UPDATE 1-Firms can delay payments on Brazil 4G bids; fiscal goal eyed

jueves 21 de agosto de 2014 18:18 GYT
 

(Recasts with delayed payment option)

BRASILIA Aug 21 (Reuters) - Companies that win Brazil's next rights auction for fourth-generation (4G) data services can delay payments on 90 percent of bids, potentially depriving the government of part of a $3 billion lifeline needed to meet its year-end fiscal goal.

The auction to run the 700 MHz spectrum is scheduled to take place on Sept. 30, according to a statement from telecommunications regulator Anatel on Thursday, and will raise at a minimum, 7.71 billion reais ($3.43 billion).

The winning companies must pay 10 percent of their bids up front but the rest can be paid in six years with a grace period of up to three years, adjusted to the IGP-DI inflation index plus 1 percent per month. The rate adjustment is meant to discourage companies from delaying payment.

President Dilma Rousseff has pledged to save at least 99 billion reais this year in primary surplus, or 1.9 percent of the country's gross domestic product.

The primary surplus represents the public sector's excess revenue over expenditures before debt interest payments.

The finance ministry has previously said the profits from the 4G auction would help meet the 2014 goal. The government is still counting on receiving the nearly 8 billion reais by the end of the year, a government source said on Thursday.

Brazil's public finances have deteriorated rapidly under Rousseff. She has given tax breaks to dozens of industries in an attempt to restart the country's stagnant economy ahead of October's presidential election. Most analysts are skeptical that the government will reach its goal given disappointing budget numbers over the past few months.

Each of the three nationwide slots being auctioned will require a minimum bid of 1.927 billion reais, Anatel said.   Continuación...