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Monday, September 6, 2010

TECHNOLOGY - Mexico digitalizes TV for wireless space

by Cyntia Barrera Diaz

MEXICO CITY | Thu Sep 2, 2010 6:41pm EDT


(Reuters) - Mexico wants to auction more spectrum for wireless communications, including 4G standard, and boost competition in the TV market as it frees up capacity by digitalizing television.

In a decree published in Mexico's official gazette on Thursday, President Felipe Calderon ordered to free up the 700 MHz band -- currently used by broadcasters Televisa, TV Azteca and other regional companies -- by 2012, the year he concludes his administration.

The transition will allow Mexico to "offer more and better services, because (700 MHz) is a band apt for 4G mobile and Internet," Calderon said.

4G is the latest generation of wireless technology that allows for Internet-based telephony, ultra-broadband Internet access, gaming services and streamed multimedia, among others.

Currently, Carlos Slim's America Movil and rival Telefonica offer 3G services in Mexico. Televisa and partner Nextel recently teamed to buy spectrum in a government auction to deploy a 3G network across Mexico over the next two years.

Calderon also said all analog television transmissions should migrate fully to digital standards by 2015, six years ahead of the original plan.

The president instructed Mexico's telecommunications watchdog Cofetel to conduct the auction for the 700 MHz band, but he gave no details about when the process may start.

During his annual address on the state of the nation on Thursday, Calderon said the government will provide help so that every Mexican can access digital television.

Mony de Swaan, head of Cofetel, told Reuters via Twitter that the government would grant a $60 subsidy for every TV household starting in 2011. He said Mexico currently has 21 million homes with no digital services, compared with 3.6 million that do.

TV Azteca already sells a $206 antenna and box set that transforms analog television signals into digital, higher quality images although the number of channels they offer is still limited.

Digital television uses less bandwidth, meaning more channels can be transmitted over the same space. It is also good for high-definition TV, with better picture and sound quality, and can bundle other non-television services.

Calderon is also creating a commission that will bring together the communications, interior, finance, economy, and education ministries to coordinate the analog to digital switch. De Swaan will also be part of this commission.

But the president's plan leaves many loose ends, according to Jorge Alvarez Hoth, a consultant and former deputy communications minister, who noted the difficulties that other countries like the United States had before going digital.

"It is a good intention ... but it is not clear yet how things will work. We have to wait and see," Alvarez Hoth said.

Calderon will be replaced in two years, raising questions as to whether this initiative can survive past that date.

(Editing by Bernard Orr)