The Ministry of Finance has decided not to align the yearly fees for utilizing mobile and fixed wireless spectrum with the global average, a stance that could potentially affect the outcome of Mexico's planned 5G spectrum auction.
This position was elucidated in the Ministry's 'Federal Income Law Initiative for Fiscal Year 2024'.
In its fiscal year 2024 blueprint, the Secretaría de Hacienda y Crédito Público (SHCP) has dismissed two propositions put forth by the regulatory body, Instituto Federal de Telecomunicaciones (IFT). These proposals included a suggestion that operators pay a mere 1% of their revenue for the privilege of using frequency bands and a recommendation to align band prices with global norms, particularly for companies holding less than a 25% stake in the mobile market.
Previously, IFT had noted that the spectrum costs in Mexico were beyond 180% higher than the international average. The regulatory authority's long-anticipated 5G auction was intended to include spectrum in the 600MHz, 1500MHz (L-band), 3.3GHz and 3.5GHz bands. However, the auction has not taken place, and industry experts have pointed to the high spectrum prices as a significant obstacle.
In Mexico, successful bidders are required to pay both an initial fee and an annual frequency usage fee for the duration of their concession. Since licenses typically remain valid for 20 years, the prices of these licenses are considerably higher than equivalent concessions in other markets.