State telco Telebras to manage US$240mn government network

Brazil's state-run telco Telebras has been confirmed as the company that will operate a private, secure network that will be built for the exclusive use of the federal government with funds from the 5G auction. 

The confirmation came in a decree signed by outgoing President Jair Bolsonaro and published in the federal gazette on Wednesday. 

Former communications minister, Fábio Faria, who resigned from the post on Wednesday, promised last month that a decree putting Telebras at the helm of the project would be issued by Bolsonaro.

As part of the obligations included in the 5G tender, mobile carriers had to fund this federal network, to be separate from the public one. 

The idea of a separate network came due to concerns about the security of sensitive information, but was also motivated by geopolitical issues, mainly in relation to the involvement of Chinese companies.

This secure network comprises two separate projects: metropolitan fiber networks serving government agencies in each state capital and a mobile network serving the government in federal capital Brasília.

The network will be funded with 1.25bn reais (US$240mn) of the amount paid by auction-winning telcos and must be ready by 2026. EAF was the entity created by the telcos that made winning bids in the 5G spectrum auction to oversee obligatory tender investments, including in the network. 

Amdocs won a tender called by EAF and will help the entity with the technical details of these networks and will outline the request for proposals (RFP) to acquire equipment for both networks, EAF president Leandro Guerra said at Futurecom. These RFPs are due to be launched to the market next year.

Telebras is expected to develop the network with Brazilian ICT R&D firm CPqD and use secure technology provided by local crypto specialist Kryptos.

CAPITULATION

Bolsonaro's decree marks an U-turn from decree 10,799/21, which had stripped Telebras of exclusivity for this government network and had opened up the possibility of having a private player in charge of it instead.

With that, not only did Bolsonaro give new powers to the state-owned company, but also capitulated on the original plan to privatize the company.

In effect, all the state-run companies related to the communications structure of the federal administration that Bolsonaro's administration intended to privatize remain under government control.

In addition to Telebras, Bolsonaro did not manage to go through with plans to sell Empresa Brasil de Comunicação (EBC), Serpro, Dataprev and national mail service Correios.

As for semiconductor manufacturer Ceitec, the goal was to liquidate most of the company and transfer its technical expertise, intellectual property and professionals to the control of a civil society organization, but this did not advance either.

The incoming government of president-elect Luiz Inácio Lula da Silva has already announced it plans to revamp Ceitec, claiming it considers the firm to be of strategic importance to the country given the global problems with the supply of chipsets, and to halt privatizations.