Mexico Cuts Annual Spectrum Fees by 12% in Bid to Revive 5G Investment

Mexico's Senate has approved a 12% reduction in annual spectrum fees across most mobile bands in use, ending — on paper at least — nearly two decades of some of the world's highest spectrum charges. The cut, passed through the Federal Law of Rights and already approved by the Chamber of Deputies, applies to the 2.5 GHz, 1.9 GHz, 1.7/2.1 GHz, 800/850 MHz, 1.4 GHz and 3.5 GHz bands.

The government selected these bands because their current value sits above the international median, stating that "additional measures are needed to promote the adoption of higher-capacity technologies" such as 5G. The law also allows regulators to offer spectrum price discounts in exchange for coverage obligations in specific areas — a mechanism already tested with success in Brazil.

The 12% figure deserves scrutiny. It is nominal, not adjusted for inflation, so the real reduction could be materially smaller. There is also no guidance yet on how the discount will be applied in practice.

What did the industry say?

Operators and trade bodies have demanded fee reductions for years. Their welcome was measured. The GSMA said the proposal, alongside additional measures, "represents a change of course" for Mexican connectivity. Lucas Gallito, GSMA president for Latin America and the Caribbean, cautioned: "The important thing for Mexico is to consolidate this signal of a change in direction and move toward a sustained policy that favors investment and innovation."

Radamés Camargo, director of analysis at consultancy the Competitive Intelligence Unit, said 12% is not enough to meaningfully move investment. Mónica Aspe, general director of AT&T Mexico, framed the problem in terms of payback periods: "The industry needs stable rules before committing to investments that will only be recovered in 15 or 20 years," she said.

That reference point is concrete. AT&T pays roughly MXN 7,481 million — about $400 million — per year for its spectrum. A 12% cut on a bill of that size is real money, but it shaves annual costs rather than transforming them.

Why were fees so high?

A 2019 GSMA report found Mexican mobile operators paid double the Latin American median in annual spectrum costs. The consequences were visible. High fees produced unsuccessful auctions and cases of operators — Telefónica and AT&T among them — returning frequencies to the state, which cost the Treasury tax revenue running into the tens of thousands of pesos.

The former regulator, the Federal Telecommunications Institute (IFT), evaluated 475.35 MHz of spectrum and concluded 89.83% of it was overpriced relative to other countries, especially bands used for mobile coverage. Some analysts have estimated that if costs aligned with international levels, an additional five million Mexicans would have 4G access.

Former president Andrés Manuel López Obrador tried and failed to lower the fees. His successor, Claudia Sheinbaum, is now carrying the effort through.

What comes next?

The new Telecommunications Regulatory Commission (CRT), created in 2025 to replace the IFT, launched its first spectrum auction earlier this year — frequencies for industrial 5G — and has announced two further tenders: one aimed at rural connectivity, one at mobile services.

Nicolas Lucas-Bartolo, a veteran telecommunications journalist in Mexico, said it is too early to judge the government's decision. Whether lower costs translate into investment will depend on the actual discounts, the terms of the upcoming auctions and the needs of individual players. Still, he noted, "there is optimism in the industry" — because the authorities are, at minimum, attempting to fix the problem. Whether that optimism survives the auction terms will become clear as the CRT's three tenders unfold.