The Brazilian Senate has approved a new bill that will allow telcos to enter the cable TV market and that will give foreign investors more flexibility.
Under the current rules, foreign groups can also not own more than 49% of a cable TV company in…
The Brazilian Senate has approved a new bill that will allow telcos to enter the cable TV market and that will give foreign investors more flexibility.
Under the current rules, foreign groups can also not own more than 49% of a cable TV company in Brazil.
The country’s regulation for pay-TV is currently based on the kind of technology used, such as cable, microwave or satellite.
The new bill, which still requires approval from Brazilian president Dilma Rousseff before it comes into effect, aims to unify regulation for the different kinds of technology.
It will enable foreign groups to control all the capital of cable TV companies.
But a spokesman for the Brazilian Ministry of Communications said that the production of content for cable TV will still be restricted to Brazilian companies.
Brazilian telecoms regulator Anatel welcomed the deal, saying it will encourage the expansion of pay television services and the expansion of infrastructure needed to spread broadband internet across the country.
Speculation is already rife about how the dominant telcos in the Brazilian market will respond to the changes.
According to Brazilian Net Servicos, the America Movil subsidiary Embratel holds 35.8% of its common shares and 5.4% of its preferred shares, making a total stake of 15.5% in the company.
America Movil could move to acquire the stake in Net Servicos that it does not already own, Spanish newspaper Expansion speculated, while Telefonica could begin to offer IPTV services in Brazil.
A spokesman for fixed line operator Oi said that the approval of the new bill will increase competition and encourage the entry of new investors.
He added that the new rules will end “the barriers to the cable TV market”, where “a regulatory asymmetry” had prevented telcos from competing on equal terms with cable TV companies.
“From now on the telcos will be stimulated to invest in ultra-broadband networks,” he said.
