Brazil telcos get green light to offer TV service

Brazil's IPTV market growth may be less than stellar, but that could change as the country's president Dilma Rousseff passed a law that eliminates restrictions on telcos providing pay TV.

This latest move follows new legislation that the country's senate passed in August that allowed both local telcos and foreign-owned competitors such as Vivendi and Telefonica (NYSE: TEF) to offer subscription-based video services to customers.

By giving telcos the permission to offer TV service, consumers will be able to have another option for triple play voice, data and video services besides the cable operator.

Jose F. Otero, president of Signals Telecom Consulting, told FierceTelecom that there "won't be a great impact in terms of pay TV subscriber growth there as all the incumbent operators were already offering the service via DTH," but that "it would help drive investment on FTTX networks in the markets."

Otero added that the legislation could drive consolidation in the cable TV market.

"The immediate impact would be that Embratel (AMX) would acquire the societal control of NET the main CATV operator in Brazil," he said. "The same will happen with Telefonia and its CATV operator TVA."

And while it will take time to see what the effect of the new law will have, it comes at a time when the competitive dynamics of Brazil's video and broadband market are changing.

TIM Brazil and Telefonica Brazil are building out their own seperate Fiber to the Home (FTTH) networks, and the Brazilian government has a proposed open access fiber network to offer video services over these networks. Cable operators will also be facing new competition from Netflix (Nasdaq: NFLX), which announced its intention to bring its streaming video service to Brazil.   

For more:
- TeleGeography has this article

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Related articles:
NTT America expands IP network presence in Brazil
TIM Brazil to build fiber network to serve rural areas
Brazil's Anatel introduces new pro-competition regulations
Four Brazil service providers stake claim in country's broadband plan
Telefonica Brazil pushes toward goal of 1 million FTTH customers by 2015

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