<P class=MsoNormal style="MARGIN: 0in 0.9pt 0pt 0in">BellSouth, Entel Chile, and Megatel-Emce are struggling for a mobile license. The winner will compete with Celtel. The regulator wants to introduce more competitors in the future.

The National Telecommunications Commission (Conatel) moves forward in the tender process for the A-band, to run o n 1850-1865 Mhz and 1930-1945 Mhz frequencies. o nce the auction is over, the regulatory body will try to deliver two more licenses. However, the body is quite cautious o n the entrance of a third and fourth operator. The Government’s initiative may find hindrances in the setting the region offered through 2002 and during the first quarter 2003. 

BellSouth, Entel Chile, and Megatel-Emce, were the qualified firms for November’s  auction that counted o n 18 participants. The successful bidder for the PCS license will compete with Celtel (owned by Millicom and Motorola) for a market that in 2001 registered earnings for US$ 67.3 million. This tender gives the three companies some possibilities to expand operations to Central America. BellSouth operates in Guatemala, Nicaragua and Panama, where it has recently introduced 2.5G technology. Entel Chile (Telecom Italia), is present through Americatel Centroamérica, that renders long distance telephony. In turn, Megatel-Emce holds 40% in Empresa Nicaragüense de Telecomunicaciones (Enitel).

Companies has until April 25th to file economic offers, with a base price of US$ 5.5 million. The figure does no reach half of the o ne estimated when the process started, some US$ 14 million. However, the panorama is in line with the Latin American setting noticed after PCS tenders in Colombia and Ecuador: in both cases, licenses went to fixed telephony operators controlled by the State, thus showing few foreign capitals are interested in the region.

With a lower entrance barrier, entrants will find a low cell density market (4.8%), though users two folded between 2000 and 2002, when totaling 325,000. The figure is similar to that for fixed lines, market with an unmet demand of 400,000 lines.

The lack of sector maturity may be explained not o nly for the lack of competition, but also for the low GDP per capita that, according to the World Bank, was US$ 908 million during 2001, for a population that reaches 7 million inhabitants.

Both mobiles and fixed count o n o nly o ne operator, situation that will change in the short term. The first to lose exclusivity will be Celtel, while the incumbent in fixed telephony, the State-run Empresa Hondureña de Telecomunicaciones (Hondutel), will continue being the sole operator until the end of 2005. Market deregulation is planned for that date. Besides, the regulatory body plans a new tender for mobiles to be held next year, for a third operator to enter the market in 2005.

However, other alternatives may come out before. o ne of them will be the privatization of the State-run operator, that counts o n a failed attempt. Another will be to expand services toward mobile telephony. This initiative is part of the Conatel¿s project to deliver two new licenses o nce the auction is finished. The way in which Hondutel will get a license is not settled, but may get the band through Congress or through a future auction.