Brazilian ISPs Brisanet and Unifique opt for differing 5G strategies

Two of Brazil's leading internet service providers (ISPs), Brisanet and Unifique, have opted to follow different strategies when it comes to launching their respective 5G networks, although they do share some similarities.

Both have entered Brazil’s mobile market after having acquired regional licenses in the 2021 spectrum auction and both have chosen Chinese suppliers for their 5G networks: Huawei, in the case of Brisanet and ZTE in the case of Unifique.

However, it is mostly the expansion targets and geographies that differ between the companies' mobile services.

“Brisanet has acquired hundreds and hundreds of ERBs [antennas],” CEO José Roberto Nogueira said in reply to a question from BNamericas during an earnings call.

“Each ERB was planned to reach 10,000 inhabitants,” he added. The company’s Huawei's antennas will operate both 4G LTE and 5G technologies. 

That reach is required, according to Nogueira, due to the obligation of carriers with national licenses to deploy one ERB for every 100,000 people.

Brisanet, added the executive, aims to get to the end of 2023 with a “mature” mobile network in its licensed area (northeast and mid-west Brazil), meaning it will have a presence in municipalities of with 15,000, 45,000, 100,000 and 300,000 residents, as well as state capitals, he said.

The company will launch its 5G service as soon as the second half of June, with the first activations set to take place in the localities surrounding Brisanet’s head offices, such as Pereiro in Ceará state and São Miguel in Rio Grande do Norte. 

In the second half of July, the firm's coverage is expected to grow to over 20 localities, mostly in those two states, encompassing around 800,000 mobile users, and by the end of this year Brisanet’s 5G coverage is expected cover more than 40 localities.

The software platform to manage the operation took eight months to develop, said Nogueira. It runs over SAP, in what Nogueira says is SAP’s first mobile operation project in Latin America.

Brisanet’s planned capex for 5G in the northeast region is 2bn reais (US$406mn), of which 350mn reais will be disbursed this year. Ten percent of the 700mn-real budget for 2023 was spent in Q1, as it invested 107mn reais, compared with 497mn reais in 1Q22. That drop was due to network equipment acquisitions being concentrated in 2022, among other factors, according to the company,

The ISP also reported 292mn reais in net revenues in January-March, up 35% year-on-year, while clients reached 1.15mn clients, increasing 27%. Brisanet claims to have almost 29,000km of fiber backbone and more than 61,000km of FTTH cables.

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UNIFIQUE

Based in Santa Catarina, Unifique also entered the mobile market by acquiring a regional license in the 3.5GHz band in the November 2021 spectrum auction to offer 5G in the southern states of Rio Grande do Sul and Santa Catarina.

The obligation assumed in the tender was to cover localities with up to 30,000 residents with a 5G signal by the end of 2029. According to the company, this requirement involves 421 localities in Rio Grande do Sul and 247 in Santa Catarina. 

Like Brisanet, Unifique plans to activate its first 5G networks as soon as June. Unifique, however, admits there is the possibility that its "soft launch" could be pushed back. 

The company is not planning to make any big investments in ERBs just yet, CFO and investor relations director José Wilson Jr said in an earnings call. 

Contrary to Brisanet, Unifique is in no hurry to meet its 5G obligations and it has not established a specific number of cities to be covered this year.

Furthermore, while ZTE has been confirmed as its supplier, Unifique plans to continue conducting tests with different providers, said Wilson Jr. The focus of its 5G preparations is on the core of the network, not on antennas for now, he added.

On the other hand, Unifique has been more active than Brisanet in acquisitions to expand fixed broadband services, having just announced the purchase of Santa Catarina-based ISP Concórdia ClientCo “Superline”. In April, it also acquired Brick Telecom.

Between 2018 and 2021, the company made nearly 30 acquisitions and Unifique also announced the acquisition of five companies in early 2023.

Overall, the company invested 106mn reais in 1Q23, up 18.7% year-on-year, a figure that includes property & equipment, but also intangible investments and equity acquisitions.

Unifique reported 205mn in net revenues in the first quarter, a 33.2% increase compared with 1Q22, and 653,274 clients (up 27.7%). It claims to have over 33,300km of fiber networks deployed.