CALA News (Jan 2015)

AT&T will buy NII Holdings’ Mexican assets for US$1.875bn including Nextel Mexico, spectrum licenses, network assets, retail stores and its customer base of approximately 3 million. The transaction follows the bankruptcy filing of NII Holdings in Q3 2014.

América Móvil is planning to spin off Sercotel and the move has already been approved by its shareholders. In the meantime, América Móvil has reached out to potential buyers including Softbank Corp. of Japan, Bell Canada, China Mobile and AT&T with views to discuss the possible sale of Telmex and Telcel in a deal valued as much as US$20bn.

Grupo Salinas sold Iusacell to AT&T for US$2.5bn in a deal that includes all of its wireless properties including over 9 million customers and a network covering approximately 70% of Mexico’s territory. The goal is to create the ‘North American Mobile Service’ area which will cover more than 400 million individuals and business in Mexico and the United States.

Ifetel has announced it intentions to allocate via auction or direct allocation various wireless spectrums which will become available over the course of this year including 1710MHz-1725MHz paired with 2110MHz-2125MHz and 1755MHz-1770MHz paired with 2155MHz-2170MHz. The details of the allocation process haven’t been announced yet.

Kolbi, Movistar and Claro are moving forward with the extension of their 4G LTE coverage. All companies announced plans to extend their footprint to uncovered areas in the upcoming months.

Tigo Honduras has recently launched its 4G LTE services in Tegucigalpa, San Pedro Sula and La Ceiba for both pre and post-paid customers.

State-owned Hondutel has attracted the interest of Guatemalan investors who might acquire a stake in the company. Hondutel is seeking US$300mn to upgrade its infrastructure and enhance its market share.

Movistar Guatemala switched on its 4G LTE network in the capital city and other key sites back in 2014 and will be soon followed by Tigo who recently announced it will launch 4G LTE in Q2 of 2015.

Movistar has reached over 300,000 4G LTE users since its launch one year ago. 4G LTE is available in seventy-five major cities and municipalities and the company is ahead of the coverage requirements set by the regulator.

After the merger, Une-EPM and Tigo have agreed to relinquish a 50MHz block of spectrum in the 2500MHz band. The combined entity ended up owning as much as 135MHz of spectrum versus the 85MHz limit set by the Superintendencia de Industria y Comercio (SIC).

Digitel has announced it invested as much as US$650mn over the course of 2014 to upgrade its 3G and 4G networks. To date, the company is the only one offering 4G LTE services in major cities across the country.

Movilnet, Digitel and Movistar have started the construction of the first shared base station in a project supported by the Ministry of Popular Power for Higher Education, Science and Technology. The first shared station is being constructed in the Zona Franca Industrial, Commercial and Services Paraguana. The companies are planning to build ten more shared base stations in the future.

Claro and Movistar have agreed with the national government terms to grant 4G LTE licenses. The document setting terms and conditions is now being discussed by the cabinet and president for approval and operators will then sign contracts. The negotiated portion of spectrum included 1900MHz bands and the parties also agreed an expansion of import quotas for LTE smartphones.

The Ministry of Telecommunications and Information Society has recently announced that Ecuador has 35,111 kilometres of fibre installed and is expecting it to reach 45,000 km by the end of 2017. Telesemana reported that back in 2006, the country had a fibre backbone of 3,500 kilometres only.

Local newspaper Gestion reported that Claro Peru is ready to invest US$987.1mn over the next three years to expand coverage, increase capacity and develop new value added services. According to Claro, its 4G LTE customer base has reached 600,000 users in eight months of services and will work to enhance its offering further.

Movistar has expanded services to 1,432 new locations since March 2013, when its concession was renewed. In order to meet stringent coverage targets, the company announced investment plans for US$1.8bn for the period 2014-2016.

Plans to launch a new spectrum auction for LTE services are being discussed by the Agency for the Promotion of Private Investment along with government officials. The auction would include three blocks of spectrum in the 698MHz-806MHz band and should be completed by Q2 2015.

Frequencies to the winners of last year’s 700MHz auction should be allocated within the next few months. The three awarded companies, Entel, Claro and Movistar, have eighteen months to launch services using the new band.

Claro, Movistar and Entel have announced that they finished 2014 with half a million combined 4G LTE subscribers and noted how the numbers could be higher if it wasn’t for the delays in the 700MHz spectrum allocation. Claro signed up approximately 250,000 users by the end of 2014, Movistar 200,000 and Entel 170,000. The delays were caused by the legal action of MVNO Telestar which stated that the obligations set in the auction were prohibitive for small operators.

Oi has recently stated it’s open to discuss various alternatives in terms of market consolidation. After the approval of PT Portugal Telecom sale to Altice Group (for US$9.2bn), Oi has the financial bandwidth to consider various deal options. In the meantime, it’s been reported how Telecom Italia is discussing with Brazilian officials a possible bid for Oi.

Anatel has recently approved the dissolution of the Telco consortium which is the largest shareholder in Telecom Italia. The consortium was formed by Telefonica (Spain), Intesa Sanpaolo, Gruppo Generali and Mediobanca (Italy) and as a result, Telefonica is now the largest owner of TI shares (14.8%). Telefonica has agreed to offload its stake within eighteen months in line with Brazilian competition law.

Nextel has announced its intention to invest as much as US$1bn in the country in order to reach 200 new cities in 2015. To date, the company covers 497 cities and has recently inked a five-year network sharing agreement with Telefonica Vivo.

Claro will invest US$3.8bn to expand its 3G and 4G networks over the course of this year. The news was announced by Carlos Zenteno, President of Claro Brazil and reported by local news outlets.

American Tower has entered an agreement with TIM Brasil for the acquisition of two portfolios of towers (approximately 6,480) for an estimated US$1.2bn.

Local news sources announced that Vivo has launched 4G LTE in sixteen new cities in the states of São Paulo, Rio de Janeiro, Minas Gerais, Mato Grosso do Sul and Mato Grosso. To date, Vivo’s 4G LTE footprint reaches out to 77 million people.

Reuters Brasil has recently quoted Algar Telecom’s President, Divino de Souza, stating that the company has no interest in a deal in spite of rumoured takeover interest from other carriers. Algar Telecom is currently planning investment of US$162.2mn over the course of this year to utilise the 700MHz frequencies and will add forty new cities to its footprint, in addition to the one-hundred ninety-two already covered.

Telecom Argentina will invest US$24.4mn to deploy a new fibre-optic network using DWDM technology. Huawei is building the network and reportedly its first phase between Buenos Aires, Rosario and Cordoba is already active. The second phase connecting more cities is being launched in February.

Movistar has announced that its 4G LTE services are now covering Buenos Aires, Mar del Plata, Pinamar and Carilo among others thanks to one hundred-sixty base transceiver stations.

Argentinian operator Telecom Personal has switched on 4G LTE in major cities including Buenos Aires, Cordoba and Rosario with a total of eighty-four base transceiver stations deployed at launch. This figure should reach two hundred stations by Q1 2015 and the company’s network should cover 85% of the population by the end of 2016. The company has announced it will invest approximately US$1.52bn to deploy 3G and 4G nationwide.