Brazilian carrier Ligga shortlisting suppliers for 5G network

Brazilian internet service provider Ligga is progressing with talks with potential suppliers for its 5G network, with more than one provider expected to be hired, Vitor Menezes, director of regulatory affairs, told BNamericas.

Ligga is negotiating with all the main vendors, analyzing the best offers from both a commercial and technical standpoint, said Menezes.

“We understand that to launch a 5G operation from scratch, we mustn't have just one equipment supplier. And we really want partners, not just vendors. I’m here for that, too. I have a meeting with a potential supplier,” he told the Futurecom conference in Sâo Paulo.

Nokia, Huawei and ZTE, among the world's largest wireless vendors, were present with booths and staff at the event. However, Ericsson was not.

In Brazil’s 2021 5G spectrum auction, Paraná-based Ligga snapped up a license in the 3.5GHz band in a consortium with Unifique to offer 5G in the southern states of Rio Grande do Sul, Santa Catarina and Paraná. Ligga was entitled to Paraná. Unifique, to the rest.

Bidding alone, Ligga also won another license in 3.5GHz covering São Paulo state and the northern region of the country, where the company opted to operate as a wholesaler. As an MVNO, it will lease the 3.5GHz band to local broadband providers interested in offering 5G mobile internet to their customers in the region.

Ligga will receive a percentage of the revenue from mobile internet plans sold by these providers. Menezes said MOUs are already agreed with some ISPs.

The rules of the 5G auction allowed coverage obligations to be met by third parties. And in the case of non-national 5G licenses such as those won by Ligga, the timetable for launch is longer, which is why the company is yet to activate the network.

In northern Brazil, ISP Telecom was chosen by Ligga as an intermediary, being responsible for installing towers and antennas and managing the 5G signal to be accessed by the providers. 

The choice of ISP Telecom and Ligga's MVNO contracts, however, still need to be approved by regulator Anatel. 

“We have made a huge effort to get this deal done this year. We should have the contract signatures, Anatel's approval and the actual start in 2024, beginning in the north region and then moving to other states,” said Menezes, who is a former deputy communications minister.

DIRECT OPERATION

Ligga is expected to build, operate and offer 5G directly in cities in Paraná state where its presence is stronger, namely Londrina, Curitiba, Paranaguá and Pato Branco, said Menezes.

The commercial strategy will be offering 5G bundled with content and digital services and on top of its fiber-to-the-home service. FTTH, in particular, has been slowing down. 

“Ligga is working to improve its product portfolio precisely to be able to have better organic growth. We believe that this fourth quarter we should have better results. But next year the results will certainly be even more promising.” 

Menezes also hinted at M&As in 2024.

With around 526,000 clients as of end-August, of which 337,000 were fiber, the company competes with Telefônica for second spot in FTTH in Paraná after Oi. 

Ligga is controlled by Brazil’s Bordeaux fund and was formed by the combination of four telcos: Sercomtel, Copel Telecom, Horizons and Nova Fibra. 

CLIENTCO DISPUTE 

Menezes declined to comment on the company’s failed attempt to acquire Oi’s fiber broadband client base (ClientCo).

Ligga was the sole bidder and offered 1.03bn reais (US$182mn) for ClientCo, more than 86% below the minimum price of 7.3bn reais, in the first round of a competitive process that was part of Oi’s second judicial reorganization proceedings.

The bid was rejected by Oi’s creditors.

In a second round, in which the company was not allowed to participate because it had expressed interest after the deadline, V.tal offered 5.6bn reais for ClientCo. Oi's creditors still need to approve the deal.

REVERSE AUCTION

Ligga, meanwhile, was one of the winners of Brazil’s first reverse mobile auction, held by Anatel to take 4G or 5G mobile coverage to underserved locations in the country.

Ligga won six locations in Pará, Rondônia and Tocantins states, presenting proposals with a total value of almost 56mn reais.