On Thursday, local units of America Movil, Telefonica, Telecom Italia, and a number of other local companies spent well over a billion dollars in order to secure valuable spectrum in Brazil for fifth-generation (5G) wireless technology.

The government estimates that the auction, which will be the largest in Latin America’s top economy, will need the victors to invest around 40 billion reais ($7.14 billion).

Seven businesses paid a total of 7.09 billion reais ($1.27 billion) for spectrum rights across Brazil on the first day of the auction.

Claro, a subsidiary of Mexican billionaire Carlos Slim’s America Movil SAB de CV, was the highest spender, paying 1.63 billion reais for numerous batches, including the B1 batch of 3.5 GHz spectrum, for which it paid 338 million reais, and the 2.3 GHz E3 batch, for which it paid 750 million reais.

Telefonica SA, which operates Brazil’s largest wireless carrier under the Vivo brand, paid around 967 million reais to obtain the B2 batch of 3.5 GHz spectrum, as well as many other batches, with a 420 million reais bid.

TIM SA, a subsidiary of Telecom Italia SpA, purchased the B3 3.5 GHz batch, as well as many other batches, for 351 million reais, bringing its total payout to about 976 million reais.

With a 1.4 billion reais bid, Winity II, controlled by Brazilian asset management Patria Investimentos, won a 700 MHz bandwidth batch.

Brisanet Participacoes SA, a Brazilian internet service provider that went public in July, won the C4 batch in the 3.5 GHz regional coverage band with a bid of 1.25 billion reais, making it the day’s second highest spender.

The long-awaited auction was postponed due to disagreements about Huawei Technologies Co Ltd’s participation as a supplier of 5G telecom equipment, which the US had pressured Brazil’s far-right government to prohibit on security grounds.

Brazil has pushed forward with the offer of four broadcast bands: 700 MHz, 2.3 GHz, 3.5 GHz, and 26 GHz, following a deal aimed at safeguarding government communications.

Industry groups have long anticipated the chance for Brazil to catch up on 5G technology, allowing greater efficiency and automation in fields from healthcare to agribusiness. However, slow local licensing for new antennas across the country may drag on the rollout of the new wireless coverage.

The telecom infrastructure sector expects Brazil`s 5G network to generate new business opportunities worth over $1 trillion over 15 years and create 1.5 million jobs in four years, said Vivien Suruagy, head of a federation of 137,000 companies.

Brazil`s main wireless firms already use Huawei for more than half of their networks and argued that banning Huawei would add billions of dollars in additional costs that would be passed on to consumers.

Instead, President Jair Bolsonaro`s government decided to build a separate network for itself and all federal agencies, from which Huawei will effectively be excluded. 

The government stipulated that bidders must comply with the governance rules of publicly listed companies, which Huawei does not.

Brazilian telecom regulator Anatel expects to resume the auction on Friday, when it should offer the 26 GHz bands.

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