At the beginning of this year, Maravedis predicted that 2010 would be the year for 4G regulation in Brazil, with auctions expected for the 3.5GHz band and remaining 3G spectrum and changes expected in the 2.5GHz regulation. Our predictions came true.

Throughout 2009 the Brazilian telecom regulator, ANATEL, initiated a series of public consultations for the usage and allocation of the 3.5GHz and 2.5GHz bands, namely consultation N°54 and N°31, respectively. Consultation N°54 proposed the attribution of the remaining 75% of spectrum in the 3.5GHz band and the allowance of mobility, which had been previously restricted in this band. Consultation N°31 considered regulatory changes for the 2.5GHz band, which had been exclusively allocated for MMDS services since 2002. Consultation N°31 proposed to take a big chuck of spectrum from MMDS operators and allocate it to mobile services.

Considering the responses received from public consultation N°31, ANATEL resolved to re-farm this spectrum in resolution N°544, published in August 2010, permitting the allocation of spectrum in the 2.6GHz band to support nationwide deployment of Next-Generation Mobile Broadband services under a technology neutral scheme, meaning that either WiMAX or LTE can be deployed in this band. 

Under the new regulation MMDS operators will operate in the entire 2,500-2,690MHz frequency until June 30th, 2013. After that date, MMDS operators will keep only 50MHz of TDD and 2x10MHz of FDD (a total of 70MHz). The remaining spectrum will be auctioned off by 2012 for the provision of mobile broadband services; 120MHz will be allocated in this auction, however winning bidders are not expected to deploy until 2013 after the spectrum is freed from MMDS operators. 

It is well known that if this spectrum is allocated to mobile operators, the last thing they would do is deploy a WiMAX network, in favor of providing 4G/LTE services. If this is true, WiMAX has little chance to be deployed in the 2.5 GHz band in Brazil. Brazilian mobile operators don’t have enough 3G spectrum to satisfy the increasing demand of mobile services, nor to deploy 4G at the moment. Out of 198 million inhabitants, over 189 million are mobile subscribers – 3G has been a complete success. 

ANATEL’s decision on spectrum refarming in the 2.6GHz band will open up new and attractive opportunities for local mobile operators and foreign investors. Brazil, long seen as a nation with a tough regulatory environment, has made a wise decision that will foster competition and create opportunities for operators to enjoy economies of scale from the GSM ecosystem and a wide range of 4G products.

Auction for the 120MHz in the 2.6GHz band will definitely be a fierce contest, and only players with deep pockets will be able to gain access to this disputed spectrum. A small greenfield operator would find in virtually impossible to get a piece of this spectrum to deploy WiMAX. Telefonica is the only operator in a position to deploy either mobile WiMAX or LTE at the moment, since they acquired MMDS operator TVA Brazil who already had a portion of 2.6GHz spectrum. However, we anticipate their choice to be towards LTE.

We believe that the players with a stronger position to win spectrum in the upcoming 2.6GHz auction will be: Vivo, Claro / America Móvil, TIM (Telecom Italia), and Oi (Brasil Telecom). A maximum of 60MHz could be allocated to one operator in a single geographic area and up to 80MHz in some instances. 

In its latest report “Brazil LTE, WiMAX and Broadband Wireless Market Analysis, 2010” published September 2010, Maravedis analyses the regulatory situation for WiMAX and 4G in Brazil, including the 2.5 GHz, 3.5 GHz and 10.5 MHz bands, as well as for 3G, including the 850 MHz, 1.8 GHz and 1.9/2.1 GHz bands. It provides detailed profiles of Brazilian WiMAX players, including their deployment status and their reaction to the recent public consultations N°31 and N°54. We have added a special section dedicated to the “Latest Regulatory Update on 2.6GHz spectrum refarming.” The report also synthesizes the participation of mobile players and the spectrum that they have each been allocated. Finally, it provides Maravedis’ assessment of future prospects for the Brazilian wireless market. 

DOWNLOAD THE REPORT BROCHURE HERE

For more information about this report please contact: sales@maravedis-bwa.com, To contact the author: cintia@maravedis-bwa.com 

MARAVEDIS is a premier global provider of market intelligence and advisory services focusing on 4G and broadband wireless technologies, regulation and markets.

Author: Cintia Garza, Team Leader 4GCounts & Market Analyst CALA