UPDATE: Brazil Telecoms Regulator Suspends New TIM Mobile-Phone Plan

Date : 11/16/2012 @ 8:48AM
Source : Dow Jones News
Stock : Telecom Italia (TIT)
Quote : 0.766  -0.006 (-0.78%) @ 3:14AM
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UPDATE: Brazil Telecoms Regulator Suspends New TIM Mobile-Phone Plan

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--Brazil telecommunications regulator tells TIM to suspend new calling plan

--Anatel says calling plan could lead to network problems, quality-of-service issues

--TIM rejects Anatel's allegations, says network can handle call volumes

(Adds statement from TIM, starting in fourth paragraph.)

   By Matthew Cowley 

SAO PAULO--Brazil's telecommunications regulator, Anatel, on Friday said it has suspended a new mobile-phone calling plan launched earlier this week by TIM Participacoes SA (TIMP3.BR), saying it could hurt quality of service.

On Monday, mobile-phone operator TIM, a unit of Telecom Italia SpA (TIT.MI, TI), launched a calling plan called Infinity Day, under which customers pay 0.50 reais ($0.24) for unlimited local calls and a further BRL0.50 for unlimited long-distance calls to other TIM customers.

Anatel said there was "potential instability in the network" and potential "damage to the quality of service" for all of TIM's users as a result of the Infinity Day promotion.

TIM said in a statement that its investment plan presented to Anatel in August--as part of a previous effort by the regulator to improve quality of service at all mobile-phone operators--already included the Infinity Day proposal.

The firm rejected the suggestion that the network would be affected, and said network capacity is 30% higher than it expected as a result of the new calling plan. It said it tested the impact of the calling plan in the southern state of Rio Grande do Sul without any problems.

TIM said its rivals have launched "more aggressive" promotions and haven't been challenged by Anatel.

Anatel has given TIM 30 days to present a proposal that will demonstrate that the firm's network is capable of handling the volume of calls.

If it doesn't stop selling the plan, TIM faces a fine of BRL200,000 a day, Anatel said.

Write to Matthew Cowley at matthew.cowley@dowjones.com

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