Brazil intends to initiate an auction of 450 MHz and 2.5 GHz spectrum by June 10 with an aim toward having next-generation mobile broadband technologies launched over the latter band in time for two upcoming international sporting events.
The 2.5 GHz spectrum is targeted for 4G services, while the 450 MHz band will be used for extending rural coverage.
Winners of the 4G auction will be determined by which company offers the highest bids, but winners of the 450 MHz auction will initially be chosen based on which bidder proposes to offer the lowest prices for consumers. The 450 MHz spectrum will be auctioned first so Brazil's telecom regulator Anatel can gauge interest in it. If there are no acceptable proposals for the 450 MHz frequencies, then Anatel will offer that spectrum in conjunction with portions of the 2.5 GHz band.
Three or four operators are expected to win enough 2.5 GHz spectrum to provide nationwide coverage. Winning operators will have to hustle to launch their networks as Anatel will require them to offer mobile broadband service over their new spectrum by next April in the six Brazilian cities hosting soccer's Confederations Cup. Winners will also have to launch service by the end of 2013 in the dozen cities staging the 2014 Fifa World Cup. The regulator said it will publish reserve prices for the 2.5 GHz bidding later this month.
Telecom Italia's TIM Brasil and Telefonica's Vivo Participacoes previously expressed doubts about the 4G auction's timing, since 3G networks in Brazil have not had much time to mature. Nonetheless, both operators are expected to bid in the 2.5 GHz auction, as are America Movil's Claro, Oi and NII Holdings' Nextel Brasil. Rumors are that Sky Brasil, part of DirecTV, may also bid.
Anatel will require auction winners to use considerable amounts of locally produced goods in their networks, ranging from 60 percent in 2012-2014 to 70 percent by 2017-2022.
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