1. TIM Brasil - Meeting with Investors
TIM Brasil
September, 2012 - Meeting with Investors
February, 2013
2. Knowing TIM Better
Shareholders Structure TIM: A Huge Brazilian Company
Presence in Brazil since 1998
TIM Brasil Serv. e Part. S.A. Minoritários Unique Telco company listed on the Novo Mercado:
ON: 67% (1.611.969.946) ON: 33% (805.662.701)
.100% Tag Along and equal dividend rights
. One single class of shares
. Independent Board members
TIM Participações S.A. . A more strict disclosure policy
100% 100% ~ 11,000 direct employees
+ 21,000 indirect jobs
TIM Celular S.A. Intelig
+400,000 Points of Sales (Top-up and SIM cards)
+ 130 own stores
> 70 million costumers. The 2nd player.
11 Customer Care Centers with 14,000 consultants
Highest level of ~ 11,500 antennas in 3,383 cities, covering +94% urban
Requirement of
protection for
Corporate population
Governance
minority
Demand for
transparency and shareholders Exclusive attendance of 391 municipalities and 1.64
Legal disclosures million customers
Requirements
Payment of R$7.3 billion in taxes and contributions in
2011
Investment: R$3.8 billion in 2012
Brazilian Law “Nível” 1 “Nível” 2
“Lei das S.A”
3
4. Macro-Economic Fundamentals Remain Solid
Families Income is increasing continually
Brazilian families consumption is growing every year
Average Real Salary (R$)
Families consumption on Brazilian GDP demand side - %YoY growth
8 2.000
6,9
1.900
7 6,1
5,7 1.800
6 5,2 1.700
4,8
5 4,4 4,1 4,3 1.600
4 3,0 1.500
1.400
3
1.300
2 Lowest 1.200
1 Growth 1.100
- 1.000
2006a 2007a 2008a 2009a 2010a 2011a 2012e 2013e 2014e
Family Indebtness will probably drop Unemployment rate is reaching a low record constantly
% debt service/families income Unemployment Rate(%)
30 13,0 12,4
12,0 11,5
25 22,4
19,1 19,2 20,3 19,5 20 20,2 11,0 9,9 10,0
20 17,8 10,0 9,3
Peak 9,0 7,9 8,1
15 8,0
6,7
10 7,0 6,0
6,0 5,5
4,8
5 5,0 4,2
4,0
-
3,0
Source: Credit Suisse, BaCen and IBGE 5
5. Mobile Business in Brazil is driving sector growth
A huge market…. …with demographic bonus … and still low Voice and Data usage
Serv.Rev. US$ Bln; Mln subs; 2011 Mln of people MoU (minutes); Data as a % of Serv. Rev.; 2011
173 2002 2009 2014 Minutes of Use %Data Serv. Rev.
Service 108 898
Revenue 82 Class
37 A/B 14.5 20 29.1
4o 55%
- 50,00 100,00 150,00 200,00 250,00 300,00
C
350,00 400,00
67.5
450,00 500,00
95 118 452 38%
986 339 31%
D 46.1 44.5 32.1 19%
Subscriber 894 116
Base E 46.6 28.9 16.8
332
246 4o Above From US$891 From US$558 From zero
US$3.843 to US$3.843 to US$891 to US$558
- 200,00 400,00 600,00 800,00 1.000,00 1.200,00
Brazil: GDP vs. Telecom Revenues Growth ARPM Fixed vs. Mobile
% Growth YoY R$
Mobile
25%
20%
15%
10%
TIM
5% Mobile Market 50% mobile
0%
GDP**
discount
Fixed
-5%
-10%
Wireline
-15% Market* 2006 2007 2008 2009 2010 2011 2012
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
**BaCen estimates for 3Q12
Source: Company estimates; BofA ML Global Wireless Matrix 3Q12; Teleco; IBGE; Bloomberg; Credit Suisse * Wireline Market is composed by incumbents only 6
9. Business Resilience Against a Strong Headwind
Operational Improvement
Users, Minutes, Unique Users, %YoY Leader in customer base
+10% +14%
growth for the 10th
+22% consecutive quarter
150 ~21
70.3
67.2 68.9 69.4 139
64.1 131 126 127
~18 Leader in pre-paid
#2 in post-paid voice (ex
- M2M and Dongles)
4Q11 1Q12 2Q12 3Q12 4Q12 4Q11 1Q12 2Q12 3Q12 4Q12 4Q11 1Q12 2Q12 3Q12 4Q12
Customer Base – Mln Minutes of Usage Data Monthly Unique Users - Mln Record of MoU at 150
min
Smartphone penetration
Financials
reached 43% of total base
R$ Bln, %YoY
Increasing investment to
Total Revenues Organic EBITDA Organic Net Income
R$3.4 Bln (+12% YoY) ex-
19% 27% 34% licenses
13% 16%
8% 7% 8% -2%
% YoY 7% 7% 6% Organic Net Income FY12
= R$1.5 Bln (+17.4% YoY)
EBITDA – Capex = R$1.6
0.5 Bln (ex-licenses)
5.0 0.4
4.7 0.3
4.5 1.2 1.2 1.4 0.3 Proposed dividends of
4.5 1.2
~R$743 mln (+39% YoY)
1Q12 2Q12 3Q12 4Q12 1Q12 2Q12 3Q12 4Q12 1Q12 2Q12 3Q12 4Q12
% Margin 26.2 26.7 26.3 28.4 6.1 7.5 9.0 9.2
10
10. Guidance: Check Point
%
2011 2012 Guidance
R$ billion Achievement
Total Net 17.1 18.8 18.8 100%
Revenues (+10%)
Organic EBITDA 4.7 5.1 5.1 100%
(+10%)
Organic Capex 3.0 3.4 3.0 113%
Tough Year Underscored by Solid Business Foundation
• Resilience of customer base growth • Macroeconomic slowdown Net Service Revenue Evolution
and usage (especially data) • Regulatory scrutiny 2.7%
• ARPU sequentially improving • Image damage
1.7%
1.8%
13.1%
• Good cost control (ITX / network • Increased competition 6.9%
costs up 9% while traffic +34%)
• Intelig’s business performance Intelig’s
• More investments in infrastructure below expectations
2011 YoY MTR Macro 2012 YoY
Net Service Impact Business Competition Net Service
Revs Impact Regulatory Revs
Impact
11
11. The only company to gain market share
Total Market Share Growth
(% of total lines)
D YoY #1 Pre-paid
30.1% 30.2% 30.1% 29.7% 29.8%
29.5% 29.5% 29.5% 29.5% 29.6% 29.7% 27.6% 28.3% +63 Bps
29.1% Vivo -45 Bps
221 28.0% 27.2% -78 Bps
640 26.8% 26.9% 26.8% 26.9%
26.5% bps
bps 26.0%
25.4%25.3% 25.5% 25.4% 25.6% 24.1% 24.7% +67 Bps
25.4% +42 Bps
24.9%
20.1% 19.5% -53 Bps
23.7%24.0% 25.1% 25.1% 25.5% 25.3%
24.9% 24.6% 24.5%
24.5% 24.6% Claro +0 Bps 2011 2012
20.4% 20.1% #2 Voice Post-paid
19.5% 19.4% 19.7% 19.1% 18.8% 18.8% 18.5% 18.7% 18.7% 18.8%
Oi +3 Bps 38.2% 38.4% +21 Bps
22.0% 23.2% +121 Bps
The only mobile
operator which -282 Bps
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 grew in 2012 23.9% 21.0%
15.3% 16.7% +143 Bps
Source: Anatel 2Q12 4Q12
Sales Force Focus on Efficiency Bad Debt Trend
(Points of sale EoP) (R$; months) (as % of Gross Revenues)
2010 67 SAC/ 1.5
Own 1.3 1.4
ARPU
2011 81 +96%
Stores
2012 131 1.04%
36 0.92%
28 27 0.71%
SAC
3Q12 298k +9%
Mass -21% -5%
Channel 4Q12 QoQ
326k
4Q10 4Q11 4Q12 4Q10 4Q11 4Q12
12
12. Customer Base Evolution
Voice post-paid Base Analysis (ex-M2M and broadband)
(Million lines)
Customer Base Growth
(% YoY) 10.5 10.7 D% YoY
10.4
10.2 10.4 10.3 +15%
9.9 10.0
9.8
9.4 9.5 9.7
10.7 9.3
+15.5% Total post- 8.3 8.4 8.7 +25%
paid
10.3 base
10.0
9.7 Voice post- 4Q12: 519k Net adds
post-paid paid base 34% Net share (#2)
9.3
Dec 11 Mar 12 Jun 12 Sep 12 Dec 12
Source: Anatel
4Q11 1Q12 2Q12 3Q12 4Q12
+75 Bps Voice Growth (MOU)
(Minutes; %YoY; Top Up)
post- 14.5% 14.4% 14.5% 14.8% 15.3%
paid Mix
% YoY +1.7% +0.2% +0.2% +6.7% +14.5%
+8.8%
59.1 59.6 Top Up Volume
58.9
57.6 210
pre-paid 150
139 183 +15%
54.8 131
126 127
4Q11 4Q12
4Q11 1Q12 2Q12 3Q12 4Q12 4Q11 1Q12 2Q12 3Q12 4Q12
Source: Anatel
13
13. Data as Key Driver for Growth
Products Net Revenues Handset Sales Market Share Smart/Web phone Penetration
(R$ Million) (% of handset revenues from Jan/12 to Nov/12) (% over total base of lines)
+56.4% 1.6x
706 Operators 43.1%
7% 39.1%
622 35.2%
563 54%
25% 31.1%
451 453 46% 30% 26.6%
Open Market 38%
4Q11 1Q12 2Q12 3Q12 4Q12
P1 TIM P3 P4
Sales of web/smartphones
represented 65% Source: Company estimates 4Q11 1Q12 2Q12 3Q12 4Q12
VAS Gross Revenues SMS unique users growth Data users
(R$ Million; % of Gross Mobile Services Revenues) (Million Montlhy unique users) (Million monthly unique users)
19.6% 20.5%
18.1% 18.7% +21.5%
16.7% +24.6% >21
~18
+29.7%
1,243
1,132
1,000 1,031
958 4Q11 1Q12 2Q12 3Q12 4Q12
3G coverage
(% of urban 66% 72%
4Q11 1Q12 2Q12 3Q12 4Q12 4Q11 1Q12 2Q12 3Q12 4Q12 pop.)
14
14. EBITDA & Efficiency
EBITDA Evolution
(R$ Million) 16 mln of provision on advertising credit
~400 26 mln of provision on Anatel administrative
procedures established between 2007/09
+69 +91 -630
+1,067 -202
5,052 -42 5,010
4,658
27.3% 26.9% 26.7%
EBITDA Margin
32.4% 32.1%
32.5% Service EBITDA Margin
EBITDA Δ Services Δ Handset Δ Marketing Δ Network Δ Pers./G&A Adj. EBITDA Non- Rep. EBITDA
2011 Revenues Margin and Sales and ITX and others 2012 recurring 3Q 2012
ΔYoY +6.9% -20.9% -2.3% +13.3% +11.8% +8.5% +7.6%
Handset Business and Commercial Efficiency Leased Lines, Traffic and ITX Costs
(%YoY) (Compound Growth Rate - Quarterly)
Traffic
Handset Business
6.9%
Net Product COGS +26%
+35%
Revenues
2011 2012
2011 2012 2011 2012
Leased ITX costs
Commercial Efficiency Lines costs (ex-SMS)
0.2%
Gross -0.6%
-3.4% Commissioning
Adds Expenses -9.3%
2011 2012 2011 2012
2011 2012 2011 2012
15
15. Net Income & Dividend
From EBITDA to Net Income
(R$ Million)
5,010
16 + 26 = 42.1 mln – provisions
9.1 mln – monetary adjustments for
the administrative procedures
-2,689
2,321 -168 -705
1,449 1,500
EBITDA Depreciation/ EBIT Net Financial Taxes and Net Income Adj. Net
2012 Amortization Result Others 2012 Income 2012
ΔYoY +7.6% +3.6% +12.6% -29.7% +29.1% +13.4% +17.4%
Organic Net Income Dividend Evolution
(R$ Million, CAGR) (R$ Million, CAGR, Reported Payout)
+22%
+39%
1,500 743
1,278 533
776 497
2010 2011 2012 2010 2011 2012
Payout
22% 42% 51%
Ratio
16
16. Cash Generation
2012 Operational Free Cash Flow Net Debt
(R$ Mln) (R$ Mln)
R$ 378.2 Mln
of 4G Licenses
EBITDA: -5,010
5,010 -3,765 D WC: -579
Capex: +3,765 Dividends: +523
~ R$ 340 Mln of Income Tax: +414
License payable Others: +295
441
-1,824
+579 1,824
+1,232 -151
EBITDA CAPEX Δ WC OFCF
%YoY +7.6 +24.4 +7,342 +12.4
2011 Oper. Non-Oper 2012
%Net FCF
26.7 20.1 3.1 9.7 Net FCF Net
Rev.
Debt Debt
5.1 Bln for Organic EBITDA in 2012 1.8 Bln of Oper. Free Cash Flow in 2012
3.4 Bln on Organic CapEx in 2012
17
17. Conclusion
% Households with only mobile services Fixed price premium over mobile TIM MoU
Mobile
(minutes)
55%
FMS on Play 49% 129 136
116
83
Fixed
2009 2011 2006 2009 2011 2014 2009 2010 2011 2012 2015e
Mobile Broadband Access per Social Class
Data Monthly Users
+600 bps +700 bps x2 x5 (Mln)
>21
Mobile ~18
Data 20% 20% 2010
Accelerating 18% 18%
14% 2011
11% 9%
4%
4Q11 1Q12 2Q12 3Q12 4Q12
A Class B Class C Class D/E Class
Source: PNAD (national institute of statistics)
MTR Path
MTR (Mobile Termination Rate) (R$/minute)
• Cut implemented
• Clear path towards 2016 0.37 0.33
MTR & EILD • Great contribution from mobile sector (ARPM -16%YoY) 0.25
partially
0.17
implemented
EILD (Leased lines)
• Resolution 590 released (cut up to 30%)
• Needed framework to be followed by incumbents
• Monopoly break 2012a 2013e 2014e 2015e
18
19. Live TIM: Up & Running
MSANs
Optical Backbone
Network 2
network
Construction 1
3
Buildings authorized Building’s connected MSANs installed
7.1 k 8.5 k 3.0 k 4.2 K 405 694
3Q12 4Q12 3Q12 4Q12 3Q12 4Q12
Capex per Client Quality of Service
(R$) (Average Speed in Mbps)
>700
35 37
500
Quality of 20 21
Service with
Low Cost 1.8 0.4
Market Average Live TIM Live TIM
2012 Dec/15e (nominal) (delivered)
Download Upload
20
20. Live TIM: Speeding-Up with the New Offer
Market Demand Offers
(Units) (Units)
Launch Promo Actual (jan13)
Website
Registration
160k
Customer Base / Sales Msan Installation Takeup (average) weeks
('000 Clients) MKT share per Week per Coverage
10
Customer Base 10%
9
Sales
8
7
6
5 5%
4
3
2
1
0%
0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33
may/12 jun/12 jul/12 aug/12 sep/12 oct/12 nov/12 dec/12
Week
21
22. Lessons Learned: Focus on Quality
1 One Network for all businesses
Restructuring of the
network More Strength
Management
Change Intelig, TIM Fiber and TIM Great resilience
Celular network to become
Clear priorities
one single entity
2 The least claimed Telecom carrier at consumer
Direct report to the CEO, a protection agency (Procon)
Structuring new division responsible to
Delivery Anatel’s network plan
Quality assure quality measures, as
well as customer relation Improved IDA (Index of caring performance) from 88 pts
satisfaction in August to near 93 pts in December (2nd best)
3 Launch of a comprehensive Advertisement with the chairman and employees
website, focused on Anatel Plan disclosure
Image
network quality Real coverage footprint
Repair
Market campaign focused Quality KPI’s and network improvement/incidents
on transparency disclosure
4 3.4 Bi
Focus on mobile 3 Bi +12% 18% of
Incremental infrastructure Incremental Top Line
CapEx Investments
Enhanced 3G coverage
2012E 2012A
23
23. Consumers Complaits: Good position at Anatel and
Procons
IDA – Index of Attendance (last reported by Anatel) Anatel Ranking of Complaits (last reported by Anatel)
(Points) (Index of Complaints under 1,000 access)
0.64 0.63
99.40 100.00 99.90
96.75 97.90 0.50
96.15 95.15 0.47 0.48 0.50 0.50
95.05 98.00 0.47
93.95 97.00 96.70 0.41
89.85 91.00 88.00 89.35 0.39
90.30 0.44 0.34 0.44 TIM
87.90 92.80 TIM 0.40 0.41
89.35 84.01 0.32 0.30 0.26 0.27 0.38
0.24
86.40 86.20 0.27 0.30
84.80 84.85 0.24 0.28
73.26 0.21 0.20 0.20
72.72 73.15
Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12
Source: Anatel Source: Anatel
Volume of claims at Consumer’s Protection Agency (Procon) Procon Demands throughout 2012
(# Quarterly claims) (Mln of clients; Thousands of Demands) Best
position in
21,618 19,838 Telecom
19,245
18,558
16,013
14,737
12,567
10,687 10,510
9,344 8,882 8,913
8,229 7,693 TIM
7,591 8,745
6,229 7,166 7,648
6,533
4Q11 1Q12 2Q12 3Q12 4Q12
Source: SINDEC data base. Represents 45% of total Procons (12/31/12) Source: SINDEC published in Folha de São Paulo newspaper
P1 TIM P3 P4
24
24. Network and Quality Approach
3G Coverage Anatel Plan: Network Development Anatel Plan: Quality Targets
(# Cities, % Urban Population Covered) (Units TRX, Km Fiber) (Preliminary Results)
% Urban Pop 80% TRX (000) SMP5 – Call Completion
Covered 72%
54%
66%
241
271 97%
95% 95% 95%
205 205
# cities 712 2012a Anatel 2013e 2014e 2012a Anatel 2013e 2014e
488 Plan Plan
210 Data Channel Elements (000) SMP7 – Drop Call
741
2010 2011 2012 2013e 2014e 2015e 406 328
517
1.7% 2.0% 2.0% 2.0%
2012a Anatel 2013e 2014e 2012a Anatel 2013e 2014e
Organic Capex (ex- 4G license) Plan Plan
(Capex/Sales, Mix of Investments) FTTS (Km of Fiber 000) 53 SMP8 – Data Connection Rate
47
As % of Net Revs.
39 38
99%
95%
98% 98%
18.0% 18.0%
19.6%
10.7 2012a Anatel 2013e 2014e 2012a Anatel 2013e 2014e
3.4
3.0 Plan Plan
2.8
FTTS (#Sites 000) 3.3 SMP9 – Data Connection Drop Rate
Infra 2.7
Invest. 2.3 2.7 3.1
1.3 1.3 3% 5% 5% 5%
Other
Invest. 0.5 0.3 0.2
2012a Anatel 2013e 2014e 2012a Anatel 2013e 2014e
2010 2011 2012 2013e 2014e 2015e Plan Plan
25
26. Brazil: Leveraging on Pure Mobile Competitive Advantage
Voice FMS: Mobile is more convenient than Fixed… Data Going Mobile: Internet has a great potential…
R$/minute, voice Mln Households;
Fixed BB by speed
% of connections
68 Mln
Possess < 2 Mbps
38% 66%
Internet
connection
25.7 Mln
50% mobile
27% Other
discount 3.2 Mln
Does NOT 28% 25% Lack of
Possess 62% 2.9 Mln Coverage
Internet
connection 41.9 Mln Intention
2006 2007 2008 2009 2010 2011 2012 48% Too
to buy
5.6 Mln Expensive
over next 12 months
Total Households Households which does
NOT possess
Voice FMS: …TIM, with no legacies, can only gain on the trend Data Going Mobile …Mobile has greater price efficiency
R$ billion, Net Revenue per Group (9M12) Willingness to pay, % of households
Willingness to pay (% of Households)
Total 25.0 22.8 20.8 13.7 3.1 > R$ 250 1%
FMS R$ 250 2%
R$ 200 3% UBB
Fixed + Data + Focus Live TIM
9.4 R$ 150 6%
Pay TV Approach
13.7 0.7 R$ 100 13%
14.1 R$ 80 20%
R$ 70 26%
Mobile 15.6 13.0 R$ 50 41%
9.1 6.6 R$ 40 50%
3.1 R$ 30 62%
R$ 20 68% Mobile
Vivo Claro Oi TIM GVT R$ 10 73%
A pure mobile approach is the most suitable strategy to capture both opportunities
Source: Company estimates; CETIC dec’11;
28
27. TIM Fiber: Plan for 2013/2015
Coverage (addressable)
Thousands of Households
4x >2000
Geographic Expansion
Geographic expansion for low-middle class and targeting high
~500 income neighborhood
2012 2013 2014 2015 • 2012: priority coverage in areas with high ‘A/B classes’
concentration
Efficient approach
MSAN port occupancy (%), Capex (R$) • 2013: chess board strategy and entering in class C
Port Occupancy (%)
80 • 2014: additional coverage in Rio de Janeiro and São
60 Paulo metropolitan regions, focusing class C
40 concentration areas
20
0
2012 2013 2014 2015
Coverage Capex Installation Capex Total Capex
per Home Passed per Sub per Sub
~R$2k ~R$800 ~R$5k
~R$300
~R$80 ~R$700
TIM Int. Bench.*
TIM Int. Bench.* TIM Int. Bench.*
Fiber
Fiber Fiber
29
28. Business Drivers of Growth
CAGR 12-15
4 Ways of Growth Revenue Growth
(Total Revenues,R$ billion)
High Single
Digit growth
18.8
17.1
14.5
Customer MoU VAS HH ready
Base Revenues to sell
>90 Mln >200 min >26% ~2Mln
Community FMS Internet for Tim Fiber
2010 2011 2012 2013e 2014e 2015e
Expansion (Voice) everybody Ultra BB
Mobile Customer Base FMS – Voice (MOU) Internet for All (Mobile Data)
Million of lines Minutes of usage per line Data as % of Gross Mobile Serv. Revs.
250
>200 25%
>26%
> 90
200
19%
150 20%
70.3 129 15%
64.1
150
116 15%
13%
51.0 100
Double digit 10%
Double digit
growth growth
50
5%
0 0%
2010 2011 2012 2013e 2014e 2015e 2010 2011 2012 2013e 2014e 2015e 2010 2011 2012 2013e 2014e 2015e
30
29. 2013-2015 Guidance
2013 -2015
R$ billion 2011 2012
CAGR Guidance
Total Net High Single Digit
Revenues 17.1 18.8
Growth
Organic EBITDA High Single Digit
4.6 5.1
Growth
Organic CapEx 3.0 3.4 10.7
31
34. Regulatory Update
PGMC
• Access to fixed operators networks: • MTR (VU-M) billing system:
Unbundling of copper networks (Backbone, Backhaul and Last Mile at Full billing between PMS* players (i.e. TIM, Claro, Oi and Vivo).
regulated prices (wholesale vs. retail prices cross check). Partial bill and keep between non-PMS players (Nextel, CTBC and
No unbundling of fiber networks: exclusive use of fiber networks Sercomtel) and PMS players was defined as follows:
(including dark fiber) for 9 consecutive years (Regulatory Grace Period). 2013/2014: 80/20
2015: 60/40
• Infrastructure sharing: 2016: Full Billing
Sharing of the passive infrastructure (duct, conduits and towers).
• MTR cut path:
• National Roaming: 2013: 9.5% (~R$ 0.33/min.)
Charged at the lowest tariff in the market for non-PMS players (Nextel, 2014: 25% (~R$ 0.25/min.)
CTBC and Sercomtel). 2015: 33% (~R$ 0.17/min.)
2016: Cost Model
4G QUALITY
• 2.5 GHz: • Improvement Plan:
Contract is signed, 10% paid in 4Q12, 90% to be paid in 2Q13 Focus on the improvement of customer care and network.
(License value: R$ 382 mln).
Suppliers are defined: Huawei, Nokia-Siemens and Ericsson. • Anatel quarterly assessment:
Based on follow-up monthly meetings
• Future of 700 MHz Auction :
Ongoing discussion among Anatel, mobile carriers and • Indication of the integrality of the new quality rules
broadcasters on digital dividend. New broadband indicators start to be informed of November/ 2012.
*PMS as Significant Market Power. A player which has the power to influence a specific market. 37
35. Taxation Over Telecom in Brazil
Tax Composition
Telecom Tax Aliquots in Brazil
% of Gross Revenues % of Net Revenues
30%-40%
In 2011, TIM paid R$7.3 25%-35%
bln of taxes, fees and 1.5%
contributions (~43% of
total net revenues) LatAm Average
20%
Mexico
15%
0.65%
3% Nicaragua
Cofins ICMS Total 15% Venezuela
PIS/ Fust/
PASEP FUNTEL 14%
Colombia
20%
Tax Relief - 1º Step: M2M Fistel and Smartphones (MP 563/2012) Ecuador
27%
Tax reduction Reduction in the Increase of Peru Brazil
price to Penetration 19% 40%
consumer Bolivia
13%
Chile
Social 19%
Impacts
Argentina
Possibility of Better 25%
higher Quality
investment in
network Paraguay
10%
Economic
Impact
Source: UIT, Deloitte and Acel
38
36. Shareholders Structure and Stock performance
Telecom Italia
100%
Stock Performance (base 100)*
Telecom Italia International N.V.
140
100%
120
TIM Brasil Serv. e Part. S.A. Minorities
100
ON: 67% (1,611,969,946) ON: 33% (805,662,701)
80
60
40
TIM Participações S.A. 20
0
100% 100%
TIM Celular S.A. Intelig TIMP3 Ibovespa TSU
*Last price as of 02/01/2012 39
37. Safe Harbor and IR Contacts
Safe Harbor Statements Investor Relations Team
Avenida das Américas, 3434 - Bloco 01
Statements in this presentation, as well as oral 6 andar – Barra da Tijuca
22640-102 Rio de Janeiro, RJ
statements made by the management of TIM E-mail: ri@timbrasil.com.br
Participações S.A. (the “Company”, or “TIM”), that
Rogério Tostes
are not historical fact constitute “forward looking E-mail: rtostes@timbrasil.com.br
statements” that involve factors that could cause Phone: +55 21 4109-3742
the actual results of the Company to differ Vicente Ferreira
E-mail: vdferreira@timbrasil.com.br
materially from historical results or from any Phone: +55 21 4109-3360
results expressed or implied by such forward
Leonardo Wanderley
looking statements. The Company cautions users E-mail: lwanderley@timbrasil.com.br
of this presentation not to place undue reliance on Phone: +55 21 4109-4017
forward looking statements, which may be based Gustavo Valente
E-mail: gvalente@timbrasil.com.br
on assumptions and anticipated events that do Phone: +55 21 4109-3446
not materialize.
Luiza Chaves
E-mail: luchaves@timbrasil.com.br
Phone: +55 21 4109-3751
Visit our Website
www.tim.com.br/ir
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