Four years ago, Brazil was seen by many as a country with a promising future for WiMAX, given its high population density (190 million POPs), the low broadband penetration of 5.6%, and the many rural and underserved areas (110 million people still do not have broadband access). However the Brazilian situation has changed, leaving very little opportunity for WiMAX to develop.

In early 2003 Anatel, the Brazilian regulator, allocated five 3.5 GHz licenses. In this auction only 25% of the spectrum was allocated, the remaining spectrum was to be awarded in a second auction planned for 2006, which has been delayed since then. Of these five license holders, only two - Neovia and Embratel - have commercially deployed WiMAX networks as of today.

In November 2008, Anatel held a public consultation (N°54) on the attribution of the remaining 75% of spectrum in the 3.5 GHz band. Anatel proposed to make this band available to mobile operators for mobile services and mobile personal services (MPS); to wireline companies for commutable fixed transmission services (STFC); and to service providers. Anatel also proposed allowing mobile services in this band, and allocating one portion of this spectrum to the public sector.

Anatel received over 2,000 contributions from interested, parties, but has not come to any resolution on this consultation. If approved before year’s end 2009, the anticipated 3.5 GHz auction could be held in early 2010. For the moment, no operator except Embratel has access to enough spectrum to deploy a large scale WiMAX network in Brazil.

The 2.5 GHz band was allocated for MMDS services in 2002, and later in 2006 Anatel allowed MMDS operators to use 184 MHz of this spectrum to providedata services as well. MMDS services have made almost no progress, except in certain rural areas to a small extent. On the other hand, all MMDS operators are using their 2.5-2.7 GHz spectrum to provide broadband wireless services; however these services are not WiMAX, since the regulator does not allow WiMAX in this band.

MMDS operators are providing broadband wireless using a DOCSIS system and NextNet. In previous years MMDS operators conducted several WiMAX trials in Brazil; however Anatel did not provide certification for the equipment that operates in the 2.5 GHz band, which it considered could represent a threat to 3G services.

The regulator launched a public consultation (N°31) in March 2009 for alteration of the 2.5 GHz band. With this consultation Anatel proposed to take a big chunk of spectrum from MMDS operators and allocate it to mobile services. The use of the spectrum under this new allocation will be technology neutral; meaning it could be used either for mobile WiMAX or LTE. However, it is well known that if this spectrum is allocated to mobile operators, the last thing they would do is to deploy a WiMAX network, in favor of providing 4G/LTE services. If the latter is true, WiMAX has no chance to be deployed in the 2.5 GHz band in Brazil.

To put it simply: WiMAX's progress in Brazil has been difficult. Many obstacles will have to be overcome before it can reach market momentum. One of these is the regulatory environment; second, if the spectrum is allocated to mobile operators, the 2.5 GHz band will be used for 4G/LTE services rather than WiMAX. Finally, 3G has been a tremendous success in Brazil, and mobile operators need additional spectrum to keep expanding and upgrading their networks.

Fixed WiMAX however has still a good chance to develop in Brazil in the 3.5 GHz spectrum. 2010 could be the year for the Brazilian Telecom market, given that auctions are expected to occur for the 3.5 GHz, 2.5 GHz, and 450 MHz bands, according to Anatel.

To learn more about Brazil's Telecom regulation, upcoming WiMAX spectrum auctions, consultation results, WiMAX players and WiMAX opportunities, look for our report, Broadband Wireless and WiMAX in Brazil, available in January 2010.

For more information you can contact the author at cintia@maravedis-bwa.com

Copyright © 2009 by Maravedis Inc. All Rights Reserved.
No reproduction without consent.



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