Licensing and authorisation
What licenses/authorizations are required to provide telecoms services?
Mexican legislation provides for two types of licence in order to provide telecoms services:
- concessions; and
Concessions are issued by the Federal Institute of Telecommunications (IFT) to enable the provision of public telecoms services. The Federal Telecommunications and Broadcasting Law provides for four types of concession:
- commercial use concessions;
- public use concessions;
- private use concessions; and
- social use concessions.
Concessions are issued exclusively to Mexican entities (ie, entities incorporated under Mexican law) for up to 30 years (renewable). Concessions relating to telecoms services are applied for and granted based on the applicant’s business plan. In the case of concessions relating to spectrum or orbital positions, the award is subject to an auction and bid process.
Non-concessionaires seeking to resell telecoms services or operate as a mobile virtual network operator (or mobile virtual network enabler or mobile virtual network aggregator) must obtain an authorisation. These parties cannot have their own interconnection and roaming agreements. Although nothing in the Federal Telecommunications and Broadcasting Law prevents foreign entities from applying for a reseller authorisation, the IFT's position is that only Mexican entities can apply for authorisations. There are no restrictions on foreign ownership of such an entity.
Telecoms services which are not subject to either a concession or an authorisation are considered to be deregulated services. As a result, the so-called ‘value-added services’ which in the past were subject to a registration-only process may now be freely offered without registration or authorisation.
What are the eligibility, documentary and procedural requirements to obtain a license/authorization?
The provision of telecoms services continues to be subject to the granting of a concession. New sector participants must apply for a single concession (see below).
In the case of spectrum, frequency bands are subject to auction and a bid process. The main change in the Federal Telecommunications and Broadcasting Law is that the chief consideration for the award need not be the economic component of the bid. The law has also shifted the focus of the determination of the floor price of bid processes. The IFT, rather than the Ministry of the Treasury, now determines the floor price with the ministry's prior non-binding opinion in order to migrate from a revenue collection focus to an industry development-driven focus.
The IFT must publish an auction plan annually. Industry participants may comment on the plan and request additional frequency bands be added or that the plan be refocused to address specific needs. As in the past, the state maintains sovereign domain over the means of communication within the telecoms networks.
A new feature incorporated into the Federal Telecommunications and Broadcasting Law is the single (all encompassing) concession. Carriers that hold more than one concession may:
- apply for a single concession, thereby consolidating all of the services being offered (which historically are more likely than not the subject matter of more than one concession) into one concession; and
- petition to have additional converging services included in the single concession.
The single concession will be effective for up to 30 years and is renewable, subject to an IFT ruling to the effect that the applicant is complying with its obligations under its existing concessions and the carrier's acceptance of the IFT's terms and conditions.
The acquisition of spectrum via a bid is not the only means by which a concession holder can provide telecoms services using spectrum. The Federal Telecommunications and Broadcasting Law provides two additional alternatives – namely, the leasing of spectrum between concessionaires and the acquisition of spectrum from a competing carrier. Both options require the IFT's prior approval and the acceptance of certain obligations by the lessee or the purchaser of the spectrum (primarily the joint and several liability of the lessee in connection with obligations provided for in the concession of the leased frequency bands and continuity of service obligations where the purchase of spectrum comes with pre-existing obligations and additional obligations imposed by the IFT).
The IFT's decision will include an analysis of the competitive effects of the lease or sale of spectrum.
Resellers and mobile virtue network operators (mobile virtual network enabler or mobile virtual network aggregator) must obtain a licence (not a concession) from the IFT in order to operate. A licence will be granted for up to 10 years and entitles its holder to:
- access wholesale services offered by concessionaires;
- sell its own services and resell those contracted on a wholesale basis; and
- access its own numbering or that of the wholesaler.
In addition, satellite-landing rights are now subject to a licensing process, whereas the prior telecoms law required a concession.
Validity period and renewal
What is the validity period for licenses/authorizations and what are the terms of renewal?
Concessions are issued for a maximum term of 30 years and authorisations for a maximum term of 10 years. Each may be renewed for a like period if applied for before the start of the fifth part of their respective term and if the applicant is in good standing and meets all of the requirements of law.
The IFT must resolve applications within 60 days of submission. The IFT will record the renewal of the concession in the Public Registry of Concessions.
What fees apply?
The filing fees involved vary annually.
What is the usual timeframe for obtaining a license/authorization?
With regard to concessions, the application must be resolved within 60 days of its filing. If the IFT decides that relevant information is missing, it will afford the applicant 30 additional business days to provide the missing information. If the IFT resolves to grant the concession, the interested party will have 20 business days to pay the applicable fees and the IFT will issue the concession title within 15 business days following payment. Finally, the day after the notification of authorisation is granted, the IFT has 15 business days to record this in the Public Registry of Concessions.
Authorisation applications will be resolved by the IFT within 30 business days of filing. If the 30 days expire without a resolution, a favourable resolution will be deemed to have been granted and the IFT must issue a resolution to that effect within 30 business days.
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