• Reciprocal agreement with Winity requires regulatory approval.
  • Regional operator group TelComp demands “maximum transparency.
  • Questions whether deal is against “the spirit” of last year’s 5G auction.

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Vivo’s network share challenged by rivals

Source: Winity Telecom

Telefónica|Vivo’s network-sharing arrangement with Winity came under immediate scrutiny on Wednesday as regional operator group TelComp demanded “maximum transparency” regarding the newly signed deal.

The agreement, which remains subject to regulatory approval from Brazilian regulators Anatel and Cade, was announced on Monday.

It sees Winity lease passive infrastructure from Telefónica|Vivo, enabling it to expand mobile coverage to “up to 3,500 sites by the end of 2030”, the duo said in a press release. Reciprocating, Winity will grant Telefónica|Vivo access to a 5MHz + 5MHz block of its national 700MHz frequency. The pair stated that the frequency block to be leased involves about 1,100 cities, and the deal has a term of up to 20 years.

The two operators additionally penned a roaming agreement, “which may evolve into RAN sharing”, depending on the traffic flow.

The new partners believe their deal — assuming it is sanctioned — will benefit the Brazilian telco sector “as a whole” because of its “potential for enabling an innovative business model in the wholesale market, which will contribute to increasing the quality and accessibility of the mobile service in the country”.

Brazil’s long-awaited spectrum auction took place in October 2021, raising BRL 47.2bn (£7.6bn/€9.0bn) with Telefónica|Vivo among the big-name operators to win spectrum.

Winity’s national 700MHz licence effectively made it a new, fourth mobile network operator player. Winity was launched in 2020 by Pátria Investimentos as a wireless infrastructure provider. Asset manager Pátria Investimentos, which is based in the Cayman Islands, said the operator’s focus is on the wholesale market, and it will not make a move to consumer sales.

Vivo’s acquisitions included blocks in the 2.3GHz and 26GHz bands, as well as a 20-year national licence in the 3.5GHz range, seen as key to 5G rollout. It was the biggest spender in the band, paying a hefty 30% premium on the lot’s expected price: BRL 420m for the national licence (Telefónicawatch, #159).

According to Brazilian outlet Teletime, TelComp is questioning whether the network-sharing agreement is against the “spirit of the 5G auction”, as the 700MHz frequency was auctioned to wholesale companies and therefore not intended for the larger-name operators.

TelComp stated that it hopes Anatel will “ensure that the purpose of the auction is not distorted”, and that “prices and conditions are consistent [for] all operators”.

“ The situation presented here causes great concern to this association, which is why it already signals the need for maximum transparency of the terms of the agreement to guarantee a fair competition environment. ”

TelComp.

Telefónica|Vivo launched its 5G network in São Paulo on 4 August, and has commenced rollouts in Belo Horizonte Brasília, João Pessoa, and Porto Alegre. The operator said that other capitals should be announced “in the coming weeks”.

Currently, Telefónica|Vivo claims to have in the region of three million customers with 5G-compatible devices.