Tim meeting with investors - september

TIM Participações - Investor Relations
Meeting with Investors
TIM Brasil
Company’s Presentation
September, 2018

2
This presentation contains
Statements that constitute
forward looking statements regarding
the intent, belief or current expectations
of the customer base, estimates regarding
future financial results and other aspects
of the activities.
Such forward looking statements are not
guarantees of future performance and
involve risks and uncertainties, and actual
results may differ materially from those
projected as a result of various factors.
Analysts and investors are cautioned not
to place undue reliance on those forward
looking statements, which speak only as of
the date of this presentation. TIM Part
undertakes no obligation to release publicly
the results of any revisions to these forward
looking statements.
Disclaimer
Financial results are presented on Pro
Forma basis, disconsidering impacts
from new IFRS adoption.

3
Agenda
Visit our website and download our IR app:
www.tim.com.br/ir
TIM IR app
(English)
TIM RI app
(Portuguese)
About Us ………………………………………………………………………………………………………4
Market Overview and TIM Positioning ……………………………………………………………………..9
Regulatory Update ……………………………………………………………………………………….....37
2Q18 Results ……………………………………………………………………………………………......18
Strategic Plan 2018-20 ……………………………………………………………................................. 30
Appendix ………………………………………………………………………………………………….... 41

4
ABOUT US

EBITDA¹ Margin
26.6%
28.4%
31.5%
33.5%
36.6%
2013 2014 2015 2016 2017
New Brand and Offers Positioning
#2 in Mobile
Net Services
Revenues
Best and Wider
4G
Network
¹ Normalized Figures.
>85k km of
fiber optical
network
throughout
the country
TIM's Turnaround consolidated: from Recovery to Consistent and Sustainable Growth"
Presence in
Brazil
since 1998
Introduced the
first plan focus
on data for
smartphones
#1 in
prepaid
users
#2 in postpaid
users
(excluding
M2M)
%
Net Service Revenues
2.5%
-3.0%
-5.8%
-4.3%
5.1%
2013 2014 2015 2016 2017
%
5

Redesign the Customer Experience of our customers to become the best value for money player leveraging our leadership
position as an Ultra-Broadband player and our disruptive Offer proposition. Shift internal Culture from “excusability” to
Accountability, redesign Platforms and Processes from analogue to Digital to allow a full Digital Transformation.
Customer Experience
Offer Infrastructure Efficiency
Digitalization
Culture
Offer based on customer interactions
Residential ultra broadband through 4G
network
Convergent offers and multimedia
services
3 53 4
Integrated channel approach for sales and
customer service
More flexible operator to lead market evolution
5
Improved Customer Experience due to advances in
all other pillars6
Digital transformation
Creation of a Digital marketplace,
connecting customers and
partnerships
2
Accountability and
efficiency as part of
culture
1
6
1
2
4G expansion in 700MHz
Coverage > 90% of urban population
Selective expansion of FTTx network
4
Strategic Pillars
6

1. Education
Every child and young person has the right to a
science and mathematics education that
represents the advances in knowledge gained in
these areas.
2. Applications
Technological innovation should serve human
development
3. Work
Technological innovations are the basis for a new
way of working.
4. Inclusion
People have the right to learn about new
information and communication technologies and
how they influence their everyday decisions.
7
Founded in July, 2013
MISSION: We are committed to creating and strengthening resources and strategies for the
democratization of science and innovation that promote human development in Brazil, with
mobile technology as one of the main facilitators.
Corporate Social Responsibility
Applications
ZUP – Zeladoria Urbana Participativa
Agentes da Transformação
Mapas Culturais
Busca Ativa Escolar
TIM + Unicef
Education
Círculo da Matemática do Brasil
Support to Science and
Technology Museums and
Centers
TIM Faz Ciência
TIM + Brazilian Public School
Math Olympics (OBMEP)
Inclusion & Work
Academic Working Capital
TIM Tec
PRINCIPLES AND STRATEGIES
TIM Stands out in
Sustainability
Joined UN Global Compact
in 2008
Member of ISE (Sustainability
Index) for 10 consecutive
years
ISO 14001 certified since 2010, 1st
Brazilian telco and ISO9001 Quality
Certification for Billing and Networking
processes
Sustainability

8
Corporate Governance
 Statutory Audit Committee:
• Report to Board of Directors
• Oversight Financial reporting
• Analyze anonymous complaints
 Compensation Board and Internal Control and Risk Board operate
indefinitely and act independently
 Whistleblower channel website
Brazilian Law
“Lei das S.A”
Legal
Requirements
Demand for
transparency and
disclosures
Highest level of
Corporate
Governance
Requirement of
protection for
minority
shareholders
Unique Telco company listed on the Novo Mercado
Committees to Reinforce and Guarantee Solid Corporate Governance
10 members
(3 independents)
3 members
(3 independents)
3 members
(3 independents)
3 members
(1 independent)
5 members
(2 independents)
8 members
 Equal rights: vote, dividends and tag along
 Higher liquidity
• Single class of share (ordinary shares)
 Greater independence of Board of Directors (at least 20%)
 Strict disclosure policy

9
MARKET OVERVIEW and TIM
POSITIONING

10
Brazilian Telcos: Financial X-Ray 2Q18

11
Brazilian Telcos: Financial X-Ray 6M18

12
Brazilian Telcos: Operational X-Ray

13
Brazilian Telcos: Revenues X-Ray
Total Services Net Revenues
R$ mln
Mobile Service Net Revenue
R$ mln
62,659
60,724
61,798
62,519
2015 2016 2017 LTM12
Total Services Net Revenues - Share
%
37.7% 40.1% 41.1% 41.1%
23.5% 23.0% 23.8% 24.2%
18.7% 17.6% 17.8% 19.1%
14.1% 13.8% 13.0% 12.1%
6.0% 5.5% 4.4% 3.5%
2015 2016 2017 1H18
Mobile Service Net Revenue - Share
120,999
119,286
118,460
117,967
2015 2016 2017 LTM12
33.6% 34.6% 35.6% 35.7%
29.1% 29.3% 29.4% 29.9%
21.5% 20.9% 19.7% 18.9%
12.7% 12.3% 13.1% 13.6%
3.1% 2.8% 2.3% 1.9%
2015 2016 2017 1H18
%
Nextel
TIM
Oi
Claro
Vivo
Nextel
TIM
Oi
Claro
Vivo

 c50% of the time is spent watching video and to
communicating with voice
 Text messaging (SMS) accounts now for only c10% of text
communications
Usage: Apps x Traditional Services
23 51
88
98
211
149121
262
236
07 08 09 10 11 12 13 14 15 16 17
0.41 0.42 0.42 0.42 0.42
0.36
0.32
0.24
0.16
0.10
0.06
0.03 0.02
07 08 09 10 11 12 13 14 15 16 17e 18e 19e
14
Change in Customer Profile and Mix
MTR Cuts
Stabilization
Changing Customer Base Mix
Expansion
Consolidation
Total base in mln customers
R$
Prepaid
Total
Postpaid
¹ Source: comScore
²Source: HSBC
89% of Brazilians' digital time in mobile is spent on apps
30% of Brazil's digital population uses only mobile device
In Brazil, 33% of the digital time is spent on social network and
instant messaging apps
Mobile Global Research¹
New Customer Profile
Brazil “Anatomy of the Consumer”²
50%50%
Netflix /
Youtube /
etc
Live TV50%50%
Whatsapp /
Skype
Telephone
voice calls

TIM Brasil: Growth Waves
Complexity/Timing
RevenuesGrowth
~5%
~8%
FTTH/WTTX &
Convergence
Market
Consolidation
2
3Consumer Mobile
& TIM Live (FTTC)
1
B2B
Fixed & Mobile
Mobile Market Revenues
(R$ mln)
BB Market Revenues
(R$ mln)
2017E 2018 2019 2020 2017E 2018 2019 2020
CAGR
>3%
CAGR
>6%
1 Consumer Mobile (“the Controle wave”)
• Growth mostly based on a «Pure Mobile»
approach with Residential BB opportunity
geographically limited.
• TIM exploits the benefits of its 4G
acceleration.
3 FTTH/WTTX & Convergence
• Accelerated Fiber deployment (backbone,
backhaul and FTTH).
• Additional revenues growth and Convergent
CB expansion thanks to FTTH Service.
2 Business Segment (SMB and Top)
• Opportunity to gain Market Share and
support a Top Line rebound leveraging on:
• Brand repositioning and New
Portfolio;
• More Convergent approach;
• CEx centric philosophy.
15

Mobile Growth Levers
(1) TOP 5 market includes SMP+SME
24.5%
23.1% 22.7%
23.8%
>26%
2014A 2015A 2016A 2017E 2018 2019 2020
Mobile Service Revenues Share¹ (%)Total ARPU Trajectory (R$)
2017A 2018 2019 2020
CAGR
High Single Digit
PORTFOLIO
BEST
OFFER
LOYALTY
(CHURN MANAGEMENT)
PREPAID
CONTROLE
PURE
POSTPAID
• Innovation: dedicated data
package and OTT partnerships
for 3P offers
• Convergence in FTTX/WTTX
• Simple and segmented
offers
• Better acquisition quality
• Big Data Analytics to
improve churn prediction
• Services lock-in offers
• Handsets with lock-in as key
element of proposition for
the high end segment
• Targeted handsets and
services lock-in offers
CB MANAGEMENT
• 1-2-1 management with RTD
(UP-SELL and RETENTION)
• 1-2-1 management (UP-SELL
and RETENTION) with
segmented and dedicated
offers (Mass Market)
• Best offer using “more for
more”
• Innovation: OTT
partnerships
GO-TO-MARKET &
POSITIONING
• Enhance TIM Black
positioning to accelerate the
recovery of high end
customer perception
• Naked SIM to improve
acquisition quality and go-
to-market flexibility
CEX & DIGITAL
• Recurring offer and Naked SIM
simplify and improve the
customer experience
• Continued evolution of digital
channels
• Focus on convenience and
digital payment
• Push Meu TIM App w/ new
features (self-caring, up-sell)
• Focus on convenience and digital
payment
• Push Meu TIM App w/ new
features (self-caring, up-sell)
• Best value for money,
convenience and control
• 1-2-1 management (UP-SELL
and RETENTION) with
segmented and dedicated
offers (Mass Market)
16
Pure
Postpaid
Control
Postpaid
Prepaid
Recurring
Prepaid
Non-Recurring
Upgrade
Upsell
Upsell
Loyalty
Upgrade
Upsell
Upgrade
Upsell
Monetizing Customer Base

Opportunity for Residential Broadband solutions to be captured
2017E 2018 2019 2020
> 60%
20% - 40%0 – 20%
40% – 60%
Residential Broadband Penetration
• Broadband Penetration 42%
• Ultra-BB Penetration 6%
• 96% of cities (~50% population) has very low BB
penetration (~20%)
• 23% of BB connections have speeds < 2Mpbs
Relevant opportunity to capture a strong
unserved demand for Residential
Broadband and Ultra-BB connectivity
Fixed Broadband Market Customers
(mln users)
FTTH
• Best overall performance (capacity, speed and
stability)
• Focus on high value customers and high
customer experience standards
• Smart strategy coverage launching in new cities
• Leverage in fiber infra already built for mobile
• Partnership with content providers
1
• Increase of capacity on already saturated areas
• Refocus with dedicated offer to high income
areas with historical low sales performance
• Higher speeds (VDSL2+) and ARPU over the
existing coverage
• Partnership with content providers
FTTC2
• Simple and smart solution (plug n play, value for
money)
• Focus on customers with limited broadband
services (suburbs and smaller cities) offers
• Fast time-to-market to attack new regions
(incremental revenues)
• Optimize investments: use of 4G network
(700Mhz) spare capacity
WTTX3
CAGR
>6%
17

18
2Q18 RESULTS

3.6
3.8
4.0
2Q16 2Q17 2Q18
Quarter Highlights
 Solid results amid worsening
macro and temporary
impacts.
 Reshaped user base profile
increases resilience, reducing
prepaid volatility exposure
(~R$ 15 mln impact in MSR
from extraordinary events).
 2018 efficiency target at 86%,
supporting EBITDA Margin
expansion.
 Operational and Network
metrics remain strong.
Net Service Revenues (R$ bln)
+5.0%
+5.7%
700 Mhz cities
1,131
+215 vs. 4Q17
FTTH³ HH
+519 (000)
vs. 4Q17
MSR
+5.7 %
YoY
Live Revs.
+41.0 %
YoY
19
12M Postpaid
Net Adds²
+3.0 mln
¹Normalized figures
²Postpaid Net Adds Ex-M2M, Source: Company
³Addressable households ready to sell
Total Net Revs.
R$ 4.2 bln +5.8%
YoY
EBITDA¹
+12.7 %
YoY
EBITDA Margin¹
37.6 %
+2.3 p.p YoY
Capex
1.02 bln
+25.8% YoY
12M UBB Net
Adds
+75k
Net Income
+53.2 %
YoY

Post
paid
(pure)
Control
Prepaid
Non
Recurring
Prepaid
Recurring
Prepaid
Postpaid
2Q17 2Q18
Mobile Operations: Managing the Customer Base Through Advanced
Real-Time Analytics
Mobile Base¹ Mix Shift (% of users)
26%
34%
16%
33%
58%
33%
¹Source: Company; Anatel
²Base of May
20
Daily-Weekly-Monthy
Pre-Control
Control-Pure
Control-Control
Pure-Pure
Mobile Strategy: upsell based on profiling to increase ARPU
Zooming-In Prepaid Dynamics
Despite Disconnections
Prepaid Base Quality is
Improving
Improving Acquisition Quality Increasing Recurrence
(% Prepaid Gross Adds)
2Q17 2Q18
Gross Adds
w/ Recharge M+1
(% Gross Total)
Prepaid 4G Base²
(mln of users)
40%
67%
2Q17 2Q18
+5.9p.p
8
14
2Q17 may/18
+69.0%
+27.1p.p
ARPU growth
per segment
(% YoY)
+0.9%
+7.8%
+0.5%
Total
ARPU
+13%
(YoY)

64
90
2Q17 2Q18
348
423
2Q17 2Q18
64,0
72,1
2Q17 2Q18
81.7
97.2
1Q18 2Q18
75.4
81.1
1Q18 2Q18
TIM Live Operations: Focusing on Execution
UBB Customer Base (000) TIM Live Revenues (R$ mln)
+41.0%
21
40 Mbps
17%
60 Mbps
49%
≥ 100 Mbps
34%
35Mbps
34%
≥ 50 Mbps
66%
January 2018
June 2018
New Customers ARPU¹ (R$ mln; %QoQ)
+7.6%
+19.0%
FTTC FTTH
+21.5%
Net Adds & Available Ports (000)
New portfolio drives ARPU up Higher speed as FTTH offers are introduced
… while transitioning focus from FTTC to FTTH
Sustaining solid revenue growth...
TIM Live ARPU (000)
+12.7%
Phase-in FTTH, Phase-out FTTC
Sales Mix Evolution (% Gross Adds)
TIM Live arrives in
Salvador-BA
¹Broadband ARPU
1Q18 2Q18 3Q18e 4Q18e
1Q18 2Q18 3Q18e 4Q18e
FTTH
FTTC
Net
Adds

Mobile and Fixed
Networks Evolving
to Support
Business Expansion
and CEX
 700 MHz available in major
capitals helping to close
indoor coverage gap.
 ~40% of urban pop. covered
with LTE 700 MHz.
 4G enabled devices already
accounts for 87% of data
traffic.
 FTTH outside Rio and SP,
based on FTTS project.
22
4G at The Core of Mobile Network Strategy
Coverage
(Cities)
Sites
(‘000)
Mobile Network Usage
(% of data traffic)
17.2
14.7
12.5
8.0
TIM P3 P1 P4
3,138
2,823
1,626
834
TIM P1 P3 P4
(1) Number of 4G cities based on Teleco website as of Jun/18. 4G sites extracted from Anatel’s Siec system as of Jun/18
(2) Number of 700Mhz cities and sites in 700 MHz extracted from Anatel’s Mosaico system as of Jun/18. Cities with 700MHz = at least
one site using this frequency. Number of 700 MHz sites based on sites licensed by Anatel which may include non-active sites.
(3) Addressable households ready to sell
4G¹700MHz²
4.3
3.5
2.3
-
TIM P1 P3 P4
1,131
869
440
-
TIM P1 P3 P4
FTTH Rollout Acceleration
45%
68%
55%
32%
2Q17 3Q17 4Q17 1Q18 2Q18
4G 2G + 3G
New Cities with FTTH
 Salvador – BA (02/Aug)
 Suzano – SP (07/Aug)
 São Gonçalo – RJ (07/Aug)
 Nilópolis – RJ (07/Aug)
 Mauá – SP
7
42
68
4Q17 1Q18 2Q18
50
203
569
4Q17 1Q18 2Q18
Addressable HH³
(‘000)
Gpon Areas
(# areas)

VoLTE & Refarming
Enhancing
Customer
Experience
 VoLTE (HD calls) is available
for more than 10 mln
devices in Brazil.
 2.1GHz refarming, starting a
new wave after a successful
implementation of LTE
@1.8GHz.
 TIM continues to lead 4G
availability in Open Signal
Report (Jun/18).
23
(1) Number refers to the first week of July/18
(2) Based on analysis by Ookla® of Speedtest Intelligence® data for Q3 2017–June 2018. Ookla trademarks used under license and
reprinted with permission.
(3) Based on analysis by Ookla® of Speedtest Intelligence® data for Q1 2017–Q2 2018. Ookla trademarks used under license and reprinted
with permission.
2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18
Continuous Improvement in LTE Indicators³ Countrywide
5 mln
4G Throughput Downlink
(Mbps)
4G Throughput Uplink
(Mbps)
4G Latency
(ms)
VoLTE Evolution Refarming Strategy Moving on to 2.1 GHz: Teresina Case
Clients¹
using VoLTE
State
Capitals with
VoLTE
Refarming pilot started in mid-April improving 4G
throughput and availability in Teresina city
22
in drop
calls
-57%
1,559
Cities with
VoLTE
in call setup
time
-44%
+14%
+19%
-26%
3Q17 4Q17 1Q18 apr/18 may/18 jun/18
+3%
+14%
Before 2.1 GHz
refarming
After 2.1 GHz
refarming
4G Throughput Downlink²
(Mbps)

2Q17 2Q182Q17 2Q18
2Q17 2Q182Q17 2Q18
2Q17 2Q182Q17 2Q18
Digital
Transformation at
Full Speed
CARING
BILLING & COLLECTION
SALES
E-Billing
(# e-bills delivered)
+28.4%
E-Payment
(# clients paying by e-methods)
+35.8%
Adjusting incentives and
pushing e-billing and
e-payment through the
right channels are driving
adoption
Focus on Customer
Experience supported by
self-caring.
Mobile App and
modernized IVR are key in
this approach.
Caring
(Human interactions)
Sales in Digital Channels
(Pure postpaid+ control)
Meu TIM Unique Users
(App+Web Users)
-6%
+62%
24
~2x
(Recurring prepaid)
1.5x
Prepaid recharge mix
changing driven by
e-channels.
E-sales is a key driver for
TIM’s upselling strategy.
 Understanding clients’ needs
to improve customer journey.
 Re-engineering of processes to
address clients’ pain points.
 “Meu TIM” App Experience:
Best app rating
in the Apple
Store among
Telcos.
2Q17 2Q18
E-Recharges
(Prepaid recharge mix)
+5.3 p.p
+4p.p IVR retention

2Q17 3Q17 4Q17 1Q18 2Q18
Total Net Revenues Breakdown (R$ mln, %YoY)
+6.1% +1.4% +5.6% +7.5%
3,942
4,171
Mobile ARPU (R$,%YoY)Mobile Revenues Mix: Bundled Offers (%)
Bundle
No-Bundle
76%
A More Resilient
Revenue Expansion
 6M18 Net Service Revenues
growing at 6.0% YoY, and MSR
at 5.8% YoY.
 Reduction in working days¹ in
2Q impacted prepaid revenues
due to lower recharge level
(~0.4% of MSR).
 Mobile Recurring Bundled
Offers Revenues growing at
34.9% YoY in 2Q18.
25¹Number of full workings days was affected by truck drivers’ strike and Brazil’s National soccer matches in FIFA World Cup.
+5.8%
19.4
21.9
2Q17 2Q18
+13.0%

444 481
952 1,001
924
901
232 221
2Q17 2Q18
Normalized Opex Breakdown
26
Opex X-Ray: Efficiency Continues to Be a Key Driver
+2.1%
Efficiency Plan Recap
JAN-18 APR-18 JUL-18 OCT-18
86% Completion of 2018
Target, in June
Efficiency Plan Completion
(R$ mln, %YoY)
(R$ mln)(R$ bln)
1.3
0.4 1.7
2,552 2,604
Plan
2017-2019
Additional
2020
New Plan
2018-2020
0.7
FY17
1.0
P18-20
COGS
Traffic
(Network & Interconnection)
Process
(G&A + Personnel + Others)
Market
(Selling & Mkt + Bad Debt)
Selling & Marketing (+0.3% YoY):
Since 2Q17 costs remain practically stable,
despite a higher commercial pressure from
acquisition mix.
Bad Debt (+56% YoY) :
Despite expansion, remains under control (~2% of Gross Revenues). Performance is
mainly explained by the larger revenue base exposed to payment default (up by ~50% in
the case of Control). To a smaller extent non-recurring items also affected the trend.
Others (+61% YoY):
Explained by non-recurring events, that impacted both 2Q18 and the annual comparison,
related to tax ( 2013 and 2014) and civil contingencies.
1
2
3
902
869 869 854 869 871
1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
Costs remain under control, growing under inflation and in line with
guidance. Low FX exposure reduce macro risks.
2Q Trends Explained

132
250
219
335
6M17 6M18
1.29 1.20
1.39
1.57
29.5%
31.5%
35.3%
37.6%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
35,0%
0,00
0,50
1,00
1,50
2,00
2Q15 2Q16 2Q17 2Q18
Solid Execution
Translated Into
Higher Profitability
& Bottom Line
Consistent Evolution for Normalized EBITDA & Margin (%; R$ bln, %YoY)
Reported Net Income (R$ mln, %YoY)
351
585
+66.7%
1Q
2Q
Capex Acceleration (R$ bln, %YoY)
%Network 61% 65%
 Once again record high
EBITDA and Margin for a
2nd Quarter
 Net Income boosted to
~R$ 0.6 bln in 6M18
 Network Capex
acceleration to anticipate
availability of incremental
capacity.
27
EBITDA
EBITDA
Margin
+12.7%
+2.3 p.p.
2.65
3.04
33.6%
36.5%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
30,0%
35,0%
0,00
0,50
1,00
1,50
2,00
2,50
3,00
3,50
4,00
4,50
6M17 6M18
+2.9 p.p.
+14.5%
+53.2%
0.67 0.65
0.81
1.02
6M17 6M18
1Q
2Q
1.48
1.66
+12.5%
+25.8%
New IOC distribution
R$ 240 mln to be paid Nov/18

Cash Flow And NFP Dynamics
Operating Free Cash Flow Ex-License
Net Financial Position
Exposure to FX
28
383
-186 244
2
(130)
313
OFCF
6M17
Δ EBTIDA
(YoY)
Δ CAPEX
(YoY)
Δ WC
(YoY)
Δ Non-Recurring
Items (YoY)
OFCF
6M18
 6M18 EBITDA-
CAPEX up 16.9%
YoY
 6M18 OFCF
expanded R$443
mln
(R$ mln)
(R$ mln)
313 -437
-158 -101
-151
2,697
3,231
NFP
Dec/17
OFCF 6M18
(ex-license)
Net Financial
Expenses
Cash
Taxes
Dividends Paid License
+Tower Sales
+Other
NFP
Jun/18
Capex
~20%
Fx Bands to further reduce
potential impacts.
Debt
100% Full Hedged
10%

2.7%
1.8%
Jan-18 Jun-18
4.0% 3.9%
Jan-18 Jun-18
3.32 3.63
Jan-18 Jun-18
29
Key Messages & Outlook
2018 Targets checkpoint
 Macro recovery decelerating, expectations deteriorating
2H18 actions:
 Accelerate FTTH rollout adjusting phase-in/phase-out with FTTC
 Maintain focus in our own customer base: upsell + migrations to
continuously improve ARPU
 Accelerate 700 MHz deployments + 2.1 GHZ refarming to improve
quality and CEX
 B2B (mobile and fixed) turnaround refocused to accelerate results
 Slow and unbalanced economic recovery requires even
more focus in execution
Guidance
Metrics
Short Term
Targets (2018)
6M18 Results
1) Service
Revenues
5 – 7% 6%
2) EBITDA Growth Doublet Digit
(YoY)
14.5%
3) EBITDA – Capex
on Revenues
 13% 16.5%
4) IOC Distribution R$ 800 – 900
mln
R$ 470 mln
5 ) CAPEX ~ R$ 4 bln R$ 1.66 bln
2018 YE GUIDANCE
GDP Growth Inflation FX Rate (BRL-USD)
Internal
Estimates
(Plan 18-20)
Focus Survey Estimates for 2018
2.0%
4.2%
3.38
Status

30
STRATEGIC PLAN 2018-20

Strategic actions Impact by 2020
Cash-flow
generation
Sustain
leadership
position
Best in class
customer
engagement
≥40% EBITDA margin in 2020
≥20% EBITDA-CAPEX on revenues in
2020
4X growth of residential BB CB ( FTTX +
WTTx)
>4K Cities covered by 4G (96% of Urban
Population)
>2X growth of e-bill and e-pay penetration
~5X growth in My-TIM App users
• Acceleration of Mobile growth targeting more affluent
segments (e.g., controle, post-paid)
• Growth of Residential BB contribution to top-line
• Step-change growth in SMB segment leveraging new
Organization, go-to-market and value proposition
• Development of new and innovative revenue streams (e.g., IoT,
mobile adv, etc.)
• Continued expansion of the best fixed and mobile
infrastructure (4G, FTTX) to differentiate experience
• Improve Customer engagement through increased penetration
of Digital interactions
• Improvement of Cash Generation ability through “smart”
Capex and Debt/Tax optimization
• Capture of digitalization efficiency potential
• “Zero-based” approach on traditional efficiency levers
Prepaid
Postpaid
15,8 >22
~50%
2017 2020
Mobile CB Mix (%)
30%
Executive Summary:
More Postpaid and Broadband to support Revenue Growth and Expand Cash Generation
31

FTTH
Coverage
FTTH
Coverage
FTTX
Coverage
FIXED UBB BOOST
Focus on FTTH and FTTC
2 13cities
0.1 3.0HH (MM)
3.2 5.9HH (MM)
2017 NEW plan! (2020)
TRANSPORT INFRASTRUCTURE
Capillarity to support Mobile and Residential Services
4G EVOLUTION
Capacity Expansion and Coverage Evolution
411
1,255
>3,000
>4,200
916
2015 2016 2017 2018 2019 2020
LTE 700MHz
Cities Covered
4G Cities
Covered
60% ~80% 450
2017
1,200
2020
2017 NEW plan! (2020)
FTTCITY
~+600 vs Old Plan
FTTSITE
96% urban
population
High Capacity
BackhauL (%)
Network: Expansion in Mobile Access and Fiber
32

2017 2020
Vendor Portal:
> 11k invoices/month
already automatized
Compliance Tax:
Increase in fiscal credits
utilization (R$ 100 mln/year)
Legal Process Optimiz.:
System automation and
integration of legal processes
with A.I and Bots
Inventory
Clean up:
Reduction in WBS
(>85%) and invoices
(>25%) by 2H18 with A.I
and Bots
R$0.5 bln
in savings
in 2020
Customer Management: Simplification of Customer Journey Customer Acquisition: Channel Mix Improvement
Prepaid Recharges: Experience and Profitability Support Processes & Systems: Upgraded and
Strengthened IT Architecture
2017 2020
Digital Interactions
(Total)
E-Billing
(#users)
>80%
<2X
E-Payment
(#users)
2017 2020
>2X
2017 2020
~2X
2017 20202017 2020
(Control+Pure Postpaid)
(Live)
~2x
~3x
2017 2020
Digital Prepaid Recharge Mix
(% Digital sobre Total)
Recharge Commission (ex.
volume effect)
(R$ mln)
-14%
+7p.p.
Process Enhancement
Asset
Management:
RFID tagging process
for assets: safe and
reliable tracing
Efficiency Oriented
Sales & VAS Commiss.:
Automation of the charge
creation process and VAS
revenue share calculation
2x 2017
vs. 2016
3x 2017
vs. 2016
Digitalization will sustain our CEx improvement while supporting Efficiencies
33

10.2
10.3
2017 2018 2019 2020
2018-2020 Plan
2018-2020 except additional cost of TIM Live & WTTx acceleration CAGR
< 4%
< 2%
10.3
(1.0) ~11.5
2017FY Volume &
Structural
Growth
Inflation Savings 2020FY
0.7
1.1
1.3
0.4
1.0
Old Plan
2017-2019
New Plan
2017-2019
Additional
2020
New Plan
2017-2020
Additional Savings
Achieved in 2017
FY17
P18-20
1.7
50% Market Driven
50% Process Driven Post Paid CB: ~+60%1
Residential BB CB2: 4X Growth1; ~+3M HH passed
Network: Sites ~+30%1; Energy MWh >25%1
FTTCity Coverage: ~+800 Cities
Opex Evolution
Efficiency Plan Evolution
R$ Bln
R$ Bln
Efficiency Plan Highlights
• Expected OPEX growth below inflation.
• Excluding additional acceleration in WTTx and Live business,
Opex should grow bellow 2%.
• Network and postpaid customers structural growth continues
to impact costs considering the expected acceleration in
commercial activity.
~50% from Digitalization
¹ 2020 vs 2017
Opex Evolution: over-executing the Efficiency Plan thanks to Digitalization
initiatives
34

33.5%
36.6%
>40%
-0.5
0.4
-0.6
2016A 2017A 2018 2019 2020
New Plan ‘18-’20
Old Plan ‘17-’19
% on Tot.
Revenues 3.9% 11.1% ≥20%
EBITDA
Margin
∑ ‘18-’20: ~12 bln
EBITDA and Margin Expansion
R$ Bln; %
CAPEX
R$ Bln
Net Cash Flow Bef. Dividends
R$ Bln
EBITDA - Capex
R$ Bln
EBITDA
CAPEX
5.2
5.9
2016A 2017A 2018 2019 2020
EBITDA
CAGR 2017-20
Low Double Digit
5.2
5.9
4.5 4.1
2016A 2017A 2018 2019 2020
New Plan ‘18-’20
Old Plan ‘17-’19
≥13%
Increasing Profitability and Cash Generation
35
4.5
4.1
2016A 2017A 2018 2019 2020

• Further improve Mobile Service
Revenue Share
• Expand Residential BB Revenues
contribution
GOALS DRIVERS
• “Zero-based” approach on
traditional efficiency levers
• Capture digitalization efficiency
potential
Sustain
Top Line
Growth
Expand Cash
Generation
Improve
Profitability
LONG TERM
TARGETS / KPIs
Service Revenues
Growth:
Mid to High Single
Digit CAGR ‘17-’20
EBITDA Margin:
≥40% in 2020
• Smart Capex “More with less”
approach
• Optimize Tax Rate
• Optimize Debt and Shareholders’
Remuneration
Ebitda-Capex on
Revenues:
≥20% in 2020
Capex:
~12B R$ in ‘18-’20
(~20% on Rev. in 2020)
SHORT TERM
TARGETS / KPIs
Service Revenues
Growth:
5-7% in 2018
EBITDA:
Double Digit
growth in 2018
Ebitda-Capex on
Revenues:
≥13% in 2018
TIM Brasil 2018-’20 Targets
36

37
Regulatory Updates

38
Brazilian Spectrum - Caps and Distribution
11
18
14
21
5
5
4
3
43
35
29
14
26
24
22
25
20
29
20
20
40
40
20
20
20
0 20 40 60 80 100 120 140
Oi
TIM
Claro
Nextel
Vivo
850 MHz 900 MHz 1.800 MHz 2.100 MHz 2.500 MHz 700 MHz
Band 850 MHz 900 MHz 1.800 MHz 2.100 MHz 2.500 MHz 700 MHz
Regulated Spectrum Cap
(FDD Applications)
(12.5+12.5)
MHz
(2.5+2.5)
MHz
(25+25)
MHz
(15+15)
MHz
(30+30)
MHz
(20+20)
MHz
Global Cap of 80 MHz < Σ of Sub-Caps Specific Caps
Spectrum Distribution
Caps

39
Main Regulatory Topics 2018
2Q18
May JuneApril
Public Consultation
• Quality
(Conclude in 04/08)
TAC (TEF)
• Rejected by
ANATEL
PLC 79/2016
• Senate CCT
700 MHz (Switch Off)
• João Pessoa
• Natal
• Maceió
• Manaus
• Teresina
• Aracaju
• Belém
Public Consultation
• Área de Tarifação
do STFC
• Strategic Indicators
• Spectrum
Management
PLC 79/2016
• Public audience in
Senate
Grant of Subsidies
• New RGC (Pre PC)
Public Consultation
• Sectorial data
collection
3Q18
August SeptemberJuly
New PPDUR
• Approved
New PGMC
• Approved
New RGI
• Approved
700 MHz (LTE)
• All capitals available
Public Consultation
• PERT
• Reversible assets
• Regulatory
monitoring
• Grant and Licensing
Public Consultation
• New RGC
• Anatel’s New
Regiment

700 Mhz and 3,5 GHz Auction
40
Available LTE TIM, #cities
2002
2005 / 2006
2011
2015
2017
2018
Blocks of 1,75 MHz
(Auction 003/2002)
TCU suspends
Auction
Auction
cancelled
Interference C
Band vs. WiMax
Auction proposed, not
started
Harmonized for IMT (WRC-
15)
• TIM coordinates tests w/ ANATEL+Telcos
• 3,5 GHz Public Consultation
Further tests
Usage Conditions
Interference management
Macro Cell applications
3,5 GHz Auction (award 2019)
TIM field trials confirm ANATEL studies C
Band vs. IMT coexistence
3,5 GHz
700 MHz
2016
2017
1Q18
2018E
2019E
2 cities + 975 cities
of which: 21 capital
916 cities
of which: 20 capitals
> 1700 cities,
included all capitals
> 3500 cities
• Rio de Janeiro
• Belo Horizonte
• Curitiba
• São Paulo
• Porto Alegre
Jun. Jul. Set.
• Florianópolis
Capitals Availabity
2018E

41
APPENDIX

42
Historical Data: P&L Pro-Forma

43
Historical Data: Operational

44
Historical Data: Cash Flow

For Further Information:
Investor Relations
Avenida João Cabral de Melo Neto, n 850, South Tower,
12th floor – Barra da Tijuca
22775-057 Rio de Janeiro, RJ
E-mail: ri@timbrasil.com.br
Vicente Ferreira
E-mail: vdferreira@timbrasil.com.br
Phone: +55 21 98113-1400
Bernardo Guttmann
E-mail: bguttmann@timbrasil.com.br
Phone: +55 21 98113-1408
Pedro Yagelovic
E-mail: pybsantos@timbrasil.com.br
Phone: +55 21 98113-1881
Rafaela Gunzburger
E-mail: rgunzburger@timbrasil.com.br
Phone: +55 21 98113-1808
Luiza Macedo
E-mail: ldcmacedo@timbrasil.com.br
Phone: +55 21 98113-6312
Visit our Website
www.tim.com.br/ir

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