Several players in the Brazilian market have added to their 3G spectrum holdings.
IHS Global Insight Perspective | |
Significance | Oi, Claro and Sercomtel have picked up some additional 3G spectrum in the Brazilian auction. |
Implications | These wins will primarily be used to add capacity to their 3G networks. |
Outlook | A 2.5-GHz auction is planned early next year, which should provide LTE-capable spectrum to most operators. |
Brazilian regulator Anatel has announced the results of an auction of additional 3G spectrum. Fifteen lots of sub-spectrum were won by four companies: Brasil Telecom (Oi), Claro, Sercomtel and TIM, at a total cost of 237.5 million Brazilian real (USD132.5 million). There were no bids for lots 2–33, 42, 46–48, and 52–53. Details of the spectrum won are as follows:
- Lot 1: Claro won 2 MHz of spectrum in the 800-MHz band in Area 4.
- Lots 34–41 and 43: TIM won spectrum in the 1.8-GHz band in Areas 16 (5-MHz), 17 (15-MHz), 18 (15-MHz), 20 (10-MHz).
- Lots 44, 45, 49 and 50: Brasil Telecom (Oi) won spectrum in the 1.8-GHz band in areas 17 (5 MHz), 18 (5 MHz), 2 (10 MHz) and 9 (20 MHz).
- Lot 51: Sercomtel won 10 MHz of spectrum in the 1.8-GHz band in Area 14.
Outlook and Implications
- Oi and TIM Win Largest Holdings: This set of auctions was not of strategic importance to the participants, as reflected in the low average premium (0.69%) above the base prices and the lack of participation in most lots. Nevertheless, TIM and Oi took the opportunity to buy additional spectrum to raise capacity in data hotspots. TIM acquired significantly more than Oi, having to date seen far more success on the 3G front. At the end of September 2011, TIM had 5.6 million handset-based 3G subscribers, up from 2.3 million in September 2010, while Oi had only 900,000. As a proportion of their total mobile customer base, TIM is well ahead, with a penetration of 9.5%, to Oi's 2.1%, although the latter has seen an acceleration of 3G uptake over the past few quarters.
- Looking to LTE: While an LTE launch in Brazil is not imminent, most players are considering participation in the planned 2.5-GHz auction or else using other bands to launch the next generation of mobile technology. TIM has said that it wants to exploit pre-LTE technologies as much as possible (see Brazil: 8 November 2011: TIM Brazil Outlines Benefits of AES Atimus Acquisition), while Oi is considering using its 1.8-GHz holdings to offer LTE (see Brazil: 18 August 2011: Oi Considers LTE in 1.8-GHz Band). Both Vivo and Claro have indicated that they will seek to launch LTE networks in the next two to three years.