Oct. 7 (Bloomberg) -- Tele Norte Leste Participacoes SA, Brazil’s biggest fixed-line phone company, fell the most in more than seven weeks on concern a possible takeover by Telefonica SA of a rival will increase competition.

Tele Norte, which sells services under the Oi brand in Brazil, fell 2.4 percent to 32.74 reais. Voting shares of Tele Norte, which is also known as Telemar, dropped 3.1 percent to 39.20 reais for the biggest decline since Aug. 17.

Telefonica, Europe’s second-biggest phone company, offered to buy Curitiba, Brazil-based GVT Holding SA for about 2.55 billion euros ($3.74 billion), or 48 reais a share, topping a Vivendi SA bid for the Brazilian company.

“In case the deal is completed, Telefonica will expand its areas of operations and Telemar would suffer in the short term,” said Joao Pedro Brugger, analyst at Leme Investimentos in Florianopolis, Brazil. “A successful bid by Telefonica is negative for Oi,” he said in a phone interview.

Brasil Telecom Participacoes SA, which was taken over by Telemar in a 5.86 billion real deal last year, fell 2.2 percent to 19.60 reais.

To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.

Last Updated: October 7, 2009 16:56 EDT