TIM's performance in 2Q11
In the second quarter of 2011 TIM had the results of its strategy for increasing in mobile voice segment.
The carrier led cellular growth in quarter holding net adds of 2.7 million mobile accesses (39.1% of the market total) and reached the Claro's market share (25.55%), decreasing the difference which separates both companies to 9.5 thousand accesses.
By equaling, with Infinity Plan, the price for local and long distance calls, TIM got to increase its client base and reach the leadership charged minutes in National Long Distance (LDN).
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Source: Anatel
TIM's long distance revenue (41) grew 38.7% in 2Q11, when compared with 2Q10, and mobile voice 15.4%.
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The operator registered also an expressive growth in mobile data revenue (33.5%), in handsets sales (92.8%) and in its fixed operations (Intelig and TIM Fixed)(23.3%).
The growth of handsets revenue came after the end of the subsidies in cell phones sales. TIM negotiated exclusive promotions with suppliers, mainly for smartphones (54% of the handsets sold in 2Q11). By the end of the quarter smartphones represented 15% of TIM's cell phones base.
The growth of mobile data revenue was encouraged by promotions for the prepaid market, in SMS as well as Internet accesses for R$0.50 by day. Infinity Web's base (prepaid) increased from 300 thousand users by day in Aug/10 to 1.8 million in Aug/11.
As a result, TIM Brasil's gross revenue grew 24.5% (2Q11/2Q10) and net adds 19.5%, reaching the targets established by Telecom Italia in the beginning of 2010: betting on TIM Brasil as leverage for revenue growth, making up for the losses in Italy.
Telecom Italia's revenue in Italy presented negative growth (-7.0%) in this period (2Q11/2Q10). Fixed telephony hit -5.6% and Mobile -9.2%.
To repeat this growth in the next 12 months, TIM will have to continue to innovate. Infinity plan brought the leadership in mobile voice growth, but other carriers are already offering promotions charging almost the same price for local and long distance calls. TIM will need to accelerate the growth of data revenue, which represented 14.6% of the mobile services gross revenue in 2Q11.
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After purchasing AES Atimus, company that has an big fiber network in metropolitan regions inside the states of São Paulo and Rio de Janeiro, TIM wants to improve quality in its mobile broadband (3G) by connecting its ERBs with fiber and launch in 2012 a new offer for residential fixed broadband with speeds faster than 10 Mbps.
The challenges are big for TIM, but innovation has been its weapon to keep growing inside the Brazilian market.
You could ask:
Will TIM reach two digits growth for its revenue in the next 12 months?
Will TIM overtake Claro in market share? When?
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