UPDATE 3-Brazil court OK's halting sales of new cellphone plans

Mon Jul 23, 2012 5:25pm EDT

* Brazil court denies TIM's appeal to reverse sales halt

* Major mobile carriers rush to present investment plans

* Claro exec sees sales resuming shortly

BRASILIA, July 23 (Reuters) - A partial ban on new sales of mobile phone plans took effect in Brazil on Monday, as telecoms companies failed to overturn the measure in court and try to convince regulators they can improve their poor customer service.

Anatel, Brazil's telecoms regulator, last week ordered telecommunications firm TIM Participacoes and two other leading carriers to stop selling new mobile plans in some states in response to rising consumer complaints about dropped calls and spotty coverage.

Brazilian Communications Minister Paulo Bernardo met with executives from the carriers on Monday, later saying in a news conference that 15 days should be "more than enough" time for the companies to present investment plans and convince Anatel that they will improve performance.

"We don't want to demonize the companies," Bernardo said. "The problem is that they need to maintain a good relationship with their consumers."

A Brazilian court on Monday denied a request by TIM to overturn the decision, according to a court filing.

"For the past two years, the worsening quality of cellular phone service in the country has been public and notorious," federal judge Tales Krauss Queiroz said in the ruling. He concluded that "there is nothing illegal in the conduct of the regulatory agency," and that the sales suspension was "proportional" to the problems at hand.

According to Victor Cravo, Anatel's attorney general, TIM can appeal to a higher court.

Representatives of TIM declined to comment on the ruling, although the firm issued a statement later on Monday saying it was complying with Anatel's decision and that "at this moment all the company's efforts are focused on the national action plan for improving personal mobile service."

The plan will be filed on Monday and discussed with Anatel on Tuesday.

Rival telecommunications firm Claro, controlled by Mexican billionaire Carlos Slim's America Movil, expects to resume sales shortly in three states including Sao Paulo, according to the company's chief executive officer, Carlos Zentano.

Claro delivered its investment plan to Anatel on Friday, and Zentano met with regulators to discuss the plan on Monday.

Anatel requested additional information from Claro, which will be delivered later in the day.

"This week, we will work with the company, as we have to discuss things a little more," said Bruno Ramos, private services superintendent at Anatel.

Bernardo said Anatel was also looking into regulations to govern the sharing of transmission towers among different carriers for the eventual implementation of 4G telephony services in Brazil.

Shares of TIM ParticipaƧƵes closed trading on Brazil's Bovespa stock exchange Monday with a 2.58 percent loss, while shares of America Movil rose 1.29 percent on Mexico's IPC exchange.

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