Spectrum holdings in Mexico
In the preceding part of this series, we talked about AT&T’s (T) two recent acquisitions in Mexican wireless space, Iusacell and Nextel Mexico, in 1H15. These acquisitions have helped AT&T gain a sizable wireless spectrum portfolio in Mexico. According to AT&T, Iusacell and Nextel Mexico have an average of 85 MHz (megahertz) spectrum holdings per market. These holdings include both capacity and coverage spectrums.
As we can see in the chart above, Iusacell has ~54 MHz of average spectrum per market. These holdings include the low-band 800 MHz spectrum as well as the mid-band PCS (Personal Communications Service) spectrum. According to the company, Iusacell’s network has ~3,700 cell sites.
In terms of holdings, Nextel Mexico has ~31 MHz of average spectrum per market. According to the company, these mid-band holdings include both AWS (Advanced Wireless Services) and PCS spectrums. Nextel Mexico reportedly has ~4,900 cell sites.
Capacity and coverage spectrums
The low-band spectrum is particularly useful in providing coverage in the rural areas and in-building penetration in urban areas. Both mid-band and high-band spectrums are capacity spectrums. The high-band spectrums are capable of managing high data traffic. The mid-band spectrums help provide both coverage and capacity to wireless networks, which cater to the relatively high data usage of smartphones like Apple’s (AAPL) iPhone and Google’s (GOOG) (GOOGL) Android.
You may take a diversified exposure to AT&T by investing in the SPDR S&P 500 ETF (SPY) or in the Technology Select Sector SPDR Fund (XLK). AT&T represented ~1.1% of SPY as of July 31, 2015, and it made up ~5.2% of XLK’s holdings on the same date.