According to recent reports, an Ericsson executive said on Monday that the company plans to invest 1 billion reais ($ 238.3 million) in Brazil to add a new 5G assembly line. This is to improve its 5G business in Latin America.
“We have exported 40% of all equipment assembled in Brazil to Latin American countries, and it will not be different in 5G.” Eduardo Ricotta, president of Ericsson, Southern Latin America, said in a telephone interview.
He added that the investment will be made between 2020 and 2025 and includes the cost of leasing and purchasing the machine and other expenses.
Eduardo Ricotta said Ericsson will initially spend 200 million reais to set up a new 5G assembly line at its plant in the industrial city of Sao Jose dos Campos, near Sao Paulo.
“We expect this new assembly line to begin operations in the third quarter of 2020, but the timetable will also depend on 5G auctions,” he said.
Brazilian telecommunications regulator Anatel is still determining the rules for 5G auctions. The auction was originally scheduled to be held next March, but testing for interference with other services is still ongoing. Thus it can not happen in March.
“Our business plans always take into account some deviations, but we think it is the right time because this plant will also serve other countries in Latin America.” Eduardo Ricotta said, but he did not disclose the main target market.
However, if Brazil’s 5G auction is further postponed until 2021, Ericsson estimates that public funds will lose about 25 billion reais, according to a study published in early October. In the same document, Ericsson stated that, overall, the company expects that 5G deployment in Brazil will trigger a direct investment of approximately R$ 10 billion and another R$ 250 million in R&D expenses. It will also create more than 200,000 jobs.
Just over three months ago, Huawei announced plans to invest $800 million in the state of São Paulo over the next three years to build a smartphone factory to boost its business in Latin America.