Anatel predicts greater dispute for 4G licenses in the 5G auction

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Anatel (National Telecommunications Agency) holds, this Thursday (4), the auction of 5G. It will be the biggest event ever held in the world in terms of frequency (3.7 gigahertz).

Despite marking the arrival of fifth-generation technology, the biggest dispute should occur in 4G frequencies, a service that did not reach all locations in the country. Fifteen groups were enabled by the agency.

Frequencies are avenues in the air through which operators make signals travel. Outside these ranges interference occurs.

In all, 3.71 GHz (gigahertz) will be auctioned in four frequency bands —700 MHz (megahertz), 2.3 GHz (gigahertz), 3.5 GHz and 26 GHz.

All blocks are valued at R$49 billion, but the winners, instead of disbursing this amount, will be forced to make investments to, for example, take 4G to the entire country.

These investments together reach R$ 40 billion. In other words, in practice, the Union should receive around R$ 9 billion in the auction, which, for this reason, has been called non-collection.

All 15 interested parties submitted proposals last week and delivered the necessary guarantees for them to be able to bid during the event.

The envelopes will be opened this Thursday by the agency’s bidding committee.

The expectation is that the large operators (with national coverage) will stay with the 3.5 GHz frequencies, the so-called “filet mignon” of 5G, a range that will allow speeds up to a hundred times faster than those of 4G.

The 12 regional groups intend to compete for the frequencies that allow greater coverage, especially the 700 MHz.

This group includes investment funds such as Pátria (Winity II Telecom), companies and regional internet providers such as Highline (NK108 Empreendimentos e Participações) and Brisanet in smaller cities, mainly in the Northeast.

Highline’s participation was only possible thanks to a change in the rules of the notice, allowing the company to start operating 5G in smaller cities.

The agency made an exception for regional coverage blocks. In blocks with national coverage, the rule of installing 5G networks from more populous cities continues to apply.

The consortium of small providers associated with the 5G Initiative (Mega Net Internet and Computer Commerce Provider) said it intends to acquire 3.5 GHz frequencies.

The partners claim to have investors capable of investing more than R$19 billion in fifth-generation networks. It is not yet known who these investors are.

Datora Telecomunicações, specialized in internet of things and communication between machines (M2M), qualified for the auction through the company VDF Tecnologia da Informação.

The other participants are Sercomtel, Algar Telecom, 5G Brasil Consortium, Brasil Digital Telecomunicações, Cloud2U, On Telecom (Neko Serviços) and Fly Link.

5G should pave the way for sophisticated applications such as telemedicine and long-distance guided cars, among other features.

It is estimated that this new front will bring new forms of work and wealth generation, also increasing the productivity of companies and workers.

Consulting firm Omdia, which specializes in telecommunications, calculated that Brazil’s GDP should grow by R$6.5 trillion with the implementation of 5G, as long as all the features are offered to consumers.

The volume of data that will travel through the new networks will be very large and sensitive. For this reason, the Brazilian government, allied with the then US president Donald Trump, considered imposing restrictions on the Chinese company Huawei’s participation in the supply of equipment for 5G networks in Brazil.

This threat caused a strong reaction from operators that, in Brazil, have networks mostly equipped by Huawei.

If the Chinese were banned, as happened in other countries, it would be necessary to change the 4G and 3G equipment already installed because they wouldn’t talk to the 5G devices from other manufacturers.

Huawei’s possible banishment led Congress to create a special commission. There was concern about damage to the population with a delay in the implementation of 5G of up to three years and the increase in the cost of telephony generated by the exchange of the entire equipment park.

To prevent this from happening, the Minister of Communications, Fábio Faria, proposed the construction of a private network for the federal administration.

To please the ideological military wing, the auction’s winners considered it a mandatory investment to connect the entire Amazon.

There was a strong reaction to these two mandatory investment commitments by operators and TCU technicians (Tribunal de Contas da União). They judged that both projects hurt the public interest, but they were voted out.

The plenary of ministers of the court of accounts approved the edict in August — and not in July, as they had promised Minister Faria — with several relevant amendments.

The process was then returned to Anatel. Two changes led Anatel’s counselor Moisés Moreira to request a view for a week.

For him, it was necessary for the government to deliver the complete project for the private network to the federal administration and the connection program for the Amazon (Pais). Both were maintained as mandatory investment commitments in the notice approved by the agency’s board.

All this delay led Faria to announce the postponement of the auction date twice, suffering political attrition in Congress.

The Parliamentary Education Front put pressure on the TCU and managed to impose that in the 26 GHz band, before without any investment commitment, the winners would pay for the connection of all public schools in the country, something that should cost up to R$ 6 billion.

The change was added by Anatel later.

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