Analysis: Brazil speeding up ICT launches as election looms

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Tuesday, March 20, 2018

With the October elections in sight, Brazilian authorities are launching long-promised digital programs and ICT initiatives.

Public officials who intend to run for congress or state governorships have until April 7 to resign, according to Brazil's electoral rules.

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Gilberto Kassab, minister of science, technology, innovation and communications (MCTIC), is a potential deputy governor of São Paulo state on the ticket of São Paulo mayor João Dória, who will for the governor.

"There is an understanding that the deputy governor on the ballot will be appointed by the PSD [Kassab's party]," Kassab himself said at a recent event at São Paulo city hall.

Even President Michel Temer, despite his overwhelming unpopularity, is said to be considering a re-election bid – although he is not required to step down by April.

While Kassab has not yet confirmed – or denied – that he will run for the position, the ministry is rushing to launch many of the programs and initiatives by the April deadline.

The announcements would be positive for both him and Temer - or whoever turns out to be the official presidential candidate of the current administration.

Below are some of these initiatives:

INTERNET FOR ALL

– Launched: March 12

– Investment: 2.7bn reais (US$820mn)

The program, a revamped version of the 2008 e-gov initiative Gesac, will use the country's geostationary satellite SGDC, put in orbit last May, to take connectivity to rural and remote parts of Brazil.

The brand Internet for All itself started being spoken of only in the fourth quarter of 2017, after the government failed to auction 57% of SGDC's capacity to the private sector.

No company showed up to bid, which forced state-run telco Telebras to retain the entire project for itself.

While the current administration has been highlighting the SGDC launch and its use, the satellite program and its construction took place under former president Dilma Rousseff.

Part of the investment in SGDC was also made during Rousseff's administration.

INDUSTRY 4.0 STRATEGY

– Launched: March 14

– Investment: nearly 8bn reais in financing lines

First mentioned in a November 2016 white paper published by the MCTIC and the development and industry ministry (MDIC), the so-called strategy for the industry 4.0 was unveiled by MDIC last week in a press conference at the World Economic Forum on Latin America, in São Paulo.

The launch was coordinated to take place during the event to provide "maximum impact," as BNamericas heard from a high-ranked government source.

The strategy can be found here.

DIGITAL GOVERNANCE

– Promised launch data: March 21

– Investment: undisclosed

Another tech-related program being wrapped up by the government, the digital governance strategy was also expected to be announced during the WEF event, but was postponed to fine tune details.

According to Thiago Camargo, secretary of information policies at the MCTIC, it is scheduled to be disclosed Wednesday (Mar 21) via a decree issued by President Temer.

The policy will set the guidelines for the digitization of processes by government agencies.

NATIONAL INTERNET OF THINGS PLAN

– Promised launch data: April

– Investment: undisclosed

The idea of a national policy to encourage IoT investments was first announced in 2015, also in Rousseff's term.

In 2016, the Temer government awarded a contract for 17mn reais to a consortium led by McKinsey & Co to produce a study to support the plan.

Last week, Camargo told BNamericas and Brazilian media that the plan will be announced early April and that health projects will be the first to be financed.

BROADBAND PLAN

The Internet for All program runs in parallel to the national connectivity plan, which was unveiled in October as a new version of the national broadband plan (PNBL).

However, the plan is not yet in effect as it depends heavily on legal and regulatory changes that have not yet been implemented.

Changes include first and foremost the passing of a bill modifying the country's telecom legislation, as well as the unfreezing of resources from the telecom universalization fund (FUST), and the fines-for-investments deals between telecom regulator Anatel and telecom operators.

The overhaul of the telecom legislation, however, was announced last month as one of Temer's 15 priority projects after his administration admitted defeat in passing pension reforms.

SPECIAL DATACENTERS REGIME

- Estimated launch date: April

- Investments: undisclosed

Another initiative close to see daylight is a policy of incentives to boost the installation of datacenters in Brazil, being drafted by the telecoms secretariat of the MCTIC ministry.

There is not yet a defined date for the presentation of such policy, first brought up in Feberuary 2017, but telecoms secretary André Borges has mentioned the plan should be out by April, via decree or bill.

Despite the government's complex fiscal situation, MCTIC expects to reduce or exempt federal taxes and provide incentives for state ones. Also part of the policy will be ehancing procedures for the import of datacenter equipment, among other measures.