Brazil ban on sales of mobile services may lift in two weeks

Communications minister says investment issues will take some time to resolve, but 15 days should be enough for the telcos to present plans.

A ban on sales of new mobile-phone-service contracts by three service providers in Brazil may be lifted in as soon as two weeks if the companies submit convincing investment plans to improve telecom services, Communications Minister Paulo Bernardo said Wednesday.
Mr. Bernardo made the declaration after a meeting with representatives of Telecom Italia SpA, controller of Brazilian mobile operator TIM Participacoes SA.
“These problems with investments are going to take some time to resolve, but we think a 15-day period should be sufficient to present plans,” Mr. Bernardo said.
Brazil’s telecom regulator, Anatel, last week banned sales of new service contracts by operators TIM, Oi SA and Claro because of frequent customer complaints about service problems. Bernardo said the telecoms this week complained the measures were excessively severe and provoked steep drops in their share value.
“We know the measures we’re severe, but in our view they were necessary,” he said, adding “Share-value losses are temporary and can be reversed.”
He said Telecom Italia Chief Executive Franco Bernabe Wednesday estimated the group had suffered market losses of $2.5 billion because of Brazil’s measures.
The minister said companies also complained about local bureaucracy that made investment difficult. He said the government was studying legislation that could help ease restrictions and encourage more investment.
He estimated the mobile-phone sector had made investments averaging around 17 billion Brazilian reais ($8.4 billion) annually over the past 10 years, but said the government believed that figure needed to be raised to about BRL25 billion to meet increasing demand.