The two carriers secured spectrum in the 2.5 GHz band in a spectrum auction held in August

Mexico’s Federal Telecommunications Institute (IFT) confirmed that local carriers AT&T and Movistar have been formally awarded the concessions they had obtained in the 2.5GHz spectrum auction, which was held in August this year.

AT&T secured 80 megahertz of spectrum in the 2.5 GHz band in the auction, while rival operator Movistar, owned by Spanish telecommunications group Telefonica, also secured 40 megahertz in the process.

Airwaves in the 2.5 GHz band will allow these telcos to provide broadband services, as well as 5G and internet of things (IoT) offerings.

Under these new licenses, both AT&T and Movistar will have to provide services in at least 200 of the 557 localities with a population between 1,000 and 5,000 inhabitants, which currently lack a mobile service. The carriers are also obliged to deliver connectivity to at least ten of the 13 metropolitan areas with more than one million inhabitants within the next four years.

The U.S. telco agreed to pay MXN1.4 billion (currently $68.4 million) for the new airwaves. AT&T secured two 20 megahertz blocks of FDD and two 20 megahertz blocks of TDD spectrum.

Mexican regulator said AT&T now holds around a third of all spectrum available for international mobile operators in the country. The carrier also owns licenses in the 800 MHz, 850 MHz, PCS and AWS bands.

In a previous conference call with investors, AT&T CFO John Stephens said that the company will fund the purchase of the frequencies in the 2.5 GHz band with money from its own recent spectrum sales and a pending offloading of data centers to Brookfield Infrastructure Partners.

Telefonica committed to pay MXN700 million for two blocks of FDD spectrum. Following this acquisition, the telco now holds around 17% of spectrum available across all bands in the country, IFT said.

AT&T and Telefonica were the only two bidders in the auction, as other domestic telecommunications players including America Movil and Altan Redes did not take part in the process.

Telcel had acquired 60MHz of 2.5GHz frequencies via the secondary spectrum market in July 2017. Telcel’s concessions were acquired from Grupo MVS and cover 1,575 localities, equivalent to coverage of 75.41% of the national population.

The regulator said that AT&T and Telefonica’s new 20’year licenses would generate a total of MXN44.4 billion including the bids and annual feeds.

In June, AT&T announced plans to launch a NB-IoT network to complement the carrier’s existing LTE-M network in the U.S. and Mexico.

The U.S. telco said it plans to launch NB-IoT in the U.S. early next year, followed by Mexico by the end of 2019.

AT&T also highlighted that NB-IoT technology will be deployed through software upgrades at cell sites across the U.S. and Mexico. Both will operate alongside the firm’s 4G LTE network and within its mobile 5G network. AT&T’s 5G network is scheduled to launch in parts of Dallas, Atlanta and Waco, Texas, by the end of this year.

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