The race toward 5G technology implementation in Mexico is in full swing. Telcel and AT&T, leaders in building 5G networks in the country, face significant challenges in their path toward consolidating this technology. One of the main obstacles: the high cost of acquiring the necessary spectrum.
The spectrum challenge
The fifth generation of mobile technology, better known as 5G, promises to revolutionize the way we consume and use mobile internet. However, its successful implementation in Mexico requires that both Telcel and AT&T acquire a spectrum of 1,200 MegaHertz. This requirement would translate into an annual expenditure of 3,797 million dollars solely in spectrum rights and usage fees, not counting other operating costs such as infrastructure and equipment.
Raúl Lucido, senior consultant in IT and international telecommunications markets, emphasizes the financial challenge this represents for these companies. While Telcel reported annual sales of 12,123 million dollars last year, AT&T registered revenues of 3,144 million dollars. This latter amount is precisely the cost the company would have to cover to acquire the necessary spectrum, putting into perspective the magnitude of the investment.
The outlook for AT&T
For AT&T, the situation seems particularly challenging. The entirety of its annual revenues could be allocated to 5G spectrum. The company has been clear in its stance: it will not participate in spectrum auctions if costs are not reviewed. In an attempt to optimize resources, it has even had to return spectrum bands previously acquired. Despite these obstacles, AT&T has already managed to implement 5G networks in 85 Mexican cities.
Telcel and its competitive advantage
On the other hand, with revenues that far exceed spectrum costs, Telcel seems to be in a more favorable position to face this investment. However, the company is not exempt from challenges. The need to continue expanding its infrastructure to support 5G network demand implies additional investments.
So far, Telcel, a subsidiary of América Móvil, has connected more than 100 Mexican cities. This means that around 40 million Mexicans already have access to this cutting-edge technology, according to data provided by Fabián Monge, country manager of Ericsson México.
Mexico is on the threshold of a technological revolution with the implementation of 5G. Telecommunications companies are willing to lead this change, but the path toward consolidation is fraught with financial and operational challenges. The acquisition of spectrum is, without a doubt, one of the main obstacles to overcome.
With information from Expansión.
If you want to receive more news like this, sign up for our newsletter:
{% module_block module "widget_59c58238-993a-4db2-b6d4-d1690b4308c5" %}{% module_attribute "child_css" is_json="true" %}{% raw %}null{% endraw %}{% end_module_attribute %}{% module_attribute "css" is_json="true" %}{% raw %}null{% endraw %}{% end_module_attribute %}{% module_attribute "form" is_json="true" %}{% raw %}{"form_id":"80d24394-e306-4dc1-9257-1089732c6118","response_type":"inline","message":"Thank you for submitting the form.","gotowebinar_webinar_key":null}{% endraw %}{% end_module_attribute %}{% module_attribute "label" is_json="true" %}{% raw %}null{% endraw %}{% end_module_attribute %}{% module_attribute "module_id" is_json="true" %}{% raw %}1155238{% endraw %}{% end_module_attribute %}{% module_attribute "schema_version" is_json="true" %}{% raw %}2{% endraw %}{% end_module_attribute %}{% module_attribute "tag" is_json="true" %}{% raw %}"module"{% endraw %}{% end_module_attribute %}{% end_module_block %}