2. TIM PARTICIPAÇÕES S.A. | Investor Relations
4Q08 Results
Macro Scenario & TIM’s Fundamentals
TIM’s Re-launch Plan
Historical Data
1
3. TIM PARTICIPAÇÕES S.A. | Investor Relations
Breakdown: subscribers base and revenue
Subscriber Base Net Revenue
Million lines R$ Million
35.2 36.4 +16% 3,544
32.5 33.8 3,376 3,186 3,358
31.3 ∆ YoY 2,993
27.0 28.4 29.8 +22% 3,100 3,066 3,223 +4.0%
24.5 25.8 2,838 2,971
∆ YoY ∆ YoY
6.8 6.8 6.8 6.8 6.6 -3% 276 155 215 292 321 +16.5%
4Q07 1Q08 2Q08 3Q08 4Q08 ∆ YoY 4Q07 1Q08 2Q08 3Q08 4Q08 ∆ YoY
Post-paid Pre-paid +5,3% +4,1% +6,1% +5,0%
∆ YoY
% Pos /
21.7 20.8 20.2 19.4 18.1
Total Net Service Revenue Net Handsets Revenue
Mix change due to pre-paid growth: Revenue growth at 5.1% in 2008:
TIM Customer Base grew to 36.4 Mln lines mainly on Lower than expected post-paid growth, high churn on
pre-paid (+22%) post-paid (10% in 4Q08)
Post-paid lines down to 6.6 Mln (-200K lines YoY), MOU reduction in 4Q08 due to of lower push on
representing 18.1% of total customer base promotions
2
5. TIM PARTICIPAÇÕES S.A. | Investor Relations
4Q08 Results
Macro Scenario & TIM’s Fundamentals
TIM’s Re-launch Plan
Historical Data
4
6. TIM PARTICIPAÇÕES S.A. | Investor Relations
A large and competitive market
Customer Base Service Revenue
Million lines Billion R$
25% 14%
Double-digit 121 151 38
44
market growth
2007 2008 2007 2008
Penetration 64% 78%
Gross Adds Churn
Million lines Million lines
35%
32%
Churn market... 75
56 46
35
2007 2008 2007 2008
Churn 32% 34%
TIM Player 1 Player 2
R$, R$/min R$, R$/min R$, R$/min ARPU
… suffering ARPM Competition increases with
0.39 Mobile Number Portability in
strong 0.36
0.31 -13% 0.34 -15% 0.35 -23%
2009:
competitive 0.27
17% of population covered in
34.4 29.7 -13% 30.3 29.6 -3% 27.3 -7%
pressure 25.5 Sep-08 100% by Mar-09
2007 2008 2007 2008 2007 2008
5
7. TIM PARTICIPAÇÕES S.A. | Investor Relations
Brazilian competitive landscape
TIM Telefonica/Vivo (1) Embratel /Claro Oi (2)/Brasil Telecom
Player Footprint
National fixed
Long distance
license acquired in
incumbent
may / 07
24% 30% 26% 20%
Market share (4)
Mobile
(36.4 MM) (44.9 MM) (38.7 MM) (30.0 MM)
Fixed ~0.5% ~30% / ~90%(3) ~13% ~55% / ~85%(3)
Broadband ~5% ~26% ~22% ~40%
(1) Including Telemig Celular
Mobile + Fixed Incumbent (2) Including Amazonia Celular
(3) Considering its regional presence
Mobile (4) 4Q08 figures
6
Source: company reports and Anatel
8. TIM PARTICIPAÇÕES S.A. | Investor Relations
TIM’s strong fundamentals
1 Network: leadership in coverage and quality
• voice (coverage and quality)
• data (Edge/ 3G)
2 High-Value Customer Base (ARPU ~30R$) with Operating as a
proven innovation attitude (VAS 10.8% Gross Service “Pure Mobile”
Revenue in 4Q08) company, with solid
fundamentals…
3 Unique “Pure Mobile” convergence offering … in line with our DNA
• TIM Web: strong growth (+2.5x of base YoY)
• TIM Fixo: high satisfaction among early adopters
7
9. TIM PARTICIPAÇÕES S.A. | Investor Relations
1 Network: leadership in voice and data coverage
Voice Data
Population covered by GSM* Largest data network = Edge / UMTS
93%
Player 2 90%
3G Data Only high quality
“Right on spot”
Player 3 88%
Player 4 88%
Native 3.5G (HSDPA) high performance
Recovery of Service Quality
Congestion % cells with Grade of Service > 2%
10
59% of high-value customer base covered by 3G
8
(Jan-09) 78% by Dec-09
6
4
2
0
Jan Feb March April May June July Aug Sept Oct Nov Dec Jan Jan
W1 W2
* Urban population covered (Jan-09) 8
10. TIM PARTICIPAÇÕES S.A. | Investor Relations
2 High-value customer base with proven innovation attitude
ARPU VAS / Gross Service Revenue Data Revenue Growth
Monthly ARPU, R$ % Gross Service Revenue 4Q07 vs. 4Q08
34.5 10.8%
29.5 29.8 29.7 29.9 9.8% SMS/ 4%
9.7% MMS
9.0%
8.4%
38%
VAS-i
4Q07 1Q08 2Q08 3Q08 4Q08 4Q07 1Q08 2Q08 3Q08 4Q08
Reversal of ARPU ... with push in
Increase in VAS...
dilution data and content
9
11. TIM PARTICIPAÇÕES S.A. | Investor Relations
3 Unique “Pure Mobile” convergence offering
Mobile Broadband: Strong growth
Million (Mn) TIM Web ARPU grew > 50% since 3G launch (May’08)
+70% The fastest mobile broadband offer in the market: up to 7.2
~0,5
Mbps and robust 3G backhaul
~0,3 Unattended ADSL demand: Over 50% of TIM Web users has
~0,2
a fixed location
2007 1H08 2008 Over 70% of TIM Web users are satisfied*
Fixed: Assessing TIM Fixo satisfaction*
Subscriber base reached ~200K users
Market average 7.63
Strong customer satisfaction on TIM Fixo
TIM Fixo 8.52 Over 25% of TIM’s clients came from other fixed players
Fresh-market: 40% of TIM Fixo users were previously
Fixed Mkt Avg TIM Fixo
Region I 7.99 8.44 unattended
Region II 7.85 8.82
Region III 7.07 8.44 Customer loyalty far above the average market
10
*source: TNS Intersience Survey Dez2008
12. TIM PARTICIPAÇÕES S.A. | Investor Relations
4Q08 Results
Macro Scenario & TIM’s Fundamentals
TIM’s Re-launch Plan
Historical Data
11
13. TIM PARTICIPAÇÕES S.A. | Investor Relations
Main phases of TIM Brasil’s re-launch plan
2008 1st half 2008 2nd half – 2009 1st quarter 2009 2nd quarter – 2009 2nd half
Phase 0: Current Phase 1:
Difficulty Restructuring Position Re-Launch Plan
Volume driven New management Loss of Top of Brand
strategy team Mind/Preference repositioning
Falling ARPM Strict financial Drop in volume New portfolio of
Rising bad debt discipline share and value offerings
Offering strategy Launch of Fixed- Issue in post-paid Converging
is lacking Mobile substitution segment approach
offer
Loss of
Lower Profitability Defend % EBITDA Growth in Value
Revenue Share
12
14. TIM PARTICIPAÇÕES S.A. | Investor Relations
Re-launch plan
1 Brand
Repositioning: Strong communication, maintaining coherence and awareness
2 Offering portfolio
Distinctiveness: Custom and multiple play offers
3 Caring
Selectiveness: New management model based on access/ value
4 Sales Force
Leveraged footprint: higher productivity with a multi-channel approach
5 Network
Quality and efficiency: higher capacity and to support 3G roll-out
6 Organization and team
New, marketing-driven and rapid: a customer-oriented structure
13
15. TIM PARTICIPAÇÕES S.A. | Investor Relations
Re-launch timeline
1Q09 2Q09 3Q09 4Q09
New strategy assessment New Offering: Network optimization
• Consumer
Organization and Team • Corporate New Caring Model
• Convergent
Advertising: new format Push on Commercial
Convergence: multiple
Actions Push on the points of play strategy
Push on existing Offers:
sale
• TIM Fixo
• TIM Web
• Existing post-paid
offer
High Churn: Post-paid Subscribers:
Results “back on track” Back to Revenue Growth
“Clean” our prepaid and
postpaid customer base
14
16. TIM PARTICIPAÇÕES S.A. | Investor Relations
Commitments for 2009
Top of Mind
Strengthening
Preference
the Position
ARPU
Growth
in Value Revenue Growth
Back to
double digit in 2H
Service Revenue Share Maintain #2
Operating cash flow
Positive
(EBITDA – CAPEX)
15
17. TIM PARTICIPAÇÕES S.A. | Investor Relations
4Q08 Results
Macro Scenario & TIM’s Fundamentals
TIM’s Re-launch Plan
Historical Data
16
20. 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.timpartri.com.br
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
19
