2. 2TIM ParticipaƧƵes ā Investor Relations
Disclaimer
Financial results are presented disconsidering
impacts from IFRS 9, 15 and 16 adoption, unless
otherwise stated.
This presentation contains declarations that
constitute forward looking statements
regarding the intent, belief or current
expectations of the customer base, estimates
regarding future financial results and other
aspects of the activities.
Analysts and investors are cautioned not to
place undue reliance on those forward looking
statements, which speak only as of the date of
this presentation. TIM Part undertakes no
obligation to release publicly the results of any
revisions to these forward looking statements.
Such forward looking statements are not
guarantees of future performance and involve
risks and uncertainties, and actual results may
differ materially from those projected as a
result of various factors.
Institutional Presentation | 3Q19
3. 3TIM ParticipaƧƵes ā Investor Relations
Agenda
ABOUT TIM
MARKET OVERVIEW
INFRASTRUCTURE
STRATEGY AND POSITIONING
OPERATING EVOLUTION
FINANCIAL EVOLUTION
OUTLOOK
04
10
22
30
37
43
49
TIM.
READY FOR
THE FUTURE.
Institutional Presentation | 3Q19
5. 5TIM ParticipaƧƵes ā Investor Relations
Challenger with relevant role in the telecom sector
ā #2 in Mobile Service Revenues
ā Operator with National Presence
ā Best and Wider 4G Coverage
ā #1 in Prepaid, despite the transformation in the customer base
ā >90 thousand km of Fiber optical Network throughout the country
MOBILITY
ā IoT: pioneer in Agribusiness vertical solutions, connected car and value added
services
SOLUTIONS
ā >500k Residential Broadband Clients
ā 100% of the Base with High Speed (>34 Mbps)
ā Presence in 20 cities with FTTH coverage
ā 1,9 MM Homes Passed with FTTH
ā Residential Broadband offered through Mobile Network
RESIDENTIAL
~R$ 30 billion market
capitalization
Institutional Presentation | 3Q19
6. 6TIM ParticipaƧƵes ā Investor Relations
2018 financial highlights show strong execution
6
R$ 17.1 Bi
Net Revenue
(+4.7% YoY)
R$ 6.6
Bln
Highest EBITDA1
in TIMās history
(+10.3% YoY)
38.5%
Highest EBITDA
margin2 in the
market
+R$ 2.9
Bln YoY
Operational Cash
Flow3
R$ 392
MM
TIM Live Revenue
(Fixed Broadband)
(+38.4% YoY)
(1) Normalized; (2) Normalized, Among Top 5 Players in the Telecom Market; (3) Ex-licenses; (4) Financial KPIs presented on Pro-forma basis, excluding IFRS 9,
15 and 16 impacts.
Institutional Presentation | 3Q19
7. 7TIM ParticipaƧƵes ā Investor Relations
UNIQUE TELCO COMPANY LISTED ON
THE NOVO MERCADO
82%
8%
10%
Adopted
Partially adopted
Not adopted
SHAREHOLDERSā STRUCTURE COMMITTEES TO REINFORCE AND
GUARANTEE SOLID CORPORATE
GOVERNANCE
10 members
(4 independents)
3 members
(3 independents)
3 members
(3 independents)
3 members
5 members
(2 independents)
7 members
ā Equal rights: vote, dividends and tag
along
ā Higher liquidity
ā Single class of share (ordinary shares)
ā Greater independence of Board of
Directors (at least 20%)
ā Strict disclosure policy
ā Member of ISE for 11 years
Shareholdersā structure and highest level of corporate governance
Corporate Governance Form1
(1) Not considering 5 items non applicable to TIM; (2) According to EY 2018 report.
vs 65% on
average2
24%
41%
35%
Institutional Shares
Brazil
USA
Rest of World
Telecom Italia S.p.A.
Telecom Italia
Finance S.A.
TIM Brasil Serv. E
Part. S.A.
Minority
TIM ParticipaƧƵes
S.A.
TIM S.A.
100%
100%
67% 33%
100%
ā 40% of independent members: 2x of
required
ā 20% of female representation: 3x B3-Novo
Mercado average
General Assembly
Board of Directors Fiscal Council
Statutory Audit
Committee
Compensation
Board
Control and Risk
Board
Statutory Board of
Officers
Institutional Presentation | 3Q19
8. 8TIM ParticipaƧƵes ā Investor Relations
(since 2013)
SUSTAINABILITY IN BUSINESS
ISO 14001 Environmental Certification for
Management and Operation Network
process (1st Brazilian telco) and ISO 9001
Quality Certification for Billing and
Management Network processes
Commitment to corporate social responsibility
MAIN PROJECTS
MISSION: To create and strengthen resources and strategies for
the democratization of science, technology and innovation that
promote human development in Brazil, with mobile technology as
one of its main enablers.
ā + than 700,000 people involved
ā Partnership with 3 Ministries: MINC, MEC e MCTIC
ā Present in ~ 500 cities and 26 states (+DF)
ā 500,000 students, 4,000 Public Schools and 16,000 teachers
GARATEA-ISS
INSTITUTO TIM-OBMEP
SCHOLARSHIP
PRINCIPLES AND
STRATEGIES
Education Work Application Inclusion
Incentive in renewable energy sources, approximately 29% of the
company's electricity consumption performed in 1Q19.
Self-generation: 6 Hydroelectric Generating Centers (5 in Minas Gerais
and 1 in SĆ£o Paulo); 1 Biogas Power Plant (Methane burning from landfill)
ā Energy purchase: Free energy market
GRI 302-1 Standard
Joined UN Global
Compact in 2008
Member of ISE (Corporate
Sustainability Index) for
11 consecutive years
Member of ICO2
(Carbon Efficient Index)
for 7 years
Member of CDP (Carbon
Disclosure Project), responding
Investor and Supply Chain
questionnaires, since 2010
2018
Sustainability
Report based on
GRI Standard
GHG Inventory
verified by 3rd
Part: Gold Stamp
ACADEMIC WORKING
CAPITAL
Institutional Presentation | 3Q19
9. 9TIM ParticipaƧƵes ā Investor Relations
Milestones: Innovation DNA
Start-up
1998
Beginning of Long
Distance Services
2003
The end of differentiated
call tariffs (MTR) between
operators
2015
GSM launch
National Presence
2002
3G and Mobile
BroadbandLaunch
2008
Infinity and Liberty
Leadership in national LD
Intelig Incorporation
2009
AES Atimus Acquisition
Migration to Novo
Mercado
2011
4G License Acquisition ā
2.5GHz
Launch of Live TIM in
SP
2012
Launch of InstitutoTIM
2013
4G License Acquisition ā
700MHz
TIM Live reaches 100
thousand customers
2014
New Positioning
& New brand
2016
Comercial and financial
turnaround
2017
TIMLIVE / Fiber/WTTx
Digitalization
2018
5G Trials
TIM Live reaches 500 thousand
customers
2019
Institutional Presentation | 3Q19
12. 12TIM ParticipaƧƵes ā Investor Relations
Brazilian population by social class
The consumers still feels the impact from past years crisis,
influencing the sector dynamics
During the past year, class B decreased, while classes D/E
increased
A
B
C
DE
5
MM
44
MM
101
MM
60
MM
2.5%
21.0%
48.1%
28.5%
Source: IPC Maps 2019 and 2019/ABEP 2019, Worlddata (2018), Exchange rate as of October 11st, 2019 (R$/US$ 4,11), IBGE, BACEN, FGV.
Average
income
Benchmark
countries
6,9 6,5
12,0 11,6
Unemployment Rate
(% in the last quarter of the year)
39,6
43,8
46,3
42,4 42,7
Household Debt
(%, EOP)
2012 14 16 1813 15 17 3Q19 2012 14 16 1813 15 17 Sep-19
106,1
86,4
73,4
93,0
Consumer Confidence
(0-200)
104,5
86,9
78,4
96,1
Business Confidence
(0-200)
> 100 = optimism > 100 = optimism
2012 14 16 1813 15 17 Sep-19 2012 14 16 1813 15 17 Sep-19
(US$ 6.262)
(US$ 4.872)
(US$ 3.203)
(US$ 2.596)
(US$ 1.681)
(US$ 1.137)
(US$ 959)
(US$ 804)
(US$ 711)
(US$ 299)
(US$ 217)
(US$ 151)
US$ 6.217
US$ 1.373
US$ 426
US$ 176
US$ 734
Institutional Presentation | 3Q19
13. 13TIM ParticipaƧƵes ā Investor Relations
Brazilian market is relevant globally with room for ARPU growth
(1) Selected countries.
Source: Merrill Lynch ā Global Wireless Matrix 2T19 (1Q19 data).
207
226
277
409
925
1.570
Russia
Brazil
Indonesia
USA
India
China
5th
Mobile Customer Base Ranking
(MM)
16,6
19,6
20,2
58,1
129,6
174,2
Brazil
Germany
Korea
Japan
China
USA
9th
Mobile Service Revenues Ranking
(US$ Bln / year)
107%
154%
170%
172%
180%
181%
Brazil
Portugal
South Africa
UAE
Austria
Finland
29th
Mobile Penetration Ranking
(MM)
6,1
29,7
35,2
35,6
36,2
39,5
Brazil
Qatar
Norway
USA
Switzerland
Canada
35th
Mobile ARPU Ranking
(US$ / mo)
0,6%
0,7%
0,8%
0,8%
0,9%
1,3%
France
USA
Brazil
Japan
Colombia
South Africa
19th
Mobile Wallet Share1
(Mobile ARPU / per capita GDP)
Institutional Presentation | 3Q19
14. 14TIM ParticipaƧƵes ā Investor Relations
New consumer habits reinforce data service as essential,
especially over mobile network
3%
56%
40%
Internet users by device
Only computer
Only mobile
Both
+7 p.p
A/A
24%
10%
63%
3%
Internet users
Only Wi-Fi
Only mobile
Both
Don't know
73%
96%
66% 59%
37%
27%
6%
Whatsapp Facebook Youtube Instagram Twitter
Time spent per day
2Āŗ3Āŗ2Āŗ 2Āŗ
(Global ranking position)
2Āŗ Internet ā 9h29m
2Āŗ Social Network ā 3h34m
Social network penetration
(% population)
50%
64%
71%
2017 2018 2019
38%
20%
Movies and series Music
Paid streaming and car app users
(% of smartphone users)
+21 p.p.
Source: We are Social, Mobile Time, Statista.
Institutional Presentation | 3Q19
15. 15TIM ParticipaƧƵes ā Investor Relations
Traditional services have been losing relevance in this new
framework and internet has been gaining prominence
Source: Anatel.
25% 27% 31% 34% 36% 37%
42% 44%
2011 2012 2013 2014 2015 2016 2017 2018
Fixed Broadband Penetration
(% of households)
16%
32%
26%
26%
< 2 Mbps
2 - 12
12 - 34
> 34
Fixed Broadband Connections Speed
31.2 MM
lines
31%
47%
56%
66%
71% 74%
2011 2012 2013 2014 2015 2016 2017 2018
Mobile Internet Users
(% of >10 years population)
21%
25% 28% 29% 28% 27% 26% 25%
2011 2012 2013 2014 2015 2016 2017 2018
Pay TV Penetration
(% of households)
17.5 MM
accesses
69% 69% 69% 67% 64% 61% 58%
53%
2011 2012 2013 2014 2015 2016 2017 2018
Fixed Voice Penetration
(% of households)
37.5 MM
lines
Institutional Presentation | 3Q19
16. 16TIM ParticipaƧƵes ā Investor Relations
Change in Market structure combined with new consumption
habits resulted in a transformation in the base profile
197 199 201 203 204 206 208 209
123% 131% 135% 138% 126% 118% 115% 110%
2011 2012 2013 2014 2015 2016 2017 2018
Mobile Penetration
Population (MM) Penetration
2,03 2,00 1,96 1,94
1,73 1,64 1,54 1,44
2011 2012 2013 2014 2015 2016 2017 2018
SIM Cards per Unique User
(Unit)
0,42
0,36 0,32
0,24
0,16
0,10 0,06 0,03
2011 2012 2013 2014 2015 2016 2017 2018
MTR Evolution
(R$ / min)
(1) Human Postpaid (ex-Data, Modem + M2M).
Source: Anatel, CETIC.
The maintenance of a high interconnection tariff
pushed the ācommunity effect (on-net)ā through
the possession of multiple SIM cards.
Mobile market has been experiencing organic
growth in total unique users.
Penetration is decreasing due to the reduction of
total SIM cards: weakening of the ācommunity effectā
due to the decrease in ITX tariff (off-net reduction)
and dissemination of communication apps.
SIM consolidation despite the growing number of
mobile users.
198 211 212 213
185 165 149 130
36 37 44 51 56 62
70 77
2011 2012 2013 2014 2015 2016 2017 2018
Prepaid Human Postpaid
Mobile Base per Segment
(MM)
Postpaid base already represents ~50% of unique
users, besides that >60 MM Brazilians are in the
credit bureau blacklist.
229 MM
SIM Cards
144 MM
people
Institutional Presentation | 3Q19
115 124 130 137 139 138 142 144
69%
74%
76%
79% 80% 79% 80% 80%
2011 2012 2013 2014 2015 2016 2017 2018
Unique user >10 years (MM) Penetration
Unique User Penetration
17. 17TIM ParticipaƧƵes ā Investor Relations
Three major players working in integrated manner, TIM with
relevant performance in mobile and selected approach in broadband
Integrated Pure
Regional / Niche
ISPs
MVNOs
Selected
broadband
(Mobile)
(Pay TV)
Acquired
4-play
(In JR)
Institutional Presentation | 3Q19
18. 18TIM ParticipaƧƵes ā Investor Relations
51% 52% 54%
49% 48% 46%
119,3 118,5 116,9
2016 2017 2018
Mobile Fixed
60,7
61,8
62,8
2016 2017 2018
Market revenue dynamic indicates mobile growth, and highlights
TIMās evolution
(1) All: on Pro-forma basis, excluding IFRS 9, 15 and 16 impacts (2014-18); (2) TIM, Vivo and Oi: with IFRS 9 and 15 (1H18, 2019); (3) AMX: with IFRS 9, 15 and 16
(2019).
Source: Operatorsā Earnings Releases.
20,9 19,7 18,5
2,8 2,3 1,9
29,3 29,4 30,0
34,6 35,6 35,7
12,3 13,1 13,9
2016 2017 2018
13,8 13,0 12,0
5,5 4,4 3,5
17,6 17,8 19,2
40,1 41,1 40,9
23,0 23,8 24,4
2016 2017 2018
Total Services Net Revenues Share
(%)
Mobile Service Net Revenue Share
(%)
Nextel
TIM
Oi
Claro
Vivo
Nextel
TIM
Oi
Claro
Vivo
Market | Total Services Net Revenues
(R$ MM)
Market | Mobile Service Net Revenues
(R$ MM)
Institutional Presentation | 3Q19
-1.0%
CAGR
+1.7%
CAGR
53% 55%
47% 45%
86,9 86,1
9M18 9M19
46,2
47,5
9M18 9M19
18,9 17,4
1,9 2,0
29,7 30,4
35,7 36,0
13,8 14,2
9M18 9M19
12,2 11,6
3,6 3,6
18,6 19,7
41,0 40,8
24,6 24,3
9M18 9M19
19. 19TIM ParticipaƧƵes ā Investor Relations
Mobile and broadband market are competitive, but have been
showing evolution towards more rationality. Changes in market
structure may reinforce this path
0%
3%
2%
24%
9%
32%
22%
32% 25%
49%
29%
29%
26%
10%
31%
17%
16%
32%
5%
30%
1%
Others
(1) Claro considers participation of Nextel in the SMP; (2) Mobile and Pay TV are considering Aug/19 results.
Source: Anatel.
Nextel
Institutional Presentation | 3Q19
HHI Index
0 0,25 0,5 0,75 1
0 0,25 0,5 0,75 1
0 0,25 0,5 0,75 1
0 0,25 0,5 0,75 1
Level of competitiveness
+ -
(Market Share | Sep-192)
21. 21TIM ParticipaƧƵes ā Investor Relations
Regulatory updates promoting major changes in the sector
Anatel and Relevant Regulators
4 MAIN REGULATORY
CHAPTERS
ā License and Spectrum
ā Competition
ā Quality and Consumer Protection
ā Universalization Policy and
Broadband
ORGANIZATION
Anatel is subject to special authority regime and bound to the
Communication Ministry, with the function to regulate the Brazilian telecom
sector (LGT, Art. 8Āŗ)
Independent Antitrust Agency (coordination with Anatel to sectoral
matters)
Important in the intersectoral regulation (infrastructure)
Tribunal de Contas da UniĆ£oĀ¹: surveillance of Anatelās operating activities;
final instance on matters ārelated to costsā (RF auctions, liquidation
agreements etc.)
Independent system for consumer protection on national, regional and local
levels; not integrated entities that work in parallel (and overlapping) to
Anatel
~1,500
Public
agents
~5,000
Control items
26 Regional
Offices
331
Resolutions
in force
Recent important changes
Law nĀŗ 13.879/2019 (PLC 79)
(presidential approval on 10/04/2019)
Fixed
ā Option to migrate from concession to authorization model
ā Additional broadband investment plan: balance of concession
exchange to authorization, reversible goods and public politics area
Mobile Spectrum
ā Successive renewals of the authorization
ā Possibility of conversion of the renewal fee for investments
ā Radiofrequency transferal between operators
PGMUĀ³ (2018)
ā Investment of the balance generated with the flexibilization of PGMU
(Plano Geral de Metas de UniversalizaĆ§Ć£o) rules in 4G network
expansion projects
TACĀ² āConduct Adjustment Term (Sep/19)
ā First agreement approved with a major operator, with a reference value
of R$ 627 million, to generate improvements in three operating pillars:
client experience, quality and infrastructure.
SPECTRUM CAP (Nov/18)
ā <1GHz frequencies: stablished the limit of up to 35% concentration
ā Between 1GHz and 3GHz bands: up to 30%
In both cases the participation can be extended up to 40%, with
conditioning
(1) Government Accountability Office.
(2) Agreement for Conduct Adjustment ā agreement that operators can reach with Anatel to substitute fines for investment in less favored regions.
(3) Universalization Plan.
Institutional Presentation | 3Q19
23. 23TIM ParticipaƧƵes ā Investor Relations
Evolving proposition for consistent and sustainable growth
Quality
Price
2017-
2018
2016
Today
2016-2018 Turnaround Strategy
Quality
Price
2017-
2018
2016
2019-21
2019-2021
2019-21 Consolidation Strategy
2008
2012
Quality
Price
2008-2016
Accelerate the Digital Transformation and increase Customer Experience with
better Quality and Value Proposition, leveraging on 2nd wave of Mobile Upselling,
FTTH and other sources of revenues (e.g. B2B, digital services).
Institutional Presentation | 3Q19
24. 24TIM ParticipaƧƵes ā Investor Relations
TIM is well positioned to attend the new demand, with no legacy
to defend
41,2
39,6
37,5
34,8
2016 2017 2018 Sep-19
Fixed Line Base
(MM)
18,8
18,1
17,5
16,3
2016 2017 2018 Aug-19
Pay-TV Base
(MM)
62,1
69,7
77,5
80,8
2016 2017 2018 Aug-19
Human Postpaid Base
(MM)
26,9
28,9
31,2
32,7
2016 2017 2018 Sep-19
Broadband Base
(MM)
-6.0%
CAGR
Fixed-mobile
substitution
Traditional-OTT
ssubstitution
Source: Anatel.
+16.8%
CAGR
Market
+10.3%
CAGR
+11.9%
CAGR
Market
-5.1%
CAGR
Market
+7.6%
CAGR
+23.5%
CAGR
Market
Institutional Presentation | 3Q19
25. 25TIM ParticipaƧƵes ā Investor Relations
1
Mobile Post Paid Consumer (āthe Controle waveā)
ā¢ Growth based on a Ā«Mobile ChallengerĀ» approach pushing migration from
prepaid and upselling
ā¢ Leverage the benefits of 4G coverage leadership
ā¢ Customer long term relationship driven by loyalty initiatives
3 B2B & Residential BB
ā¢ Fiber deployment acceleration (backbone, backhaul and FTTH), with FTTH
offer in selected regions
ā¢ Opportunity to gain relevance in overall business Revenues leveraging on:
o Revision of Value Proposition
o More Convergent approach offering E2E solutions
o Increase in efficiency and sales productivity
2
4 Digital Provider
ā¢ New revenue streams: Enable innovative services that meet customers
needs
ā¢ Customer Experience: Digitalization of customer care process
ā¢ Time to Market: Support current business model with digital capabilities
Mobile Pre Paid
ā¢ Offer simplification to improve customer experience with continued
evolution of digital channels
Revenues
B2B & Residential BB
2
3
Mobile Post Paid
4 Digital Provider
Timing
Market
Consolidation
Illustrative Graph.
1 Mobile Pre Paid
Opportunities: TIM Brasil Growth Waves
Institutional Presentation | 3Q19
27. 27TIM ParticipaƧƵes ā Investor Relations
B2B (mobile + fixed): penetrate clients through added value
solutions, becoming a business partner
ā¢ Increase B2B investment to turnaround
results over the next three years
ā¢ Increase efficiency/productivity
ā Revise back office and support functions
processes
ā Review client caring model (digital)
Vision for B2B segment
(Revenue Growth)
Top
Enterprise
SMB
ā¢ Complement top clients offer and portfolio
ā¢ Increase sales force productivity and size
ā¢ Increase penetration on Brazilian Top
Companies
ā¢ Explore new opportunities to sell more
aggregated value solutions (e.g: IoT/Agro)
ā¢ Recover growth in Fixed segment
Levers Implications
ā¢ Specify value proposition for Enterprise
segment
ā¢ Define go-to-market, addressing channel mix
(direct vs indirect) optimization
ā¢ Explore convergence opportunities
ā¢ Optimized geographic approach to maximize
productivity
ā¢ Revise value proposition of SMB segment
ā¢ Focus commercial effort in fixed products and
uplift in sales force
ā¢ Increase digital channels on sales mix
2018 2021e
25%
ā¢ Market share
ā¢ Share of wallet
ā¢ Market share
ā¢ Share of wallet
ā¢ Market share
ā¢ Share of wallet
Institutional Presentation | 3Q19
28. 28TIM ParticipaƧƵes ā Investor Relations
Infrastructure: capitalizing on existing infrastructure and
expanding FTTH
Residential Broadband Penetration - Brazil
ā¢ Broadband Penetration at 45% of HH; Ultra-
BB Penetration only 12% of HH
ā¢ 96% of cities (~50% pop.) have very low BB
penetration (~25%)
ā¢ 16% of BB connections have speeds < 2Mbps
Relevant opportunity to capture a strong
unserved demand for Residential
Broadband and Ultra-BB connectivity
0-20%
40-60%
>60%
20-40%
Main trends
ā¢ ~3x participation on total revenue
Capitalize
current
assets
Expansion
ā¢ Focus on execution excellence
ā¢ Optimize go-to-market, exploiting
existing infrastructure
ā¢ Leverage fiber coverage from mobile
network (FTTS ā fiber to the site)
ā¢ Shift in product mix (growth coming
from FTTH) leading to a bigger ARPU
Levers
ā¢ Expand FTTH to several new cities in
the next 3 years using cluster approach
76,0
2018 2019e 2020e 2021e
FTTX Customer Base (ā000)
TIM Live ARPU (R$/month)
Geographic Expansion: 22 active
municipalities
Manaus ā Oct-18
Salvador ā Jul-18
Lauro de Freitas ā Feb-19
Feira de Santana ā Jul-19
GoiĆ¢nia ā Aug-18
Aparecida de GoiĆ¢nia ā
Oct-18
AnĆ”polis ā Jun-19
Rio de Janeiro ā Oct-12 (FTTC)
Nov-17 (FTTH)
SĆ£o GonƧalo ā Jun-18
NilĆ³polis ā Aug-18
Duque de Caxias ā Nov-12 (FTTC) Jun-19
(FTTH)
Nova IguaƧu ā May-14 (FTTC only)
SĆ£o JoĆ£o de Meriti ā Aug-15 (FTTC only)
SĆ£o Paulo ā May-12 (FTTC) Nov-17 (FTTH)
MauĆ” ā Apr-18
PoĆ” ā Aug-18
Suzano ā Jul-18
+3 ā Jun-19 | +1 ā Aug-19
0
400
800
1200
2018 2019 2020 2021
FTTC
FTTH
High-single to Low-Double
digit growth (CAGR)
ā¢ ~2.5x customer base growth
NOTE: Ultra BB: > 34 Mbps / very low BB penetration: < 34Mbps.
SOURCE: Anatel December 2018, IPC Maps 2018.
Institutional Presentation | 3Q19
29. 29TIM ParticipaƧƵes ā Investor Relations
New revenue streams: Enable
innovative services that meets
customers needs
Customer Experience: Improve
digital customer service, acquiring
capabilities, customer attendance and
internal processes and systems
Time to Market: Support current
business model with digital capabilities
ā¢ New revenues opportunity from being a
Platform provider (analytics, BD, mobile
advertising, etc.)
ā¢ Content offer aggregation to support
Mobile + Fixed service revenue growth
ā¢ Increased role in IoT growing ecosystem
(beyond connectivity)
~1
Addressable market by 2021
>30bln
Reais
mln
lines
Digital: key strategic pillars to improve customer experience and
exploit new revenue streams
PARTNERSHSIP
ACCELERATION
Open Innovation. API
based development.
DIGITAL FIRST
Works across all
digital devices and all
channels
CUSTOMER ORIENTED
Continuous Customer
Feedback (closed loop)
AGILE DRIVEN
Agile methods and
practices integrated into
the platform
COGNITIVE
Data-driven
architecture providing
actionable information
and automation
ANALYTICS DRIVEN
Customers personalized
experience, marketing,
campaign, NBA
DIGITAL CHANNELS
Evolve platforms and
encourage usage with
offer benefits
TRADITIONAL
CHANNELS
Improve IVR retention
with evolved platform
Institutional Presentation | 3Q19
35. 35TIM ParticipaƧƵes ā Investor Relations
TIM Live
Exploring accelerated growth opportunities: Residential
broadband
306
392
467
507
2016 2017 2018 1H19
Broadband Base
(Mil)
FIBER
Internet (WTTx)
Ultra
Ultra Fibra
speed from
40 mbps
to 60 mbps
speed from
100 mbps
to 2 gbpsallowance of 30 GB
to 80 GB
Plans
Value-Added
Services Protection
+ VoD
Partnerships
+ Content (VoD, TIM
Banca, Ensina)
+ Power Wi-Fi
57,9
67,3
76,0 80,9
2016 2017 2018 9M19
TIM Live Fiber ARPU
(R$ / mo, Pro-forma1)
22 cities166 cities
+25.2%
CAGR
+14.3%
CAGR
Institutional Presentation | 3Q19
(1) ARPU on Pro-forma basis, excluding IFRS 9, 15 and 16 impacts.
36. 36TIM ParticipaƧƵes ā Investor Relations
Not Only B2C: Evolving from Connectivity to Value-Added Service
and Solutions Provider
Porto Seguro Conecta
ā New M2M customer base: vehicle/fleet
tracking and financial services (POS);
ā New SIM card management platform:
upselling opportunity for value-added
services.
ConectarAGRO
ā New farm covered: Amaggi;
ā Partnership to promote 700MHz 4G in
countryside;
ā Implemented solutions:
Connected Car
ā Development of agreements with car
manufacturers;
ā Connected sensors to monitor, protect, and
maintain the car;
ā Management using new e-SIM platform;
ā Upselling opportunity for human lines and
VAS.
2,5
0,81,8
3,3
2Q18 2Q19
M2M Base
(MM)
+77.3%
Porto
Conecta
EM CONSTRUĆĆO
Institutional Presentation | 3Q19
41. 41TIM ParticipaƧƵes ā Investor Relations
New Network Initiatives
5G: Steps towards commercial launch
ā 5G tests on real network in the 3.5GHz frequency
ā Registered download speeds greater than FTTH (>1Gbps) with
more efficient capacity distribution between users
ā Edge computing (decentralization) and core virtualization for
better service responsiveness
Future
Increasing assets efficiency
ā MOU with Vivo to discuss sharing opportunities aiming quality
improvement and CAPEX / OPEX efficiency
ā 2G network in a single grid model
ā 4G network infrastructure in 700Mhz band ā cities with
<30.000 inhabitants (could be expanded)
ā Other frequencies and technologies
ā Efficiency and cost reduction regarding Network
Operations and Maintenance
ā Use of 5G technologies to improve 4G capacity: massive MIMO
ā Greater spectrum capacity: 2 to 3x improvement in live
tests
ā 4th operator in the world to deploy this approach
Today
Institutional Presentation | 3Q19
42. 42TIM ParticipaƧƵes ā Investor Relations
5G Protagonism: Exploring Applications and Building a Readiness
Ecosystem to the Technology Launch
Applications
ā Network virtualization: 37
data centers until 2021
ā 5G-ready equipment:
network migration through
software update
ā RFP Process: 4G and 5G
vendors for the next three
years
Network
Preparation
ā Trials on real network: all
vendors involved (Huawei,
Ericsson, Nokia)
ā Trials in stores: engaging
customers with 5G
technology in >10 stores
Trials
ā 5G Auction:
expected for
2H20, conditions
still under
discussion by
Anatel
Regulatory
IoT
MOOC
Telemedicine
VR
360Āŗ
Streaming
Connected
Band
Drones
Games
GB
Rate
Smart
Cities
Augmented
Reality
Industry
4.0
FWA
Institutional Presentation | 3Q19
45. 45TIM ParticipaƧƵes ā Investor Relations
Efficiency plan leveraged by digitalization initiatives
2,2
0,7
1,0
2017 2018 2019 2020 2021
OPEX Efficiency
(R$ bln, Pro-forma1)
Plan Act
Our efficiency program
forecasts 50% of the
savings related to
digitalization initiatives.
Institutional Presentation | 3Q19
(1) Financial KPIs on Pro-forma basis, excluding IFRS 9, 15 and 16 impacts.
46. 46TIM ParticipaƧƵes ā Investor Relations
Leverage on Efficiency Plan to maintain OPEX below inflation1
throughout the plan period
Caring (Digital Interactions) E-Billing (% on total invoice)
2021e2018
+12MM
2018 2021e
+22p.p.
Digital Top Up
(% on Total Top Ups)
2018 2021e
+12p.p.
2018 2021e
+31p.p.
E-Payment
(% on total payments)
Accelerate Digital Transformation Initiatives
ā¢ Customer facing: digital interactions, e-billing, e-payment,
customer acquisition, recharges, IVR
ā¢ Internal process and systems: automation of support
processes, upgrade and strengthen IT Architecture
ā¢ Accelerate the adoption of automatic debit in stores
Sustain and Develop Traditional Initiatives
Description ā Plan 2019-21
Risk/PDD
ā¢ Create new credit models
ā¢ Implement new fraud model and collection channels
Legal
ā¢ Re-structure multi-functional team to mitigate entries of
new lawsuits
ā¢ Introduce variable incentives scheme for the external offices
HR ā¢ Assess internalization vs. outsourcing
Purchasing ā¢ Review purchasing practices for key categories
Energy
ā¢ Cleaner electricity matrix and less exposed to the regulated
market movements and regulations
ā¢ Put in operation the first biogas power plant of solid urban
residue
Efficiency Plan 2019-21: ~R$ 1.2 bln
(Full plan 2017-21 R$ 2.2 bln)
Institutional Presentation | 3Q19(1) Ā¹Inflation from Focus (18th January 2019).
Source: BACEN.
51. 51TIM ParticipaƧƵes ā Investor Relations
LONG TERM TARGETS
SHORT TERM (2019)
TARGETS
Capex on Revenues:
Low 20ās
Capex:
~R$ 12.0 bln
(āā19-ā21)
ā¢ Increase cash flow from operations
ā¢ Continue with debt and tax rate
optimization
ā¢ Accelerate digitalization efficiencies
ā¢ Maintain zero-based approach and
traditional initiatives
ā¢ Improve risk management models
ā¢ Further improve mobile ARPU
ā¢ Expand Residential BB Revenues
contribution
ā¢ Tap B2B opportunity
GOALS DRIVERS
Revenue
Growth
Sustainability
Expand Cash
Generation
Improve
Profitability
EBITDA Margin:
ā„39% em 2020
EBITDA-Capex on
Revenues:
ā„20% em 2021
Service Revenues
Growth
Mid single digit
(CAGR ā18-ā21)
EBITDA Growth:
Mid to High single digit
growth (YoY)
EBITDA-Capex on
Revenues:
>15%
Service Revenues Growth
3% ā 5% (YoY)
ā¢ Additional Capex to grow fiber and
improve mobile capacity
Infrastructure
Development
TIM Brasil 2019-ā21 Targets
Institutional Presentation | 3Q19
52. Vicente Ferreira
E-mail: vdferreira@timbrasil.com.br
MĆ³vel: +55 21 98113-1400
Bernardo Guttmann
E-mail: bguttmann@timbrasil.com.br
MĆ³vel: +55 21 98113-1408
Camila Assano
E-mail: cacruz@timbrasil.com.br
MĆ³vel: +55 21 98113-4236
Lucas Carneiro
E-mail: lmcarneiro@timbrasil.com.br
MĆ³vel: +55 21 98113-1141
Guilherme Kopke
E-mail: gknascimento@timbrasil.com.br
MĆ³vel: +55 21 98113-0583
Visit our Website
ri.tim.com.br
E-mail: ri@timbrasil.com.br
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