700MHz spectrum holders pay into EAD fund for spectrum transition

13 Apr 2015

A group of Brazilian mobile operators which secured frequencies in last year’s 700MHz band spectrum auction have paid the EAD – an entity created by the companies to support the transition of analogue channels to digital – BRL1.44 billion (USD46.94 million), or 40% of the money needed to support the switchover. The remaining funding is expected to be deposited in two instalments over the next two years. National licence winners Claro, Vivo and TIM Brasil will each contribute BRL1.19 billion to the fund, with a minor contribution (BRL18 million) from regional player Algar Telecom, which won 700MHz frequencies in the states of Goias, Minas Gerais, Mato Grosso do Sul and Sao Paulo. Oi, Brazil’s fourth largest mobile operator, did not participate in the auction.

According to TeleGeography’s GlobalComms Database, the auction of 700MHz Long Term Evolution (LTE)-suitable spectrum in Brazil concluded in September 2014, generating a total of BRL5.85 billion – well below regulator Anatel’s BRL7.71 billion target. The use of the 700MHz spectrum band, currently in use by TV broadcasters, is expected to allow the operators to extend their LTE networks into rural areas; currently 4G in Brazil is provided using the 2500MHz band, which was auctioned in June 2012. Although the government originally hoped that the analogue switch-off would take place in 2016, there will now be a staggered transition between 2015 and 2018.