5G auction: new operator gives up winning lot and will have to pay a fine

The National Telecommunications Agency (Anatel) announced that the company Fly Link gave up the frequency lot he won during the auction of 5G last Friday (5). With the withdrawal, the company will have to pay a fine, and will no longer become a new telecommunications operator.

According to a statement from the agency, Fly Link’s decision was made “for not having bought other lots that would complement its business model.”

With the decision, the company will have to pay a 10% penalty on the price offered in the winning proposal. In addition, the auctioned lot had not received any other bid, and therefore is considered a “desert”.

In a note sent to CNN Brasil Business, the company stated that “it is impracticable to develop a business plan contemplating only batch H42”. The reason would be that the batch encompasses an “incipient and still very restricted market” technology, and the company did not purchase other batches that made up its business strategy.

“There is an expectation that next year there will be a new 5G auction, and if this actually materializes, Fly Link will analyze the frequencies that will be offered by Anatel, and eventually may participate in the new event”, says the note.

In another statement sent on Friday, the company stated that the winning bid for lot H42 was part of a strategy “which took into account a possible victory on lots C8 and F8, which ended up not materializing”.

Because of this, Fly Link said it would “re-evaluate the business plan considering only the win on lot H42, to assess the investments and return on this isolated lot”.

Fly Link was created in 2002 and is headquartered in the city of Uberlândia, Minas Gerais. The company operates in the supply of internet for fixed lines, through dial-up and wireless connections.

Lot H42 was sold for R$ 900 thousand, and provides for operation in the 26 GHz frequency band, encompassing cities in the south of Minas Gerais, municipalities of Goiás, São Paulo and the city of Paranaíba, Mato Grosso do Sul.

In the 26 GHz band, companies must provide 5G business networks in sectors such as industry, mining, logistics and agribusiness. Those who purchased lots in the range are also committed to implementing connectivity projects in schools.

Lots C8 and F8 involve the same region, but the first for a frequency of 3.5 GHz and the second for 2.3 GHz. Both were purchased by Algar Telecom, which already operates as a telecommunications operator.

Fly Link was part of a group of other 5 companies that will become telecommunications operators after auctioning lots in the auction. It comprises Brisanet, Cloud2U, Winity, Consortium 5G Sul and Neko Serviços.

(With information from Estadão Content)