Reuters: Regulatory News: UPDATE 1-Brazil's TIM faces new government scrutiny over service

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UPDATE 1-Brazil's TIM faces new government scrutiny over service Nov 16th 2012, 14:17 Fri Nov 16, 2012 9:17am EST * Regulator suspends sale of TIM's flat-rate promotion * TIM says promotion poses no risk to its network * TIM had sales suspended in 19 states in July * Shares fall 3.9 percent By Sérgio Spagnuolo RIO DE JANEIRO, Nov 16 (Reuters) - Brazilian telecom regulator Anatel on Friday ordered TIM Participacoes, the nation's No. 2 wireless carrier, to stop selling a flat-rate promotional plan with unlimited calls per day because of concerns about service quality. It was the latest in a series of regulatory setbacks for the Brazilian unit of Telecom Italia. In July, Anatel banned TIM's sales in 19 states for nearly two weeks until the company presented an investment plan to improve service. TIM started selling its "Infinity Day" promotion on Monday, allowing customers to make unlimited local phone calls within the carrier's network for a flat daily rate of 0.50 real ($0.24) and unlimited long-distance calls for an additional 0.50 real a day. The plan could bring "potential instability" to the company's network and "hurt the quality of service for all TIM customers," Anatel said in a decision published on Brazil's official gazette. Shares of TIM were down 3.9 percent at 7.71 reais on the Sao Paulo stock exchange after falling as much as 4.5 percent earlier in the session. The company said there was no risk of network instability from the promotion. In a statement, TIM said its network had capacity at least 30 percent higher than the estimated voice traffic in the 18 areas where it was offering the plan. Anatel's decision, TIM added, will hurt some "12 million consumers who will not be able to benefit from an innovative promotion." TIM has 30 days to provide Anatel with a study on the impact of the plan on its network and to make the necessary adjustments to ensure its service meets the agency's quality standards. The company intended to sell the plan to prepaid customers on a promotional basis until Jan. 15. Link this Share this Digg this Email Reprints

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