Brazil’s expected 5G offering gives billions of investment

The technology promises faster speeds, less delay when connecting to the network and the ability to connect more devices to the internet. But the ambitious auction also aimed to address the country’s deep digital inequalities, forcing successful bidders to build or improve wireless infrastructure in underserved areas.

The auction has not yet been completed on Thursday, but has already given pledges for more than 30 billion reais (more than $ 5 billion) in an investment by mobile phone operators such as Claro, Tim and Telefônica, the owner of Vivo.

Overall, the government expects the auction, which could last until Friday, to bring in up to 50 billion reais.

Authorities, legislators and the National Telecommunications Agency have been planning the auction for years.

Much of the debate surrounding 5G has been whether wireless operators would be allowed to partner with Chinese telecommunications giant Huawei at a later stage, despite strong US opposition.

Huawei is at the center of a diplomatic battle between the U.S. and China, and U.S. officials suspect the Chinese government could use Huawei’s online equipment to help it spy. The U.S. government has pressured other countries, including Brazil, to ban Huawei from 5G networking, citing security concerns. Huawei has denied such allegations.

Huawei, which did not attend Thursday’s auction, may enter the game later, experts and lawmakers said. After operators have built the infrastructure, they will have to install hardware for the radio antennas to work with the new wireless network. Companies that can do it include Huawei and ZTE of China, Swedish Ericsson or Helsinki-based Nokia.

The auction – by far Brazil’s largest telecommunications offering ever – was also aimed at expanding digital inclusion, prioritizing investment over replenishing state coffers.

Of the nearly 50 billion reais the administration of President Jair Boslonaro expects, 20% will go to the federal treasury, and the rest to the construction of new infrastructure or improvement of existing networks.

In addition to 5G, winning bidders have to bring wireless internet with 4G or higher to nearly 10 million people in northern Brazil, including 500 villages in the vast Amazon region, where many still lack internet access.

“Brazil will be the first Latin American country to have 5G,” communications minister Fábio Faria said on Thursday, which apparently means a nationwide launch. Several other countries have already started installing some 5G networks.

The plan is to cover more than 31,000 kilometers (nearly 20,000 miles) of federal highways with 5G coverage and provide it to public schools. Faria said nearly 7,000 of the country’s 85,000 schools now have no internet.

“When we went to two indigenous communities, the Tucanos and Yanomamis, what did they ask of us? They asked for the internet!” Bolsonaro said at the opening ceremony of the offer.

Bolsonaro, an admirer of former U.S. President Donald Trump, said in September last year that he will be the one to decide who could participate in the 5G auction, although experts say the decision belongs to the regulatory agency.

In November 2020, Brazil backed Trump’s “Clean Network” initiative, which lists Chinese technology companies that his administration considered security risks, including Huawei.

It was difficult for the management of Bolsonaro to openly block Huawei, as China is the country’s main trading partner, Thiago de Aragão, director of strategy at Brazilian political consulting firm Arko Advice, told The Associated Press.

In addition, Brazil has relied on Chinese exports of active ingredients for local production of the only COVID-19 vaccine available in Brazil for months, Sinovac’s biopharmaceutical company Coronavac.

“At that time, it became clear that it would be very difficult to exclude Huawei,” de Aragão said.

Federal lawmaker Perpétua Almeida, who led the commission on the 5G offer in the lower house of Congress, said banning Huawei never makes sense, as the company is already a provider of the country’s top mobile operators.

Without Huawei, “You would take Life, Claro and TIM, the leading companies today, out of the bidding process,” Almeida told AP. “Brazil must choose its own path and stay away from this dispute between China and the United States. We must choose what is best for Brazil.”

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