Lagging in current technologies, Brazil eyes a 5G spectrum auction

. Feb 28, 2019
5g brazil

Brazil plans to enter the 5G era next year, according to Anatel—the country’s telecommunications regulator. The government’s goal is to auction the 5G spectrum in March 2020, hoping to foster investments and make sure there will be enough coverage throughout the country, something that has been lacking only 20 years after the sector was opened for private actors.

“We are not going to donate the spectrum as China did, but to consolidate the 5G ecosystem in Brazil we need an invitation for bids that compels companies to make it, not to pay for it. It is not going to be an auction to raise money, because what we will get from revenues and taxes further down the line will be much bigger than the value of the auction,” said Leonardo Euler de Morais, to newspaper Valor.

</span></p> <p><span style="font-weight: 400;">Bidding proposals may start as soon as the second half of 2019, he said. Meanwhile, the government is working out how to split up the spectrum. Brazil currently uses a portion of 3.5 GHz frequencies—the most commonly used for 5G—for satellite television, so there is about half of the average space available for 5G. Anatel now will evaluate whether it will offer two larger packages, increasing competition in a highly concentrated sector, or if it will auction four smaller parts, diminishing its efficiency.</span></p> <p><span style="font-weight: 400;">Regardless, the move may put Brazil closer to countries such as </span><a href=""><span style="font-weight: 400;">China, the United States, South Korea, and Japan</span></a><span style="font-weight: 400;">, which are leading investments in this new upgraded mobile technology. Besides being faster than current technologies, 5G is considered crucial to support the so-called Internet of Things. In the future, when many devices—from fridges to cars—will be connected, this spectrum will be necessary to provide them fast and reliable connectivity. Having a structural advantage on this front may attract investments and have large implications on industry and the economy as a whole.</span></p> <h2>Roadblocks</h2> <p><span style="font-weight: 400;">While the country seeks new horizons, there are problems on the ground. According to broadband and internet analysis firm Ookla, </span><a href=""><span style="font-weight: 400;">Brazil is in 65th place on a global broadband download speeds ranking</span></a><span style="font-weight: 400;">, and falls to 71st when it comes to mobile internet.</span></p> <p><a href=""><span style="font-weight: 400;">Anatel data</span></a><span style="font-weight: 400;"> shows that 21 percent of Brazilian towns still do not have access to 4G services, although the coverage has been growing in the past few years. Companies have also increased investments: TIM Brasil, a Telecom Italia company, is currently the leader in 4G coverage in Brazil and projected </span><a href=""><span style="font-weight: 400;">BRL 12 billion in investments</span></a><span style="font-weight: 400;"> from 2017 to 2019. Even Oi, recovering after the </span><a href=""><span style="font-weight: 400;">biggest court-supervised reorganization request in Brazil</span></a><span style="font-weight: 400;">, is directing investments</span><a href=""><span style="font-weight: 400;"> to expand its mobile networks</span></a><span style="font-weight: 400;">.</span></p> <hr> <p><img loading="lazy" class="size-large wp-image-14416 aligncenter" src="" alt="5g brazil" width="1024" height="694" srcset=" 1024w, 300w, 768w, 610w, 1240w" sizes="(max-width: 1024px) 100vw, 1024px" /></p> <p><span style="font-weight: 400;">Quality issues remain, though. According to Fundação Procon, an entity that advocates for consumer rights, in 2018, the top three companies in </span><a href=""><span style="font-weight: 400;">number of complaints</span></a><span style="font-weight: 400;"> in São Paulo state are telecommunication services providers. Problems such as service interruptions and slow speeds are quite frequent.</span></p> <h2>A new legal framework</h2> <p><span style="font-weight: 400;">Although a 5G auction wouldn’t be connected to the bill that aims to upgrade Brazil’s telecom regulation, it is a pending demand from the sector. The project was approved in Congress in 2016, but due to a Supreme Court ruling it was sent back to the Senate and has been bouncing between committees ever since. </span><a href=",projeto-de-revisao-da-lei-geral-de-telecomunicacoes-segue-para-plenario-do-senado,70002594909"><span style="font-weight: 400;">The bill updates Brazilian regulation</span></a><span style="font-weight: 400;">, which dates back to the 1990s, transforming fixed telephony concessions into authorizations, in which fees are free. It also allows companies to keep assets obtained in concession, as long as they invest the same value in broadband connections, an amount estimated at BRL 20 billion.</span></p> <p><span style="font-weight: 400;">Brazil’s Science and Technology Minister, Marcos Pontes, </span><a href=""><span style="font-weight: 400;">has been negotiating with the president of the Senate</span></a><span style="font-weight: 400;">, Davi Alcolumbre, to take the bill to a vote—but no date has been scheduled yet.

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