Telemar suspends Oi Internet ads

Brazil's largest telco Telemar has decided to suspend an ad campaign promising discounts for early subscribers to its Oi Internet dial-up service, thus complying with an order by Brazil's advertising regulator Conar, a Telemar spokesperson told BNamericas. Telemar launched the free dial-up service late last month, offering a 31% refund of connection costs for the first 500,000 subscribers. But earlier this month, telecoms regulator Anatel prohibited Telemar from including the 31% discounts in its subscribers' telephone bills, since internet access cannot be part of the normal telephone service. Rival dial-up service provider iG complained to Conar that Oi Internet's ad campaign is now false, prompting Conar's order. "iG misinterpreted Anatel's decision, as we only had to remove the 31% discount from the telephone bills," the Telemar spokesperson said. "They said [Anatel wanted us] to remove the whole campaign, and that is not true," she added. "Of course we complied with the Conar decision and took the ad off air, but we will appeal the decision," she said. "Our 31% credit offer continues to be valid, we will only stop the ads." "Soon after the Anatel decision we changed the campaign's text from 31% discount to 31% credit to make it clear that we will pass the refund in a different way that has nothing to do with the telephone bill," the spokesperson said. "By March 24 we will finally decide how to refund the 31% credit to our subscribers and our marketing department is developing various means of doing that." "The free dial-up market sees lots of legal action instead of fair competition, and as Oi Internet is the newest of the dial-up competitors, the other dial-ups try to stop us with legal moves like this," the spokesperson said. Client loyalty is very important for free dial-up providers since clients are not bound by contracts, and the best way to achieve this is to offer the best service, she added. In related news, a service quality war appears to be emerging in the dial-up sector with UOL launching an e-mail service with 2GB storage for 7.90 reais (US$2.9) a month. The offer is seen as a reaction to last week's launch of Terra Mail Gigante by Telefonica subsidiary Terra offering 1GB storage for 8 reais a month. Terra is the actual market leader with 1.7 million subscribers, followed by UOL with 1.3 million clients. While Terra offers its email service to other dial-up operators' subscribers, UOL limits access to UOL dial-up clients. Telemar hopes Oi Internet will reach the one million client mark by the end of the year. "After two weeks we already reached the 200,000 subscriber mark," the spokesperson said. "And figures now show that we have fulfilled 25% of our full 2005 plan," she added. The newest Oi Internet figures will be published by Telemar on March 31.