SAO PAULO
By Ben Tavener
Brazil's government is hoping to raise at least $3.15 billion (7.7 billion reais) from an auction to be held Tuesday of six licenses to operate next-generation 4G (LTE) mobile phone services.
Anatel, the telecoms regulator, announced last week that the country's three biggest mobile services providers confirmed they would bid for the three available concessions to provide nationwide services on the 700 megahertz range.
As of 11.30 a.m. local time (1430GMT) in Brasília, Vivo, the local subdivision of Spain's Telefónica; Claro, a subsidiary of Mexican América Móvil; and TIM Brasil, the Brazilian wing of the eponymous Italian parent company, had all successfully bid for the three national concessions.
The offering is Brazil's second major 4G auction. The first was held in 2012 and reaped a total of $1.9 billion (2.9 billion reais). The government hopes the auction could reach $4 billion (9.8 billion reais). If lots remain unbought, a second round of the auction will be held.
Local media say the revenue from Tuesday's sales is sorely needed by the government to meet fiscal targets on the country's primary surplus, which is currently threatened by a drop in tax revenues and a weak performance from the country's flagging wider economy.
Three other regional licenses are also going under the hammer, some of which are likely to be of interest to the fourth competing company, locally-owned Algar Telecom, which operates in four states in the central-west and southeastern regions of Brazil.
Brazil's Communications Minister Paulo Bernardo and a number of commentators expressed surprise at news that two other major telecoms companies operating in Brazil -- Oi and Nextel -- would not take part in the auction.
The bandwidth range being auctioned Tuesday is currently used for analog television, but the 700 megahertz frequency range will be vacated to make way for the new 4G services. As a result, Brazilian broadcasters will be required to switch to digital services by 2018.
New equipment to avoid interference will be paid for by the new licensees, local media reported, but radio services have raised concerns that their broadcasts could be compromised.
Brazil already has 4G services on the 2.5 GHz frequency band, auctioned in 2012.
According to the latest figures from Anatel, only 2.8 percent of the 132.9 million smartphones and tablets active in Brazil accessed 4G services. Commentators say this is partly due to the patchy nature and high price of the services currently offered.
The news of the new frequency was welcomed by many Brazilians on social media, as some smartphones do not work on the 2.5 gigahertz frequency, which functions better in large urban areas.
The new 700 megahertz frequency has better range and requires fewer antennas, allowing operators to cover wider areas.
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