Courts review Mexican wireless award

By:
Alan Burkitt-Gray
Published on:

Communications ministry and economic court to review award of shared wireless contract after Rivada protests

Mexico’s plan to set up a wholesale LTE wireless network has been thrown into doubt after the government started an investigation into the bidding process.

The internal control body of the Secretariat of Communications and Transport (SCT), which awarded the Red Compartida – “shared network” – contract in November, has begun investigating claimed “administrative irregularities”.

A consortium called Altán, backed by the Morgan Stanley Investment Bank and the World Bank and supported by a number of Mexican cable and telecoms companies, won the 20-year deal after a bid from Rivada Networks, an Irish company, was excluded.

“We think justice will prevail in Mexico,” Rivada CEO Declan Ganley told Global Telecoms Business in an interview. “All we want is that our bid is opened.”

The SCT rejected Rivada’s bid after claiming that it did not include a bond for one billion pesos ($49 million). Rivada says the money was provided and that details of the bond were included in the bid. “All they need to do is open it,” said Ganley.

Rivada says that it plans to present evidence to the enquiry that Altán “used privileged information from the SCT for the preparation of its proposal”.

The company added in a statement: “This is part of the various actions that the company has undertaken to safeguard its rights against the illegal disqualification of its proposal by the SCT.”

Separately from the SCT’s internal investigation, a Mexican district court – which specialises in economic affairs, including broadcasting and telecommunications – has asked the SCT to let is see the Altán proposal “for review and comparison” as part of the process to see whether privileged information was used.

“That means we’re in two different Mexican courts,” said Ganley.

Rivada says that it will submit to the Mexican enquiries a deposition made to a US district court on 20 December by a consultant who advised the SCT. The consultant was told, he says in the sworn deposition, that “one of the bids was essentially a photocopy of our … work [for the SCT], or a 1% differential”. He claimed in the deposition that SCT officials wanted the Altán consortium to win.

Despite the legal issues, Ganley praised the overall Mexican plan for a shared wireless network, that will allow operators to buy spectrum dynamically on a wholesale market to compete with the country’s dominant mobile operators. “The Red Compartida reform is brilliant,” he told Global Telecoms Business. “We are talking to a number of other significant governments.”