A National Telecommunications Agency (Anatel) approved the notice for the auction frequency 5G. The document will now be sent for analysis by the Federal Audit Court (TCU). The event is expected to take place in the first half of 2021.
5G technology is the fifth generation of mobile communication networks. It promises speeds up to 20 times faster than 4G with greater consumption of videos, games and virtual reality environments. It will be the largest spectrum bid in the history of the country.
The president of the regulatory body, Leonardo Euler de Morais, brought today, 25, a divergent vote from the original proposal of the rapporteur Carlos Baigorri, presented on February 1st. Councilor Moisés Queiroz Moreira, in turn, presented a proposal in line with Baigorri’s, with some adjustments and acceptance of part of Morais’s proposals. This last proposal was approved by 3 votes (Baigorri, Moreira and Vicente Aquino) to 2 (Morais and Emmanoel Campelo).
The announcement maintained the proposal for regional lots for the 3 5 GHz band, radio frequency in which the 5G will be offered, and the use of the entire available spectrum, 400 MHz. Thus, there will be lots of 80 MHz, being, in principle, four nationwide and one subdivided into eight regional – with a smaller reach, aimed at municipalities with less than 30 thousand inhabitants and small providers.
Anatel maintained Baigorri’s proposal on technological standards in the use of the 3.5 GHz band, which will require the construction of entirely new networks – purely 5G (standalone) – and heavy investments by the companies. Vivo and Claro had a smoother migration, in which they could use part of the current 4G structures to gradually reach the standards of the fifth generation, and Morais spoke in favor of the proposal. TIM was already defending the new standard now.
For Baigorri, the new standard is what can actually deliver the quality expected for 5G. He told the Broadcast earlier this month that this pattern could be comparable to a Ferrari, while the other would be a Beetle. Today, he said he did not want a 5G “half-assed” or “for a few”.
“This is a dilemma that arises when proposing public policy. Imposing the new standard does not follow the logic of the market at this time, but in my understanding public policy overlaps the logic of the market,” said the rapporteur.
Anatel’s meeting to discuss the announcement began at 3 pm, but the discussions lasted until 9 pm. Therefore, the press conference that would be held today, 25, was for tomorrow, 26, at 10 am.
Complementary lots will also be offered on other frequencies. In the 700 MHz band – currently used for 4G, but with the possibility of use in 5G – a national lot of 20 MHz will be offered. If there is no buyer, the lot will be divided into two of 10 MHz in a second round at the auction. The great teles that already operate on this 700 MHz frequency will not be able to dispute this lot.
In the 2.3 GHz band, up to 90 MHz will be offered in regional blocks, eight of which are 50 MHz and eight of 40 MHz, without the possibility of a second round.
And in the 26 GHz band – with greater capacity and geared to specific uses – 3,200 MHz will be offered in 5 national and 21 3 regional blocks of 400 MHz. These lots can be divided into 200 MHz if there are no buyers in the first round. This is the only frequency that does not place additional obligations on the auction winners. An adjustment proposed today makes it possible to use the spectrum to provide fixed broadband.
Anatel accepted some changes in the vote presented by Baigorri. Moisés maintained the existence of a compensation criterion related to the TV channels that are transmitted by satellite dish, which should migrate to a new satellite band – the Ku band, used by Sky – to avoid interference in the 3.5 GHz band. Today they operate in the 3.7 GHz to 4.2 GHz range.
Another adjustment accepted today is that which determines that all companies interested in the auction will have to prove municipal fiscal regularity.
Despite all the controversy surrounding the conflicts between the government and China, Huawei, the main supplier of 5G technology, the bid notice does not prohibit the company from supplying equipment to the telecommunications that dispute the auction. The ban on the company could only be achieved through a decree signed by President Jair Bolsonaro – which, so far, has not occurred.
The minimum price of each lot in the auction will only be released after the approval of TCU. But given the number of additional obligations to the winning companies in each lot, the expectation is that the financial collection for the National Treasury will not be so great in the bidding. This is because the investments required to fulfill each consideration provided for in the notice are discounted from the amounts that could be charged as a grant.
Winners on that 3.5 GHz frequency will have to make most of the commitments set by the government. With the migration of channels transmitted by satellite dish, as happened with the end of analogue TV to accommodate 4G networks, low-income families enrolled in the Single Registry for Social Programs should receive kits so as not to lose access. This cost will be borne by the companies that take the national lots of this frequency of 3.5 GHz, as well as the expense of channel migration. For state capitals and the Federal District, the “cleaning” of the strip should take place within 300 days after signing the contracts.
In addition, as determined by the Ministry of Communications, the winners of the auction in the 3.5 GHz band must build a secure and exclusive telecommunications network for the entire federal administration, whose ownership will be transferred to the Federal Government and will be handed over to the Telebrás administration. With the inconvenience of the Ministry of Economy, which intends to privatize the company, the government said it must issue a decree so that the operation can be carried out by other companies – which, until now, has not occurred.
This infrastructure for the government, which will be called Rede Segura, should be of fixed optical fiber, with encryption, and reach the entire national territory where there are federal public agencies. In the specific case of the Federal District, the networks must be fixed and mobile.
In addition to public agencies, Rede Segura must attend to all activities of public security, defense, relief and emergency services, disaster response and other critical tasks that involve strategic State communication.
The companies will also have to build high-speed transport networks to connect the northern municipalities in optical fiber (backbone), within the Integrated and Sustainable Amazon Program (Pais). This network is expected to cover 13,000 kilometers, with routes to connect 20 million people.
After the complaints from telcos about the volume of counterparts that will be required in the 5G auction, the government suggested a maximum ceiling of R $ 2.5 billion in investments for two of the projects that are part of the list of obligations that will be imposed on companies – R $ 1 billion for Rede Segura and R $ 1.5 billion for Pais. The amounts, however, were not accepted in the notice at this time, but may be included after analysis by the TCU.
The 5G bidding proposal brings other obligations to the winning auctioneers on the other frequencies. Companies that take lots at 700 MHz must guarantee the offer of 4G on roads by 2025. As determined by the Ministry of Communications, the priority is the installation of mobile coverage on six federal highways. BR 163, 364, 242, 135, 101 and 116 will be preferred. Currently, the sections without sign on these highways add up to 48 thousand kilometers.
Companies that bid for lots in the 2.3 GHz bands will need to guarantee coverage of 95% of municipalities without 4G, with priority for the provision of 4G and for the construction of high-speed transport networks, preferably of fiber, in municipalities still in the North and Northeast.
The bid notice also ensures mandatory roaming throughout the country. Teles that carry lots at any frequency will have five years to guarantee access for visiting subscribers between the different networks of each operator. In practice, if a location has only Vivo’s antenna, it should also signal users of Claro, Oi and TIM.