Brazil to Let Phone Carriers Invest Rather Than Pay Fines

Brazilian phone and television carriers would be able to commit to invest more in their networks rather than paying fines for regulatory violations under a plan being readied by the government’s telecommunications agency.

Anatel, as the regulator is known, plans to vote on the proposal March 7, Joao Rezende, the agency’s president, said in a phone interview from Barcelona. The measure would only be applied to new fines issued by Anatel, and the sanctions would double if companies failed to comply with their agreements to increase investments, he said.

“The sooner a company acknowledges and corrects a mistake, the bigger a discount in the fine,” Rezende said.

The proposal is the latest step by Anatel to balance its tougher scrutiny of the industry with incentives for companies to invest more in their networks. Last year, when the agency announced a plan to reduce fees companies can charge, it also granted carriers a nine-year “holiday” on new fiber-optic infrastructure, saying they wouldn’t have to share their new networks with rivals during that period.

America Movil SAB (AMXL), Brazil’s biggest cable-TV provider and its third-largest mobile-phone carrier, slid less than 1 percent to 13.37 pesos in Mexico City. Telefonica Brasil SA, the nation’s largest wireless company, fell less than 1 percent to 52.14 reais in Sao Paulo.

Tim Participacoes SA (TIMP3), the second-largest mobile-phone company, dropped less than 1 percent to 8.65 reais, and Oi SA (OIBR4), the biggest landline carrier, fell 1.5 percent to 7.35 reais.

To contact the reporter on this story: Carla Simoes in Brasilia Newsroom at csimoes1@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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