10/24/07


What can go wrong with 3G authorization?

In December will be the auction of 3G frequencies in Brazil.

 

The rules established by Anatel to this tender has as main goal to guarantee 4 competitors in every region of the country and expand cell phone coverage to every brazilian city.

 

Anatel divided Brazil in 9 regions where 4 frequency blocks are in dispute. Minimum value of 36 spots is R$ 2.8 billion.

 

Note: Areas Numbering as defined in public consultation.

 

In São Paulo's metropolitan region and North States of the country they form one region, the same in São Paulo's border and part of Northeast.

 

The expectation is that the 4 frequency blocks from 5 main regions could be acquired by Vivo, Tim, Claro, Oi and Brasil Telecom (BrT).

 

Region Composition
Probable Candidates
Area I RJ, ES, BA and SE.
Vivo, Tim,
Claro and Oi
Area II Region II PGO (BrT) except cities attended by CTBC and Sercomtel.
Vivo, Tim,
Claro and BrT
Areas
III e IV
SP (11) and North.
Vivo, Tim,
Claro and Oi
Areas
V and VI
SP interior (except cities attended by CTBC) and Northeast (from Alagoas until Piauí).
Vivo, Tim,
Claro and Oi
Area X MG except cities attended by CTBC.
Vivo, Tim,
Claro and Oi

 

A worse dispute can happen in other 4 regions where, beyond these operators, would also be in the dispute Sercomtel (Area XI) and CTBC (Areas VII, VIII and IX).

 

The operators which acquire 3G frequencies in a certain region will have to attend with GSM 25% of the cities with lesser than 30 thousand inhabitants. The cities choice will be made in sequential order, by the 4 winners of the region, so guarantee attendance to 100% of these cities. The 4 operators can also choose a sharing network to attend all of these cities.

 

With these rules Anatel will probably reach the established goals. The operators know they can't be out of technological changes which extend offer of new services with mobile broad band and allows voice minute price decreasing in its service plans with network growth. Not implant 3G while others are doing would be very bad to any operator and competitiveness.

 

What can go wrong with 3G authorization?

 

The big risk would not get to sell all of frequency blocks in any of the regions. In this case, wouldn't be guaranteed attendance of the cities with lesser than 30 thousand inhabitants.

 

This actually can happen if some of these operators decide to implant 3G (WCDMA/HSDPA) with frequencies 850 MHz (Bands A and B) which were free with GSM implantation.

 

Claro has frequencies 850 MHz available in the State: São Paulo and can not change its situation in the State so it won't cover North and Northeast.

 

This is not Vivo's case, that use band 850 MHz to CDMA and GSM. It could not acquire 3G frequencies in São Paulo's border, where the need of spectrum is minimum, so won't get to cover area VI (Northeast) where still is in operation.

 

Oi and BrT which have frequencies 1800 MHz and WCDMA/HSDPA are not standardized and don't have much alternative. The same work for Tim which attend with 1800 MHz almost every region, except Area X (Minas Gerais). Remember that all of the cities in the State of Minas Gerais will be attended until Oct/08, thanks to a state government program.

 

Claro and Telemig already have 3G networks (WCDMA/HSDPA) 850 MHz in some of Brazil's cities and only wait for Anatel's authorization to start operation. Anatel says this authorization depends on Resolution. 227 (Jun/00) give bands 1.9/2.1 GHz to IMT-2000 (3G) implantation.

 

Anatel will not be able to stop the use of band 850 MHz to 3G (WCDMA/HSDPA). Vivo's EVDO is also IMT-2000 (3G) and use this band. Wimax in Brazil will also use the standard IMT-2000.

 

You could ask:

  • Will Anatel sell all of 3G authorization spots?
  • The 4 operators will attend the cities with shared networks with lesser than 30 thousand inhabitants?
  • CTBC and Sercomtel will acquire new frequencies in its areas of service provider? Or it will choose for 3G in 850 MHz?
  • What about Unicel with this authorization?
  • When will 3G (WCDMA/HSDP) be available in Brazil?

 

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