The Spectrum Dilemma in Mexico
In Mexico, the radioelectric spectrum—a crucial component for mobile connectivity—has become more of a barrier than an element of development. The country maintains one of the most burdensome regimes worldwide, with annual rights that double the total spectrum cost compared to international references.
Consequences of Overpriced Spectrum
This revenue-generating approach, instead of strengthening public finances, has had the opposite effect: operators return frequencies, lack incentives to participate in new auctions, and there’s a lag in 5G network coverage and a decline in public revenue.
According to the GSMA, an international organization of mobile operators and companies, if Mexico aligns its costs with international levels, five million more people would have 4G coverage, and download speeds would increase by 32%.
Moreover, Mexico has only been allocated 562 MHz of spectrum, less than half the minimum recommended by the International Telecommunication Union (ITU).
International Evidence and Solutions
Internationally, the evidence is clear: countries that have reformed their spectral policies to make them more affordable not only accelerate network deployment but also increase revenue in the medium term through sector growth.
First Approach: Nominal Reduction of Charges
One effective route has been the direct reduction of annual spectrum usage fees. For instance, the UK regulator Ofcom cut 26% off spectrum usage charges by 2025, acknowledging that previous fees “overestimated the economic value of spectrum and limited investment.”
Similarly, India eliminated annual fees for new licenses in 2021, sparking the largest 5G auction in its history. Croatia, New Zealand, and Australia have followed suit, adjusting their fees to reflect the spectrum’s true value and stimulate private investment.
These cases show that a less burdensome and more accessible spectrum regime fosters fiscal sustainability, translating into greater infrastructure deployment, competition, and economic growth.
Second Approach: Investment Discounts
Another alternative is substituting cash payments with infrastructure investment commitments, a model adopted by Brazil, Colombia, and Peru.
In Brazil’s 2021 5G auction, cash payments were replaced with coverage obligations. This resulted in over 7,000 localities and 2,350 road segments gaining connectivity, achieving a national 5G coverage of 63.6% in just four years.
Colombia and Peru implement similar schemes aimed at bridging the digital divide, allowing operators to deduct annual royalties for investments in rural or vulnerable areas. These mechanisms transform tax obligations into public infrastructure and tangible economic and social returns.
A Dual Strategy for Mexico
Mexico needs to adopt a dual strategy: reduce annual rights nominally—following India and the UK’s examples—while simultaneously implementing an investment compensation scheme for deployment, inspired by Brazil’s case with nationwide scope.
The goal is not to collect less but to collect better: link every collected peso with concrete results in connectivity, coverage, and productivity. Only then can the vicious cycle of high costs, reduced investments, and lower revenue be broken.
In other words, lower cost per MHz can mean more connectivity, more investment, and ultimately, greater fiscal revenue.
Mexico’s Opportunity
Mexico has the chance to transform its spectral policy from a fiscal obstacle into a genuine digital transformation catalyst.
