Your SlideShare is downloading. ×
Tim   meeting with investors - august 2013
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Saving this for later?

Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime - even offline.

Text the download link to your phone

Standard text messaging rates apply

Tim meeting with investors - august 2013

594
views

Published on

Published in: Business, Technology

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
594
On Slideshare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
9
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Meeting With Investors TIM Participações S.A. August 2013
  • 2. 15th Listing Anniversary TIM: A Huge Brazilian Company  Presence in Brazil since 1998.  13th largest Private Company in Brazil (source: Exame Magazine - 2013).  Approximately R$22 billion of Market Capitalization. Brazilian Law “Lei das S.A” “Nível” 1 “Nível” 2 Legal Requirements Demand for transparency and disclosures Highest level of Corporate Governance Requirement of protection for minority shareholders 2 Corporate Governance Knowing TIM Better Unique Telco company listed on the Novo Mercado: . 100% Tag Along and equal dividend rights . One single class of shares . Independent Board members . Strict disclosure policy • 72.2 million customers (27.2% Share) • The 2nd Player - Market and Rev. Share. • More than 400,000 points of sales. • More than 130 own stores. • 11 Customer Care Centers (14k attendants) Sales • More than 12,000 Antennas. • 3,393 cities covered. • 95% of urban pop. covered. • 42,470 km of optical fiber network. Network • 11,500 employees. • 23,000 indirect jobs. • R$9.1 billion in taxes payments in 2012. • R$3.8 billion invested in 2012. Social & Economic 27.8 1998 Gross Revenues (R$ Bln) Customer base EoP (Million) 2012 1998 70.3 2012 15,000 km fiber optical backbone 5,500 km fiber optical backhauling Organic Growth Growth Via Acquisition
  • 3. Source: BaCen and Bloomberg. 3 Brazilian Real GDP (%YoY growth) Brazilian Unemployment Rate (UnemploymentRate %) 7,9 8,1 6,7 6,0 5,5 5,5 5,8 5,4 3 4 5 6 7 8 9 10 2008a 2009a 2010a 2011a 2012a 2013e 2014e 2015e Brazilian Interest Rate (Average %SELIC p.a. Target) 12,5 10,1 9,9 11,8 8,6 8,3 9,3 9,5 5 6 7 8 9 10 11 12 13 14 2008a 2009a 2010a 2011a 2012a 2013e 2014e 2015e Brazilian Inflation Rate Forecast (% IPCA p.a.) 5,9 4,3 5,9 6,5 5,8 5,8 5,9 5,5 0 1 2 3 4 5 6 7 8 9 2008a 2009a 2010a 2011a 2012a 2013e 2014e 2015e 5,2 -0,3 7,5 2,7 0,9 2,2 2,6 2,9 -1 0 1 2 3 4 5 6 7 8 2008a 2009a 2010a 2011a 2012a 2013e 2014e 2015e Macro-Economic Fundamentals Inflation Target@ 4,5 %
  • 4. Industry Overview & TIM Business Opportunity
  • 5. MOBILE FOOTPRINT FIXEDLINE FOOTPRINT FIXEDLINE +LD+INFRA MOBILE BROADBAND FIXEDAND MOBILE PAYTV AMÉRICA MÓVIL Embratel (Local+LD+Infra) (Bov espa: EBTP4) and NetFone (Local+LD) Claro GSM 66.31 Virtua (NET) EasyBand (Embratel) Claro 3G (Claro) CBB 5.68 SBB MBB Net + Embratel (Net TV + Via Embratel + Claro TV) CTV 8.79 Mkt. Shr 22.3% DTH Embratel Claro TELECOM ITALIA TIM Part. (NYSE: TSU; Bov espa: TIMP3) GSM 71.23 TIM 3G Live TIM (Rio and SP only) MBB TIM Brasil Intelig (Long Distance+Data) Atimus (Infra-Structure) ‘Vivo Fixed (Mn Subs) Former Telesp (NYSE: VIV; Bov espa: VIVT4/VIVT3) 10.45 Vivo Mobile (Mn Subs) Former Vivo (NYSE: VIV; Bov espa: VIVT4/VIVT3) GSM 75.99 Vivo Speedy (Mn Subs) Vivo 3G DSL 3.69 MBB TEF & TVA (Mn Subs) DTH MMDS 0.56CTV TELEFONICA Mkt. Shr 23.5% Telesp Vivo TELEMAR Oi Fixed (NYSE: OIBR; Bov espa: OIBR4/OIBR3) 18.52 Oi Mobile GSM 49.49 Oi Velox Oi 3G DSL 5.86 Oi TV CTV 0.84 Mkt. Shr 41.7% Oi S.A. Oi S.A. OTHER GROUPS, INCLUDING: VIVENDI – GVT, NEXTEL AND ALGAR-CTBC Vivendi-GVT (Fixed) Algar-CTBC (Fixed) 3.71 3G 3.98 GVT Algar-CTBC Other DSL 2.23 CBB Sky/DirecTV Algar GVT Other DTH Mkt. Shr 8.4% 0.83 GSM 0.84 MBB 5.25 GVT DTHMMDSCTV Nextel Nextel (Nasdaq: NIHD) Algar-CTBC Mkt. Shr1 24.7% Mkt. Shr1 28.4% Mkt. Shr1 18.5% Mkt. Shr1 1.5% Mkt. Shr1 26.6% 0.12 0.82 CBBMBB 1.92DSL DTH 0.49 0.77 FTN/H FTN/H FTN/H IDEN 9.88 16.38 0.05 MBB 7.51 28.18 18.27 5 Brazilian Telcos X-Ray *1Q13 figures.1Considering Nextel iDen costumers. Intelig + TIM Fiber
  • 6. 121,0 150,6 174,0 202,9 242,2 261,8 39,4 41,2 41,5 42,0 43,0 44,0 2007 2008 2009 2010 2011 2012 Mobile Penetration Mobile Fixed 64% 79% 90% 105% 124% 133% Customers Growth - Telecom (Mln customers) Market Transformation Total Revenues- R$ Bln +116% +12% Customers Growth – Broadband (Mln customers) Mobile Fixed 6 1,4 4,1 14,6 33,2 52,5 10,0 11,4 13,8 16,3 19,1 2008 2009 2010 2011 2012 +38x +90% 40 (38%) 35 (31%) 32 (26%) 30 (23%) 17 (16%) 21 (18%) 23 (19%) 25 (19%) 41 (40%) 46 (40%) 47 (38%) 46 (36%) 6 (6%) 14 (12%) 22 (18%) 28 (22%) 2009 2012 2014 2015 • Fixed Voice 104 Market split between: Mobile Fixed 47 (45%) 57 (55%) CAGR ’12-’15 4% Mobile: +7% Fixed: -1% 69 (56%) 55 (44%) 129 116 75 (58%) 55 (42%) 124 60 (52%) 56 (48%) • Fixed Data* • Mobile Voice • Mobile VAS 28% 0% 7% -5% *including Corporate/Wholesale Mobile Segment to Support Universalization Mobile Segmentas the Growth Driverand Sector Universalization
  • 7. Data Going Mobile: Internet has a great potential… (Mln Households) Leveraging on PureMobile CompetitiveAdvantage Voice FMS: Mobile is more convenient than Fixed… (R$/minute, voice) 7 2006 2007 2008 2009 2010 2011 2012 50% mobile discount Voice FMS: …TIM, with no legacies, can only gain on the trend (R$ billion, Net Revenue per Group (2012)) Source: Company estimates; CETIC jun’13; Akamai Mobile 21.4 12.2 9.1 17.9 Fixed + Data + Pay TV 12.5 18.5 19.0 0.9 4.3 Total 33.9 30.7 28.1 18.8 4.3 Vivo Claro Oi TIM GVT FMS Focus A pure mobile approachis the most suitable strategy to capture both opportunities 29.5% Rev. Share Possess Internet Connection Does NOT Possess Internet Connection Reasons for notpossessing: 1. Too Expensive. 2. Lack of Coverage. Mobile Internet as a Solution. 36.5 Mln (60%) 24.3 Mln (40%) Total Households Market Approach Possess Internet Connection Does Not Possess Internet Connection Internet Connection Speed per Band 87% 12% 0.5% <4MBPS 4-10 MBPS >10 MBPS
  • 8. Internet Users Penetration: large room for growth... (% population who has used internet within the last 3 months) Mobile Internet and Its Great Business Opportunity FMS on Data (% internet connection - households) 8 89 86 81 80 74 1 3 10 17 21 2008 2009 2010 2011 2012 Mobile Devices are also increasing its presence… (% Presence over households) Source: CETIC jun’13; Data Market Fixed* Mobile *Includes dial-up connection 10 14 23 41 50 2 4 2008 2009 2010 2011 2012 34 39 41 46 49 2008 2009 2010 2011 2012 A: 94% B: 80% C: 47% DE: 14% 68 mln people never used internet …and usage is 4 years behind (% internet users within the last 3 months) 53 58 60 67 69 35 30 30 24 23 10 9 9 7 7 2008 2009 2010 2011 2012 Everyday/Almost Everyday At least once a week At least once a month Euro Area data in 2008: Everyday: 70% Once a Week: 20% Once a Month: 7% Social Class Split Notebooks Tablets
  • 9. TIM’s Strategic Priorities 9 Network Quality & Infrastructure 1 Strategy & OfferEvolution 2 Institutional Relationships 3 People & Organization 4 Solid Capex investment program. Significant coverage and capacity improvement through extensive own fiber infrastructure. Network Quality War Room approach. Efficient 4G Investment with RAN sharing. Continuous evolution of our offer platforms (transparency, simplicity, convenience, micro- segmentation). Promoting data usage with handset strategy, new VAS offers (e.g. TIMmusic) and 4G launch. Expanding postpaid and business user base. Developing option value of Live TIM ultra-broadband services. External Positioning: Innovation, Quality, Transparency. “Portas Abertas” customer portal for increased transparency and network quality evolution. Focus on regulatory and institutional dialogue. People Focus – highly skilled, highly motivated, right organization. Best Place to Work initiatives. Renewing Sense of Pride and Belonging – One of Brazil’s Top 15 Companies.
  • 10. 2Q13 Results in Few
  • 11. 0.9% 1.1% 0.7% 1.0% 0.9% Quarter in Few: Improvements Across the Board 7.0% 5.4% 9.7% 2Q132Q12 Organic1 Net Revenue Growth(YoY) Organic1 Net Services Revenue Growth(YoY) Organic1 EBITDA Growth(YoY) -15.3% -11.0% -9.5% -3.6% +0.4% 1Q132Q12 10.0 10.3 10.7 10.9 11.4 2Q132Q12 3Q12 4Q12 2Q13 -0.7% Reported ARPU Performance (YoY) Postpaid Base (mln customers) %Bad Debt/Gross Revs. +20% (YoY) Ex-M2M Financial Operational +14% 1Q133Q12 4Q12 1Q13 6.4% 5.5% 1.4% 1.8% 3.1% 2Q132Q12 1Q133Q12 4Q12 +8.7% (YoY) Reported 5.6% 4.1% 4.4% 2Q132Q12 1Q13 2Q132Q12 1Q133Q12 4Q12 +2.0% (YoY) Reported +1.8% (YoY) Reported 11 Efficient Approach 1: Organic revenues grow th adjusted by R$44mln, EBITDA grow th adjusted by R$31mln and Net Income grow th adjusted by R$20 mln due to one-off impact related to interconnection disputes. Organic1 Net Income Growth(YoY) -1.6% 13.9% 17.9% 2Q132Q12 1Q13 +12% (YoY) Reported 18.7% 19.6% 20.5% 21.4% 22.1% %VAS / Mobile Service Gross Revenues 2Q132Q12 1Q133Q12 4Q12
  • 12. Customer Base Evolution - Market Share (Source: Anatel) Growth Backed by Business Resilience 19.6% 19.6% 24.0% 25.0% 28.0% 26.3% 28.1% 28.8% 2Q12 +67 bps -168 bps +96 bps -1 bps 2Q13 15.3% 16.5% 23.9% 20.3% 38.2% 39.1% 22.0% 23.4% 2Q12 +140 bps +90 bps -353 bps +124 bps 2Q13 29.6% 29.7% 29.1% 28.8% 28.7% 26.9% 26.8% 26.9% 27.0% 27.2% 24.6% 24.5% 24.9% 25.1% 25.0% 18.7% 18.7% 18.8% 18.7% 18.7% Oi Claro Vivo 2Q12 3Q12 4Q12 +28 Bps -89 Bps +43 Bps +5 Bps YoY 1Q13 2Q13 Prepaid Voice Postpaid* 35 26 27 1.6 1.4 1.5 2Q11 2Q12 2Q13 2Q132Q11 2Q12 1.1% 0.9% 0.9% Total TIM SAC & SAC/ARPU (R$; months) Efficient Market Approach (Source: TIM, Anatel) Bad Debt & Postpaid CB (000 customers; %postpaid mix)  Leadingnetadditions.  Consolidating Prepaid #1.  Accelerating on Postpaid.  Maintainingan efficient go- to-market. SAC/ ARPU SAC % Gross Revs Postpaid *Excluding modems and M2M. +25% +14% 14.4% 14.5% 15.8%Mix 12
  • 13. Caring Improvements to Increase Customer Satisfaction Claims at Consumer’s Protection Agency (Procon) (Avg # Claims - the lower the better; Source:SINDEC database) ImprovingcaringReducingcomplaints P3 P4 P1 TIM TIM PRE POS CORP Customer Care Satisfaction Survey (Points; Source: TIM) IDA – Index of Caring Performance (last reported) (Points - the higher the better;Source Anatel) 99.9 93.998.0 92.1 92.8 80.4 84.9 65.9 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 P3 P4 P1 TIM Anatel Ranking of Complains (last reported) (Index of Complains under 1,000 access - the lower the better; Source: Anatel) 0.20 0.320.24 0.360.34 0.470.50 0.65 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 P3 P4 P1 TIM 2,564 4,147 2,262 3,179 6,187 6,990 3,503 6,870 2Q12 3Q12 4Q12 1Q13 2Q13 13 8.0 7.5 7.0 6.5 6.0
  • 14. ARPU Performance (%YoY; R$) Reverting ARPU Trend Voice Usage (000 lines; minutes) Data Performance (monthly unique users;average days of use) 7,638 8,184 8,703 8,956 9,367 2Q12 4Q123Q12 1Q13 127 150 139 145 2Q12 4Q123Q12 1Q13 18.3 19.918.9 18.5 VAS Voice -15.3% -11.0% 9.5% -3.6% -0.7% 2Q12 4Q123Q12 1Q13 After several quarters, ARPU has reversed its trend thanks to a continuous management of the customer base. Voice Postpaid* Total MOU 2Q13 18.1 2Q13 148 2Q12 4Q123Q12 1Q13 Data Users SMS Usage 2Q13 2Q13 2Q12 4Q123Q12 1Q13 2Q13 +21% +13% *Excluding modems and M2M. +23% +16% 14 Organic 18.3 Organic 0.4%
  • 15. 35% 39% 43% 46% 50% 2Q12 3Q12 4Q12 1Q13 2Q13 Data Services Update: Keeping the Good Pace Data users (% over total customer base) VAS (% of Mobile ServicesGrossRevenues; R$ Million) Handset SalesMarket Share Apr-Jun/13 (% of handsetrevenues; Source: TIM) 19% 22% Smart/Web phone Penetration (% over total base of lines) VAS Gross Revs VAS/Revs 7% 21% 34% 38% 54% 46% P4 P3 P1 TIM Players Open Mkt TOP SELLERS @ ~R$300 27.7% 28.7% 30.3% 31.0% 31.9% 2Q12 3Q12 4Q12 1Q13 2Q13 +25% 23 mln users 78 % on sales 15 1,031 1,291 2Q12 2Q13
  • 16. Financial Evolution Analysis 1,210 EBITDA 2Q12 Organic EBITDA 2Q13 -15 ΔMkt and Sales ΔPers./G&A and others -53 ΔHandset Margin -39 ΔNetw ork and ITX +35 ΔServ. Revs 26.6% 25.3% 32.1% 31.5% +125 +5.8% +8.3%-51.2% +1.1%+3.1%ΔYoY 1,263 +4.4% 563 879 879 3,984 4,109 4,065 Thousands Revenue 2Q12 Δ HandsetΔ Fixed Services Organic Revenue 2Q13 Δ Mobile Services +316-86+211 Service Handset 4,547 -33%+5.7%ΔYoY 4,988 -44 One-off Event Reported Revenue 2Q13 4,944 -31 Reported EBITDA 2Q13 1,232 +1.8% 24.9% 31.1% One-off Event 16 +56% +3.1% +2.0% EBITDA Margin Service EBITDA Margin Organic EBIT Net Financial Result Organic Net Income 2Q13 Organic Taxes and Others Depreciation/ Amortization Organic EBITDA 2Q13 From EBITDA to Net Income (R$ Million) ΔYoY One-off Event Reported Net Income 2Q13 +0.9% +8.5% -36% +5.6% +18% +12% 1,263 -671 592 -41 -145 406 -20 386 Net Revenue Evolution (R$ Million,% YoY) From EBITDA to EBITDA (R$ Million) +8.7%+10%
  • 17. Strong Cash Position Net Debt (R$ Mln) Capex (R$ Mln, % YoY) 1,998 2,278 1,984 2Q11 2Q12 2Q13 +14% -13% 725 1,057 2Q11 2Q12 2Q13 +46% +6% → 37% of debtin foreign currency(100% hedgedto R$). → Average debtmaturity:~ 3 years. → 0.39x net debtto ReportedEBITDA(LTM). → Capex catch up during Q2. → 94% of Capex relatedto infrastructure(ex-licenses). → No subsidycapitalization. 1,123 0.45x 0.47x 0.39xNet debt/ EBITDA (LTM) 17
  • 18. Strategic Priorities Check Point • Improvements on all customer care indicators; • FTTS Plan on track (569 new sites in Q2); • 4G launch anticipated in SP and Curitiba, good traction on 4G market share.; • Final steps of LT Amazonas Fiber Line; • Started rollout of small cells for JMJ in Rio. • Strength of “Controle” strategy – hybrid pre/post; • VAS over Mobile service: 22%; • 3G adoption: WCDMA base grew by 21%; • TIM Music launch: OTT music platform, more than 6mln songs downloaded already; • Several actions for monetizing customer base with new micro-packages. • Launched company wide initiative on “Best Company to Work For”; • Total employee population grew to over 11,500, an additional 574 new employees compared to 2Q12; • Reached the number of 134 own stores, adding several new TIM employees; • Initiated a movement to reinforce and add new talent on all teams, in particular on Network and Regional structures. • “Portas Abertas” campaign, web-site and mobile app reinforcing commitment with quality and transparency; • Closure of the Dropped Calls accusation with final report from Anatel releasing the company from any misconduct; • Proactive position in the sector in conversations with Congress, Anatel, Ministry and State Governments – position of collaboration and transparency. 1Q13 2Q13 TIM Call Center 1Q13 2Q13 Anatel 2Q12 2Q13 +23% 2Q11 2Q12 2Q13 14% 39% 57%40% 40% 21% 46% 21% 22% % Only Smartphone over Total Sales Smartphone Webphone Essential Network Complaints -15% -8% Postpaid Voice Base 18
  • 19. Network and Infrastructure
  • 20. Development of Infrastructure 20 Optical Fiber Network Evolution (km of fiber) 28,891 38,951 42,470 47,000 2011 2012 Jun/13 Dec/13* *According to Anatel Network Plan FTTS Project Status - 14 Brazilian Main Cities (Stage1) Manaus Florianópolis São Paulo Macapá Salvador Curitiba Maceio Recife Fortaleza Brasília Rio de Janeiro Porto Alegre Belém Aracaju São Luis Palmas Vitoria Teresina Belo Horizonte Campo Grande Imperatriz Goiânia Cuiaba Natal M M M M M M M M M M M M M M M M M M M M M MJ.Pessoa M M M M M M M M M M M M M M M MM M M  1st phase: Connecting sites with own fiber. 88% of sites in the 14 main Brazilian cities are connected with own fiber.  3rd phase: Expanding and fine tuning. Recife is the first city to reach this stage.  2nd phase: Light up the fiber and shift data traffic to own lines. 2nd phase is expected to be completed by 4Q13 M Cities of Stage 1 M Cities (additional 30) of Stage 2 Own Network to Support Traffic Growth (% of total transport network) 52% 80% 48% 20% 2009 2012 Owned Third Parties • Increasing customer experience (throughput 50xfaster than previous leased links on copper, 2/8Mbps) • Reduce network congestion • 4G (LTE) ready • Reducing leased lines costs Metro Ring To own fiber up to 300 MbpsFrom copper 2-8 Mbps
  • 21. 11.607 12.120 Jun/12 Jun/13 Network Commitments 21 Network Elements Expansion… (units. Source: Company) …Driving Quality Improvements (% of success; % of call/data connection drop;Source:Anatel) 181 215 Jun/12 Jun/13 250 464 Jun/12 Jun/13 BTS TRX (Voice Capacity; 000) Channel Elements (Data Capacity; 000) 95,7% 97,1% Aug/12 Apr/13 Voice Network Access Rate Voice Network Drop Rate Data Network Access Rate Data Network Disconnection Rate +4% +19% +86% Target agreed w / Anatel 1,3% 1,1% Aug/12 Apr/13 95,9% 96,0% Aug/12 Apr/13 1,5% 1,7% Aug/12 Apr/13 95% 2% 98% 5%
  • 22. Capex Analysis 22 Organic Capex (ex-4G licenses) (Capex/Sales;Mix of Investments;R$ bln) 9,5 8,3 7,2 5,5 0.4 TIM Claro Vivo Oi Benchmark: Anatel Plan for 2012-2014 (R$ Bln) Owned Network Deployment…. (% of total transport network) 9.9 2012 Extra Capex over AnatelPlan +20% +39% 2012-2014 Capex … Driving Network Opex Savings (% YoY) +81% 22,1% 4,8% 3,5% Total Traffic Customer Base Network Costs Q2 2013 52%48% Owned Rented 80% 20% 2009 2012 0.5 0.3 0.2 2.3 2.7 3.1 2010 2011 2012 2013e 2014e 2015e 19,6% 18,0% 18,0% Infra Invest. As % of Net Revs. Other Invest. 2.8 3.0 3.4 10.7 3.6 Voice Postpaid +23% YoY
  • 23. Live TIM
  • 24. Live TIM: Delivering on Plan 257k 522k 609k 804k 3Q12 4Q12 1Q13 2Q13 Network Evolution (Addressable Households ; Source: TIM) Salesper Quarter (Customers;Source:TIM) 9.7k 17.1k 1Q13 2Q13 Customer Base (Customers;Source:Anatel) 9.7k 16.3k 26.4k 4Q12 1Q13 2Q13 82% Net Share Live TIM SP+RJ (UBB >34MB ; Source: Anatel) Market Share SP+RJ (UBB >34MB ; Source: Anatel) 38% 19% 13% 11% 10% 9% Live TIM Oper. I Oper. II Oper. III Oper. IV Outras 26% 69% 73% 3Q12 4Q12 1Q13 ITAQUERA CASA VERDE BUTANTÃ JABAQUARA PINHEIROS MORUMBI MOOCA São Paulo Totaling 26 Districts in São Paulo 24
  • 25. Efficient approach MSAN port occupancy (%), Capex (R$) Coverage (addressable) Thousands of Households ~500 ~1,000 ~2,000 2015201420132012 0 20 40 60 80 2012 2013 2014 2015 ~R$2k Coverage Capex per Home Passed ~R$80 ~R$800 Installation Capex per Sub ~R$300 TIM Fiber Int. Bench. TIM Fiber Int. Bench. ~R$5k Total Capex per Sub ~R$700 TIM Fiber Int. Bench. Port Occupancy (%) 25 4x • 2012: priority coverage in areas with high ‘A/B classes’ concentration • 2013: chess board strategy and entering in class C • 2014: additional coverage in Rio de Janeiro and São Paulo metropolitan regions, focusing class C concentration areas Geographic Expansion Geographic expansion for low-middle class and targeting high income neighborhood TIM Fiber Plan Update 2013/2015
  • 26. Business Outlook
  • 27. 116 129 150 >200 0 50 100 150 200 250 2010 2011 2012 2013e 2014e 2015e 14.5 17.1 18.8 2010 2011 2012 2013e 2014e 2015e High Single Digitgrowth 4 Ways of Growth Revenue Growth (Total Revenues,R$ billion) CAGR 12-15 Mobile Customer Base Million of lines Double digit growth FMS – Voice (MOU) Minutes of usage per line Internet for All (Mobile Data) Data as % of Gross Mobile Serv. Revs. 27 51.0 64.1 70.3 > 90 2010 2011 2012 2013e 2014e 2015e 13% 15% 19% >26% 0% 5% 10% 15% 20% 25% 2010 2011 2012 2013e 2014e 2015e Double digit growth VAS Revenues MoUCustomer Base Community Expansion FMS (Voice) Internet Services ~2Mln HH ready to sell Tim Fiber Ultra BB >90 Mln >200 min >26% Business Drivers of Growth
  • 28. 28 TotalNet Revenues High Single Digit Growth OrganicEBITDA 4.6 5.1 OrganicCapEx 3.0 3.4 10.7 17.1 18.8 High Single Digit Growth R$ billion 2011 2012 2013 -2015 CAGR Guidance 2013-2015 Guidance
  • 29. Appendix
  • 30. Total Customer Base (% Market Share) Market Share Evolution 30 29,6% 28,7% 26,9% 27,2% 24,6% 25,0% 18,7% 18,7% P3 P4 P1 TIM 2012 Mobile Net Revenue Share (% 2012Total Net Revenue) Total Voice Postpaid Customer Base (% Market Share) 38,2% 39,1% 22,0% 23,4%23,9% 20,3% 15,3% 16,5% P3 P4 P1 TIM Total Prepaid Customer Base (% Market Share) 28,0% 26,3%28,1% 28,8% 24,0% 25,0% 19,6% 19,6% P3 P4 P1 TIM Size: 265,741 thousand Penetration rate: 134.3% 20,2% 29,5%35,3% 15,0% P3 P4 P1 TIM
  • 31. Understanding Internet Usage Trends Going deeper into wireless penetration in Brazil (%) 31 79 91 105 124 133 56 63 67 76 80 2008 2009 2010 2011 2012 Our current portfolio reflects consumer’s behavior (Activities over mobile phone; % users who have used mobile within the last 3 months) Source: CETIC jun’13; Data Market; Anatel 22 31 47 5 18 24 49 57 64 2010 2011 2012 Wireless Penetration Real Penetration # SIM Cards Social Class 0 1 2 3+ A 3% 67% 24% 6% B 7% 63% 24% 5% C 17% 62% 17% 3% DE 41% 47% 10% 1% Total 20% 59% 17% 3% Send SMS ListenMusic Internet
  • 32. Historical Data: Financials (R$ Thousand) 32
  • 33. Historical Data: Financials (US$ Thousand) 33
  • 34. Historical Data: Operational & Financial Ratios 34
  • 35. 3% Tax Relief - 1º Step: M2M Fistel to drop and Smartphones tax exemption (Law 12,715/2012) Total ~34% Fust/ FUNTEL PIS/ PASEP 1.5% 0.65% ICMSCofins ~28% Tax reduction Reduction in the price to consumer Increase of Penetration Social Impacts Economic Impact Possibilityof higher investmentin network Better Quality Tax Composition 35 In 2012, TIM paid R$9.1 bln in taxes, fees and contributions (~48% of total net revenues). • R$1 bln in Fistel. • R$8.1 bln in taxes, contributions and others fees. % of Gross Revenues Taxation Over Telecom in Brazil
  • 36. Shareholders Structure and Stock performance Stock Performance (base 100)* 0 20 40 60 80 100 120 TIMP3 Ibovespa TSU 36*Last price as of 08/02/2013 TIM Celular S.A. Intelig 100% TIM Brasil Serv. e Part. S.A. Minorities Telecom Italia International N.V. Telecom Italia 100% TIM Participações S.A. ON: 33% (805,662,701)ON: 67% (1,611,969,946) 100%100%
  • 37. 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 Gustavo Valente E-mail: gvalente@timbrasil.com.br Phone: +55 21 4109-3446 Luiza Chaves E-mail: luchaves@timbrasil.com.br Phone: +55 21 4109-3751 Visitour Website www.tim.com.br/ir Safe Harbor and IR Contacts 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. 37