TIM's challenges for 2016
TIM faced a difficult year in 2015, with the migration from voice to data accelerated by the economic crisis:
In mobile telephony, the growth of data net revenue (+18.5%) wasn't enough to make up for the reduction in voice net revenue (-17.1%).
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Contributed for the drop in voice revenue, the reduction of:
In face of this scenario, TIM launched in Nov/15 new service plans having the same minute price for on net and off net calls. Despite the positive results, these plans don't seem to be able to influence the trend for fall in voice revenue.
So the main TIM's challenge for 2016 will be to accelerate the growth of data revenue. According to TIM's projections, it will overtake voice revenue in this year.
To this end, TIM needs to increase the penetration of:
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TIM also needs to invest in its 3G/4G network, amplifying the coverage and capacity. Data consumption per TIM's user increased from 340 MB in 1Q15 to 475 MB in 4Q15 and is likely to keep growing in 2016.
The operator invested R$ 4.7 billion in 2015, 18.5% more than in 2014. In 2015, TIM amplified:
In 2016, investments may continue but the impact of the currency devaluation should be felt more strongly in the purchase of equipment this year.
Despite the difficult year, TIM's profitability improved in 2015. The EBITDA margin increased from 28.4% in 2014 to 31.5% in 2015, due to the reduction of costs with handsets purchase and with interconnection. Net profit raised from R$ 1.5 billion in 2014 to R$ 2.1 billion in 2015.
TIM is a mobile operator. Fixed services represented 3.9% of its net revenue in 2015.
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