ConferêNcia Bear Stearns 2006 Telecom & MíDia   AméRica Do Sul En
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ConferêNcia Bear Stearns 2006 Telecom & MíDia AméRica Do Sul En

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ConferêNcia Bear Stearns 2006 Telecom & MíDia   AméRica Do Sul En ConferêNcia Bear Stearns 2006 Telecom & MíDia AméRica Do Sul En Presentation Transcript

  • TIM Participações S.A. Bear Stearns - 2006 South American Telecom & Media Conference 1 Sep 28th. 2006
  • Key Messages The sole fully integrated nationwide player Cutting edge in innovation with 1st “home zone offer” in Brazil - TIM Casa 1st Choice for high value customers also in the corporate segment Rapidly closing the market share gap vs. 1st player Strong Growth Revenue and share in the market Combining strong top-line growth with healthy margin expansion 2
  • Industry Environment Company’s Profile Commercial Strategy 2Q06’s Review 3
  • Industry Environment Lines and Penetration trend Growth 2006 YoY YTD 49.8% 50.7% +7.3pp +3.5pp 48.7% 49.6% 49.2% 47.3% 47.2% 47.4% 48.1% 45.2% 43.4% 44.0% 44.6% 89.4 90.6 92.4 91.8 93.0 94.9 +20% +10% 86.2 87.5 88.1 78.9 80.0 81.2 82.4 14.9 15.1 15.5 15.8 16.5 16.8 17.1 17.4 17.6 18.0 17.9 18.1 18.3 +23% +11% aug/05 sep/05 oct/05 nov/05 dec/05 jan/06 feb/06 mar/06 apr/06 may/06 jun/06 jul/06 aug/06 Postpaid lines (Million) Penetration (%) Source: ANATEL. 4
  • Industry Environment Competitive Landscape The only fully integrated with National 4 3 Presence 4 4 4 3 4 4 4 Clients: 23.6 Clients: 28.8 Clients: 21,870 # of players Market Share: 24.9% Market Share: 30.3% Market Share: 23.0% & Clients: 12,553 Clients: 2,975 Clients: 4,666 Market Share: 13.2% Market Share: 3.1% Market Share: 4.9% Source: ANATEL. Data base: August/2006 5 Clients (Mln)
  • Industry Environment Company’s Profile Commercial Strategy 2Q06’s Review 6
  • Company’s Profile TIM Participações 23.6 million clients with a 24.9% of market share Leader in Net Adds in 2005 (32.0%) and YTD 2006 (39.3% as of August) Unique National Mobile Operator Constant technological innovation: First to lunch the TIM Casa, a home zone pricing service Leader in GSM in terms of number of clients Base: August/2006 7
  • Company’s Profile Optimized Corporate Structure Past structure Current structure TIM International TIM Brasil 100% ON: 81% TIM Brasil PN: 64% Total: 70% 100% 100% TIM Participações TIM Cel Bitel 100% TIM RIO TIM TIM 43.15% 10% Norte SP Celular 52.32% 52.06% TIM Celular MAXITEL 46.85% TND TSU 100% TIM Nordeste 1 2 3 4 5 6 1 2 3 Remove tax inefficiency Become more transparent to the market Increase liquidity of listed shares The restructuring transactions were conducted in a fair and transparent way 8
  • Company’s Profile Strategic Stance VAS & Innovation Offer Distribution TRUE CARE Brand and Coverage communication Caring market leader in Total Customer Caring offering a unique and innovative experience through all contact points 9
  • Company’s Profile Continuing outperforming market growth National Market and Penetration Market share YoY Lines growth First YoY change TIM Player 60.8% 56.4% 48.5% 43.5% 33.3% 31.1% 37.7% 36.1% Market 34.5% 39.8% 37.6% 31.4% 30.3% 21.5% 20.2% 33.7% - 7.4 pp 49.2% 50.7% 31.1% 47.3% 48.1% 30.3% 44.0% 94.9 41.6% 89.4 91.8 24.9% 86.2 24.3% 75.5 80.0 TIM 22.9% 23.4% 23.5% 22.2% + 2.7 pp 2Q05 3Q05 4Q05 1Q06 2Q06 Aug06 2Q05 3Q05 4Q05 1Q06 2Q06 Aug06 Narrowing the gap vs. 1st. Player Total market lines (Million) Penetration (%) 10 Source: Anatel’s data base.
  • Company’s Profile Customer base: combining growth and quality TIM Lines (mln) Strong Quality Base YoY Strong postpaid gross additions in the 22.3 +33.3% quarter (21.6% share of total gross vs. 16.8 17.5% in 2Q05) 21% +35.1% 20% Continuous customer mix improvement: 21% postpaid lines vs 79% + 32.9% 85% 20% one year ago Postpaid 80% Prepaid Leader in GSM market 2Q05 2Q06 87% of our lines are GSM. an increase of +12 pp YoY Market Share (%) 22.2% 24.3% 29.0% GSM base grew by 54% YoY Revenues Share (%) 11
  • Industry Environment Company’s Profile Commercial Strategy 2Q06’s Review 12
  • Front-runner in innovation First to launch a home zone pricing Service (“TIM Casa”) change the consumer’s perception that mobile calls are more expensive than fixed-line Your TIM mobile now is Flexible and attractive for home also your home phone! telephony TIM Plans + TIM Casa Service Enhancing TIM Plans: Postpaid: 200 minutes per R$ 29.90/month (Fixed local call) Prepaid: 100 minutes per R$ 19.90/month (Fixed local call) The home zone pricing service savings of up to 25% and 50% for postpaid and prepaid users, respectively 13
  • Pushing on VAS usage: Try and Buy Increasing service Evolving segmentation to Boosting SMS penetration community concept New TIM WAP site MMS Promotion New site to facilitate access to the WAP content: Promotional price on MMS for all customers during a segmented layout to low, med and high users. month to reduce the entry barrier and improve service penetration. Provide community place, strategic content, real time Brazilian and Intl editorial, entertainment and music. Mega TIM TV Globo World Cup Promotion SMS special bundle sold electronically (IVR) and Cross-operator innovation initiative: the user could through recharge cards during short periods to pull subscribe a World Cup channel per week and win customer usage. 2006 prizes (boosted revenue in June) 14
  • Promotions focused on usage and on-net traffic Segmented Consumer Offer “Tarifa Zero” Bonuses for on net call Leveraging on TIM community Zero Tariff Regional approach concept on net Reduced aggressiveness in prepaid subsidy Boosting sales in regions with lower market share growth Focus on prepaid high user Quality acquisitions: new clients “TIM +25” Reward outgoing traffic show 15% higher ARPU than the & “TIM + 5” Important acquisition and average prepaid base retention tool Proactive retention : 1 of 5 prepaid current lines already “TIM Chip Only” Bonuses for recharge moved to “TIM + 25” or “TIM +5” Push on made in 48 hours recharge Low SAC strategy Push on “TIM Chip Only” pays off: users recharge 3x > average 15
  • Leveraging on Corporate Market Leader in Business Segment Acquisition Retention TIM Lines (mln) 23.6 Segmented Leadership in mobile 18.0 management through office solutions customer profiling Long Distance and One on one Retention International roaming offers aggressive offer 2.2 2.2 Corporate 1.4 Implementation of Volume discount for YTD YTD dedicated account for Aug/05 Aug/06 national contracts top SME clients Corporate Market Share Main driver of TIM postpaid base growth: 70% of the 2nd Player 18.6% 21.4% total net additions YTD 1st Player 33.6% 28.5% Increasing share of churn market from competitors Powerful and growing large account portfolio 30.0% TIM 27.3% Leader in the business segment with 2.2 million lines July/05 July/06 16
  • Roaming all over the world Focus on corporate segment, but not only… Leader in International GSM/GPRS/EDGE/MMS/SMS roaming First and only to offer Voice/VAS prepaid international roaming TIM’s roaming services are based on : Convenience: one handset – and one number – worldwide Coverage: the largest international GSM network available for customers Promotional bundle offer: positive effects on outbound traffic (stimulating the usage) Roaming Alianza (one rate offer) Virtual Home Environment (intelligent network) 17
  • Industry Environment Company’s Profile Commercial Strategy 2Q06’s Review 18
  • 2Q06’S Key Achievements Delivering continuous and profitable growth Over 1.3 million net adds Strong Subscriber growth 22.3 million clients base 24.3% of market share Net service revenues: + 20% YoY Successful performance ARPU marked trend improvement QoQ and YoY on services top-line Growing momentum of VAS revenue: + 62% YoY (8.9% of total service revenues) EBITDA of R$500 million: 73.4% higher YoY Consistent focus on Profitability 21.5% Margin EBITDA (+7.6 p.p. YoY) Promotions focused on usage and on net traffic Full pipeline of innovative First and unique to offer international roaming services continuously (VAS + Voice) for GSM prepaid customers stimulating usage First to offer BlackBerry to business and consumer Leader in the business segment 19
  • 1H06’s Main Financials Net Revenues EBITDA R$ mln R$ Mln YoY YoY 4.452 +15% 1.018 +65% 3.886 15% 19% +7.1 p.p. 615 85% 22.9% 81% +21% 15.8% 1H05 1H06 1H06 1H06 Service Handsets sales EBITDA Margin over Total Net Revenue 20
  • Focus on ARPU Performance ARPU Analysis VAS Revenues (R$ mln) ARPU (R$) 2Q05 2Q06 6.8% 8.9% 30.2 30.0 237 147 37% 41% 1Q06 2Q06 marked improvements in ARPU Traditional Innovative dynamics over time VAS revenue over total service revenue Improving ARPU trends Growth YoY Growth YoY +0.7% positive Users Usage inversion -3.3% SMS P2P: + 38% MMS P2P: + 156% QoQ MMS P2P: + 148% Data: + 345% 2Q05 2Q06 Data: + 223% 21
  • “Safe Harbor” Statements Statements in this presentation. as well as oral statements made by the management of TIM Participações S.A. (the “Company”. or “TSU”). 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. Investor Relations Avenida das Américas. 3434 - Bloco 01 6° andar – Barra da Tijuca Visit our Website: 22640-102 Rio de Janeiro. RJ http://www.timpartri.com.br Phone: +55 21 4009-3742 / 4009-3751/8113-0571 Fax: + 55 41 4009-3990 22