Brazil eases telecommunications sector regulation

Brazil eases telecommunications sector regulation

In a widely expected move – and one that could benefit struggling operator Oi SA – Brazil's President Bolsonaro has signed a new law aiming to modernise the country’s telecommunications sector.

According to Reuters, the law lifts restrictions on sales by fixed line and cellular telecommunications companies of their formerly state-owned assets. It will also allow for a secondary market for trading cellphone frequencies.

Fixed-line concession holders will now be allowed to migrate their licenses to a private regime in which they can more freely allocate investments to expand broadband services. In addition, satellite companies will be able to apply directly for frequencies, rather than through auctions.

Brazil’s regulatory restrictions on Brazil’s telecommunications sector have, it seems, been eased at a stroke: certainly there were no last-minute changes in Congress or vetoes by the president. However, the law took five years to clear Congress.

The law has been widely welcomed by analysts and commentators and, one assumes, service providers, not just because it makes it easier for them to do business but because it is expected to free up resources for the expansion of internet access for Brazilian end users.

A less heavily regulated telecommunications sector may also be a boost for beleaguered operator Oi. Oi has been in discussions with a number of major names in the telecommunications world, including Telefonica, Telecom Italia Group, AT&T and China Mobile, about the planned sale of its mobile unit, which could give it enough cash reserves to avoid insolvency.

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