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Fly Link returns Brazil 5G license after investor pulls out

Bnamericas Published: Tuesday, November 09, 2021
Fly Link returns Brazil 5G license after investor pulls out

Brazilian ISP Fly Link has returned the regional 5G block in the 26GHz frequency it acquired in the spectrum auction, regulator Anatel reported.

The ISP offered 900,000 reais (US$164,000) for 200MHz in the H-42 block, linked to an obligation to connect basic education facilities.

According to the provider, which operates mainly in Minas Gerais state, an “external investor” withdrew resources it committed as its business partner.

The investor’s name was not revealed, but investment was conditioned on the acquisition of at least one of two other regional blocks in the 3.5GHz band, the prime one for 5G, in the region where Fly Link operates. But Algar Telecom bought these blocks.

“Since this did not happen, it becomes impossible to develop a business plan contemplating only the H-42 block, as this batch refers to an incipient technology and with a still very restricted market,” Fly Link said in a statement.

The 26GHz frequency is considered a long-term bet, as there are no proven business models and equipment involving this band for 5G services.

Algar Telecom won the eighth and last regional block in the 3.5GHz spectrum, comprising the south of Minas Gerais and parts of Mato Grosso and São Paulo states, with a 2.35mn-real bid, a premium of 358%.

Fly Link offered 2.2mn reais.

With Fly Link's withdrawal, the number of new entrants to the Brazilian mobile market falls to five.

Anatel will now have to evaluate how to proceed, since Fly Link was the only bidder for the block it acquired. One option considered is to open envelopes from another regional block in the 26GHz frequency, but with a different coverage area.

Also according to Anatel, under the auction rules, Fly Link's withdrawal implies the execution of the proposal maintenance guarantee and the application of a 10% fine on the amount of the winning bid.

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