UPDATE 2-Appeal jeopardizes Mexico’s frequency auction

* Judge accepts MVS Net appeal vs auction

* Claim over govt’s renewal of parent’s licenses

* Telecom regulator says auction can continue
(Adds Cofetel comment, byline, closing prices)

By Cyntia Barrera Diaz and Tomas Sarmiento

MEXICO CITY, Feb 3 (BestGrowthStock) – A Mexican judge has accepted
an appeal filed by broadband provider MVS Net against a
frequency auction that could delay one of the government’s key
plans to boost competition in the telecommunications market.

A federal judge in Mexico City accepted the appeal filed by
MVS Net against the process to tender blocks of frequency in
the 1.9 GHz and 1.7 GHz bands, the company’s parent MVS
Comunicaciones said in a release.

The tender of added capacity, one of two government
initiatives to bolster competition in a telecom market
dominated by tycoon Carlos Slim, is meant to make way for the
entrance of a new cellphone operator and expand existing
services of current market players.

MVS Net offers broadband services to several telephone
companies in Mexico. Its argument for the appeal is that the
government has yet to decide on the renovation of MVS
Comunicaciones’ licenses to operate in the 2.5 GHz band that
expired five years ago.

MVS Comunicaciones said the uncertainty has kept it from
investing heavily to deploy new infrastructure in Mexico.

Gonzalo Martinez, a commissioner at Mexico’s telecom
regulator Cofetel, told Reuters on Wednesday that the appeal
would not stop the auction for now.

He said the appeal could keep the eventual winners from
receiving their concessions to operate the spectrum on
schedule.

Cofetel and the Transport and Communications Ministry, in
charge of overseeing the auctions, believe the tenders are in
the public interest and should not be suspended, Martinez
added.

Telephone companies belonging to tycoon Ricardo Salinas had
filed similar appeals against the frequency auction recently,
but they were dismissed this week, Reforma newspaper said on
Wednesday.

Some 40 companies, including media giant Televisa
(TLVACPO.MX: )(TV.N: ) and Spain’s Telefonica (TEF.MC: ), have
purchased terms for the auctions.

Winners were expected to be announced in June.

Additionally, the government last week launched a tender
for two strands of state-owned optical fiber that will provide
private companies with a new backbone to transport television,
telephone and Internet.

Slim’s America Movil (AMXL.MX: ) (AMX.N: ), which could benefit
from a delay in competitors gaining access to more capacity,
rose 2.65 percent to close at 29.83 pesos. It is the leading
cell phone company in Mexico.

Investing Analysis

(Reporting by Cyntia Barrera Diaz; Editing by Lisa Von Ahn,
Bernard Orr)

UPDATE 2-Appeal jeopardizes Mexico’s frequency auction