Q2 2025 TIM SA Earnings Call

Alberto Griselli: Revenues, you will see that you have a different mix of drivers. So if you look overall, you see a flattish number. But remember that you have something that we have here like C6, but we don't have here. And so we have some line of business like mobile advertisement, indeed, that are growing double-digit. This is all related to our core strategy that is mobile and incremental revenues that we're working and roaming with in that category because it's part of the evolution of our main offerings. And then you have new revenue streams like the B2B, IoT, or mobile advertising and things that are growing faster and contribute to the overall growth. It's certainly in line with our strategy to diversify our revenue portfolio.

It's a different mix of drivers. So if you look at overall you see a flattish number but I remember that you have something that we had last year like C. C. We don't have here and so we have got some line of business like our mobile advertising maintain data growing double digits. This is all related to.

Our core strategy that is mobile and incremental revenues that we're working in and roaming would fall.

It would be in that category, because it's part of our evolution of our main offerings and then you have new revenue streams like the beat to be Iot or mobile advertising and things that are growing faster and contribute towards the overall growth.

Shockingly in line with our.

Our strategy to live up to find while our revenue portfolio.

Yes.

The negotiation that we made with our.

Andrea Viegas: The negotiation that we made with our companies is more related to the extended time of the contract and get discounts with this. When we are talking about FT and another opportunity that we are studying is a plus for us. For example, as Alberto mentioned, we have some partners that we are not achieving an agreement with them and have very higher monthly fees with this tower company, so the alternative will be to build a tower. Another thing is in the context of B2B, sometimes we are in a place that it's only us and that our company is not interested in building a tower in this agro business or road. So this also is an alternative for us. But until now, we already renegotiated 30% of our tower contracts, and we believe that we still have room to renegotiate a lot more.

Confidence is more related.

Stan.

Time of the contract and get a discount.

With this when we are talking about.

It is key.

Are there opportunities that we I study is a plus.

As far as example.

Our bathroom installs may have some some after that.

Yeah.

Nothing achieving green.

Freeman with Sam ill have Larry Hyatt.

Mostly to use this.

Perpetual.

Tennessee.

Bill.

Uh Huh tower another another.

Things in the contract each sometimes we are in place that it's only us.

The telecom is not interesting in billed hour in this as in this agribusiness or road. So this also it's alternative for us so.

Yeah.

Until now we are right now and they're going to say, it's very friendly hands off hour type of contracts and we are we believe that we still have the room to negotiate a lot more.

Andrea Viegas: I don't know if I was.

I don't know if that was.

Alberto Griselli: And if I may add, look at it this way. It's like we have a cost line that we really want to dominate, and so we are putting in place all the levers and alternatives that we have to drive the cost where we want, as Andrea said. So you have the negotiation, you got the rationing agreement, you got a make versus buy option. So we are putting all the options in place because we think that we got more flexibility and more levers to get this cost line where we want to go.

Look at this way.

Mike.

So it's like we have.

Our cost line that we really want to dominate and so we are putting in place are all believers in alternatives that we have to drive the costs, where we want something that I've said. So you have the negotiation and you got the ran sharing agreement that you got to make versus buy option. So we're putting all the options in place because we think that we got more flexibility.

More leavers to get these cost line that where we want.

Cool.

That's clear makes sense. Thank you.

Luis Chagas: That's clear. Makes sense. Thank you.

Our next question comes from Louise sugars through next week with Mr. Shai S smartphone shopping.

Operator: Our next question comes from Luis Chagas for the next speak. Please, Mr. Chagas, your microphone is open.

Hi, guys. Thank you for taking my question from my side I have two so the first one is regarding opex.

Luis Chagas: Hi, guys. Thank you for taking my question. From my side, I have two. So the first one is regarding OPEX. What are the main drivers behind increased network and interconnection costs? Are these pressures likely to persist, or do you expect normalization in the coming quarter? And the second question is regarding competition. What is your view on the competitive pressure from new entrants in regions like the Northeast? How are you responding to protect market share there? Thank you.

The main drivers behind increased network and interconnection costs.

These pressures likely to persist or do you expect normalization in the coming quarters.

And the second question is regarding the competition.

What's your view on the competitive pressure from new entrants in regions like the northeast.

Respondents to protect market share there.

Sure.

As always let me go on the first one and then I will pass the Opex question Andrea So if you look at the overall.

Alberto Griselli: So, Luis, let me go on the first one, and then I will pass the OPEX question to Andrea. So if you look at the overall market, it's our view that we are in a rational market with a competition focused on quality by all main players and our peers, let's put it this way. And you see some positive movements in the last quarter whereby some of the more-for-more back from book price adjustment has been executed, I believe, and we're starting some potential adjustment according to a more-for-more strategy from book prices for pure postpaid also. And so overall, my reading on the competitive dynamics is that it's rational. Of course, there are some regional competitors that tend to be a bit more aggressive, and they are playing more on the price levers. As we commented on the first quarter, we are looking at it very closely.

Yes.

The over the overall market.

It's our view that.

We are in a rational market.

The competition focused on quality.

All main players than our peers, so let's put this way and you.

You see some positive movement in the last quarter, whereby the some of the more for more back.

Front book price adjustment has been executed.

I believe and we're starting some oh potential.

Potential adjustment there in according to a more for more strategy.

Front book prices for pure postpaid also and so overall the am I reading on the competitive dynamics is that is rationale.

Of course without some regional competitors that tends to be a bit more aggressive.

And they are playing more on the price levers.

As we commented on the first quarter, we are looking at very closely and we are not reacting.

Alberto Griselli: We are not reacting on prices at this point in time. We're more focusing on our levers in terms of quality of services to make these customers more happy and less sensible to the price movement or the regional competitors. So far, my take is that the threat is limited, but we look at this and we respond as things will evolve over time.

On on prices at this point in time, we are more focusing on our leveraged in terms of our quality of services.

To make these customers more have been sensible to be price movement or the regional competitors. So far my take is that the threat is limited, but the week.

Look at these two and.

We will respond as things will evolve over time.

Henry.

Andrea Viegas: Hi, Luis. The increase of the network and interconnection is related to the increase in the international roaming cost and also in provider cost. And international roaming, we increase the customer that they are using the service, and the provider cost increased because we launched a new portfolio with streams on board and also because more customers are acquiring this kind of thing. For us, it's a positive view. I can say this because all these have a good margin for us profit if we have an increase in our provider cost because we have more revenue related to this. And in the roaming international, as we mentioned in the past time, we have an adjustment between cost and revenue that in the year, this is also a positive margin. So the increase of these expenses is related to the more customers and more revenue.

The increase of the natural inclination is related to the increase in the national roaming costs and also provide a cost.

The National home, we increased the customers actually are using the service.

And there are pros either cost increase because of the allowance.

But in your portfolio with with.

Streams on board and also because more customer or a client is kind of.

For us it's up it's up.

Paul just to deal with.

I can't say this because I'll just have a good margin for US profits. If you have an increase in our product cost because we have more revenue related cities and they are in their Rami international as we mentioned.

In the past.

We have an adjustment between costs and revenues in the year. This is also a positive.

A positive margin so.

Uh huh.

The increase of this extensive extensive is relates to the more customers and more revenue.

Okay.

Alberto Griselli: Okay, Luis, did we answer your question? Okay, Luis, did you answer your question? So.

We answer the question.

Okay. Louise did you answer your questions.

Luis Chagas: Yes. Yes.

Yes.

Okay.

Alberto Griselli: Okay.

Just as a reminder.

Operator: Just as a reminder, if you wish to ask a question, use the raise hand button or type it down on the Q&A field. Wait while we pull for questions. Our next question comes from Gustavo Farias from UBS. Please, Mr. Farias, your microphone is open.

If you wish you asked the question used reason burden or type of down on the Q&A.

Wait while we pull for questions.

Our next question comes from Bruce double quote he is from UBS.

Christmas Aquarius, and my Poncho Bank.

Hi, everyone. One additional question I'd like to take a look on on prepaid.

Gustavo Farias: Hi, everyone. One additional question. I'd like to take a look on prepaid. We've seen a sequential growth in ARPU versus the first quarter. I just wanted to have an outlook for the how you're seeing the segment, the perspectives ahead, and especially in the light of numbers from AMX last week, which also showed some improvements. Thank you.

We've seen sequential growth in our pool versus the first quarter.

Just wanted to have an outlook for the Ohio seen the segment of perspectives to hedge.

Especially in the light tough numbers from from Amex.

Last week, which also showed some.

Improvements thank you.

Okay Gustava.

Alberto Griselli: Okay, Gustavo. Sorry, Gustavo here. It's okay. Now, when you look at prepaid, one of the main drivers of our dynamics, I would feel our competitive dynamics also is related to the prepaid-to-control migration. So this is something that we will keep doing. We have been doing. It's accretive to our revenue growth, and it's one of the drivers of the revenue performance of prepaid. As we commented, Gustavo, in the previous calls, we are also working on opportunities of improvement in the frequency of recharges. And we have in place a number of initiatives on the offer side, channel side that will increase capability and communication that we're putting in place. And this, basically, if you look forward, should allow us to soften the decline of prepaid revenues from one side while sustaining the postpaid revenues with prepaid-to-control migration. It's a general trend, I would say.

Gustavo here, Okay now.

When you look at prepaid.

The one or the main driver.

Of.

Our dynamics that I would feel our competitive dynamics also is related to the prepaid to controle migration. So this is something that we will keep doing we have been doing is accretive it towards the 12, our revenue growth.

And.

It's one of the driver of the revenue performance of prepaid.

As we commented that we're showing there in the previous calls we are also working on the opportunities of improvement in the fragrance frequency of recharges and we have in place.

A number of initiatives on the offer side channel side that will increase capillarity and communication that we're putting in place.

And.

And these are basically if you look for or the should allow us to self fund the decline of prepaid revenue so from one side the wildly sustaining.

Sustaining the postpaid revenues with the prepaid to Controle migration.

It's a general trend that I would say.

I won't comment on others.

Alberto Griselli: I don't comment on our peers' performance. I would say that a lot of what you see is strongly related to the prepaid-to-control migration strategies of each operator and each one of us has its own.

On that on our peers for four months.

I would say that a lot of what you see is the <unk>.

<unk> related to the prepaid to Controle migration strategies of each operator in each one of us is home.

Perfect. Thanks, a lot.

Gustavo Farias: Perfect. Thanks a lot.

Once again, if you issue ask a question. Please use the Malaysian burden or tap it down on the Q&A field wait while ore questions.

Operator: Once again, if you wish to ask a question, please use the raise hand button or type it down on the Q&A field. Wait while we pull for questions. Without any more questions from analysts, I'm returning the floor to Mr. Alberto Griselli for his final remarks. Please, Mr. Alberto, you may proceed.

Without any more questions from analysts.

I'm returning the floor to Mr. Alberto <unk> for his final remarks, Mr. Oberto.

Pete.

So thank you all for joining today's video caller.

Alberto Griselli: So thank you all for joining today's video call. I think we wrap up the first half with strong momentum, and despite external challenges, we are staying true to our strategy and consistently delivering solid results. Looking into the second half, I'm generally excited for what the second half holds for us. I've got a robust plan in place and the confidence to make it happen. I would like also to provide my heartfelt thanks to our entire team for their commitment and drive. And I look forward to catching up with some of you in the upcoming one-to-one meetings. Ciao, everybody.

I think we were up at the first half with strong momentum and despite external challenges, we are staying true to our strategy and consistently leaving delivering solid results.

Looking into the second half generally excel.

For what the second half holds for us.

Got a robust plan in place and the confidence to make it happen.

I would like also to provide my heartfelt thanks to our entire team for their commitment and drive and I look forward to catching up with some of you in the upcoming one to one meetings.

Hello, everybody.

This will conclude in the second quarter of 2025 conference call of Ciena say or further information and details of the company. Please access our website at <unk> Dot Com Dot BR Slash IR you can disconnect from now on.

Operator: Thus, we conclude the second quarter of 2025 conference call of TIN S.A. For further information and details of the company, please access our website at tin.com.br/ir. You can disconnect from now on. Thank you once again and have a wonderful day you.

Thank you once again and have a wonderful day.

Uh huh.

[music].