Brazilian 4G auction achieves lower price per capita than Europe

08 August 2012 |


Pricing per megahertz per capita of spectrum in Brazil’s 4G auction was lower than in Europe but still relatively expensive at $1.3 billion, according to Pyramid Research.

 

However, this cost is not expected to justify delayed investment in LTE infrastructure by operators. Brazil has more need than most countries to roll out LTE services due to its national broadband plan and the 2014 World Cup.

Brazil’s operators jointly invested an estimated $5 billion in 2009 in spectrum and infrastructure for 3G, but still many claim that there is potential in the existing network. They are also uncomfortable with the 2.5GHz frequency acquired, which needs more investment from them in order to achieve good coverage.

The Brazilian national broadband plan is aimed at connecting 40 million households by 2014. Given that there are only 19 million fixed access lines in the country, it is expected to mean a reliance on wireless to bridge the gap.

Brazil also wants to make sure the needed connectivity to prove it is no longer an underdeveloped country and wants to project the image of being a trendsetter, according to Pyramid.

All spectrum sold in Brazil’s 4G auction has a minimum coverage requirement, with operators expected to have the network in place in all cities hosting the World Cup by the end of 2013. While in 2014, all cities with more than half a million inhabitants must be covered.

Vivo and Claro acquired the larger bands of spectrum available, which reinforces their strong positions in the market.