Brazil’s 5G Expansion Auction May Endanger Global Competitiveness

Brazil is currently at a major crossroads in the push toward greater connectivity and communication.

A major deal with Chinese tech giant Huawei to introduce 5G network power into Brazil has stalled for several weeks. This has increased the chances of Brazil losing some economic competitiveness in the global economy.

The developments of this deal will definitely alter the geopolitical, economic, and communication activities of the region massively.

In this article, we’ll go over: 

• Details of Brazil’s 5G Expansion Process + Major Players
• Effect of Stalling the Expansion Auction

Let’s get into it!

Brazil’s 5G Telecom Dilemma

Over the past several years, Brazil has been recognized as one of the most rapidly growing communications markets in the world.

The region has seen technology and Brazillian e-Commerce growing at a rapid rate, and the Brazilian government has been actively pushing that growth to a new level. 

5G represents that new level. 

Brazil has been working towards a solution that will see the next generation of telecommunications brought into the country, which will positively affect:

• The performance of mobile networks for consumers and several industries
• The expansion of support for new devices and services
• The cost-effectiveness of using telecommunications in Brazil

Before Brazil can begin the integration of 5G tech into their infrastructure, they have to go through the process of auctioning off the available spectrum.

This is when the government licenses pieces of radio airspace in their borders off to bidders, which is necessary for a company to start its 5G work.

The leading candidate in the auction process has been the Chinese telecom giant Huawei, which has been pushing to enter new markets with its 5G services.

Although talks have been progressive, the auction has had delays in the actual commencement of bidding. Several factors have contributed to the delays in the Brazilian 5G telecom deal.

Auction Structure

Anatel, or the national telecommunication body that oversees operations for Brazil, has had setbacks in outlining the structure of the auction.

Between ongoing conversations with the government and Huawei officials, the terms of the auction are not fully set in stone as of yet. 

Political Issues

For years, Brazil has remained mostly equivocal in the affairs of two of the world’s major superpowers – the USA and China.

When it comes to expanding 5G communication for the future, Brazil has been facing increased pressure from both sides to decide on what company will be in charge of that expansion. 

The United States is not happy that the Chinese-born company, Huawei, has been implicitly chosen for the role.

The U.S has made attempts to steer the Brazilian government away from them (with fears of spying being the main rationale). 

As the tension between Chinese and American technological influence picks up, Brazil’s delays have postponed the choice between the two parties, which will definitely alter those respective relationships, for better or for worse. 

Effect of Stalling the Auction

As countries are racing to reap the early advantages of 5G, Brazil’s stalling on the auction already sets them behind from a competitive standpoint.

The longer it takes for the process to get off the ground, the farther behind Brazil will be in terms of utilizing new communications in global commerce. 

As time passes, this will cause significant losses in the Brazilian market.

According to Swedish communications company Ericsson, delays to the official bidding into 2021 may result in a potential loss of 25 billion reais or about 6 billion USD. 

Brazil will have to make hard choices fast, as potential profit and competitive advantage hang in the balance.

Looking to Expand into Brazil and Beyond?

Contact our multilingual marketing team and LATAM business strategists at hola@colibricontent.com to help expand your brand in Brazil!

Be sure to check out the Business in Brazil Report to take a look at the latest growth trends in the Brazilian economy!