Ericsson Invests US$5mn in Brazil to Produce 3G Technology

The Brazilian unit of Swedish telecoms equipment provider Ericsson has invested US$5mn this year in its local systems factory to boost productive capacity of equipment for 3G networks, news service Valor Online reported.

"For the size of the company [Ericsson], the investment is marginal... Our intention is to utilize this capacity to serve the Brazilian market," Valor Online reported Ericsson's vice president Carlos Duprat as saying.

Ericsson, which posted net revenues of 2bn reais (US$977mn) in 2006 in Brazil, does not rule out the possibility of importing 3G equipment to supplement potential demand, he added.

Ericsson has already started production at its factory in the city of São José dos Campos, in São Paulo state, ahead of the anticipated demand from Brazil's telecoms operators, according to Duprat.

Currently, only Brazil's Minas Gerais state-based mobile phone operator Telemig Celular has started tests with Ericsson's 3G/WCDMA technology in the state capital of Belo Horizonte, the newspaper reported.

"We have already identified an interest from other operators to implement the technology before the [3G] auction," Duprat said.

Brazil's telecoms regulator Anatel has said it expects to issue bidding rules for the auction of 3G mobile licenses in October.

However, Duprat would not commit himself to estimating how much demand the company is likely to see from operators because the regulators has created a lot of uncertainty by changing its mind on a number of occasions regarding the 3G auction timetable.

Posted to the site on 14th August 2007