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Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
Tim Presentation Morgan Stanley (Jan10)
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Tim Presentation Morgan Stanley (Jan10)

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  • 1. TIM Participações S.A (Bovespa: TCSL4, TCSL3; NYSE: TSU) Morgan Stanley Latin America CEO Conference Florida – January 6-8th , 2010 0
  • 2. TIM PARTICIPAÇÕES S.A. | Investor Relations 2008 Issues and Re-Launch Plan Update New Commercial Approach and Portfolio Next Challenges Intelig Deal Concluded Attachments - Market Facts and Historical Data 1
  • 3. TIM PARTICIPAÇÕES S.A. | Investor Relations 2008 Issues… Strategic Indecision: - 2G or 3G? (slow 3G roll-out, 2G low quality) - Fixed/Web or Core business - mobile? - High Price with low quality Offer obsolete: - ‘TIM Brasil plans’ (Post-paid Consumer): since 2005 - ‘Nosso Modo plans’ (Post-paid Business): since 2002 - Pre-paid Promotion: Less Competitive (10x vs 20x/30x from peers; End of ‘7 cents’ promotion) - Customer acquisition model “handset based” Short-cuts to profitability: - Price-up in the Q4 2008 - Exit from post-paid market - Stop advertising and commercial efforts 2
  • 4. TIM PARTICIPAÇÕES S.A. | Investor Relations ... with a loss of competitiveness and post-paid base ARPM Outgoing Share of Investment R$ Quarterly Share of investments on TV Increased Tariff 0,27 Stop Advertising 0,21 22,2% 0,19 Profitability in the 19,9% 18,2% 17,5% 0,19 0,18 short term Jan-08 Apr-08 Jul-08 Oct-08 Dec-08 1Q 2Q 3Q 4Q Pre-paid - Total Post-paid - Voice Mn Lines Mn Lines 5,3 29,0 29,8 5,1 25,2 26,2 27,3 4,9 4,7 4,6 +4,6 -0,7 Jan-08 Apr-08 Jul-08 Oct-08 Dec-08 Jan-08 Apr-08 Jul-08 Oct-08 Dec-08 Market 26,1% -1,9pp 24,2% share Loss of competitiveness Post-paid base erosion 3
  • 5. TIM PARTICIPAÇÕES S.A. | Investor Relations TIM’s Strategic Guidelines Vision: - Short-term: Voice service will continue to be the killer application - Voice is the mobile core business; Data is Fixed core business - Fixed to Mobile substitution will happen in 2010; the process for data is more articulated Mission: - TIM is a company that thinks differently and seeks innovative ways for customers to talk more, spending less (MOU intensive strategy, community based concepts) - The 2G Network is a competitive advantage to follow the MOU growth (capacity) and the Customer Base growth (cover) - The data are not only brownsing: with microbrowsing it is possible to replicate the same voice’s path (anywhere, any time, for everybody), with consistency and sustainability 4
  • 6. TIM PARTICIPAÇÕES S.A. | Investor Relations Our Path in 2009 1Q09 2Q09 3Q09 4Q09 Brand: new format Launch of Infinity Plans Encourage Usage: Focusing on Post-paid: and increasing Share (Pre and Post-paid) - Infinity (Pre and Post) - Liberty of Investments Loyalty (Handset and and launch of “Blue” - Infinity / Único Monthly Fee Discounts) Concept (Local and Go-2-Market Model: Network Quality: Push on Sales: LD) Chip Only, as alternative capacity, access, transportation (LD) - Focused on Post- - Quick-win of pre-paid to traditional model paid and MNP clients Acceleration and Costumers Push on Sales and CRM - Network Network Development: Satisfaction Recovery action Rationalization - 2G Capacity in all Consumer - New ways to Clients migration to - 3G Coverage Segments new plans (Pre) encourage Usage Intelig Awareness Customer Base and Δ Post-paid Clients and KPIs and Quality MOU Market Share SAC/ARPU 5
  • 7. TIM PARTICIPAÇÕES S.A. | Investor Relations Main Achievements Positioning Positioning Subscriber Base Growth (Brand and Quality) Subscriber’s base Subscriber Base Growth Self-financing Self-financing (Brand and Quality) Brand: improve in Awareness and TIM reverses market share trend (net Re-launch costs +R$ 0.5 Bln 9M YoY Top of Mind share of 27.3% in 3Q, after 29.1% in Advertising, CRC, network quality and 2Q, vs. ~24% of market share) commissioning Customer Satisfaction: recovery quality level in all customer Improving pre-paid customer base Self-financing -R$ 0.7 Bln 9M YoY segments (Infinity Pre-paid: >11 million clients in through Efficiency Plan 6 months) Interconnection, Bad Debt and Personnel Quality: confirmed #2 Anatel (with MOU +30% higher than 1Q09) End of post-paid base erosion, after 15 ΔEBITDA +6.7% 9M YoY months (Infinity Post-paid and TIM Despite -0.9% of revenues decrease Jul ‘08 Jan ’09 Jul ’09 Único) Overall 7.41 6.60 7.47 Post-paid 6.22 5.89 6.88 Continuous improvement on KPIs QoQ Sources: ABA (Associação Brasileira de Anunciantes) 6
  • 8. TIM PARTICIPAÇÕES S.A. | Investor Relations Brand: improving in Awareness and Top of Mind TIM Player 1 Player 2 Player 3 Share of Investments Awareness 40% 32% 31% 53% 30% 35% 29% 50% 44% 28% 42% 41% 28% 30% 26% 25% 26% 26% 34% 33% 24% 19% 33% 34% 20% 18% 32% 31% 33% 30% 29% 31% 29% 27% 17% 15% 16% 15% 23% 15% 10% 20% 22% 5% 2006 2007 2008 Jan-Aug ‘09 May/09 Jun/09 Jul/09 Aug/09 Sep/09 Share of Voice Top of Mind TV – GRP 15”+ •ABA: #1 31% •Folha de SP: # 2 32% 30% 29% 27% 29% 29% 29% 28% 27% 25% 22% 22% 21% 23% 20% 23% 22% 21% 20% 21% 19% 20% 18% Oct-Nov May-Jun Oct-Nov Jun/09 2008 Jan-Aug ‘09 07 08 08 Sources: Ibope Monitor, TIM Brasil - Pesquisa de imagem (Synovate – third-party survey institute) and weekly communication tracking * RJ and SP – last week of the month 7
  • 9. TIM PARTICIPAÇÕES S.A. | Investor Relations Customer Satisfaction: quality level recovery in all customer segments From 0 (dissatisfied) to 10 (maximum satisfaction) Customer satisfaction Index Customer Care Satisfaction CRC Average satisfaction, consumer segment Δ vs last Ranking measure oct/08 may/09 7,9 7,7 7.5 7.5 7.4 7,5 7.1 Overall 8.43 +0.44 #3 #1 Pre-paid 7,3 -0,5 7.0 +0,5 7,1 6,9 6,7 Pre 8.50 +0.36 #2 #1 3Q08 4Q08 1Q09 2Q09 3Q09* 7,1 6,9 6.6 6.7 Post 8.06 +0.72 #4 #1 Post-paid 6,7 6,5 6.3 6.1 +0,7 6,3 6.0 Post 6,1 7.96 +0.87 #4 #1 High 5,9 5,7 3Q08 4Q08 1Q09 2Q09 3Q09* Client satisfaction recovery in all segments * Jul/09 and Aug/09 Sources: TIM Brasil - 12nd Customer Satisfaction Monitoring - may-jun/09; CRC Monthly Satisfaction Research 8
  • 10. TIM PARTICIPAÇÕES S.A. | Investor Relations Quality: Improvement of Customer Care and Network Overall Service Quality – YTD’ 2009 Overall Service Quality – Sept’ 2009 % target achieved in overall service quality, TIM vs. competitors % target achieved in overall service quality, TIM vs. competitors -0.2 +5.2 +2.1 -1.2 -5.1 -7.8 -0.9 ∆pp #2 YTD 09 99.3% 99.2% 97.7% vs. FY08 96.8% 95.5% 95.5% 93.9% 92.6% 90.9% 90.2% 85.5% 81.8% 83.0% 65.9% Player 1 TIM Player 6 Player 5 Player 4 Player 2 Player 3 Player 1 TIM Player 6 Player 4 Player 2 Player 5 Player 3 Network Service Quality (*) % target achieved in network quality , TIM vs. competitors % target achieved in TIM network quality Jan/09 Set/09 Delta (p.p.) 100,00% 96.4% 97.8% TIM 84.1% 97.3% +13.2 98,00% 96,00% 94.0% 90.7% 94,00% Main Player 1 100.0% 99.1% -0.9 92,00% Mobile 90,00% 87.6% 88,00% Operators 86,00% Player 2 95.7% 96.5% +0.8 84,00% 82,00% Player 3 53.8% 50.0% -3.8 4Q08 1H09 jul/09 aug/09 nov/09 MOU 86 71 90 Fonte: Anatel 9 (*) SMP Anatel 3, 5, 6, 7 and 12
  • 11. TIM PARTICIPAÇÕES S.A. | Investor Relations Subscriber Base Growth: Reverting negative trends Returning to increase in post-paid… …and market share Net Additions (000’s lines) 1,729 1,774 Net Share (%) 29.1% 1,392 1,196 27.3% 26.5% 25.4% 25.0% 24.2% 23.5% 1,687 25.9% 1,687 23.7% 23.8% 1,393 1,446 Market (306) Share (%) 17.4% 18.3% 91 42 87 (1) (250) -10.1% (397) ..Invert the 12.1% trend 3Q08 4Q08 1Q09 2Q09 3Q09 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 Post-paid Pre-paid Net Adds YoY Growth (%) After four quarters of market … TIM confirmed -17.2% -42.9% N/A 34.9% 27.5% share erosion… trend reversal 10
  • 12. TIM PARTICIPAÇÕES S.A. | Investor Relations Self-financing the Re-launch plan… Bln R$ -0.9% Set-09 YTD vs. YA Net Service Revenues 8.9 8.8 Service -0.08 -0.9% More quality in: •Traffic Revenues Interconnection (on-net) Bad Debt 3.8 -0.7 3.1 •Clients G&A •Organization • Brand Re-shaping Service Margin* +0.59 +10.0% Commercial Expenses 3.1 +0.5 3.6 • Recovery Customer (Fixed and Variable) Base Network • Improve in Margin despite of Revenues +6.7% EBITDA +0.13 +6.7% EBITDA 1.97 2.10 decrease 0 Sep´-08 YTD Sep´-09 YTD 11
  • 13. TIM PARTICIPAÇÕES S.A. | Investor Relations 2008 Issues and Re-Launch Plan Update New Commercial Approach and Portfolio Next Challenges Intelig Deal Concluded Attachments - Market Facts and Historical Data 12
  • 14. TIM PARTICIPAÇÕES S.A. | Investor Relations Innovative Commercial Approach Plans Plans Business Model Business Model Handsets and VAS Handsets and VAS Segmented Offers Chip only (for all post-paid plans) Unique and distinctive • Win-Win-Win: - TIM: SAC/Bad Debt reduction, • Complete portfolio of plans with • Exclusivity in devices (e.g.: Windows competitive differentiation in segmented approach Phone) service vs. handset • New Plans based on Community • Outsourcing of VAS platforms - Sales: one more option for sales concept (more than 40 million multiplatform applications store: - Client: flexibility music, games, adult (ex: Qualcomm) clients nationwide) . Handset Benefit or • Presence of TIM in applications • Community Free National . Service Benefit store of main suppliers (e.g.: Roaming “Brasileirão 2009” in Apple Store) Subscriber Base and Usage Handset Revenue Microbrowsing Infinity Pre Infinity Post Liberty SAC / ARPU 13
  • 15. TIM PARTICIPAÇÕES S.A. | Investor Relations New segmented portfolio: based on Community Concept On-Net Off-Net Super Da Vinci All Unlimited High TIM Liberty Unlimited Bundle of off-net High TIM Liberty minutes Infinity Post-paid Unlimited call Mid Free tariff among Family Free bundle of minutes Family Family members Low Infinity 30 Infinity 30 Infinity Benefit in Low plan Infinity Controle Cheapest Controle offer in the market and Controle Infinity Controle also includes Infinity benefit Pre Infinity Pre-paid Unlimited Call Price / Minute Including LD 14
  • 16. TIM PARTICIPAÇÕES S.A. | Investor Relations New Offers: Fast market reaction Infinity Pré Mundo Azul Competitive MOU advantage of 90 TIM’s offer 70 +30% Increasing LD 1Q09 3Q09 >11 million clients market share of traffic (+ 10pp) % MOU on-net Infinity Pós TIM Único +8 pp 1Q09 3Q09 Leveraging on TIM Community ~60% of Gross Adds are ~40 million clients +40% Post-paid Gross Adds (Local and DDD) (Voice) Consumer 3Q YoY new Business clients 15
  • 17. TIM PARTICIPAÇÕES S.A. | Investor Relations 2008 Issues and Re-Launch Plan Update New Commercial Approach and Portfolio Next Challenges Intelig Deal Concluded Attachments - Market Facts and Historical Data 16
  • 18. TIM PARTICIPAÇÕES S.A. | Investor Relations Telecommunication’s Evolution Microbrowsing Mobile Browsing • Anytime, anywhere • Anywhere, • Critical success factors: HSDPA 7Mb/seg 3G Roll-out and smartphone • Critical success factors: spectrum and backhauling Browsing and connectivity Voice • Always Connect • Critical success factors: • F-M substitution capacity, last mile (fiber) and • Critical success factors: application Radio Coverage Kbit/seg TIM World Intelig World Mobility Capacity Radio Access Backbone/backhauling Last Mile 17
  • 19. TIM PARTICIPAÇÕES S.A. | Investor Relations Three waves of growth for the mobile market Brazilian Market Driver of growth for the mobile market In 2012 Sept ‘09 139% 117% 120% 99% 87% A ~216 Mi Lines ‘09 ‘12 MOU, 2Q09 833 249 133 130 B 76 ~130 MOU Penetration ‘09 ‘12 and voice access Usage Broadband % data/Net Service Revenues, 2Q09 A B C 44% 29% 24% 18% C 12% ~18% VAS/Revenues Today H2 2010 2012 ‘09 ‘12 Waves of TIM’s growth Customer Base Evolution MM acessos Convergence 2009 2012 Fixed 0.3 2-play (voice & data) Web 0.5 Post-paid - Voice Post-paid - Voice 5.0 Pre-paid More 15 million Clients Pre-paid 34.5 2009 H2 2010 2011 2012 18
  • 20. TIM PARTICIPAÇÕES S.A. | Investor Relations Next Challenges “Breaking the Rules” “Best in class” Service Offers: Network: ionn - MOU intensive - “Close the gap” to “wide the Qu attio Qu ovva aai - Community based gap” (Coverage) l lty o ity Inn Inn - Chip-only - Voice Quality (Capacity) - Differentiation and Customer Care: Segmentation per Area - Quality on E2E process, Handset: products and solutions - Focusing on Microbrowsing Capabilities - New Caring model and Capabilities experience simplifying internal process “Focusing on Technology Infra-structure” Push on 2G Capacity and Coverage A consistency development of 3G Network Efficiency: back-hauling and fast integration with Intelig Network Improve IT capabilities 19
  • 21. TIM PARTICIPAÇÕES S.A. | Investor Relations Innovation: “Breaking the Rules” Post-paid Offer Pre-paid Offer Handset Low importance based of the phone number Market Trend Low MOU High Interconnection Pressure on Promotion: SAC elevado flat para as diretrizes Costs - bonus to on-net local calls nos canais vendas - discount on chip (4x1) tradicionais (ex: GDO) High SAC Increase Customer Base Low Differentiation Decrease of ARPU High Churn Chip only (Low SAC) From price per minute to price per call (ARPU Traffic Differentiation: accretion) TIM - MOU intensive “Azul”: F to M substitution on DDD Strategy - Community based Push alternative channels Low SAC New services to increase phone number importance 20
  • 22. TIM PARTICIPAÇÕES S.A. | Investor Relations Quality: “Best in Class” Customer Satisfaction Index Consumer Customer Satisfaction Index Business Index Index 8,0 8,5 7,5 6,5 7,0 5,7 Target: #1 on Anatel ‘09 H1 ‘10 YE ‘10 ‘09 H1 ‘10 YE ‘10 Ranking in terms of CSI Offer: simplifying portfolio (focusing on business segment) Push on clients’ loyalty (focusing on consumer segment) In sourcing Customer Care to PME segment in 2010 Actions to Internal Caring to post-paid high-end (in-house) Churn Rate improve Outsourcing Customer Care to consumer segment low-end: reduction in Customer all segments - Focusing on quality in partnerships Satisfaction - Focusing on process and efficiency - Responsible for Clients E2E Process revision on Business segment (sales, after-sales e caring) 21
  • 23. TIM PARTICIPAÇÕES S.A. | Investor Relations Capabilities: “Focusing on Technology Infra-structure” 2G Capacity ‘000 TRX >50K TRX em 3 anos 2G Capacity 92,2 TRX 2009 2010 2011 2012 Efficiency 3G innovation Efficiency 3G innovation ‘000 Microwaves ~9K MW # Node B >4.,1K Node B em 3 anos em 3 anos 6,2 North and 3,9 Northeast Regions 2009 2010 2011 2012 2009 2010 2011 2012 22
  • 24. TIM PARTICIPAÇÕES S.A. | Investor Relations 2008 Issues and Re-Launch Plan Update New Commercial Approach and Portfolio Next Challenges Intelig Deal Concluded Attachments - Market Facts and Historical Data 23
  • 25. TIM PARTICIPAÇÕES S.A. | Investor Relations Established in 1999 during the privatization process, Intelig Deal Concluded being an alternative player (“mirror company”) to compete with incumbent operators ~ 500 employees Network Footprint Brief Since Jan/08, owned by Docas Investimento Description (Brazilian Media and Publishing Group) Boa Vista Américas II (Florida) Macapá Globnet (New York e Miami) Atlantis 2 (Europa) National and international LD (Code 23) Belém Manaus Voice, data and images transmission nationwide. In Fortaleza 2003, launched a local fixed telecommunication service Recife Maceió Backbone: 14.500 km of fiber optic cables Rio Branco Porto Velho Aracaju Network Salvador Fiber optic cables length: ~500.000 km Goiás Brasília Asset DF Goiânia Metropolitan Network: 18 capitals Uberlândia Belo Horizonte Vitória Campo Rib. Preto Juiz Grande Campinas Fora Jundiaí Barueri Rio de Janeiro Corporate – 100k clients ~50% Curitiba São Paulo Joinville - LD (national and international) Porto Alegre Florianópolis Uruguaiana - Data solution for business segment Atlantis 2 (Argentina) Wholesale ~35% Business line - Data transmission (leased lines) Central Retail Central ATM/IP ~15% Estação satelital terrestre - Local service (~260k lines) MAN POP - ISP (Internet service provider) Rede em Fibra Óptica Cabo submarino - LD (national and international) 24 % of net revenue
  • 26. TIM PARTICIPAÇÕES S.A. | Investor Relations New Shareholder Structure Before Intelig After Intelig TIM Brasil Serv. e TIM Brasil Serv. e Part. S.A. Free Float JVCO Free Float Part. S.A. T : 69.86% ON: 81.32% T : 30.14% T : 66.27% T : 5.14% T : 28.59% PN: 63.94% ON: 18.68% ON: 77.14% ON: 5.14% ON: 17.72% PN: 36.06% PN: 60.65% PN: 5.14% PN: 34.21% 100% 100% 100% TIM Cel. S.A. TIM Cel. S.A. 100% 100% TIM Nord. S.A. TIM Nord. S.A. 25
  • 27. TIM PARTICIPAÇÕES S.A. | Investor Relations Rational behind the Deal Grow current business New markets Support long distance traffic growth to Growth in the Fixed residential market : mobile and fixed Revamp of long distance share Development of own network for data Convergent offers: multiple-play transmission and 3G coverage Performance in the Corporate segment: Deploying a network to support the data Convergent solutions (voice and data, F-M) traffic sudden increase Custom applications Gain of Efficiency Integration of backbone network and backhauling with leased lines migration System integration (billing, customer care, provisioning, processes, commercial) 26
  • 28. TIM PARTICIPAÇÕES S.A. | Investor Relations Expected benefits: further profitability, further growth Efficiency Gains Addressing new markets Leased Lines Cost Intelig Revenues 1200 Inertial Costs 1000 Residential 800 ~ -50% 600 Business 400 200 Expected Costs Wholesale 0 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Reduction of up to 50% of the inertial leased lines costs and structural growth in profitability Integration completed in April Saving from Q1 '10, under the Q4 '10 TIM’s Revenue growth driven by the strong growth in Intelig Fixed Business 27
  • 29. TIM PARTICIPAÇÕES S.A. | Investor Relations 2008 Issues and Re-Launch Plan Update New Commercial Approach and Portfolio Next Challenges Intelig Deal Concluded Attachments - Market Facts and Historical Data 28
  • 30. TIM PARTICIPAÇÕES S.A. | Investor Relations Market Facts Stock Performance New Shareholders Structure TCLS4 TCSL3 IBOV 100,0 TIM Part. Total (%) Control (%) Free Float (%) 80,0 Common 843,281,477 100% 650,537,118 77% 192,744,359 23% 60,0 Preferred 1,632,453,583 100% 990,098,811 61% 642,354,772 39% 40,0 Total 2,475,735,059 100% 1,640,635,929 100% 835,099,130 100% *Jan, 2010 20,0 - Telecom Italia (20,0) 100% Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 TIM Brasil Market Panel* ON: 77% PN: 61% Market Capitalization: R$ 13.00 Billion Market Capitalization: US$ 7,47 Billion Total: 66% TIM Participações Stock Exchange: : BOVESPA Stock Exchange: : BOVESPA Stock Exchange: : NYSE Ticker Symbol: TCSL4 (Preferred) Ticker Symbol: TCSL3 (Common) Ticker Symbol: TSU (ADR) 100% Price: R$ 5,12 Price: R$ 7,15 Price: US$ 29,76 52 Week Price Range: 52 Week Price Range: 52 Week Price Range: TIM Celular High – R$ 5.20 High – R$ 7.95 High – US$ 30.13 Low – R$ 2.64 Low – R$ 4.91 Low – US$ 11.99 *All Market Panel data refer to Dec 30, 2009. 29
  • 31. TIM PARTICIPAÇÕES S.A. | Investor Relations Historical indicators: operational results QoQ YoY 3Q09 2Q09 3Q08 % % Brazilian Wireless Subscriber Base (million) 166.1 159.6 140.8 4.1% 18.0% Estimated Total Penetration 86.7% 83.5% 73.3% 3.2 p.p. 13.4 p.p. Municipalities Served - TIM GSM 2,958 2,944 2,765 0.5% 7.0% Market Share 23.8% 23.7% 25.0% 0.1 p.p. -1.2 p.p. Total Lines ('000) 39,600 37,826 35,206 4.7% 12.5% Prepaid 33,297 31,610 28,386 5.3% 17.3% Postpaid 6,303 6,216 6,820 1.4% -7.6% Gross Additions ('000) 5,930 4,855 4,573 22.1% 29.7% Net Additions ('000) 1,774 1,729 1,392 2.6% 27.5% Churn 10.9% 8.6% 9.4% 2.3 p.p 1.5 p.p ARPU (R$) 26.5 26.6 30.1 -0.2% -12.0% MOU 90 73 101 23.2% -10.7% ARPM (R$) 0.29 0.36 0.30 -19.0% -1.5% SAC (R$) 113 120 110 -6.2% 2.1% Investment (R$ million) 535.9 422.5 510.7 26.8% 4.9% Employees 9,351 10,174 10,173 -8.1% -8.1% Numbers are according to previously published earnings release, and therefore, may differ from the subsequent publishing due to rounding and re-classification. 30
  • 32. TIM PARTICIPAÇÕES S.A. | Investor Relations Historical indicators: financial results 3Q08 2Q09 3Q09 QoQ % YoY % Thousands R$ Net Revenues 3.406.923 3.304.252 3.337.481 1,0% -2,0% Services 3.114.872 2.936.240 3.083.348 5,0% -1,0% Handset Revenue 292.051 368.012 254.133 -30,9% -13,0% Operating Expenses (2.608.467) (2.568.235) (2.578.700) 0,4% -1,1% Personal Expenses (152.654) (138.181) (144.695) 4,7% -5,2% Selling and Marketing Expenses (715.019) (829.036) (873.341) 5,3% 22,1% Network & Interconnection (1.077.171) (920.902) (964.315) 4,7% -10,5% General & Administrative (101.496) (113.542) (100.954) -11,1% -0,5% Cost of Goods Sold (378.072) (466.727) (335.308) -28,2% -11,3% Bad Debt (143.250) (105.949) (99.552) -6,0% -30,5% Other operational revenues (expenses) (40.804) 6.102 (60.534) - 48,4% EBITDA 798.456 736.016 758.781 3,1% -5,0% EBITDA - Margin over total net revenues 23,4% 22,3% 22,7% 0,5 p.p. -0,7 p.p. Depreciation & Amortization (617.988) (647.451) (663.684) 2,5% 7,4% EBIT 180.468 88.565 95.097 7,4% -47,3% Net Financial Results (152.943) (65.857) (61.865) -6,1% -59,5% Income (loss) before taxes and Minorities 27.526 22.708 33.232 46,3% 20,7% Income tax and social contribution (39.579) (37.956) 27.579 - - Net Income (Loss) (12.053) (15.247) 60.811 - - Numbers are according to previously published earnings release, and therefore, may differ from the subsequent publishing due to rounding and re-classification. 31
  • 33. TIM PARTICIPAÇÕES S.A. | Investor Relations “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. Investor Relations Visit our Website Avenida das Américas, 3434 - Bloco 01 http://www.tim.com.br/ir 6° andar – Barra da Tijuca 22640-102 Rio de Janeiro, RJ Phone: +55 21 4009-3742 / 4009-3446 / 4009-4017 Fax: +55 21 4009-3990 32

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