SAO PAULO, Sept 5 (Reuters) - Credit rating agency Moody’s Investors Service said on Thursday the pending approval of a new telecommunications law in Brazil is positive for the sector as it paves the way for asset sales.
The Senate may vote on the bill, known as PLC 79, by Sept. 11, the chamber’s president Davi Alcolumbre said this week.
“The likely passage of PLC 79 would be credit positive for the entire Brazilian telecom industry, but especially for Telefonica Brasil SA and Oi SA, still in bankruptcy protection,” Moody’s said.
The law, in part, is designed to encourage investment in broadband in remote areas of Brazil by allowing companies to own outright telecom assets, such as cell phone towers and valuable real state, that they may sell if they so choose.
Under the current more restricted model, asset ownership reverts to the government once a service provider’s contract period expires. It also required providers to invest in outdated technology, such as public phones and landlines.
This laws 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 will also benefit Claro, the local subsidiary of Mexico’s America Movil SAB de CV and TIM Participações SA, a subsidiary of Telecom Italia SpA, Moody’s said. (Reporting by Tatiana Bautzer Editing by Bill Berkrot)