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The Federal Court of Accounts (Tribunal de Contas da Uniao, TCU) has approved the upcoming 5G spectrum auction, but told the regulator Anatel it was concerned about low prices
Earlier this week, nine TCU judges voted eight-to-one to approve the bidding notice for Brazil’s upcoming 5G spectrum auction.
In effect, this gives Brazilian regulator Anatel the green light to make final adjustments to the tender process and schedule the auction in the near future.
The auction process has found itself mired in controversy for over a year now, resulting a string of lengthy delays. The auction was first announced all the way back in March 2019, with initial plans to have the process completed by the end of 2020, but this was soon pushed back to June 2021, then July, and finally August, with Anatel waiting for the conclusion of the TCU’s analysis.
Now, the tender process its expected to begin in October, with Anatel publishing the tender notice within the next two weeks.
This approval of the auction’s rules by the TCU is crucial to expediting the auction process, with Brazil’s minister of communications, Fábio Faria, previously noting that ordering further changes to the 5G tender process could result in up to eight months of additional delays.
“The court understood the importance of 5G to the country’s competitiveness,” said Faria.
The auction, which will allocate frequencies in the 700MHz, 2.3GHz, and 3.5GHz bands, as well as 26GHz mmWave spectrum, is set to raise around 45.6 billion reais (about $8.71 billion).
However, as part of their analysis the TCU suggested that these prices could be too low, urging Anatel to consider increasing them. If Anatel does follow this advice, it will risk making it much harder for new players to acquire spectrum.
“Raising the price of bands goes against the government’s mantra that the auction will not be for collecting money, even though most of the required payments can be converted into investments,” said Omdia’s principal Latin American analyst, Ari Lopes, speaking to BNamericas.
Many potential bidders in the auction are already restricted due to the scale of obligations attached to the spectrum licences, which include rolling out non-standalone 5G and providing connectivity to underserved regions.
According to Faria, all of the country’s state capitals will have standalone 5G networks deployed by July 2022.
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