SAO PAULO: Brazilian telecoms regulator Anatel said on Friday it prefers a market solution for carrier Oi SA , which has been struggling to turn around its business since filing for bankruptcy protection in June 2016.

In a statement, Anatel denied a Friday report by newspaper O Estado de S. Paulo saying the Brazilian government was considering an imminent intervention in the carrier, as it fears the interruption of Oi services next year.

Oi declined to comment.

On Wednesday, Brazil's largest fixed-line carrier posted a second-quarter net loss of 1.5 billion reais ($390 million), 24% more than a year earlier, as debt servicing costs rose and the real weakened against the dollar. Still, the company raised capital expenditures by 50% in the second quarter to 2 billion reais.

In July, Oi disclosed a strategic plan aiming to divest up to $2 billion in non-core assets and invest in fiber-to-home (FTTH) broadband service, considered the heart of the company's strategy.