Brazil Senate committee passes telecoms modernization bill
Adds rise in telecom share prices
BRASILIA, Sept 11 (Reuters) - The Brazilian Senate's Science and Technology Committee on Wednesday approved a bill that will modernize Brazil's telecommunications law and boost companies in the sector by lifting restrictions on asset sales.
The full Senate could vote on the bill, known as PLC 79, later on Wednesday.
The law aims to encourage investment in broadband in remote areas of Brazil by allowing companies to own outright telecom assets, such as cellphone towers and valuable real estate, that they may sell if they so choose.
Credit ratings agency Moody's Investors Service last week said passage of PLC 79 would be credit positive for the entire Brazilian telecommunications industry, but especially for Oi SA OIBR4.SA, which is in bankruptcy protection.
The new law could facilitate a sale of Oi by making the company more attractive.
Shares of Oi jumped 4% on news that the bill cleared the committee stage and then settled up 2.4%, and Telefonica Brasil SA VIVT4.SA was 1.1% higher on the Sao Paulo stock exchange.
Under the current more restricted model, assets such as concessions revert to the government once a service provider's contract period expires. It also requires providers to invest in outdated technology, such as public phones and landlines.
The law could unleash a wave of asset sales, Moody's said, citing the regulator's estimate of $5 billion in reversible assets currently held by major carriers.
The bill could also benefit Claro, the local subsidiary of Mexico's America Movil SAB de CV AMXL.MX and TIM Participações SA TIMP3.SA, a subsidiary of Telecom Italia SpA TLIT.MI.
(Reporting by Anthony Boadle; Editing by Steve Orlofsky and Dan Grebler)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.