TIM's performance in 2012 and challenges for 2013
TIM faced a tough year in 2012:
However, the carrier got to overcome these adversities:
Despite of the expressive results, TIM, as what happened with other operators, showed smaller growth in 2012.
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More restrict rules established to turn off prepaid accesses, mainly in 4Q12 (what drove to churn growth and increased MOU and ARPU in this quarter), contributed to a smaller market growth.
| - | 4Q11 |
1Q12 |
2Q12 |
3Q12 |
4Q12 |
| Month Churn | 3.9% |
3.5% |
4.0% |
4.0% |
4.3% |
| Minutes of use (MOU) | 132 |
126 |
127 |
139 |
150 |
| ARPU (R$) | 21.9 |
19.1 |
18.3 |
18.9 |
19.9 |
The smaller base growth was followed by smaller growth in net revenue which dropped from 18.2% in 2011 to 9.8% in 2012.
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This is a sign that the model based on voice revenue growth getting exhausted and that is important to invest in data revenue growth.
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Brazil is going through a moment of broadband expansion (Fixed and Mobile) what requires heavy investments from operators.
TIM invested R$ 3.4 billion in 2012, what represents 17.9% of its net revenue in the year and 67.2% of its Capex. Besides mobile broadband (3G and 4G), TIM is also investing in TIM Fiber division offering high speed fixed broadband inside metropolitan regions of São Paulo and Rio de Janeiro, using the network acquired from AES.
In this scenario, TIM initiates 2013 with new president who has to keep TIM's trajectory of growth and innovation in recent years.
Telecom Italia's operations in Latin America (Brazil and Argentina) were responsible for the positive growth (0.5%) in the Group's revenue. The revenue in Italy dropped 3.7%. Revenue in Latin America represents 38% of the revenue and 27% of the Group's EBITDA.
Telecom Italia Group is also reducing its net debt from € 35.9 billion in 2007 to € 28.3 billion in 2012.
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