2. Visit our website and IR app:
www.tim.com.br/ir
AGENDA
Macro & Industry Overview.......5
Recent Results……………..…………..11
Network Evolution…………………...18
Regulatory Update…………………..23
Fixed Business…………………….…...26
Business Outlook…………….….…..29
Historical Data & Others…….……33
TIM IR app
(English)
TIM RI app
(Portuguese)
3. KNOWING TIM 3
KNOWING TIM BETTER
Gross Revenues
(R$ Bln)
Customer base
EoP (Million)
15,000 km fiber optical backbone
5,500 km fiber
optical backhauling
Growth
Via
Acquisition
Brazilian Law
“Nível” 1
“Nível” 2
Legal
Requirements
Demand for transparency and disclosures
Highest level of Corporate Governance
Requirement of protection for minority shareholders
100% Tag Along
Equal dividends rights
One single class of shares
Strict disclosure policy
Statutory Audit Committee:
•Report to Board of Directors
•Oversight Financial reporting
•Analyze anonymous complaints
Unique Telco company listed on the Novo Mercado
CORPORATE GOVERNANCE
TIM: A Huge Brazilian Company
Presence in Brazil since 1998.
16th largest Private Company in Brazil (source: Exame Magazine - 2013).
Approximately R$32 billion of Market Capitalization.
74.7 million customers (27% Share)
The 2nd Player - Market and rev. share
More than 465,000 points of sales
More than 166 own stores
15 Customer Care Centers (16k attendants)
~13,500 Antennas
3,432 cities covered
95% of urban pop. covered
51,700 km of optical fiber network
~12,520 employees
23,000 indirect jobs
R$10.4 billion in taxes payments in 2013
R$3.9 billion invested in 2013
Sales
Network
Social
& Economic
GROWTH STRUCTURE
25
28
30
2011
2012
2013
4,7
5,0
5,2
2011
2012
2013
64
70
73
2011
2012
2013
EBITDA (R$ Bln)
5. MACRO SCENARIO OUTLOOK (1/2)
•Market consensus shows a softer growth in GDP.
•Consensus expects a deterioration in overall macroeconomic scenario on the medium term.
•Market expects that the government is unlikely pushing inflation towards the center of the target.
•With inflation and FX Rate going up, SELIC is expected to grow, specially after the recent decision to rise the rate to 11.25% p.y.
GDP Forecast (% YoY Growth)
Inflation Forecast
(IPCA: 12 months)
Interest Rate Forecast
FX Rate Forecast
(R$/U$ - year average)
(% Selic Target p.y. – year average)
Source: BaCen/Bloomberg
5.9
6.3
6.3
5.9
4.5
2013a
2014e
2015e
2016e
10.0
11.0
11.5
12.3
2013a
2014e
2015e
2016e
2.2
2.4
2.5
2.4
2013a
2014e
2015e
2016e
2.3
0.3
1.2
2.3
0.7
3.0
4.0
2013a
2014e
2015e
2016e
Government’s Target
Government projection
Market Consensus
Government projection
Market Consensus
MACRO & INDUSTRY OVERVIEW 5
6. MACRO SCENARIO OUTLOOK (2/2)
•Market expects the unemployment rate to increase in 2015, as jobs creation remains low.
•Even with a high number of indebted families, families in default figure has been decreasing, probably guided by the constant reduction of unemployment and real income gains, specially on classes C and D.
Unemployment
(%)
Formal Jobs Creation* (In Thousand)
Indebted Households*
Families on Default (% of total)
(% of total)
Source: Banco Central/Bloomberg
61.6
58.9
61.4
63.2
3Q11
3Q12
3Q13
3Q14
-307
303
189
237
4Q13
1Q14
2Q14
3Q14
24.3
19.1
20.6
19.1
3Q11
3Q12
3Q13
3Q14
6.0
5.4
5.4
4.9
5.0
5.6
6.1
3Q11
3Q12
3Q13
3Q14
2014e
2015e
2016e
* Families that declared to have debts on the categories of: credit card, stores bills, personal loans, car loans and insurance and postdated check
* Families that declared to have debts overdue for more than three months
*Number of job positions with the complete registration of the employee
MACRO & INDUSTRY OVERVIEW 6
7. TIM represents 30% of the industry mobile revenue* while has 27% of the market share
TIM
Source: Anatel and Players balance sheet
Vivo
Claro
Oi
Mobile
Fixed
Fixed BB
Pay-TV
Group
Customers 2Q14 (000´s)
74.203
665
121
n.d.
74.989
Market share 2Q14
26,9%
1,5%
0,5%
n.d.
---
Net Adds 2Q14 (000´s)
286
-
19
n.d.
305
Net Adds 12M (000´s)
2.008
31
61
n.d.
2.100
Net Revs FY13 (R$ Mln)
19.264
657
19.921
Mobile
Fixed
Fixed BB
Pay-TV
Group
Customers 2Q14 (000´s)
79.357
11.035
4.370
688
95.450
Market share 2Q14
28,8%
24,1%
18,8%
3,6%
---
Net Adds 2Q14 (000´s)
892
333
36
43
1.305
Net Adds 12M (000´s)
3.158
619
345
175
4.296
Net Revs FY13 (R$ Mln)
23.002
11.720
34.722
Mobile
Fixed
Fixed BB
Pay-TV
Group
Customers 2Q14 (000´s)
68.776
11.289
7.045
10.106
97.216
Market share 2Q14
24,9%
24,7%
30,3%
53,3%
---
Net Adds 2Q14 (000´s)
27
189
220
230
667
Net Adds 12M (000´s)
2.303
1.133
905
1.121
5.462
Net Revs FY13 (R$ Mln)
12.773
20.424
33.197
Mobile
Fixed
Fixed BB
Pay-TV
Group
Customers 2Q14 (000´s)
51.081
17.023
6.567
887
75.558
Market share 2Q14
18,5%
37,2%
28,3%
4,7%
---
Net Adds 2Q14 (000´s)
502
-240
3
58
304
Net Adds 12M (000´s)
1.373
-1.307
17
- 16
48
Net Revs FY13 (R$ Mln)
9.290
19,132
28.422
The mobile segment represents
75% of the industry access growth
*Mobile revenue considers only the 4 major players
Fixed / Mobile
Fixed BB
Fixed voice & BB / TV
Mobile
Fixec BB/ TV
Fixed
Mobile
BRAZILIAN TELCOS X-RAY
Fixed / Mobile
7
8. 122.6
23.2
56%
35.2 mi
43%
27.0 mi
62.8 mi
Possess Internet connection
Does NOT Possess Internet connection
Total Households
38%
High cost
43% of total active connections have speed below 2Mbs
3%
37%
51%
91%
MARKET STRUCTURE CHANGING TOWARDS DATA USAGE
Households with internet connection (%)
With Telephone
Only mobile phone
Mobile and fixed phone
Households Profile
Fixed phone only
Purchase Power
Salaries up to R$1.2k
Salaries up to R$3.1k
Average Cost
32 mln
2 mln
81 mln
106 mln
23 mln
53% of pop.
70% of pop.
Source: PNAD 2012, CETIC.br ‘ TIC Domicílios 2013, Company estimates
Re-visiting Market Structure...
Market Data Revenues Growth 2016 vs. 2012:
> 13 bln Reais on Mobile (+100%)
> 7 bln Reais on Fixed (+35%)
1
2
57 mln
3
83 mi
~R$40
~R$100
Fixed: Voice and Broadband Entry level plan
Mobile: Voice and Data
PTIM’s entry level plan
4
Access Growth
(users in mln)
Fixed
Mobile
2009
2010
2011
2012
2013
Jul/14
+ 5.2X
Reasons for not having Internet:
12%
Lack of coverage
…with room to grow
MACRO & INDUSTRY OVERVIEW 8
9. Widespread use of Social Media (Social Network Users in Brazil 2011-2017)
BRAZILIAN INTERNET USAGE BOOM
Internet Penetration in South America
(Internet users per 100 inhabitants)
Strong adoption of Instant Messaging
(WhatApp mln users)
High Penetration of E-commerce
(E-commerce revenues in Bln US$)
8.4
11.0
17.0
2010
2011
2012
Amazon lauched operations in Brazil in Dec/12
83 mln Internet users – Brazil is the 5th largest nation in the world of internet users
66%
60%
59%
56%
46%
44%
41%
37%
32%
32%
30%
24%
Arg
Col
Chi
Uru
Bra
Ecu
Vem
Per
Guy
Sur
Bol
Par
56.1
66.2
78.3
88.3
97.8
104.2
110.0
2011
2012
2013
2014
2015
2016
2017
#2 in Facebook active users (76mln) only after US
#2 in Twitter users (41mln) only after US
2nd largest market outside US
40
38
32
31
25
17
13
11
3
India
Brazil
Mexico
Germany
Spain
UK
Argentina
Russia
France
28% of mobile users in Brazil use Instant Messaging apps
Source: SocialBakers, e-Marketer, Semiocast, G1.com, Folha de São Paulo
MACRO & INDUSTRY OVERVIEW 9
465 mln worldwide users
List of selected countries as of Feb/14
10. 53%
64%
79%
90%
2006
2007
2008
2009
4%
12%
11%
52%
2011
2014
Tablet
Smartphone
56%
48%
42%
34%
27%
27%
23%
•Incoming calls only device
Mobile Penetration
(% over population)
DATA GROWTH IS THE NEW CHALLENGE
Data Penetration
(% of data over total revenues in 3Q13)
248
212
166
162
140
139
91
MOU in 2008
(minutes)
•Still a lot of phones without data access
•Wi-Fi only devices
PCs, Notebooks,
Feature Phones
MACRO & INDUSTRY OVERVIEW 10
...was similar to the challenge
in data growth now
Challenge in voice growth in 2009…
Goal: increase voice usage
Challenge: deliver the best experience in mobile internet
Source: Anatel and IBGE
Source: IDC
Source: Global Matrix
High Growth
“Fear” to use
Low Usage
Handset Sales Share
12. 3Q13
3Q14
+6%
3rd QUARTER IN FEW: RESULTS OVERVIEW
Financial Highlights
Operational Highlights
Business generated revenues
at a good pace
1
Net Mobile Revenues
(ex-incoming)
3Q13
3Q14
+5%
EBITDA at a solid performance
2
EBITDA reached R$1,332 mln in Q3
1
New offers
2
Bad debt under control
Bad debt as % of gross revenues
Increasing data penetration
3
% of data users over total base
4
Strong performance in 4G market share
4G Market Share
0.7%
0.6%
1.1%
1.1%
0.8%
3Q13
4Q13
1Q14
2Q14
3Q14
-22.3%
-21.9%
-22.9%
-20.5%
-2.9%
3Q13
4Q13
1Q14
2Q14
3Q14
Improving fixed business (fixed business net revenues Δ% YoY)
5
+19 p.p.
Strong cost control (total opex Δ% YoY)
4
8.8%
2.3%
-2.9%
-7.2%
-8.1%
3Q13
4Q13
1Q14
2Q14
3Q14
33%
39%
43%
3Q13
2Q14
3Q14
Net Income
3
Net Income totaled R$348 mln in Q3
3Q13
3Q14
+11%
+6.4%
+10 p.p.
Source: Anatel
26%
30%
Jul/13
Jul/14
+4 p.p.
3Q RESULTS 12
13. 1,283
1,378
3Q13
3Q14
Service EBITDA (ex-handset business)
(R$ mln; %YoY)
BUSINESS FUNDAMENTALS
Core Business Evolution…
…Overcoming Challenges
Mobile Service Net Revenues
(% YoY)
Service EBITDA Margin (ex-handset business) (% YoY)
(Local + LD
+ VAS
+ Others)
Business Received
3Q13
3Q14
Business
Generated
1
MTR cut impact on revenues
(YoY performance)
(Incoming Voice + SMS)
+7.4%
30%
34%
3Q13
3Q14
+3.6 p.p.
2
SMS Outgoing Revenues
(YoY performance)
-18%
-28%
-27%
1Q14
2Q14
3Q14
Net revenues from MTR
3
Macro Environment
Brazilian GDP Growth (%YoY)
Source: IBGE; CNC
Indebted Households (% of total)
1S13
1S14
2.7%
0.5%
A market trend
Greater potential for data growth usage
1.2%
-8.2%
-19.4%
1Q14
2Q14
3Q14
+5%
-34%
Operating margin improvement
61%
63%
3Q13
3Q14
1H14
1H13
3Q RESULTS 13
14. 45%
39%
26%
30%
17%
20%
12%
10%
DRIVEN BY INNOVATION
Customer Base
(mln users)
PREPAID MOBILE ACCOUNT/ MONEY
oPartnership: TIM, Mastercard and Caixa Econômica Federal
oFocus on unbanked population ( >50% of prepaid base)
NEW MUSIC PLATFORM
oPartnership TIM and Deezer (top global streaming platform)
oMore than 35 million music available for download
oMaintaining leadership position in the mobile music industry in Brazil
Aug/12
Aug/13
TIM
Source: ANATEL
Aug/14
P1
P3
P4
Jul/13
Jul/14
3G Market Share
(%; mln users)
4G Market Share
(%; thd users)
30.1
31.4
42.7
16.8
123 mln
Jul/13
Jul/14
TIM
1,437
1,101
735
364
3.7 mln
TIM
Source: ANATEL
Source: ANATEL
INTERNET SHARING PLANS
oUp to 4 devices
oNo additional charges
WEEKLY SERVICE PACKAGE
oVoice + Data + SMS
oR$ 7 per week
NEW M2M PLANS
oNew data packages launched for M2M services
R$ 0.75 DAILY OFFER
oExpansion to new regions: PR, SC, MA, RJ
oCovering most of the country
Adding Value Through Innovation
NEW APP FOR LANGUAGE COURSES
oGames and quizzes help students developing English skills
blah COMMUNICATION APP
oIntegrated communication (VOIP, IM, SMS) App
oFirst ad campaign
76.5
77.1
79.7
69.4
72.9
74.7
63.2
67.1
69.3
48.0
50.0
51.3
23%
25%
25%
26%
40%
35%
11%
14%
3Q RESULTS 14
15. 67%
77%
3Q13
3Q14
3Q13
3Q14
Jul - Aug/13
Jul - Aug/14
24
32
3Q13
3Q14
MAINTAINING STRONG DATA PACE
Data Adoption
Increasing Data Penetration
Smartphone Penetration Over Customer Base (%; Δ YoY)
Smartphones Share over New Sales
(%; Δ YoY)
Data Users (mln users; % YoY)
+32%
BOU: Bytes of Use (megabytes)
Days of Use
+40%
+22%
43 mln to go!
28 mln untapped market
15 mln with data handset
Data Opportunity over Customer Base
32 mln data users
1Q14
2Q14
3Q14
25%
27%
29%
% over total gross mobile service revenues
Mix of Data Gross Revenues
(R$ mln; %YoY)
SMS
Web
1,500
+29%
+39%
+45%
+80%
Δ %YoY growth
1,578
Content & Others
1,677
+33%
+72%
74.7 mln customer base
+23%
+20%
+22%
+10 p.p.
New Data World
Usage Increase
Penetration Increase
25%
44%
3Q13
3Q14
+20 p.p.
3Q RESULTS 15
16. 3Q13
3Q14
~0.7%
~0.8%
3Q13
3Q14
4,045
180
Thousands
4,207
4,045
+149
Thousands
+0.4%
FINANCIAL RESULTS ANALYSIS (1/2)
Service Net Revenues (R$ mln; % YoY)
Reported Revenue 3Q13
Reported Revenue 3Q14
MTR Impact
-3.8%
4,225
‘Pro forma’ Revenue in 3Q14
-306
-4.5
ΔYoY
+4.7%
-34.5%
-2.9%
Δ Others
Δ Business Incoming
Δ Business Generated
Ex-MTR
1,332
109
Thousands
EBITDA (R$ mln; % YoY)
1,252
Reported EBITDA 3Q13
Reported EBITDA 3Q14
+151
-71
Δ Opex/ Others
Traffic/Data Δ Contribution Margin
24.6%
30.5%
1,332
27.4%
34.1%
EBITDA Margin
Service EBITDA Margin
+4.5%
+3.4%
MTR Impact
+15.1%
+6.4%
1,441
‘Pro forma’ EBITDA in 3Q14
ΔYoY
Ex-MTR
Efficient Cost Control
Interconnection Cost
(Δ% YoY)
Leased Lines Cost (Δ% YoY)
Bad Debt/Sales (% over gross revenues)
stable
3Q13
3Q14
-36.2%
3Q13
3Q14
-1.8%
Mobile First Margin Analysis (% YoY)
+6 p.p.
Strong first margin expansion showing core business improvement
Margin expansion driven by data and VAS (content & others)
3Q RESULTS 16
19. INFRASTRUCTURE (R)EVOLUTION (1/3)
2016
MASSIVE LD
BACKBONE
65,000 KM OF FIBER
2013
FIBER TO THE
AMAZON
46,000 KM OF FIBER
BY YE13
Fiber to the site / Mobile Broadband
Project Key to Data Growth
Targeting 38 cities in 2013,+100 cities till 2016.
From 2-8 to +100 Mbps.
LTE Ready.
Macro coverage fine tuning.
Focus on IP infrastructure, caching, peering.
INTELIG 15,000KM
2009
INTELIG
ACQUISITION
New backbone routes- Increasing resilience.
82% urban
population
2013 2014 2015 2016
95% urban
population
#NodeB / eNodeB
(3G + 4G)
# BTS
(2G)
2012 2013 2014e 2015e 2016e
New Sites
Including
Small Cell.
POP MW
POP MW POP MW
POP MW
BSC-RNC Site
POP MW
2013 2014 2015 2016
LTE* 3G 2G
Fiber base
Infrastructure
Backhauling
Evolution Increased Coverage and Access Capacity
(# new elements)
Capex Evolution Towards Data
(% of total Capex)
Small Cell Approach
(# new elements)
NETWORK EVOLUTION 19
20. 39
81
2013
1Q14
2Q14
3Q14
900 Mhz rollout according to plan (above 600 sites using the new frequency)
Expanding backhauling
INFRASTRUCTURE (R)EVOLUTION (2/3)
Mobile Broadband Update
Cities Covered with MBB project
% of urban population covered
Quick incident resolution: from 56% to 76% within 8h
Reacting faster to network problems - faults opened within the target time: from 85% to 94%
Agreement with a tower company
Project to install more than 150 small cells in gas stations in 3 cities
Small cell installed inside Totem
Network Hiring + Insource Project
Innovative Coverage Expansion
Improving Quality and 4G Services (e.g.: SP)
Reduction in dropped call rates and better overall performance
Higher average throughput rates
Improvement in indoor coverage
Increase in data and voice traffics
Expanding # of people in the Network team
From third party TO insource Network Control Center
30%
31%
32%
Source: ANATEL app
36%
Investing Efficiently
Big Data analysis for capex allocation;
Antenna level return analyses (IRR and payback)
99.0%
97.95%
97.53%
98.36%
Voice Access
# Antennas
NETWORK EVOLUTION 20
21. 3,153
3,106 3,085
3,055
TIM P2 P3 P1
INFRASTRUCTURE (R)EVOLUTION (3/3)
Network in Numbers
4G Sites in state capitals
Ran Sharing
Smart Approach
Source: ANATEL
Number of WIFI & Small Cells
Source: Company
714
1,105
4Q13 1Q14 2Q14 3Q14
Number of 3G Sites
9.3% growth in 9M
Coverage: 79.1% of
urban population
Source: Company
9,074
9,920
4Q13 1Q14 2Q14 3Q14
NETWORK EVOLUTION 21
3,871
3,386
2,983
2,836
2010 2011 2012 2013
19% 17% 20%
% over sales
18%
Copper
(2-8Mbps)
Before FTTS After FTTS
Metro Ring
From Copper
To Fiber based
Fiber to the site expansion to ~100 cities
CAPEX Analysis
CAGR
11%
2G
3G
4G
R$2,983 ~R$3,800
2G
3G
Capex per Technology
(R$ mln)
2011 2014e
Capex Evolution
(R$ mln)
23. REGULATORY UPDATE (1/2)
REGULATORY UPDATE 23
700MHz Auction Results
TOTAL AMOUNT
o Auction totaled R$5.85 billion, 24% lower then
the R$7.7 billion expected for minimum prices
for all blocks.
FINAL PRICE
o The EAD Contribution of R$890.1 million related to unsold
blocks will be distributed proportionately among the sold
blocks and will be discounted of the Public Price.
Block 1 Block 2 Block 3 Block 5 Block 4 Block 6
(10+10) MHz (10+10) MHz (10+10 MHz) (10+10) MHz (10+10) MHz (10+10) MHz
In R$ Million
Minimum Price 1,928 1,928 1,928 30 1,893 5 7,712
Winning Bid 1,947 1,947 1,928 30
Unsold
(1st + 2nd rounds)
Unsold
(1st + 2nd rounds)
5,852
Premium 1.00% 0.99% 0.00% 0.02% - - -
EAD 903.93 903.93 903.93 13.86 887.59 2.48 3,616
Total
National Regional
1st Round
(10+10) MHz cap
5800 Mhz
2100 Mhz
850 Mhz
700 Mhz
< 700 Mhz
0 2 4 6 8 10
Number of BTS
20 15 10 7 5 2
BTS Range (km)
0.52 0.78 0.83 1.07 1.13 1.18 1.22 1.28 1.29 1.29 1.48
2.58
DEN NZL Spain Brazil GER PORT EUA Taiwan Italy France AUS Canada
Average = 1.22
AUCTION PLAYERS
o Oi and Sercomtel did not
participate in the auction.
Spectrum acquisition at fair price;
(Price in USD/MHz/Pop. adjusted for GDP)
Better Coverage
(Indoor and Rural)
24. 3rd week
•Return of the MHz Bond
Estimated 700 MHz Auction Roadmap
Aug/6
•TCU’s precautionary measure preventing the auction rules publication
Jul/17
•Approval of auction terms and interference rules
•Definition of Analog TV switch- off dates
Aug/21
•Auction publication
Aug/16
•ANATEL’s auction rules revision
2nd week
•Authorization extracts published in DOU
Oct/16
•Counterarguments by TIM
4th week
•EAD constitution
4th week
•GIRED institution (One TIM representative)
4th week
•EAD’s 1st 30% payment
July/14
Set/12
•Clarification from ANATEL
•Bid bond issuing
Sep/1
•Clarifications request
•Administrative Appeal
Aug/20
•TCU approval
Oct/13
•Nor TV’s appeal (MMDS operator) against CEL
3rd week
•Call for Authorization signature
4th week
•Performance Bond (EAD) issuing
Oct/7
•Auction Special Commission; Classification and Award decision published in D.O.U.
4th week
•Proof of good standing documentation filing
•GO/NO GO Decision: Additional Commitments
…
March/15
April/15
Sep/30
•Auction
Sep/23
•Documentation
•Bid bond; and
•First bid filing
September/14
October/14
December/14
REGULATORY UPDATE (2/2)
August/14
REGULATORY UPDATE 24
2nd week
•ANATEL’s Board Award approval
1st week
•Authorization signature
•Public Price payment
November/14
26. 3Q13
4Q13
1Q14
2Q14
3Q14
TIM SOLUÇÕES CORPORATIVAS: BUSINESS REBOUND
Turnaround on fixed business in place
2013
2012
-
2014
+
EBITDA-CAPEX
Net Revenues (with intercompany)
2013
2014
1Q14
2Q14
oNew business unit organization
oIT renewal plan
oMultiservice network launch
oNew branding
oNew offers and product launch
oRestructured sales force
4Q14
oSales and customer service improvement
3Q14
Financial Performance
oSales multi-channel Improvement
oNew offers and product launch
oMTR reduction
Revenues from New Sales (R$; YoY)
Revenue rebound
Sales growth
Market repositioning
Infrastructure reinforcement
Governance / Efficiency
Business Priorities:
Business development
Quality and Process
+5x
Organization restructuring
Dedicated B.U. to all business customer
Fixed + mobile integration
FIXED BUSINESS 26
27. 36.7
38.2
3Q13
3Q14
21
13
3Q13
3Q14
Accelerating Operational Performance…
LIVE TIM: SPEEDING UP GROWTH
27
43
120
3Q13
3Q14
Customer Base (000 users)
Source: Anatel
881
1,366
3Q13
3Q14
Netflix Broadband Ranking (average streaming speed representation)
3Q13
3Q14
ARPU (R$; YoY%)
… with Support of Quality Experience
Addressable Households (000 HH)
Source: Company
+2.8x
+55%
+32%
New Line Payback (months)
-38%
Gross Adds (000 users)
18
31
3Q13
3Q14
+74%
Live TIM Net Adds Share (% of SP and RJ market additions)
Average Speed of New Sales (mbps)
+4.1%
16%
31%
Aug/13
Aug/14
Source: Company
FIXED BUSINESS 27
29. CONCLUSION
29
Q3 Conclusions: A good balance between objectives
Perspectives: Moving the plan forward
Strategic…
Financial…
Operational…
EBITDA
Net Income
+6.4% YoY
+5% YoY
+11% YoY
MBB in 81 cities
OPEX Control
Prepaid leadership
Infrastructure growth
Evolving revenue profile
Renewed Mission/ Purpose/Values
New 3-year plan
“To connect and take care of every customer, so everyone can do more”
oIndustry leadership
oLong term commitment
o4G license 700MHz
oTower sale supporting investment plan
Quality
Business Generated
TIM Protagonist
•VOICE
•SMS
•MTR
•DATA
•DIGITAL SERVICES
oData and digital services leadership
oInfrastructure
oCustomer base value
oCustomer experience
oOne TIM initiative
Data Users (mln users)
Data + VAS (ex-SMS)
Smartphones (over total base)
32 mln 32% YoY
44% +19 p.p. YoY
R$1.3 billion +49% YoY
BUSINESS OUTLOOK 29
30. 21.3
27.5
2012
2013
2016e
2012
2013
2016e
+xx%
OFFER EVOLUTION
136
148
>170
2012
2013
2016e
18%
21%
>40%
VAS Gross Revs.
VAS/Revs.
30%
37%
>50%
43%
55%
>75%
2012
2013
2016
+xx%
+29%
+22%
Smart/Web phone Penetration (% over total base of lines)
Voice MOU (minutes)
Data Users (% of Data Users in CB; million users)
VAS Revenue Growth (% of Mobile Services Gross Revenues; R$ mln)
BUSINESS OUTLOOK 30
31. TIM PART: 2014-2016 GUIDANCE
Total Net Revenues
EBITDA
CAPEX
18,764
19,921
2012
2013
2014e
2015e
2016e
5,012
5,207
2012
2013
2014e
2015e
2016e
R$ million
R$ million
626
3,139
3,871
3,487
384
2012
2013
2014e
2015e
2016e
R$ million
Infrastructure
Others/Licenses
3,765
Guidance
2013-2016 CAGR: Mid Single Digit Growth
2013-2016 CAGR: Mid Single Digit Growth
Total CAPEX 2014-2016:
~R$11 billion*
*Does not consider 4G licenses (700Mhz).
BUSINESS OUTLOOK 31
36. HISTORICAL DATA: OPERATIONAL & FINANCIAL RATIOS
ROA: NOPLAT/Avg. Total Assets.
Calculation considers organic Net Income and EBITDA
HISTORICAL DATA & OTHERS 36
38. Cofins
PIS/ PASEP
ICMS
Fistel
Fust/
FUNTEL
Total
Total
Fust/ FUNTEL
PIS/ PASEP
ICMS
Cofins
Fistel
% Gross Revenues
TELCOS’ TAX BURDEN & HIGH INVESTMENTS
3%
~1%
28%
~5%
1.5%
~39%
32% of Revenues
Taxation represents almost 40% of companies gross revenues.
Tax Burden Composition
Telecom Industry Tax Payments1
(R$ Bln)
Telecom Industry Investments2
(R$ Bln)
HISTORICAL DATA & OTHERS 38
Source: players Balance Sheet
1 Considers TIM, Telefonica, Oi and AMX
2 Considers TIM, Telefonica, Oi, AMX and GVT
45.7
46.0
2012
2013
36.8
38.4
2012
2013
39. Investor Relations Team
Avenida das Américas, 3434 - Bloco 01
6° andar – Barra da Tijuca
22640-102 Rio de Janeiro, RJ
E-mail: ri@timbrasil.com.br
Rogério Tostes
E-mail: rtostes@timbrasil.com.br
Phone: +55 21 4109-3742
Vicente Ferreira
E-mail: vdferreira@timbrasil.com.br
Phone: +55 21 4109-3360
Leonardo Wanderley
E-mail: lwanderley@timbrasil.com.br
Phone: +55 21 4109-4017
Rodrigo Godoy
E-mail: rcgodoy@timbrasil.com.br
Phone: +55 21 4109-3446
Luiza Chaves
E-mail: luchaves@timbrasil.com.br
Phone: +55 21 4109-3751
Visit our Website
www.tim.com.br/ir
Safe Harbor Statements
Statements in this presentation, as well as oral statements made by the management of TIM Participações S.A. (the “Company”, or “TIM”), that are not historical fact constitute “forward looking statements” that involve factors that could cause the actual results of the Company to differ materially from historical results or from any results expressed or implied by such forward looking statements. The Company cautions users of this presentation not to place undue reliance on forward looking statements, which may be based on assumptions and anticipated events that do not materialize.
SAFE HARBOR AND IR CONTACTS
SAFE HARBOR & IR CONTACT 39
