At 8,511,965 km², Brazil is the 5th largest country on earth and, with over 260 million connections, the fourth largest mobile market in the world. Therefore, it comes as no surprise that the Brazilian tower industry is expanding at a very swift pace.
But what is the legal context in which telecom and tower companies operate? How easy is it for them to obtain licenses for new towers? And how likely is this system to change?
With a highly complicated licensing system for greenfield projects, Brazil is currently struggling to meet its ambitious coverage and capacity goals ahead of the 2014 World Cup.
TowerXchange’s aim is to keep track of the progress the country makes in its attempt to simplify the existing legislation for new towers’ installation while providing an insight into the various bodies involved in the process.
Brazil is at the very heart of the South American tower industry with plenty of opportunities for tower companies to establish successful businesses in the land-grab for portfolio acquisitions and BTS projects.
But what is the legal context in which tower companies operate? And how is it likely to change in the near future?
The Brazilian Constitution establishes that each municipality has to set its own rules to deal with telecommunication towers, their construction and regulation.
At present date, Brazil has 5,564 municipalities, making the average municipality population 34,361. The average state in Brazil has 214 municipalities.
In a recent statement, the Executive Secretary of the Ministry of Communications of Brazil, Mr Cezar Alvarez, stated that the country needs to further develop the dialogue with each municipality and city hall for the implementation of a national law (Lei Nacional) to govern the installation of telecom towers in the country.
In his views, each municipality issued laws defending their own historical heritage, landscape and urban plans. But these times of exceptional growth require a consolidated and more organised effort.
A proposed legislation is seeking to solve the problem of the lack of points of service in Brazil, but it is not without controversies and has attracted the opposition of some municipalities.
it is estimated that the ratio of new SIM cards being activated in Brazil is one per second, reaching an astounding 2 million per month
But what do we mean by a lack of points of service? It is estimated that the ratio of new SIM cards being activated in Brazil is one per second, reaching an astounding 2 million per month. Therefore, it is obvious that the need for added capacity, as well as expanded coverage, is growing by the hour.
However, permits and licenses are not being issued as fast as this swift market development would need. In fact, some Brazilian municipalities require as many as seven different licenses to build a new tower.
A Special Commission has been created recently within the Brazilian House of Representatives (Câmara dos Deputados) to rapidly approve the proposed legislation referred to as Lei das Antennas or Towers Law (PL 5.013).
The law would allow the CONAMA (Conselho Nacional do Meio Ambiente or National Counsel of Environment) to create a simplified procedure to analyse requests for new towers’ erection.
The Minister of Communications, Mr Paulo Bernardo, recently stated that the main point of the law is to enable the CONAMA to vote on new projects within a “reasonable time scale”.
One of the key points to date is that telecom is not treated like energy when it comes to the power of municipalities to charge telecom companies or other tower operators for the right of passage. The proposed Towers Law would change this aspect, hence treating telecom and tower companies like energy providers and freeing them of these charges.
the new law would introduce a rule whereby without a decision within 60 days with regards to new installations, the company applying for the permit would be allowed to proceed with the construction
Finally, another major point of discussion is that the new law would introduce a rule whereby without a decision within 60 days with regards to new installations, the company applying for the permit would be allowed to proceed with the construction.
The Minister stated with this regards that: “At first sight, this rule can create controversy. However, why do we have to wait for one year or more? Our idea is to slowly push towards simplification.” TowerXchange notes that similar laws have accelerated the deployment and extension of mobile phone networks in Africa (see the DRC case study in this edition of TowerXchange).
This legal debate is expected to culminate towards the end of the year when several roundtables will be hosted in Brasilia to listen to the opinions and views of a Brazilian States’ representatives including Paraíba, Rio de Janeiro, Rio Grande do Sul and Rondônia.
In the meantime, the imminent 2014 World Cup is pushing telecom companies to ensure 4G coverage in the 14 cities that will host the event.
SindiTelebrasil (Sindicato Nacional das Empresas de Telefonia e de Servçio Môvel Celular e Pessoal) is a Brazilian association created in 2003 to coordinate and legally represent companies that operate in both fixed and mobile telecommunications.
in order to reach the 4G coverage goal, SindiTelebrasil has stated earlier this year that 9,556 new towers should be installed - or 30 new towers per day
In order to reach the 4G coverage goal, SindiTelebrasil has stated earlier this year that 9,556 new towers should be installed - or 30 new towers per day. While the main carriers operating in Brazil (VIVO, Oi, Claro and TIM) have agreed to reach 100% 4G coverage by December 2013 for the cities involved in the upcoming World Cup, this aggressive target creates a tension with the aforementioned restrictions set by municipalities.
It is estimated that to allow 4G to function properly, Brazil will need two or three 4G towers for each 3G tower already in place. This increase in quantity is due to the different characteristics of the frequency needed to enable 4G.
According to SindiTelebrasil, the proposed Towers Law will simplify the much needed network expansion to reach 4G coverage.
We will keep following the legal debate as it develops in the hope that a decision is reached in a timely manner, not only to ensure coverage ahead of the World Cup but to unlock further possibilities to develop the thriving national tower market in Brazil.
Additional articles in our Brazil case study:
The Mott MacDonald Share Square for Brazil
SBA Communications’ expansion into Central and South America
A legal perspective on the Lei das Antennas
Exclusive: How Brazil’s Ministry of Communications is encouraging tower industry growth
