Brazil presses regulators to resolve concerns of fraud by TIM

Wed Aug 8, 2012 3:04pm EDT

* Communications minister pushes to resolve investigation

* Says intentionally dropped calls would be criminal issue

* Folha reports that TIM misreported indicators to regulator

* Lawmakers seek congressional inquiry into service quality

BRASILIA, Aug 8 (Reuters) - Brazil's communications minister has asked the regulator Anatel to speed up an investigation of TIM ParticipaƧoes, Brazil's No. 2 wireless phone company, saying allegations of intentionally dropped calls would merit legal action.

"If there were fraud, it would obviously leave Anatel's purview. It would be a problem for the police," Communications Minister Paulo Bernardo told reporters on Wednesday, saying the case was very serious.

His comments reinforce growing pressure on the Brazilian unit of Telecom Italia after Anatel released a report on Tuesday saying it was investigating whether TIM intentionally dropped calls by subscribers paying by the call rather than paying by the minute.

Newspaper Folha de Sao Paulo reported on Wednesday that TIM had misrepresented indicators of service quality in its monthly reports to Anatel, including the number of dropped calls and customer complaints.

A TIM spokesman had no immediate comment on the newspaper report. TIM has denied deliberately dropping calls and has said the Anatel report was based on technical errors.

Still, TIM's head of regulatory issues, Mario Girasole, told reporters on Wednesday that it would take time to restore the company's public image after news of the Anatel report.

Public outrage over the regulator's investigation has kept the pressure on TIM following Anatel's nearly two-week suspension of sales of TIM mobile phone plans in 19 states, demanding an investment plan to improve service.

The regulator also suspended sales by rival Grupo Oi in five states and by Claro, a unit of Mexican tycoon Carlos Slim's America Movil, in three states.

Telefonica Brasil, a unit of Spain's Telefonica , did not have its sales suspended, but also had to present an investment plan to improve service.

TIM shares gained 1.2 percent to 8.80 reais in Wednesday trading, while the benchmark Bovespa stock index rose 1.8 percent. The stock has lost 20 percent in the month since Anatel took a harder line with TIM and rivals.

The Parana state government cited the Anatel report in a lawsuit filed late Monday aimed at restoring the sales prohibition that Anatel lifted last week. State prosecutors are also seeking fines and repayment to some subscribers.

Lawmakers in the capital of Brasilia also filed on Wednesday to open a congressional inquiry into the quality of cell phone service in the country, promising to keep the issue in the national spotlight.

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