Reuters: Regulatory News: UPDATE 1-Brazil wants more pay TV investment as complaints soar

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UPDATE 1-Brazil wants more pay TV investment as complaints soar Sep 27th 2012, 21:54 Thu Sep 27, 2012 5:54pm EDT * Move aims to curb a surge in service problems * Government using regulation to boost investment * Adds to uncertainties about industry oversight By Leonardo Goy and Guillermo Parra-Bernal BRASILIA/SAO PAULO, Sept 27 (Reuters) - Brazilian pay-TV companies will have to present an investment plan within the next 30 days showing how they plan to stem a surge in service problems, in the latest show of growing state intervention in Latin America's largest economy. Telecommunications watchdog Anatel and representatives from pay-TV companies met on Thursday in Brasilia to discuss how to reduce subscriber complaints, which have doubled over the past 12 months. Officials from Vivendi SA's GVT, America Movil's Claro TV and Net, Sky and Grupo Oi were at the meeting, Anatel said in a statement. According to Marconi Maya, who oversees Anatel's mass communications division, "the sharp increase in complaints" was behind the decision. Complaints rose three times as fast as the growth in the industry's subscriber base in the period, he added. Investors say they are being left with the impression that President Dilma Rousseff's administration is using regulation to revive investment in the country. Capital spending as a percentage of gross domestic product fell this year to the lowest level in almost two years. Recently, Anatel imposed sales bans and other measures on wireless carriers, citing years of subpar service and the companies' poor response in fixing the situation. The bans were lifted after the carriers pledged to invest a total of more than 10 billion reais ($4.9 billion) to improve service. Analysts do not expect Anatel to implement drastic measures on the pay-TV operators, but concern is growing about the agency's focus on capital spending as a way to encourage investment. As a result, investors have become more cautious about sectors ranging from healthcare and electricity, to retail and even the country's banks. The financial industry has been Brazil's most profitable for years. According to data by Anatel, the number of pay-TV subscribers in Brazil reached 15.1 million in August 2012, up 30 percent from the same month a year earlier. An index measuring penetration per household rose to 25.5 percent in August, up from 19.4 percent a year ago. America Movil has a market share of 37.2 percent, followed closely by DirecTV, through its Sky Brasil brand, with a 31.2 percent. Link this Share this Digg this Email Reprints

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