Two and a half years later than planned, the Ministry of Communications and the National Telecommunications Agency (Anatel) start this Thursday the largest technology auction in Brazil, which will authorize the exploitation of the 5G internet frequency. The expectation is that at least 50 billion reais will be collected and invested by the telecommunications companies that win the bids. The auction covers 180 lots divided into four frequency bands that should reach the entire country by 2028. In all, 15 companies were registered for the event, five of which already operate in the areas of telephony and internet nationwide. They are: Vivo, Claro, Tim, Algar and Sercomtel.
More than a technological dispute, competition became a geopolitical fight encouraged by the United States. There was an initial attempt by the Jair Bolsonaro government to prevent the Chinese company Huawei from being one of the suppliers of equipment for telephone companies. After several negotiations, this veto ended up not being implemented in its entirety. In practice, the Chinese company will only be able to operate in the Government’s internal networks because it does not have publicly-held capital and shareholders in Brazil, according to the auction’s rules.
The 5G technology will be responsible for speeding up the connection speed and for encouraging the use of the Internet of Things (IOT). Through it, it will be possible to enable, for example, the use of autonomous cars, amplify remote surgeries, control traffic on highways or improve deliveries by means of drones.
The covid-19 pandemic, which postponed lawsuits, and the delay in defining the rules of the dispute and an obstacle with the frequency in which the satellite dishes operate were some of the reasons that resulted in the delay in the competition, according to specialists heard by EL PAÍS . “If the rules had been prepared for a longer time, we could already be reaping the fruits that other countries are. This directly affects our investments and the expansion of new businesses”, says engineer Fábio de Miranda, a professor at Insper. Attorney Cristiane Sanches, a specialist in Digital Law and a member of Anatel’s Advisory Board, says that the deadline is reasonable. “Brazilian timing is correct, only behind Chile. The maturity of other countries will be used in favor of Brazilian operators and the industry will be better prepared for the entry into operation in Brazil”, said she, who works at the Maneira Advogados office.
Initially, a collection was expected to be almost four times greater than the 50 billion forecast by Anatel, of around 180 billion reais. But, over time, the estimate was reduced. When the auction’s rules were analyzed by the Federal Court of Accounts (TCU), between September and October, minister Aroldo Cedraz raised the hypothesis that the ideal was that the minimum price was 101 billion reais, but he was voted out . The other eight court ministers agreed to Anatel’s rules.
“The way the Government has been conducted results in an impact on investments. There is a lack of legal certainty. Brazil has become a place of great risk, we are on the eve of an election year and, in order not to alienate investments or companies from abroad, the expectation of revenue has decreased”, said attorney Andrea Costa, a specialist in digital law who works at LCS Consulting and Advocacy.
Officially, Anatel claims that what is at stake is not money, but “to remedy the country’s telecommunications infrastructure deficiencies”. It goes along the same lines as the lawyer Cristiane Sanches. “Imagine a tower not foreseen in an investment commitment, but necessary for the entry into operation of 5G in the interior city. This tower will end up entering into this greater expectation of total investment, but it is not part of the predicted object being auctioned”, he pondered.
Of the entire value of the auction, around 10.6 billion will enter the Government’s coffers. The rest will be divided into the implementation of fast internet in public schools (7 billion reais), the construction of a private communication network for the Federal Administration and the expansion of the network to all Brazilian municipalities, including rural areas and federal highways.
Of the four auctioned tracks, there is one that is considered the filet mignon, the 3.5 GHz, which is where the profit should occur in the short term. Its function will be entirely aimed at the consumer, mainly mobile telephony, and its immediate effect will be to speed up the internet speed of those who are already a user and reduce the latency (response) time of some applications, such as streaming. The 26 GHz band is the second most coveted, it will be the 5G for fixed broadband. The 700 MHz and 2.3GHz bands aim to improve 4G coverage and, in the future, distribute 5G. Frequency bands are a kind of avenues through which data will travel.
According to Anatel and the Government’s schedule, the expectation is that the 27 Brazilian capitals will receive 5G by July 2022. The deadline is considered tight by those who follow the sector. Conexis Brasil Digital, the union that brings together the largest operators in Brazil, calculates that in the current scenario, only seven of these capitals are prepared to start installing the new technology. The reason is the laws that cities have to facilitate the installation of antennas. According to the entity, the capitals with greater accessibility in this regard are Boa Vista, Brasília, Curitiba, Fortaleza, Palmas, Porto Alegre and Porto Velho.
In other cities, the schedule is as follows: those with more than 500,000 residents must receive the service by July 31, 2025; those with more than 200,000 inhabitants, until July 31, 2026; those over 100,000 by July 31, 2027; and, where there are more than 30,000, by July 31, 2028.
The auction is scheduled to start at 10 am this Thursday and will be broadcast live on Anatel’s YouTube profile. President Bolsonaro confirmed his presence at the opening of the bids. The expectation is that the event will last up to two days, since all the envelopes with the bids made by the 15 companies will be opened. As in an auction, anyone who wants to increase the bid for a particular lot can do it throughout the day.
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