Argentina Says It Received Bids for $2.23 Billion in 4G Auction

Argentina received bids totaling
$2.23 billion in an auction of 4G mobile-phone airwaves, a move
that will double the country’s capacity for wireless calls and
Internet access while boosting dwindling foreign reserves.

The local units of Telefonica SA (TEF), Telecom Argentina SA and
America Movil SAB (AMXL), which each hold about a third of the nation’s
mobile-phone market, all vied yesterday for a share of two 4G
frequency bands and for 22 percent of already-existing 3G
spectrum. They’ll 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 $1.97 billion, the Communication Secretary’s office
said in an e-mailed statement.

The winning bids will be announced in mid-November, 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 $2 billion, which will contribute to
foreign currency sustainability in the future,” the
Communications Secretary’s office said in the statement.

The government’s insistence that the participation fee be
paid in dollars prompted Grupo Clarin SA (GCLA)’s Cablevision unit to
drop out of the auction, arguing that it can’t get access to
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 $2 billion would represent about 7 percent of
current reserve levels.

No Pesos

“The state wants to bolster its foreign reserves,”
Enrique Carrier, director of Buenos Aires-based
telecommunications research firm Carrier y Asociados, said by
telephone. “The operators wanted to pay in pesos at the
official exchange rate and the government told them to bring
dollars from abroad.”

In a document released by the communications secretary,
Claro, America Movil’s local unit, said that the central bank
doesn’t permit purchases of foreign currency to pay for the
auction’s license fee and asked if it could be paid in pesos
instead. The communications secretary said the operator should
refer to Article 30 of the auction document, which says that
“the bidding currency will be U.S. dollars.”

Argentina, South America’s second-largest economy, has been
slow to develop 4G technology, Carrier said. Apart from the
impoverished region north of Brazil known as the Guianas, the
rest of South America has already begun to develop 4G, he said.
The technology offers faster speeds capable of handling
streaming video.

The Argentine government has given companies a five-year
deadline to install the new technology in 98 percent of the

For Related News and Information:
Argentina Gets Reserves Boost From China Currency Swap

To contact the reporter on this story:
Charlie Devereux in Buenos Aires at

To contact the editors responsible for this story:
Andre Soliani at
Daniel Cancel, Sylvia Wier

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