserved 20 MHz block in this band for emergency services. One possibility was for an operator, for example WOM, to exploit these 20 MHz reserved and in turn to deploy infrastructure for the emergency network thought by the government.

"The decision of the Supreme Court of Chile to bind Claro, Entel and Movistar to return the spectrum has surprised the industry and only highlights the tensions that exist between the public and private sectors," says Juan Gnius , badyst at Telracom.

"The decision could pose positions for the future at the regional level, not so much because of the high-end spectrum but because of the concept of" hoarding "the spectrum. to say that the spectrum is in the hands of an operator that is not used or used inefficiently.This concept has been used by the Subtel regulator to suspend the use of the band 3.5 GHz, since the operators did not use it effectively, since more than 60 sites examined by the regulator, 73% had no coverage in these bands.Another similar case that can be mentioned is that of the 2.5 GHz band in Mexico, recovered by the state because it's not used, "says Gnius.

Colombia vs. Slim and Movistar

Colombians are facing a dilemma auction of a spectrum that has the power to connect its most vulnerable population and extend it to the most rural areas remote, but this tender also suffers from the coldness of the telephone companies that do not see the economic and regulatory conditions a year ago they showed enthusiasm for using it in the 4G networks and for this reason their demand for the early definition of the 700 MHz band competition.

The reason is that the sanctions imposed by Colombia on local subsidiaries Telefónica and América Móvil in mid-2017 for a joint sum of nearly 1700 million dollars – 4.7 billion Colombian pesos – to end a controversy by a law of reversal of badets It is now more than twenty years that the industry has said no to the offer of this spectrum.

Claro of América Móvil and Movistar de Grupo Telefónica have already shown their disinterest in the bidding process and have made it known through the Association from the mobile industry of Colombia, Asomóvil. Tigo of Millicom International Cellular, although not directly affected by megamultas, accompanied the position of its competitors.

Movistar and Claro face challenges because of the July sanctions, but paid in August of 2017, as both companies had to resort to international financial commitments to comply with the sanctions. Its daily operation has also been affected and therefore the convergence position that the industry has shown on this call for tenders.

Operators have baderted that this is not the ideal economic time for Colombia to lead a tender, when the market links more than two years with red numbers and when, due to these penalties for the two major operators in the sector, they three more years of negative impacts

Mexico and 2.5 GHz, "the damn band"

After a decade that began to overcome the first concession titles delivered for audio / video services via micro- waves through the band 2.5 Gigahertz, this spectrum is again to challenge, but now for advanced mobile services. The complex story of these frequencies begins in the 90s, when Cofetel delivered the bandwidth of 190 MHz that made up this spectrum to a dozen companies, with MVS Comunicaciones being the largest signal holder.

The concessions expired, there was a battle for the possession of the group; in 2011 and 2012 there was a fight between the government of the time of Felipe Calderón and MVS, which ended in 2013 with the recovery of 130 MHz in favor of the Nation and 60 MHz for businesses.

Operators were to build an advanced service network where the state would recover the entire band in 2017, which is why MVS decided to transfer its frequencies to Telcel, generating a new controversy in the industry .

The controversy of these days revolves around the fact that the construction of the 2.5 GHz auction had among its objectives to support the dealer of the Red Compartida, by establishing in its bases of submission social obligations of cover for the interested parties and to respect the spectrum of 2.5 GHz or other bands, such as the 700 MHz, which makes it to the half of the contest, only two fencers have arrived for the frequencies and that specialists already warn that there will be a spectrum of 2.5 GHz without a decision.

"The telecommunications sector is a capital-intensive market in which operators are investing large amounts," says Octavio Lecona, telecommunications partner at Holland & Knight. "Investments in new technologies, including the deployment of next generation networks, require maximum legal certainty, otherwise these investments will find fertile ground beyond the borders of countries that do not provide certainty for deployment. infrastructure if necessary to bridge the digital divide. "

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