TIM's plans for 2012
In 2011, TIM is getting good results of a strategy developed two years ago and had the acquisition of Intelig as one of its pillars.
Intelig's fiber backbone was fundamental to the launch of the carrier's main innovation, the INFINITY plan (which charges R$ 0.25 for on-net local or long distance calls). INFINITY plan set the death of long distance in telephone calls in Brazil and led TIM to the leadership in market share of long distance minutes, overtaking Embratel, Oi and Telefônica.
In 2011, TIM surpassed Claro in mobile market share and leads cellular growth in the year. The good performance gotten by the operator is being translated not only in growth of cellular base but also in net revenue, which increased 17.5% in the first nine months of the year.
With INFINITY and Liberty plans, TIM got the biggest increase in mobile voice revenue in comparison with other operators (17.3% in 3Q11 over 3Q10).
This growth of voice is likely to decrease in 2012 and the operator must to grow in data. TIM's data gross revenue increased 47.6% in 3Q11, over 3Q10, but still represents 15.7% of the services gross revenue. At Vivo this percentage reached 25.9%.
Plans for 2012
In 2012, TIM wants to keep innovating and the main leverage is the acquisition of AES Atimus which has a big fiber network in metropolitan regions of Rio and São Paulo. By this acquisition, TIM plans to offer in these regions:
- Higher speed in mobile access
- High speed residential broadband
The operator wants to connect with fiber its cell sites in these regions, increasing speed connection with backhaul to 100 Mbps in Mar/11 and 300 Mbps in the future. With a backhaul of bigger capacity the company will be able to activate HSPA+ in its network and offer higher speed in mobile access. This solution will be applied also in other cities using even AES Atimus' fiber swap with other operators.
Increase speed and capacity of data transmission in mobile access is important for TIM in order to grow in data.
TIM wants to launch residential broadband service inside metropolitan regions of Rio de Janeiro and São Paulo (TIM Fiber), offering speeds higher to 10 Mbps using AES Atimus' net work.
Differently of other operators, TIM doesn't believe in convergence. The carrier doesn't have plans to have lower prices for fixed broadband when offering in packages. For TIM, package market is restricted to a small part of the market with high purchasing power.
Packages are offers for domiciles, and pay TV is the service holding the smallest penetration in the Brazilian homes. TIM doesn't have plans to get into pay TV segment, but is negotiating a partnership with SKY in order to come up with its offer.
Source: IBGE and Teleco's projections for Internet and pay TV.
Services integrated sale (packages) for domiciles is a world trend and got started by cable TV operators with their triple play offers (Telephone, broadband and pay TV). By the integration of fixed and mobile operations, operators are including cellular telephony and mobile broadband in these packages. Beyond low prices, the packages may in the future provide bigger interaction of the offered services. TIM is betting that this scenario will take time to happen in Brazil and is choosing an individual services offer.
You could ask:
- Will TIM's fixed broadband offer be successful? Or will packages prevail?
- Is TIM's entrance in São Paulo a reason for GVT to postpone breaking into this market?
- Will TIM offer high speed mobile data outside metropolitan region of Rio de Janeiro and São Paulo?
- Will voice strategy be modified?
Will TIM increase the participation of data revenue in services revenue?
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