Brazil’s Senate Approves Opening Cable TV to Phone Carriers, Foreigners
Brazil’s Senate approved a law allowing telephone carriers and foreign companies to offer cable television, creating new opportunities for Tele Norte Leste Participacoes SA (TNLP3) and America Movil SAB. Cable carrier Net Servicos SA’s bonds jumped the most in a year.
The Senate approved the bill yesterday. The measure already has been passed by the lower house of Congress and awaits the signature of President Dilma Rousseff. The bill lifts the current 49 percent cap on foreign ownership of cable operators, Brazilian newspapers Folha de Sao Paulo and Valor Economico reported yesterday on their websites.
Under the new law, America Movil, based in Mexico City, would be able to exercise an option it has to take control of the voting shares of Net Servicos, Brazil’s largest cable company. America Movil, controlled by billionaire Carlos Slim, already owns 49 percent of the voting shares and a 92 percent financial stake in Net.
Net 7.5 percent bonds due in 2015 rose 2.71 cents on the dollar, the biggest jump since March 10, 2010, to 117.78, according to data compiled by Bloomberg. The yield on the notes fell to 4.9 percent, the lowest since the bonds were issued in October 2009.
Net shares fell 30 centavos, or 1.9 percent, to 15.30 reais at 4 p.m. New York time in Sao Paulo, where the cable carrier is based.
Pay-TV carriers are getting into the phone and Internet business, causing phone companies to seek television service to prevent customer defections. Tele Norte Leste, Brazil’s biggest fixed-line carrier, could offer TV service over its phone lines.
Oi, as Tele Norte Leste is known, America Movil and rival land-line carrier Telecomunicacoes de Sao Paulo SA (TLPP3) already offer satellite-TV service in Brazil.
Oi, based in Rio de Janeiro, fell 43 centavos, or 2 percent, to 21.20 reais in Sao Paulo trading. Telecomunicacoes de Sao Paulo, controlled by Madrid-based Telefonica SA (TEF), rose 80 centavos, or 1.7 percent, to 46.80 reais. America Movil gained 19 centavos, or 1.3 percent, to 14.90 pesos in Mexico City.
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