Tim brasil results presentation 3Q17

2. 2
3Q17 Results Presentation
Investor Relations
3Q17 Highlights: Solid Trends in All Fronts
Accelerating Growth State of the Art Profitability
Customer Experience Supported
by Leadership in 4G
Net MSR
+5.8%
YoY
 Mobile Net Service Revenues accelerating
from +5% YoY in 2Q
445 509
935
1Q17 2Q17 3Q17
Postpaid Net
Adds +1.9 mln
lines in 2017
 Fixed Ultra BB (TIM Live) Net Revenues
jumping from +32% YoY in 2Q
Fixed Ultra
BB Net Adds
+70k subs in
2017
17
26 27
1Q17 2Q17 3Q17
Highest 3Q Normalized EBITDA in
TIM’s history (R$ mln)
Cities covered with 4G Pure Postpaid
Customer Satisfaction Survey¹
(1) Source: Customer Satisfaction Index (CSI) model by University of Michigan, survey conducted by CFI Group as of Jun/17
2,401
P4
P3
P1
TIM
EBITDA
Margin
37.4%
in 3Q
UBB Revs
+54%
YoY
1,527
3Q13 3Q14 3Q15 3Q16 3Q17
Total Gross Service Revenues +2.0% YoY
Total Net Service Revenues +5.9% YoY
%YoY 0.7% 6.4% 0.5%-2.7% 17.2%
Dec-16 Jul-17
3rd
1st
2x
vs. ‘16
2x
vs. ‘16

3. 3
3Q17 Results Presentation
Investor Relations
3Q16 3Q17 3Q16 3Q17
3Q16 3Q17
Improving Value Through Customer Base Transformation
Postpaid (Gross + Migration)
(lines; % YoY)
Client Generated ARPU
(% YoY)
Further Evolving in the Go 2 Market
Pure Postpaid Plans: focus on
loyalty and churn reduction
Prepaid
Postpaid
+4%
+8%
Prepaid Recurring Offers
(bundles) over Gross Adds
(% YoY)
Control Plan better value
for money at R$55 offer
Prepaid New Offer, encouraging
the recurrence :
+9 p.p.
CB Reshaping Towards Recurrence
(% of total base)
 Promotions on services
and/or handset with 12
months lock-in contracts
 ~40% of Pure Postpaid
gross comes from
customers with lock-in
contracts
1GB+ 1GB Bonus
Unlimited calls TIM-TIM
+ 100 minutes off-net
Unlimited Whatsapp
messaging
+39 p.p.
 Up-sell between Control
Plans: ~90k users to Control
R$55 in Sep/17
~70% <50%
~10%
~25%
~20% >28%
3Q16 3Q17
Postpaid
Non Recurring
Prepaid
Client Generated
Revenue Mix
>70%
<30%
Recurring Prepaid
1GB+500MB 1GB+1GB1GB
1st renewal 2nd renewal 3rd renewal
1GB+250MB
Mix of gross + migration
on R$55 plan
3Q16 3Q17
+64%
Jan Sep

4. 4
3Q17 Results Presentation
Investor Relations
746
2,401
3Q16 4Q16 1Q17 2Q17 3Q17
Further Advancing on Infrastructure
4G Coverage Evolution
(# of cities)
P1
P3
P4
301
Cities with
4G 700MHz
177
Cities with
VoLTE
Leadership in
4G coverage
86% of
urban pop
TIM1st in Latam and
unique operator
in Brazil
Network Data Usage
(% of data traffic by technology)
17,7859,858 +80%
4G
Sites
30%
51%
70%
49%
3Q16 4Q16 1Q17 2Q17 3Q17
4G 2G + 3G
65%
79%
3Q16 4Q16 1Q17 2Q17 3Q17
P1
P3
P4
TIM
Best 4G Coverage leveraged by 1.8GHz refarming and Leadership in LTE 700MHz
Brazil
(Ookla Speedtest;% of tests in 4G Network)
77%
88%
3Q16 4Q16 1Q17 2Q17 3Q17
79%
90%
3Q16 4Q16 1Q17 2Q17 3Q17
P1
P3
P4
TIM
P1
P3
P4
TIM
São Paulo
(Ookla Speedtest;% of tests in 4G Network)
Rio de Janeiro
(Ookla Speedtest;% of tests in 4G Network)
75.5%* of traffic
generated by 4G
Devices
*
* 3Q17 until Aug/17

5. 5
3Q17 Results Presentation
Investor Relations
9M16 9M17 Sep/16 Sep/17 Sep/16 Sep/17 Sep/16 Sep/17
Digital Transformation Across the Company to Improve CEX and
Process Efficiency
IT Initiatives: Infrastructure & Digital Capabilities Enablers
helping to reduce costs and accelerate revenues
Digital Evolution of Customer Journey
Sales in Digital Channels
(# of digital activations)
+3x
Control
Recurring
Prepaid
Improving Trends for
Customer Satisfaction¹
#1 General Satisfaction
#1 in Pure Postpaid
#1 in Prepaid
Digital Caring
Process Efficiency
150 Projects
Network
Planning SQM
Big Data
API
TAX
Management
+2.6x +23p.p
AI
(1) Source: Customer Satisfaction Index (CSI) model by University of Michigan, survey conducted by CFI Group as of Jun/17
Unique Users of
App or Website
Digital Interactions/
Total interactions
SALES & ACTIVATION
CUSTOMER MGMT &
CARING
BILLING PAYMENT
E-Billing
(# of online invoices)
E-Payment
(credit card, bank account and internet)
+15%
Sep/16 Sep/17
+13%
Billing
Platforms
Procurement
to Payment
9M16 9M17
+80%

6. 6
3Q17 Results Presentation
Investor Relations
3Q16 3Q17
57
29
7
-27
P4
P3
+26%
User Base
(‘000; %YoY)
Net Revenues
(R$ mln; %YoY)
Occupation Rate
(% of ports used)
SAC/ARPU
(months; %YoY)
TIM Live: Growing its Importance Every Quarter with Solid Results
+9p.p.+54% -14%
+16%
ARPU (new clients)
(R$; %YoY)
ARPU (user base)
(R$; % YoY)
+27%
Net Promoter Score
(%; Jul 17; Bridge Research)
Netflix ISP Speed Ranking
(Mbps, Sep 17)
Growing at robust double digit rates Efficient approach guaranteeing profitability
Extracting value with new portfolio:
upselling and pricing Leadership in customer experience
2.14
2.39
2.88
3.00
3.09
OI
Algar
Vivo Fibra
net virtua
Live tim
P6
P4
P3
P1
P1
Leader 33x
in the last
36 months
TIM Live
299
376
3Q16 3Q17 3Q16 3Q17 3Q16 3Q17
3Q16 3Q17 3Q16 3Q17
+36% YoY
Addressable
HH

7. 7
3Q17 Results Presentation
Investor Relations
+8.9% -17.9% -14.0% +7.0% -15.3%
Consolidating Revenue Improvements with More Focus on Bundle
Offers
Total Mobile ARPU
(R$; % YoY)
Total Net Revenues Breakdown
(R$ bln; %YoY)
+4.7%
18.4
20.5
3Q16 3Q17
Revenues Mix from Bundled1 Offer
(% of TIM Client Generated Revenues )
Client Generated2 Revenue Growth
(% YoY)
-1.4%
0.0%
4.8%
7.2%
8.0%
3Q16 4Q16 1Q17 2Q17 3Q17
Client Generated²
+11%
Bundle
7th quarter of
ARPU uplift
3.9
4.1
+8%
(1) Bundle Revenues = Revenues from postpaid packages (off-bundle services not included) and recurring prepaid offers
(2) Client Generated Revenues = MSR excluding interconnection and other revenues
Pure
Postpaid
Control
Postpaid
Prepaid
Recurring
Prepaid
Non-Recurring
Improving Revenue Predictability and
monetizing Customer Base
Upgrade
Loyalty
Upsell
Upsell
Loyalty
Upgrade
Upsell
Upgrade
Upsell
0%
25%
50%
75%
100%
3Q16 4Q16 1Q17 2Q17 3Q17
Bundle
No-Bundle >60%

8. 8
3Q17 Results Presentation
Investor Relations
469 444 470
967 952 960
1,050
924 926
202
232 200
1Q17 2Q17 3Q17
Opex Dynamics: Efficiency Continues to be a Driver
COGS
Traffic
(Network + ITX)
Marketing
(Selling & Market
+ Bad Debt)
Process
(Personnel + G&A + Other)
Normalized Opex Breakdown Analysis
(R$ mln; %YoY)
2,688
2,552 2,557
-
-4.3%
+7.7%
-13.7% COGS
• Reduction in volume due to lower sales to prepaid customers, postpaid
users represents ~80% of total sales (+ ~35% YoY).
• Lower acquisition price from vendors.
• ITX: lower cost after MTR (VU-M) cut partially offset by off-net traffic
growth.
• Rental & Power: growth driven by network expansion and inflation.
• Network: leased line price cut after Res. 639 (last quarter of
“comparability” benefit) and efficiency gains thanks to “zero leased lines”
project.
• Higher postpaid Customer Base and sales generating increase in
customer management opex (customer care, billing and collection, bad-
debt) partially offset by digital efficiencies.
• Positive impact of Fistel (-11.8% YoY in 3Q17) and recharge fees in
prepaid.
• Commissioning costs growth, +10.0% YoY, due to postpaid gross adds.
Traffic
Market
Process
• Personnel (+4.1% YoY) and G&A (+2.8% YoY) grew low single digit, close
to inflation, thanks to impact efficiency program gains
• Other Operating (income) expenses, +26.4% YoY, trend impacted by
higher provisions for labor lawsuits of mainly third parties from previous
years.
-1.5% Δ YoY
Efficiency Plan Recap
(R$ bln)
Efficiency Plan Completion
(%)
R$1.1 blnR$0
2017 2018 2019
~90%1.1
1.7
-1.2
0.5
0.6
+
+
-
+
+
-
-
+
-
-

9. 9
3Q17 Results Presentation
Investor Relations
Solid EBITDA Growth Boosting Bottom Line and Cash Generated
Normalized EBITDA¹ Growth
(%YoY)
¹ Normalized for tower sales and other items
² License 700MHZ
Margin Expansion
(% Normalized EBITDA Margin)
0.5%
5.8%
8.7%
15.5%
17.2%
3Q16 4Q16 1Q17 2Q17 3Q17
Reported Net Income
(R$ mln)
184
279
3Q16 3Q17
EPS 0.08 0.12
Operating Free Cash Flow Ex-License²
(R$ mln)
511
320
213
26
-334
737
OFCF
9M16
Δ EBTIDA
(yoy)
Δ CAPEX
(yoy)
Δ WC
(yoy)
Δ Non-Recurring
Items
(yoy)
OFCF
9M17
33.4%
37.4%
3Q16 3Q17
+4 p.p.
+ 1.1bln
9M17 Normalized EBITDA up 13.9%
9M17 Normalized EBITDA Margin at 34.9%
16 quarters of YoY EBITDA margin
expansion: from mid 20’s to high 30’s
Service EBITDA Margin at 39.7% in 3Q17
and 37.1% 9M17
9M17 EBITDA - Capex of R$1.7 bln, (+2x
YoY), 14.1% on Net Revenues, (+7p.p. YoY)
~1.5x

10. 10
3Q17 Results Presentation
Investor Relations
Closing Remarks
4G Network Expansion: beating targets
411
1,255
2,401
>2,600
301
>1,000
2015 2016 Sep/17 2017e
Turnaround evolved from a “recovery”
to a “growth story”
“State of the art” profitability
considering tax burden in Brazil…
…additional profitability gains and CEX
improvements with digital transformation
Improving cash generation profile
alongside maintaining a strong
balance sheet
R$ 1.5 bln Highest
EBITDA for a 3rd quarter
R$ 190 MLNin IOE
37% 34%
29%
TIM P1 P3
3Q17
EBITDA
Margin
Benchmark
0.7x net debt/
EBITDA
R$ 1.7 bln
EBITDA- Capex
Still to come in 2017
FTTH “soft launch” in Oct/17, available in 4
neighborhoods in RJ and SP
Nº of cities
covered
 Urban pop covered (‘17YE): >90%
 Cities with VoLTE (’17YE): ~1000
LTE700
Postpaid repositioning continues: more
DATA… more CONTENT… more LOYALTY
TIM Live Expansion:
Bundle Video Offer
Double Data to Watch: