Regional Operators Using 5G Spectrum? Costa Rica & Brazil

In many markets, there are regional mobile operators and companies that use mobile technologies or radio spectrum to provide fixed Internet services. This is known in English as Fixed Wireless Access (FWA) — a wireless fixed service. Mobile operators also use their spectrum and mobile networks to offer FWA to households within their coverage area, aiming to expand their customer base and increase revenues.

Now, regional operators can take advantage of available spectrum in areas where population density, number of homes, or housing concentration make it economically attractive to deploy a network. In this case, 5G deployment depends on the frequency band used. However, in all markets, this is not necessarily profitable, even if technically feasible.

The viability of using 5G to offer FWA depends on the capacity provided by the network. Offering this service without access to 100 MHz in the 3.5 GHz band or 20 + 20 MHz in the 700 MHz band makes it less appealing to customers when compared to other technologies such as direct fiber-to-the-home (FTTH).

In the recent 5G spectrum auction conducted by SUTEL (Costa Rica’s telecommunications regulator), regional operators were offered spectrum in the 700 MHz, 3.5 GHz, 26 GHz, and 28 GHz bands. SUTEL applied the model previously used by ANATEL, Brazil’s telecom regulator, although these countries differ significantly in terms of their telecommunications markets. The purpose of this analysis is to highlight these differences, serving as an example of key factors to consider when designing a 5G spectrum auction.

In the image, we show the results obtained by the Alfaro Ruiz Cooperative, which acquired a total of 10 + 10 MHz in the 700 MHz band, 10 MHz in the 3.5 GHz band, 100 MHz in the 26 GHz band, and 100 MHz in the 28 GHz band. These resources will be used to deploy a network covering the cantons of San Rafael and Grecia.

It's worth noting that the canton of San Rafael had, according to INEC data from 2022: a population of 93,264 people, 31,246 occupied homes, with an average of 3 residents per household. Meanwhile, the canton of Grecia has 76,220 inhabitants, 25,136 occupied homes, and again an average of 3 residents per home. It should be emphasized that I chose this cooperative as an example; except for some exceptions, this analysis applies to most organizations that acquired spectrum in the SUTEL auction.

Additionally, INEC reported in 2024 that according to the 2023 National Household Survey, 81.7% of homes have Internet access: 35.3% via cable or coaxial, 30.3% via fiber optic, 16.9% via mobile devices, and 2.1% via fixed telephony. These figures demonstrate that mobile networks rank third in terms of the number of Internet access connections by technology.

Mobile technology like 5G requires at least 20 + 20 MHz in the 700 MHz band, 100 MHz in the 3.5 GHz band, and 200 or 400 MHz in the high bands (26 GHz or 28 GHz) to be competitive in download speeds compared to fiber optics. Additionally, FTTH holds a preferred position over mobile technologies.

On the other hand, regional operators such as the Alfaro Ruiz Cooperative, Coopelesca, or Coopeguanacaste will face competitive disadvantages compared to companies using FTTH, or even if those same cooperatives integrate FTTH into their existing fiber or coaxial networks, they won't be able to offer comparable download speeds unless they deploy a significantly larger number of base stations to achieve similar coverage and performance.

When comparing different markets, we often focus on similarities or contrasts. In this case, we’ll use both approaches to deepen our analysis.

For similarity, I’d like to compare with Ireland, a country with comparable territorial and demographic characteristics, as well as ecological diversity. Ireland covers 70,280 km², has a population of 5,351,681, and a GDP of $577.389 billion in 2024, with a per capita GDP of $106,456 annually.

By early 2025, 64.9% of Ireland’s population lived in urban centers, while 35.1% lived in rural areas. According to GSMA Intelligence, Ireland had 5.5 million mobile cellular connections and 5.22 million internet users, with an online penetration rate of 98.9%. Ireland has three main mobile networks: Three, Vodafone, and Eir, plus seven mobile virtual network operators (MVNOs) that use the main networks to provide mobile services.

Costa Rica, in contrast, spans 51,100 km², has a population of 5.278 million, a GDP of $95.350 billion in 2024, and a per capita GDP of $17,909 annually. By early 2025, 83.4% of its population lived in urban centers, while 16.6% lived in rural areas. GSMA Intelligence reports that Costa Rica had 7.4 million mobile cellular connections at the start of 2025 — representing 144% penetration relative to the total population. Latest data indicates 4.76 million internet users in Costa Rica.

Notably, there are significant differences in economic output between the two countries: Costa Rica’s GDP in 2024 was about 17% of Ireland’s during the same period. Despite similarities in population size, natural resources, and ecological diversity, this economic gap is crucial.

This difference becomes important when analyzing service markets. Ireland’s market can support three full mobile network operators, just like Costa Rica. However, Ireland hosts seven MVNOs and lacks any presence of regional mobile operators — despite having a higher percentage (35.1%) of its population in rural areas compared to Costa Rica’s 16.6%.

These figures show that although Ireland has a more productive economy — and therefore a wealthier population — and a larger rural population, it has opted not to implement regional mobile operators. Instead, it relies on MVNOs due to better cost recovery potential and operational profitability.

Now, for a contrasting comparison, Brazil differs greatly from Costa Rica in terms of economy, population, and territory. Brazil covers 8,510,418 km², has a population of 211.695 million, and a GDP of $2.171 trillion in 2024, with a per capita GDP of $10,257 annually. At the beginning of 2025, Brazil had 217 million active mobile cellular connections — a penetration rate of 102% of the total population.

Meanwhile, 88.1% of Brazil’s population lives in urban centers, while 11.9% live in rural areas. GSMA Intelligence data shows that Brazil had 217 million mobile cellular connections and 183 million internet users by early 2025, indicating an internet penetration rate of 86.2%.

Brazil’s vast geography makes it difficult for one, two, or even three companies to deploy a mobile network capable of reaching nearly 100% of the population. Its political-administrative structure includes the Union, 26 states, the Federal District, and 5,568 municipalities. For instance, the state of Bahia alone covers 567,295 km² — over ten times the size of Costa Rica — and has a population exceeding 14 million, triple that of Costa Rica. In 2024, Bahia contributed $84.126 billion to Brazil’s GDP — nearly matching Costa Rica’s entire GDP.

Therefore, the existence of regional operators makes economic sense in Brazil due to the opportunity to serve untapped markets with paying customers and recover network deployment investments in a shorter time frame.

In conclusion, when designing a spectrum allocation process — especially for a technology like 5G — it is essential to conduct a thorough study of international experiences. In previous analyses, I’ve emphasized that each country has unique characteristics, so simply copying models isn’t always the best approach. Although understandable, Costa Rica is not the first nor will it be the last country to carry out a spectrum assignment process with similar outcomes.

At Artifex Consulting LLC, we offer our SpectrumInvest services to help develop the implementation of new mobile technologies like 5G, and in the coming years, the next generation — 6G. Contact us: contact@artifexconsulting-us.net