Instituto Federal de Telecomunicaciones

IFT Plenary authorizes and conditions[1] the purchase in Mexico of Grupo Nextel by AT&T

• Yesterday, unanimously, the concentration was authorized subject to conditions
• As a result of the transaction, AT&T will be the third operator in the provision of services of mobile telecommunications, measured in terms of end users
• AT&T must submit a formal written acceptance of the conditions imposed

The Plenary of the Federal Telecommunications Institute (Instituto Federal de Telecomunicaciones, IFT) decided to authorize, subject to compliance conditions, the concentration by which AT&T acquired the company Grupo Nextel in Mexico. As a result, mobile telecommunications service, AT &T will be established as: the third operator with the largest number of users; the second with higher incomes; and the first with possession of radio spectrum allocated to date. In terms of end users, the main competitor is Telcel, whose participation is six times greater than what AT&T acquired with the Grupo Nextel acquisition.

AT&T, through the acquisition of mobile business Iusacell/Unefon held in January 2015 of determined concentration yesterday, will accumulate on average 42% of the radio spectrum allocated to date for mobile telecommunications services.

The concessioned spectrum to companies of Grupo Nextel that AT&T will acquire through concentration, approximately 41.1% are located in the frequency band called “trunking”.

To use this portion of the acquired spectrum in the provision of commercial mobile telecommunications services, on terms comparable to those offered in other bands, AT&T will have to make significant changes in the infrastructure and technology of the existing network acquired from Grupo Nextel.

Therefore, incentives are identified for AT&T to make investments in the deployment and modernization of existing networks that purchases of Grupo Nextel, which improvements are planned in the supply of mobile telecommunications services in Mexico.

In addition, it was identified that in the short and medium term the current and potential participants, the interested in providing wholesale mobile telecommunications services and to end users can access to radio spectrum will be allocated as follows: 90 MHz in the frequency band 700 MHz (digital dividend); 80 MHz in the band known as AWS and its extension, and 130 MHz in 2.5 GHz band.

Therefore, the Institute determined that the accumulation of spectrum arising from the concentration analyzed does not limit or restrict the possibility that, in the short and medium term, other participants, current and potential have access to this input.