Brazil's TIM Hopes Sales Ban Will Be Lifted Next Week

Date : 07/26/2012 @ 4:21PM
Source : Dow Jones News
Stock : America Movil, S.A.B. de C.V. American Depository Receipt Series L (AMX)
Quote : 17.75  0.29 (1.66%) @ 4:00PM

Brazil's TIM Hopes Sales Ban Will Be Lifted Next Week

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BRASILIA--TIM Participacoes SA (TSU, TIMP3.BR), Brazil's second-biggest mobile-telephone-services provider by market share, hopes to be able to resume as early as next week the sale of contracts in states where the government has banned new sales.

Last week, Brazil's telecommunications regulator, Anatel, imposed a ban on the sale of new mobile-phone contracts in certain states by three providers: TIM, Oi SA (OIBR, OIBR4.BR), the fourth-biggest provider by market share, and the Brazilian unit of America Movil SAB (AMX, AMX.MX), known as Claro, No. 3.

The financial effect of the sales ban for TIM should be almost "immaterial," said Franco Bernabe, chief executive of Telecom Italia SpA (TI, TIT.MI), which controls TIM. The biggest impact has been on the company's image and its share price, he added.

The Anatel ruling took effect Monday. Operators were given 30 days to present investment plans aimed at resolving customer complaints. They face a fine of 200,000 Brazilian reais ($98,890) per region for each day they are late.

Each of the three companies has since handed in its plans, and Anatel asked all of them for more information, which the companies expect to provide next week.

TIM's plan will redirect planned investment toward improving the quality of the network and customer service, which were the biggest areas of consumer complaints.

The reason quality declined, the company said, was that the investment plan fell behind schedule because of organizational and technical problems as well as difficulties related to two acquisitions TIM made in a short period of time.

Write to Jeffrey T. Lewis at jeffrey.lewis@dowjones.com

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