11 May 2021

Brazilian telecom regulator Anatel approved rules for a spectrum auction for 5G networks this year and rejected calls to curb China’s Huawei Technologies an equipment supplier.

The South American country’s president Jair Bolsonaro last year criticised the Chinese company and considered banning the world’s largest telecom equipment-maker from the country’s fifth-generation technology market on security concerns.

Brazil’s telecom companies insisted on a free market and  complained that excluding Huawei would cost billions of dollars to replace the equipment of the tech giant, which currently supplies 50% of the existing 3G and 4G networks.

Rules for the auction expected in a few months have costly conditions such as requiring telecom companies to migrate by next year to more advanced technology with stand-alone networks not based on their current technology. They will also have to cover the big northern Amazon region with broadband connectivity, largely using optic fibre cables laid in rivers, as well as build a separate secure network for the federal government.

Industry representatives said Huawei could not be excluded from Brazil’s 5G market because, cost aside, it would set the country back three to four years in technology.

Two of Brazil’s main telecom companies, Telefônica Brasil and Claro are pressing for a five-year transition to the more advanced stand-alone networks.

“The stand-alone condition requires changing the core of today’s networks and will set us back years,” said Vivien Suruagy, head of Feninfra, a lobby representing 137,000 companies that build and maintain telecommunications networks.

The rules must be approved by Brazil’s Federal Audit Court, the TCU, where the telecoms hope the government’s onerous conditions can be changed, Suruagy added.