RIO DE JANEIRO, -- Brazil held its eagerly awaited auction to build out the fifth generation of its wireless network. It is unclear if Huawei, China's telecommunications company, will participate.
Technology promises faster speeds and less lag when connecting the network. It also allows for more devices to be connected to the internet. The auction was also designed to address the nation's deep digital inequalities. It required winning bidders build or improve the wireless infrastructure in areas that were not served.
Although the auction was still ongoing on Thursday, pledges of more than 30 billion reals (over 5 billion) from mobile operators like Claro, Tim, and Telefonica, which is Vivo's owner, were already made.
The government anticipates that the auction will bring in up to 50 billion reals. It could even continue through Friday.
The auction has been planned by authorities, legislators, and the National Telecommunications Agency for many years.
The main topic of debate surrounding 5G is whether or not wireless operators will be permitted to partner with Chinese telecom giant Huawei in the future, given strong U.S. resistance.
The U.S. and China are locked in a diplomatic war over Huawei. Officials from the U.S. suspect that Huawei's network equipment could be used by the Chinese government to spy on them. Due to security concerns, the U.S. government has asked other countries, including Brazil and India, to ban Huawei 5G network expansions. Huawei denies these allegations.
Experts and legislators suggested that Huawei, although it was not part of Thursday's auction sale, may enter the game in the future. Once the infrastructure is built, operators will need to install hardware to allow radio antennas to be used with the new wireless network. It is possible for companies such as ZTE in China, ZTE in Sweden, ZTE in China, and Nokia-based Helsinki to do it.
This auction, Brazil's largest ever telecommunications tender, also aimed at expanding digital inclusion. It prioritized investment over replenishing the state's coffers.
The administration of President Jair Boslonaro expects that 20% will go to the federal Treasury and the remainder to improving or building new infrastructure.
Fabio Faria, Communications Minister of Brazil, stated that Brazil would be the first Latin American country with 5G. This apparently refers to a nationwide rollout. Many other countries have already started to install 5G networks.
It is planned to cover over 31,000 km (nearly 22,000 miles) of federal highways and to provide 5G coverage to public schools. Faria stated that almost 7,000 of the 85,000 schools in the country do not have internet.
"What did they ask for when we visited two Indigenous communities of the Tucanos or Yanomamis? Bolsonaro stated at the tender's opening ceremony that they asked for the internet.
Bolsonaro is a close admirer of Donald Trump and said last September that he would decide who could take part in the 5G auction. Experts however say it was the regulatory agency.
Brazil supported Trump's "Clean Network", an initiative that lists Chinese tech companies it considered to be security threats, in November 2020.
Bolsonaro's government was unable to block Huawei openly, since China is the country’s top trade partner,Thiago De Aragao, director strategy at Arko Advice, told The Associated Press.
Brazil also relied on Chinese imports of active ingredients to localize the COVID-19 vaccine, Coronavac, which has been available in Brazil since months.
De Aragao stated, "At that point, it became obvious it would be very difficult for Huawei to exclude."
Perpetua Almeida (federal lawmaker) was the leader of the Commission on 5G Tender in Congress' Lower House. She said that banning Huawei would not make sense since it is already a supplier to the country's largest mobile phone operators.
Almeida stated to the AP that without Huawei, "You would take Vivo Claro and TIM (the leading companies of today) out of the bidding procedure." Brazil must decide its own path, and avoid the dispute between China's and the U.S.