The Senate has passed a modernising reform, changing the licensing regime and lifting restrictions on assets sales.
Background: Brazilian lawmakers introduced a bill in 2016 to reform the regulatory framework of the telecoms sector. The bill aimed to simplify the rules to which industry is subject, moving from a licence-based system to one of authorisations, in return for investment in broadband development.
What does the act look like? Last week, the Brazilian Senate gave final approval to the bill, which now only needs presidential signature to become law. By allowing companies to replace licences with authorisations, the law allows firms to operate in the sector without going through public tenders and having to enter contracts they cannot terminate unilaterally. The economic value gained by a firm in replacing a licence with an authorisation shall be turned into investment commitments in high-speed broadband, based on guidelines set out by the government. Among other provisions, the bill defines the scope of ‘reversible assets’ and allows public interest services to be operated under private regime, which was not possible until present; and opens up the possibility for operators to trade spectrum, under the consent of the regulator Anatel which is empowered to set conditions and limitations.
Anatel is pleased with the changes: In a statement, the national regulator expressed its satisfaction for the approval of the reform, noting that the change of model for the sector paves the way for “massive” investments in infrastructure, and will facilitate the expansion of 4G and the arrival of 5G, in line with recent developments worldwide. Operators are also largely satisfied. In particular, Oi is likely to be among the biggest winners, since the sale of assets could now help it regain financial stability.
