Newsletter Telecom – Updates on the 5G Bid Tender in Brazil (*)

On February 1st, 2021, it was held the 13th Board of Directors´ Extraordinary Meeting of the National Telecommunications Agency – ANATEL in order to discuss and approve the revised bid tender proposal relating to the 700MHz, 2.3GHz, 3.5GHz and 26GHz frequencies destined to the 5G (“5G Bid Tender”) (“Bid Tender”) (“Meeting”).

On February 1st, 2021, it was held the 13th Board of Directors´ Extraordinary Meeting of the National Telecommunications Agency – ANATEL in order to discuss and approve the revised bid tender proposal relating to the 700MHz, 2.3GHz, 3.5GHz and 26GHz frequencies destined to the 5G (“5G Bid Tender”) (“Bid Tender”) (“Meeting”).

The approval of the Bid Tender was postponed at the request for examination by ANATEL´s president, Leonardo Euler de Morais. Nevertheless, three directors of the agency already voted in favor of the document. According to ANATEL´s president, the voting is expected to be resumed as of February 24.

Once approved by ANATEL, the Bid Tender must be analyzed by the Union Court of Audit – TCU, which will have 150 days to issue its opinion. This deadline may be accelerated in the 5G case.

ANATEL’s intention is that the Bid Tender is released in the first semester of 2021.

CMA followed the Bid Tender´s voting and the live discussions of the Meeting. See below a brief summary of the matter.

 

(1) Ordinance No. 1.924/SEI-MCOM, of January 29, 2021 (“Ordinance MCOM”)

The Bid Tender was affected by the Ordinance MCOM, which brought new guidelines to the process, as well as additional obligations and requirements for the participating providers and the infrastructure suppliers, as detailed below.

 

(2) Federal Government´s Private Network

The Bid Tender has included an obligation for providers to establish a private communication network for the federal administration – the so-called Secure Network (Rede Segura).

The Secure Network must cover the entire Brazilian territory. Such coverage must be done through fiber optic cable infrastructure, complementary to the existing government network, and through a mobile network in the Federal District.

The companies supplying the infrastructure for this private network must “observe corporate governance standards compatible with those required in the Brazilian stock market”, pursuant to the Bid Tender.

The Secure Network´s details, usage and requirements still need to be regulated.

 

(3) Small Providers

In line with the 5G regionalization plan and as a way to incentivize the participation of small/local providers, the 3.5GHz band will also be offered in regional blocks (instead of considering federative states or numbering areas).

Each participant will be allowed to acquire up to two regional blocks.

The 3.5GHz band is considered one of the most relevant ones for the 5G development and covers almost the entire Brazilian territory. Therefore, will likely be one of the most disputed bands of the bid.

 

(4) ERB 5G – Release 16 and “Stand Alone” Network

The providers that acquire the lots of the 3.5GHz band of the Bid Tender must install, at least, one Radio Base Station – ERB that allows the offering of personal mobile services by means of technology standard equal or superior to the “5G NR release 16 of 3GPP” – 5G ERB, as per the Bid Tender´s guidelines and schedule.

In practice, this means that such providers will have to adopt a new and independent network from existing mobile networks, which could, initially, be used as a support to the 5G.

 

(5) Integrated and Sustainable Amazon Program (Programa Amazônia Integrada e Sustentável) – PAIS

The Bid Tender also introduced the government plan for the establishment of a high-capacity optical system in the Pan-Amazon region and the formation of an “optical belt” linking the Atlantic Ocean to the Pacific – PAIS. The deployment of 5G in the 3.5GHz band within the PAIS area by the providers will be mandatory.

The PAIS is linked to North Connected Program (Projeto Norte Conectado) which aims at bringing fast internet to Brazil´s North region.

 

(6) Satellite and C Band

 

The Bid Tender also determined that the providers that acquire 3.5GHz band lots, will have to (i) bear the costs for the migration of the free-to-air TV signal reception by means of satellite dishes from satellite C band to Ku band (including through the distribution of adequate equipment to the affected persons), and (ii) reimburse Brazilian and foreign satellite operators for the utilization costs related to the 3.625 MHz to 3.700 MHz bands, currently allocated to the Fixed Satellite Service.

 

(*) About the 5G Bid Tender

The 5G Bid Tender will offer, in lots, the 700MHz, 2.3GHz, 3.5GHz and 26GHz bands for the implementation of the mobile network fifth-generation technology – 5G in Brazil.

In addition to enhancing the general internet functioning in mobile gadgets, the 5G has the potential to enable the modernization of various economic sectors, by means of automation, Internet of Things, digitalization, etc.

There is an expectation that the 5G Bid Tender will be the largest bid tender of such spectrum, even though the bid value is still to be defined.

The original 5G Bid Tender was launched on February 17, 2020, by means of the public consultation 9/2020 and is being subject to discussions and reviews since then. The public consultation is available in ANATEL´s webpage.

 

Key contacts:

 

Rafaella Chiachio

Sócia / Partner

T + 55 11 3077-3529

rafaella.chiachio@cmalaw.com

 

Camila Cavour

Associada / Associate

T+ 55 21 2217-2039

camila.muniz@cmalaw.com

 

Isabella Dias

Auxiliar legal / Legal Auxilary

T+ 55 21 2217-2023

Isabella.dias@cmalaw.com