November 4, 2016 / 5:46 PM / 2 years ago

UPDATE 3-Mexico rejects one of two bids for telco network, group cries foul

(Adds Rivada board, Deputy Telecommunications Minister defends bidding process, paragraphs 7-9, background)

By Christine Murray

MEXICO CITY, Nov 4 (Reuters) - The Mexican government on Friday disqualified one of the two consortia competing to build and run a long-delayed national wholesale mobile network, leaving one group as the sole bidder on the ambitious project.

The government disqualified the Rivada consortium from the tender for the network that will use spectrum in the 700 MHz band, leaving only rival group Altan, led by Morgan Stanley Infrastructure and the World Bank’s International Finance Corporation.

The Altan consortium also includes Mexico’s Megacable and conglomerate Alfa’s unit Axtel .

Ezequiel Gil, an official at the Communications and Transport Ministry (SCT) told a news conference the group made up of Rivada Networks and Spectrum Frontier, did not present the required 1 billion peso ($52 million) bid bond on time.

Rivada was quick to complain, however, that its disqualification and the bid process may have been unfair, heaping fresh controversy on a slow-moving project that has faced doubts from many in the telecommunications sector.

Rivada Networks Chief Executive Declan Ganley said in an interview that he believed his group’s bid was fully compliant with the SCT’s rules. He said on Twitter he was concerned the tender had favored a “pre-picked winner.”

“Frankly, process in Mexico stinks,” Ganley wrote in a separate Twitter post.

Rivada is wireless network management company, which counts former Florida Governor Jeb Bush and several former U.S. Homeland Security officials as board members.

Deputy Telecommunications Minister Monica Aspe said in an interview that the process had been totally transparent and that the rules were clear that any group that did not present a bid bond on time would be disqualified.

“Unfortunately sometimes when things don’t go well, participants in a competition can try to make noise about an issue that they themselves had praised as transparent and ordered,” she said.

Altan declined to comment on Rivada’s accusations.

In an unusual twist, Ganley said his company had been targeted by unknown assailants last month when a vehicle with the company’s bid boxes in Mexico City was stopped by a motorcyclist who made off with the containers.

Luckily, he said, for security reasons the company’s bid paperwork was not in the boxes at the time.

Reuters could not independently verify Ganley’s account and he said he did not know if it had been reported to authorities.

The network, which must cover at least 85 percent of the population, was part of a sweeping telecoms reform aimed at curbing the dominance of Carlos Slim’s America Movil.

The network could be one of the largest infrastructure projects carried out under President Enrique Pena Nieto.

Another of Pena Nieto’s major projects, a high-speed train, was shelved last year in the wake of a presidential conflict-of-interest scandal. It, too, was left with one sole bidder.

The mobile network winner is set to be announced on Nov. 17.

$1 = 19.0705 Mexican pesos Reporting by Christine Murray; Editing by Dave Graham and Grant McCool

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