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TIM ensures cut in Opex after digital transformation

TIM revenue Q3 2017 OpexTIM announced that its existing digital transformation programs are resulting into significant savings for the telecom operator.

TIM has achieved 1.5 percent reduction in normalized costs and expenses during the third quarter of 2017 — despite growing its post-paid subscriber base and network.

TIM has achieved 90 percent of the savings target set under the 2017 Efficiency Plan by cutting costs by 1.4 percent in the first nine months of 2017.

TIM has reduced its employee base to 9,404 people (–5.5 percent) in order to reduce job related expenditure.
TIM revenue Q3 2017 ARPUTIM said commercial decreased 2 percent, mainly due to the efficiency initiatives with digitalization process, as well as FISTEL expenses and prepaid recharge fees reduction.

TIM admitted that costs were under pressure mainly due to network expansion (+80 percent on 4G sites and +14 percent on 3G sites), mainly affecting land rental costs and energy consumption and maintenance costs. TIM reduced costs related to network and ITX by 0.6 percent.
TIM revenue Q3 2017 digital transformationEBITDA grew 17.2 percent to R$1.5 billion in Q3 and 13.9 percent R$ 4.2 billion in 9 months to due to increase in service revenues, content revenues, and cost reduction, following the current efficiency plan. EBITDA margin reached 37.4 percent (+4.0 p.p.) in Q3 and 34.9 percent (+3.2 p.p.) in nine months of 2017.

Capex

TIM reduced Capex to R$ 1,009 million (–10.1 percent) in Q3 due to efficiency in investments after achieving decrease in equipment prices and better negotiations. TIM dedicated about 90 percent of Capex to infrastructure, especially transport network projects and 4G technology. Capex of TIM fell 11.4 percent to R$ 2,487 million in first nine months.
TIM revenue Q3 2017 infrastructure
The infrastructure improvement and growth is supported by ongoing projects, such as the expansion of the optical fiber network, the densification of sites, the expansion of hetnet coverage, the refarming of the frequency and the aggregation of carriers in two or three frequencies, depending on the place.

TIM said the hetnet project reached 3.9 thousand new hotspots in the whole country, a 9 percent increase when compared to 3Q16 and the optical fiber network exceeded 80 thousand kilometers, representing an increase of 12 percent over the same period.

TIM said its 4G coverage reached 2,401 cities, or 86 percent of the urban population of the country, an increase of more than 220 percent in the number of covered cities. The number of 4G sites grew 80 percent, surpassing the amount of 3G sites.

In addition, TIM continues the development of LTE network, using the 700MHz frequency, operating in 301 cities.

TIM said it expanded its 4G coverage to 3,128 cities, or 90 percent of the country’s urban population, a 50 percent increase in terms of covered cities.

TIM has 24.8 million 4G users. 4G user base increased 81.6 percent due to migration from 3G to 4G. TIM has 21.6 million 3G users.

Net revenues of TIM grew 4.7 percent to R$ 4,083 million in Q3 and 3.5 percent to R$ 11,977 million in nine months.

Data revenues and content increased 40.5 percent and represents 60.8 percent of MSR, confirming the company’s position to offer more combined bundles (voice+data) and content. Mobile ARPU of TIM rose 11.4 percent to R$ 20.5.

Fixed service revenues of TIM increased 7 percent thanks to 54.1 percent growth in TIM Live revenues in Q3.

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