Tim Brasil results presentation 4Q17

2. 2
4Q17 Results Presentation
Investor Relations
15,387
14,720
15,474
2015 2016 2017
638
728
1,801
2015 2016 2017
Highlights: Strong Quarter to Consolidate the Turnaround
Confirming Growth Trajectory
Fixed UBB
Revs
+52.1% YoY
in 4Q+1%
+5%
Breaking the Barriers of Profitability
% of
Revs. 3.7% 4.7% 11.1%
Solid Operational and Network Results
445 509
935 1,028
1Q17 2Q17 3Q17 4Q17
3,003
TIM P2 P3 P4
All Time
High EBITDA
MARGIN
41.6%
in 4Q
All Time High
EBITDA Level
R$ 1.77 bln
in 4Q
EBITDA Growth
+13.3%
YoY
in 4Q
Net Mob
Serv Rev
+6.1% YoY
in 4Q
CONSISTENT
DELIVERY
FY17 Postpaid Net Adds + 2.9 mln
Postpaid Net Adds
mln lines
Fixed Ultra BB Net Adds
k lines
FY17 Ultra BB Net Adds 86k lines
Cities with 4G
Largest and Best Coverage
EBITDA-CAPEX
R$ mln
Net Serv Rev
+6.1% YoY
in 4Q
Net Service Revenues
R$ mln
7
16
4Q16 4Q17
+140%
+2.5x
#1 in
Net Adds
(ex-M2M)

3. 3
4Q17 Results Presentation
Investor Relations
Capturing Value Through Customer Base Transformation
Customer Base Transformation
(# of clients)
Non Recurring
Prepaid
Recurring
Prepaid
Postpaid
4Q16 4Q17
Postpaid Gross Adds + Migration
(# of clients)
Client Base Evolution
(# of mln clients)
ARPU By Offer
(R$)
 Strict and consistent
disconnection policy
 Fistel cost reduction
 Strong migration actions
 Pricing up daily offers (opportunistic
usage only) to increase attractiveness
of weekly bundle
 Encourage weekly and monthly offers
with data bonuses and multi segment
approach (i.e. voice only)
Prepaid
ARPU: Gross x Base
(# of clients)
Lock-in Over Gross Adds
Pure Postpaid
(%)
 New clients with higher ARPU
 More for more as key strategy
 Gross Adds ARPU increased
approx. 20% in the last 12M
 Reduction of 10pp in early churn
after 6 months
 More focus on loyalty (service or
handset)
 MNP still positive: +77%, 2017 x
2016.
Postpaid
Prepaid Recurring Offers (bundle)
Over Gross Adds
(%)
Control Pure Post
Base Gross
+5%
+3%
Total Daily Weekly Monthly
x2.2
x2.9
x1.6
4Q16 4Q17
+53 p.p.
+20%
23%
13%
64%
30%
26%
44%
48.5
40.8
4Q16 4Q17
13%
48%
1Q17 2Q17 3Q17 4Q17
18%
71%
4Q16 4Q17
+3.7x

4. 4
4Q17 Results Presentation
Investor Relations
75.8
85.2
>8k
>9.8k
4Q16 1Q17 2Q17 3Q17 4Q17
1,255
3,003
4Q16 1Q17 2Q17 3Q17 4Q17
Network & Quality: Strong Delivery in 2017 Supporting Competitive
Advantage
4G Coverage²: 3,003 Cities Milestone
Accomplished
(# of cities)
Network Achievements
+140%
4G Elements (e-NodeB)
11,645 20,638+77%
Backbone & Backhaul Evolution
Network Data Usage
(% of dada traffic by technology)
+12%
Sites Connected
w/ high capacity
backhaul (Fiber +
MW)
Km of Fiber
(‘000)
P2
P3
P4
Fastest LTE
700MHz
deployment
Pioneer in
VoLTE
deployment
Leadership
in 4G
coverage
916 cities
with 700MHz
(20 state capitals)
91% coverage
(3k cities)
1,200 cities
with VoLTE
(22 state capitals)
General
Satisfaction¹
1st in
pure post
Internet Use
Satisfaction¹
1st in
pure post
General
Satisfaction¹
2nd in Control
Quality Achievements
Least demanded Company in
Consumer Protection Agency
Increasing NPS YoY in pure postpaid
in recent survey¹
Above target in all ANATEL network
metrics
Highest availability
according to OpenSignal
(1) National Quantitative Satisfaction Survey ran from Sep to Dec 2017 by Bridge Research consultancy.
(2) Source: Teleco Website
34%
60%
66%
40%
4Q16 1Q17 2Q17 3Q17 4Q17
4G 2G+3G

5. 5
4Q17 Results Presentation
Investor Relations
Digital Transformation Drives Efficiency and Customer Experience
Improving
Customer
Experience
with customized
and flexible caring,
while opening
opportunities for
OPEX reduction
Digital Interactions
(My TIM App + My TIM Web)
Human Interactions
(Call Center)
2016 2017
+111%
2016 2017
-7%
Digital caring
reached
>50% of total
interactions
in 2017
Sales in Digital Channels
(Postpaid + Control)
2016 2017 2016 2017
Sales in Digital Channels
(Recurring Prepaid)
+185%
+83%
Customer
Acquisition
7% of Total Opex
Customer
Management
6% of Total Opex
Prepaid
Recharges
5% of Total Opex
2016 2017
+3.8 p.p.
Digital Prepaid Recharge Mix
(% Digital over Total)
Digital sales
doubled its
participation
over Gross
Adds in 2017
Improving
recharge
channel mix
with multi-
channel
approach and
new
partnerships
Average Recharge Ticket
(R$ by transaction)
Traditional Digital
+44%

6. 6
4Q17 Results Presentation
Investor Relations
3.12
TIM Live: Solid Performance in All Fronts
Netflix ISP Speed Ranking
(Mbps, Dec 17)
Delivering The Best Experience
P4
P5
P2
P3
User Base
(‘000; %YoY)
306
392
4Q16 4Q17
+28.2%
Three-times Champion
“Melhores Serviços 2017”
2015 / 2016 / 2017
Ranking Estadão
4Q16 4Q17
ARPU (new clients)
(R$; %YoY)
ARPU (user base)
(R$; %YoY)
FY17
ARPU
+ 16.4%
YoY
+6.8%
4Q16 4Q17
+20.3% FY17
ARPU
+ 10.7%
YoY
4Q16 4Q17 4Q16 4Q17
Occupation Rate
(% of ports used)
SAC/ARPU
(months; %YoY)
+18 p.p. -6.0%
Operating Efficiently
Net Revenues
(R$ mln; %YoY)
4Q16 4Q17
FY17
Net Revs
+ 44.6%
YoY
+52.1%
Growth supported by the best UBB Experience in Brazil
FY17
Net Adds
+ 86k
YoY

7. 7
4Q17 Results Presentation
Investor Relations
Customers Profile:
 95% lower-middle class customers
 Focus on regions with limited broad band offer
 Usage:
- 90% uses doesn’t surpass the allowance
 Before acquiring WTTX service:
- 83% did not have broadband
- 21% did not have paid TV
Portfolio: “Internet Fácil para sua casa”
Customers Profile:
 High Value Customers
 High Streaming Consumption
 Multi Connected Devices
“More for More” Offers: unlimited local calls (fixed)
TIM Live 100 Mega 100 Mbps Down
40 Mbps Up
TIM Live 150 Mega 150 Mbps Down
40 Mbps Up
Residential Solutions: Soft Launch of FTTH and WTTx
FTTH: Expansion and Differentiation WTTx: Opportunity Leveraged on 700 MHz
Soft Launch:
 16 new cities in 4Q
 Customers with high satisfaction index: 76% (vs 57%
of overall broadband market)
Soft Launch on October:
 ~50k Households covered
 90% is very satisfied and 8% satisfied
2Mbps 50GB
4Mbps 80GB
SPEED ALLOWANCE
Ready to Start !

8. 8
4Q17 Results Presentation
Investor Relations
3,641
3,861
4Q16 4Q17
Solid Revenue Recovery with Great Contribution from Mobile Bundle
Offers
-8.3%
-5.8%
-2.5%
-0.7%
3.5%
5.0%
5.9%
6.1%
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
ARPU
(R$)
Total Net Service Revenues
(%YoY)
Revenues Mix from Bundle2 Offers
(% of TIM Client Generated Revenues )
<70%
Bundle
No-Bundle
FY17 Net
Serv. Rev.
+ 5.1%
YoY
19.2
21.9
4Q16 4Q17
+13.9%
FY17
ARPU
+ 12.1%
YoY
Mobile Net Serv. Revenues
(R$ mln)
FY17
MSR
+ 5.1%
YoY
+6.1%
(1) Client Generated Revenues = MSR excluding interconnection and other revenues
(2) Bundle Revenues = Revenues from postpaid packages (off-bundle services not included) and recurring prepaid offers
Total Net Revenues Breakdown
(R$ mln,; %YoY)
+5.3%
+6.2% +5.1% +6.1% -9.6%
4,044
4,257

9. 9
4Q17 Results Presentation
Investor Relations
-1.0% YoY
excluding
R$ 30 mln
of one-off effect
in Leased Lines
in 4Q16
0.23
0.19
0.24
0.66
Process Driven Market Driven Traffic Driven Total
1.77 1.80
3.86 3.81
3.77 3.83
0.98 0.85
2016 2017
Opex Dynamics: Efficiency Continues to be a Driver
COGS
Traffic
(Network + ITX)
Market
(Selling & Marketing
+ Bad Debt)
Process
(Personnel + G&A
+ Other)
Normalized Opex Breakdown Analysis
(R$ bln; %YoY)
10.4 10.3
-1.4%
+1.4%
+1.5%
COGS-13.2%
• Lower acquisition price from vendors;
• Lower volume of handset sales (-12.6% YoY).
• Network: Higher costs associated with network expansion offset by savings from
leased lines tariff reduction and Zero Leased Lines Project;
• Increase of VAS opex driven by digital content penetration in bundle offer;
• ITX: lower cost after MTR (VU-M) cut partially offset by off-net traffic growth.
• Positive impact of Fistel (-12.3% YoY), recharge fees and higher efficiency on
advertising mix;
• Higher postpaid Customer Base (+19.6% YoY) and sales (+26.9% YoY) generating
increase in customer acquisition and management opex (SAC, customer care,
billing and collection, bad-debt) partially offset by digital efficiencies.
Traffic
Market
Process
• Increase in third parties labor contingencies and inflation impacts (IPCA +2.95%);
• Savings from Efficiency Program
-1.0% Δ YoY
2017 Efficiency Plan Completion
(R$ bln)
117%
+
-
+
-
+
-
+
-
-Quarterly Normalized Opex
(R$ bln; %YoY)
(YoY%) -0.1% -2.5% -1.5% +0.2%
2.69
2.55 2.56 2.49
1Q17 2Q17 3Q17 4Q17
Original
Target
(0.56)

10. 10
4Q17 Results Presentation
Investor Relations
2016 2017
364
604
4Q16 4Q17
Boosting Profitability: EBITDA and EBITDA Margin at Historic Levels
All Time High Normalized EBITDA¹
(R$ bln;%YoY)
¹ Normalized for tower sales and other items
All Time High EBITDA Margin
(% Normalized EBITDA Margin)
Reported Net Income
(R$ mln)
EPS 0.15 0.25
+66%
CAPEX: More with Less
(R$ bln)
Capex/
Sales 29% 26%
4.5
4.1
-7.9%
IT
Licenses
& Others
Improving EBITDA each
quarter
EBTIDA Margin from mid
20’s to 40’s in 5 years
1,769
4Q13 4Q14 4Q15 4Q16 4Q17
FY17
Normalized
EBITDA
+13.7%
YoY
FY17
EBTIDA Margin
+ 36.6%
YoY
%YoY 5.2% 4.0% -5.3% 5.8% 13.3%
FY17
Reported
Net Income
+64.5%
YoY Service EBTIDA Margin at
44.2% in 4Q17 and 39.0%
FY17
Focusing investments
in 4G, fiber and IT
Renewing
Margin Historic
Levels
Network
2016 2017
Transport
2G+3G
4G >40%
>50%
<10%
Network Capex
per Technology
32.0%
35.3%
37.4%
41.6%
1Q17 2Q17 3Q17 4Q17

11. 11
4Q17 Results Presentation
Investor Relations
Operating Free Cash Flow & NFP Evolution
¹ Clean up Costs related to the license of 700 MHz frequency
Operating Free Cash Flow Ex-License¹
(R$ mln)
EBITDA-CAPEX soared 147% YoY
R$ 1,216 mln in Net Cash Flow before
Dividends/IOE and licenses, back to positive in
2017
Reducing Net Debt despite increase in capital
distribution and spectrum clean-up costs
719
354
598 19
688
2,379
OFCF
2016
Δ EBTIDA
(yoy)
Δ CAPEX
(yoy)
Δ WC
(yoy)
Δ Non-
Recurring
Items (yoy)
OFCF
2017
+ 1.7bln
NFP Evolution
(R$ mln)
+2,379
-859
+15
-750
-297
-333
-1312,721 2,697
NFP
2016
OFCF 2017
(ex-license)
700 MHz
Clean up
Tower Sales Net Financial
Expenses
Cash
Taxes
Dividends Paid Other NFP
2017
OFCF
Yield
4% 15%

12. 12
4Q17 Results Presentation
Investor Relations
KPIs Short Term
Targets
Net Service
Revenues
(Mobile)
EBITDA
EBITDA-Capex
(% on revenues)
Revenue share
~25% in 2019
EBITDA Margin
>36% in 2019
Long Term
Targets
> 15%
< R$12 bln 2017-19 period
3G/4G Coverage >92%
Capex
Over Delivering Despite a Still Challenging Environment
~R$4 bln
High
single
digit


New Plan on
March, 6th
Positive in
all
quarters
 Already
Achieved in
2017
36.6%
New
Opportunities
ahead:
+ Revenues: TIM Live, macro recovery (prepaid + migration)
- Costs: Digitalization
x 360º Value Creation: Customer Experience
2017
Results
+5.1%
+13.7%
4.1 bln
11.1%