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Brazil Issues 3G Licenses

Light Reading
LR Mobile News Analysis
Light Reading
5/2/2008
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Brazilian telecom regulator Anatel this week doled out 3G licenses for the 2.1 GHz band that operators won in its December 2007 auction, and the likes of TIM Participacoes S.A. (TIM Brasil) and América Móvil S.A. de C.V. subsidiary Claro immediately kicked off services.

Carriers have already begun launching 3G services in the 850 MHz band, but the licenses for the 2.1 GHz band cover major cities such as Sao Paulo, Rio de Janeiro, and the capital Brasilia.

Anatel had initially ruled against using the 850 MHz band for 3G, making carriers wait for the auction of UMTS licenses for 1.9 GHz–2.1 GHz frequencies, but on October 31 last year it said it would allow carriers to use any frequency.

TIM Brasil, a subsidiary of Telecom Italia, began offering services in Sao Paulo and Rio de Janeiro yesterday, having already launched in six state capitals in the 850 MHz band on April 16, and intends to provide coverage to all of the country's 26 state capitals by the end of the year. The carrier has tapped Ericsson AB (Nasdaq: ERIC) for WCDMA/HSPA gear to upgrade its 2G network in eight states. (See Ericsson to Supply Brazil.)

It's also using equipment from Huawei Technologies Co. Ltd. and Nokia Networks , and handsets from Sony Ericsson Mobile Communications , Nokia Corp. (NYSE: NOK), and Samsung Corp.

The country's second largest operator, TIM Brasil is offering its 3G applications, including mobile broadband, 11 TV channels, and video calling, free of charge until the end of June to entice users to try out the service.

Claro, which began rolling out services in the 850 MHz band in 37 cities back in November, launched its 2.1 GHz operations on Wednesday.

Claro has deployed HSDPA equipment from Huawei and Ericsson, and plans to invest BRL2 billion (US$1.2 billion) in building out its 3G network coverage this year. (See Ericsson Wins Claro Deal .) Claro, Brazil’s third largest operator, says it will introduce a prepaid 3G broadband offering in the second half of the year.

Vivo Participacoes SA , the country’s largest mobile operator, already runs a CDMA 1xEVDO network in 24 cities, but it also signed new licenses for the 2.1 GHz band.

According to a statement from Anatel, operators will be required to provide 3G coverage to 3,800 cities within eight years, and in the first two years bring mobile services to 1,836 cities that are without coverage.

Brazil, which ranks fifth in Light Reading's Top 10 Emerging Mobile Markets 2007, now has more than 125 million mobile subscribers, but coverage remains spotty for smaller towns because 2G licenses only require operators to cover towns with populations over 30,000.

Anatel says that within eight years, it expects at least 60 percent of towns with populations below 30,000 to have access to 3G services and the remaining 40 percent to be able to receive 2G services.

— Nicole Willing, Reporter, Light Reading

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