“IFT-13” will be the first spectrum tender in Mexico for companies outside of telecommunications

The Federal Institute of Telecommunications (IFT) projects a future bidding process for Radioelectric spectrum in which he warns that it is possible that the contestants interested in exploiting the frequencies will be companies not so closely related to those that today offer traditional mobile telephone or Internet services.

The IFT approved this week the annual program for the use and exploitation of frequency bands for the year 2023, the PABF. This is the instrument with which that authority defines how, when and the levels of economic consideration that will be applied for the commercial use of spectrum frequencies in services such as radio, TV, telephony o Internetamong others.

Among the plans planned for next year, it is worth noting that the IFT goes with 27 commercial FM radio stations to contest; it also plans to deliver five channels for public television and confirms that there has not yet been a formal expression of interest for the commercial television channel with coverage in Mexico City that a concessionaire could not pay for this year, so the future of that channel left for a next exercise. In telecommunications a novelty of the PABF is that the regulator will compete with the spectrum that AT&T and Movistar have returned to the State in months and years ago, but with blocks of up to 80 MHz of bandwidth and to be tendered in smaller geographical regions, so that local or regional operators can improve their offers to the consumer by using of that spectrum that IFT wants to put on the market again.

But among all that this authority will put up for tender in 2023, the availability of 7,750 Megahertz of frequencies in the so-called high or millimeter bands stands out, located between 24 and 43 Gigahertz of the entire world. Radioelectric spectrum, and that may be used for productive or high-precision processes, even for new generation entertainment due to its high data transmission power, such as use cases in automotive assembly plants, mines or oil platforms; hospitals with telemedicine or augmented reality applications in the tourism sector.

This “stock” of millimeter bands means only in volume of signals, an equivalent to eleven times what the IFT it has already placed in previous years among the companies for mass consumption cellular services. This, however, does not mean that the Mexican State will receive too much income from its bidding, because although they are powerful due to their high capacity to support and transport data, they are weak in terms of broad coverage, hence their notable disadvantage compared to traditional radioelectric bands. that the State awards to the companies at very expensive prices for cellular telephony.

“The price per Megahertz in these bands is much lower than those in medium or low bands, due to its coverage and because its spectrum availability is much greater,” explains Alejandro Navarrete Torres, director of the IFT Radioelectric Spectrum Unit. “It will be an ad hoc tender, a different tender; a tender typical of these gangs”, says Navarrete in this interview.

—It is recently known that the IFT delivered spectrum to the Mexico City Metro, but there are versions that these are bands for use in massive Internet and not for STC Metro’s own operations, could you clarify?

—The bands we deliver are for Metro operations. The idea is that they can count on a better security and video surveillance system; with better voice backups. is to make a Subway Line 1 Completely modern in every way, now that it’s undergoing a modernization. Line 1 is the oldest and has the oldest systems.

As it is the oldest line and the most important in terms of connectivity and a kind of trunk network for the other lines, it was important to start by modernizing this line, and it is possible that they have planned the spectrum to expand to the others lines.

This spectrum is for the Metro authorities to put up an LTE network to modernize the control of trains, cameras, security; of operations that demand strong capacity. It’s a very interesting project and that’s why we set out to find the appropriate band with the best capacity, and that’s why they were given 40 MHz in the 2.3 GHz band. Yes, it’s for, let’s say, an LTE network. private, but it is for a public service. The authorization is only for the Metro’s own operations.

—Speaking of capacity… The PABF 2023 indicates that the IFT wants to tender 7,750 MHz of millimeter bands. Does the regulator plan to bid them in a kind of “IFT-13” auction or include them in the IFT-12 Tender for 5G services?

—The idea is to make a proper tender. It is not planned to include those frequencies in IFT-12. What is planned to include there are low bands (600 MHz) and medium bands (PCS, AWS, 2.5 GHz and 3.5 GHz), no millimeter bands.

The reason is that millimeter bands have particular qualities. For example, the coverage is much lower; we are talking about 400 to 800 meters of signal coverage there. So, the same rules of the mid and low band tenders don’t necessarily apply. Therefore, we have to prepare an ad hoc tender for the type of spectrum to be tendered. It will be an ad hoc tender, because it will recognize the particular characteristics of millimeter bands and based on this type of tender, a more efficient spectrum allocation can be made.

—Could it be understood that the need for an operator for these bands will obey the evolution of their own 5G offers or businesses, which in order to be competitive need, for example, millimeter bands to offer better video quality in a stadium or greater precision? in the assembly of a vehicle? Some kind of scalability?

—Millimeter bands have two fundamental characteristics: one is their very high data transmission capacity and the other is their very low latency. Of course, an Internet connection could be offered with them, but if more medium and low bands are already available on the market, how can you imagine a coverage of 800 meters with these bands to provide connectivity in CDMX, it would be crazy because of the amount of cells that would have to be installed.

The most appropriate is that they are used in applications for this type of propagation characteristics. In ultra reliability and very low latency applications. In a rural hospital, surgery is performed with a robot directed by someone hundreds of kilometers away is an example of these ultra-trustworthy applications.

If it is scalable, depending on the specific application and the operator will see if it is more or less appropriate to use spectrum in medium bands or high bands. An agricultural application does not require millimeter bands, but low bands for its coverage. If the operator wants autonomous vehicles or industrial automation, low latency and high reliability applications are required there.

—Contesting for more than seven thousand Megahertz of this type of spectrum would make a government like the current one, which has been characterized by squeezing public revenue, think that a cascade of money will come to the Treasury through millimeter bands. Is it so or how does the IFT plan to place it on the market?

—The price of Megahertz in those bands is much lower than in medium or low bands. Yes there is an international reference. The United States, Europe and Brazil have made a tender, where in addition to money, the operator has coverage obligations and depending on how many coverage obligations they agree to have, the spectrum is assigned. The one that assumes a greater number of coverage obligations, a greater number of localities where connectivity has to be provided, that operator is given the concession, but does not have to pay money as such, but commits to bring connectivity to those localities with the investment they mean.

It would be necessary to see if with millimeter bands it is adequate to provide coverage in geographical areas where there is a great dispersion of inhabitants. It would seem that no, that with the low bands it is much more suitable, but that is an example.

In Brazil there was a tender where the amount of coverage obligations was bet. Each obligation was associated with an amount and whoever had the highest position was the one who got the band, he did not have to pay, but the money he proposed there had to be covered.

We are open to evaluating all the options on the table and seeing different mechanisms, which are not only based on money. In Hong Kong, for example, the government gave out free spectrum for the innovation that was promised.

—Between the innovation and the need for investment that millimeter bands mean, do you think it is feasible that other companies that are not directly telecommunications are interested in buying these bands? How much does the IFT intend to deliver per bidder in bandwidth?

—Clearly we do think that there may be other companies other than the traditional ones that are interested in this bidding for millimeter bands.

In other countries there are companies that are in charge of that, of going through the spectrum and have a business of deploying cell or microcell infrastructure. This in Mexico could be a business for them, if they see head and tail. For example, in what Smart cities are, where with all this infrastructure they can control critical systems, public transport or provide services in industrial parks due to the very high efficiency of these bands. Such a possibility opens up with this tender.

But it is true that these millimeter bands are just beginning to be tendered and the business models for traditional companies have not yet been reflected with absolute clarity, which is why we believe that the appropriate thing to do is to carry out an ad hoc bidding process, not a traditional one so that various interests and it is built in due time, so that the IFT-12 passes.

We hope that this tender will also come out in 2023, which, like everything else, will have to see the circumstances that justify a postponement. But we go with these processes to consult the market and then we will come with the pre-bases. We are working to do it with all seriousness.

Responding to the other question, according to international experience, blocks from 400 Megahertz and up to 1 Gigahertz blocks are delivered, a tremendous thing.

—About pre-bases… didn’t the consultation of the IFT-12 Tender for spectrum for 5G services come out in December?

“We’ll have news soon.

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