Tim Rallies on Authorization to Resume Infinity Day Calling Plan

Tim Participacoes SA (TIMP3), Brazil’s second-biggest mobile operator by market share, headed for a five-month high after regulators cleared a sales promotion that was suspended last year on concern over service quality.

The Brazilian unit of Telecom Italia SpA (TIT) gained 2.9 percent to 8.54 reais at 5:12 p.m. in Sao Paulo. A close at that level would be the highest since Aug. 17. The benchmark Bovespa index rose 0.6 percent.

Anatel, the telecommunications regulator, authorized Tim to resume its Infinity Day plan, which offers unlimited calls at a fixed price between telephones operated by the carrier, according to a statement in Brazil’s official gazette today. While the operator’s network still needs improvement, there is no risk to service delivery, Anatel said.

The decision is “a relief for Tim and should help the company to improve results this year,” Sandro Fernandes, a trader at Belo Horizonte-based brokerage Corval, said in a phone interview. “Investors are still a little cautious because the regulator can apply another sanction to the carrier if it understands quality hasn’t advanced.”

Brazilian regulators have increased pressure on telecommunications providers to improve service and drive down costs in the world’s second-largest emerging market. Anatel suspended the Infinity Day promotion in November.

In July, Anatel banned Tim, Oi SA (OIBR4) and America Movil SAB, owner of Claro, from selling new mobile voice and data service because of network failures. The three companies later resumed sales after promising to reduce dropped calls and improve customer service.

Tim shares declined 11 percent in 2012 while the Bovespa gained 7.4 percent during the same period.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net