Turnar arou ound on T Track: k: Virtuou uous Cycle e on the - - PowerPoint PPT Presentation

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Turnar arou ound on T Track: k: Virtuou uous Cycle e on the - - PowerPoint PPT Presentation

Jul 18, 2023 199 likes •310 views

Turnar arou ound on T Track: k: Virtuou uous Cycle e on the Rise 000 070 145 4G Network Expansion Human Postpaid Net Additions (1Q17) 235 000 (# 4G sites e-NodeB) (Excluding M2M and modem; in thd lines) 040 #1 in Net 12.5

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2

Results Presentation Investor Relations

000 070 145 235 000 040 000 081 135 000 110 184 000 156 222

8.0 12.5 1Q16 1Q17

  • 9.2%

1Q16 1Q17

Turnar arou

  • und on T

Track: k: Virtuou uous Cycle e on the Rise

Operational Financial Cash Network

4G Network Expansion

(# 4G sites – e-NodeB)

Normalized¹ EBITDA – CAPEX

(R$ million)

12% 15% % over Net Revenues

452 594 1Q16 1Q17 +31% YoY +55%

“Human” Postpaid Net Additions (1Q17)

(Excluding M2M and modem; in thd lines) Source: Anatel

Mobile Service Net Revenues

(%YoY) ¹ Normalized for towers sale and other transformation impacts 3.7% 418 327 166

  • 8

TIM P1 P3 P4

#1 in Net Adds

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Results Presentation Investor Relations

000 070 145 235 000 040 000 081 135 000 110 184 000 156 222

Custo tome mer r Base Transforma rmati tion

  • n:

: Postpa paid

Net Mobile Number Portability

(Postpaid)

Acquisition ARPU

(Postpaid gross adds; R$/month)

Postpaid Base Evolution

(mln users; % of Postpaid over CB) 13.5 15.3 1Q16 2Q16 3Q16 4Q16 1Q17 20% 25%

Gross Adds and Migration

(Postpaid; %YoY)

Churn & Downgrade

(Postpaid) +16%

Customer Base ARPU

(Postpaid customers; R$/month) 1Q16 1Q17 +25%

Better quality improves acquisition and loyalty… ... while “more for more” strategy and price-ups improves ARPU

1Q16 1Q17 >2x 1Q16 1Q17 1Q16 1Q17

  • 12%

1Q16 1Q17 +8% +17% Postpaid Controle

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Results Presentation Investor Relations

000 070 145 235 000 040 000 081 135 000 110 184 000 156 222

Custo tome mer r Base Transforma rmati tion

  • n:

: Prepa paid

Focusing on recurring offers

Daily packages

50MB +WhatsApp

Weekly packages

1GB + 100 min + Deezer +WhatsApp

R$0.99 R$10 R$0.99

Unlimited voice on-net

+

R$9

1GB + unlimited

  • n-net + Deezer

+WhatsApp

x 2x

ARPU

<50% >70%

% Data utilization

Prepaid Customer Profile Recurring Prepaid Base

(Quarterly average)

Recurring offers successfully attracting higher value prepaid subs.

1Q16 1Q17 2X

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Results Presentation Investor Relations

000 070 145 235 000 040 000 081 135 000 110 184 000 156 222

7.4 9.8 1Q16 2Q16 3Q16 4Q16 1Q17

Data Services ces Revenu enues s Over 50% % of MSR

Changing Customer Base profile Yielding data revenues

32% 14%

4G users over CB

(%) 34% 43% 52% 66% 57% 48% 1Q15 1Q16 1Q17

Mobile Service Net Revs Mix

(%)

Traditional Data

All plans with digital services embedded. Improving loyalty and acquisition

VAS ARPU

(R$; %YoY) 34% 1Q16 1Q17

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Results Presentation Investor Relations

000 070 145 235 000 040 000 081 135 000 110 184 000 156 222

Residen enti tial al Soluti tion

  • ns:

: TIM Live Consistency ency and New Opportun tunit itie ies

256 322 1Q16 1Q17

Efficient Customer base increase

+26%

Customer base (thd) Homes Passed (mln)

2.9 3.1 1Q16 1Q17 +7%

WTTx Solution Trials: TIM Casa Internet

  • Runs over LTE (700MHz, 1.8GHz and 2.6GHz);
  • Available offers: 2Mbps (50GB) and 4Mbps (80GB);
  • Target markets: Residential;
  • Self-installed CPE (comodato with lock-in contract)

First Results:

  • City: Rio Verde (GO)
  • High satisfaction levels (>9.6/10)
  • Average data consumption:

~70GB/month

  • >80% clients did not have broadband

IDU PC TV Mobile

TIM Live Net Revenues

(R$ bln; %YoY) 1Q16 2Q16 3Q16 4Q16 1Q17 TIM Live on Fixed Revs. +38% +8.9% >20% >30%

TIM Live ARPU Expansion

(%YoY) 1Q16 1Q17 +9% #1 on Netflix ISP Speed Index

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Results Presentation Investor Relations

000 070 145 235 000 040 000 081 135 000 110 184 000 156 222

4G Fast Rollout

  • ut Supporti

rting ng Data Strategy egy

66%

  • f data

traffic

>90%

  • f sites

through 4G devices with proprietary backhaul

4G

fastest deployment

4G Cities Coverage Evolution

(# of cities)

Doubling 4G Capacity in Key Areas Trough 1.8GHz Refarming

With additional 10MHz from 700MHz still to come

Quality Perception Surveys

1,322 (TIM) (P3) (P4) (P1) 300 600 900 1.200 1.500 Dec-13 Dec-14 Dec-15 Dec-16 Mar-17

 Rio de Janeiro  Porto Alegre  Curitiba  São Paulo  Distrito Federal from

(1Q15)

10MHz 20MHz to

(1Q17) 700MHz rollout started in Goiás and Brasília Offerings Voice 3G/4G Availability 3G/4G Connection Stability 3G/4G Speed Billing Customer Care Problem Resolution 2016 2015

TIM’s Annual Evolution

(2016 ANATEL’s Perception Survey) 76.3 73.6 68.7 72.7 74.8 71.8 70.9 69.9 4Q15 4Q16 P1 TIM P3 P4

Customer Satisfaction Index¹

(Postpaid general satisfaction) Source: CSI Model by CFI Group. From October to December, 2016.

Already #1 in Controle

Source: Teleco website (other players)

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Results Presentation Investor Relations

000 070 145 235 000 040 000 081 135 000 110 184 000 156 222

Turnar arou

  • und Milestone:

ne: Revenue nues Back k to Positive ive

Business Generated

  • 5.7%
  • 4.0%
  • 0.3%

0.9% 6.3% 1Q16 2Q16 3Q16 4Q16 1Q17 (Mobile Services Net Revenues ex-incoming ; %YoY)

  • 9.2%

3.7%

  • 5.4%

7.0% 1Q16 2Q16 3Q16 4Q16 1Q17

Mobile Service Net Revenues

(%YoY)

Total Net Revenues Breakdown

3,854 3,951 + 3.5%

  • 12.0%

1Q16 Services Revenues Handsets 1Q17 (R$ mln; %YoY) Ex–MTR impact Reported +2.5%

  • 27%

+31% 1,849

Total VAS

1,480

Data Growth Acceleration

(R$ mln; %YoY)

%YoY

34% 43% 52% 1Q15 1Q16 1Q17

Reshaping Revenues

(VAS over MSR %) +14% +25% 1Q16 1Q17

SMS Innovative

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Results Presentation Investor Relations

000 070 145 235 000 040 000 081 135 000 110 184 000 156 222

2,721 4,372 495 859 178 72 47

Solid EBITDA A Growth With Opex Control

  • l and Margin Expansion
  • n

Net Financial Position Evolution

(R$ mln, %) 8.2% 1.9% 1Q16 2Q16 3Q16 4Q16 1Q17 Service Margin Margin 2.7 2.7 1Q16 1Q17

Normalized1 OPEX

(R$ bln; %YoY)

  • 13.5%

8.7% 1Q16 2Q16 3Q16 4Q16 1Q17

Normalized¹ EBITDA Growth

(%YoY) ¹ Normalized for towers sale and other transformation impacts 30.2% 32.0% 32.6% 33.6%

Normalized1 EBITDA-Capex

(R$ mln; %YoY) 452 594 1Q16 1Q17 +31%

EBITDA Exposure to MTR

(%)

  • 0.1%

Stable Opex despite Revenues growth and 4.6% 12M inflation NFP Dec/16 OFCF ex- license 700MHz Clean Up Net Financial Expenses Cash Taxes Other Movements NFP Mar/17 +R$964 mln improvement

  • vs. 1Q16

+1,651

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Results Presentation Investor Relations

000 070 145 235 000 040 000 081 135 000 110 184 000 156 222

1Q17 7 Key Messages es & O Outloo

  • ok

Operational and financial turnaround already bearing results

TURNAROUND

IN PROGRESS

Customer Base Mix Network Traffic Mix

(Data traffic through 4G devices)

Prepaid Pospaid

Value approach in both segments 4G leadership reshaping traffic Revenues at a different pace Normalized EBITDA

(%YoY)

Normalized EBITDA acceleration

Recovery trend should continue going forward

Network & Quality: Offers: Financials:

20% 25% 80% 75% 1Q16 1Q17 1,255 >2K 2016a 2017e

Cities Covered with 4G

(EoP)

Net Revenues

(%YoY)

  • 15.3%
  • 12.4%
  • 5.3%
  • 1.7%

2.5% 1Q16 1Q17

36% (2019e)

40% 66% 1Q16 2Q16 3Q16 4Q16 1Q17

Network quality to be perceived as a differentiation factor and VoLTE to be launched in 2Q17 helping voice quality

  • 13,5%
  • 6,5%

0,5% 5,8% 8,7% 1Q16 1Q17

New offers continue to reshape customer base and usage profile Revenues and EBITDA positive growth in every quarter FCF growth to be continued