Expected to last until Friday (5) due to the high number of proposals – 15 companies have signed up to bid for the 700MHz, 2.3GHz, 3.5GHz and 26GHz frequency bands in national and regional blocks – the auction is being held at the main auditorium of the National Telecommunications Agency (Anatel), in Brasília. The ceremony preceding the auction was attended by president Jair Bolsonaro, Communications minister Fábio Faria and several other central government ministers. The expectation is that 5G will bring 169 billion reais ($30 billion) to the Brazilian economy over the next 20 years, according to Anatel estimates. “We are going to show the world that Brazil is within the digital economy and is pursuing digital transformation. Brazil will become an innovation hub,” said Faria, adding that Brazil hopes to attract innovative companies from sectors such as technology with the introduction of 5G. The proposals received from companies and consortia interested in the fifth-generation spectrum bands came from large service providers, who aimed for the higher frequencies, as well as companies and regional internet providers competing for the lower frequencies aimed at covering large areas. Of the 15 organizations and consortia registered to compete in the 5G auction, only five already operate in the sector in Brazil: Vivo, Claro, TIM, Algar Telecom and Sercomtel. At the time of writing, operators Claro, Vivo and TIM, the three national mobile operators, had secured the three lots available for the 3.5GHz band, considered the main slice of the spectrum. Together, the three companies will spend 1.1 billion reais ($195 million). The auction notice also included the offer of a fourth batch of the 3.5GHz band, with national coverage, for which there were no bids. Backed by the Pátria/Blackstone fund, telecoms firm Winity secured the 700MHz band for 1.4 billion reais ($249 million). It will become the fourth company with authorization to provide mobile services nationwide in Brazil. If all the frequency bands available are sold, the expectation is that Brazil’s 5G auction will raise 49.7 billion reais ($8.84 billion), of which the government will retain 3 billion reais ($533 million). The remainder will be allocated to investment obligations provided for in the auction notice, such as the 7.5 billion reais ($1.3 billion) that will go towards the provision of connectivity in public schools. In return for the right to use the fifth-generation spectrum bands, auction winners will also be required to invest in the roll-out of 4G networks in all municipalities with more than 600 inhabitants and in the coverage of 48,000km of roads with high-speed Internet access. Another obligation of the auction winners is structuring the private 5G communication network for the federal public administration, with more robust security protocols and encryption. Earlier this year, minister Faria said equipment supplied by Chinese firm Huawei will not be used in the government’s private network. Huawei was among the companies visited by Faria in one of the global tours the minister organized to speed up the process around the auction. As well as China, Brazilian government officials visited other global 5G hubs, such as Sweden, Finland and Japan, in February. In a subsequent visit in June, Faria organized a visit to the United States. The government entourage included ministers and technical staff from the Federal Court of Auditors (TCU), which analyzed the notice for the auction for the 5G spectrum. Prior to giving its final seal of approval to the notice, TCU had some internal pushback from minister Aroldo Cedraz, who had been following the work carried out by the Court’s technical team. Justifying his decision, Cedraz pointed out that allowing the auction to go ahead under the proposed terms would be a backwards step. “In this case, we would be condemning Brazil and its citizens to live for another 20 years with expensive and low-quality telecommunications services,” the minister said at the time. However, Faria turned up the pressure for the auction to go ahead, arguing the Brazilian economy would suffer daily multimillion-dollar losses by delaying the event. According to the Ministry of Communications, the arrival of 5G is hoped to address issues relating to infrastructure, which is one of the major barriers to the universalization of digital access in Brazil. Some 45,9 million citizens are digitally excluded in Brazil, and factors include lack of interest, cited by 34,7% of those who remain unconnected. Not having the technical knowledge required to go online was cited by 24.3%. According to a report published by the Brazilian Institute of Geography and Statistics, the high price of Internet services was another reason given by 25.4% of Brazilians who don’t use it. The 5G auction notice established the timescales for when 5G should be available: all Brazilian capitals by July 31, 2022. The roll-out will continue with cities with more than 500,000 inhabitants, which should get 5G coverage by July 2025; cities with more than 200,000 inhabitants, which should have 5G coverage by July 2026; followed by those more than 100,000 inhabitants by July 2027, and lastly, cities with more than 30,000 inhabitants, which should only have 5G by July 2028.
