Few individuals working in the telecommunications sector who are aware of the positive externalities associated with investments in new technologies would advocate for utilizing the radioelectric spectrum as a short-term revenue-generating asset. On the contrary, experts propose integrating the allocation of this resource into economic development plans—termed digital transformation initiatives—by embedding telecommunications into all stages of the country’s production processes. In this manner, by enhancing efficiency and reducing costs, the positive economic impact on the nation would be substantially greater.
Nevertheless, the radioelectric spectrum, particularly that allocated to mobile services, has become a point of friction in Mexico’s structural development. Despite digital connectivity being constitutionally recognized as a fundamental right, the country maintains one of the costliest access regimes worldwide. This contradiction reflects a policy that prioritizes fiscal revenue over digital inclusion, with adverse consequences for competition, coverage, and technological innovation.
In a global context where the expansion of 5G networks and universal access are strategic priorities, Mexico faces a vicious cycle: high costs that disincentivize investment, delay technological innovation, limit terrestrial network coverage, and, paradoxically, reduce state revenues in the long term.
For those unfamiliar with this dilemma, which harkens back to the era of the Federal Telecommunications Commission (better known as COFETEL), the conflict stems from the duality of Mexico’s legal framework. On the one hand, the Federal Telecommunications and Broadcasting Law promotes universal access and competition; on the other hand, the Federal Law on Rights (Ley Federal de Derechos, LFD) converts the spectrum into a fiscal resource through disproportionately high annual fees.
Unlike international schemes that favor one-time payments or coverage commitments, Mexico employs a hybrid model that combines an initial counter-performance with permanent annual rights. According to the Organisation for Economic Co-operation and Development (OECD), between 70% and 92% of the total spectrum cost in Mexico is attributed to these recurring payments. In contrast, in other countries, they rarely exceed 50%.
The Secretariat of Finance and Public Credit (SHCP) proposes annual fees for Congress without considering the regulator’s recommendations. Although the Federal Institute of Telecommunications (IFT)—now replaced by the Telecommunications Regulatory Commission (CRT)—has documented the negative effects of this model, it lacks the authority to modify it. Congress, in turn, has repeatedly approved the fees proposed by the SHCP, even following multiple warnings regarding their impact. Mobile operators (Telcel, AT&T, and Telefónica Movistar) have been the primary affected parties. For instance, Movistar completed the return of its spectrum in 2023, citing economic unviability. AT&T has partially implemented the scheme, while Telcel has publicly criticized it. These companies allocate between 6% and 17% of their revenues to rights payments, distorting their budgets and constraining network expansion.
The consensus among international associations and consultancies aligns with the OECD’s view. The Competitive Intelligence Unit (The CIU) and the GSMA rank Mexico among the world’s most expensive regimes, with prices up to 93% above the international average. At one point, the now-defunct IFT estimated that, in the 850 MHz band, rights are four times more expensive than the global average, and in the 600 MHz band, up to ten times. Consequently, recent auctions, such as IFT-10 in 2021, were partially deserted due to operators’ lack of interest. Few doubt that the same will occur in the next spectrum allocation attempt, the so-called 5G auction, if conditions are not altered to eliminate the revenue-generating aspect of spectrum concessions.
If Mexico adjusted its prices to international levels, five million more people would have 4G coverage, and download speeds would be 30% higher, according to GSMA figures from a 2022 study. However, according to The CIU, revenue from rights decreased from 19,980 million pesos in 2019 to 16,776 million in 2024, confirming that the current model not only hampers expansion but is also fiscally inefficient.
The structural consequences of the high cost of the spectrum in Mexico are multiple and deeply interconnected. Coverage and service quality are deficient, as spectrum overpricing diverts investment resources toward rights payments. Moreover, there is growing market concentration, as elevated costs drive smaller competitors out of the market and reinforce Telcel’s dominance, which currently controls over 60% of the sector.
Additionally, the deployment of 5G technology is delayed by a lack of interest in onerous auctions, which threatens to further widen the digital divide, particularly with respect to the adoption of generative artificial intelligence tools by academic institutions and small to medium-sized enterprises. Finally, this dynamic also generates fiscal losses, as spectrum returns and reduced market dynamism diminish public revenues, with estimates exceeding 18,000 million pesos between 2019 and 2024, according to IFT figures.
More balanced international models demonstrate that an alternative path is feasible. Brazil converts payments into coverage commitments, prioritizing digital inclusion. The United Kingdom reduced its licenses by 26% upon recognizing that high prices limited investment. India eliminated annual fees for new permits in 2021, spurring the largest 5G auction in its history. Croatia and New Zealand also lowered their tariffs to incentivize technological expansion. These examples demonstrate that reducing fees does not entail revenue loss but rather fosters market dynamism and a broader tax base through enhanced connectivity.
Mexico maintains its policy for three primary reasons: first, fiscal dependence, which renders the spectrum an easy and politically low-visibility revenue source; second, a short-term vision that prioritizes immediate revenues over long-term structural benefits; and third, institutional fragmentation that hinders effective coordination among the Finance Ministry, the regulator, and Congress.
From a political perspective, the complexity of the issue and limited public awareness reduce the potential for political pressure to reform a model that, though dysfunctional, proves lucrative in the short term for public finances.
What is surprising about Mexico’s current revenue scheme is that it has become one of the few points of consensus within the telecommunications industry, from academia and service providers to all commissioners who served at the IFT and even the last president of its predecessor, COFETEL.
Among the recommendations offered over the years by diverse voices are reducing annual rights to align with global standards, establishing a progressive scheme that benefits smaller operators, allowing the conversion of payments into coverage commitments, and periodically reviewing fees based on the spectrum’s actual economic value. The SHCP must recognize that short-term revenue sacrifices will be offset by greater investment, employment, and innovation. Congress, for its part, must legislate with a long-term vision and grant the regulator effective powers to align fiscal policy with connectivity objectives.
Reforming this regime is not merely a technical matter but a national development decision. Mexico must decide whether the spectrum will serve as a source of fiscal revenue or as a lever for innovation, inclusion, and prosperity. Maintaining it as a perpetual tax is not only an error, but a luxury Mexico can no longer afford.
Considering this landscape, in October 2025, the Agency for Digital Transformation and Telecommunications, along with the CRT, published a methodological note concluding that Mexico is 7% below the international reference for spectrum prices when the mean is used, or 27% above when the median is employed. The spectrum blocks considered in this exercise by the new regulator were: 850 MHz, AWS (1.7 GHz/2.1 GHz), PCS (1.9 GHz), 2.5 GHz, and 3.5 GHz.
The publication of this document appears convenient amid the ongoing debate on high spectrum costs. However, the issue is that it relies on a poorly constructed comparison disconnected from market realities. The cost of spectrum has two components in nearly every country worldwide: a high initial payment corresponding to the auction, and modest annual fees. Mexico inverts this logic, as the LFD’s hybrid scheme shifts most of the cost to recurring annual payments over twenty years and renewable fees, exerting permanent pressure on operators’ finances.
Furthermore, the CRT publication commits a fatal error by comparing Mexico’s single-year annual payment with the total present value cost in other countries, which includes the initial payment and the sum of yearly fees.
If the net present value (NPV) for Mexico’s annual rights is calculated correctly—using the average figure of 34,829 pesos per kHz per year from the CRT publication and a 10% discount rate—the result is that Mexico is neither 7% cheaper nor 27% more expensive in equivalent annual terms: in total NPV, it proves 9% to 49% more burdensome, and up to 76% if the median is prioritized as a robust reference.
Another element sowing confusion is that the CRT document offers two readings—the arithmetic mean and the median, without justifying which corresponds to the analyzed problem. In spectrum markets, where outliers abound, the median is the most robust indicator of the typical price. Even accepting the note’s own median, Mexico is 27% above the international reference. The coexistence of two contradictory conclusions, without guidance for interpretation, constitutes an invitation to biased data selection.
The value of spectrum depends on variables that the CRT publication omits or treats superficially: geographic coverage, license duration, block size, investment obligations, and the timing of the technological cycle. Without adjustments for these factors, the price-per-MHz-per-population indicator is erroneous. Mexico’s appearance as inexpensive in bands like 850 MHz or 3.5 GHz contradicts market evidence, which shows deserted auctions, spectrum returns, and 5G delays. If it were truly inexpensive, bidders and deployments would abound, but they do not.
The CRT publication does not distinguish between OECD and non-OECD countries, nor between regions or income levels. With a skewed distribution, this lack of sensitivity yields fragile conclusions. Nor is there reconciliation with the IFT’s 2023 study, which found up to 88% overpricing against the international average, or with analyses from the GSMA, OECD, or consultancies like The CIU. Market evidence is also ignored: spectrum returns, failed auctions, and lagging 5G deployment. If prices were competitive, these facts would not exist—unless one suggests that both Telefónica and AT&T lied in justifying their spectrum block returns to the government.
In Mexico, high recurring costs generate severe economies of scale. Telcel can absorb rights by allocating about 6% of its revenues, while AT&T approaches 17%. For smaller operators, this is unviable. A single average conceals this asymmetry and reinforces concentration. Following the IFT’s dissolution, the new regulatory structure aligns more with fiscal priorities, and a note asserting reasonable prices justifies the status quo. The outcome is reduced coverage, lower quality, diminished competition, and—paradoxically—net lower revenue collection.
A rigorous analysis should compare equivalent total costs, publish the complete database, conduct sensitivity exercises, reconcile results with existing literature, and incorporate market evidence. Only then could spectrum policy be evidence-based. The methodological note does not fail on a technicality: it confuses an annual flow with a total cost and, in doing so, distorts the reality it purports to measure. When the correct calculation is performed, Mexico is not below the international average but several times above.
It is also worth noting that the document mentions a sample of 47 countries and 225 observations from 2008 to 2024, but does not provide the list of countries, inclusion criteria, license durations, or associated obligations. Knowing which jurisdictions serve as references in this document is not trivial, as the manner in which each aforementioned spectrum block is considered may vary depending on each country’s geographic location.
This stems from the International Telecommunication Union (ITU) dividing the world into three regions for radioelectric spectrum management, with Mexico belonging to Region 2, alongside the rest of the Americas. Comparing spectrum prices across these regions without adjustments constitutes a grave methodological error, as the same frequency band may be allocated to entirely different services in each region, have varying bandwidths available for mobile services, feature incompatible device ecosystems, and face dissimilar technical constraints due to cross-border interference.
For example, the 2.5 GHz band, primarily allocated to mobile services in the Americas (Region 2), may include satellite services or military uses in Europe (Region 1) and Asia (Region 3), rendering a nominally “2.5 GHz” concession non-comparable across regions. Moreover, Region 2 exhibits greater spectral harmonization due to the influence of the U.S. market, generating economies of scale in equipment and higher economic value for the harmonized spectrum—a phenomenon not typically observed in other regions.
If the CRT document includes observations from all three regions in its 47-country sample without distinguishing or adjusting for these fundamental differences, the resulting average would be biased and fail to adequately reflect the U.S. market conditions in which Mexico must compete. The most pertinent and actionable comparison would be with Region 2 states, particularly the United States, Canada, Brazil (not in all bands, e.g., PCS), Colombia, Chile, and Argentina, countries facing the same technical frequency allocation framework, sharing compatible device ecosystems, and operating under similar regional regulatory conditions.
The complete absence of any mention or analysis of the ITU regions in a document purporting to establish international spectrum price references constitutes a significant technical omission that seriously undermines the validity of its conclusions, suggesting that the presented comparisons may blend fundamentally incomparable technical and economic realities.
As can be observed, the discussion on the spectrum is not a matter of tables or percentages but an essential decision for Mexico’s economic, social, and technological development. The high cost of the radioelectric spectrum is not an accident, but the result of political choices that subordinate digital policy to revenue collection zeal. Evidence from the GSMA, The CIU, the OECD, and the IFT itself demonstrates that this model has caused market concentration, technological lag, loss of competitiveness, and a persistent digital divide.
The government must regard spectrum as an essential input, with reasonable annual fees, coverage commitments, and rules fostering competition. The CRT’s methodological note sends a terrible signal to the sector, constructing a fictitious narrative that may frame future decisions. It is regrettable to see Mexico continue to pursue the wrong path.
