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BusinessBrazil

Brazil raises billions in 5G tender

November 6, 2021

Winning bids went to subsidiaries of Telefonica, Telecom Italia and America Movil. Huawei was exluded from the tender amid US-China tech standoff.

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A tablet with "5G" written on it in large type, with an auctioneer's gavel resting on it.
Brazil put future rights to one of the world's largest 5G networks under the hammerImage: imago images/J. Schwarz

Brazil raised €7.27 billion in investments and license fees in a two-day international tender to build and operate a 5G data network, said Brazilian Communications Minister Fabio Faria on Friday. The network will be one of the world's biggest.

The final result was 46.8 billion reais ($8.4 billion, €7.27 bn), which came in shy of the €7.79 bn ($9 billion) the government had forecast.

Winning bids went to Telecom Italia's local subsidiary, Tim; the Spanish Telefonica's Brazilian unit; and Claro, owned by the Mexican America Movil.

Six newcomers to the Brazilian market also made winning bids. The tender drew 15 bidders in total.

The tender was for the right to build and operate different blocks of the frequency spectrum for 20 years.

Why was Huawei excluded?

Brazil also tendered the development of a separate network reserved for government communications. Bidding for this network excluded equipment from Huawei, the Chinese corporation that has been the target of US espionage accusations.

A Huawei mobile phone store in London, UK.
Huawei was excluded from the tender for developing Brazil's 5G network, after similar restrictions in a series of countries in recent yearsImage: picture-alliance/ZUMAPRESS/London News Pictures

China and the United States are Brazil's largest trading partners, and Brazil had come under pressure from both sides over the ground rules for its 5G network.

Due to this tech standoff between China and the United States, the tender was postponed from early 2021.

Reactions

President Jair Bolsonaro called the event "historic". "Almost 10 thousand small towns that didn't have internet will have internet,” said Bolsonaro in a government statement.

"We're going to show the world that Brazil is now in the digital economy”, said Communications Minister Faria.

"It was an absolute success,"  Marcos Ferrari told AFP. Ferrari is the CEO of Conexis Brasil Digital, a group representing five of the bidding firms.

sdi/msh (AFP, Reuters)