América Móvil objects to Uruguayan spectrum prices for 4G-LTE services

Unit Claro of América Móvil in Uruguay expressed disagreement with respect to the economic considerations that the Uruguayan State provided for cell phone companies to keep various frequencies of the radio spectrum for another twenty years in the bands of 850 MHz y 1900 MHzalso identified in this sector as PCS.

For Claro Uruguay, the compensation provided by the Uruguayan government do not correspond to reality of the local market, besides that now are exploited in 4G-LTE services nor is it reasonable for the State to appraise with the same value two radio bands with different nature technique for data coverage and transport, such as the 850 MHz and 1900 MHz spectrum that will soon go through a process of renewal of concessions.

Uruguay had an economic growth of 3.7% in the third quarter of 2022, but the data means a stagnation compared to the data from a year ago, of 4.4 percent. Uruguay is a market with 3.5 million inhabitants, but with 6.02 million cellular accesses active in the first half of 2022 and the operator Claro from América Móvil is last in all relevant segments before Telefonica Movistar and the state Antel:

The company has 1 million mobile accesses, which means 17% of the total Uruguayan market, although a year ago this quota exceeded 18.03 percent.

Among the accesses that include a cellular line plus a telephone, Claro occupies 21% of the market and as for the prepaid segment, its market share is also 21%, with 588,023 customers understood until last July. in the business of postpaid its participation reaches 14% In general, with 465,098 lines under contract and in service with only mobile Internet, its presence is 3%, said the Bearthe regulatory authority for this sector in Uruguay.

These data could be among the reasons that led Claro to object to the prices that the Uruguayan State requests commercial operators, including Antel and Movistar, to maintain their concessions in different radio bands after having exploited them for twenty years.

In 2023, the frequencies in Claro and Movistar in the 1800 and 1900 MHz bands expire. The government of that country would request 18 million dollars from Movistar for its bands and 18.12 million dollars to Claro. The amounts are practically identical to the prices established by the government twenty years before.

The Uruguayan State intends to renew the concessions without passing the frequencies through a bidding process, given the impossibility of a new relevant player appearing to compete for the same bands with any of the three operators and why “take” the radio spectrum from the market that now itself is being exploited to serve the 6 million accesses, it would originate an exposure to deficiencies in the provision from service.

The local government intends to extend the concessions in this way and give a period of thirty days for the operators to pay the considerations to the Uruguayan treasury and meanwhile, the Ursec authority also refines the process to award f5G frequencies in the 3.5 band Gigahercios.

For Claro, in conversations with the journalist Andrea Catalano from the specialized portal TeleSemana, there is no valid reasoning to maintain the same prices as twenty years ago, when the market is different, for example in terms of consumption habits, and it is not reasonable to use the same criteria for setting the prices of the 850 MHz and 1800/1900 MHz bands, due to the fact that network deployment costs between one band and another are different for building cell coverage.

“A renewal criteria is set with prices that are not reasonable. The values ​​are not duly substantiated and do not correspond to the relative prices of the bands”, the company commented to the journalist.

Claro has filed a legal appeal and now has 150 days to argue why the cost of buying spectrum and operating a cellular network with the same input in the current context does not correspond to the market of twenty years ago.