Established mobile operators in Latin America are struggling to obtain spectrum as regulators place restrictions on auctions in a bid to foster competition, a strategy that impacts on consumers, 4G Americas said on Wednesday.
Spectrum in the region is not readily available because ″[the regulators] are trying to customise auctions,″ Erasmo Rojas, director of Latin America and the Caribbean at the industry body, told Total Telecom on the sidelines of Mobile World Congress in Barcelona.
One tactic employed by regulators is to impose caps on the amount of spectrum any one operator is permitted to hold, thereby effectively barring the existing operators from taking part in a spectrum auction, he explained. There is also a trend of ″setting aside spectrum for new players,″ Rojas said. ″The results [from customised auctions] haven't been good.″
For example, in Chile in 2009 the regulator auctioned spectrum in the 1.7-GHz/2.1-GHz band. It made a ruling that no operator could hold more than 60 MHz of spectrum; the country's three incumbents had 55 MHz and therefore ″they couldn't participate,″ Rojas said. The spectrum went to Nextel and ITR, but ″it took them more than two years before they launched,″ he said. During that time end-users were unable to benefit from that spectrum, a national resource.
More recently, last year Argentina made headlines when the government cancelled its latest spectrum auction and awarded the airwaves to a state-owned satellite player. And in Ecuador the state-owned mobile operator has had spectrum reserved for it in the 700-MHz and 2.6-GHz bands despite having a market share of just 1% because the government wants it to take the lead in mobile development, Rojas said. ″What happens to the other 99% [of mobile users]?″ Rojas asks.
National regulators are customising auctions because they want to boost competition, bring in new players and lower prices for end-users, but so far completely new players from overseas markets have been reluctant to make the move. One exception is Vietnam's Viettel, which acquired spectrum in Peru and launched services last month.
But such moves can be counter-productive. Your operator cannot improve the service he provides ″because he cannot get the