President of Telefônica Brasil says 5G obligations ‘are not for anyone’ – 10/28/2021 – Market

The president of Telefônica Brasil stated this Thursday (28) that, despite the 5G auction scheduled for next week not having a collection bias, the investment obligations defined in the notice cannot be assumed by any investor.

Anatel representatives said the day before that the Treasury could raise R$ 3 billion with the 5G auction, while the investment obligations foreseen in all frequency bands that will be made available in the November 4th dispute are close to R$ 50 billion.

“We invest, on average, R$ 8 billion a year in Brazil, being a relevant group requires a lot of investment,” stated the executive president of Telefônica Brasil, Christian Gebara, in an interview with journalists this Thursday.

“It’s a market that still has an infrastructure gap, it requires a lot of investment. I don’t think it’s for anyone,” said the executive in response to a question about the ten new entrants who expressed interest in participating in the auction.

“The obligations [do leilão] there are many, long-term, and I also think that it is not for any investor to assume this type of obligation. Everyone will have to do the math to understand what kind of profitability an auction like this can offer,” said Gebara.

Asked about the extension of the deadline requested by Cade’s general superintendence to assess aspects of the sale of Oi’s mobile telephony assets to Telefônica Brasil, TIM and Claro, Gebara said that he does not expect the antitrust agency to eventually impose hard remedies.

This week, the superintendency asked for another 90 days to analyze the operation, carried out in the context of the judicial reorganization of the group, which years ago was considered “national champion” to compete in the market with international telecommunications groups.

“I don’t expect the drugs to be strong. The competition is already there. We have one of the most competitive markets, the number of groups in the 5G auction shows the opportunity for other groups that want to be competitive also buy licenses and previous operations had no remedies [fortes]”, these Gebara.

“The operation was carried out preserving all frequency limits defined by Anatel, preserving all the competitiveness in the number of customers and the 5G auction, we are talking about more than 60% of the frequency available in the country that will be auctioned now on November 4th” , he added.

Asked about Telefônica Brasil’s interest in the auction, the executive avoided commenting, including on deadlines for the entry into service of the so-called “standalone” 5G, or pure, which does not use 4G frequencies to function.

He mentioned that the deadline defined in the auction notice for the standalone service is July of next year for entry into operation and that the winners have no obligation to launch services with the technology until the end of this year.

In mid-September, the Minister of Communications, Fábio Faria, stated that São Paulo and some other capitals in the country will have pure 5G networks working by the end of this year.

“Standalone depends on the release of frequencies (from 3.5 GHz currently used in services such as satellite dishes) and this will be defined post-auction,” said Gebara.

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