Less than 5% of cell phones in operation in Brazil are ready to receive the standalone 5G signal, which was launched Friday in Porto Alegre, João Pessoa and Belo Horizonte. The warning has been repeated by Moisés Moreira, the director of the Brazilian Telecommunications Regulatory Agency (Anatel), in an attempt to lower expectations at this first moment.
In Mr. Moreira’s view, phone companies must make it clear to their clients if the devices in use are prepared for standalone 5G, the most sophisticated version of the new technology, and if it will be necessary to change the chip. “Don’t expect 5G technology to arrive in a big way right now. On the contrary, it demands a certain amount of time,” he told Valor.
Brasília has had standalone 5G since July 6. The signal is offered over the 3.5 gigahertz (GHz) band. Anatel has received reports of frustrated users who have had an experience not very different from that of 4G, in addition to encountering many “shadow” areas (without 5G signal).
“Operators are not changing the chip yet, nor are they marketing exclusive plans for 5G. So far, they only have the obligation to effectively turn on the signal by the end of September. So Anatel still can’t fine them for not meeting quality standards,” he said.
Days after the 5G debut in Brasília, Vinicius Caram, one of Anatel’s technicians involved in the implementation, told Valor that users would now only have a “tasting.” He said that the moment is for “fine tuning” or network “optimization.”
Mr. Moisés reinforced that, among the capital cities that are yet to receive standalone 5G, São Paulo, Rio de Janeiro, Curitiba, Goiânia and Salvador are the ones with “more advanced” work to prevent interference. However, he stated that there is still no defined date.
Regarding the monitoring of the quality, Gustavo Borges, Anatel’s head of control of regulatory obligations, told Valor that, besides checking the number of antennas, the “coverage map” of telecom companies will be evaluated.
“The number of antennas is an objective commitment in the call for bids. By observing the map, we will know if in fact there is signal where availability is declared,” said Mr. Borges. He said that after September 29, the agency will start measuring technical parameters to verify network performance: speed, latency, jitter and packet loss. This involves comparison with international standards.
Mr. Borges said that, even without the commercial launch of 5G plans, Anatel already monitors consumer complaints. The collection of indicators will result in the production of the quality seal A, B, C, D or E for each provider, in each municipality, to be unveiled in 2023.
Most 5G handsets available on the market already offer access to networks that simulate 5G by dynamic spectrum sharing (DSS). With the arrival of 5G networks in new capital cities, users will be able to automatically use the 5G NSA networks, without changing chips or plans, operators and manufacturers told Valor. This option uses the 3.5 GHz network with the pre-existing network structure already used by phone carriers, without the performance of the very low latency offered by 5G SA.
The pure 5G networks require the use of a specific chip and plan, according to information from América Móvil’s Claro, and compatible phones. Currently, this is the case for six Motorola and three Samsung models. The iPhones 12 and 13, launched in November 2020 and 2021, respectively, by Apple, are not prepared for standalone 5G networks in the country.
For the consumer, the difference in latency, or response time, between a device with 5G NSA and with 5G SA is not significant, says Thiago Masuchette, head of product at Motorola.
“You will have a latency difference of 10 milliseconds, on a 5G DSS or NSA, to 1 millisecond on 5G SA,” he explains. Tests done by the manufacturer indicate that the speed does not change between a standalone 5G and a 5G NSA, but the indicator will vary depending on the network quality of the carrier.
In practice, “the frequency and bandwidth that each carrier won in the bidding will interfere with the maximum speed that the consumer can have in the plan,” says Mr. Masuchette.
Today, 60% of Motorola’s portfolio is compatible with 5G networks, according to the executive. Among the six devices that are also compatible with SA networks, currently, the average price ranges from R$2,000 for the Moto G62 model, to R$5,000 for the Edge 30 model, top of the line of the brand.
*By Rafael Bitencourt, Daniela Braun — Brasília, São Paulo
In addition to the expansion of telecommunications infrastructure like antennas and cables, the digitalization of society and the advent of 5G wireless technology will also require “invisible” services including network management and automation, with intensive use of artificial intelligence – the ability of machines to interpret data and learn. The demand for these products is already increasing, sources from this market told Valor.
The telecommunications products and services sector has room for a “gigantic” growth, according to Ranier Souza, director of engineering at Cisco Brazil.
A survey by the company found that 95% of network changes in 27 countries, including Brazil, are executed manually, which results in operating costs two to three times higher than the expenses with automation.
According to IDC, considering the years 2021-2022, 5G technology will generate the equivalent of $2.7 billion in new business involving technologies such as artificial intelligence, virtual and augmented reality, internet of things, cloud, security, and robotics.
One company that already perceives the segment’s expansion is Infovista, which projects a revenue growth of at least 50% in Brazil and Latin America. Michel Araujo, the firm’s vice president for Latin America, explains that 5G will increase the need for network automation. “In the case of a self-driving car, for example, which heavily relies on the new technology, if there is a problem that interferes in the communication cycle from the cell tower to the infrastructure of the carrier, including how the vehicle is receiving the information, this process must be automatically reviewed, diagnosed and re-established in an automated way,” he said.
Paris-based Infovista develops solutions that automatically prevent and repair problems in the network cycle. The solutions are primarily provided to carriers so they can serve corporate customers on an individualized basis, but there are also deals with businesses in general. “5G is nothing without control,” Mr. Araújo said.
The network management solutions allow a greater spread of the carriers’ signal, which brings investment gains, because the biggest expenses of the telcos are with antennas – especially because 5G has greater capacity but less coverage, which requires a larger number of base transceiver stations. Companies are also expected to save money because automation requires lean operation teams, although they need knowledge of artificial intelligence.
The Infovista executive stressed that the new technology will enable the fourth industrial revolution, with thousands of devices connected to networks including agricultural, industrial and smart city sensors.
There is also the concept of digital twins, virtual representations in real time of objects, processes and systems, which will allow a mining company, for example, to have bases in several different locations, with many connected devices. “Imagine how this company will be able to control, visualize, diagnose and make repairs within this model? It will need automation. This is the challenge,” Mr. Araújo said.
Another company in this segment is Logicalis, which emerged in the United Kingdom in 1997. According to Rodrigo Parreira, the firm’s chief executive for Latin America, the platforms for network management are old and manual operations still play a prominent role. “There are control rooms with dozens of employees sitting around, looking, trying to identify problems within carriers,” he said.
With 5G technology, which will increase the amount of data transmitted over telephone networks, it will be necessary to quickly identify the root cause of any failures. That’s why automation is important, says Mr. Parreira.
Logicalis does not focus so much on developing solutions. Instead, it works installing and maintaining the systems inside carriers and companies. According to Mr. Parreira, growth in this segment is likely to speed up in coming months in tandem with the implementation of 5G in the country. “We are working hard in this field and we are looking closely at this new transition, including some ongoing projects and initiatives, such as a partnership with IBM for cloud computing management,” he said.
For the executive, the 5G auction was meant to “shake up” the market, enabling the arrival of new providers, who will need to invest and build networks in the coming years.
Mr. Souza, with Cisco, said that the need to avoid manual tasks is inevitable and imminent, with increasingly leaner structures. He points out that the digital security field also needs automation. “In the past, when a new virus appeared, updating networks took a long time. Today, what used to take days happens in minutes. If there is no robust automation and detection solution, with artificial intelligence, a company can quickly fall victim to ransomware,” he said. According to Cisco’s global survey, 39% of the technologies used by organizations are outdated.
According to him, “a very large number of tasks are still manual and there is room to grow, which is already happening. Pandemic and increased digitalization, as well as 5G, accelerate this process.”
Eduardo Tude, a consultant at Teleco, sees further growth potential for the next few years as 5G reaches Brazilian cities. “Carriers are activating their networks and services. There will be more tests this year, not something massive. 5G has all the consumer part, but it came to enable a new type of services for companies,” he said.
The Ministry of Economy has released a study on the topic.
The demand for 5G solutions for the most diverse areas of the economy has the potential to generate BRL 101 billion ($ 21.6 billion dollars) over the next decade for companies and startups in Brazil, a study released on Tuesday (April 19) by the Ministry of Economy reads.
The study also estimates that the potential benefit of 5G deployment for the Brazilian economy could reach BRL 590 billion ($ 126.2 billion dollars) over the next decade. The calculation takes into account productivity increases and cost reductions from the so-called Industry 4.0.
5G is the fifth generation of mobile and internet networks, whose speed is hundreds of times higher than the current fourth generation. With its implementation, countless possibilities are expected to be opened in areas such as artificial intelligence, data processing, augmented reality, and logistics, among others.
“The new technology will serve as a lever for several sectors,” Secretary of Productivity and Competitiveness of the Ministry of Economy Daniella Marques said.
The report on the projection for the software market and applications was produced by Deloitte consulting company, in cooperation with the United Nations Development Program (UNDP).
“We are behind developed countries, but we realize we have good chances to make a fast progress with 5G, especially in software and application development,” managing partner and head of the Technology, Media and Telecommunications Area at Deloitte Brasil Maria Ogawa noted.
Recommendations
The report suggests 96 recommendations for public policies on eight fronts, so that the potential for generating wealth is achieved, and points out the challenges along the way.
The report recommends, for example, the creation of special economic zones focused on 5G technology, tax exemptions for the purchase of equipment for emulating 5G networks and the offer of tax benefits for multinational companies to implement strategic operations in the country, transmitting technology.
The low availability of resources to foster the national ecosystem around 5G, the lack of qualified labor (programmers and developers) and the insufficiency of environments that emulate 5G and allow the testing of solutions are among the main problems pointed out in the report.
“We are talking about a capital-intensive industry, and obviously all this investment is not cheap,” said Alberto Boaventura, senior strategy manager at Deloitte Brasil and one of the report´s co-writers. “It´s necessary to keep breaking down these barriers to financial and tax support,” he added.
After years of preparation, the phone carriers that won the auction last November are beginning to put in place the fifth-generation mobile network in Brazil. Algar, América Móvil’s Claro and Telefónica’s Vivo have already started using one of the auctioned frequencies, 2.3 Ghz, to offer 5G connection in specific places. Telecom Italia’s TIM, on the other hand, is waiting for the release of the 3.5 GHz band by telecoms regulator Anatel to start operating the new technology.
For now, 5G is being offered in a band that can be used both for 5G and for 4G in the 2.3 Ghz band. Claro launched 5G in this frequency in some areas of São Paulo and Brasília; Algar did the same in Uberlândia and Uberaba, in Minas Gerais, and Franca, in São Paulo. Algar said it offers customers a better data browsing experience through the 5G 2.3 GHz network. It would be possible to download a 20-gigabyte video in about 40 seconds.
When available, a more powerful version of 5G, known as standalone, will allow downloading a movie, video, or song faster and easier. Tests done in Claro’s 5G lab in Rio show that downloading a 10-hour YouTube video in high definition would take only one minute and 30 seconds. On Netflix, a 500-megabyte video could be downloaded in 30 seconds, while on Spotify 24 hours of music will be downloaded in two minutes. Downloading the game Free Fire will take only 25 seconds.
The bands work as “avenues” through which the signal reaches the consumer. The major carriers will focus on “Avenue 3.5,” the fastest and most efficient of them all. According to the schedule of the call for bids, the standalone 5G will be working in the 3.5 GHz band in all the country’s capital cities by July 31. However, Communications Minister Fábio Faria said there may be delays in some locations until September – the maximum deadline defined by Anatel.
Despite the minister’s prediction, telecom companies, trade unions and the regulatory agency are still in talks about potentially moving up the 3.5 GHz band launch in some cities, where the satellite dish broadcast is used less. Phone carriers and suppliers have been saying that, from an operational standpoint, 5G is ready to be activated. Vivo, for instance, says it expects to launch the technology in capital cities by July 31.
Transmitted by radio waves, the new technology will need exclusive frequencies. The 3.5 GHz band, however, needs to be cleared because part of it, mainly in the interior of the country, is used for parabolic TV transmission, whose signal will be changed to another “avenue.”
The band clearing involves bureaucratic issues as well. One step was made on February 23, when Entidade Administradora da Faixa (EAF), a private-sector company coordinated by Anatel, was created to manage the bands. It will be overseen by telecoms regulator Anatel through a body known as Gaispi. The schedule may only be moved up with regulatory authorization.
Vivo says it is still adapting its network and, since the beginning of 2021, customers can already try 5G in the 2.3 GHz frequency in some locations in São Paulo, Rio de Janeiro and Brasília. The company is in the final phase of quality assurance of the service and plans to make a commercial launch soon. In the auction, the lots acquired in the 3.5 GHz frequency were those of 100 Mhz, while the 2.3 GHz frequency was divided into 40 Mhz and 50 Mhz lots – meaning a capacity about twice as small, able to offer a less robust 5G called NSA (non-standalone).
Despite its lower potential – although much faster than 4G – some carriers have chosen to go ahead and use the 2.3 GHz band. Algar will focus on expanding connectivity in the country by region. “We were the first carrier in the country to launch the 5G service, in January, for customers in the frequencies auctioned by Anatel, in the NSA standard. Since December 15, 21 neighborhoods in Uberlândia, 12 in Uberaba and seven in Franca started to count on the new fifth-generation technology,” said Márcio de Jesus, Claro’s head of retail business.
Claro’s CEO, Paulo Cesar Teixeira, says that the launch of 5G at 2.3 GHz in specific points met the great demand for data traffic. The executive also says that the phone carrier was the first to offer, in July 2020, the so-called 5G DSS, which uses 4G with some 5G features, a kind of 4.5G. Its capacity, however, is smaller than that of 5G NSA and standalone 5G. TIM and Vivo also offer the technology to their customers.
“From there, we started to foster the handset industry. It is key that clients have the possibility of immediate use. There is no point in launching a network and not being able to use it because the cell phone is not suitable,” Mr. Teixeira said. Claro is already talking to manufacturers to launch mid-range level, cheaper handsets, and bets that cell phone prices will fall as 5G gains ground in the country. “The technology will quickly reach other social classes,” he said.
At the moment, carriers are not charging more from customers to have use 5G in the 2.3 Ghz band. On the other hand, to be able to connect to the internet, one must have a device compatible with the new frequencies. For the 2.3 GHz frequency, there are already some compatible smartphones. For the 3.5 Ghz band, the supply is still low.
In a recent event held by BTG Pactual, Huawei argued for a plan to sell 5G phones at affordable prices. According to specialists, one possibility is to sell subsidized handsets to customers, at lower prices, under loyalty programs.
With the release of the 3.5 GHz band, data usage packages with 5G technology are expected to become more expensive in the first moment. Marcos Ferrari, head of Conexis, which brings together Brazil’s large phone carriers, says that companies do not have a “crystal ball” to know how long the new technology will take to be dominant and surpass 4G. For this to happen, the country must foster competitiveness and face challenges including municipal laws that block base transceiver stations, the tax burden of the sector and cable theft.
TIM’s chief technology officer Leonardo Capdeville says that the standalone 5G network will coexist with DSS and NSA in the future. The carrier’s strategy is to wait for the release of the 3.5 GHz band, which, despite higher capacity, has smaller coverage, requiring more antennas. “We are not going to race simply to claim that we have released something that is not definitive. Our choice is not to worry about being the first one, but about being the best one. And to be the best one we are going to have to use the 3.5 Ghz frequency,” he said. The executive also said that the cost of investment in the 2.3 Ghz and 3.5 Ghz bands is virtually the same, so it is better to focus investments on what offers the best technology.
According to data from Anatel, the existing coverage in the 2.3 Ghz band is still incipient. At the beginning of February, there were only 90 authorized base transceiver stations in the country. Brazil currently has about 100,000 antennas. 5G, on the other hand, will need at least five times as many.
Paraná-based Copel, another phone carrier, has already defined investments. The company joined Sercomtel and Consórcio 5G to win regional lots in the 3.5 Ghz frequency in the South and North regions and in São Paulo. Now, it has a minimum initial investment plan of R$1 billion, besides a $200 million fund to bring 5G to the Amazon rainforest region.
CEO Wendell Oliveira said that the goal is to bring the technology to the cities in 2022, before the deadline set in the call for bids for cities with more than 500,000 inhabitants, which is 2025. In Paraná, the goal is to have the new technology online in the first half of this year. “The idea is to take 5G to those who need it most, especially regions and activities where not even the internet is a reality yet. For São Paulo, the group will look closely at the commercial sector, taking the new internet to companies, ports, airports, logistics companies and the agribusiness sector,” he said.
Cloud2U, which bought a regional lot in the 3.5 Ghz band, covering locations in Rio de Janeiro, Minas Gerais and Espírito Santo, says that the company will follow Anatel’s schedule.
Winity, which has bid for the 700 Mhz lot, which will be used to connect roads and expand 4G, says that the commitments made with the concession begin as of 2023 and that the company will be the country’s first wholesale carrier. “During 2022, we will develop commercial agreements with our customers, companies that operate nationwide and in specific regions, and deploy our wholesale operating business model, where we build the network to make coverage and capacity available to our customers,” the company said.
There are, however, risks with the worsening of the economic scenario due to the war in Ukraine. Telecoms and international relations experts do not foresee sanctions against China due to its implicit support for Moscow – which could affect Huawei, a key supplier of telecoms infrastructure, including in Brazil. But the war increases inflationary pressure and the possibility of supply chain disruptions.
Mr. Ferrari, with Conexis, sees no risk for the local telecoms industry, though. “For now, the sanctions we have seen do not affect the deployment of 5G in the country. We do not anticipate any kind of problem to connecting 5G in the capital cities this year as provided for in the call for bids,” he said.
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