Brazil plans no spectrum auction in near term, says regulator

Brazil does not plan a new spectrum auction in the next years, contrary to official comments shortly after the 5G auction in November 2021, the president of regulator Anatel, Carlos Baigorri, told BNamericas.

Baigorri said a new auction wouldn’t be possible, among other things, because neither enough spectrum nor demand is available and preparing an auction is costly and complex. In effect, an auction is not even mentioned in Anatel's recently announced agenda for the next two years.

According to Baigorri, frequencies that were not acquired in 2021, in addition to other idle bands, are being requested by providers and released by the agency case-by-case, as a secondary spectrum use.

“What we have done is that some companies have asked for the secondary use of bands that were not sold. And we are releasing this secondary use, always emphasizing that this is not permanent, that it has fewer guarantees. One of our main missions is that spectrum is used,” Baigorri said.

In the so-called secondary model, the spectrum usage license is usually valid five years and renewable but with fewer guarantees. But this license ceases and changes when the frequency is sold at an auction for primary use.

In the 2021 auction, Brazil raised some 47.2bn reais (US$8.5bn), making it the second-largest auction of assets in the country’s history. It was also the biggest in terms of spectrum offered, with 3.7GHz in the 700MHz, 2.3GHz, 3.5GHz and 26GHz bands.

However, around 25% of the range of spectrum blocks offered were not sold, most in the 26GHz band. Around 40MHz in the 2.3GHz band was also not sold.

Six of 10 national blocks of 200MHz in the 26GHz band were sold, totaling 1.2GHz of contracted network capacity, of 2GHz available. Meanwhile, only 12 of 42 non-national (regional) 200MHz blocks were sold.

DEMAND AND COMPLEXITY

Launching spectrum auctions in short succession, if only to sell surplus bands, is somewhat rare. Countries usually wait some years before carrying out new frequency tenders because preparations are time consuming, also involving assessing investor sentiment.

However, Brazil’s initial post-auction plan was to offer frequencies mostly in the 26GHz band that were not acquired in the tender. Former communications minister Fábio Faria said in December 2021 that a new auction could happen within six months.

At a hearing in the lower house, Faria said bands not awarded in the auction were already cleared by audit court TCU and regulator Anatel, so a new bidding process would be relatively easy.

“In 26GHz there was a lot left because companies didn't want to buy. Those who wanted to buy bought a lot. Algar bought almost 1GHz in 26GHz. So we are going to do a new auction what for, to be left over again?,” said Baigorri.

In June 2012, Brazil held its first 4G auction, tendering frequencies in the 450MHz and 2.5GHz bands. In September 2014, Anatel held a second 4G auction, selling frequencies in the 700MHz band.

And in December 2015, Anatel auctioned leftover 2.5GHz frequencies from the 2012 tender and blocks in the 1.8GHz and 1.9GHz bands.