Open tender

Huawei taps Temer as Brazil's 5G auction approaches.

Despite President Bolsonaro’s affinity for the US, and in particular President Trump, we reported in August last year that a ban on Huawei participating in Brazil’s long-awaited 5G auction was unlikely. Bolsonaro’s government had been pushing for a ban as recently as last month but now it appears that there will be no restrictions on Huawei’s participation.

Last week, it was reported that Carlos Baigorri, an adviser to Anatel, had prepared a technical report on the 5G tender for the regulator which did not recommend any restrictions on Huawei. The report will be put to the vote of Anatel’s plenary session this week.

Huawei aren’t taking any chances though and have been working hard behind the scenes to ensure they are well-positioned to compete. Most recently, they have hired former President Michel Temer as a lobbyist to help them navigate the legal and political landscape.

This could be a shrewd move. Temer’s credentials are clear: he is a well-known lawyer and negotiator and has previously dealt with Chinese affairs – while Vice President he led the Sino-Brazilian Commission for High Level Cooperation and Concentration (COSBAN) – an important dialogue mechanism between Beijing and Brasilia.

It could also be fortuitous for Huawei that Temer was responsible for the appointed of Leonardo Euler de Morais as President of the Board of the Brazilian telecommunications regulator, Anatel.

Equally important is Temer’s access to Bolsonaro, according to a former Brazilian ambassador to Beijing, “Hiring Temer will be helpful but is not a guarantee of success. Bolsonaro has significantly reduced its inner circle in the last months and there are very few people who can access his core of aides. Temer is one of them and that gives Huawei certain leverage over Bolsonaro.”

“Hiring Temer will be helpful but is not a guarantee of success.”

Former Brazilian ambassador to Beijing

Huawei clearly are not fazed by Temer’s chequered past: the former President has been accused of accepting bribes and electoral fraud and has been arrested and released, twice!

In terms of the auction itself, a Brazilian public law academic and telecommunications consultant believes including Huawei is the right decision for Brazil, “The current government is still captive to the dual logic of pro- and anti-American and pro- and anti-China. The executive has an institutional responsibility to define the rules of the 5G tender without considering itself America’s backyard or a Chinese satellite state. It is in Brazil’s own interest to protect and enhance its local telecommunications network and infrastructure.”

“Eliminating a competitor from the [5G] market would result in an increase of costs and delays.”

Public law academic and telecommunications consultant, Brazil

Continuing his analysis, the same consultant concludes that is unlikely Huawei will be banned, “Eliminating a competitor from the [5G] market would result in an increase of costs and delays in the development of the telecommunications network as contrasted studies have already shown. Furthermore, competitors can also feel unease with competition restrictions which could potentially apply to them in the future.”

 

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