Anatel signs off on 4G auction terms with September date now likely

18 Jul 2014

Brazil’s telecommunications regulator Anatel yesterday approved the terms for the proposed auction of 700MHz spectrum for 4G mobile services, which will be published as soon as the country’s comptroller general, Tribunal de Contas da Uniao (TCU), finalises the reserve price for the licences. The auction is now expected to kick off in September. The news comes in the wake of a statement from the communications minister Paulo Bernardo last month saying that he expected the auction to go ahead by ‘the end of August or the first week of September’ – in line with the government’s previous rough schedule. At the time, the minister downplayed concerns about possible delays to the timetable, particularly the possibility of the auction being delayed until after Brazil’s elections (scheduled for this October), saying that ‘theoretically this can happen because we cannot set a deadline for TCU. But the trend is that the auction will happen before the election.’ Bernardo was speaking at an international investor presentation given by the ministry and Brazilian telecoms regulator Anatel at the Brazilian Embassy in London, following a similar presentation in New York, as Brazil aims to attract fresh foreign investment.

As reported by CommsUpdate, in June this year the ministry finalised the schedule for shutting down analogue TV signals and freeing up the 4G 700MHz band across Brazil, which, following a pilot phase, begins in major cities in April 2016 and will see the 4G frequencies available in areas representing around 60% of the population by the end of 2017, and the entire country by November 2018. Usage of the 700MHz range for LTE enables coverage of large areas using fewer antennas, enabling high speed mobile broadband services to rural areas at a lower cost. Bernardo notes that, unlike the high levels of competition in large cities, smaller towns in the Brazilian interior have low competition and therefore ‘there is a great market to be exploited.’ However, cellular operators in Brazil are struggling to sustain profitability in the face of weak demand and heavy investments to roll out 4G coverage. The big four – Telefonica Brasil (Vivo), TIM Participacoes (TIM Brasil), America Movil’s Claro Brasil and Oi SA – paid a combined BRL2.56 billion (USD1.2 billion) in 2012 for the first round of 4G licences.