Colombia’s telecoms operators are braced to face additional competition from AT&T, which reportedly plans to bid in the country’s upcoming auction of 700 MHz spectrum with a view to adding mobile services to the presence it will gain in the TV market when its acquisition of DirecTV closes.
AT&T’s mobile CEO Ralph de la Vega will architect its move into Colombia, according to local financial publication Portafolio. The exec is due to visit Colombia in June to seal the deal, it claims.
Within two years AT&T will be a large-scale player in Colombia, the news outlet said, quoting an unnamed source.
As it stands, DirecTV has around 20% of the pay TV market in Colombia with close to 952,000 customers, according to Portafolio, thereby providing AT&T with a solid base to build upon.
AT&T agreed to pay $48.5 billion for DirecTV just under a year ago. The deal has yet to receive all the required regulatory approvals; however, alongside the telco’s Q1 results presentation last week, CEO Randall Stephenson said he expects to pass the final hurdles this quarter.
The U.S. telco has recent experience when it comes to Latin American expansion. In November it announced the acquisition of Mexico’s third largest mobile operator Iusacell for $2.5 billion and followed that up by purchasing market minnow Nextel for $1.88 billion.
The main driver for AT&T’s Mexican deals is its desire to create a single mobile network covering the U.S. and Mexico, but it is worth pointing out that DirecTV is a factor there too. The satellite operator owns a 41% stake in Sky Mexico.
Back in Colombia, the state is due to begin the sale of 700 MHz spectrum in August, Prensario Internacional reported this week, citing Oscar Leon Suarez, head of the country’s National Spectrum Agency (ANE).
Colombia will auction 90 MHz of 700 MHz spectrum, as well as airwaves in the 900 MHz, 1900 MHz and 2.5 GHz bands, Leon Suarez revealed at a press conference. The sale will be able to take place once various TV st ations have vacated the 700 MHz band, he said. There were previously 16 channels using the spectrum, but now just six remain.
Given the demand for 700 MHz spectrum, the government should raise more than the US$400 million it brought in via Colombia’s 4G auction in mid-2013, he said.
DirecTV was one of the winners at that contest, picking up frequencies in the 2.5 GHz band.
At present, Colombia’s mobile market is dominated by its big three network operators, America Movil’s Claro, Telefonica’s Movistar and Tigo. The three together controlled 93.6% of the market at the end of last year, according to the latest government statistics, with Claro being by far the largest with a market share of close to 54%. The only other provider with a noteworthy market share is MVNO Virgin Mobile, which had captured 3.6% by the same date.
In total, Colombia ended 2014 with 55.33 million mobile customers.
