Movistar: Spectrum bidding rules on sale Feb 20

Tuesday, February 7, 2006

Mobile operator Movistar Chile has set February 20 as the date to start selling the bidding rules for the auction of 25Mhz of excess spectrum it has in the 800MHz band, local press reported.

The spectrum sale was a requirement established by Chile's antimonopoly tribunal (TDLC) to allow Spain's Telefónica Móviles (NYSE: TEM) to create Movistar Chile by merging its two local units BellSouth Chile and Telefónica Móvil. TEM ended up with excess spectrum when it bought BellSouth Chile in 2004.

Chilean triple play service provider VTR and mobile operator Smartcom, owned by Mexico's América Móvil (NYSE: AMX), are considered most likely to bid for the spectrum Movistar Chile has set for sale, local press reported.

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Entel was also reported as a potential bidder, but the company still has plenty of spectrum to grow considering it purchased some BellSouth Chile frequencies before TEM bought the operator.

Movistar will receive bids until March 17 and has until the first half of 2007 to sell the spectrum. The company is expected to ask US$30mn for the spectrum.

The operator has accepted that if there is no higher or equal bid, it could award the frequency for a lower price or just give it back to the authorities.