5G Auction Notice
- The most controversial change to the new 5G bid proposal, prepared by the rapporteur Carlos Baigorri, is the obligation that the auction winners adopt, in the 3.5 GHz band, the 5G NR technology (New Radio) Release 16 of the 3GPP.
- Release 16 of 3GPP details the 5G specification (release 15) with the main features shown in the figure above.
- Typically, operators choose which of these features makes sense for them to deploy. The first question, therefore, is what is to adopt the 5G NR Release 16 technology? What characteristics would be required?
- The second issue is that this obligation would contribute to the provision of new services, since it is restricted to radio (5GNR). For them to be available, it is necessary to implement the new 5G core, in the Stand Alone model, and the existence of use cases that make its commercial offer feasible.
- The vast majority of operators in the world are gradually deploying 5G with the 5G NR, initially being used with the 4G core and experimenting with use cases for the second phase of 5G, in which the new 5G core can be used only to serve the B2B market.
- In other words, this obligation would lead to a higher cost for operators and Anatel, that would have to inspect their service, without any result or benefit for society.
- Experience has already shown that Anatel should regulate services and not the technological strategy of each operator.
- Anatel's Council will meet on Monday (Feb 1st) to discuss the proposal for the 5G Notice.
5G: MCOM Guidelines
The Ministry of Communications published a document with the guidelines for Anatel to carry out the 5G frequency auction, which presents as the main novelty the obligation of the winners to implement, with funds from the auction, the following Government programs:
- Integrated and Sustainable Amazon Program (Programa Amazônia Integrada e Sustentável - PAIS), which makes up the Northern Connected Program;
- Fixed Private Networks (Fiber) in Brazil and mobile in Brasilia for the Federal Public Administration and which would be owned by the Union.
Among the guidelines, there is no restriction on any type of supplier, except regarding to the Government's private network.
More details in: https://www.teleco.com.br/5g_licitacao.asp
Fiber
The new Teleco's fiber section is being launched as special theme bringing the following results for the end of 2020:
- 46.2% of the broadband accesses in Brazil are fiber;
- 62.4% of the fiber accesses operated by the competitive companies;
- Brisanet (623 thousand), Algar (517 thousand) and Vero (333 thousand) are competitive companies with more accesses in fiber.
Brisanet's investment project with funds from the issuance of incentive debentures was approved by the Ministry of Communications.
Accesses growth in 2020
Accesses of telecommunications services registered greater growth in 2020 in comparison with 2019:
- Mobile, postpaid and fixed broadband net adds in 2020 were higher than the previous year;
- Losses in prepaid, pay TV and fixed telephony fell in 2020;
- Claro (cellular and postpaid), Vivo (prepaid), competitive companies (fixed broadband) and Oi (pay TV) led net adds in these segments in 2020.
Results 2020
Net revenue growth in 2020 reached:
- +21.6% at Facebook;
- +14.2% at Microsoft;
- +9.9% at Apple;
- +4.0% at SKY (Brazil);
- +3.8% at Verizon;
- +1.3% at Samsung;
- -5.2% at AT&T.
Samsung led smartphone sales worldwide in 2020 (267 million), followed by Apple (206 million) and Huawei (189 million).
Apple led sales in 4Q20 (90 million) surpassing Samsung (74 million).
Oi
- Oi signed with Telefônica Brasil, TIM and Claro the contract for the sale of its mobile assets for R$ 16.5 billion. The conclusion of the operation still depends on the approval of CADE/Anatel.
- Oi confirmed receiving the proposals for the sale of 51% of its fiber unit (InfraCo). Digital Colony (Highline's controller) and an Investment Fund (FIP) managed by BTG Pactual submitted proposals. Amos Genish may lead the company if it is acquired by BTG.
- Oi's ON shares decreased 6.4% in the week and the PN shares fell 2.2%.
More Highlights
- The decree with the General Universalization Targets Plan V was published. It establishes the obligations of the fixed telephony concessionaires in the period from 2021 to 2025 (end of the concession).
- The main change, in relation to the previous Plan, is that the balance resulting from the changes in the goals promoted by the previous Plans will be used in the implementation of Backhaul in the headquarters of municipalities, villages, isolated urban areas and rural agglomerations, indicated by Anatel, which don't have this infrastructure yet.
- The Government eliminated the limit of R$ 30 million for financing projects for the development and use of telecommunications technologies using FUNTTEL resources.
- Claro officially launched Claro Box TV in 49 cities.
Coming week
- Anatel's Council analyzes the proposal for 5G notice (Feb 1st)
- IPO da Intelbras (04/02)
Streaming: Netflix in 2020
- Netflix is the main streaming service in Brazil and Teleco estimates that it ended the year with 15 million subscribers in the country, the same amount as pay TV;
- Netflix ended 2020 with 204 million subscribers worldwide, with growth of 21.9% over the previous year. From those, only 74 million are in the USA and Canada, market where growth reached 9.3%. There are 37.5 million subscribers in Latin America, with growth of 19.5% in 2020;
- Netflix's Global Revenue grew 24% in 2020, reaching US$ 25 billion and net profit hit US$ 2.8 billion (+ 47.9%).
Oi
- Digital Colony (Highline's controller) and an Investment Fund (FIP) managed by BTC Pactual presented a binding proposal for the purchase of 51% of InfraCo, which will bring together Oi's fiber assets;
- Oi must now decide who will receive the preemptive right (Stalkholder) in the InfraCo sale auction. The minimum value for InfraCo's total was established by Oi in R$ 20 billion;
- Oi's intention to migrate its fixed telephony concession for authorization this year may not materialize;
- The inventory of reversible assets may be ready by June, but the final calculation of the value of the commitments will only be available at the end of the year, when it will then be sent to the Federal Court of Auditors; (Telesíntese)
- Oi's financial cash fell by R$ 622 million in November/20, totaling R$ 4,367 million. Investments in Nov/20 were R$ 463 million;
- Oi's ON shares lost 10.9% in the week and PN preferred 7.1%.
5G
- China Mobile and China Telecom ended 2020 with 251.5 million 5G phones. The service was launched in Nov/19 by the two operators together with China Unicom, which does not disclose this information;
- In the United States, the number of 5G cell phones is only expected to take off at the end of the year, when the networks in Band C start operating. US cell phone operators are expected to spend around US$ 100 billion on the auction that is still in progress;
- Other points that may affect the evolution of 5G are the position of the Biden Government in relation to China and the entry of cloud service providers, such as Microsoft, in the 5G network market;
- The prices of 5G smartphones are falling worldwide. Samsung's new models are US$ 200 cheaper than previous versions. The S21 went on to cost US$ 800.
Fiber
- Vivo's fiber srrived in Trancoso, city in the state of Bahia;
- Vinci Partners, controller of Vero, launched an initial public offering (IPO) in the amount of US$ 287.180 million, which will be traded on Nasdaq in the United States;
- The Federal Government's Investment Partnership Program (CPPI) Council determined that further studies on Telebras be carried out as a way to "deepen the alternatives for privatization" of the company;
- Gaúcha Tecpar, through the Amigo internet brand, incorporated HDTurboNet in the city of Cacequi.
More highlights
- Bemobi, an application aggregator for mobile operators, will hold its IPO on February 10th. The company's net revenue reached R$ 222 million in 2019;
- Uber will launch its MVNO in Brazil (Uber Chip), in partnership with SurfTelecom;
- A new Decree No. 10,602 was published on the industrial policy for the ICT sector, which meets, according to Abinee, the main demands of the sector, in particular on the rules for investments in RD&I foreseen in the New ICT Policy.
Coming Weeks
- 2020 Results: AT&T/SKY, Verizon, Apple, Samsung, Microsoft, Facebook, among others.
Priorities of Anatel's Regulatory Agenda 2021 - 2022
- Anatel's regulatory agenda has as main priorities to be concluded in the 1st semester, the regulation for migration of fixed telephony concessionaires to the authorization regime and the 5G notice;
- To be concluded in the 2nd semester, the priorities are the reassessment of the regulations on consumer rights, the numbering regulations and the general regulation of satellites;
- It was for 2022 to conclude the reassessment of the regulation on pole sharing and the revision of the Spectrum Use Regulation;
- The Federal Court of Accounts is organizing itself to make the 5G bidding feasible in the 1st semester. It formed a working group to enable the analysis of the 5G notice in 60 days. The Court ministers Bruno Dantas, Vital do Rêgo and Walton Alencar, will travel to Europe and Asia in February, together with the Minister of Communications, to familiarize themselves with the theme.
Oi
- Highline, BTG and Ufinet would be interested in Infraco, Oi's optical fiber unit;
- Oi's ON shares appreciated by 1.6% in the week and PN by 1.0%.
More highlights
- WhatsApp's intention to update the terms of services and privacy policy, forcing its users to accept sharing information with Facebook, had a negative impact. Procon-SP notified Facebook and users started to migrate to alternative Apps (Signal and Telegram). WhatsApp extended the deadline for accepting the terms from February 8th to May 15th;
- TikTok, Caixa TEM and WhatsApp were the applications with the largest number of downloads in Brazil in 2020. (App Annie/Mobile Time);
- Intercel, MVNO of Inter bank, will be accredited by Vivo and no longer Surf Telecom;
- Intelbras intends to hold its IPO on Bovespa on February 4th;
- SKY will start selling Viasat's satellite broadband;
- Artur Coimbra leaves the Telecommunications Secretariat (Setel) of the Ministry of Communications to take over the Internal Affairs of the National Personal Data Protection Authority (ANPD);
- Telefónica announced the sale of 30,722 towers in Spain, Germany, Brazil, Peru, Chile and Argentina to American Tower for € 7.7 billion. The towers were owned by its subsidiary Telxius;
- This week, in virtual format, the Computer Electronic Show (CES 2021), held annually in Las Vegas. The highlights were the launches of smartphones and innovations such as the smartphone with rolling screen that LG intends to launch in 2021. The Verizon's CEO took advantage of the event to talk about the progress of 5G to the next phase. In a side event, Samsung presented its chipset for mobile devices and its new smartphone models.
Celular grew again in Brazil in 2020, due to the postpaid, which presented net adds of 7.7 million in the first eleven months of the year. Prepaid showed negative net adds in this period (-2.4 million), but much smaller than in the first eleven months of 2019 (-9.7 million);
Oi
- At Algar's request, an administrative procedure was opened at CADE to investigate competitive irregularities in the formation of the consortium formed by Vivo, Claro and TIM, which won the auction for the sale of Oi mobile. (Teletime);
- SKY and Claro would be interested in acquiring Oi's satellite pay TV (DTH) operation;
- Oi's ON shares raised by 1.9 %% in the week and PN by 0.4%. In the year, they appreciated by 144% and 135% respectively.
More highlights
- Algar Telecom's Extraordinary General Meeting approved the discontinuity of the direct provision of pay TV services by the Company.
