Brazil‘s telecommunication regulator Anatel, announced yesterday that it has suspended sales in some states by three mobile phone companies —TIM, the Brazilian unit of Telecom Italia; América Móvil’s Claro; and the national carrier Oi — due to the volume of customer complaints. Anatel said the worst wireless carriers in each state are prohibited from selling new lines. The suspension will start July 23. (Read full document — in Portuguese).
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TIM won’t be allowed to sell in 19 states, including Rio de Janeiro; Oi in five states and Claro in three states, including the most populous state, Sao Paulo. Together, the three account for around 70% of the Brazilian mobile phone market. According to Anatel’s latest numbers, Vivo still leads the market with a 29.6% market share and more than 75.7 million mobile lines. TIM is second with just under 68.9 million mobile lines, followed by Claro with nearly 63 million mobile lines and Oi with more than 47.7 million mobile lines.
“The measure was taken because of the growth in the number of complaints registered at Anatel since the last year,” the regulator said in a statement.
If a telecom operator fails to comply with Anatel’s suspension, it will be subject to a fine of $99,000 (R$ 200,000) per day and for each state in which the noncompliance is found.
Carriers disagree
The National Union of Telephone Companies and Mobile Service and Personnel (SindiTelebrasil) said in a statement that the association was surprised by the measure adopted by Anatel.
SindiTelebrasil complained that the telecommunications sector has been demanding for some time that Brazilian authorities take action to enable the deployment of infrastructure. SindiTelebrasil’s executive director, Eduardo Levy, has argued that the main barriers to network expansion, especially cellular antennas, are restrictive laws. (Read New rules impeding mobile’s growth in Brazil, SindiTelebrasil chief says).
There are about 250 different municipal laws that limit and delay the expansion of services, said SindiTelebrasil, which also noted that LTE implementation will require at least double the number of antennas used today by 3G technology. “And the installation of this infrastructure may also face the same difficulties,” the association stated.
The carriers were surprised by what they believe is an extreme measure adopted by Anatel. The most affected telecom operator, TIM, noted that it was the only Brazilian mobile phone operator that sells unblocked phones without fines for terminating services. TIM said that it has invested $1.5 billion (R$3 billion) to improve network capacity and expand its infrastructure.
TIM also said that “such a disproportional measure by Anatel will certainly affect competition in the telecommunications industry in the country that will benefit some competitors and hurt more than 200 million users.”
Oi said its commitment to the development of the telecommunications sector and Brazil’s growth can be shown by its increased investment in 2012. The company said it is investing $3 billion (R$6 billion) throughout Brazil this year, which is $500,000 more than in 2011 and nearly double the investment it made in 2010.
Oi believes that Anatel’s analysis is outdated compared to recent developments for service provision and that the data do not consider the efforts and investments made in the past 12 months.
Claro explained that the criteria that affected Anatel’s determination are related to specific problems of a call center serving the three states, but the company said it has already taken action which resulted in improvements according to Anatel indicators in the month of June.
The carrier also noted it invested $1.8 billion (R$3.5 billion) in Brazil this year and said it shall promptly submit its investment plan to Anatel for maintaining constant service quality.
Brazil’s June numbers
Brazil ended June with 256.13 million mobile lines, which represents a penetration of 130.44%. Prepaid (81.68%) and GSM (76.66%) mobile phones had the highest penetration percentages. Postpaid represented 46.9 million lines (18.32%).
Of the total, 18.7% of connections were W-CDMA; broadband data terminals (modems) accounted for 2.4%, while machine-to-machine terminals accounted for 2.3% of mobile connections. CDMA mobile phones represented .4% of all connections.
