(Updates with more details on auctions; comments from communications and transport minister)

MEXICO CITY -(Dow Jones)- Mexico's Communications and Transport Ministry, or SCT, has authorized telecommunications regulator Cofetel to move ahead with plans to auction four spectrum bands aimed at boosting competition in mobile and fixed-line telephony, officials said Thursday.

"This will allow for the use of more advanced technology and (will) foment more competition in the sector to the benefit of consumers, so that they have services at more accessible prices," Communications and Transport Minister Luis Tellez said at a press conference.

Mexico's telecommunications industry is dominated by wireless carrier America Movil SAB (AMX) and fixed-line telephone company Telefonos de Mexico SAB (TMX), or Telmex, both of which are controlled by billionaire Carlos Slim.

America Movil's Telcel unit had about 74% of the country's 62.1 million mobile users at the end of June, with the rest of the market divided between a unit of Spain's Telefonica SA (TEF), Grupo Iusacell (CEL.MX) and Nextel Mexico.

Telmex, which had 18.2 million lines at the end of June, still controls more than 90% of the country's fixed lines even though that business has been open to competition for more than a decade.

Regulations banning foreign investors from owning a controlling stake in fixed-line companies have discouraged investment in the sector. Congress is reportedly working on a bill that would lift those investment caps.

"I think it would be a very good (measure) to increase investment in our country," Tellez said. "We at the SCT agree with the proposal to open fixed-line telephony."

The SCT has given Cofetel the go-ahead to sell three, 10MHz blocks in the 1900MHz band in eight of the country's nine mobile telephony regions for fixed wireless and mobile telecommunications services, according to the ministry's resolution published in the official gazette Thursday.

Cofetel will also offer spectrum in the 1.7GHz-2.1GHz band for third- generation mobile telephony services, which include high-speed Internet and streaming video.

The spectrum will be sold in three 10MHz blocks and one 20 MHz block in the nine mobile telephony regions, while two 10MHz blocks and one 20MHz block will be sold in 65 smaller geographic areas covering the entire country.

Tellez said enough spectrum in that band will be available to support at least one new mobile operator.

The remaining auctions are for spectrum in the 3.4GHz-3.6GHz and 3.6GHz-3.7GHz bands, which can be used for wireless broadband technologies like WiMax, and spectrum in the 70GHz-80GHz band for fixed-wireless broadband connections.

The WiMax spectrum will be sold in two 25MHz blocks in each of the nine mobile telephony regions, and two 50MHz blocks in each municipality with a view to boosting coverage in under-served areas. The 70GHz-80GHz spectrum will be sold in 10GHz blocks in 65 coverage areas nationwide, the SCT said.

The SCT recommended that Cofetel auction the 1900MHz spectrum in the next 90 days, the WiMax spectrum within 180 days, and the third-generation mobile telephony and 70GHz-80GHz spectrum within nine months.

Although short on details, Deputy Communications Minister Rafael Del Villar said Cofetel should sell the spectrum through a format designed to attract the greatest amount of investment possible, and not necessarily to the highest bidder.

Iusacell, Telefonica, cable TV operator Empresas Cablevision (CABLE.MX) and corporate communications and long-distance carrier Alestra all have expressed interest in obtaining more spectrum to offer mobile telephony and broadband services.

Cofetel's auction program, which it sent to the SCT for final approval in June, will be the agency's first spectrum sale since a bungled spectrum sale in the 1900MHz band in 2005.

In that auction, the Federal Competition Commission, or CFC, imposed a spectrum cap of 35 MHz per company in each of the nine wireless regions, and forced Telefonica and America Movil SAB (AMX) to return spectrum they had won.

Since then the SCT, Cofetel and the CFC have worked together to ensure a smoother auction process this time around.

Tellez said the CFC will have the final say as to who can bid for spectrum in the upcoming auctions.

"We will respect the opinion that the CFC issues on this subject," he said.

-By Ken Parks, Dow Jones Newswires; 52-55-5080-3453; ken.parks@dowjones.com

  (END) Dow Jones Newswires   10-18-07 1439ET   Copyright (c) 2007 Dow Jones & Company, Inc.