Huawei warns Brazil further delays in 5G auction could hurt competitiveness

SAO PAULO (Reuters) - Brazil’s economy risks becoming less competitive if a long-awaited 5G spectrum auction is further delayed, an executive of China’s Huawei Technologies said in an interview.

FILE PHOTO: The EU flag and a smartphone with the Huawei and 5G network logo are seen on a PC motherboard in this illustration taken January 29, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

Huawei is widely expected to take a leading role in deploying high-speed, next-generation telecommunications networks in Latin America despite U.S. efforts to block that growth.

But Brazil’s 5G auction was delayed from an initially scheduled March date to the second half of the year because of concerns about frequency interference and uncertainties related to the rules governing the spectrum dispute.

Analysts have said it could be postponed further, which Carlos Roseiro, Huawei’s director of integrated solutions for Brazil, said would be worrisome.

“We see it very realistically and we adapt to what we have, but the economy could become less competitive in the midterm if the auction is once again delayed,” he said.

“If the auction takes place in the second half, Brazil is still perfectly capable of catching up with more advanced economies that first launched 5G networks,” Roseiro said.

Brazilian President Jair Bolsonaro is a close ally of U.S. President Donald Trump, whose administration has urged governments worldwide to shun Huawei, arguing its equipment could be vulnerable to Chinese eavesdropping. But Roseiro said he had seen no sign Latin America’s largest economy would do so.

“We have never been informed about any intention to restrict our operation in Brazil,” Roseiro said.

U.S. efforts to exclude Huawei were dealt a setback by the UK, another close ally, in late January, when Prime Minister Boris Johnson granted the company a limited role in the country’s 5G networks.

Roseiro’s remarks precede a Thursday meeting by local regulatory agency Anatel to discuss proposed rules for the auction.

“It is not just a matter of technology. ... 5G can only deliver the promise of one gigabyte per second if more spectrum is made available to the carriers,” he noted, adding it would take at least six months to deploy a 5G network.

Swedish rival Ericsson has voiced similar concerns, warning in an October study of a potential 25 billion reais ($5.90 billion) hit to public coffers by 2025 if the spectrum bidding is delayed to 2021.

Roseiro said Huawei is conducting “business as usual” and helping carriers to modernize their infrastructure before 5G deployment starts.

In August, Reuters reported Huawei would to invest $800 mln in Brazil’s Sao Paulo state by 2022, in a push to ramp up its Latin American footprint. ($1 = 4.2398 reais)

Reporting by Gabriela Mello; Editing by Christian Plumb and Jonathan Oatis