Senate approves new law to open CATV to telcos

17 Aug 2011

Bloomberg reports that Brazil’s Senate has approved a new law that would allow telecoms operators and foreign owned companies to offer cable TV services in the country, presenting new business opportunities for the likes of Tele Norte Leste Participacoes (TNL, trading under the brand name Oi) and Mexico-based America Movil (AM). It is understood the bill has been passed by the lower chamber – the House of Congress – and now awaits the signature of the president. If formally adopted, the new law would raise the current 49% cap of foreign ownership of cablecos, local papers Folha de Sao Paulo and Valor Economico report.

As it stands, Brazilian pay-TV operators are allowed to offer telephony and internet access, but traditional telcos are restricted in not being so free to offer TV services over their networks. As a result, companies such as TNL are struggling to maintain market share in the face of customer defections to rival pay-TV operators. Under the new law they would be able to compete, while AM, which is based in Mexico City, would be able to exercise an option to take control of the voting shares of Brazil’s leading cableco by subscribers, Net Servicos.

Brazil, America Movil (AM), Oi