On April 12 2012 Brazil's telecommunications regulator (ANATEL) approved the bid notice for the 2.5 gigahertz (GHz) radio frequency band, to be used for the provision of 4G technology, and the 450 megahertz (MHz) radio frequency band, designed to improve coverage in Brazil's rural areas. The text of the 4G technology bid notice was available for public consultation from January 25 2012 to March 5 2012 and received more than 190 responses from a number of industry commentators, including providers of telecommunications services.
The bid notice, which is yet to be published by ANATEL, is expected to establish that winners in the 2.5 GHz bands must serve the municipalities designated as host and sub-host cities of the 2013 Confederations Cup by April 2013, and of the 2014 World Cup by December 2013. The requirements to use national technology set out in the initial draft bid notice were maintained.
In relation to the 450 MHz band, the bid notice stipulates that the construction and availability of infrastructure under the industrial exploitation regime must cover at least 30% of municipalities by June 2014, and 100% of municipalities by September 2015. The winning bidders in the 450 MHz band must supply internet broadband (at a rate of 256 kilobytes per second) and telephony to rural schools, within 30 days of a request.
The 450 MHz band will be offered to interested parties first, with the winning bid being that which offers the lowest price to consumers. If there are no bids, or if the bids presented are unsatisfactory, the 450 MHz band will be offered together with the 2.5 GHz lots; the winners will be those that present the highest bids. ANATEL has not yet announced the minimum bid for each sub-band.
The bid notice approved by ANATEL differs from the initial draft as it establishes that the winning bidders in the 2.5 GHz band auction must present reference offers for mobile virtual network operators. This measure is aimed at promoting efficient use of the spectrum and reducing the price charged to end users.
The restriction that previously established that interested parties, their affiliates, subsidiaries or parent companies that already had radio frequencies in the 2.5 GHz band - in particular, multichannel multipoint distribution service (MMDS) operators - could acquire new radio frequency sub-bands only up to a 80 MHz limit has been maintained.
ANATEL has tightened the rules relating to the waiver of the 2.5 GHz band by MMDS operators. The initial draft of the bid notice stipulated that a new 2.5 GHz grant must be obtained as a condition for the waiver. However, the final version of the bid notice establishes that, even if they are not winners, MMDS operators that wish to participate in the bidding process must waive the right of use of the radio frequencies that they already possess within 18 months. The cut-off date for negotiations between MMDS operators that possess frequencies in the 2.5 GHz band and the winners of the 4G auction is March 30 2013. If no agreement is reached, negotiations will be submitted to ANATEL for arbitration.
The bid notice is expected to be published shortly, with the bidding process planned for early June 2012.
For further information on this topic please contact Ricardo Barretto Ferreira Da Silva, Fabio Ferreira Kujawski or Thays Castaldi Gentil at BARRETTO FERREIRA KUJAWSKI E BRANCHER – Sociedade de Advogados by telephone (+55 11 3897 0300), fax (+55 11 3897 0330) or email ([email protected], [email protected] or [email protected]).