Technology

Ericsson to invest over $230 million in Brazil to build new 5G assembly line for Latin America

The investment is likely to stir competition with Nokia and Huawei

Ericsson's brand in a smartphone and the Brazilian city of Sao Paulo as background.
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  • The installation of the new line will require BRL 200 million of the BRL 1 billion (more than $230 million) announced amount;
  • The company estimates that the implementation of 5G in the country will generate $ 10 billion in direct investments.

Swedish manufacturer Ericsson has announced that it will have a new assembly line dedicated to 5G technology products at its plant in Brazil, located in São José dos Campos (SP). According to Reuters, the investment of BRL 1 billion (more than $ 230 million) will be made between 2020 and 2025 and is likely to stir competition with Nokia and Huawei, which also are racing to lead 5G deployment in Brazil.

“We already export 40% of all equipment assembled in Brazil to Latin American countries, and it will be no different with 5G,” said Eduardo Ricotta, president of Ericsson Latam South, in a phone interview after meeting with President Jair Bolsonaro, according to Reuters.

Ricotta also told the news agency that the announced amount includes, among other expenses, the cost of hiring and purchasing machines. The installation of the new line will require BRL 200 million of this amount.

The new Ericsson’s plant in Brazil should begin its operation in the third quarter of next year–a date in line with the 5G auction in Brazil.

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The National Telecommunications Agency (Anatel), the regulatory agency responsible for the sector in Brazil, had scheduled the auction for March 2020, but later announced that the event would need to be postponed and there is no new date yet.

The company estimates that the implementation of 5G in the country will generate $ 10 billion in direct investments and open more than 200,000 jobs.

Huawei confirmed in August that it will also have a factory in Brazil focused on 5G. At the time, the Chinese giant announced in a relevant fact an investment of $ 800 million between 2020 and 2022 in a new assembly line, in a city of the state of Sao Paulo yet to be defined.