This article presents guidelines for businesses wanting to enter the mobile phone industry in Brazil. It explains how to get permission to operate and the different business models available.

Service authorization

Authorization to provide telecommunications services is mandatory for any company that aims to constitute a mobile phone operator in Brazil. The National Telecommunications Agency (Anatel), Brazil’s sector’s regulatory body, must grant the service authorization.

Currently, service authorizations issued by Anatel have a generalist nature, being valid for different telecommunications services and for an indefinite period. However, the interested company shall notify the Agency of the services it plans to explore. Specifically for mobile services, the notification shall indicate the Personal Mobile Service (“Serviço Móvel Pessoal” or SMP).

The interested company must submit an authorization requirement form, accompanied by company and tax documents and declarations of technical qualification and sound financial conditions. Moreover, the company must declare that no regulatory hindrances prevent them from obtaining the authorization.

The applicant must be a legal person constituted according to Brazilian law, with its headquarters and administration in Brazil. The company must also comply with other regulatory and legal requirements.

It will also be necessary to pay a regulatory fee of BRL 400.00 to Anatel regarding the expedition of the grant instrument.

Access to radio frequencies

Companies interested in becoming SMP carriers in Brazil must also obtain access to the radiofrequency spectrum. In that regard, they need Anatel to grant them authorization to the right to use radio frequencies.

Applicants can secure radiofrequency bands by submitting an application or engaging in a public call or bidding process. The method to obtain the frequency will depend on evaluating existing technical limitations, manifestations of other interested parties and the possibility of band use sharing. Moreover, Anatel may organize a bidding process to encourage competition in the telecom market.

The granted right to use can either be primary or secondary. In both cases, protection against prejudicial interference is guaranteed. However, in secondary use, there is no protection against interferences caused by primary or subsidiary use resulting from industrial exploration contracts (“Contratos de Exploração Industrial”).

The regulatory authority can authorize secondary use in areas where the primary use holder has not yet effectively used their radio frequencies. This authorization depends on prior notification and, possibly, negotiations with the primary use holder. The secondary user must discontinue the use once the primary use of the band starts.

The interested company must also pay a public price for Anatel to grant them the right to use radio frequencies. The public price will be calculated based on the chosen band’s capacity and coverage, population and geographic area of the authorization, grant period and the service provided.

MVNO models

As an alternative to the traditional mobile carrier model, it is also possible for interested companies to constitute a mobile virtual network operator (MVNO) in Brazil.

There are two different MVNO models in Brazil: authorized and accredited. In the former, the MVNO provides their services through network sharing with the MNO (traditional operator).

An authorized MVNO is also considered an SMP provider. In that sense, the authorized MVNO must comply with the same legal conditions of a traditional operator to obtain service authorization. Moreover, the interested company must also submit to Anatel their network sharing agreement signed with the MNO.

Furthermore, the authorized MVNO can set up an enabler business strategy. In this model, the authorized MVNO operates as an MNO to accredited MVNOs, providing support and solutions to help them structure their own businesses.

On the other hand, accredited MVNOs are just representatives of their respective MNOs. They incur lower regulatory, tax and infrastructure investment costs than traditional mobile carriers and authorized MVNOs.

Companies interested in becoming accredited MVNOs must submit their signed contract with an MNO to Anatel. The Agency then validates the contract.