Tim part   industrial plan 2014-16
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Tim part   industrial plan 2014-16 Tim part industrial plan 2014-16 Presentation Transcript

  • Industrial Plan 2014-2016 TIM Participações
  • Safe Harbour These presentations contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this presentation and include statements regarding the intent, belief or current expectations of the customer base, estimates regarding future growth in the different business lines and the global business, market share, financial results and other aspects of the activities and situation relating to the Company and the Group. Such forward looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those projected or implied in the forward looking statements as a result of various factors. Consequently, Telecom Italia S.p.A. makes no representation, whether expressed or implied, as to the conformity of the actual results with those projected in the forward looking statements. Forward-looking information is based on certain key assumptions which we believe to be reasonable as of the date hereof, but forward looking information by its nature involves risks and uncertainties, which are outside our control, and could significantly affect expected results. Analysts are cautioned not to place undue reliance on those forward looking statements, which speak only as of the date of this presentation. Telecom Italia S.p.A. undertakes no obligation to release publicly the results of any revisions to these forward looking statements which may be made to reflect events and circumstances after the date of this presentation, including, without limitation, changes in Telecom Italia S.p.A. business or acquisition strategy or planned capital expenditures or to reflect the occurrence of unanticipated events. Analysts and investors are encouraged to consult the Company's Annual Report on Form 20-F as well as periodic filings made on Form 6-K, which are on file with the United States Securities and Exchange Commission. The accounting policies and consolidation principles adopted in the preparation of the Condensed Consolidated Financial Statements as of, and for the nine months ended, 30 September 2013 have been applied on a basis consistent with those adopted in the Annual Consolidated Financial Statements at 31 December 2012, to which reference can be made, except for the new standards and interpretations adopted by the Group, which, other than for the prospective adoption of IFRS 13 ( Fair Value measurement), didn’t impact on the Condensed Consolidated Financial Statements as of, and for the nine months ended, 30 September 2013. Some data for the first quarter 2012, used in comparisons, included into this presentation have been restated as a result of the early adoption, starting from the first half 2012, of the revised version of IAS 19 (Employee Benefits) and the reclassification of Matrix (company that was disposed of on October 31, 2012) from the Business Unit Domestic–Core Domestic to the Business Unit Other Activities. 2
  • 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 Revenues 3
  • Macro Scenario: A Different Outlook Real GDP Forecast Inflation Forecast (%YoY Growth; Source: BaCen) (IPCA - %YoY Growth; Source: BaCen) Old Scenario New Scenario Old Scenario New Scenario 3.8 3.6 3.3 5.8 6.0 5.5 2.4 2.4 2.3 2.4 5.5 5.4 5.5 • Market consensus shows now a softer growth. 5.0 2013 2014 2015 2016 2013 2014 2015 Interest Rate Forecast • Telecom industry has shown resilience, specially in the mobile side, but it is not completely immune. FX Rate Forecast (%Selic Target p.y. - Year average; Source: BaCen) 2016 ( R$/US$ - Year average; Source: BaCen) Market Consensus on Oct/12 Market Consensus on Oct/12 Market Consensus on Oct/13 Market Consensus on Oct/13 10.3 10.3 8.7 9.0 8.8 2014 2015 2016 8.4 10.0 2.3 2.4 2.4 2.0 2.0 2.0 2.1 2013 2014 2015 • Mobile sector will continue to benefit from fixed-mobile substitution, now also strong on data. 2016 2.2 7.3 2013 4
  • Still Increasing Internet Penetration and Data Market 61.3 Mln (40%) 1% R$ 250 1% R$ 200 2% R$ 150 5% R$ 100 32% 11.8 mln Other Does NOT Possess Internet connection 60% 36.8 mln R$ 80 R$ 70 Lack of (60%) coverage 24% 8.8 mln R$ 50 R$ 40 R$ 30 Too Expensive Total Households 44% 16.2 mln CABLE FTTH > R$ 250 R$ 20 R$ 10 12% ADSL VDSL 53% of active connection base has currently a speed below 2Mbps 18% 24% 39% 48% 59% 65% MBB 40% 24.5 mln Possess Internet connection Willingness to pay (% of Households) 71% Households which does NOT possess Source: CETIC 13 Market Data Revenues Growth 2016 vs. 2012:  >13 bn Reais on Mobile (+100%)  >7 bn Reais on Fixed (+35%) 5
  • The Opportunity in Brazil and TIM’s Strategic Positioning A. Continue to Explore Voice FMS B. Lead the Data/Internet Wave     Market  Very large voice market, although declining.  High price umbrella in Fixed services.  Customer migration to higher plans / hybrid and postpaid. Emerging data/internet user population. Large unserved Internet demand. Old Fixed networks legacy + bundle requirement. Mobile as the natural vehicle for inclusion. Voice Revenues Voice Revenues Voice Revenues Data Revenues R$ Bln Source: TIM) (R$ bln; R$ Bln Source: TIM) (R$ bln; 41.1 42.8 39.9 41.2 33.8 45.7 46.8 46.0* Mobile Mobile 39.7 40.4 38.4 36.4 34.1 32.3 Fixed 13.4 2.7 Strategy/ Objectives 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 FMS Customer Base Growth Customer Base Expansion 15.1 16.7 17.9 8.0 4.0 5.8 19.2 20.4 21.7 Fixed 10.5 13.3 16.7 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 … Massive Mobile Internet Access Internet and Data For All C. Manage Existing Customer Base * Excluded non recurrent and non-operational revenues (e.g.: towers sell) 6
  • Strategy: Infrastructure Evolution 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 2014e 2015e 2016e  New backbone routes- Increasing resilience. *Includes 2.5GHz RAN Sharing. 7
  • Offer Evolution Smartphone Sales Smart/Web phone Penetration Voice MOU (% total handset sale) (% over total base of lines) Innovative Offers Driving Growth and Differentiation (Minutes) 42% 3Q12 30% 4Q12 46% 1Q13 46% 19% 67% 3Q13 Smartphone 13% Webphone 150 136 52% 43% 30% 21% >170 >75% 35% 24% 57% 2Q13 28% 22% 21% 2012 Essencial Jul 13 2012 2016e 3Q13 2016e Devices Sales Share 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% 56% 46% Notebook 44% XX% +15% 21.3 2012 3Q13 XX% +XX% 24.5 36% Tablets VAS Gross Revs. 2016e 17% Desktop 2012 2013e 2016e 2010 2012 2014 2016 8
  • BUSINESS STABILIZATION AND RECOVERY INTELIG Fixed Business Evolution Top Line: Recovery Path • Focus on value, selecting high margin customers. • Selective approach focused on high potential verticals: Finance, ISP (data), Call Center (voice). 2012 2013e 2014e 2015e 2016e 2014e 2015e 2016e EBITDA: Inflection Point • Network ready to retake sales. • Increasing addressable market with mobile synergy approach. • Optimize investment leveraging on multi service networks. 2012 2013e Addressable Households Sustainable Growth Mode TIM FIBER 000 • Leading the market share for speed above 34Mbps (ultra BB offers). 522 881 2012 3Q13 • Leveraging fiber assets in SP and RJ with reduced investment and efficient approach. 2016 UBB Market Share RJ/SP (Aug13) >34 Mbps download speed • Good potential at SME segment. GVT 7.1% • Strong support to mobile business w/ small cell backhauling. OTHER5.6% LIVE TIM VIVO 22.0% 48.5% NET 8.9% OI 7.8% 9
  • TIM Part: 2014-2016 Guidance Guidance R$ billion 18.8 2013-2016 CAGR: Mid Single Digit Growth Total Net Revenues 2012 2013e 2014e 2015e 2016e R$ billion 2013-2016 CAGR: Mid Single Digit Growth 5.0 EBITDA 2012 2013e 2014e 2015e 2016e R$ billion 3.8 CAPEX Infrastructure Total CAPEX 2014-2016: ~R$11 billion* 3.2 Others/Licenses 0.5 2012 *Does not consider 4G licenses (700Mhz). 2013e 2014e 2015e 2016e 10