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Summary

Last month, Mexican regulator the IFT approved the final migration of 48 DTT channels that were still operating on the valuable 600MHz spectrum band, making Mexico the first country to completely free up the band for high-speed 5G services. Mexico plans to auction the spectrum by the end of 2018, following in the footsteps of the US, which allocated the band over the past two years. With this move, Mexico is taking a step toward the launch of 5G in a band that enables high coverage at relatively low costs, essential for large countries such as Mexico.

Prioritizing broadband development over the broadcasters’ lobby

Several countries have already identified the 600MHz band, which covers 614–698MHz, as a 5G core band, including the US, Canada, and New Zealand. The US took a long time to auction this band, with the process running from March 2016 until June 2017. Half of the auction revenue went to the broadcasters that relinquished the spectrum, meaning that of the $19.8bn raised in the auction, about $10bn went to the broadcasters. T-Mobile was the main winner and is currently deploying a 5G network in this spectrum.

Mexico took a straightforward approach, reallocating the digital TV channels in lower channels of the UHF band. When analog switch-off took place in 2015, there were still 151 TV channels that were using the 600MHz spectrum band (comprising UHF channels 38–51). By last month, 103 were already migrated, and the IFT’s regulatory decision has reallocated the last 48. Mexico’s approach differs from that of the US in that all of the revenue from the 600MHz band is going into the Mexican treasury. Broadcasters usually have significant lobbying power, and several countries are delaying the reassignment of this band. UHF channels 21–37 allow for up to 34 high-definition signals or 58 in standard definition, more than the total number of free-to-air stations in Mexico, and at a time when the continued existence of free-to-air television is in question due to the rise of internet-based entertainment.

The 600MHz spectrum band is particularly valuable for operators in Mexico, since the 700MHz band is fully allocated to the national wholesale network, which launched operations in March 2018, covering 32% of the population. The availability of the 600MHz band for established operators is an additional disincentive to sign an agreement for use of the wholesale network. The IFT is already in the process of auctioning the 2.5GHz band, and the 600MHz is next on the roadmap, leading Mexico in the right direction to reduce the digital gap and boost network investments, especially considering the benefits that this cost-effective band can bring. The band’s propagation capabilities enable it to reduce capex – with one radio base station able to cover more than 10 sq. km. – making it essential for countries where the 700MHz band is already in use, to balance low-band spectrum for 5G coverage.

Appendix

Further reading

Latin America needs to develop a roadmap for 5G spectrum,” GLB007-000018 (December 2017)

“T-Mobile changes the narrative as the first operator to announce an ultra-low-band 5G network,” TE0006-001386 (May 2017)

Author

Sonia Agnese, Senior Analyst, Latin America

sonia.agnese@ovum.com

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