Movistar questioned the increase contemplated in the renewal of the spectrum 4G in Uruguay by the Ministry of Industry, Energy and Mining (MIEM) and warned that the price increase —compared to the value assigned 20 years ago, with the original designation of the bands— will affect investment in the technology 5G.
The controversy surrounding the 5G network in the country it seems to have remained as a past anecdote, from time to time remembered after announcements such as those of Antel, that last week activated its signal of this technology in all the capitals of the country. However, the main players in the telecommunications services market still have questions to address regarding the available spectrum and the implementation of the new network in the country.
Such is the case of Movistar that, although he did not directly complain about 5G, he did warn that the company’s investment in this technology —enabled from the award of one of the three blocks tendered by MIEM— could be negatively affected. The reason is a increase in price of the agreements made between 2002 and 2004 for the 4G spectrum.
It should be remembered, in this sense, that the MIEM presented a decree at the end of November of last year that enabled the automatic renewal of these agreements – signed by antel, of course and Movistar. This decision that, at the time, brought its own controversy, now annoys the international telephone company.
Movistar’s disgust and complaint
The center of the problem is in the 25 MHz block that belongs to Movistar, within the 850 MHZ band, which will expire in July 2024. At the time, the value of the agreement was 6 million dollars, but the MIEM requested a technical analysis for the designation of the new price at the Communications Services Regulatory Unit (Ursec).
This organization considered as a reference the 5+5 MHz block, corresponding to Antel in the 900 MHz band —whose conditions are “quasi similar” to those of the Movistar block—, which was awarded by competitive procedure a few years ago in 7 .5 million dollars. In this way, since Movistar has a 12.5+12.5 MHz block, the recommended price is 18.7 million. An amount that certainly did not go down well with the telecommunications company.
In this regard, the director of Public Affairs of Telefónica Movistar Uruguay, Leticia Lago, indicated that they had not “been aware of this recommendation” for which they are unaware of “the grounds that led Ursec to suggest said amount.” In dialogue with El País, he stressed that they are still evaluating the conditions to define its renewal, since there is almost a year left before the expiration of the agreement.
However, and although the decision has not yet been made, he affirmed that the increase with respect to the value assigned 20 years ago would “definitely” affect the investment of the company to offer 5G services. In this sense, he expressed that the telecommunications sector is “highly demanding of investments due to all that the permanent updating of networks entails. The money that goes into spectrum is money that is not invested in network deployments”.
He also held that “the Inter-American Association of Telecommunications Companies (ASIET) has indicated that the immediate consequence of high spectrum values is the delay in the network deployment process and the adoption of new technologies such as 4G and 5G”.
“The spectrum cannot be conceived as a simple collection mechanism since a high cost discourages investment, the extension of networks and the quality of services. The focus when establishing the conditions for access to the spectrum should be oriented to the maximization of social welfare and set aside collection approaches ”, he concluded.
Source: Ambito
