Argentina received bids totaling US$2.23 billion in an auction of 4G mobile phone airwaves, a move that is set to double the nation’s capacity for wireless calls and Internet, access while boosting dwindling foreign reserves.
The local units of Telefonica SA, Telecom Argentina SA and America Movil SAB, which each hold about one-third of the nation’s mobile phone market, all vied on Friday for a share of two 4G frequency bands and for 22 percent of already existing 3G spectrum.
They are set to compete against a new fourth operator, Arlink SA, a unit of media conglomerate Grupo Uno, owned by Daniel Vila and Jose Luis Manzano.
The starting bid for 10 segments of the spectrum was US$1.97 billion, the Argentine Communication Secretary’s office said in an e-mailed statement.
The winning bids are scheduled to be announced in the middle of this month, the government has said.
“This is very important, not only because it’s been guaranteed that a fair price was paid for a natural, limited and, in some cases, scarce resource such as the spectrum, but also because the investments the companies will have to make in infrastructure are about US$2 billion, which will contribute to foreign currency sustainability in the future,” the statement said.
The government’s insistence that the participation fee be paid in US dollars prompted Grupo Clarin SA’s Cablevision unit to drop out of the auction, saying that it is unable to get access to US dollars amid currency restrictions imposed by the government three years ago.
Locked out of global capital markets due to litigation with holdout creditors, the nation has depended on its shrinking reserves to service performing debt and import energy.
Inflows of US$2 billion would represent about 7 percent of current reserve levels.
“The state wants to bolster its foreign reserves,” said Enrique Carrier, director of Buenos Aires-based telecommunications research firm Carrier y Asociados. “The operators wanted to pay in pesos at the official exchange rate and the government told them to bring dollars from abroad.”
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