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Tim Day london
TIM is a leading telecommunications company in Brazil that has experienced solid growth over the past decade. In 2013, TIM's customer base grew 10% to over 73 million customers, revenues increased 16% to R$5.2 billion, and EBITDA grew 12% to R$1.3 billion. TIM is focusing on data as the new growth area, with data revenues increasing 49% in 2013 and data users growing 32% to 32 million. TIM is expanding its infrastructure including mobile broadband coverage and 4G services, and innovating through new service offerings such as prepaid mobile accounts, music and communication apps, and machine-to-machine plans.
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Tim Day london
- 1. TIM Day inLondon November, 12,2014
- 2. A SOLID HISTORYOF GROWTH 2 TIM’s Position Long Distance Leader 2nd in Market Share Overall Smartphone Sales Leader 1998 2003 2009 2014 Prepaid Leader Gross Revenues (R$ bln) Customer Base EoP (mln customers) 19 20 25 28 30 2009 2010 2011 2012 2013 3.5 4.2 4.7 5.0 5.2 2009 2010 2011 2012 2013 41 51 64 70 73 2009 2010 2011 2012 2013 EBITDA (R$ bln) CAGR+12% CAGR+10% CAGR+16% 1 2 1 1
- 3. 4% 12% 11% 52% 2011 2014 2014 53% 64% 79% 90% 2006 2007 2009 Tablet Smartphone 56% 48% 42% 34% 27% 27% 23% •Incoming calls only device Mobile Penetration (% over population) DATA THE NEW GROWTH WAVE Data Penetration (% of data over total revenues in 3Q13) 248 212 166 162 140 139 91 MOU in 2008 (minutes) •Still a lot of phones without data access •Wi-Fi only devices PCs, Notebooks, Feature Phones ...was similar to the challenge in data growth now Challenge in voice growth in 2009… Goal: increase voice usage Challenge: deliver the best experience in mobile internet Source: Anatel and IBGE Source: IDC Source: Global Matrix High Growth “Fear” to use Low Usage Handset Sales Share 2006 2007 2008 2009 2011 3
- 4. 39 81 2013 1Q14 2Q14 3Q14 900 Mhz rollout according to plan (above 600 sites using the new frequency) Expanding backhauling INFRASTRUCTURE (R)EVOLUTION 4 Mobile Broadband Update Cities Covered with MBB project % of urban population covered Improving Quality and 4G Services (e.g.: SP) Reduction in dropped call rates and better overall performance Higher average throughput rates Improvement in indoor coverage Increase in data and voice traffics 30% 31% 32% Source: ANATEL app 36% 99.0% 97.95% 97.53% 98.36% Voice Access # Antennas Investing Efficiently Big Data analysis for capex allocation Antenna level return analyses (IRR and payback) 50% 88% 50% 12% 9M13 9M14 Infrastructure Investment Mix (as % of capex) 2G 3G + 4G +38 p.p. Δ YoY Technology Small cells in gas stations: agreement with a tower company to install more than 150 small cells inside Totem BioSite: sustainable coverage, bringing harmony between environment and technology Innovative Coverage Expansion After Before
- 5. DRIVEN BY INNOVATION 5 PREPAID MOBILE ACCOUNT/ MONEY oPartnership: TIM, Mastercard and Caixa Econômica Federal oFocus on unbanked population ( >50% of prepaid base) NEW MUSIC PLATFORM oPartnership TIM and Deezer (top global streaming platform) oMore than 35 million music available for download oMaintaining leadership position in the mobile music industry in Brazil INTERNET SHARING PLANS oUp to 4 devices oNo additional charges WEEKLY SERVICE PACKAGE oVoice + Data + SMS oR$ 7 per week NEW M2M PLANS oNew data packages launched for M2M services Adding Value Through Innovation NEW APP FOR LANGUAGE COURSES oGames and quizzes help students developing English skills blah COMMUNICATION APP oIntegrated communication (VOIP, IM, SMS) App oFirst ad campaign Data Adoption 67% 77% 3Q13 3Q14 24 32 3Q13 3Q14 Smartphone Penetration Over Customer Base (%; Δ YoY) Smartphones Share over New Sales (%; Δ YoY) Data Users (mln users; % YoY) +32% +10 p.p. 25% 44% 3Q13 3Q14 +20 p.p. Mix of Data Gross Revenues (R$ mln; %YoY) 1Q14 2Q14 3Q14 25% 27% 29% % over total gross mobile service revenues SMS Web 1,500 +29% +39% +45% +80% Δ %YoY growth 1,578 Content & Others 1,677 +33% +72% +23% +20% +22% New Data World 43% of data users over total base TIM Protect SECURITY SERVICES oEnsures safety of customer’s devices and information
- 6. 24.6% 27.4% 3Q13 3Q14 1,252 1,332 3Q13 3Q14 EBITDA (R$ mln; %YoY) BUSINESS FUNDAMENTALS 6 Core Business Evolution Mobile Service Net Revenues (% YoY) EBITDA Margin (% YoY) (Local + LD + VAS + Others) Business Received 3Q13 3Q14 Business Generated (Incoming Voice + SMS) +6.4% +2.8 p.p. +5% -34% Operating margin improvement ~0.7% ~0.8% 3Q13 3Q14 Efficient Cost Control Interconnection Cost (Δ% YoY) Leased Lines Cost (Δ% YoY) Bad Debt/Sales (% over gross revenues) stable 3Q13 3Q14 -36.2% 3Q13 3Q14 -1.8% 306 372 386 366 315 348 9M13 9M14 2Q 1Q +10.6% % YoY 3Q 1,007 1,086 +21.6% -5.2% +7.9% 2013 2014 Net Income Evolution (R$ mln; % YoY) Total cost (Δ% YoY) 8.8% 2.3% -2.9% -7.2% -8.1% 3Q13 4Q13 1Q14 2Q14 3Q14
- 7. 36.7 38.2 3Q13 3Q14 21 13 3Q13 3Q14 Accelerating Operational Performance… LIVE TIM: EXECUTING ON OPPORTUNITY 7 43 120 3Q13 3Q14 Customer Base (000 users) Source: Anatel 881 1,366 3Q13 3Q14 Netflix Broadband Ranking (average streaming speed representation) 3Q13 3Q14 ARPU (R$; YoY%) … with Support of Quality Experience Addressable Households (000 HH) Source: Company +2.8x +55% +32% New Line Payback (months) -38% Gross Adds (000 users) 18 31 3Q13 3Q14 +74% Live TIM Net Adds Share (% of SP and RJ market additions) Average Speed of New Sales (mbps) +4.1% 16% 31% Aug/13 Aug/14 Source: Company
- 8. CONCLUSION 8 Q3Conclusions: A good balance between objectives Perspectives: Moving the plan forward Strategic… Financial… Operational… EBITDA Net Income +6.4% YoY +5% YoY +11% YoY MBB in 81 cities OPEX Control Prepaid leadership Infrastructure growth Evolving revenue profile Renewed Mission/ Purpose/Values New 3-year plan “To connect and take care of every customer, so everyone can do more” oIndustry leadership oLong term commitment o4G license 700MHz oTower sale supporting investment plan Quality Business Generated TIM Protagonist •VOICE •SMS •MTR •DATA •DIGITAL SERVICES oData and digital services leadership oInfrastructure oCustomer base value oCustomer experience oOne TIM initiative Data Users (mln users) Data + VAS (ex-SMS) Smartphones (over total base) 32 mln 32% YoY 44% +19 p.p. YoY R$1.3 billion +49% YoY