Federal court halts WiMAX auction

5 Sep 2006

The ongoing saga of Brazil’s auction of 3.5GHz and 10GHz spectrum licences for WiMAX services took a fresh twist yesterday when the federal accounts court (TCU) ordered a halt to the process citing ‘inconsistencies’ in the tender. Although the regulator Anatel had received 100 preliminary bids from interested parties, the TCU ruled that an economic feasibility study carried out before the auction contained several flaws, not least in using an out of date exchange rate to set the minimum price for spectrum blocks in some regions. According to the TCU’s statement, Anatel set a minimum price of BRL655.71 (USD308.80) for 7MHz blocks in the 3.5GHz band for the cities of Santos and Ribeirão Preto. However, the price is well below the average price of BRL200,000 used for other cities of a similar size. The watchdog has now been given 15 days to amend the minimum price in its licence rules. The courts have also highlighted errors dating back to November 2004 in the exchange rate used for the real and euro currencies. Based on the figures used as against the current exchange rate, the TCU said that there would be a premium of 76% on the price forecast in the auction ruling.

According to BNamericas, around 100 companies, including fixed line operators Brasil Telecom, CTBC Telecom, Telemar, long-distance operator Embratel and Sercomtel, presented preliminary bids on Monday. Other bidders include TIM, Oi, Telemig Celular, Amazônia Celular, GVT and Nextel.