Reduction in Tim's base affects cellular growth in Brazil
The one responsible for the low cellular growth in Brazil in the beginning of 2009 doesn't seem to be the global financial crisis, but Tim's performance that presented negative net adds of 823 thousand cellulars in Feb/09, -686 thousand in the accumulated in the year. Tim has a new direction and is going through a restructuring which involves repositioning of the brand, new portfolio of promotions and a bigger focus in increasing revenue and profitability (more details).
All the indications are point out that Tim is promoting a cleaning in its client base eliminating not only the inactive prepaid cellulars but also the in debt postpaid cellulars, the same process was promoted by Vivo in 2006 which cleaned its base, eliminating 2 million cellulars. The loss of 249 thousand postpaid cellulars in 4Q08 is related to this process.
Cleaning cellular base, eliminating inactive and in debt cellulars, has as an inconvenience for operators the reduction in the number of its cellulars and its market share. However, this process improves the ARPU (calculated for a smaller cellular base) and reduces the expenditures with the payment of inspection fees (Fistel).
The operators have a continuous process of base cleaning, but when this process isn't efficient it makes necessary a bigger cleaning, as it seems to be happening to Tim now and happened to Vivo in 2006. The expectation is that Tim will recover its growth pace in March/09. This cleaning set, however, Tim in a position more distant from Claro and decreases its advantages over Oi/BrT.
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