First it was TIM, now Telefonica (Vivo) criticises Anatel over 4G plans

12 Apr 2012

BNamericas reports that Brazil’s largest mobile operator by subscribers Vivo Participacoes, owned by Telefonica of Spain, has joined with fellow carrier TIM Brasil to criticise Anatel’s forthcoming 4G mobile licence tender, scheduled for June. Vivo network planning director Leonardo Capdeville is quoted as saying that whilst the cellco is not against the auction of Long Term Evolution (LTE) 4G licences per se, it questions the timing of the tender process for the Brazilian market. Echoing TIM Brasil’s concerns over what it sees as ‘a premature initiative’, Capdeville expressed concern over the low level of availability of 4G devices in the country to drive uptake. ‘Unfortunately, what drives the technology is the terminal, not the operators. If we don’t have devices for this particular technology, then we don’t have scalability and flow,’ he said. The Vivo executive pointed out that while there are in excess of 2,800 3G-ready devices worldwide, the equivalent figure for 4G phones, tablets and dongles is just 257 – making them expensive, particularly in markets where incomes are low. Furthermore, Capdeville says the decision to forge ahead with LTE now is premature given that the 3G market is still relatively underdeveloped. Vivo is forecasting that it will be 2015 before 3G accounts for the majority of users (it predicts the technology will account for 54% of users at that date), adding that at the end of last year only 14% of the total market was 3G. Capdeville notes that it predicts the total will hit between 17%-18% of all mobile users this year, leaving more than 80% still on a 2G connection.

Vivo also questions the need to hold a tender for 4G frequencies so soon after it concluded the 3G tender process, saying that a time gap of a little over four years is smaller compared to many other markets and that as such, it will present carriers with a massive headache in terms of their return on investment plans. Capdeville also pointed to a legislative minefield which needs to be addressed and whilst acknowledging that the government is working on this matter, said the issues must be resolved before the 4G auction goes ahead. For example, he points to the fact that currently, Brazil has 200 different municipal laws covering the deployment of antennas, including the distance between them and the areas where they can be installed.

Brazil, TIM Participacoes (TIM Brasil)