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Meeting With Investors
TIM Participações S.A.
August 2013
15th Listing Anniversary
TIM: A Huge Brazilian Company
Presence in Brazil since 1998.
13th largest Private Company in Brazil (source: Exame
Magazine - 2013).
Approximately R$22 billion of Market Capitalization.
Brazilian Law
“Lei das S.A”
“Nível” 1 “Nível” 2
Legal
Requirements
Demand for
transparency and
disclosures
Highest level of
Corporate
Governance
Requirement of
protection for
minority
shareholders
2
Corporate Governance
Knowing TIM Better
Unique Telco company listed on the Novo Mercado:
. 100% Tag Along and equal dividend rights
. One single class of shares
. Independent Board members
. Strict disclosure policy
• 72.2 million customers (27.2% Share)
• The 2nd Player - Market and Rev. Share.
• More than 400,000 points of sales.
• More than 130 own stores. • 11 Customer Care Centers (14k
attendants)
Sales
• More than 12,000 Antennas.
• 3,393 cities covered.
• 95% of urban pop. covered. • 42,470 km of optical fiber network.
Network
• 11,500 employees.
• 23,000 indirect jobs.
• R$9.1 billion in taxes payments in 2012. • R$3.8 billion invested in 2012.
Social
&
Economic
27.8
1998
Gross Revenues (R$ Bln)
Customer base EoP (Million)
2012 1998
70.3
2012
15,000 km fiber optical backbone
5,500 km fiber optical backhauling
Organic
Growth
Growth
Via
Acquisition
Source: BaCen and Bloomberg. 3
Brazilian Real GDP
(%YoY growth)
Brazilian Unemployment Rate
(Unemployment Rate %)
7,9 8,1
6,7
6,0 5,5 5,5
5,8 5,4
3
4
5
6
7
8
9
10
2008a 2009a 2010a 2011a 2012a 2013e 2014e 2015e
Brazilian Interest Rate
(Average %SELIC p.a. Target)
12,5
10,1 9,9
11,8
8,6 8,3
9,3 9,5
5
6
7
8
9
10
11
12
13
14
2008a 2009a 2010a 2011a 2012a 2013e 2014e 2015e
Brazilian Inflation Rate Forecast
(% IPCA p.a.)
5,9
4,3
5,9 6,5
5,8 5,8 5,9 5,5
0
1
2
3
4
5
6
7
8
9
2008a 2009a 2010a 2011a 2012a 2013e 2014e 2015e
5,2
-0,3
7,5
2,7
0,9
2,2 2,6 2,9
-1
0
1
2
3
4
5
6
7
8
2008a 2009a 2010a 2011a 2012a 2013e 2014e 2015e
Macro-Economic Fundamentals
Inflation Target @ 4,5 %
Industry Overview & TIM Business Opportunity
MO
BIL
E
FO
OT
PR
INT
FIX
ED
LIN
E
FO
OT
PR
INT
FIX
ED
LIN
E
+ L
D +
IN
FR
A
MO
BIL
E
BR
OA
DB
AN
D
FIX
ED
AN
D
MO
BIL
E
PA
Y T
V
AMÉRICA MÓVIL
Embratel (Local+LD+Infra) (Bov espa: EBTP4)
and NetFone (Local+LD)
Claro GSM 66.31
Virtua (NET)
EasyBand (Embratel)
Claro 3G (Claro)
CBB 5.68
SBB
MBB
Net + Embratel
(Net TV + Via Embratel + Claro
TV)
CTV 8.79
Mkt. Shr
22.3%
DTH
Embratel
Claro
TELECOM ITALIA
TIM Part.
(NYSE: TSU; Bov espa: TIMP3)
GSM 71.23
TIM 3G
Live TIM (Rio and
SP only)
MBB
TIM Brasil
Intelig (Long Distance+Data)
Atimus (Infra-Structure)
‘ Vivo Fixed (Mn Subs) Former Telesp
(NYSE: VIV; Bov espa:
VIVT4/VIVT3)
10.45
Vivo Mobile (Mn Subs)
Former Vivo (NYSE: VIV; Bov espa:
VIVT4/VIVT3)
GSM 75.99
Vivo Speedy
(Mn Subs)
Vivo 3G
DSL 3.69
MBB
TEF & TVA
(Mn Subs)
DTH MMDS 0.56 CTV
TELEFONICA
Mkt. Shr
23.5%
Telesp
Vivo
TELEMAR
Oi Fixed (NYSE: OIBR; Bov espa:
OIBR4/OIBR3)
18.52
Oi Mobile GSM 49.49
Oi Velox
Oi 3G
DSL 5.86
Oi TV CTV 0.84
Mkt. Shr
41.7%
Oi S.A.
Oi S.A.
OTHER GROUPS, INCLUDING: VIVENDI – GVT,
NEXTEL AND ALGAR-CTBC
Vivendi-GVT (Fixed)
Algar-CTBC (Fixed)
3.71
3G 3.98
GVT
Algar-CTBC
Other
DSL 2.23
CBB
Sky/DirecTV
Algar
GVT
Other
DTH
Mkt. Shr
8.4%
0.83
GSM 0.84
MBB
5.25
GVT
DTH MMDS CTV
Nextel
Nextel (Nasdaq: NIHD)
Algar-CTBC
Mkt. Shr1
24.7%
Mkt. Shr1
28.4%
Mkt. Shr1
18.5%
Mkt. Shr1
1.5%
Mkt. Shr1
26.6%
0.12
0.82
CBB MBB 1.92 DSL
DTH
0.49
0.77
FTN/H
FTN/H FTN/H
IDEN
9.88
16.38
0.05 MBB 7.51
28.18
18.27
5
Brazilian Telcos X-Ray
*1Q13 figures.1Considering Nextel iDen costumers.
Intelig +
TIM Fiber
121,0
150,6 174,0
202,9
242,2 261,8
39,4 41,2 41,5 42,0 43,0 44,0
2007 2008 2009 2010 2011 2012
Mobile Penetration
Mobile
Fixed
64% 79% 90% 105% 124% 133%
Customers Growth - Telecom
(Mln customers)
Market Transformation
Total Revenues- R$ Bln
+116%
+12%
Customers Growth – Broadband
(Mln customers)
Mobile
Fixed
6
1,4 4,1
14,6
33,2
52,5
10,0 11,4
13,8
16,3 19,1
2008 2009 2010 2011 2012
+38x
+90%
40 (38%)
35 (31%)
32 (26%)
30 (23%)
17 (16%)
21 (18%)
23 (19%)
25 (19%)
41 (40%)
46 (40%)
47 (38%)
46 (36%)
6 (6%) 14 (12%)
22 (18%)
28 (22%)
2009 2012 2014 2015
• Fixed
Voice
104
Market split between:
Mobile
Fixed
47
(45%)
57
(55%)
CAGR ’12-’15
4%
Mobile: +7%
Fixed: -1%
69
(56%)
55
(44%)
129
116
75
(58%)
55
(42%)
124
60
(52%)
56
(48%)
• Fixed
Data*
• Mobile
Voice
• Mobile
VAS
28%
0%
7%
-5%
*including Corporate/Wholesale
Mobile Segment to Support Universalization
Mobile Segment as the Growth Driver and
Sector Universalization
Data Going Mobile: Internet has a great potential…
(Mln Households)
Leveraging on Pure Mobile Competitive Advantage
Voice FMS: Mobile is more convenient than Fixed…
(R$/minute, voice)
7
2006 2007 2008 2009 2010 2011 2012
50% mobile
discount
Voice FMS: …TIM, with no legacies, can only gain on the trend
(R$ billion, Net Revenue per Group (2012))
Source: Company estimates; CETIC jun’13; Akamai
Mobile 21.4
12.2 9.1
17.9
Fixed + Data + Pay TV
12.5
18.5 19.0
0.9
4.3
Total 33.9 30.7 28.1 18.8 4.3
Vivo Claro Oi TIM GVT
FMS
Focus
A pure mobile approach is the most suitable strategy to capture both opportunities
29.5%
Rev. Share
Possess
Internet Connection
Does NOT
Possess Internet
Connection
Reasons for not possessing:
1. Too Expensive.
2. Lack of Coverage.
Mobile Internet as a Solution.
36.5 Mln
(60%)
24.3 Mln
(40%)
Total Households
Market Approach
Possess Internet Connection Does Not Possess Internet Connection
Internet Connection Speed per Band
87%
12%
0.5%
<4MBPS
4-10 MBPS
>10 MBPS
Internet Users Penetration: large room for growth...
(% population who has used internet within the last 3 months)
Mobile Internet and Its Great Business Opportunity
FMS on Data
(% internet connection - households)
8
89 86 81 80 74
1 3 10
17 21
2008 2009 2010 2011 2012
Mobile Devices are also increasing its presence…
(% Presence over households)
Source: CETIC jun’13; Data Market
Fixed*
Mobile
*Includes dial-up connection
10 14
23
41
50
2 4
2008 2009 2010 2011 2012
34 39 41
46 49
2008 2009 2010 2011 2012
A: 94%
B: 80%
C: 47%
DE: 14%
68 mln
people
never used
internet
…and usage is 4 years behind
(% internet users within the last 3 months)
53 58 60
67 69
35 30 30
24 23
10 9 9 7 7
2008 2009 2010 2011 2012
Everyday/Almost Everyday
At least once a week
At least once a month
Euro Area data in
2008:
Everyday: 70%
Once a Week: 20%
Once a Month: 7%
Social Class Split
Notebooks
Tablets
TIM’s Strategic Priorities
9
Network Quality
& Infrastructure 1
Strategy &
Offer Evolution 2
Institutional
Relationships 3
People &
Organization 4
Solid Capex investment program.
Significant coverage and capacity improvement through
extensive own fiber infrastructure.
Network Quality War Room approach.
Efficient 4G Investment with RAN sharing.
Continuous evolution of our offer platforms
(transparency, simplicity, convenience, micro-
segmentation).
Promoting data usage with handset strategy, new VAS
offers (e.g. TIMmusic) and 4G launch.
Expanding postpaid and business user base.
Developing option value of Live TIM ultra-broadband
services.
External Positioning: Innovation, Quality, Transparency.
“Portas Abertas” customer portal for increased
transparency and network quality evolution.
Focus on regulatory and institutional dialogue.
People Focus – highly skilled, highly motivated, right
organization.
Best Place to Work initiatives.
Renewing Sense of Pride and Belonging – One of
Brazil’s Top 15 Companies.
2Q13 Results in Few
0.9% 1.1%
0.7% 1.0% 0.9%
Quarter in Few: Improvements Across the Board
7.0% 5.4% 9.7%
2Q13 2Q12
Organic1 Net Revenue Growth(YoY)
Organic1 Net Services Revenue Growth(YoY)
Organic1 EBITDA Growth(YoY)
-15.3% -11.0% -9.5%
-3.6%
+0.4%
1Q13 2Q12
10.0 10.3 10.7 10.9
11.4
2Q13 2Q12
3Q12 4Q12 2Q13
-0.7%
Reported ARPU Performance (YoY)
Postpaid Base (mln customers)
%Bad Debt/Gross Revs.
+20% (YoY)
Ex-M2M
Financial Operational
+14%
1Q13 3Q12 4Q12
1Q13
6.4% 5.5%
1.4% 1.8% 3.1%
2Q13 2Q12 1Q13 3Q12 4Q12
+8.7% (YoY)
Reported
5.6% 4.1% 4.4%
2Q13 2Q12 1Q13
2Q13 2Q12 1Q13 3Q12 4Q12
+2.0% (YoY)
Reported
+1.8% (YoY)
Reported
11
Efficient Approach
1: Organic revenues grow th adjusted by R$44mln, EBITDA grow th adjusted by R$31mln and Net
Income grow th adjusted by R$20 mln due to one-off impact related to interconnection disputes.
Organic1 Net Income Growth(YoY)
-1.6%
13.9% 17.9%
2Q13 2Q12 1Q13
+12% (YoY)
Reported
18.7% 19.6% 20.5% 21.4% 22.1%
%VAS / Mobile Service Gross Revenues
2Q13 2Q12 1Q13 3Q12 4Q12
Customer Base Evolution - Market Share
(Source: Anatel)
Growth Backed by Business Resilience
19.6% 19.6%
24.0% 25.0%
28.0% 26.3%
28.1% 28.8%
2Q12
+67 bps
-168 bps
+96 bps
-1 bps
2Q13
15.3% 16.5%
23.9% 20.3%
38.2% 39.1%
22.0% 23.4%
2Q12
+140 bps
+90 bps
-353 bps
+124 bps
2Q13
29.6% 29.7% 29.1% 28.8% 28.7%
26.9% 26.8% 26.9% 27.0% 27.2%
24.6% 24.5% 24.9% 25.1% 25.0%
18.7% 18.7% 18.8% 18.7% 18.7%
Oi
Claro
Vivo
2Q12 3Q12 4Q12
+28 Bps
-89 Bps
+43 Bps
+5 Bps
YoY
1Q13 2Q13
Prepaid Voice Postpaid*
35 26 27
1.6
1.4 1.5
2Q11 2Q12 2Q13 2Q13 2Q11 2Q12
1.1% 0.9% 0.9%
Total
TIM
SAC & SAC/ARPU
(R$; months)
Efficient Market Approach
(Source: TIM, Anatel) Bad Debt & Postpaid CB
(000 customers; %postpaid mix)
Leading net additions.
Consolidating Prepaid #1.
Accelerating on Postpaid.
Maintaining an efficient go-to-market.
SAC/
ARPU
SAC
% Gross
Revs
Postpaid
*Excluding modems and M2M.
+25% +14%
14.4% 14.5% 15.8% Mix
12
Caring Improvements to Increase Customer Satisfaction
Claims at Consumer’s Protection Agency (Procon)
(Avg # Claims - the lower the better; Source: SINDEC database)
Imp
rov
ing
ca
rin
g
Re
du
cin
g c
om
pla
ints
P3
P4
P1
TIM
TIM PRE POS CORP
Customer Care Satisfaction Survey
(Points; Source: TIM)
IDA – Index of Caring Performance (last reported)
(Points - the higher the better; Source Anatel)
99.9
93.9 98.0
92.1
92.8
80.4
84.9
65.9
Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13
P3
P4
P1
TIM
Anatel Ranking of Complains (last reported)
(Index of Complains under 1,000 access - the lower the better; Source: Anatel)
0.20
0.32 0.24
0.36 0.34
0.47 0.50
0.65
Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13
P3
P4
P1
TIM
2,564
4,147
2,262
3,179
6,187
6,990
3,503
6,870
2Q12 3Q12 4Q12 1Q13 2Q13
13
8.0
7.5
7.0
6.5
6.0
ARPU Performance
(%YoY; R$)
Reverting ARPU Trend
Voice Usage
(000 lines; minutes)
Data Performance
(monthly unique users; average days of use)
7,638 8,184
8,703 8,956 9,367
2Q12 4Q12 3Q12 1Q13
127
150
139
145
2Q12 4Q12 3Q12 1Q13
18.3 19.9 18.9 18.5
VAS
Voice
-15.3%
-11.0%
9.5% -3.6% -0.7%
2Q12 4Q12 3Q12 1Q13
After several quarters, ARPU has reversed
its trend thanks to a continuous
management of the customer base.
Voice Postpaid* Total MOU
2Q13
18.1
2Q13
148
2Q12 4Q12 3Q12 1Q13
Data Users SMS Usage
2Q13
2Q13
2Q12 4Q12 3Q12 1Q13 2Q13
+21% +13%
*Excluding modems and M2M.
+23% +16%
14
Organic 18.3
Organic 0.4%
35% 39%
43% 46%
50%
2Q12 3Q12 4Q12 1Q13 2Q13
Data Services Update: Keeping the Good Pace
Data users
(% over total customer base)
VAS
(% of Mobile Services Gross Revenues; R$ Million)
Handset Sales Market Share Apr-Jun/13
(% of handset revenues; Source: TIM)
19% 22%
Smart/Web phone Penetration
(% over total base of lines)
VAS Gross Revs
VAS/Revs
7%
21%
34%
38%
54%
46%
P4
P3
P1
TIM
Players
Open Mkt
TOP SELLERS @ ~R$300
27.7% 28.7%
30.3% 31.0%
31.9%
2Q12 3Q12 4Q12 1Q13 2Q13
+25%
23 mln
users 78 %
on sales
15
1,031
1,291
2Q12 2Q13
Financial Evolution Analysis
1,210
EBITDA
2Q12
Organic
EBITDA
2Q13
-15
ΔMkt
and Sales
ΔPers./G&A
and others
-53
ΔHandset
Margin
-39
ΔNetw ork
and ITX
+35
ΔServ.
Revs
26.6% 25.3%
32.1% 31.5%
+125
+5.8% +8.3% -51.2% +1.1% +3.1% ΔYoY
1,263
+4.4%
563 879 879
3,984 4,109
4,065
Tho
usa
nd
s
Revenue
2Q12
Δ Handset Δ Fixed
Services
Organic
Revenue
2Q13
Δ Mobile
Services
+316 -86 +211
Service
Handset
4,547
-33% +5.7% ΔYoY
4,988 -44
One-off
Event
Reported
Revenue
2Q13
4,944 -31
Reported
EBITDA
2Q13
1,232
+1.8%
24.9%
31.1%
One-off
Event
16
+56%
+3.1%
+2.0% EBITDA Margin
Service EBITDA Margin
Organic EBIT
Net Financial Result
Organic Net Income
2Q13
Organic Taxes and
Others
Depreciation/ Amortization
Organic EBITDA 2Q13
From EBITDA to Net Income
(R$ Million)
ΔYoY
One-off Event
Reported Net Income
2Q13
+0.9% +8.5% -36% +5.6% +18% +12%
1,263 -671
592 -41 -145 406 -20 386
Net Revenue Evolution
(R$ Million, % YoY)
From EBITDA to EBITDA
(R$ Million)
+8.7% +10%
Strong Cash Position
Net Debt
(R$ Mln)
Capex
(R$ Mln, % YoY)
1,998
2,278
1,984
2Q11 2Q12 2Q13
+14% -13%
725
1,057
2Q11 2Q12 2Q13
+46%
+6%
→ 37% of debt in foreign currency (100%
hedged to R$).
→ Average debt maturity: ~ 3 years.
→ 0.39x net debt to Reported EBITDA (LTM).
→ Capex catch up during Q2.
→ 94% of Capex related to infrastructure (ex-licenses).
→ No subsidy capitalization.
1,123
0.45x 0.47x 0.39x Net debt/ EBITDA (LTM)
17
Strategic Priorities Check Point
• Improvements on all customer care indicators;
• FTTS Plan on track (569 new sites in Q2);
• 4G launch anticipated in SP and Curitiba,
good traction on 4G market share.;
• Final steps of LT Amazonas Fiber Line;
• Started rollout of small cells for JMJ in Rio.
• Strength of “Controle” strategy – hybrid pre/post;
• VAS over Mobile service: 22%;
• 3G adoption: WCDMA base grew by 21%;
• TIM Music launch: OTT music platform, more than
6mln songs downloaded already;
• Several actions for monetizing customer base with
new micro-packages.
• Launched company wide initiative on “Best Company
to Work For”;
• Total employee population grew to over 11,500, an
additional 574 new employees compared to 2Q12;
• Reached the number of 134 own stores, adding several new TIM employees;
• Initiated a movement to reinforce and add new talent on all teams, in particular on Network and Regional
structures.
• “Portas Abertas” campaign, web-site and mobile
app reinforcing commitment with quality and transparency;
• Closure of the Dropped Calls accusation with
final report from Anatel releasing the company from any misconduct;
• Proactive position in the sector in conversations with Congress, Anatel, Ministry and State
Governments – position of collaboration and
transparency.
1Q13 2Q13
TIM Call Center
1Q13 2Q13
Anatel
2Q12 2Q13
+23%
2Q11 2Q12 2Q13
14% 39%
57% 40%
40% 21%
46% 21% 22%
% Only Smartphone over Total Sales
Smartphone
Webphone
Essential
Network Complaints
-15%
-8%
Postpaid Voice Base
18
Network and Infrastructure
Development of Infrastructure
20
Optical Fiber Network Evolution
(km of fiber)
28,891 38,951 42,470
47,000
2011 2012 Jun/13 Dec/13*
*According to Anatel Network Plan
FTTS Project Status - 14 Brazilian Main Cities (Stage1)
Manaus
Florianópolis
São Paulo
Macapá
Sa lvador
Curi tiba
Maceio Reci fe
Forta leza
Bras ília
Rio de Janeiro
Porto Alegre
Belém
Aracaju
São Luis
Pa lmas
Vitoria
Teresina
Belo Horizonte
Campo Grande
Imperatriz
Goiânia Cuiaba
Natal
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M
M J.Pessoa
M
M
M
M
M
M M
M
M
M
M M
M
M
M
M M
M M
1st phase : Connecting sites with own fiber. 88% of sites in the 14 main Brazilian cities are connected with own fiber.
3rd phase : Expanding and fine tuning. Recife
is the first city to reach
this stage.
2nd phase : Light up the fiber and shift data traffic to own lines.
2nd phase is
expected to
be completed
by 4Q13
M Cities of Stage 1
M Cities (additional 30) of Stage 2
Own Network to Support Traffic Growth
(% of total transport network)
52%
80%
48%
20%
2009 2012
Owned
Third Parties
• Increasing customer experience (throughput 50x faster than
previous leased links on copper, 2/8Mbps)
• Reduce network congestion
• 4G (LTE) ready
• Reducing leased lines costs
Metro Ring
To own fiber up to 300 Mbps From copper 2-8 Mbps
11.607
12.120
Jun/12 Jun/13
Network Commitments
21
Network Elements Expansion…
(units. Source: Company)
…Driving Quality Improvements
(% of success; % of call/data connection drop; Source: Anatel)
181
215
Jun/12 Jun/13
250
464
Jun/12 Jun/13
BTS TRX
(Voice Capacity; 000)
Channel Elements
(Data Capacity; 000)
95,7%
97,1%
Aug/12 Apr/13
Voice Network Access Rate Voice Network Drop Rate Data Network Access Rate Data Network Disconnection Rate
+4% +19% +86%
Target agreed w / Anatel
1,3% 1,1%
Aug/12 Apr/13
95,9% 96,0%
Aug/12 Apr/13
1,5% 1,7%
Aug/12 Apr/13
95%
2%
98%
5%
Capex Analysis
22
Organic Capex (ex-4G licenses)
(Capex/Sales; Mix of Investments; R$ b ln)
9,5 8,3
7,2 5,5
0.4
TIM Claro Vivo Oi
Benchmark: Anatel Plan for 2012-2014
(R$ Bln)
Owned Network Deployment….
(% of total transport network)
9.9 2012 Extra
Capex over
Anatel Plan +20% +39%
2012-2014 Capex
… Driving Network Opex Savings
(% YoY)
+81%
22,1%
4,8% 3,5%
Total Traffic Customer Base Network Costs
Q2 2013
52% 48%
Owned Rented
80%
20%
2009 2012
0.5 0.3 0.2
2.3 2.7 3.1
2010 2011 2012 2013e 2014e 2015e
19,6% 18,0% 18,0%
Infra
Invest.
As % of Net Revs.
Other
Invest.
2.8 3.0
3.4 10.7
3.6
Voice
Postpaid
+23% YoY
Live TIM
Live TIM: Delivering on Plan
257k
522k
609k
804k
3Q12 4Q12 1Q13 2Q13
Network Evolution
(Addressable Households ; Source: TIM)
Sales per Quarter
(Customers; Source: TIM)
9.7k
17.1k
1Q13 2Q13
Customer Base
(Customers; Source: Anatel)
9.7k
16.3k
26.4k
4Q12 1Q13 2Q13
82%
Net Share Live TIM SP+RJ
(UBB >34MB ; Source: Anatel)
Market Share SP+RJ
(UBB >34MB ; Source: Anatel)
38%
19%
13%
11%
10%
9%
Live TIM Oper. I Oper. II
Oper. III Oper. IV Outras
26%
69% 73%
3Q12 4Q12 1Q13
ITAQUERA
CASA VERDE
BUTANTÃ
JABAQUARA
PINHEIROS
MORUMBI
MOOCA
São Paulo
Totaling
26 Districts
in São Paulo
24
Efficient approach
MSAN port occupancy (%), Capex (R$)
Coverage (addressable)
Thousands of Households
~500
~1,000
~2,000
2015 2014 2013 2012
0
20
40
60
80
2012 2013 2014 2015
~R$2k
Coverage Capex
per Home Passed
~R$80
~R$800
Installation Capex
per Sub
~R$300
TIM
Fiber Int. Bench.
TIM
Fiber Int. Bench.
~R$5k
Total Capex
per Sub
~R$700
TIM
Fiber Int. Bench.
Port Occupancy (%)
25
4x
• 2012: priority coverage in areas with high ‘A/B classes’
concentration
• 2013: chess board strategy and entering in class C
• 2014: additional coverage in Rio de Janeiro and São
Paulo metropolitan regions, focusing class C
concentration areas
Geographic Expansion
Geographic expansion for low-middle class and targeting high
income neighborhood
TIM Fiber Plan Update 2013/2015
Business Outlook
116 129
150
>200
0
50
100
150
200
250
2010 2011 2012 2013e 2014e 2015e
14.5 17.1
18.8
2010 2011 2012 2013e 2014e 2015e
High Single Digit growth
4 Ways of Growth
Revenue Growth
(Total Revenues,R$ billion)
CAGR 12-15
Mobile Customer Base
Million of lines
Double digit growth
FMS – Voice (MOU)
Minutes of usage per line
Internet for All (Mobile Data)
Data as % of Gross Mobile Serv. Revs.
27
51.0 64.1
70.3
> 90
2010 2011 2012 2013e 2014e 2015e
13% 15%
19%
>26%
0%
5%
10%
15%
20%
25%
2010 2011 2012 2013e 2014e 2015e
Double digit growth
VAS
Revenues MoU Customer
Base
Community
Expansion
FMS
(Voice)
Internet
Services
~2Mln
HH ready
to sell
Tim Fiber
Ultra BB
>90 Mln >200 min >26%
Business Drivers of Growth
28
Total Net
Revenues High Single Digit
Growth
Organic EBITDA 4.6 5.1
Organic CapEx 3.0 3.4 10.7
17.1 18.8
High Single Digit
Growth
R$ billion 2011 2012 2013 -2015
CAGR Guidance
2013-2015 Guidance
Appendix
Total Customer Base
(% Market Share)
Market Share Evolution
30
29,6% 28,7%
26,9% 27,2%
24,6% 25,0%
18,7% 18,7%
P3
P4
P1
TIM
2012 Mobile Net Revenue Share
(% 2012Total Net Revenue)
Total Voice Postpaid Customer Base
(% Market Share)
38,2% 39,1%
22,0% 23,4% 23,9%
20,3%
15,3% 16,5%
P3
P4
P1
TIM
Total Prepaid Customer Base
(% Market Share)
28,0%
26,3% 28,1%
28,8%
24,0% 25,0%
19,6% 19,6%
P3
P4
P1
TIM
Size: 265,741 thousand
Penetration rate: 134.3%
20,2%
29,5% 35,3%
15,0% P3
P4
P1 TIM
Understanding Internet Usage Trends
Going deeper into wireless penetration in Brazil
(%)
31
79 91
105
124 133
56 63 67
76 80
2008 2009 2010 2011 2012
Our current portfolio reflects consumer’s behavior
(Activities over mobile phone; % users who have used mobile within the last 3 months)
Source: CETIC jun’13; Data Market; Anatel
22
31
47
5
18
24
49 57
64
2010 2011 2012
Wireless
Penetration
Real
Penetration
# SIM Cards
Social
Class 0 1 2 3+
A 3% 67% 24% 6%
B 7% 63% 24% 5%
C 17% 62% 17% 3%
DE 41% 47% 10% 1%
Total 20% 59% 17% 3%
Send SMS
Listen Music
Internet
Historical Data: Financials (R$ Thousand)
32
Historical Data: Financials (US$ Thousand)
33
Historical Data: Operational & Financial Ratios
34
3%
Tax Relief - 1º Step: M2M Fistel to drop and Smartphones tax exemption (Law 12,715/2012)
Total
~34%
Fust/
FUNTEL
PIS/
PASEP
1.5%
0.65%
ICMS Cofins
~28%
Tax reduction Reduction in the price to
consumer
Increase of Penetration
Social Impacts
Economic Impact
Possibility of higher
investment in
network
Better Quality
Tax Composition
35
In 2012, TIM paid R$9.1 bln in taxes, fees and contributions (~48% of
total net revenues).
• R$1 bln in Fistel.
• R$8.1 bln in taxes,
contributions and others fees.
% of Gross
Revenues
Taxation Over Telecom in Brazil
Shareholders Structure and Stock performance
Stock Performance (base 100)*
0
20
40
60
80
100
120
TIMP3 Ibovespa TSU
36 *Last price as of 08/02/2013
TIM Celular S.A. Intelig
100%
TIM Brasil Serv. e Part. S.A. Minorities
Telecom Italia International N.V.
Telecom Italia
100%
TIM Participações S.A.
ON: 33% (805,662,701) ON: 67% (1,611,969,946)
100% 100%
Investor Relations Team
Avenida das Américas, 3434 - Bloco 01
6° andar – Barra da Tijuca
22640-102 Rio de Janeiro, RJ
E-mail: [email protected]
Rogério Tostes
E-mail: [email protected]
Phone: +55 21 4109-3742
Vicente Ferreira
E-mail: [email protected]
Phone: +55 21 4109-3360
Leonardo Wanderley
E-mail: [email protected]
Phone: +55 21 4109-4017
Gustavo Valente
E-mail: [email protected]
Phone: +55 21 4109-3446
Luiza Chaves
E-mail: [email protected]
Phone: +55 21 4109-3751
Visit our Website
www.tim.com.br/ir
Safe Harbor and IR Contacts
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.
37
