Brazil's LTE auction to go ahead in June
Despite opposition from TIM and Telefonica, regulator Anatel will sell licences in 2.5GHz and 450MHz, targeting 4G for World Cup
Published: 16 April, 2012
Despite protests from the largest cellcos in the country, Brazilian regulator Anatel has given the green light for an auction of 4G spectrum, to start on June 10. Major players TIM Brasil and Telefonica's Vivo had called on Anatel to postpone the sale because the market is immature and it comes too quickly after 3G roll-outs.
Despite the opposition, the regulator is moving ahead to try to improve broadband coverage in the huge country and place it in the forefront of LTE build-out, as well as have services ready for the 2014 soccer World Cup. Licences in 2.5GHz and 450MHz will be offered.
As Beijing's Olympic Games kickstarted 3G and the Shanghai Expo provided a showcase for LTE, so Brazil's World Cup will be a catalyst for new mobile investment. Carriers winning spectrum will be required to launch services by April 2013 in the six cities hosting next year's Confederations Cup, and then in the 12 host cities for the World Cup by the end of 2013.
The country's five largest mobile providers - Telefonica/Vivo, TIM Brasil, America Movil/Claro, Telemar Norte Leste (Oi) and NII Holdings' Nextel Brasil - are all expected to participate in the auction, and satellite TV operator Sky Brasil may also bid. Anatel commissioner Marcelo Bechara said that he expects the spectrum on offer to be enough to support three or four operators offering national coverage.
The 450MHz band will be key to supporting rural broadband in the huge country, though it may have a limited device ecosystem. Mainly used in the past for analog mobile services, it has been deployed in some regions for CDMA, but the most commonly used bands for rural LTE will be the digital dividend frequencies in 700MHz and 800MHz, plus refarmed GSM900 spectrum.
Anatel will publish its reserve prices for the auction later this month after its plans are reviewed by the federal accountability office. It will offer a total of 140MHz in the 2.6GHz band - three 20MHz paired blocks, and one 2 x 10MHz licence. There will also be 450MHz allocations for rural coverage and 2.6GHz winners will be obligated also to invest in these low frequency rural services.
Winners will also be required to source a proportion of their hardware in Brazil, where available, an approach which mirrors the attempts of other BRIC economies, notably Russia and India, to be more self-sufficient in high growth technologies. While Brazil does not have a large number of homegrown wireless technology firms, it is an increasingly major manufacturing center for large suppliers such as ZTE.
The transaction has already been surrounded by controversy. Last week, Vivo's network planning director Leonardo Capdeville joined TIM in criticizing the timing of the process as "premature". He pointed to the low availability of affordable 4G devices, the limited time which cellcos have had to get a return on 3G investments, and legal issues which he believes need to be sorted out before the auction starts.
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