Brazil's Programa Nacional de Banda Larga

In this article we'll examine the history and current status of Programa Nacional de Banda Larga, the Brazilian government plan to establish a wide-reaching, reliable data network infrastructure in the country.

In this article we'll examine the history and current status of Programa Nacional de Banda Larga, the Brazilian government plan to establish a wide-reaching, reliable data network infrastructure in the country

PNBL's history

The penetration of reliable high-speed, or broadband internet connections in a country is directly related to its development, or so says the UN. The Brazilian Government seemed to be aware of this in 2010 when it launched a national program to help deliver affordable broadband connections to numerous municipalities in Brazil.

Programa Nacional de Banda Larga, or PNBL, was put into action when the national internet connection averaged 0,55 Mbps and internet connection was only found in 30,7% of households. This scenario was a direct result of a lack of infrastructure for internet providers in the farthest, less populated regions of the country and the general high price for broadband plans that simply weren’t affordable for the vast majority of Brazil’s citizens.

With PNBL the federal government aimed to make Brazil a connected country by introducing affordable broadband internet plans, massively expanding an estate-owned backbone infrastructure to reach most of the population and presenting incentives for internet providers to invest in the country’s internet service infrastructure.

These goals were delegated to private companies incentivised by tax reductions and to the government controlled organization Telebras.

Telebras

Telecomunicações Brasileiras S.A., or Telebras, used to be the national telecommunication monopoly until 1998, when it ceased operations due to the privatization of Brazil’s communication services. The organization was relaunched in 2010 with the sole function of putting into action the directives of PNBL.

National Backbone

Telebras’ main function since the program’s launch was to operate a major expansion of the country’s estate-owned internet backbone infrastructure to reach the farthest, less populated regions of Brazil and establish a faster, resilient network as an investment in the country’s future.

The expansion meant utilizing unused government owned optic fiber cables lines installed by estate-owned Petrobras and Eletrobras and installing new cables where needed. These existing and new optic fiber cables were built to transport wavelength division multiplexing, or WDM, high capacity visual signals.

From 2011 to 2013, Telebras managed the installation of a country wide network with over 25 thousand kilometres of cabling composed of three optical fiber rings - South, Southeast and Northeast - and extensions to the North and Center-West regions, with radio towers for data transmission and hundreds of POPs installed across the country. In 2012 Telebras also opened a Network Operating Center in Brasília to manage the entire network.

Brazilian companies were contracted for the installation of the Telebras network infrastructure, which includes containers, cabinets and protection material for telecommunication equipment for the optical fiber rings. These companies include:

• Clemar Engenharia: Based in the Brazilian southern state of Santa Catarina, the company has managed telecommunication infrastructure operations since 1991. Contracted for the installation of structure in the North and Southeast rings
• Zopone Engenharia: Building company that has managed multiple types of specialized construction since 1988. Contracted for the installation of structure in the Northeast and Southeast rings
• Padtec: Established in 1999, the company is focused on the operation of high capacity optical fiber equipment. Contracted for the installation and management of WDM cables and other communication equipment across the network
• +2X Tecnologia em Dobro: An integrated IT management and security services company that was founded in 2012. Contracted for the operation of Telebras NOC
• Everest Engenharia: A metallic structure building company founded in 1996. Contracted for the construction of antennas and radio towers
• Bimetal: Metallurgical company based in the Center-West region of Brazil. Contracted for the supply of antennas and radio towers
• Networker Engenharia: A telecommunication equipment, industrial and civil building company established in 1993. Contracted for the supply of radio equipment
• Digitel: A telecommunication equipment company in activity since 1978. Contracted for the supply of radio equipment
• Datacom: Southern Brazilian manufacturer of high-tech computer telecommunication equipment in the market since 1998. Contracted for the supply of equipment solutions for IP/MPLS networks
• Medidata: A communication and computer systems company founded in 1976 and owned by Spanish Amper. Contracted for the implementation of Core IP

In 2013 it was announced that the Telebras backbone supported a total capacity of 500 Gbps.

Network services and uses

In the less populated regions of Brazil, where Internet structure was introduced, providers were invited to participate in public tenders organised by Telebras with the purpose of leveraging the Telebras infrastructure in order to provide reasonably priced connections to households. The public tender was intended to offer a chance for smaller providers to offer competitive services in a country where six of the largest providers control more than 70% of the market.

One of the primary objectives of PNBL was to introduce affordable monthly broadband plans for the Brazilian population. It was one of the program’s directives to offer 1 Mbps subscriptions for BRL 35 a month, served by any provider interested in joining the Telebras network. By radically lowering the price by more than any other subscription by major service providers was planned as a way to introduce broadband connections to a whole new section of the Brazilian population and to foster competitive pricing in the market.

Until PNBL, most of Brazil’s internet backbone was based on infrastructure owned by private companies, such as Embratel, GVT and Oi. The expansion of Telebras backbone together with the low cost for connections led to a significant increase in wired broadband subscriptions from 2010 to 2013.

Another goal of the Telebras backbone revamp was to connect government institutions more efficiently in an effort to facilitate e-government practices through a program called Cidades Digitais, or Digital Cities, which also planned to provide free wi-fi access points in public parks in the cities.

Interconnections were established between municipalities and capitals to provide faster communication between government institutions. Public schools in urban areas were also intended to receive improved broadband connections purposed for educational objectives.

The internet broadband strategy was supplemented with the installation of a lower-frequency mobile data network in rural regions, to be managed by the country’s mobile operators while using Telebras backbone infrastructure.

The construction of a satellite, shared with the Brazilian Defense Ministry, was also announced as a measure to offer internet coverage to areas where no other technology could reach.

International Connections

During PNBL development, projects aimed to institute a more functional network between Brazil and other countries were added to the overall plan of revamping the country’s network structure.

The first of them is from UNASUL, the South-American Nations Union. Brazilian authorities agreed to establish connections with other countries in South America, such as Argentina and Uruguay, to facilitate communication between each other and to other continents.

In 2011 Telebras announced its intention to install underwater cables to the United States, Angola and to connect cities in the country’s own shore. But most of these plans were cancelled or came to a halt.

In January 2014 Telebras announced a Joint-Venture with the Spanish company IslaLink Submarine Cables to build the connection between the Brazilian Northeast city of Fortaleza and the Iberian Peninsula.

With these projects, Telebras aims to reduce latency for connections with Asia and Europe that would otherwise have to pass through the US.

Tax incentives

In an effort to promote widespread adoption of telecommunication equipment and investment in the country’s communication structure by private organizations, the Brazilian Government started to offer a reduction in certain taxes with a plan called REPNBL, or Special Taxation Regimen for PNBL.

Tax relief was offered for:

• Broadband networks expansion enterprises that used national equipment and construction material - PIS and Cofins relief and IPI relief for equipment
• Revenue for projects specifically developed for telecommunications - 15% relief for company revenue and total relief for private individual revenue
• Acquisition of M2M equipment - Fistel relief

Total cost of the operation

PNBL’s multi-year plan turned out to be a major investment for the Brazilian Government. Most of the operation was funded directly by Telebras and the Brazilian Ministry of Communication budgets.

Some of the estimated costs include:

• BRL 719 million on backbone expansion and installation
• BRL 700 million on satellite construction
• BRL 144 million on government network
• BRL 3,8 billion in tax relief

Additionally, other costs for projects such as the construction of the undersea cable to Europe, that amounted to USD 185 million, in which Telebras has 35% participation, take part in the total cost of PNBL.

Current status

PNBL provides a long-term strategic plan for the Brazilian telecommunications structure and adoption by the country’s population. While many of the program’s projects are yet to be completed or implemented some of the direct results can already be observed.

Since PNBL, over 612 Brazilian municipalities received service from the Telebras network, which amount to around 40% of the population. From Q4/2010 to Q2/2013, wired broadband connections jumped from 13,1 million to 20,6 million, and in the same period, mobile broadband access increased from 15,3 million to 68,2, with the total covered cities jumping from 681 to 2930.

The average internet connection speed in Brazil now sits at 2,7Mbps (Q2/2014). While not an impressive number, this figure is a direct result of numerous additions of moderate speed connections in the country.

PNBL was conceived as a 4-year program starting in 2010. The results in 2014 vary somewhat from initial predictions. For example, PNBL’s initial plans predicted 30 million wired broadband connections to be achieved in 2014, but data from May 2014 reveals only 23,2 million connections. Mobile broadband, however, expanded much quicker than predicted, achieving 127,2 million connections in May 2014 while only 60 million were predicted to be achieved at the end of the year.