November 30, 2016 / 12:01 PM / a year ago

Oi needs Brazil law change to lure investor, official tells paper

SAO PAULO (Reuters) - The passage of a revamped legal framework for phone carriers is key to help Oi SA attract fresh capital and emerge from bankruptcy protection, a senior official said in a Wednesday newspaper interview.

Juarez Quadros, president of Brazil’s telecommunications watchdog Anatel, told O Estado de S. Paulo that Brazilian telephone carriers and Oi, which is operating under bankruptcy protection, will benefit from the migration to an authorization-based model from a concession-based one.

For years, Brazilian carriers unsuccessfully tried to convince the government to allow them to own fixed-line assets when their licenses ended. In the case of Oi, its concession expires in 2025 and if not renewed, certain of its assets would be returned to the state.

Quadros’s remarks suggest that Oi’s decision to request bankruptcy protection in June helped accelerate the Brazilian government’s long-delayed revamping of telecommunications licensing regulations.

On Tuesday, a congressional committee approved a draft bill changing industry rules, a move that could potentially unlock new investments in Brazil, according to Estado. The bill must yet be approved in the Senate and then signed into law by President Michel Temer.  

“The law will boost the outlook for all companies, not only Oi. However, delays in the approval can make things more difficult for the carrier,” Quadros was cited in O Estado as saying.

Reporting by Ana Mano, editing by Louise Heavens

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