Delay in 5G tender terms could push award of spectrum to 2021

The disclosure of the tender terms for Brazil’s expected 5G auction next year and their release for public consultation will probably not take place this year, thus likely pushing back the award of 5G spectrum.

This is because Anatel board member Emanuel Campello, who is the rapporteur for the tender terms, requested another 60 days to submit his proposal for the board's evaluation. His draft was originally supposed to be discussed at the regulator's meeting this week.

Only after the board discusses and approves the text will it be published for public consultation. This means that there is now an increased chance that the award of the 5G bands will eventually take place in 2021 rather than next year.

Various analysts to whom BNamericas has spoken believe that the process will eventually gain greater traction next year and that the second half of 2020 remains a feasible date for the auction to go ahead.

Officials at the science, technology, innovations and communications ministry (MCTIC) are also confident the auction can take place in 2020.

For now, however, there are still many unresolved issues regarding the auction terms, especially concerning Anatel’s suggestion to break the radiofrequencies into very small blocks of spectrum, to which operators are opposed.

Another issue refers to potential interference between 5G and satellite services in the 3.5GHz band and how to deal with that.

Other points of friction include the reserve spectrum for small, regional ISPs and for new market entrants and the grouping of lots of different regions in Brazil.

In general, telecom operators are in no hurry to bid in a new auction. They claim they have not yet seen returns on the investments made in the 700Mhz band, the auction for which was held in 2014. 

The only exception to the national telcos is TIM, which has called for the auction to be held as soon as possible, arguing that otherwise the country would be well behind many other nations technologically, which would affect its industrial development. 

Unlike the operators, and for obvious reasons, network equipment providers state that the sooner the 5G spectrum is awarded the better.

A survey carried out by one of these providers with industry experts during the Futurecom 2019 event in São Paulo indicated that 72% of them believe that a delay in the auction would have a negative impact on Brazil. According to Ericsson, only 7% were in favor of postponing the process.

Another equipment provider, Qualcomm, commissioned a study from research firm IHS Markit that estimated that 5G could generate up to US$13.2tn in worldwide revenues by 2035.

According to the US chipset company, the global 5G value chain could be responsible for as many as 22.3mn jobs in by then, which would be 3.4 times more than the current workforce in the mobile industry. It would also result in average investments of US$235bn annually, it claimed.

"Looking back on the industry's achievements last year, it's amazing how much progress we've made in accelerating the rollout of 5G worldwide," Qualcomm president Cristiano Amon said in a statement.

According to the company, there are currently 30 active 5G networks and more than 40 OEMs launching 5G-enabled devices.