Brazil's 4G auction fails to ignite as Oi keeps powder dry

Brazil’s 4G auction fails to ignite as Oi keeps powder dry

01 OCT 2014

Brazil’s auction of 4G spectrum in the 700MHz band generated less revenue than expected after just three of the four nationwide operators bid for licences.

According to Reuters, the combined bids amounted to BRL5.85 billion ($2.39 billion), significantly below the BRL8 billion that officials hoped to raise.

The smallest national mobile operator Oi said last week it would not take part in the auction, with the decision believed to be down to the significant debt carried by the business.

Telefonica Brasil, TIM Participacoes (which is majority owned by Telecom Italia) and America Movil all won licences with bids that were not much higher than the minimum set by Brazilian telecoms regulator Anatel. The three winning operators are currently assessing how they can fund the licensing fees.

The winning operators have also been given the responsibility of resolving interference issues with parts of the 700MHz spectrum they have won rights to, as well as compensating TV broadcasters that currently use the airwaves.

As one of the 4G licences was not taken, Anatel will refund some of the licensing fees to help cover the costs taken on by the three operators that secured spectrum.

Joao Rezende, the head of Anatel, said these costs would be around BRL850 million, bringing the total raised via the auction down to BRL5 billion.

Although Oi did not take part in the auction, it is reportedly working with Telefonica and America Movil to put together a joint bid to acquire Telecom Italia’s 67 per cent stake in TIM Participacoes.

Local reports suggested that a BRL30 billion bid is being prepared for what is Brazil’s second largest mobile operator. However, it was believed that all three bidders were keen to strike a deal before the spectrum auction.

The rumoured bid follows Telecom Italia losing out to Telefonica in its bid to acquire Brazilian broadband business GVT from French conglomerate Vivendi in August.

Author

Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

Read more

Related

Tags