Anatel approves plan to sell 3.5GHz WiMAX licences

9 May 2011

Brazil’s telecoms regulator Anatel last Thursday approved plans to sell licences for wireless broadband services in the 3.5GHz band using WiMAX technology. The watchdog has revealed details of a public consultation which will run from 12 May until 27 June, and will establish the new rules for the operation of such services. Under the plan, companies that already hold frequency permits to operate in the 3.5GHz and 10.5GHz bands will be allowed to compete in the new auction process even within their current areas of operation, up to the maximum limit allowed for spectrum under the scheme. However, if they do participate and are successful in securing additional frequencies, the watchdog reserves the right to recalculate the value of existing frequencies they hold and make them pay for the difference based on the amounts achieved in the forthcoming auction. In other words, what was paid in the original 2002 auction will be corrected by the Selic rate and deducted from the final auction price.

Anatel’s auction proposes the sale of 545 lots of spectrum for wireless broadband services in nine blocks of 35MHz each and with coverage of regions 1, 2 and 3, creating three competitors per region. Other lots on offer in the auction include the sale of a maximum 10MHz of spectrum – in lots 10 to 545 – in 70 areas of service. Although there are no specific coverage targets in this class of licence, for the nine blocks of 35MHz spectrum, Anatel will require licence winners to cover cities of more than 100,000 people within 24 months, cities of 30,000-100,000 within 60 months (20% of them in the first 36 months and 50% of them within 48). Anatel has also established limits on the amount of spectrum that can be purchased by each bidder in each area of service. However, it appears this limit can be increased in the event that there is no interest in the specific lot in question. In round one of the auction, the cap is set at 35MHz for lots 1 to 9, and 10MHz for lots 10 to 545. In the second round of the auction, the limit for lots 1 to 9 remains in place, but climbs to 20MHz in the other lots. And in the third round of bidding the regulator may increase the cap for the nine 35MHz blocks to 45MHz, although there would be no further expansion on the remaining lots (i.e. which will stay at 20MHz). Finally, it is understood Anatel is restricting the technologies that can be employed in the TDD bands to either WiMAX or TD-LTE.