Tim Participacoes SA (TIMP3) dropped the most in almost a year after a newspaper reported the company may be blocked from selling mobile plans to new subscribers if service doesn’t improve.
Brazil’s second-biggest cell-phone operator declined 7.5 percent to 9.80 reais in Sao Paulo, the biggest one-day loss since August 2011. It was the worst performance on the Bovespa index, which slid 0.3 percent.
Brazil Communications Minister Paulo Bernardo said Tim may be prevented from selling new contracts if it fails to improve operations as complaints mount, O Estado S. Paulo reported. Bernardo said Tim may be required to sign an agreement with regulators pledging better service, the newspaper said.
“Paulo Bernardo’s remarks were pretty strong and spurred concern that the company may lose market share,” Pedro Galdi, chief strategist at Sao Paulo-based brokerage SLW Corretora, said in a phone interview.
Tim said in a statement e-mailed to Bloomberg News that the company isn’t aware of the need to sign any document with the regulator and that it’s open to discussing with the government “deficiencies an operator is susceptible to” if so required. An official at the Communications Ministry didn’t return a phone call seeking comment.
Telefonica Brasil SA, whose Vivo unit is Brazil’s biggest wireless carrier, declined 2.2 percent to 49.51 reais.
Tim rallied 15 percent this year through yesterday, while the Bovespa fell 5.6 percent.
To contact the reporters on this story: Denyse Godoy in Sao Paulo at firstname.lastname@example.org; Ney Hayashi in Sao Paulo at email@example.com
To contact the editor responsible for this story: David Papadopoulos at firstname.lastname@example.org