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$13.8 -0.4  -3.0%

Last Trade - 09/04/21

Sector
Telecoms
Size
Large Cap
Market Cap £33.48bn
Enterprise Value £58.05bn
Revenue £36.82bn
Position in Universe 271st / 6827

Brazil regulator approves 5G spectrum auction rules, no Huawei ban

Fri 26th February, 2021 6:04pm
By Anthony Boadle
    BRASILIA, Feb 26 (Reuters) - Brazil's telecoms regulator
Anatel has approved rules for a spectrum auction for
fifth-generation networks this year without any curbs on China's
Huawei Technologies Co  HWT.UL  as an equipment supplier.
    Telecom companies will also be required to build stand-alone
networks with the latest versions of 5G technology to be
operating in state capital cities by July 30 next year, which
will involve heavier investments that they had wanted.
    Right-wing Brazilian President Jair Bolsonaro last year
criticized the Chinese company and was under pressure from the
Trump Administration to ban Huawei from the country's
fifth-generation technology market on security concerns.
    Brazil's telecom companies insisted on a free market,
complaining that excluding Huawei would cost billions of dollars
to replace the Chinese company's equipment that supplies 50% of
the current 3G and 4G networks.
    Rules for the auction expected in June require telecoms to
provide broadband connectivity across the vast Amazon region,
largely using optic fiber cables laid in rivers, as well as in
northeastern Brazil. They also must cover all federal highways.
    "Anatel found a good balance between obligations for the
companies and the collection of operating rights payments," said
Andre Gildin, a telecoms expert at RKKG Consulting.
    He said companies that have already built up infrastructure
based on existing 4G technology, such as Telefonica Brasil SA
 VIVT4.SA  and Claro, owned by Mexico's America Movil  AMXL.MX ,
will have higher capital expenditure outlays because they have
to change the core of their networks.
    The third of the major cellphone companies, TIM
Participações SA  TIMP3.SA , which is controlled by Telecom
Italia SpA  TLIT.MI , had not advanced so far into updated
technology and favored the stand-alone rule, Gildin said.
    Anatel President Leonardo de Morais estimated the spectrum
auction will generate 80 billion reais ($14.3 billion) in
investments over the next 20 years. The telecoms would need
about 7.6 billion reais in investments, including building a
secure network for the federal government, which is expected to
exclude equipment from Huawei.
    Industry representatives said Huawei, the world's biggest
telecoms equipment maker, could not be excluded from Brazil's 5G
market because, aside from the cost, it would set the country
back three to four years in technology.
    Telefonica Brasil and Claro had been pressing for a 5-year
transition to migrate to the more advanced stand-alone networks.
    The auction rules must be approved by Brazil's Federal Audit
Court, where the telecoms hope the government's onerous
conditions can be changed.


 (Additional reporting by Lisandra Paraguassu; Editing by Dan
Grebler)
 ((anthony.boadle@tr.com +55 61 98204-1110;  https://twitter.com/anthonyboadle))
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