5G auction will only guarantee R$ 3 billion for schools

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Public schools will only have BRL 3.1 billion for the 5G connection program, half of the BRL 6.6 billion provided by technicians from Anatel (National Telecommunications Agency) at the time they placed the 26 GHz (gigahertz) frequencies ) for sale.

Frequencies are avenues in the air through which telecoms make their data travel. According to the notice, the winners of this range will have to take the fifth generation internet to all schools in the country.

The result marked the closing of the 5G auction, which began on Thursday (4) with the sale of 700 MHz (megahertz) frequency lots; 2.3 and 3.5 GHz, moving, in the first round, R$ 7.1 billion in grants (bids).

This Friday, 103 lots of 26 GHz were offered for sale, but there were few interested. Winners will pay R$352 million in awards.

In the final stage of the 5G auction, operators Claro, Vivo and Tim bought national lots that are committed to implementing connectivity projects in public schools.

Claro won the first two nationals, with payment of R$ 52.8 million each. Vivo won three other lots, also worth R$ 52.8 million each. Tim got a lot for R$27 million.

For R$ 8 million, Tim took a strip to cover the South region. The operator also got a lot for the states of Minas Gerais, Rio de Janeiro and Espírito Santo, for R$ 11 million, in addition to another in São Paulo , for R$12 million.

Algar Telecom, in turn, won five lots with values ​​close to R$ 1 million. The services will be in regions of São Paulo, Mato Grosso do Sul and Goiás. For the same regions, Fly Link got a lot for R$ 900 thousand.

Tim, Algar Telecom and Fly Link and Neko took regional lots with the same obligation to connect public schools.

The first stage, won primarily by the three largest (Claro, Vivo and Tim), also included the entry of new 5G regional operators, such as Cloud2U and the 5G South Consortium. Brisanet, which already operates in the Northeast, surprised by giving a bid of R$ 1.2 billion for frequencies of 3.5 GHz, the fillet of 5G.

The 26 GHz band, known as “millimeter”, does not yet have a commercially viable business model that has been massively tested by an operator. Gradually, this frequency has been used in other countries because its operating cost is high due to the investment required.

For this reason, Anatel, initially, did not tie this frequency to mandatory commitments, as occurred in the other bands —700 MHz (megahertz); 2.3 and 3.5 GHz (gigahertz).

The notice was thus sent to the TCU (Court of Accounts of the Union) where, under pressure from the Parliamentary Education Front, the inclusion of coverage of schools with 5G was recommended.

The Minister of Communications, Fábio Faria (PSD-RN), resisted, worried that, with this change, there would be further delay in the auction schedule.

Anatel accepted TCU’s recommendation to take 5G to schools and tied this commitment to the 26 GHz band. At that time, the agency estimated the value of frequencies at up to R$ 6.6 billion. But it was already known that these lots would have few interested parties due to the commercial uncertainties associated with the strips.

At the end of the auction, this Friday (5), minister Fábio Faria celebrated the result.

“It surpassed all our expectations. We reached the final value of R$ 46.79 billion that has already been auctioned and a large part of this value will be for investments”, said Faria.

“We reached the end of this auction and, putting together all the privatizations in the sector, it did not give the value of 5G. 3G was BRL 7 billion; 4G, BRL 12 billion; Telebras were BRL 22 billion. It is the largest auction in history in the history of Brazil. Latin America and the second largest in the history of Brazil. We are behind the pre-salt.”

The values ​​mentioned by the minister, however, are nominal. If we only update the value of the Telebras auction, which took place in 1998, for inflation, this value would be R$163 billion.

At the end of this Friday, Anatel revised the winning bids (BRL 7.4 billion), with a premium of 212%, which means that, in practice, the auction moved BRL 47.2 billion. This amount, however, was discounted due to mandatory investments linked to these frequencies.

Anatel estimates that, in the end, approximately R$ 5 billion will be left over for the Treasury.

Anatel’s competition superintendent, Abraão Balbino, minimized the result of the lots linked to investments for connecting schools. According to him, the final value obtained at the auction is significant.

“The notice is already guaranteeing BRL 3.1 billion for connecting schools. An entire coverage location has an estimated cost of BRL 1 million. So, [a instalação em] thousand locations would cost R$1 billion. It is a very, very significant value for the coverage of schools,” he said.

The superintendent also made a comparison with demands made in the sale of other lots to argue that the value for schools is high.

According to Balbino, in the case of frequencies that were sold with the counterpart of investments for mobile connection in 31,000 kilometers of highways, the investment obligation was R$ 2.8 billion.

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