3. Building a Solid Organization
→
Start up (privatization process);
→
→
→
Launched national coverage;
→
Acquired fixed license;
→
1998
2003
2004
1998
Public offering R$1.7 bi;
→
Intelig acquisition (~R$0.8bln)
Organic
Growth
Gross Revenues
(R$ Bln)
Novo Mercado migration;
→
ISE adherence;
→
First operator to launch data
services: SMS and MMS.
Long distance leadership;
→
3G launch;
→
Pioneer on GSM technology;
→
2009
Atimus acquisition (~R$1.6bln).
2010
2013
Growth via
Acquisitions
27.8
2012
Customer base
EoP (Million)
1998
70.3
2012
→ Leadership on prepaid and advancing on
postpaid.
Accessing Capital Market
15,000 km fiber
optical backbone
5,500 km fiber
optical backhauling
→ >400,000 points of sale.
→ >11,800 employees.
→ Consolidated
2nd
player in value and volume.
→ >23,000 indirect jobs.
→ Building a robust fixed infrastructure.
→ Leadership in market net adds.
→ Recognized as the market
innovator.
3
4. Backed by High Level of Investments
Capex
FIBER INFRASTRUCTURE
FROM 0 TO 45.000 KM
OF WHICH ~10k KM BACKHAUL
(R$ Bln)
19,4%
19,6%
Organic as %
Net Rev.
17,7%
18,0%
17,1%
4.63
5,00
4,50
4,00
Acquisitions/
Licenses
3.54
1,60
3,50
3,00
3.76
0,38
0,87
2.77
0,12
2,50
2,00
1,50
Organic
2,67
2,84
3,03
3,39
2,65
+
CELL SITES
MORE THAN 13.6K
1,00
0,50
-
2009
2010
2011
2012
9M13
Focus on Infrastructure
(% of Organic Capex)
7%
Commercial
and Others
33%
Infrastructure
67%
2009
19%
7%
11%
+
FIBER TO THE SITE
MORE THAN 2.800 sites
81%
89%
93%
93%
2010
2011
2012
9M13
4
5. Resulting in Outstanding Market Position
Mobile is more convenient than Fixed…
Exploring an untapped market
Serving an unsatisfied demand
(R$/minute)
(Market Share of LD minutes)
(% of users using service in last 3 months)
94,1%
93,2%
73,2%
51,8%
50%
discount
2006
2007
2008
2009
2010
Mobile
2011
5,9%
2012
26,8% 48,3%
6,8%
53,5%
46,5%
50,1%
TIM
64
24
2011
49
2012
5
2010
dez/07 dez/08 dez/09 dez/10 dez/11 dez/12
Fixed
57
18
49,9%
Fixed Operators
Internet
SMS
Customer Base
Voices Services
Data Services
(Millions of line; Source: Anatel)
(Minutes; Source: TIM)
(% of data users over CB; Mln of users; Source: TIM)
70.3
69.4
51.0
Post
Paid
41.1
11,4
11,9
11,4
>50%
72.9
11,9
>170
129
136
145
148
27%
150
10,7
4%
59,6
60,3
60,8
61,0
32%
34%
XX%
22,1
23,1
24,5
21,3
5%
2012
1Q13
2Q13
3Q13 2016e
17,5
83
43,5
1,6
2009
29%
31%
116
10,3
34,6
72.2
10,9
54,8
Pre
Paid
71.2
2010
2011
2012
1Q13
Sources: Company estimates, Anatel, CETIC 13
2Q13
3Q13
2009 2010 2011 2012 1Q13 2Q13 3Q13 2016e
2,5
2009
2010
2011
5
6. Pure Mobile Paying Off: Strategic Check
Users’ Preference for Mobile
Low Fixed Broadband Quality
Entering in Data World Via Mobile
(%Households w/ mobile phones only)
( Brazil’s Average Speed; Source: Akamai)
(Mln users; Source: Anatel)
77,9 +18x
48,9%
56,3%
2Q13
52,5
2.4 Mbps
33,2
Mobile 11,4
2009
ANATEL: >50% of fixed broadband
connections are below 2Mbps
2012
14,6
Fixed
19
20,2
13,8
4,1
2009
2010
16,3
+77%
2011
2012
Net Revenues
EBITDA
(% YoY)
Aug/13
(% YoY; Not including assets sales; Mobile as TIM)
Fixed
Incumbents
-2,6%
-7,0%
-6,1%
3Q11
3Q12
3Q13
7,1%
6,9%
3Q12
3Q13
Fixed
Incumbents
3Q11
3Q11
-4,3%
-14,1%
3Q12
3Q13
3,9%
4,2%
3Q12
3Q13
11,7%
11,6%
Mobile
-6,2%
Mobile
3Q11
6
8. Data Wave Opportunities
61.3 Mln
Brazil`s Internet average
speed according to Akamai
60%
36.8 mln
R$ 80
R$ 70
5%
12%
18%
24%
R$ 50
R$ 40
R$ 30
R$ 20
R$ 10
44%
16.2 mln
Too
Expensive
Total Households
R$ 100
24%
8.8 mln
Lack of
(60%)
coverage
2%
R$ 150
32%
11.8 mln
Other
Does NOT
Possess
Internet
connection
R$ 200
53% of active connections
are below 2Mbps
1%
ADSL
VDSL
(40%)
1%
R$ 250
2.4 Mbps
2Q13
CABLE
FTTH
> R$ 250
40%
24.5 mln
39%
48%
59%
65%
71%
MBB
Possess
Internet
connection
Willingness to pay (% of Households)
Households which does
NOT possess
% of population who used the Internet in the last 3 months per social class
94%
Low usage not only in
households
47%
14%
A
Source: CETIC 13
80%
B
C
68 million people
don’t use the Internet
in class C, D, E.
DE
8
9. ...Concentrating in the Mobile Segment
Market Transformation
(Total Revenues - R$ Bln)
CAGR ’13-’16
118
120
112
104
Mobile: +3%
Mobile
(45%)
Data
(55%)
(50%)
(56%)
(57%)
(50%)
(44%)
(43%)
Data: +18%
Fixed: -2%
Data: +6%
2009
2011
2013
2016
Data Services Revenues Growth 2016 vs. 2013
>R$10 bln in Mobile (+62%)
>R$4 bln in Fixed (+18%)
9
10. Keeping Innovative Approach
Liberty Controle Express
Pushing on Postpaid migration
Payment via credit card
TIM SIM blister for each
team.
Increase Stickiness
~7x
jan/13
Young
Chip Torcedor
Young segment positioning
Member get member through
social network since 2010.
14 Teams alread
sponsored
sep/13
sep/12
VOICE
Nonstop
Innovation
+56%
sep/13
DATA
Recarga Troco
International LD
Infinity Web + SMS
TIM Music
Talk unlimited on-net for
R$2 for 2 days.
Capture extra “charge”.
Leveraging on micro
recharge on physical
PoS.
Up selling approach,
targeting only customer
base.
Internet + unlimited SMS
on/off-net.
Pay per day.
Combining Web and
SMS offers.
Cross selling WEB and
SMS .
US:R$0,20/min.
+ 8 countries: R$0,50/min
FMS initiative.
Capturing the unexplored
mobile international calls
market.
Market attended Today
through fixed carries.
Unlimited download.
Pay R$0.50/day.
Over the top service.
Increase customer
stickiness.
Network friendly.
13 million songs already
downloaded.
10
11. And Resulting in Solid Growth
Smart/Web phone Penetration
Voice MOU
(% over total base of lines)
Innovative
Offers Driving
Growth and
Differentiation
(Minutes)
>170
>75%
150
136
52%
43%
2012
Jul 13
2012
2016e
3Q13
2016e
Data Users
VAS Revenue Growth
(% of Data Users in CB; million users)
(% of Mobile Services Gross Revenues; R$ Million)
>50%
34%
29%
VAS/Revs.
>40%
23%
21%
XX%
+15%
21.3
2012
3Q13
+XX%
+XX%
24.5
VAS
Gross
Revs.
2016e
2012
2013e
2016e
11
14. Infrastructure Needed in the Data Arena
Backhauling
Evolution
Increased Coverage and Access Capacity
Fiber to the site / Mobile Broadband
Project Key to Data Growth
POP MW
POP MW
BSC-RNC Site
LTE Ready.
82% urban
population
#NodeB / eNodeB
(3G + 4G)
Targeting 38 cities in 2013,+100 cities till 2016.
From 2-8 to +100 Mbps.
# new elements
95% urban
population
# BTS
(2G)
2013
2014
2015
2016
POP MW
Capex Evolution Towards Data
Macro coverage fine tuning.
POP MW POP MW
% of total Capex
Focus on IP infrastructure, caching, peering.
Fiber base
Infrastructure
2013
INTELIG
2009
ACQUISITION
FIBER TO THE
2013
AMAZON
2016
MASSIVE LD
BACKBONE
2014
LTE*
2015
3G
2016
2G
Small Cell Approach
# new elements
INTELIG 15,000KM
46,000 KM OF FIBER
BY YE13
65,000 KM OF FIBER
New Sites.
Including
Small Cell.
2012
2013e
New backbone routes- Increasing resilience.
*Includes 2.5GHz RAN Sharing.
2014e
2015e
2016e
14
15. Where We Are: TIM 2013 Year-to-Date Results
Financial
9M13
YoY
R$ Million
Total Revenues
14,738
7.3%
− Service
12,359
2.1%
− VAS*
3,899
23.7%
− Handset
2,379
45.2%
EBITDA
3,708
3.4%
CAPEX
2,769
+16.8%
Operational
9M13
YoY
• Consistent financial and operational
results even amidst a different macro
scenario
• Continuous growth/acceleration on
postpaid, improving customer base
mix, ARPU evolution.
• Maintaining data services at double
digit growth, underscored by
smartphone sales and innovative
offers.
• Solid improvement on Network and
Quality indicators.
• Executing Fiber-to-the-Site (FTTS)
project and 3G/4G roll-out,
guaranteeing mobile broadband
acceleration.
Postpaid (mln users)
11.9
16.4%
MOU (min)
147
12.7%
• Strong efficiency: Industry benchmark
for SAC and bad debt.
R$ 18.4
-2.0%
• Strong savings on leased lines costs,
even with traffic double digit growth.
ARPU
Reported figures for TIM Part.
*Gross Mobile Service Revenues
15