On this Thursday the 4th of November, several units of America Movil, Telefonica, Telecom Italia and several local firms participated in the first day of the Brazilian 5G auction, spending over a billion dollars to scoop up valuable spectrum dedicated 5G wireless technology. This action is the largest ever in Latin America’s top economy and is predicted by the government to require around 40 billion reais ($7 bln) of investments by the winners.
In fact, on this first day of the auction, seven companies spent a total of 1.3 billion dollars, one of which was Claro, owned by Mexican billionaire Carlos Slim. The company was the biggest spender, paying 1.63 billion reais ($300M) for several batches such as the B1 batch of the 3.5 GHz spectrum1. Spain Telefonica SA, which owns Vivo (Brazil’s most influent wireless carrier), spent roughly 967 million reais ($170M), winning the B2 batch of the 3.5 GHz spectrum. Telecom Italia, which runs TIM SA, took the B3 batch of 3.5Ghz for 351 million reais ($63.6M), along with a few other batches, spending a total of 976 million reais ($177M).
The auction was delayed by disagreements over the involvement of China’s Huawei Technologies Co Ltd as a supplier of 5G equipment, which the United States has asked for Brazil’s government to ban on security grounds. However, the country’s main wireless firms already use Huawei, and thus if a permanent ban was issued, billions of dollars and additional costs would be passed on to the customers. Consequently, the Brazilian president Jair Bolsonaro decided to create a separate private network which would exclude Huawei from government and federal agency networks.
There is no doubt that industry groups are apprehensive for Brazil to catch up on the long awaited fifth generation technology, as it would optimize effectiveness in fields such as medicine and agribusinesses. According to Viven Suruagy (head of federation of 137 thousand companies), the telecom infrastructure sector is bound to receive tremendous amounts of improvements, as Brazil’s 5G network has the capability of generating new business opportunities worth $1 trillion in 15 years and generate 1.5 million job opportunities by 2025.
1. Frequencies of range 3.5 GHz are the basis for the first implementations of 5G globally. The spectrum is at a balancing point between coverage and capacity that provides the perfect environment for the earliest 5G connectivity.
Written by: Henrique Sampaio
Edited by: Anna Kissajikian