Latin America Advisor

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What Will Rollout of 5G Networks Mean for Brazil?

A cable post in Brazil is pictured. Brazil is scheduled to hold its auction for 5G spectrum in July, the government recently announced. // File Photo: Pixabay.

Brazil will hold its spectrum auction for 5G networks next month, Communications Minister Fábio Faria recently announced, adding that he expects all state capitals in the South American nation to have standalone 5G working by July 2022. Is Brazil expected to attract a significant number of bidders in its 5G spectrum auction next month? What challenges must still be overcome to make 5G a reality in Brazil? To what extent, and in what ways, will the rollout of 5G technology be transformative for Brazil’s economy?

Artur Coimbra de Oliveira, secretary of telecommunications in Brazil’s Ministry of Communications: “The implementation of 5G in Brazil depends on the bidding of radio frequency use authorizations in the 700 MHz, 2.3 GHz, 3.5 GHz and 26 GHz bands, popularly known as the 5G auction. In Brazil, at first, 5G technology will be explored mainly through the 3.5 GHz band and also through the 26 GHz band. Anatel’s board of directors has already approved the draft tender notice, which is under review by the Federal Court of Auditors. The auction could be held within six weeks of the court’s approval. Regardless of the date of the auction, however, the draft notice establishes that the companies that win bids for the 3.5 GHz band will have to start 5G mobile service in the state capitals and Brasília by July 31, 2022. The draft notice also says 5G coverage will be expanded gradually, reaching all Brazilian municipalities by Dec. 31, 2029. Apart from the auction, the implementation of 5G in Brazil depends on municipal governments’ observance of rules established in federal standards that deal with the implementation and sharing of telecommunications infrastructure, which aim to stimulate the expansion of networks. The rules issued by the federal government seek to harmonize and simplify the rules and procedures for the implementation of telecommunications network infrastructure throughout the country, in order to promote the expansion of network coverage and improving the quality of services provided to the population. Due to features including high data transmission rates and low response time, 5G technology offers a wide range of possibilities for use by people and also by machines. The innovative services provided through the 5G networks will contribute to increasing the efficiency of various activities, enabling the digital transformation of the Brazilian economy and benefiting the entire society.”

Oliver Della Costa Stuenkel, associate professor at the School of International Relations at the Getúlio Vargas Foundation: “The announcement that Brazil’s spectrum auction for 5G networks will take place in July is good news after delays had threatened to turn the country into a laggard. The regulator’s decision that operators will have to deploy standalone 5G networks—rather than use dynamic spectrum sharing (DSS) technology, which permits that 4G and 5G utilize the same spectrum band—is ambitious but also makes deployment more costly. Once successfully implemented, however, 5G technology is likely to have a significant impact on many areas of Brazil’s economy, including agriculture, and large farms are eager to utilize the new technology to enhance productivity, for example by using drones to monitor crops. The logistical challenge is enormous and involves, for example, providing broadband connectivity along all federal highways and the installation of thousands of kilometers of optical fiber cabling in river beds in the Amazon. Yet despite these efforts of digital inclusion, there is a risk that the arrival of 5G will deepen the digital divide in the country, boosting innovation in rich urban areas while leaving less affluent rural regions behind. About 40 million Brazilians—about 20 percent of the population—still lack Internet access. Particularly in remote areas, however, 5G also represents an opportunity for the government to provide better public services, ranging from public health to education, two areas severely affected by the pandemic.”

Lourdes S. Casanova, senior lecturer at the S.C. Johnson College of Business and Gail and Roberto Cañizares Director of the Emerging Markets Institute at Cornell University: “In spite of all the rumors saying that the auction may be rescheduled, the Brazilian government is pushing ahead with the spectrum auction for the award of 5G frequencies. As part of the agreement, Brazil’s communications minister, Fábio Faria, wants all state capitals to have 5G standalone working in a year, and operators will also be obliged to cover the Amazon region with broadband and deploy a network for the federal government as well. Brazil’s bet on 5G will have a great influence in improving Internet access and speed. In a moment of electrical vehicles and the Internet of Things, having 5G is essential for the digitalization of the Brazilian economy. Last year, and in line with President Trump’s views, Brazilian President Jair Bolsonaro criticized Chinese company Huawei. It seems that he wanted to allow Huawei to participate only in local 5G auctions, not national ones. Huawei arrived in Brazil more than 20 years ago and provides about 50 percent of the telecom equipment to the main Brazilian telecom operators, Telefónica (Vivo), América Móvil (Claro), Oi and Telecom Italia. Also, China is Brazil’s main trade partner and, in the last year, exports from Brazil to China have increased. However, Anatel, the Brazilian telecom operator regulatory agency, has opened the 5G auction to all companies. Brazil is Latin America’s biggest economy, and this decision may influence the rest of the region, where Huawei is a major telecom equipment provider and, after this decision, will continue to be so.”

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