Ericsson Sees 5G Stirring Competition in Brazil, Eyes Leadership
(Bloomberg) -- Ericsson AB is hoping to take advantage of its large share in Brazil’s telecommunications market to fight off competition as the country prepares to host one of the world’s largest 5G spectrum auctions.
The Swedish firm, which already holds a market share of over 52% in the local market of mobile technologies, is building up a new assembly line in its Brazilian factory. The facility will supply 5G gear to all of its Latin America operations, said Eduardo Ricotta, the president of Ericsson Latam South, in an interview.
“We expect the new assembly line to be ready with production running full-speed in the second half,” Ricotta said. He added that the company already exports about 40% of all equipment assembled in its plant located in Sao Jose dos Campos, an industrial city near Sao Paulo, to other countries in the region.
Ericsson estimates Brazil’s potential revenues from digitalization at about 391 billion reais ($69 billion) in 2030, of which 153 billion reais are likely to come from the adoption of the 5G technology in 10 industries, including health care, energy, agriculture and media.
The long-awaited auction, which has been postponed several times from its initial date of March 2020, is now expected to take place by July and will encompass four frequencies: 3.5 GHz, 2.3 GHz, 700 MHz and 26 GHz.
Ricotta considers the proposed schedule attainable and expects Brazil to catch up with other countries in Latin America that were faster in deploying 5G. “Chile, for example, is well ahead at the moment,” the executive said.
Brazil’s telecom watchdog expects the high-speed technology to be available in all capitals by mid-2022. The guidelines for the 5G auction, which still require approval from the federal audit court known as TCU, must be duly scrutinized, but the overall design of the bidding process seems positive, Ricotta said, noting the government appeased industry concerns on spectrum costs.
The 5G push is part the company’s plan to invest 1 billion reais in Brazil by 2025, just as new equipment makers begin to emerge, while U.S. efforts to ban major rival Huawei Technologies Co. from 5G deployment have so far not been successful in Latin America’s largest economy.
Brazilian carriers are not forbidden from using the Chinese supplier in 5G commercial rollout, but are required to build a separate and private network for the government, to which Huawei is unlikely to be fit, according to Communications Minister, Fabio Faria.
“We will not enter on geopolitical issues, but we will fight to provide this network to the government regardless of how many players are out there,” Ricotta said.
Ericsson has already signed 131 contracts with carriers to supply equipments for the fifth-generation mobile technology, according to him. Seventy nine of the 5G networks switched on globally are using Swedish technology, which means the group accounts for about 55% of all commercial launches up till now.
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