By Rogerio Jelmayer
SÃO PAULO--A Brazilian court lifted a suspension of a public
auction of 4G wireless airwaves, providing oxygen for the
government in its effort to meet its fiscal targets this year.
The Brazilian Federal Court of Accounts, known as TCU, late
Wednesday gave the green light for the country's telecommunications
regulator, Anatel, to go ahead with the auction process. Court of
Accounts members are appointed by Congress and the president to
oversee government spending.
Earlier this month, TCU suspended the process, asking for more
information from Anatel about the auction. TCU lifted the
suspension after Anatel provided the information, it said.
The Brazilian government, which before the suspension was
expecting to hold this auction in September, now is rushing to
still hold the auction this year.
The government plans to raise about 8 billion Brazilian reais
($3.5 billion) and use the proceeds to strengthen its books. With
the economy slowing and growth in tax revenue eroding, Brasilia in
recent years has relied on extraordinary events, such as sales of
oil leases, to bolster its accounts.
The goal is to end 2014 with a central government primary budget
surplus of 80.8 billion reais, but the country's finances are well
off that pace. In the first six months of the year, the central
government, including the central bank and social security system,
had a surplus of 17.2 billion reais--half the size of the surplus
in the same period a year earlier. The primary surplus or deficit
is the budget balance excluding interest costs.
The 4G auctions hold high interest for Brazil's main telecom
companies--Spain's Telefonica SA (TEF), known as Vivo; TIM
Participacoes (TSU, TIMP3.BR), which is the local unit of Telecom
Italia SpA (TIT.MI); Claro, the local unit of Mexico's America
Movil SAB (AMX, AMX.MX); and local company Oi SA (OIBR4.BR).
Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com
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