The Brazilian government can enforce the ban on Huawei at the network auction 5G in the country, responding to requests from the current United States government, which are in a strong trade war with China. The problem is that operators predict that, without the Chinese manufacturer involved, technology costs in Brazil will be much higher.

Conexis Brasil Digital (formerly SindiTelebrasil), which represents some of the country's main operators, released a document last Friday (27/11) warning about the billion-dollar costs that this ban will bring.

The communications companies believed that the auction rules would not be changed, especially after the Joe Biden's victory in the USA. However, last Tuesday (24/11), Communications Minister Fábio Farias took Anatel directors to a meeting with President Jair Bolsonaro to discuss the ban on Huawei in the 5G auction.

“We emphasize the need for transparency throughout the process, thus upholding the fundamental principle of free enterprise present in our Federal Constitution,” says an excerpt from the note released by Conexis.

The note also says about the possible banning of Huawei from the 5G auction: “5G will be one of the main milestones of the ongoing technological revolution and a fundamental vector of growth for the country. Therefore, a broad debate and the technical nature of the associated decisions will be fundamental for the future of the Brazilian economy”.

Moving costs

According to the mobile operators, Huawei equipment already accounts for 50% of the market in Brazil. Claro reportedly has 55% of its network equipment made by the Chinese company, Vivo has 65%, TIM has 45% and Oi has 60%. Nextel has 100%. According to the document, without the Chinese company, the expansion of the 5G network in Brazil would be compromised. The network would reach only eight Brazilian capitals in the first years of implementation.

Regarding the possible banning of Huawei from the 5G auction, the letter concludes: “Valuing dialogue, we reinforce our willingness to contribute to this relevant construction of public policy, which will take Brazil into the future with 5G, and will pave the way for the 4.0 economy in the country, ensuring continuity and evolution of services”.

Some companies estimate that banning Huawei from the 5G auction could cost it $200 billion to replace its technologies with those of a competitor, but that figure may be an overestimate.

The Chinese giant is accused by the US of spying on Western countries in the service of the Chinese government. Pressure from the White House has already resulted in the company being barred from 5G in European countries such as France, the United Kingdom and others. Even so, Huawei received solidarity from its biggest competitor in the 5G market, Ericsson.

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