Brazilian 3G Licences Loom

June 23, 2005 - source: BWCS

Brazil is set to press ahead with the award of 3G licences this year, but it is unlikely to allow new entrants into the already fiercely competitive market. According to investment house JP Morgan, the Brazilian regulator Anatel is "unlikely to attract new mobile-telephony players through the award of third-generation licences".

Elifas Gurgel do Amaral, the head of Anatel, has gone on record as saying that 3G licences are a priority and that his organization could push them through by the end of 2005. According to other sources within the regulatory body, both Vodafone and Hutchison have already expressed an interest in buying a 3G franchise in Brazil.

While analysts such as JP Morgan think it is unlikely that another new player would be tempted to dive into the crowded Brazilian mobile market, Anatel is clearly keen to make it as attractive as possible for a new entrant. The regulator is likely to make upfront licence fees very small and set the coverage requirements to a minimum level.

The regulator must await approval from the Ministry of Communications for the auction.