Brazilian operator TIM will begin making its first 5G network activations using equipment from providers Huawei and Ericsson.
The plan was unveiled by the telco's CTO Leonardo Capdeville at its year-end meeting with the press.
According to Capdeville, TIM will fulfill the initial obligations associated with the 3.5GHz frequency it acquired in November’s 5G auction, which are to activate the service in all of Brazil’s state capitals by July 2022.
TIM signed a radio access networks (RAN) deal with Sweden’s Ericsson and Chinese giant Huawei last year.
This does not mean that other vendors, including non-traditional players in the open RAN format, cannot be included over time, said Capdeville.
TIM's preparation for 5G started well before the auction and the entire core of the company's network is now ready for the new technology, the executive said, adding that the only thing lacking is the release of spectrum by sector regulator Anatel.
TIM, as well as the other auction winners, signed the concession contracts with Anatel on Tuesday.
There will be some time before the bands are actually released and TIM can activate its antennas and launch the service, according to Capdeville.
CEO Pietro Labriola said the expectation is that this can be done in some capitals before the July 2022 deadline, although he said TIM is not in any “race” to be the first to launch 5G.
In addition to the 3.5GHz frequency, TIM also acquired spectrum in the 2.3GHz and 26GHz bands at the auction. For these, however, the company does not see an immediate application.
“2.3GHZ is an opportunistic spectrum. At first, it's an interesting spectrum to offload 4G [traffic]. TIM already had in its industrial plan to end 2023 with 4G in all locations where it operates. So we've brought the 2.3GHz obligations into our industrial plan to help with the 4G offload,” said Capdeville.
“In a second stage, we might use 2.3GHz to offload 5G.”
The executive also said that TIM has less spectrum at 2.3GHz than at 3.5GHz, whereas the price of radio equipment is the same regardless of the bandwidth.
The 26GHz band is an even longer-term bet where Capdeville recognizes that there are some cases in the world with the use of this band, but still no commercial application. He believes that in a few years the spectrum could become relevant for industrial connectivity and private networks.
PRICING
The TIM executives did not go into details about its 5G pricing strategy.
Unlike 4G, they said there will be “several 5Gs” given the possibilities of using the network and service applications, and that new price levels tend to be something natural with the introduction of new technologies.
“In general, if I put something on the market that has a different level of quality, it will have a different price level,” said Labriola.
The CEO also highlighted the high costs in general for the sector in Brazil and the country’s adverse macroeconomic context with high inflation and FX impacts, as costs that have to be passed on to the consumer or be absorbed by operators.
Labriola cited specifically the wireless towers as an example.
Tower companies applied a 50% rent price increase for local operators, taking as basis the IGP-M, one of Brazil’s inflation indexes, Labriola said, adding this will have an impact on carriers for the next 25 years.
Regarding the availability of 5G for the general public, the executives said that customers will not need to change their SIM card to use the new technology, although it will be necessary to have a device compatible with the 3.5GHz frequency that will be used in the first 5G phase.
IOT, PARTNERSHIPS
Regarding new business segments, the executives said TIM intends to consolidate its leadership in 2022 as a provider of connectivity and solutions for Brazilian agribusiness.
In this segment, the operator has made use of the 700MHz band to offer narrowband IoT services in rural areas.
Another focus is to advance in the connected car segment, said chief revenue officer Alberto Griselli. TIM has a partnership with Stellantis for IoT via 4G and testing is underway for solutions using 5G.
A third vertical it will focus on, where the company's presence is small compared to other operators and suppliers, is the mining sector, said Griselli.
The operator also has an ongoing project with energy distributor Enel to use 5G as part of the smart grid concept.
Until recently, most companies did not perceive the value of 5G to their business, said Capdeville.
“Now, however, we have a lot of demand. The industry is beginning to realize the possibilities of the new technology.”
In terms of app partnerships, Renato Ciuchini, head of strategy and transformation, said TIM has three projects on the table that may be announced by the end of the year.
One is for telemedicine and the other, which is “very advanced,” is in the content area, Ciuchini said, adding that a third partnership, involving a digital wallet service, still needs more definition.
TELECOM ITALIA
Asked about TIM's fate with the possible sale of parent Telecom Italia to US investment fund KKR, Labriola provided few details.
The executive was appointed last month to add the Brazilian role to that of CEO of Telecom Italia following the resignation of Luigi Gubitosi, who was reportedly against the deal.
According to Labriola, the decision rests with the controllers and TIM is a priority within Telecom Italia's multi-year strategic plan.
Customer satisfaction will be a key priority for the company in the next few years and Griselli said TIM already leads in several independent rankings, including 4G coverage and availability, as well as best video experience.
The carrier has also significantly reduced the number of customer complaints filed with Anatel, and it has been investing in improving the network's capacity and service, reaching positive net promoter scores, according to Griselli.
TIM will also soon be able to count on spectrum that it will absorb from local player Oi, further enhancing its services, in addition to the 5G rollout.
“With 5G [3.5GHz], we start on an equal footing in terms of spectrum compared to our competitors. If we managed to be competitive with 50% less spectrum than the others on 4G, you can imagine what we can do now with 5G," he said.
Griselli said it will be necessary to invest in brand communication to change the perception of customers regarding the real state of the company's services. “Because one thing is perception. A different thing are facts.”
Source: https://www.bnamericas.com/en/news/brazils-tim-to-begin-5g-rollouts-with-ericsson-huawei