By Rogerio Jelmayer

SAO PAULO--Brazil's mobile-phone subscriptions dropped in June, as the country's sluggish economy hurt consumer confidence and the sale of new phones.

The number of active mobile phones users in Brazil dropped by 1.7 million in June, ending with a monthly total of 282.45 million, compared with 284.15 million in May, government agency Anatel said.

It was the first month of mobile-phone subscription reduction since September 2013, which declined of 173,600.

The combination of weak economic activity, high inflation and interest rates is discouraging buyers, according to economists. After expanding 0.1% last year, Brazil's economy is expected to contract around 1.7% this year.

Telefonica Brasil SA, also known as Vivo, which is part of Spain's Telefonica SA, and TIM Participacoes SA, a unit of Telecom Italia SpA, remain market leaders.

Vivo posted a market share of 29.26% in June, up from 29.24% in May, while TIM was second with 26.41% in June, down from 26.49%.

Claro, the local unit of Mexico's America Movil SAB de CV, ended the month with a market share of 25.21%, up from 25.20%, while Brazilian telecommunication company Oi SA lost ground, posted a market share of 17.78% in June, from 17.79% in May.

Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com

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