Tim meeting with investors - nov 2017

1Meeting with Investors

Investor Relations

TIM BrasilCompany’s PresentationNovember, 2017


Investor Relations

Visit our website and download our IR

app: www.tim.com.br/ir

TIM IR app

(English)TIM RI app

(Portuguese)

Agenda

About us ………………………………………………………….……………….... 3

Market Overview and TIM Positioning ……………………..….…… 7

3Q17 Results ……………………………………………………………….……… 13

Regulatory Update ……………………………………………………………. 32

Strategic Plan 2017-19 ….…………………………………………………… 35

Appendix .…………………………………………………………………………… 41

23Network ………………..………………………………………………………..…..

Residential Solutions …….……………………………..……………………. 27

19Efficiency Plan & Digitalization ..………………….……………….……

http://www.tim.com.br/ir


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About Us


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31%

44%

49% 51% 52%

2012 2013 2014 2015 2016

26.7% 26.1%

28.4%

31.5%

33.5%

2012 2013 2014 2015 2016

1.92.3

3.5

4.7

5.6

2012 2013 2014 2015 2016

Presence in Brazil since 1998

22nd largest Private Company in Brazil*

Approximately R$25 billion of Market Capitalization

Innovative Net Revenues(R$ bln; VAS Revenues excluding SMS)

Data Penetration(data users over total base)

EBITDA Margin (%)

CAGR+32%

*Source: Exame Magazine - 2016

+700 Bps

TIM: A Solid Path in a Changing Industry

Leader in 4G Coverage

~1,465 cities covered with 4G

>75% of urban population in 4G

Total of 3,460 cities covered with 2G/3G/4G

High focus on infrastructure development

>21 thousand Sites

~5,250 sites connected with fiber

~76,100 km of optical fiber network

2nd in Revenue Share

61.3 million customers

25.3% Market Share

~R$4.5 billion invested in FY2016 (ex-licenses)

Growth via M&A

1.7x


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Joined UN Global Compact in 2008

Member of ISE (Sustainability Index) for 10 consecutive

years

ISO 14001 certified since 2010, 1st

Brazilian telco and ISO9001 Quality Certification for Billing and Networking

processes

Sustainability

TIM Stands out in Sustainability

Founded in July, 2013

MISSION: We are committed to creating and strengthening resources and strategies for

the democratization of science and innovation that promote human development in

Brazil, with mobile technology as one of the main facilitators.

In public schools

185,000 children and 6,300 professors

In museums and science and technology centers

More than 70,000 people

R$2.5 million in funding

In public administration

Participatory Urban Caretaker

o 4 municipalities

Cultural maps

o 7 municipalities and RS & CE government

In the federal institutions of professional and technological education

TIM Tec

o MOOC platform

Partnership with 5 federal institutes

Corporate Social Responsibility

BNDES is a strategic partner of Instituto TIM playing andimportant role financing part of the investments.


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Statutory Audit Committee:

• Report to Board of Directors

• Oversight Financial reporting

• Analyze anonymous complaints

Compensation Board and Internal Control and Risk Board

operate indefinitely and act independently

Whistleblower channel website

Brazilian Law “Lei das S.A”

LegalRequirements

Demand for transparency

and disclosures

Highest level of Corporate

GovernanceRequirement of protection for

minority shareholders

Unique Telco company listed on the Novo Mercado

Committees to Reinforce and Guarantee Solid Corporate Governance

10 members (3 independents)



3 members(1 independent)


8 members

Equal rights: vote, dividends and tag along

Higher liquidity

• Single class of share (ordinary shares)

Greater independence of Board of Directors (at least 20%)

Strict disclosure policy

Corporate Governance

http://ri.tim.com.br/show.aspx?idMateria=kVlFY26ilc3065dMouchWg==&linguagem=en


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Market Overview and TIM Positioning


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¹Datas from May-17;

1- Mobile revenue considers only the 5 major players. Oi numbers are adjusted to include corporate mobile and on 4Q16 the company has reviewed its numbers from 2014 to 2016. With that, the historical revenues share have changed.

Source: Anatel and players’ financial statements.

Brazilian Telcos X-Ray

Mobile Revenues Share

Nextel Oi Claro TIM Vivo

The industry mobile revenue (service + handsets) represented 52,1% of the total

industry revenues in 3Q17

Mobile Fixed Fixed BB Pay-TV¹ Grupo

Customers 3Q17 (000´s) 59,390 713 376 n.a. 60,478

Market share 3Q17 24.64% 1.73% 1.39% n.a. -

Net Adds 12M (000´s) -4,028 188 70 n.a. -3,770

Net Revs 3Q17 (R$ Mln) 3,884 4,083

ARPU 3Q17 (R$) 20.5 n.a. n.a. n.a. -

200


Customers 3Q17 (000´s) 60,398 10,838 8,737 9,511 89,483

Market share 3Q17 25.05% 26.31% 32.33% 51.02% -

Net Adds 12M (000´s) 227 -285 348 -9,848 -9,558

Net Revs 3Q17 (R$ Mln) 2,913 8,844

ARPU 3Q17 (R$) 15.0 n.a. n.a. n.a. -

5,931


Customers 3Q17 (000´s) 41,911 13,852 6,235 1,390 63,389

Market share 3Q17 17.39% 33.62% 23.07% 7.46% -

Net Adds 12M (000´s) -227 -477 -22 145 -581

Net Revs 3Q17 (R$ Mln) 2,085 5,918

ARPU 3Q17 (R$) 16.1 n.a. n.a. n.a. -

3,833


Customers 3Q17 (000´s) 74,562 14,257 7,610 1,714 98,143

Market share 3Q17 30.93% 34.61% 28.16% 9.09% -

Net Adds 12M (000´s) 784 -155 133 -48 713

Net Revs 3Q17 (R$ Mln) 6,610 10,970

ARPU 3Q17 (R$) 28.4 39.3 52.2 99.2 -

4,276

39,1% 40,2% 40,3% 40,7% 40,5% 41,5% 41,1%

22,7% 22,7% 23,0% 23,5% 23,3% 23,5% 23,9%

18,2% 17,6% 17,5% 17,1% 17,9% 17,5% 17,8%

14,2% 13,8% 13,7% 13,5% 13,3% 12,8% 13,1%5,7% 5,7% 5,5% 5,2% 5,0% 4,7% 4,1%

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17


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SP Cap

33.7%

29.0%

20.9%

12.4%

SP Int

RJ/ES

MG

37.2%

23.4%

22.1%

12.3%

BA/SE

31.9%

24.7%

24.0%

19.5%

NE

32.9%

31.4%

26.6%

9.1%

NO

39.1%

25.7%

20.2%

15.1%

CO

37.4%

34.1%

15.6%

12.6%

PR/SC

53.6%

19.8%

17.2%

9.1%

RS

46.5%

29.6%

14.5%

9.4%

BRAZIL

30.9%

25.1%

24.6%

17.4%

35.6%

32.1%

13.9%

13.7%

37.4%

32.2%

19.3%

8.0%

Market share analysis for the whole country

can be misleading

Mobile Market Share Analysis: Significant Differences by Geographic Area

TIM: 2nd place

TIM: leader

TIM: 3rd placeTIM: 4th place

Population in million peopleSource: Anatel. September of 2017


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12 13 14 15 16

0.41 0.42 0.42 0.42 0.42

0.36 0.32

0.24

0.16

0.100.06

0.03 0.02

07 08 09 10 11 12 13 14 15 16 17e 18e 19e

Voice to Data Substitution

MTR Cuts

Stabilization

Data traffic booming x

Voice slowdown

Changing Customer Base Mix

Expansion

Consolidation

Total base in mln customers

TIM’sMOU

Source: Internal figures and Anatel

R$

Transition Phase

TIM’sBOU

Change on Customer Base Profile

Prepaid

Postpaid 23 51

7998

211166

121

262

245

07 08 09 10 11 12 13 14 15 16

Total

Business Generated:

VAS x Voice

Revenues over Business Generated (in R$ mln)

BOU (Mbytes of use per data customers) and MOU (min)

26%

48%

74%

52%

12 13 14 15 16

VAS

Voice

https://www.google.com.br/url?url=https://logodownload.org/whatsapp-logo/&rct=j&frm=1&q=&esrc=s&sa=U&ei=RmuIVcKsKpD9sATun5WwDA&ved=0CBYQ9QEwAA&usg=AFQjCNGysfTGR2e0nWfVTUbt5Qcj_qA1_w

https://www.google.com.br/url?url=https://logodownload.org/whatsapp-logo/&rct=j&frm=1&q=&esrc=s&sa=U&ei=RmuIVcKsKpD9sATun5WwDA&ved=0CBYQ9QEwAA&usg=AFQjCNGysfTGR2e0nWfVTUbt5Qcj_qA1_w


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Strategy Path: Pillars of TIM Turnaround

Mobile Offer based on Customer Segmentation

(Advanced Analytics and Big Data) to maximize

ARPU

Attack Residential UBB market through

FTTH/WTTX

Push on 3/4P Convergent Offer in selected

regions taking benefit of our Zero Legacy approach

3

Infrastructure

4

Offer

3

Efficiency

5

Customer Experience

Accelerate 4G expansion in 700MHz to

reaffirm UBB Leadership in coverage and

quality

Push Fiber rollout to sustain E2E CEx in

Data and support Residential UBB

coverage expansion

Use Big Data and CEx driven

approach to drive Network Capex

4

Culture 1

Digitalization 2

Continue to focus on recurring Efficiency in

Industrial Cash Cost (zero base approach,

strategic sourcing, make vs buy)

Disruptive Efficiencies from Digital

Transformation

5

Accelerate Digital Capabilities

deployment in both commercial and

administrative IT systems

Increase Digitalization of Customer”s

Interactions along the entire lifecycle to

improve CEx and allow disruptive

efficiencies

2

Accountability and “Sense of

Ownership” as part of a deep

cultural transformation

1

Redesign the Customer Experience of our clients to become the Best TLC Provider leveraging our

Leadership position as an Ultra-Broadband player and our Smart Offer proposition

Shift internal Culture from “Excusability” to Accountability, redesign Platforms and Processes from analogue to Digital to allow a full Digital Transformation.


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TIM Brasil Mobile Go-to-Market: Distinct and targeted approach

Prepaid

Controle

Postpaid

“More for More” strategy, delivering the best value proposition

(voice + data + content)Offer Evolution:

+ data + unlimited calls

Combo launch(service loyalty + device)

Offer Evolution: + VAS + Data

Price up

Q1 Q2 Q3 Q4

...

Main Speech:High value top-up

incentive

Offer Evolution: Turbo 7 – TIM Pré

Main Speech: TIM Pre 1GB

Recurring

Main Speech: TIM Pre 1GB with

1GB bonus in recurring

Recurring portfolio evolution focus

Repositioning with TIM Black launch:More data, unlimited

minutesBack to the game in

handsetsExclusive contents

New handset discount offer (lock in)

Offer evolution (more data, +content)

New Express offers

Launch of TIM Black with unlimited calls

New Family offer

New discount offer (lock in)

New data bonus to push acquisition

New VAS partnerships Video as new premium content

Bundle Video Offer


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3Q17 Results


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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 PostpaidCustomer 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

2xvs. ‘16

2x vs. ‘16


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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 servicesand/or handset with 12months lock-in contracts

~40% of Pure Postpaidgross comes fromcustomers with lock-incontracts

1GB+ 1GB Bonus

Unlimited calls TIM-TIM + 100 minutes off-net

Unlimited Whatsappmessaging

+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


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+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%


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469 444 470

967 952 960

1,050924 926

202232 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)

2,6882,552 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%1.11.7

-1.2

0.5

0.6

+

+

-

+

+

-

-

+

-

-


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Solid EBITDA Growth Boosting Bottom Line and Cash Generated

Normalized EBITDA¹ Growth(%YoY)

¹ Normalized for tower sales and other items² 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

OFCF9M16

Δ EBTIDA(yoy)

Δ CAPEX(yoy)

Δ WC(yoy)

Δ Non-Recurring Items(yoy)

OFCF9M17

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 marginexpansion: from mid 20’s to high 30’s

Service EBITDA Margin at 39.7% in 3Q17and 37.1% 9M17

9M17 EBITDA - Capex of R$1.7 bln, (+2xYoY), 14.1% on Net Revenues, (+7p.p. YoY)

~1.5x


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Efficiency Plan & Digitalization


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2017 2018 2019

~90%

>0.1

~0.25

>0.1~0.5

Efficiency Plan: Strong Execution

Execution until 3Q17

Normalized Opex Evolution(R$Bln)

11.8

10.4

11.8

2015a 2016a 2017e 2018e 2019e

Rationalization of Discretionary and

Support Costs’

Optimization and Process

reengineering

Zero Leased Lines Project

Optimization of IT and Network Costs

Sales Channels Redesign

2017

Updated

Estimate

Detailing 9M17 Efficiency

(R$ bln)Efficiency Plan(R$ bln)

1.7 1.2

0.5

0.61.1

2017 Monitoring

(R$ bln)

5,2

>0.2 >0.2 ~0.2 ~0.5

5.3

Main Actions


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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

ControlRecurring

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 WebsiteDigital Interactions/

Total interactions

SALES & ACTIVATIONCUSTOMER MGMT &

CARINGBILLING 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%


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Addressing Other Types of Efficiencies

Telecom Italia Finance

TIM Brasil

TIM Part

TIM S.A.

(new denomination of Intelig)

Telecom Italia Finance

TIM Brasil

TIM Part

TIM Celular Intelig

Abroad

Brazil

Minorities Minorities

Generating operational and financial synergies through

restructuring process

From: To:

INTEREST OVER EQUITY

R$190 mln via IOE

o Anticipation of 2017 results distribution

o Fiscal efficiency

o Minority saving perception of +9.75%

(34%-15%-9.25% = 9.75%)

o Process optimization, system integration, simplification of billing, commissioning,

BI and control systems

o Unification of fixed and mobile services facilitating bids and convergent services

o Elimination of intercompany transactions inefficiencies


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Network


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746

2,401

3Q16 4Q16 1Q17 2Q17 3Q17

Further Advancing on Infrastructure

4G Coverage Evolution(# of cities)

P1

P3

P4

301Cities with 4G 700MHz

177Cities with

VoLTE

Leadership in4G 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

P1P3

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

P3P4

TIM

P1

P3P4

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

EoY > 90%

EoY >1.000 cities

EoY >1.000 cities


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Opportunity 2018

2.600 MHz 1.800 MHz 700 MHz

About 50% indoor

coverage

About 60% indoor

coverage

About 99% indoor

coverage

2x indoor Coverage

1,6x Data Traffic in 24 days

Benefits 4G + LTE 700Mhz

Network Effect

63%

i.e. Benefits of the 700Mhz deployments in Brasilia

Vol. Traf. Total (MB)

Vol. Traf. 700 (MB)

Vol. Traf. 1800 (MB)

Vol. Traf. 2600 (MB)

3G 4G

Churn

1,6x

3G 4G

Usage (GB)

2,5x

Throughput (Mbps)

3G 4G

3,2x

Customer Effect

59% Urban pop.

69% GDP

2018

2017

700 MHz +

Differential on Coverage

and Quality with


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Use spectrum opportunities to maximize TIM assets

2015 2016 2017 2018 2019 2020

LTE

2600MHz

2100MHz*

1800MHz

900MHz

850MHz

700MHz ND NDLTE

10 MhzLTE

10 MhzLTE

10 MhzLTE

10 Mhz

UMTS10 MHz

UMTS10 MHz

UMTS10 MHz

UMTS10 MHz

GSM 2,5 MHz

GSM 2,5 MHz

GSM 2,5 MHz

GSM 2,5 MHz

GSM 2,5 MHz

GSM 2,5 MHz

GSM 20 MHz

GSM 15 MHz

GSM 10 MHz

UMTS10 MHz

UMTS10 MHz

UMTS10 MHz

LTE10 MHz

LTE10 MHz

LTE10 MHz

LTE10 MHz

LTE10 MHz

LTE10 MHz

LTE10 MHz

LTE10 MHz

10 MHz 15 MHz 30 MHz 35 MHz 50 MHz 50 MHz

UMTS 5 MHz

LTE 5 MHz

UMTS 5 MHz

LTE 5 MHz

LTE 5 MHz

LTE

10 MHz

GSM 10 MHz

LTE

10 MHz

LTE15 MHz

GSM5 MHz

LTE15 MHz

GSM5 MHz

UMTS 5 MHz

LTE 5 MHz

Spectrum Refarming Plan (average Brazil)

* 10MHz Refarming for LTE will take place in areas where TIM owns the 850MHz band, keeping the UMTS inthis frequency. In the other areas it will be refarmed 5MHz for the LTE, keeping the other 5MHz to theUMTS.

Ca

rrie

rA

gg

reg

ati

on

2017 2018 2019 2020

25% 75% 100% 100%

20% 70% 100%

10% 75%

70% 100% 100% 100%

40% 100% 100% 100%

5% 10% 20%

10% 20%

2x CC

3x CC

4x CC

Optimize Spectrum Performance

LTE Evolution (4,5G)


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Residential Solutions


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Major Brazilian cities accounts for 97% of national UBB

Broadband penetration by region¹

• Low penetration (<40%) in 19 of 27 states and only São Paulo and Federal District with penetration above 60%...

• ...demands an assertive approach to obtain good results

> 60%

20% - 40%0 – 20%

40% – 60%

% BB penetration in HHs, Aug/17

UBB: Only 12 cities³ (all from SP)

with penetration UBB above 20%

Broadband

penetretion42%

34%

0%

32%BB (< 34 Mb) 37%36%

1% 2% 3%

36%

6%

Aug-16

38%42%39%

Aug-17

32%

UBB

Aug-15

35%

Aug-14Aug-13

Penetration of fixed broadband by city profile²

53% 54%

77%

97%96%

47% 46%

23%

3

3%

BB

(Mln)

27

HH

(Mln)

UBB

(Mln)

5.570 67

População

(Mln)

Cidades

206

4%

• Potential to grow in top 4% of Brazilian cities which has 77% of broadband connections and 97% of national UBB market due to its low UBB penetration (8%)...

• …and also potential in other 96% of cities (~50% population) which also has low penetration of 20% on average

Group B: other cities (5.320)

Group A: cities most populated (250)Fixed broadband penetration

(excludes SMP and includes SME BB)

42%

21%

60%

State of Group A cities:

• SP: 64

• RJ: 26

• MG: 23

• Other States: 137

6%

0%

10%

Source: ¹ Teleco ² Teleco, IBGE, Cetic, Anatel Note: ³ Vinhedo, São Caetano do Sul, Valinhos, Indaiatuba, Santos, São José dos Campos, São

Paulo, Barueri, Santana do Parnaíba, Praia Grande, Americana and Itatiba


Investor Relations

3Q16 3Q17

5729

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

299376

3Q16 3Q17 3Q16 3Q17 3Q16 3Q17

3Q16 3Q17 3Q16 3Q17

+36% YoY Addressable

HH


Investor Relations

Customer base

• Soft launch: more than 2k customers

• High attractiveness of the higher speed

offer (average ARPU of ~R$ 105)

Coverage Customer Experience

Customers quotes:

“I recommend the internet to my

neighbors”

“I use my internet to browse, play

online and watch videos”

“I knew the offer through a Facebook

group”

• Usage:

- 80% uses all data package

- ~40% uses to watch videos and movies

online

• Before acquiring WTTX service:

- 72% did not have broadband

- 21% did not have paid TV

• Levered on LTE 700Mhz project using idle

capacity of the constructed network

• Focus on regions with limited offer and

quality regions

• 2017 commercial launch in 16 cities (in 12

states)

WTTX “Fast Guide”

Q2 2017 Q4 2017

Device

Source internal infos

• Welcome call for all new customers

• Customers with high satisfaction index

(76% vs 57% of Broadband market)

• Equipment delivery in 7 days

• 83% of recommendation

Traffic measurement (July 3rd)

00:00 230006:00 12:00 18:000 GB

06 GB

12 GB

18 GB

Youtube Cyphered Facebook Netflix Whatsapp Google Others

WTTX started with great results


Investor Relations

Residential solutions: opportunities expansion through own networkN

etw

ork

eff

icie

nc

yN

ew

te

ch

no

log

ies

Broadband

Solutions

• Replacement of some boards by VDSL2+ boards

• Higher speeds and ARPU over the already constructed network

• Focus on high value areas with low sales performance

• Fast time-to-market

• Low investment to increase offer value

• Increase of capacity on already saturated areas

• Focus on already successful areas

• Exploitation of already approached buildings

• Synergy with network upgrade strategy (use of replaced boards)

• Innovative product that delivers a full, accessibleand simple solution of residential broadband

• Fixed ultrabroadband evolution: unique solution for who wants to go where nobody has arrived

• Focus on customers with limited broadband services mostly on cities suburbs and smaller cities

• Broadband through 4G - 700Mhz network

• Plug’n’play solution

• Voice and video included in data package

• Focus on high value customers and high customer experience standards

• Smart strategy coverage with launch in new cities

• Partnership with content providers

• Digital and multichannel caring (website, APP/Chatbot, service/URA)

WTTx FTTH

FTTC network upgrade FTTC capacity increase


Investor Relations

Regulatory Update


Investor Relations

Brazilian Spectrum - Caps and Distribution

Band 850 MHz 900 MHz 1.800 MHz 2.100 MHz 2.500 MHz 700 MHz

Regulated Spectrum Cap(FDD Applications)

(12.5+12.5)MHz

(2.5+2.5)MHz

(25+25)MHz

(15+15)MHz

(30+30)MHz

(20+20)MHz

Global Cap of 80 MHz < Σ of Sub-Caps Specific Caps

4G Spectrum

3G Spectrum

1 Disregarding P Band (2.550 to 2.510 MHz / 2.620 to 2.630 MHz).

1,800 MHz900 MHz850 MHz 2,500 MHz ¹2,100 MHz 700 MHz

11

18

21

5

5

4

3

43

35

29

26

24

22

25

29

20

20

40

40

20

20

20

0 20 40 60 80 100 120 140

Oi

TIM

Claro

Vivo

11

18

21

5

5

4

3

20

24

22

25

29

Nextel

Oi

TIM

Claro

Vivo

14

35

20

40

40

20

20

20

20

Nextel

Oi

Claro

Vivo

TIM


Investor Relations

Main Regulatory Topics

4Q17

November DecemberOctober

3Q17

August SeptemberJuly

Public Consultations• Numbering

(ANATEL)

• Digital Strategy (MCTIC)

700 MHz (Switch Off)• Salvador/BA and

Fortaleza/CE, Sobral and Juazeiro postponed to 2018

Zero Rating (CADE)• Not an anti-trust

infraction (archived)

TAC (TEF)• Approved with

recommendations (TCU)

Restricted Radiation• Res. 680/2017

700 MHz (Available)• >2.000 cities

GIRED for LTE

700 MHz (Switch Off)• Recife/PE

Public Consultation• Quality

(ANATEL) up to 08/01/18

• RIA Methodology (Casa Civil)

• Public Policies Decree (MCTIC)

• CGI Governance

Data limits on Fixed Broadband to• Discussion

Postponed (ANATEL)

700 MHz (Switch Off)• Rio de Janeiro,

Belo Horizonte and São Paulo Interior

.

Spectrum Management• Public

Consultation expected

PLC 79/2016• New Telecom

Framework still under debate

PERT • Ongoing ANATEL

Telecom Network Plan discussion

PGMC/RHORPA• Revision

Expected (ANATEL)

700 MHz (Available)• >3.000 cities

GIRED for LTE

TAC (Oi)• Rejection by

ANATEL


Investor Relations

Strategic Plan 2017-19


Investor Relations

72%59%

74%

~90%95%

2015 2016 2017e 2018e 2019e

Deploying a Faster and Wider Broadband Network

Cities covered

Population covered

(%)

(# of cities)

4G 3G

2016-2018 Plan (Feb 2016)

2017-2019 Plan

2016-2018 Plan (Feb 2016)

2017-2019 Plan

82%

84%

89%92%

2015 2016 2017e 2018e 2019e

700MHZ1,839

2,833

~3,200

2015 2016 2017e 2018e 2019e

South and southeast: additional 1,800MHz spectrum availability in2017 to boost speed and customer experience

North, northeast and middle east: beginning of the 700MHzfrequency roll out will guarantee more capacity and better coverage

3G coverage evolution will support customersadopting data services and customers that arenot using 4G yet

411

1,255

>2,000

~3,600

2015 2016 2017e 2018e 2019e


Investor Relations

2015 2016 2017e 2018e 2019e

63.8

61.6

2015a 2016e 2017e 2018e 2019e

Mobile Market Scenario & TIM Revenue Share Evolution

Customer base mix

Mobile Market & TIM Revenue Share*(Mobile Service Net Revenues; R$ bln; %)

ARPU Trend(R$)

Best “value for money”

positioning will support

Revenue share rebound

16.718.0

2015 2016 2017e 2018e 2019e

-3.4%

Mobile Market

Revenues

TIM Revenue

Share

*TIM Revenue Share and Mobile Market Revenues consider Revenues from top 5 players, including SME

CAGR ~+3%

~23% ~23%

~25%

Prepaid

PostpaidPostpaid mix

21%

66.2 mln

>35%

>60 mln

(customers)Mobile

Convergence in SP/RJand Selected Regions

Fixed Voice

Mobile

Voice On + Off

Data

Messaging(SMS +

WhatsApp)

Innovative Revenues will support total ARPU growth


Investor Relations

Efficiency: Executing on Plan

Main Actions

Optimization and Process

reengineering

Rationalization of Discretionary and Support Costs’

Zero Leased Lines

Project

Sales Channels RedesignOptimization of IT

and Network Costs

11.7

10.4

~11.7

2015 2016 2017e 2018e 2019e

Normalized Opex Evolution(R$ bln)

Efficiency Plan Evolution(R$ bln)

R$ 1.2 bn deliveredR$ 1.1 bln new plan

R$ 2.3 bln Total

+

Detailing Delivered Savings (R$ bln)

1.2

0.5

0.2

0.5

Process Driven Market Driven Volume Driven Total

(Network &

Interconnection)

(Selling and

Marketing

& Bad Debt)

(Personnel,

G&A & Other)

> New savings will maintain costs flat in 2015-2019

period despite inflation pressures and Company’s

structural growth <

1.7

1.2

0.5

0.6

1.1

"Original" Plan2016-18

Done until2016

RemainingSavings

Additional2017-19

New Plan2017-19


Investor Relations

Improving Profitability and Cash Generation

Capex Plan(R$ bln)

2017-19 <12 bln

2016-18 ~12.5 bln

EBITDA-Capex (R$ bln)

Consistent Growth in Profitability: improving EBITDA Margin and

Free Cash Flow

Run Rate Cash Cost Reduction supported by efficiency program,

offsetting Inflation and Structural Growth Impacts

Significant Capex Reduction even though a Strong Upside in

Network Coverage: Capex optimization and contracts negotiations

Normalized EBITDA Margin(%)

2016-2018 Plan (Feb 2016)

2017-2019 Plan

Normalized by non-organic events

4.5

3.8

4.7

2015 2016 2017e 2018e 2019e

EBITDA

Capex

95% of urban pop.: 4G Coverage Completion

4.7 4.5

5.45.2

2015 2016 2017e 2018e 2019e

31.5%

33.5%

>36%

2015 2016 2017e 2018e 2019e


Investor Relations

2017-2019 Strategic Plan Guidance Summary

KPIs Short Term Targets

Positive in all quarters

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 ~R$4 bln

-5%

4.5 bln

~4%

-3%

2016

High single digit


Investor Relations

Appendix


Investor RelationsSource: Anatel

3G 4G

Mobile Market Share TIM Postpaid Base Evolution(% over customer base)

Nextel

Oi

Claro

TIM

Vivo

Market Shareper Technology

Mobile Base Analysis

16,4% 16,4%19,0%

22,5%

28,2%

3Q13 3Q14 3Q15 3Q16 3Q17

24,1%

24,1% 24,2%24,1%

23,4% 22,7%

32,5%32,0% 32,3%

17,3%17,8% 17,9%

3Q16 4Q16 1Q17 2Q17 3Q17

35,5%33,8%

27,7% 27,1%

19,3%22,2%

15,5% 15,7%

3Q16 4Q16 1Q17 2Q17 3Q17

29,3%

30,9%

25,2%

24,6%25,3%

25,1%

18,5%

17,4%

3Q16 4Q16 1Q17 2Q17 3Q17


Investor Relations

Total Mobile Base Overview

Base (mil) 59.390 74.562 60.398 41.911 2.622 2.179 241.063

Δ MoM -1,6% 0,0% -0,1% -0,3% 1,0% 0,8% -0,5%

Δ YoY -6,1% 1,5% -4,9% -9,6% 4,5% 15,2% -4,0%

Market Share 24,64% 30,93% 25,05% 17,39% 1,09% 0,90%

Δ MoM (p.p.) -0,29 0,14 0,09 0,03 0,02 0,01

Δ YoY (p.p.) -0,6 1,7 -0,2 -1,1 0,1 0,2

Net Adds (mil) -963 -9 -60 -114 26 16 -1.105

Δ MoM 536,4% -116,5% -150,7% -234,8% -2,9% -28,3% -807,3%

Δ YoY 260,6% -135,1% -63,6% -83,5% -9,4% -16,6% 4,9%

Net Share -87,2% -0,8% -5,4% -10,4% 2,3% 1,5%

Δ MoM (p.p.) 9,7 -36,1 -81,1 -64,7 -14,7 -13,2

Δ YoY (p.p.) -61,8 -3,3 10,2 55,7 -0,4 -0,4

Net YTD (mil) -4.028 784 227 -227 34 205 -3.004

Δ YoY 34,8% 246,4% -109,2% -86,6% 1085,1% 61,5% -55,7%

Net Share YTD -134,1% 26,1% 7,6% -7,6% 1,1% 6,8%

Δ YoY (p.p.) -90,0 22,8 43,8 17,4 1,1 5,0

TOTAL

BASE TOTAL

NEXTEL OUTRASTIM VIVO CLARO OISeptember,17

Source: Anatel


Investor Relations

Total Postpaid Base Overview

Base (mil) 16.771 35.665 19.340 9.201 2.574 1.170 84.721

Δ MoM 2,2% 0,9% 1,7% 0,1% 0,8% 1,2% 1,2%

Δ YoY 17,8% 9,7% 11,9% 0,6% 2,6% 31,4% 10,6%

Market Share 19,80% 42,10% 22,83% 10,86% 3,04% 1,38%

Δ MoM (p.p.) 0,18 -0,16 0,10 -0,12 -0,01 0,00

Δ YoY (p.p.) 1,2 -0,3 0,3 -1,1 -0,2 0,2

Net Adds (mil) 359 306 322 14 21 14 1.036

Δ MoM -0,4% -0,8% 76,9% 56,6% 4,9% -53,0% 13,9%

Δ YoY 156,2% 4,9% 74,8% -19,7% -25,5% -38,9% 51,3%

Net Share 34,6% 29,5% 31,1% 1,3% 2,0% 1,3%

Δ MoM (p.p.) -5,0 -4,4 11,1 0,4 -0,2 -1,9

Δ YoY (p.p.) 14,2 -13,1 4,2 -1,2 -2,1 -2,0

Net YTD (mil) 1.889 2.274 1.028 -37 -11 210 5.353

Δ YoY 185,7% 59,6% 61,8% -108,2% -550,7% 62,2% 62,2%

Net Share YTD 35,3% 42,5% 19,2% -0,7% -0,2% 3,9%

Δ YoY (p.p.) 15,3 -0,7 -0,1 -14,2 -0,3 0,0

Net Adds (ex-M2M) (mil) 324 201 238 -11 21 -5 768

Δ MoM 5,7% -17,5% 83,5% -53,4% 4,9% -658,3% 13,3%

Net Share (ex-M2M) 42,2% 26,2% 31,0% -1,4% 2,8% -0,7%

Δ MoM (p.p.) -3,1 -9,8 11,9 2,0 -0,2 -0,8

BASE PÓS-PAGO

TOTALSeptember,17 TIM VIVO CLARO OI NEXTEL OUTRAS

Source: Anatel


Investor Relations

Total Prepaid Base Overview

Base (mil) 42.620 38.897 41.058 32.710 48,45 1.009 156.342

Δ MoM -3,0% -0,8% -0,9% -0,4% 10,5% 0,2% -1,4%

Δ YoY -13,0% -5,1% -11,2% -12,1% 6994,1% 0,8% -10,4%

Market Share 27,26% 24,88% 26,26% 20,92% 0,03% 0,65%

Δ MoM (p.p.) -0,47 0,14 0,11 0,20 0,00 0,01

Δ YoY (p.p.) -0,8 1,4 -0,2 -0,4 0,0 0,1

Net Adds (mil) -1.322 -315 -382 -128 4,59 2 -2.141

Δ MoM 158,5% 24,2% 496,6% -268,5% -27,8% -136,6% 184,1%

Δ YoY 224,7% 18,5% 9,5% -82,0% 30513,3% -178,7% 23,2%

Net Share -61,8% -14,7% -17,9% -6,0% 0,2% 0,1%

Δ MoM (p.p.) 6,1 18,9 -9,4 -16,1 -0,6 1,0

Δ YoY (p.p.) -38,3 0,6 2,2 35,0 0,2 0,3

Net YTD (mil) -5.917 -1.490 -801 -190 45,49 -5 -8.357

Δ YoY 62,2% 24,3% -74,1% -91,1% 12677,8% 102,5% -17,1%

Net Share YTD -70,8% -17,8% -9,6% -2,3% 0,5% -0,1%

Δ YoY (p.p.) -34,6 -5,9 21,1 19,0 0,5 0,0

TOTALNEXTEL OUTRASSeptember,17 TIM VIVO CLARO OI

BASE PRÉ-PAGO

Source: Anatel


Investor Relations

Total Voice & Data (modem+M2M) Postpaid Base Overview

Modem M2M Modem M2M Modem M2M Modem M2M Modem M2M Modem M2M Modem M2M

Base (mil) 341 1.656 1.643 5.854 1.165 4.940 167 1.407 41 0 8 634 3.366 14.491

Δ MoM -0,5% 2,2% -4,0% 1,8% -1,2% 1,7% -1,9% 1,8% -4,5% n.d -1,5% 3,1% -2,6% 1,9%

Δ YoY -21,1% 15,2% -31,8% 22,5% -30,1% 16,5% -22,7% 12,5% -49,7% n.d -26,6% 64,9% -30,1% 19,8%

Market Share 10,14% 11,43% 48,82% 40,40% 34,62% 34,09% 4,95% 9,71% 1,21% n.d 0,25% 4,37%

Δ MoM (p.p.) 0,22 0,03 -0,73 -0,02 0,50 -0,05 0,03 -0,01 -0,02 n.d 0,00 0,05

Δ YoY (p.p.) 1,2 -0,5 -1,2 0,9 0,0 -1,0 0,5 -0,6 -0,5 n.d 0,0 1,2

Net Adds (mil) -2 35 -69 105 -14 84 -3 25 -2 0 0 19 -89 269

Δ MoM -72,7% -34,9% -12,7% 61,0% -73,1% 60,5% -51,5% -23,3% 7,6% n.d -48,4% -32,8% -38,0% 15,6%

Δ YoY -78,3% -2468,3% 57,1% 94,7% -51,4% 51,4% -49,1% 462,3% -64,6% n.d -48,2% 101,4% -2,0% 119,5%

Net Share -1,7% 13,0% -77,0% 39,2% -15,3% 31,5% -3,6% 9,2% -2,1% n.d -0,1% 7,2%

Δ MoM (p.p.) 2,2 -10,1 -22,4 11,1 20,0 8,8 1,0 -4,7 -0,9 n.d 0,0 -5,2

Δ YoY (p.p.) 6,1 14,2 -29,0 -5,0 15,6 -14,1 3,3 5,6 3,8 n.d 0,1 -0,6

Net YTD (mil) -62 134 -611 841 -395 464 -37 105 -26 0 -2 211 -1.134 1.755

Δ YoY 141,7% -24,2% 6,8% 56,7% 8,5% -457,9% -43,9% -27,9% -63,7% n.d -33,9% 575,0% 2,7% 130,9%

Net Share YTD -5,5% 7,6% -53,9% 47,9% -34,9% 26,5% -3,2% 6,0% -2,3% n.d -0,2% 12,0%

Δ YoY (p.p.) -3,1 -15,6 -2,1 -22,7 -1,9 43,5 2,7 -13,1 4,3 n.d 0,1 7,9

TIM VIVO CLARO OI NEXTEL OUTRAS TOTALSeptember,17

Source: Anatel


Investor Relations

Fixed Broadband - TIM Live area

Base (000) 375,6 1.568 2.436 740 119 5.238Δ MoM 2,1% 0,0% 0,1% 0,0% 1,3% 0,2%

Δ YoY 25,6% 4,2% -1,3% -1,4% 20,8% 2,3%

Market Share 7,17% 29,93% 46,50% 14,12% 2,28%Δ MoM (p.p.) 0,13 -0,07 -0,06 -0,03 0,02

Δ YoY (p.p.) 1,33 0,6 -1,7 -0,5 0,3

Net Adds (000) 7,7 0,0 2,5 0,1 1,5 11,8

Net YTD (000) 69,8 43,9 -16,2 -10,7 12,5 99,3

OI

TOTAL BASE

TOTALSeptember,17 OTHERSTIM VIVO

Source: Anatel


Investor Relations

• A longer then expectedprocess of fiscal adjustmentsand a greater level ofuncertainties in politicscontinues to trim economicactivity

• Government and marketconsensus have postponed aresume in GDP growth to 2017

• Following new governmentcommitment to convergeinflation to its target in 2017market expects an importantdecrease in interest rates

• Interest rate have its reductionpath and the Central Bankprojection is to reach 7.00% inthe of 2017

Source: IBGE, Central Bank Inflation report (as of Dez/16) for Government Estimates and Bloomberg

GDP Forecast(% YoY growth)

Inflation Forecast(% IPCA - 12 months)

Interest Rate Forecast(% Selic Target p.y. - year end)

FX Rate Forecast(R$/U$ - end of period)

Market Consensus

Government Estimates

Macro scenario outlook

0.70

2.512.80

0.20

-3.80 -3.60

0.73 2.40

2013a 2014a 2015a 2016a 2017e 2018e

3.094.00

6.20 6.30

10.70

6.29

3.504.03

2013a 2014a 2015a 2016a 2017e 2018e

7.00 7.00

10.00

11.75

14.2513.75

7.007.00

2013a 2014a 2015a 2016a 2017e 2018e

3.21 3.302.40

2.70

4.00

3.25 3.25 3.30

2013a 2014a 2015a 2016a 2017e 2018e


Investor Relations

Tax Burden Composition(R$ mln in 2016)

Tax Burden over Net Revenues(over mobile phone services - voice)

Source Teleco study of July 2014

Tax Burden

7,621

PIS/COFINS ICMS FUST/ FUNTTEL FISTEL/ Others IR/CSLL Total

34% over Gross Revenues

*

*CPMF, IOF, INSS and others


Investor Relations

Historical Data: P&L

Description 2015 1Q16 2Q16 3Q16 4Q16 2016 1Q17 2Q17 3Q17 3Q17 vs 3Q16

Gross Revenues 25.771.500 5.738.493 5.623.766 5.624.961 5.758.370 22.745.590 5.566.509 5.502.436 5.674.580 0,9%

Service Gross Revenues 23.124.634 5.387.853 5.243.026 5.291.900 5.445.040 21.367.819 5.276.318 5.189.650 5.397.036 2,0%

Mobile Service Gross Revenues 22.121.450 5.106.852 4.952.140 4.996.041 5.133.929 20.188.962 4.989.243 4.871.563 5.064.857 1,4%

Gross Revenue Fixed Services 1.003.185 281.001 290.886 295.859 311.110 1.178.856 287.075 318.087 332.179 12,3%

Product Gross Revenues 2.646.866 350.640 380.740 333.060 313.330 1.377.771 290.191 312.786 277.544 -16,7%

Taxes and Discounts (8.629.235) (1.884.147) (1.803.615) (1.725.686) (1.714.728) (7.128.176) (1.615.135) (1.560.044) (1.591.219) -7,8%

Taxes and discounts on services (7.737.407) (1.769.198) (1.672.765) (1.602.585) (1.603.017) (6.647.565) (1.532.428) (1.439.446) (1.491.584) -6,9%

Taxes and discounts on product sales (891.828) (114.950) (130.849) (123.101) (111.711) (480.611) (82.707) (120.598) (99.635) -19,1%

Total Net Revenues 17.142.265 3.854.346 3.820.151 3.899.274 4.043.642 15.617.413 3.951.373 3.942.392 4.083.361 4,7%

Net Revenues Services 15.387.227 3.618.655 3.570.260 3.689.315 3.842.023 14.720.253 3.743.890 3.750.204 3.905.452 5,9%

Mobile Service 14.726.779 3.437.810 3.387.088 3.502.730 3.640.861 13.968.489 3.565.249 3.554.874 3.705.796 5,8%

Client generated 12.939.020 3.064.145 3.061.837 3.148.485 3.283.101 12.557.567 3.211.047 3.281.964 3.401.275 8,0%

Voice Local (Usage and Monthly fee) 5.595.440 1.197.219 1.189.458 1.203.625 1.301.041 4.891.342 1.070.476 889.693 898.433 -25,4%

Voice Long Distance 1.814.065 387.400 361.906 342.180 324.337 1.415.823 291.919 263.773 250.694 -26,7%

Data and Content VAS 5.529.515 1.479.526 1.510.473 1.602.680 1.657.723 6.250.402 1.848.653 2.128.499 2.252.148 40,5%

Interconnection 1.521.917 298.014 243.896 254.473 264.637 1.061.019 227.703 176.260 196.263 -22,9%

Other Revenues 265.842 75.652 81.356 99.773 93.123 349.903 126.498 96.651 108.258 8,5%

Fixed Service 660.449 180.845 183.172 186.585 201.162 751.765 178.640 195.330 199.656 7,0%

Net Revenues Products 1.755.038 235.691 249.891 209.959 201.619 897.160 207.484 192.188 177.909 -15,3%

Operating Expenses (10.528.854) (2.733.363) (2.579.034) (2.620.042) (2.475.607) (10.408.046) (2.688.572) (2.553.793) (2.556.555) -2,4%

Personnel expenses (1.043.852) (304.744) (218.959) (249.388) (232.206) (1.005.296) (222.873) (236.087) (235.290) -5,7%

Selling & marketing expenses (3.742.720) (895.254) (852.395) (887.093) (962.359) (3.597.101) (902.130) (868.859) (868.944) -2,0%

Network & interconnection (3.823.481) (985.650) (965.956) (968.419) (853.757) (3.773.782) (1.050.497) (924.342) (926.450) -4,3%

General & administrative (610.974) (145.454) (141.690) (132.063) (121.279) (540.487) (137.834) (137.748) (135.818) 2,8%

Cost Of Goods Sold (1.856.668) (254.360) (272.576) (231.311) (217.711) (975.959) (202.190) (232.240) (199.675) -13,7%

Bad Debt (230.357) (71.356) (69.160) (73.223) (52.703) (266.442) (64.932) (82.895) (91.135) 24,5%

Other operational revenues (expenses) 779.198 (76.544) (58.298) (78.545) (35.592) (248.979) (108.115) (71.622) (99.244) 26,4%

Operating Expenses (Normalized) (11.739.834) (2.692.050) (2.616.062) (2.596.660) (2.482.614) (10.387.386) (2.688.439) (2.551.872) (2.556.556) -1,5%

EBITDA 6.613.411 1.120.983 1.241.117 1.279.233 1.568.035 5.209.367 1.262.802 1.388.599 1.526.806 19,4%

EBITDA Margin 38,6% 29,1% 32,5% 32,8% 38,8% 33,4% 32,0% 35,2% 37,4% 14,0%

EBITDA (Normalized) 5.402.431 1.162.295 1.204.089 1.302.615 1.561.028 5.230.027 1.262.934 1.390.520 1.526.805 17,2%

EBITDA Margin (Normalized) 31,5% 30,2% 31,5% 33,4% 38,6% 33,5% 32,0% 35,3% 37,4% 11,9%

Depreciation & Amortization (3.361.971) (909.582) (951.241) (944.275) (980.074) (3.785.172) (988.953) (991.329) (993.667) 5,2%

Depreciation (1.851.261) (500.220) (528.431) (529.051) (526.339) (2.084.041) (540.252) (538.244) (535.335) 1,2%

Amortization (1.510.710) (409.362) (422.809) (415.224) (453.735) (1.701.131) (448.702) (453.085) (458.332) 10,4%

EBIT 3.251.440 211.400 289.877 334.958 587.961 1.424.196 273.849 397.270 533.139 59,2%

EBIT Margin 19,0% 5,5% 7,6% 8,6% 14,5% 9,1% 6,9% 10,1% 13,1% 52,0%

Net Financial Results (250.406) (68.822) (164.802) (75.906) (101.349) (410.880) (103.225) (127.247) (148.126) 95,1%

Financial expenses (1.115.524) (291.931) (292.674) (292.866) (279.015) (1.156.485) (280.110) (241.442) (266.906) -8,9%

Net exchange variance 2.410 (3.485) (1.961) 283 318 (4.845) (692) (2) (766) -371,0%

Financial income 862.708 226.594 129.832 216.677 177.347 750.450 177.578 114.197 119.546 -44,8%

Income Before Taxes 3.001.034 142.578 125.074 259.052 486.611 1.013.316 170.624 270.023 385.013 48,6%

Income Tax and Social Contribution (915.591) (14.671) (50.625) (74.975) (122.618) (262.889) (38.533) (51.097) (105.920) 41,3%

Net Income 2.085.443 127.907 74.449 184.077 363.994 750.427 132.091 218.925 279.093 51,6%


Investor Relations

Historical Data: Operational

Description 2015 1Q16 2Q16 3Q16 4Q16 2016 1Q17 2Q17 3Q17 3Q17 vs 3Q16

Brazilian Wireless Subscriber Base (000`s) 257,814 257,811 253,408 251,028 244,067 244,067 242,790 242,124 241,063 -4,0%

Estimated Total Penetration 125,67% 125,42% 124,00% 121,64% 118,04% 118,04% 117,20% 116,73% 115,93% -5,71 p.p

Municipalities Served (GSM) 3.448 3.460 3.460 3.460 3.460 3.460 3.460 3.460 3.460 0,0%

Market Share - TIM 25,69% 26,09% 25,25% 25,20% 25,98% 25,98% 25,5% 25,12% 24,64% -0,56 p.p

Total Lines - TIM (000's) 66.234 67.269 63.988 63.247 63.418 63.418 61.868 60.831 59.390 -6,1%

Prepaid Lines (000's) 52.654 53.721 50.229 49.005 48.537 48.537 46.541 44.996 42.620 -13,0%

Postpaid Lines (000's) 13.581 14 13.759 14.242 14.881 14.881 15.326 15.835 16.771 17,8%

Gross Additions (000's) 34.201 7.552 7.128 7.812 8.966 31.458 7.017 6.924 6.918 -11,4%

Net Additions (000's) -9.486 1.035 -3.281 -741 171 -2.816 -1.550 -1.036 -1.441 94,5%

Churn 59,1% 9,5% 15,6% 13,4% 13,9% 52,4% 13,6% 12,9% 13,8% 0,42 p.p

Total ARPU (R$) 16,7 17,2 17,2 18,4 19,2 18,0 19,0 19,4 20,5 11,4%

Total MOU 119 119 118 116 113 117 107 107 111 -4,6%

SAC 30 29 32 28 27 29 34 43 40 40,4%

Handsets Sold (000's) 4.659 363 358 283 272 1.276 248 304 266 -5,9%

CAPEX (R$ Mln) 4.764 710 975 1.122 1.695 4.502 669 809 1.009 -10,1%

Organic CAPEX (R$Mln) 4.767 710 975 1.065 1.695 4.446 669 809 1.009 -5,3%

Employees 13.062 12.297 12.104 9.956 9.863 9.863 9.687 9.482 9.404 -5,5%


Investor Relations

Historical Data: Cash Flow

Description 2015 1Q16 2Q16 3Q16 4Q16 2016 1Q17 2Q17 3Q17

Initial Net Financial Position 1.276 1.733 3.476 3.957 3.455 1.733 2.721 4.372 4.400

EBITDA Normalized 5.402 1.162 1.204 1.303 1.561 5.230 1.263 1.391 1.527

Capex (4.764) (710) (975) (1.122) (1.695) (4.502) (669) (809) (1.009)

EBITDA Normalized - Capex 638 452 229 181 (134) 728 594 582 518

D Working Capital (628) (1.870) 123 579 1.149 (19) (1.089) (215) 349

Non recurring operating items - (41,3) 37 (23,4) 7,0 (21) (0,1) (1,7) -

Operating Free Cash Flow Ex-licenses 10 (1.459) 389 736 1.022 688 (495) 365 867

Clean UP 700MHZ (370) - - - - - (859) - -

Operating Free Cash Flow Reported (360) (1.459) 389 736 1.022 688 (1.354) 365 867

Financial investments - - - - - - - - -

Asset disposal 2.503 3 108 4 25 140 - 15 -

Net impact of financial interests (487) (132) (230) (144) (166) (672) (178) (201) (211)

Taxes Payments (385) (86) (134) (55) (75) (350) (72) (50) (33)

Others impacts (1.368) (69) (154) (39) (72) (334) (47) (13) (53)

Net Cash Flow before dividends and change in equity (97) (1.743) (21) 502 734 (528) (1.651) 116 570

Dividends (360) - (460) - - (460) - (144) (2)

Change in Equity - - - - - - - - -

Net Cash Flow (457) (1.743) (481) 502 734 (988) (1.651) (28) 568

Final Net Financial Position 1.733 3.476 3.957 3.455 2.721 2.721 4.372 4.400 3.832


Investor Relations

Stock Performance (base 100)*Year to date

*Last price as of 11/23/2017Source: Bloomberg

Structure and Stock Performance

Shareholders Structure

Treasury Shares: 1,711,311 (0.07%)Total Shares: 2,421,032,479

75

100

125

150

Nov-16 Jan-17 Apr-17 Jul-17 Oct-17

TSU+35.4%

TIMP3+39.5%

Ibovespa+14.4%


Investor Relations

Investor Relations Team

Avenida João Cabral de Melo Neto, n 850, South Tower,

12th floor – Barra da Tijuca

22775-057 Rio de Janeiro, RJ

E-mail: [email protected]

Vicente Ferreira


Phone: +55 21 4109-3360

Pedro Yagelovic


Phone: +55 21 4112-6990

Rafaela GunzburgerE-mail: [email protected]

Phone: +55 21 4112-5119

Luiza MacedoE-mail: [email protected]

Phone: +55 21 4112-6828

Visit our Website

www.tim.com.br/ir

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.

Safe Harbor and IR Contacts

Safe Harbor Statements


Investor Relations

Tim meeting with investors - nov 2017

Investor Relations

Transcript of Tim meeting with investors - nov 2017