5G auction in Brazil: the saga so far, and what’s left to happen | Telecommunications

The auction that will allow the arrival of the 5G it became a soap opera: we have been discussing this tender since 2019, but we are almost in 2022 and nothing of the event happens. Amidst delays, regulatory discussions and the launch of the early 5G DSS, the official arrival of the fifth generation in Brazil is still uncertain and confusing. Understand this entire process and what still needs to be done for technology to become a reality in the country.

5G (Image: Apple)

Delayed? You’re welcome…

Back in 2019, when board member Leonardo Euler de Morais assumed the presidency of Anatel, there was an announcement that the 5G auction would take place in March 2020. It was late compared to the rest of the world, but the “delay” was okay seen by Claro, Vivo and Oi, who still couldn’t predict the financial return for the new standard.

Between requests for views by the advisor, impasses with suppliers and uncertainties about the continuity of open TV via satellite (which shares the same frequency), we have no date for the auction to date. The bid notice was approved by Anatel in February 2021, with a very different text from what was discussed years ago.

For now, the 5G auction runs the risk of further delay. The text sent for approval by the Federal Court of Accounts (TCU); a technical opinion from the agency pointed out illegalities in the text, and said that Anatel exaggerated the number of antennas, did not determine connectivity in schools and overpriced the cost for the migration of open TV via satellite to another frequency.

The Minister of Communications, Fábio Faria, publicly stated that the auction of 5G should take place by the first half of October. The politician expects the text to be approved by TCU, and, after publication by Anatel, the bidding should take place within 30 days.

But don’t we already have 5G working here?

Yes and no. With the delay in the bidding, the main operators went ahead and launched a version of 5G with the frequencies that were already used by 4G, 3G and 2G:

  • The clear was the first operator to bring 5G to Brazil, but with DSS technology – acronym for Dynamic Spectrum Sharing, or “dynamic spectrum sharing” in good Portuguese. The service serves neighborhoods in 14 Brazilian municipalities, and it is not necessary to have a specific plan to enjoy the technology – just use a compatible smartphone;
  • The TIM it also has a 5G DSS network, but always makes a point of stressing that it is a prior technology and that it does not deliver the same performance as the “pure” 5G. The service serves regions in 10 Brazilian cities;
  • The Alive it also has 5G DSS, just like major competitors. The coverage reaches neighborhoods in 8 Brazilian cities, and the operator claims that it is an experimental technology;
  • The Hi it also has a 5G network, despite having sold the mobile operation to Claro, TIM and Vivo. However, tele followed a different path from competitors and allocated a dedicated frequency to the fifth generation. Coverage covers 80% the extension of Brasília (DF).
Speed ​​test on 4G and 5G DSS on Claro's network. Photo: Paulo Higa/Technoblog
4G and 5G DSS speed test on Claro’s network (Image: Paulo Higa/Tecnoblog)

Therefore, Brazil has 5G yes, but with frequency sharing with old technologies or with reduced spectrum compared to what will be available after the auction.

Brazil’s early 5G is the target of criticism from Senacon and Fábio Faria. The minister defends that the 5G DSS is not 5G, and even sent a letter to Anatel and operators asking for the removal of the fifth generation smartphone icon.

On the other hand, it is a recognized standard defined by global bodies such as the GSMA and 3GPP, even if they deliver a usage experience inferior to the “pure” 5G.

Huawei and US influence on equipment choice

The 5G auction also brought to light a geopolitical imbroglio: there was an attempt by some members of the Brazilian and US government to ban Chinese Huawei equipment in the country.

The banning policy was followed by some countries (including European nations), which determined that operators did not use equipment from Chinese suppliers or reduce participation.

A large lobby was made by the United States with the project “Rede Limpa”. A document released by the US State Department claims that the Clean Network is “a program of the Trump administration to protect US assets (…) from invasion by evil actors such as the Chinese Communist Party”. The agency also claims that Huawei is a spy arm of the Chinese government alongside companies such as Alibaba, Baidu, China Mobile, China Telecom and Tencent.

Huawei at Mobile World Congress. (Image: Karlis Dambrans/Flickr)

In the end, neither Anatel nor the Ministry of Communications established rules that would prevent the use of Huawei equipment on commercial networks of 5G. For operators, this was a relief: banning the supplier would mean even greater investments, since it would be necessary to replace several current equipment.

Huawei is one of the main network providers for Brazilian operators. It is estimated that the company accounts for something between 40% and 50% of the equipment used by telecoms; recently, Vivo reported that 65% of its 4G network uses equipment from the Chinese company, while only 35% is from the Swedish Ericsson.

The 5G Auction Bonds

Companies that decide to buy frequencies in the 5G auction will need to follow some important obligations:

Use of 5G Standalone

Anatel’s notice defines that buyers of 5G licenses must use the technology in the format standalone, with network completely independent of the current 4G. For this, telecoms must comply with Release 16 or higher established by 3GPP.

The measure is defended by Minister Fábio Faria and also by the rapporteur of the notice, Carlos Baigorri, as it is the most advanced standard that will place Brazil at the forefront of 5G. On the other hand, some operators fear that the requirement will delay the development of technology in Brazil, as there will be higher costs for adapting the network.

Capital coverage and antenna density

  • in 2022, all Brazilian capitals plus the Federal District must have a 5G network with at least one antenna for every 100,000 inhabitants. Coverage and density increase over the years, until reaching one radio base station for every 15 thousand inhabitants and the signal reaches all Brazilian municipalities with a population of more than 30 thousand inhabitants;
  • cities, towns, isolated urban areas and rural agglomerations with a population greater than 600 inhabitants must be served with 4G technology or higher. In government accounts, the measure should benefit 18 thousand locations and 8.8 million Brazilians currently disconnected;
  • whoever buys the 700 MHz band must also build cellular coverage on stretches of federal highways; however, Claro, TIM and Vivo are prevented from buying this band because they already have authorization in 700 MHz.
Cell phone tower. Photo: Lucas Braga/Technoblog
Cell phone tower (Image: Lucas Braga/Tecnoblog)

The federal government’s secure network

One of the most controversial points of the 5G auction is the construction of a private network for the federal government. The Ministry of Communications ordinance determined the construction of two infrastructures:

  • a mobile network with 4G technology or higher to work in the Federal District region. In this infrastructure, the frequency of 700 MHz with 5 MHz + 5 MHz of spectrum should be adopted;
  • a fixed fiber optic network will connect the other Brazilian states, to complement the government’s existing infrastructure.

In this secure network, minimum requirements for high security and encryption are established, as well as devices that “will comply with specific regulations” and that “comply with corporate governance standards compatible with those required in the Brazilian stock market”. For Fábio Faria, Huawei does not fit these requirements.

According to Anatel’s edict, the federal government’s commitments to build the secure network will be allocated to operators that purchase the 3.5 GHz frequency – which is the main spectrum auctioned to be used with 5G.

The migration of open TV via satellite (TVRO)

Operators that purchase the 3.5 GHz frequency will have to bear the costs of migrating open satellite TV from the C-band to the Ku-band.

The measure will serve to mitigate interference, since the C-band shares the same spectrum as the 3.5 GHz 5G. With this, operators will have to pay for new antennas, receivers and the installation of this equipment for low-income families enrolled in the CadÚnico.

Who should participate in the 5G auction?

There is still no date or notice 100% defined, there is no way to guarantee which companies will participate in the 5G auction.

It is highly likely that operators Claro, TIM and Vivo will acquire licenses to build their 5G networks in Brazil. The telcos must buy at least a national 3.5 GHz block, which will allow the adoption of the new standard on a large scale throughout the country.

5G (Image: Disclosure/Huawei)
5G auction notice is still being questioned by TCU (Image: Disclosure/Huawei)

It is also likely that some small broadband providers will participate in the bid. These companies will be able to acquire regional blocks in the 26 GHz frequencies (mmWave), with the objective of complementing the fixed service offered by optical fiber and serving new regions with high-speed internet without the need to build cabling from scratch.

Oi’s presence in the 5G auction is still uncertain. The operator sold its mobile operation to competitors Claro, TIM and Vivo; however, the exit from the cellular telephony market does not prevent the operator from also purchasing 26 GHz frequencies to use the fifth generation in order to expand fixed broadband coverage.

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