Telcos in LatAm 'getting tired' of high spectrum costs

The telecom industry is becoming tired of the high costs for spectrum use that remain predominant in Latin America, even though experts have agreed for years that the phenomenon is to blame for lack of investments and delays in coverage.

Ana Valero, regulation director at Telefónica Hispam, warned at the Mobile 360 Latin America telecom event that GSMA hosted in Mexico City that “the issue of the unsustainability of the current spectrum cost-fixing model is one of the main points where the industry is already beginning to show signs of exhaustion.”

The executive at the Spanish telco said spectrum challenges can be broken down into three. 

“The initial payment that we make for the spectrum, the coverage obligations, which in many cases are linked to the auction processes, and the fees for spectrum use, for which some countries such as Mexico impose up to 80% of the total spectrum cost that we operators face,” she said. 

Last year, Telefónica México returned some frequencies due to high spectrum costs.

And, according to a study by GSMA, spectrum costs in Mexico grew by an average of 28% from 2015-19. 

Valero also cited Peru, where little interest from operators led to the canceling of a spectrum tender, and Colombia, where Telefónica also returned spectrum rights in November.