RIO DE JANEIRO (WiMAX Day) by Joachim Bamrud. Brazil loves its telenovelas (soap operas). As Intel presented a bright future for WiMAX with its remote connectivity in Parintins last week, the on-going saga of Brazil’s auction of WiMAX spectrum continued.

It all started in July, when telecom regulator Anatel issued rules for the auction of 3.5 GHz spectrum. Hoping to secure competitive bids, the rules excluded fixed-line operators from bidding in areas where they operate. Bids were to be accepted until the auction date of 4th September.

At the end of July, the fixed-line operators protested their exclusion, and the office of the president intervened. The Communications Ministry then ordered the auction postponed. However, in August Anatel disregarded the order and said the auction would proceed on 18th September.

The drama became red hot at the end of August, when a Brazilian federal judge ruled unequivocally that the fixed-line operators could participate in the auction, even in areas where they currently operate.

On 4th September, after Anatel reportedly received 100 preliminary bids for the spectrum, a federal accounts court (TCU) ordered Anatel to suspend the auction, citing an error in the currency exchange rate in the original rules. Anatel was ordered to submit new calculations.

Not wanting to be left out, on 22 September the telecommunications association Telcomp, which represents 40 smaller telecom companies, appealed the July ruling in favour of the original rules for the auction.

“It’s a telenovela,” commented Adlane Fellah, senior analyst at US consulting firm Maravedis Inc. “We expected the auction in June, now it looks like it will be by the end of the year or even next year.”

It is unclear exactly how much damage the delay is causing. “It definitely hurts the process,” says Jean-Pierre Cote-Gil, a telecoms analyst at Standard & Poor’s (S&P) Brazil.

A spokesman for one of the fixed-line operators also acknowledged that the process has become unpredictable. “Obviously it’s going to be a turn-off when you put in a bid following the rules of the game, then these rules get changed,” said Thomas Abreau, an analyst at Pyramid Research.

Despite the auction soap opera, all experts agree that Brazil remains a strong market for WiMAX. “Brazil with the largest population and market (in Latin America) has the greatest potential,” Fellah says.