By Ken Parks

BUENOS AIRES--Argentina's government plans to auction high-speed wireless licenses later this year to attract investment in 4G networks as the surging use of smartphones and tablets swamps the country's existing data networks.

"The auction is open to all," Economy Minister Axel Kicillof said at a news conference Tuesday. "We are going to do road shows with different companies, investors and countries."

Auction winners will be required to make significant investments to build 4G networks with nationwide coverage, said Mr. Kicillof, who declined to give an estimate of cost.

The network technology known as 4G is the fourth generation of mobile services that offers ultrahigh-speed broadband access for smartphones, tablets, laptops and other devices. Telecommunications companies have long voiced interest to bring 4G technology to Argentina, but say the government has been slow to make the necessary radio spectrum available to operators. Argentina's wireless networks currently use slower 3G and 2G technologies.

Argentina boasts one of the highest rates of mobile phone ownership in the world. In 2012, the South American country had about 151 mobile phones for every 100 residents, according to the International Telecommunications Union. Rising demand for such data-intensive services as streaming video have overwhelmed the limited amount of radio spectrum available to phone companies, which has led to poor quality.

Gaps in data service, dropped calls or the outright loss of wireless coverage are common in the capital city of Buenos Aires and the surrounding urban area.

In 2012, the government cancelled a 3G spectrum auction that received bids from the country's four mobile operators. Instead, the government said it would give some of the spectrum to state-run communications company Arsat so it could compete with private mobile operators.

The government will also auction its remaining blocks of 3G spectrum to address the service quality problems of the country's 3G networks, Mr. Kicillof said.

The 4G and 3G auctions will more than double the amount of wireless spectrum available to operators to 380 MHz from 170 MHz today, according to the government.

Argentina's wireless industry is currently divided between Telecom Argentina SA (TEO, TEO.BA) and subsidiaries of Mexico's America Movil SAB (AMX), Spain's Telefonica SA (TEF) and NII Holdings (NIHD).

 
 

--Taos Turner contributed to this story

-Write to Ken Parks at ken.parks@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires