02/21/2012


The competition between Vivo and TIM

 

Vivo and TIM got into fierce competition for the leadership of the prepaid market share in Brazil.

 

 

 

 

In 2011, TIM led prepaid net adds and reduced the difference to Vivo from 4.1 million in 2010 to 660 thousand in 2011. In January, Vivo led cellular growth and increased its advantage over TIM to 895 thousand prepaid accesses.

 

 

 

 

Kept the current trends, TIM can overtake Vivo and become leader in prepaid market share in the next months.

 

Vivo's leadership in cellular market share isn't threatened yet, due to the performance gotten by the company inside de postpaid segment. The difference between Vivo and TIM in postpaid hit 6,864 thousand cellulars in Jan/11.

 

 

 

 

The investment in 3G is one of Vivo's triumphs to keep its leadership in postpaid segment. In 4Q11, Vivo overtook TIM in ARPU and in data revenue. TIM surpassed Vivo in minutes of use (MOU).

 

 

4Q11 Vivo TIM
ARPU 24.6 21.9
MOU 119 131
Month Churn 3.0% 3.9%
Data/Mobile services revenue 26.0% 16.7%
Cities covered by 3G 2,516 488

 

 

Vivo's month churn (3.0%), still inferior to TIM's (3.9%), is the result of bigger participation of postpaid in its clients base.

 

Comparing financial economic indicators, Vivo/Telefônica showed the best profitability with Ebitda margin of 38.5% in 4Q11 and net profit of R$ 1,462 million.

 

 

R$ million - 4Q11
Vivo
TIM
Net Revenue
8,600
4,688
Mobile Revenue
5,271
4431
Fixed Revenue
3,329
257
EBITDA
3,308
1,305
Ebitda Margin
38.5%
27.8%
Profit
1,462
405

Investments

1,953
1,150

 

 

 

You could ask:

  • Will TIM overtake Vivo in prepaid market share?
  • Can TIM threaten Vivo in other segments?
  • Can the competition between Vivo and TIM drive Telefônica out of the Group controlled by Telecom Italia?

 

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Note: The opinions expressed in the published articles in this section are their authors' responsibility.

 

 

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