The Official Bulletin today publishes the call for the 850 MHz and 1900 MHz band bidding process, through resolution 57/11 of the SeCom. The bands to be tendered correspond to the spectrum portion Telefonica returned as part of the purchase agreement of Movicom. Telefonica cannot access the said frequencies. Main bidders will surely include Nextel, as well as Claro and Personal.

The call becomes a reality almost a year after the Communications Secretary Lisandro Salas made the announcement of the spectrum tender along the Conference “The Mobile Revolution”, organized by Grupo Convergencia.

The 850 MHz band is defined for Cellular Mobile Radiocommunications Services (CMRS), while the remaining bands go for Personal Communications Services (PCS).

The process attracted mobile operators looking for better mobile coverage. Claro is clearly in urgent need. Meanwhile, Nextel wants spectrum to be able to compete as the fourth operator, especially in data services. The question is whether the Triple Play provider Telecentro, recently enabled to offer mobile telephony, would dare to participate; it is quite difficult to enter the mobile industry given the huge infrastructure deployment needed.

The resolution defines both areas and prices as follows: Area 1 (North of the country): four spectrum segments to be tendered on the 1900 MHz bands. Total 30MHz. Upset price per MHz: US$ 1 million for PCS. Given these base prices, the State would be collecting some US$ 30 millions.

Area 2 (Metropolitan area of Buenos Aires) a 7.5MHz segment on the 850 MHz band, and three 10MHz segments on the 1900 MHz band. Upset price per MHz: US$ 6 million for CMRS, and US$ 4.4 million for PCS. Given these reference prices, the 7.5 MHz for CMRS would cost US$ 45 million, while the three 10MHz bands for PCS would amount to US$ 132 million.

Area 3 (South of the country): four segments on the 1900MHz band. All in all, 35 MHz, three 10 MHz portions and one of 5 MHz, all for PCS. The upset price per MHz is US$ 600,000. Given this base, revenues would amount to US$ 21 millions.

All telecom service providers able to prove assets for over US$100 millions are welcome to participate in the tender.

The schedule set is as follows: Offer of Bid Specifications: May 12th to July 14th. Presentation and Opening of Offers: July 15th. Auction: August 29th. Award: within twenty days following the auction.

In Brazil, Nextel has recently paid US$ 714.4 millions for 20 MHz in, almost, the whole territory, i.e., over three times the reference price set by the SeCom for PCS on this frequency: that spectrum in the country would cost US$ 120 millions to start with. However, as Argentina counts on approximately a fifth of the number of inhabitants in the main Mercosur partner, the upset price in the country would be US$ 114 millions lower than the amounts paid by the operator.

Therefore, as sources from Claro told Convergencialatina they would struggle for the 7.5 MHz on the 850Mhz band for the Metro Area, upset prices in the said district might rocket as Personal is also highly interested in the said spectrum.

Yesterday, Franco Bertone, Executive General Director of Telecom Argentina, said to Convergencialatina that “spectrum is to become key in the next two years both for Argentina and Brazil. And we are ready to pay a fair price for it”.

Nextel CEO in Argentina, Rubén Butvilofsky, has repeatedly told Convergencialatina about the need to count on spectrum on the 1900 MHz band, so that his company would be able to supplement its iDen system with a more competitive option for 3G data transmission.