AnnuAl RepoRt tIM 2012 - report:sustentabilidade

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Annual Report
TIM 2012
Menu
PROFILE
Presentation
CEO’s Message
Who we are
Our strengths
1
1
2
10
Governance
Corporate Governance
Ethics in management
Risk management
12
15
16
Strategy
Growth strategy
Economic and industry scenario
Network and quality
Offers and commercial approach
18
23
26
28
Performance
Operational
Finance
Social and environmental
32
35
41
TIM PARTICIPAÇÕES: 2012 Annual Report
PROFILE
PROFILE
Presentation
TIM’S POSITIVE PERFORMANCE
IS THE RESULT OF INVESTMENT
STRATEGIES AND COMMITMENT
TO ETHICS
1
TIM was always recognized in the Brazilian market by its
ongoing innovation capability, which became part of its
DNA, and is currently one of the largest and most important
companies in the country. Every day, we connect millions
of people, companies and ideas, shortening distances,
integrating the country and collaborating significantly for
Brazil’s socio economic development. None of this would
have been possible without the permanent contribution of
a competent and committed team, of which I have the privilege of being part today.
This annual report presents a scenario of TIM Participações S.A.’s main accomplishments in 2012, a year of
many challenges in which the company demonstrated its
capability to overcome obstacles, supported by solid business foundations.
2012 was a very difficult and challenging year for the sector
and for TIM, particularly, including a management change
in the company, a macroeconomics slow down, increased
competition and a great increase of regulatory scrutiny,
which in mid-year led to a quick, but hard, sales ban of
several sector operators. After this suspension, additional
Even in this scenario, in which TIM’s image was affected by
the sales ban imposed by the National Telecommunications
Agency (Anatel), the year of 2012 brought several positive
results: the company was the fastest growing telecom operator (in number of customers and revenues), exceeding the
milestone of 70 million customers and consolidating itself
in the second position of the market. In addition, it conquered the leadership in the pre-paid segment, thus enabling
millions of people to participate in digital inclusion.
TIM demonstrated in 2012
its capability of overcoming
challenges to better
service its more than 70
million customers
This report presents the path covered by TIM to reach profitable sustainable growth within the context of a highly competitive market such as the Brazilian one, demonstrating the
company strategies, approaches and initiatives and the interrelationships with the various stakeholders.
PROFILE
CEO’s Message
Renewed commitment with
innovation, quality and
transparency
In March 2013, I became TIM’s CEO with great enthusiasm, starting the challenge of leading the company in
its next phase of growth, together with the entire team. I
come to TIM after more than 20 years of experience in the
telecommunications and information technology markets,
acting as chief executive of several companies of the sector in Brazil and overseas, and my most recent professional experience was as CEO of Cisco do Brasil, a company
where I worked for the last seven years.
allegations were disseminated against the company reputation, through an accusation of intentional drop call in one
of its service plans, which in no way has any foundation, as
was subsequently presented and recognized.
Despite this very turbulent scenario, TIM closed the year
with excellent results, demonstrating an impressive capability of navigating a turbulent period, supported by solid
business foundations, innovative marketing strategy, sales force, differentiated channel strategy and, particularly, strong commitment and dedication of its more than 11
thousand direct employees. Many companies could have
reacted negatively to a situation like this, but I’m sure that
TIM, on the contrary, left 2012 even stronger, with a great team and a renewed commitment to innovation, quality
and transparency in offering the best services for our more
than 70 million customers.
Leading telecommunications growth in Brazil
We believe that innovations such as the Infinity and Liberty
plans were key factors for the expansion of telecommunication services in Brazil. Through very transparent and
innovative offerings, TIM managed to reinforce its position
as the best cost-benefit rate in the market. Despite the im-
PROFILE
pact in image went through in the second half of 2012,
the results and achievements were extremely relevant, reaching the leadership in the sector in indicators such as number of pre-paid users, revenue growth, growth in the base of
mobile customers and growth of EBITDA, of market share
of net additions and total minutes of use (MOU). Maintenance of leadership in customer base growth reaches therefore
its tenth consecutive quarter, indicating the strength of the
brand and of the positioning of the company offerings in the
market. In addition, we reached the second position in the
post-paid voice segment, showing also a good growth of the
data services user base, exceeding 21 millions.
2
I believe the company today features all necessary conditions
for maintaining focus on the sustainable business growth, having as our main values relevant innovation (the one that,
effectively, makes a difference for our customers), search for
quality and transparency. These values are key elements in
supporting the strategy of continuing to gain market with the
trend of replacing fixed by mobile and the growth of the data
users base. This way, we will continue to provide innovative
offerings that enable our customers to speak more, navigate
more and go further.
Rodrigo Abreu
CEO
Evolution of the operational strategy and positioning
Even celebrating good consolidated results in the fiscal year
of 2012, we cannot fail to recognize the difficulties in the
areas of regulation and quality perception. But from them
we extracted important lessons for business improvement
and adjustment of our operational strategy to the huge
company growth. Among other actions, we restructured the
management of the network and of information technology,
reinforced and extended the scope of initiatives for quality
management and significantly increased investments in infrastructure anticipated in our industrial 2013-2015 plan. In
addition, we intensified the regulatory approach and discussions, accompanying the perception of increased value of
the telecommunications industry, highlighting the important
role this sector has in the country’s socioeconomic development and increasing competitiveness. Regarding positioning among the customers, it is worth noting the transparency and commitment to quality. Along these lines, the
site “Quality Website” allows our customers to track TIM’s
investments and the effective coverage in each location,
and even collaborate indicating where we must improve our
network.
Conclusion and perspectives for 2013
The year of 2013 will be of reacceleration of our business. In
addition to further investments in the already existing infrastructure, with great focus in increased coverage and network
quality, we will also start operating the 4G network, which
becomes an additional alternative to the expected growth in
data services usage by our customers. Once more, in an innovative way, TIM led with the pioneer adoption of a strategy
of shared infrastructure in building and operating the 4G network, which allows increased speed and higher efficiency of
the investments made.
PROFILE
Who we are
Synergy with our
controlling group is made
of shared experiences and
adoption of the policy of
best practices
TIM Participações S.A. is an open capital company with
shares traded at the São Paulo Exchange Rate (BM&F Bovespa) and ADRs (American Depositary Receipts) traded at
the New York Exchange Rate (NYSE). The company is also
part of a selected group of companies comprising the “ISE”
(Enterprise Sustainability Index) portfolio, and is the only telecommunications company that is part of ‘Novo Mercado’,
the highest corporate governance level of BM&F Bovespa.
The company is controlled by TIM Brasil Serviços e Participações S.A., a subsidiary of the Telecom Italia group. Innovation and quality are two of the strategic pillars TIM shares
with its controlling company. To that end, TIM makes substantial investments in network and information technology
(IT), building synergies with its controlling group by sharing
experiences and adopting a best practices policy, always
ensuring innovative experiences to all its customers.
Through our subsidiaries, TIM Celular S.A. and Intelig, we
operate, in addition to the mobile phone market, in the markets of fixed and long distance telecom and data transmission in all national territory. In addition, we started in August
2012 to offer Live TIM, our service of fixed ultra broadband,
whose coverage area is the metropolitan areas of the states
of Rio de Janeiro and São Paulo.
PROFILE
70.3 million customers
We are the second largest company providing mobile phone
services in Brazil in total number of lines, with 70.3 million
customers and market share of 26.9%, according to Anatel
data as of December 31st 2012. We were leaders in Brazil
in net addition of lines in 2012, maintaining the first place
also conquered in 2011 and 2010. In this last period, we
registered 6.3 million net additions, a 3% increase compared to the same period of 2011. In 2012, our net revenue
of services was equivalent to R$18.8 billion, a 10% increase compared to the previous year. Our EBITDA also grew
comparing these periods, showing a 7.6% increase in the
annual comparison.
Expansion of the optic fiber network
Our optic fiber network is deployed across the entire country, with an extensive long distance network (backbone) of
approximately 39 thousand kilometers, and metropolitan
networks with unique capillarity to offer high quality ultra
broadband service in the metropolitan areas of Rio de Janeiro and São Paulo. In addition, we started our project
of expanding the metropolitan optic fiber network in the
44 main Brazilian cities (reaching approximately 50% of
total traffic), which will extend throughout late 2014. This
project is a key step of the company in order to deliver a
high performance data service, including 4G technology.
Among other projects, such as expansion of our long distance optic fiber network, we delivered the first phase of
the LT Amazonas build project, consisting of an optic fiber
backbone connecting the main cities of the North Region
of the country, one of the areas there are most lacking in
infrastructure in Brazil.
Innovation transforming the market
Our brand shows a strong association with innovation. We
were pioneers in launching several products, such as the
introduction of MMS and Blackberry in Brazil. We believe
that some mobile phone plans we created, such as Liberty
(unlimited use) and Infinity (concept of “pay per call”) transformed the mobile phone market in Brazil, aligned with our
strategies of promoting voice traffic and long distance calls
and accelerating the fixed to mobile substitution (migration
of the traffic originated at fixed lines to those originated at
mobile numbers). Our growth in the market of mobile telecom does not generate effects of revenue cannibalization,
as we have no legacy in the fixed market.
As a reflex of our commitment to improve the capability
of providing high quality services, we invested R$ 3,386
million, of which approximately 93% in infrastructure and,
considering the acquisition of the 4G license, this number
reaches R$ 3,765 million. The amount exceeds by 10% the
value invested in 2011, a sign that the company is aware
3
of the need to invest increasingly more on a sector that,
by its nature, is capital intensive. Therefore, TIM will be the
mobile company that will invest most in the 2012-2014 three
year period, according to data presented by the mobile operators to Anatel. This movement has as a great leverage,
our strategy of discontinuing the policy of subsidizing the
acquisition of devices, diverting this amount to the focus on
infrastructure.
By the end of 2012, we had more than 10 thousand point
of sales, between Premium stores and resellers (dedicated
or multi brand), plus the capillarity of the large retail chains.
In addition to traditional points of sale, our customers of the
pre-paid segment have alternate channels for recharging,
such as supermarkets and newsstands, with a total of more
than 470 thousand points of sale distributed throughout all
of Brazil. It is also worth mentioning the number of 131 own
stores by the end of 2012, 50 of which were launched by the
end of the year.
Mission
Be close to the customer, offering innovative connectivity possibilities and focusing on their several expectations and requirements, in order to contribute
as an agent for social advancement through sustainable management.
Vision
To be the customers’ number one choice, by providing them with high-quality innovative services, while
becoming the benchmark for profitability in the Brazilian telecommunications market.
Values
•
•
•
•
•
•
•
•
Proactiveness
Transparency
Speed
Professional excellence
Innovation
Entrepreneurial spirit
Customer-focuse
Team spirit
PROFILE
4
TIMELINE
1998
Privatization of the Telebras system, with the
creation of 12 new holding companies, including
Tele Celular Sul Participações S.A. (TSU) and Tele
Nordeste Celular Participações S.A. (TND).
1999
Bovespa starts trading
TSU shares.
Company Bitel purchases the shareholder participations of
TSU and TND, becoming their controller.
The New York Stock Exchange (NYSE) starts
negotiating TSU ADRs
2001
TIM acquires licenses in the D and E bandwidths of cellular
mobile telecom, becoming the first authorized group with
national coverage
2002
Launch of the GSM technology for D and E bandwidths.
Conversion of service concessions in the Cellular Mobile
Service (“SMC”) regime to the Personal Mobile Service
(“SMP”) regime
2003
Telecom Italia (T.I.) forms TIM Brasil, a holding company of
T.I.’s operating companies in Brazil.
Launch of the Provider Selection
Code (“CSP 41”) and the beginning
of national and international long
distance (LD) services.
Subsidiary Telepar Celular S.A. had its name changed to
TIM Sul S.A. (TIM Sul).
Launch of the GSM technology for A and B bandwidths.
TIM Brasil incorporates Bitel.
2005
The total incorporation of shares of TIM Sul and TIM
Nordeste by TIM is approved.
2004
TND is incorporated to TSU, which has its name
changed to TIM Participações S.A. (TIM).
TIM shares begin negotiation in Bovespa,
with the trading floor name TIM PART. S.A.,
using negotiation code TCSL3 for ordinary
shares and TCSL4 for preferred shares.
TIM ADRs begin to be traded at NYSE,
maintaining the TSU code.
PROFILE
5
TIMELINE
(CONTINUED)
2007
TIM acquires a national fixed
telecom license.
TIM acquires third generation (3G)
frequencies for all of the country (except
“Triângulo Mineiro”), enabling it to offer
3G services in all states.
2008
TIM starts provision of 3G services through the TIM 3G+
brand, with new services, such as mobile broadband,
videocall and mobile TV.
Launch of “Tim Fixo”, establishing another milestone in the
company’s convergence strategy.
TIMi included in the portfolio of the
Bovespa’s Corporate Sustainability Index
(“ISE”), consisting only of companies
highly committed towards sustainabilit
y and social responsibility. Since then
the company has been included
in “ISE” every year.
2009
Start of the company’s restructuring process, with the arrival
of the new president.
Beginning of brand repositioning process. TIM changes its
slogan to “Você, sem fronteiras” (you, without borders).
TIM starts the launch of its new portfolio of offerings
with the Infinity plan.
2010
TIM is chosen as the best mobile
operator in Latin America operator at the
World Telecoms Award 2010, an award
granted by British magazine World Finance.
Conclusion of the incorporation process of Intelig by TIM.
TIM promotes the shareholder reorganization of its
subsidiaries through incorporation of TIM Nordeste S.A. by
TIM Celular.
Relaunch of the Intelig brand with the
media campaign “Intelig agora é TIM”
(Intelig is now TIM).
TIM reaches first place in LD market share,
surpassing traditional competitors in the sector.
Launch of the Infinity Web and Liberty Web
data offerings, providing unlimited Internet
access to the pre-payment and post-payment
audiences, respectively.
2012
TIM reaches leadership in the prepayment segment and second position
in the post-payment segment.
Conclusion of the incorporation process
of TIM Fiber RJ and TIM Fiber SP by
TIM Celular.
2011
Launch of the Infinity Torpedo, the first offering for
pre-payment customers with a focus on unlimited
communication for the operator users and other users.
Signing of the deal to build the fiber optics network
(backbone) in the North Region of the country, expanding
the operator’s infrastructure – “LT Amazonas” Project.
Migration to the ‘Novo Mercado’, highest segment of
corporate governance in Bovespa. TIM is the only Brazil
telecom company listed in the ‘Novo Mercado’.
Conclusion of the acquisition process for companies
Eletropaulo Comunicações Ltda. and AES Communications
Rio de Janeiro S.A., of Companhia Brasiliana de Energia.
Conclusion of primary IPO, with emission of 200,258,368
ordinary shares at a price of R$8.60, for a total of
R$1,722,221,964.80.
PROFILE
Broadness of Operation
National Coverage
TIM’s cellular telecom network is based on GSM technology. On December 31st, 2012 we had a national reach of
approximately 95% of the urban population, with the largest
GSM coverage in Brazil, active in 3.4 thousand cities. TIM
also has a wide data coverage in the entire country, with
100% GPRS (General Package Radio Service) and 94%
Edge (digital technology for cellular telecom that allows better data transmission), in addition to a sophisticated third
generation network (3G) available for more than 72% of
Brazil’s urban population.
TIM COVERAGE
6
In 2012 the company maintained the internal program, which started in 2009, of monitoring the network quality, based
on sample measurements conducted at the routes of the
country’s main metropolitan areas. The program tracks the
performance of TIM’s network and also of the other mobile
operators, and is used to conduct fine tuning and provide
quality improvements to the network.
It is important to highlight that changes in the regulation of
quality for the Personal Mobile Service (“SMP”), starting in
March, 2012, changed the form of collecting information,
increasing the quantity of samples analyzed and requiring
greater effort in order to meet them. Therefore, TIM submitted to Anatel’s approval the National Action Plan for Improving “SMP” Provision, forecasting a significant increase in
investments to improve quality during the 2012-2014 three
year period, reaching the amount of more than R$ 9.5 billion.
In this context of adjustment to the new regulation, TIM has
already obtained a significant improvement in meeting the
goal issued by Anatel, going from 53.14% of goals achieved
in May 2012 to 68% in December of that same year.
DURING THE YEAR, TIM
PERFORMED SIGNIFICANT
INVESTMENTS TO EXPAND
COVERAGE AND DATA AND VOICE
TRAFFIC CAPACITY
International coverage (roaming)
3G Coverage
GSM/Edge Coverage
TIM made significant investments throughout the year, of
which R$ 3.1 billion in network alone, to extend coverage
and capability, keeping up with the growth of voice and
data traffic.
Overseas, TIM continues to expand the availability of international roaming services: there are already more than 450
networks available, in more than 200 destinations in the six
continents (including Antarctic) for voice use, in addition
to 150 destinations with data coverage (GPRS/Edge). In
addition, the company is leader in coverage for pre-paid
customers, offering the service in 46 destinations. Starting
in 2009, TIM also offered 3G overseas and, in 2012, coverage was extended to more than 90 destinations. For
the purpose of providing even more comfort to the service
user, the customers travelling overseas also have coverage on board of sea cruises and airplanes, including some
national flights (partnership between TIM, OnAir and TAM).
PROFILE
7
• Bad Debt as a percentage of gross revenue, reached
2012 Highlights
• Customer confidence unchanged: Best value for money.
• Maintaining pre-paid leadership position, with 4.8 million
0.90% in 2012, a record of low level for the company.
• The organic EBITDA of 2012 (adjusted for non-recurring
events in Q3) reached R$ 5,052 million (+8,5% year over
year). Excluding non-recurring events, the reported EBITDA reached R$ 5,010 million.
net additions (or 38.1% share), reaching 59.6 million lines in 2012.
• Post-paid voice sound acceleration.
• The organic EBITDA margin in 2012 reached 27%, sup-
ported by a margin of 28.4% in Q4. The reported EBITDA
margin reached 26.7%.
• MOU (minutes of use) reached 150 minutes in the fourth
quarter of 2012 14.5% YoY growth a new record for the
company. The 2012 average MOU was 136 minutes.
• The organic net profit in 2012 reached R$ 1.5 billion
(+17,4% year over year), supported by a 16.3% growth
in Q4.
• Penetration of smart / webphone reached 43% of the total base in 2012 (versus 27% in 2011).
• ARPU (average revenue per user) reached R$ 20 in
the fourth quarter of 2012, a 5.1% increase QoQ and
a 9.5% reduction year over year (versus -11.0% in the
third quarter).
• The total net revenue grew 10% YoY in 2012.
• The annual increase of data gross revenue in 2012 reached 39%, representing 19% of the total revenue of mobile services.
• The total investment in 2012 reached R$ 3.8 billion, of
which R$ 3.4 billion organic and R$ 0.4 billion related to
4G licenses; 93% of the total Capex was directed to infrastructure.
• Live TIM update: 500 thousand homes-passed; approximately 160 thousand potential customer registered in the
site and approximately 10 thousand active customers.
• The total dividend to be proposed for 2012 reached R$
743 million (versus R$ 533 million in 2011).
Operational indicators
2010
2011
2011 X 2010
2012
2012 X 2011
Municipalities served (GSM)
3,203
3,294
2.8%
3,383
2.7%
Market share
25.14%
26.46%
1 pps
26.87%
0 pps
Total lines (000’s)
51,028
64,083
25.6%
70,343
9.8%
Pre-paid lines (000’s)
43,549
54,778
25.8%
59,599
8.8%
Post-paid lines (000’s)
7,479
9,305
24.4%
10,744
15.5%
Gross additions (000’s)
28,608
39,755
39.0%
38,408
-3.4%
Net additions (000’s)
9,914
13,055
31.7%
6,260
-52.1%
Churn
42.4%
47.9%
6 pps
47.5%
0 pps
Total ARPU
23.7
21.4
-9.8%
19.1
-11.0%
Total MOU
116
129
10.8%
136
5.4%
SAC
54
34
-38.2%
29
-12.7%
Handset Sales (000’s)
8,012
11,780
47.0%
10,226
-13.2%
Employees
9,712
10,562
8.8%
11,650
10.3%
*pps: percent points
PROFILE
8
Quality and service indicators
2010
2011
2011 X 2010
2012
2012 X 2011
SMP5 – Traffic channel allocation rate
(voice)*
n.a.
n.a.
-
97% (goal = 95%)
-
SMP7 – Drop Call*
n.a.
n.a.
-
1.7% (goal = 2.0%)
-
SMP8 – Data connection rate*
n.a.
n.a.
-
99% (goal = 95%)
-
SMP9 – Date connection Drop rate*
n.a.
n.a.
-
3% (goal = 5%)
-
Anatel’s Index of Complaints under 1,000
acesses (last reported by Anatel)
0.470
0.300
-36.2%
0.420
40.0%
Anatel’s Index of Carrying (last reported by
Anatel)
76.41
95.05
24.4%
88.95
-6.4%
*The “SMP” calculation formula was changed by Anatel on April/2012
INCOME STATEMENT
(R$ THOUSAND)
2010
2011
2011 X 2010
2012
2012 X 2011
TOTAL GROSS REVENUES
20,319,295
24,757,565
21.8%
27,755,813
12.1%
Gross Revenues Telecommunications Services
18,761,384
22,217,049
18.4%
24,350,086
9.6%
Telecommunications Services - Mobile
17,480,139
20,691,604
18.4%
22,879,828
10.6%
Telecommunications Services - Fixed
1,281,246
1,525,445
19.1%
1,469,795
-3.6%
Gross Revenues Handset sales
1,557,910
2,540,517
63.1%
3,405,726
34.1%
Discounts and deductions on Gross
Revenues
(5,861,846)
(7,671,589)
30.9%
(8,991,865)
17.2%
Net Revenues
14,457,449
17,085,976
18.2%
18,763,947
9.8%
Net Revenues on Services
13,571,625
15,353,228
13.1%
16,419,958
6.9%
Net Revenues on Products
885,824
1,732,748
95.6%
2,343,989
35.3%
Operating Expenses
(10,244,399)
(12,427,669)
21.3%
(13,753,914)
10.7%
EBITDA
4,213,051
4,658,307
10.6%
5,010,033
7.6%
EBITDA margin
29.1%
27.3%
-2 pps
26.7%
-1 pps
Adjusted EBITDA
4,213,051
4,658,307
10.6%
5,052,163
8.5%
Adjusted EBITDA margin
29.1%
27.3%
-2 pps
26.9%
0 pps
EBIT
1,200,134
2,062,339
71.8%
2,321,445
12.6%
Net profit
2,211,715
1,277,845
-42.2%
1,448,888
13.4%
Adjusted net profit
2,211,715
1,277,845
-42.2%
1,500,143
17.4%
* Consolidated financial and operational information, except when otherwise indicated, are presented according to the International Rules of Accounting (IFRS)
and in reais (R$), according to the Law of Open Capital Entities. The analysis of
demonstration of results in the fiscal year refers to TIM and Intelig operations.
pps: percentage points
**pps: percentage points
PROFILE
9
CASH FLOW* (R$ THOUSAND)
2010
2011
2011 X 2010
2012
2012 X 2011
Additions to permanent assets (Capex)
(2,835,761)
(3,027,113)
6.7%
(3,764,726)
24.4%
Free operational cash flow
1,372,792
1,623,199
18.2%
1,824,250
12.4%
Net cash flow
697,473
543,160
-22.1%
591,883
9.0%
*Consolidated financial and operational information, except when otherwise indicated,
are presented according to the International Rules of Accounting (IFRS) and in reais
(R$), according to the Law of Open Capital Entities. The analysis of demonstration of
results in the fiscal year refers to TIM and Intelig operations.
SUSTAINABILITY INDEXES (GRI)
2011
2012
2,098,194Kg
100%
2,632,291Kg
100%
49,924GJ
49,947
1,342,931
1,311,878
176.4t
748t
222.6t
573.8t
EN2-Recycled materials used
Total paper consumed
Percentage of recycled material compared to total
EN3/EN4-Energy consumption
from own sources (gas and diesel – vehicles and
generators) and from third parties (electricity)
EN22-Total weight of residues, by type and
method of disposal
Hazardous
Non hazardous
EN26-Initiatives for mitigating environmental
impacts of products and services
Level of electromagnetic emissions
EN30-Total investment and expenses in
environmental protection
In 1,539 sites (139% more than in 2010)
R$ 235.5 thousand
In 2,058 sites (33.7% more than in 2011)
R$ 1037 thousand
In 2012, HR started a partnership with the area
of Certification & Quality to develop a project
for adjusting TIM to the National Policy of Solid
Waste (PNRS). The first waste inventory ¬is
also being developed, in addition to several
education courses at PNRS.
PR5 – Practices related to customer
satisfaction, including results of surveys
measuring such satisfaction
The satisfaction average was 8.05. TIM
received 20,174 complaints at Procon
and solved 100% of their criticisms and
complaints.
received 13,540 complaints at Procon and
solved 100% of their criticisms and complaints.
LA10 – Average training hours per year, per
employee
154.2 h/year
679,675.0 h/year
SO8 – Total value of significant fines and
non-monetary sanctions resulting from noncompliance with laws and regulations
TIM received 8,156 labor claims and,
in the same period, paid an amount
of R$ 798,000.00 for cases of claims
considered justified.
TIM received 10,823 labor claims and,
in the same period, paid an amount of
R$ 2,705,000.00 for cases of claims
considered justified.
PROFILE
PROFILE
Our strengths
TIM promotes creativity and
encourages collaborators
to overcome challenges
TIM is an innovative and bold company, with 11 thousand
collaborators helping to keep its position as fastest growing
operator in Brazil. The company’s commitment towards
quality and transparency in services and its highly trained
staff of collaborators enabled it to become a reference in the
national telecom segment.
Assets
How is it developed?
2012 Highlights
TIM brand
Result of the innovative
company DNA, our offerings
lead a great number of
people to digital inclusion.
Commitment to quality of
service and transparency
towards our customers.
•
•
•
•
More than 70 million customers
2nd position in market share
Leadership in pre-paid
Launch of Quality Website
Human Resources
Human resources
management is done by
aligning the collaborator
expectations with business
needs and the market
conditions. It is constituted
of three pillars: People,
Development and Education
and Integration and Quality
of Life.
•
•
•
•
11,650 collaborators in Brazil
13,036 registrations in courses
679,675 hours of training
30 thousand registrations to
the “Estágio sem Fronteiras”
(Internship Program)
• 2,700 collaborators on the TIM
Olympic Games in 270 teams.
• 4,000 children supported at “TIM
Abre as Portas”
• 853,763 visits to the new intranet
Advertising Campaigns
Always focused on innovation
and quality of service, TIM
invests to improve the life of
its customers. The campaigns
translate the company
slogan, “Você sem fronteiras”,
therefore encouraging
customers to speak more, do
more and go further.
• Launch of “Depoimentos”
(campaign)
• Creation of “Trem Azul” (Blue Train
campaign)
• Launch of new plans and services:
Liberty Controle, Infinity Web
Modem, Liberty Passport, Infinity
Torcedor and Live TIM
• Reality show at the Caldeirão do
Huck TV program, looking for a
Blue Man
10
TIM brand
TIM was the operator with greatest growth in Brazil in 2012.
It recently reached the milestone of 70.3 million customers,
consolidating itself as the second ranked in the market. In
addition, it conquered leadership in the pre-paid segment,
thus enabling digital inclusion for many people.
These numbers are the result of consistent work and innovative services that promote the category, as was the case,
for example, with launching Liberty Control, a plan combining elements of post-paid with pre-paid, characterized by
the fact that, even without credits, the customer may continue to speak (use the services) unlimitedly with any TIM in
Brazil; and the launch of Infinity Web Modem, which allows
the pre-paid user to have mobile internet in his computer for
just R$ 1.99 per day of use.
Another important attitude taken by TIM this year was to
reaffirm its commitment to quality, launching the Quality
Website, where its customers may monitor improvements
in service and the ongoing evolution of its infrastructure, in
addition to the expansion of the network itself.
Human Resources
Working for TIM is more than just having a job. It means
being part of a bold and innovative company, which promotes
creativity and encourages collaborators to break day-to-day
barriers and overcome limitations. All of this with a focus on
the customer, to take unlimited communication, access to technology and full mobility to the entire TIM community.
The company manages its human resources aligning
people’s expectation, business needs and market conditions.
In a motivating and challenging work environment, TIM offers
room and opportunities for its staff to expand horizons, evolve
and leverage company achievements.
TIM invests on continuous promotion of the professional development of its team, encouraging the commitment of collaborators with the company goals and strategic objectives.
People
The TIM group closed 2012 with 11,650 collaborators in all
of Brazil. These people, with their stories and knowledge,
represent the company’s intellectual capital and operate as
key elements for the development of the business.
With skills and attitudes that are essential for the company
growth, the team is young and works with innovation and
accomplishing energy. The age average is 31: 29% of the
PROFILE
collaborators are 25 years old or less; 48% are between 25
and 35 years old; 17% are between 35 and 45 years old and
6% are more than 45 years old.
In our staff, 48% of the people have high education or are
undergoing, and 6% of the collaborators has post-graduate
degrees. The numbers and achievements show that the
collaborators comprise a diversified team highly qualified for
overcoming the company challenges. The operating body of
TIM is complemented by nine outsourced headcounts, 289
interns and 316 apprentices.
Development and education
At TIM, the collaborators have access to innovative tools
and well-structured paths for evolving in the company and
building a successful career. In synch with the organizational values, they outline their professional path based on
their own professional experiences and knowledge acquired through the company investment.
This is why TIM invests on classroom and online courses.
In 2012, there were 13,036 participants in the Training and
/Qualification Program, adding up to 679,675 hours, an
average of 52 hours per employee. The courses are mainly
focused on the pillars of technical, behavior and management competences required for the challenges of each job.
To guide the career of its collaborators, TIM monitors the
individual performance to guide them towards activities
with more assertiveness. In addition to encourage and
provide real growth opportunities, the company recognizes
the differentiated dedication and performance of its professionals using Performance Management as reference.
Throughout 2012, 1,087 collaborators were awarded with merit actions and internal opportunities, reaching 39.7% of the
eligible population, with an average salary increase of 20.5%.
Attraction and development of high potential professionals are priorities for TIM. Through “Talentos sem fronteiras” (Trainee program), TIM tries to identify and attract
the best young professionals in the job market, preparing
them to put new ideas in practice and assume strategic
positions in the company in a short time. In 2012 16 new
talents were selected to join the program, with a total of 68
participants in December.
“Estágio sem fronteiras” (Internship program) brings to TIM
youngsters with energy and determination, initiative, team
spirit and, particularly, interest for challenges. In 2012,
more than 30 thousand university students throughout the
country registered to the program, an increase of approximately 35% in the quantity of people interested.
11
Integration and quality of life
Among the initiatives aimed at health, well-being and quality
of life, it is worth mentioning the TIM Olympic Games. The
internal competition of national scope with forms of sports
reinforces full mobility and values such as overcoming limitations, excellence and team spirit. In 2012, the event involved more than 2,700 collaborators in 270 teams in the
regional and final phases.
The values that rule the company operation were also highlighted in the event “TIM abre as portas”, in which the
company receives the children of employees in its installations. The event, which reinforces the feeling of belonging
and brings families close to TIM’s reality, providing environmental awareness and cultural activities for the 4 thousand
participating children.
COLLABORATORS WERE
SUPPORTED BY MERIT INITIATIVES
AND INTERNAL OPPORTUNITIES,
RECEIVING AN AVERAGE WAGE
INCREASE OF 20.5%
These were not the only initiatives focused on the people
that build the company. In 2012 the new intranet was launched; its goal was to ensure more information and integration for the collaborators. The new, friendly, interactive and
collaborative digital work environment received an average
of 853,763 visits per month throughout the year, including
blogs, communities, wikis, personal area and other resources of social interaction. Collaborators gained more space
to exchange ideas, learn, know more about the company
and interact with their peers.
Internally, the campaign of corporate identity gathered all
collaborators around the same goal, highlighting the importance of everyone’s work for the company’s achievements.
The motto “Paixão Azul – Sua paixão nunca foi tão azul”
permeated all company communication with the TIM staff
throughout the year.
Advertising Campaigns
TIM invests on innovation and quality services in order to
improve the life of its customers through technology, i.e.,
to help them to speak more, do more and go further. These
benefits were pictured in “Depoimentos” campaign, which
told stories of people who went further using TIM services.
Governance
Later, a choice was made to materialize TIM’s transformation
power using a physical resource, which at the same time presented many metaphors: The Blue Train. Its main function is
to help people to reach the destination of their dreams.
In parallel with that, a consistent work of consolidation was
made over the Liberty and Infinity plans, reinforcing the
smart choice concept, with relevant benefits for the consumers. New plans and services for these platforms were also
launched, like Liberty Controle, Infinity Web Modem, Liberty
Passport and Infinity Torcedor.
In addition, the fixed ultra broadband service Live Tim was
launched, offering its users a unique navigation experience.
There were, in total, 17 mass campaigns of high impact, using
media such as television, radio, internet and printed media.
Work with the Blue Man Group (BMG) also deserves mentioning, since it matured and consolidated a successful
partnership that promises new developments and achievements in 2013. The greatest highlight was a reality show in
the Caldeirão do Huck TV program, in search of a Brazilian
Blue Man, demonstrating that TIM helps to develop the potential of people and, thus make their dreams come true.
TECHNOLOGICAL CAPITAL
Technology has a very important role to support the
services provided to TIM customers in the various
segments, now also including the residential fixed
segment. In 2012, the company invested R$ 681
million (or 18% of the total investments) in Information
Technology (IT); this, associated to a greater technological efficiency, enabled a 44% growth in the quantity of delivered projects.
Some highlights of IT this year were: (1) Optimization
of the post-paid billing process, which also enables
the provision of invoices in electronic format with access via internet. This allowed a significant reduction
of printing on paper, with advantages for the environment. (2) Implementation at the ARU (Audible Response Unit) of the predictive functions for identifying
and profiling customers and automated services.
These initiatives helped improve the efficiency of the
service centers, leveraging a greater use of unattended channels.
12
Governance
Corporate
Governance
Actions guided by legality
and ethics, based on three
principles: transparency,
honesty and loyalty.
TIM Participações S.A. is an open capital equity company,
ruled by a Management Board and a Board of Directors,
with the additional supervision of a Fiscal Board that also
plays the role of Audit Board.
The duties and responsibilities of the members of the Management Board, the Board of Directors and the Fiscal Board
are determined by Brazilian law, the company’s Articles of
Incorporation, the Regulation of ‘Novo Mercado’, the Internal Rules of the Board of Directors and the Internal Rules of
the Fiscal Council.
THE COMPANY SEEKS
TO SUPPORT THE WELLBEING AND GROWTH OF
COMMUNITIES IN WHICH IT
OPERATES, WHILE PROMOTING
SUSTAINABLE DEVELOPMENT
IN THE CONDUCTION OF ITS
BUSINESSES
As an active and responsible member of the community in
which it operates, the company and its managers must guide their actions by legality and ethics, based on three key
principles: transparency, honesty and loyalty.
While conducting its business, guided by ethics and loyalty, as
well as good faith, the company seeks: (i) to act with transparency in business, (ii) to promote loyalty at competition; (iii) competitiveness excellence in the market; (iv) to service the well-being and growth of the community in which it operates; (v)
to value its human resources; and (vi) to promote sustainable
development.Única empresa de telefonia no Novo Mercado.
Governance
Since July 2011, we are the only Brazilian company of the
telecommunications sector listed in ‘Novo Mercado’ of
BM&FBovespa. We understand that joining this segment
aligned the interests of our controller and our minority shareholders regarding voting rights, tag along and dividends policy. In parallel, joining the ‘Novo Mercado’ leverages greater
liquidity and value of our shares; allow wider access to international markets; promotes reinforcement of our institutional
image and increased trust in our company; and reaffirms the
long term commitment of Telecom Italia group with its operations in Brazil.
13
DISCLOSURE POLICY
In 2002, TIM Participações adopted a Policy on Disclosure and Use of Information and Securities Trading
under the terms of the stipulations of the Brazilian
Securities Commission (CVM), which the company’s
management adopted by signing an instrument of
adherence. As part of this policy, a code of conduct
was established, which all employees with access to
inside information must abide by, in addition to imposing restrictions on trading in the company’s securities during certain periods.
Practices of the maximum level of
corporate governance:
Ordinary shares – the capital should be comprised solely
of ordinary shares with voting rights.
Independent members – the Management Board should
be comprised by, at least, five members, 20% of which
should be independent council members; the maximum
term should be two years;
Tag along of 100% – in the case of sale of company control,
all shareholders are entitled to sell their shares for the same
price as the controlling block.
Public offering – in case of de-listing or cancellation of
‘Novo Mercado’ contract with BM&FBovespa, the company
should make a public offer to repurchase the shares of all
shareholders, at least for the economic price.
TIM IS COMMITTED TOWARDS
BEST PRACTICES OF
CORPORATE GOVERNANCE AND
TRANSPARENCY REGARDING
ITS AUDIENCES
In addition, we are the only company in the sector to belong
to the selected group of companies comprising the portfolios of Differentiated Corporate Governance (“IGC”), of the
Index of Shares with Differentiated Tag Along (“ITAG”) and
the Efficient Carbon Index (“ICO2”) comprised of companies that committed to adopting transparent practices regarding their greenhouse gas emissions effect (“GEE”). We are
also part, for the fifth consecutive year, of the portfolio of
BM&FBovespa Corporate Sustainability Index (“ISE”).
Board of Directors
The Board of Directors is a collegiate body responsible for
managing the company at the highest level, comprising a
minimum of five and a maximum of 19 members, with a two-year term of office, reelection being permitted. Currently,
the Board of Directors is composed of nine members, three
of whom are independent, including in this category the
Chairman of the Board.
All decisions taken by the Board of Directors are recorded as
minutes, which are published and registered in the Book of
Minutes of the Board of Directors and filed at the company’s
headquarters.
The Board meets ordinarily once every quarter and extraordinarily when summoned by its Chairman, by any of the
Directors or by the company’s Chief Executive Officer. The
Chairman of the Board can invite any member of the Board
of Executive Officers and other company executives to participate at Board meetings. Outsiders who might contribute
opinions or recommendations involving the subject matters
on the agenda can also be invited – but with no voting rights.
The Board of Directors also has two advisory committees
whose role is to make recommendations: the Compensation
Committee and Internal Control and Corporate Governance
Committee. Both are composed of the Board’s own members.
Board of Executive Officers
Composed of at least two and a maximum of nine Executive
Officers, the Board of Executive Officers is the body that
represents the company and manages it on a day-to-day
basis. The Executive Officers are elected by the Board of
Directors, which can also remove them from office at any
time. The term of office is two years, with reelection permitted. Currently the company’s Board of Executive Officers is
composed of nine members.
Governance
14
Fiscal Council
The Fiscal Council is the body that supervises the acts
of the company’s management and the information to
shareholders. At TIM, the Fiscal Council accumulates
the functions of the Audit Committee, and is therefore
structured to oversee the audit work undertaken within
the company and analyze the effectiveness of the internal
control systems. It is also responsible for the Complaints
Channel, the system whereby anyone can report facts
that might require investigation by the company. Installed
and operative since 2004, the Fiscal Council comprises
a minimum of three and a maximum of five members, all
independent professionals acknowledged by the market
and who have no other relationship with the company.
Telecom Italia
100%
Telecom ItAlia Internacional N.V.
100%
TIM Brasil Serv.
E Part. S.A.
MINORITARY
SHAREHOLDERS
ON: 67%
(1,611,969,946)
ON: 33%
(805,662,701)
TOTAL: 67%
(1,611,969,946)
TOTAL: 33%
(805,662,701)
TIM Participações S.A.
Instances of corporate governance
General Assembly
Fiscal Council /
Audit Board
Board of Directors
Compensation Board
Internal Control and
Corporate Governance Board*
Collegiate Board of
Directors
*Bodies linked to the Management Board
Shareholders structure
At the end of 2012, the company’s equity totaled R$
9,886,886,593.46, represented by 2,417,632,647 common
shares. TIM Brasil Serviços e Participações S.A. is the controlling shareholder of TIM, with 67% of the stock.
100%
TIM Celular S.A.
100%
Intelig
Dividend Policy
In accordance with the bylaws of TIM Participações, the
company must distribute as mandatory dividends for each
fiscal year ending December 31 an amount equivalent to
25% of the adjusted net income, provided cash is available
for distribution.
It is mandatory to maintain a legal reserve to which the company must allocate 5% of the net income of each fiscal year,
until the balance of this reserve reaches the equivalent of
20% of equity. The annual distribution of dividends is voted
at the General Shareholders’ Meeting.
Sarbanes-Oxley Law
Section 404 of Sarbanes-Oxley Law (SOX) requires the
company to verify the effectiveness of the internal control
system supporting the financial demonstrations, for the purpose of offering greater reliability and transparency to this
information.
In 2012, TIM received the certification for its compliance
with the provisions required under Section 404 of Sarbanes-Oxley Law for the year of 2011; TIM has been receiving
this certification since 2006, when the requirement was created for companies listed in American Depositary Receipts
(ADRs), at the New York Stock Exchange; this is a demonstration of the company’s commitment to the highest levels of
corporate governance.
Governance
Governance
Ethics in
management
Our code presents the
attitudes in accordance
with the company’s culture
and values
Our Ethics Code presents the principles followed by the
Telecom Italia group. It is the basis of our organizational model and internal control system, since we consider
ethics in conducting business as a factor that influences the
company’s success.
The Ethics Code presents the attitudes that comply with
TIM’s culture and values, and is the company’s guide to put
them in practice in the best way possible. Complying with
our code, we are integrating our ideas and goals to consolidate an increasingly stronger identity for the company.
The social bodies, collaborators, management body and service providers of the group companies, as well as all our other
stakeholders, should comply with this code as limited by the
corresponding competencies, functions and responsibilities.
15
Customer-focused Considers the customer, internal or
external, as his main employer, and his satisfaction as key
value. Knows how to listen to the customers to anticipate or
quickly respond to the identified needs.
Team spirit Cooperates and acts jointly, minimizing conflicts, maximizing information exchange and promoting leverage of everyone’s professional contribution in pursuit of
a common goal.
Innovation Ensures development of innovative solutions,
promoting new paths for improving existing processes and
systems and thus reinforcing TIM’s position in the market.
Entrepreneurial spirit Takes direct responsibility for reaching concrete results, taking challenges and risks delegated as a growth opportunity, without taking to his supervisors
problems that can be solved in the scope of the operation.
TIM’S CODES AND POLICIES ARE
ESSENTIAL TO ENABLE THE
COMPANY TO ACHIEVE SUCCESS
IN ITS ECONOMIC, SOCIAL AND
ENVIRONMENTAL INITIATIVES
Our values
Proactiveness Anticipates and positively influences the
events. Collects and develops opportunities that arise, creating proposals and initiatives that are useful for reaching the
organization’s goals.
Transparency Ensures, through his transparent and ethical conduct, the reinforcements of the internal and external
relationships based on principles of loyalty and information
exchange.
Speed Considers time as an important resource, whose
optimization impacts service costs and the potential for internal or external customer loyalty. Even facing a complex
situation, without enough information, presents agile and
effective solutions.
Professional excellence Develops the competencies required by his field of operation, transmitting security and
credibility to all others. Takes responsibility for self-development, using this professional growth project as a contribution for TIM’s success.
TIM’s codes and policies*
CODE OF ETHICS
MARKETING AND
COMMUNICATION
POLICY
BUSINESS
CONDUCT CODE
SUPPLIER
RELATIONSHIP POLICY
SOCIAL
RESPONSIBILITY
POLICY
ENVIRONMENTAL
POLICY
*TIM’s codes and policies, conducted by corporate governance, are
interrelated among themselves.
Governance
Governance
Risk management
Devices and processes
ensure that risks
are identified, assessed
and mitigated
Our business may be adversely impacted if we are unable
to successfully implement our strategic goals. Therefore, a
series of devices and processes is used to ensure that these risks are identified, assessed and mitigated with plans for
handling each one of them. Risk management permeates the
entire structure of the company, according to each competency. The main areas operating directly over these risks are:
• Internal Audit, linked to the Board of Directors;
• Fiscal Council/Audit Board, linked to the Board of Directors;
16
• increased marketing, IT and network activities;
• attraction, training and retention of qualified professionals, technicians, sales personnel and professionals focused on customer service
We believe such requirements will generate significant demands on our management, operational and financial resources. Thus, a large portion of our investment (approximately 93%) was assigned to infrastructure (network and
information technology). In addition, the development strategy of collaborators supports the need for technical and management qualification for managing those risks.
Our success depends
partially on our capacity to
predict and timely adapt to
technological changes.
• Internal Control and Corporate Governance Board, linked
to the Board of Directors;
• Compliance, directly linked to the CEO;
• Commercial Risk, linked to the chief operations officer.
Technological changes
Brazil’s cellular telecom market is experiencing significant
technological changes, as demonstrated by:
Telecom market risks
• changes in the regulatory environment;
Competition
We are facing growing competition and this may affect the
results of our operations. The deregulation of the Brazilian
market in telecommunications services has adversely affected the industry’s historical margins.
Our ability to compete successfully depends on the effectiveness of our marketing and our ability to anticipate and react to the competitive factors affecting the industry, including
new services that might be introduced, changes in customer
preferences, demographic trends, the economic situation,
and the pricing and discount strategies of our competitors.
Service Quality
We believe our
among others:
growth
expectations
will
require,
• ongoing development of our operational and administrative systems;
• reduction of the period from the introduction of new telecommunication products and their required updates or
replacements, as seen with 3G technology;
• ongoing improvement in capacity and quality of digital technology available in Brazil;
• conduction of bid for concession of licenses to operate
bands 2.5 GHz and 3.5 GHz (Wi-Max) with limited mobility.
Thus, our success depends, in part, on the capability of anticipating and timely adjusting to technological changes. The
arrival of new products based on these new technologies
may negatively impact us if we are unable to update and
improve our portfolio.
Governance
In this context, marketing, information technology and network initiatives are important for identifying the technologies of the future, evaluate the best alternatives and develop innovations that maintain and expand the interest of our
current and future customers.
IN 2012, THE STRONG
REGULATION MILESTONE
REPRESENTED A HIGHER RISK
FOR BUSINESS DEVELOPMENT,
WHICH SHOWED SIGNIFICANT
COMPETITIVENESS
17
Financial risks
Through its subsidiaries (TIM Celular S.A. and Intelig Telecomunicações Ltda.), TIM employs derivative financial
instruments purely for the purpose of reducing the risks
associated with currency and interest rates and exchange
rate variations, for non-speculative purposes, represented
in their entirety by swap agreements.
Exchange rate fluctuation risks
These risks involve the possibility of our subsidiaries incurring in losses derived from fluctuations in currency rates, increasing the outstanding debt balance of financing obtained
in the market and the attendant financial expenses. In order
to neutralize these kinds of risks, our subsidiaries enter into
swap agreements with financial institutions.
Interest rate risk
Regulatory risks
Extreme measures adopted by Anatel, for the purpose of
improving quality of service, may have a negative impact on
our results.
In July 2012, in order to force improvement in the quality of
mobile telecommunication services provided in the country, Anatel imposed administrative sanctions, issuing a ban
on sales and activation of services for the three main operators, including TIM. The ban was only revoked by Anatel
after the operators individually made formal commitments
to conduct specific investments on improving the quality of
the services provided and on network expansion.
In November 2012, Anatel imposed a new administrative
sanction on us, suspending Infinity Day, a plan in which
customers of specific states are charged by day of voice
use (calls to TIM numbers and local fixed telephones). For
this reason, Anatel, in a preliminary analysis, considered
that this promotion could generate potential damage to the
quality of our mobile telecommunication services. The injunction was revoked in January of 2013, after Anatel ruled
that the promotion would not be a risk for the provision of
our mobile services.
Although such extreme measures adopted by Anatel are
considered temporary, they could have a negative impact on
our results, limiting our capability of following our strategy.
Interest rate risks refer to variances in the fair value of credit
lines at fixed rates of interest or in long-term interest rates
(Brazilian acronym, TJLP), in addition to adverse movements in floating interest rates. These risks are mitigated
through interest rate swap agreements, coupled with investments linked to interbank certificates of deposit (“CDI”).
Credit risk inherent to ROVIDING SERVICES
This risk involves the possibility that our subsidiaries may
incur in losses arising from difficulties in collecting the
amounts invoiced to subscribers. In order to reduce this
type of risk, our subsidiaries carry out credit analyses, assisting in managing the risk involved when payment problems arise, while monitoring subscriber accounts receivable and blocking the ability of those in default to use the
services. Furthermore, the company’s strategy of sharply
reducing subsidy levels on handsets and alliances with
credit card operators involving more extensive installment
plans have also contributed to reduce this type of risk.
Credit risk inherent to selling handsets and prepaid
telephone cards
The policy of the subsidiaries in selling handsets and distributing prepaid phone cards directly reflects the levels
of credit risk accepted during the normal course of business. The selection of partners, a diversified portfolio of
accounts receivable, the monitoring of loan conditions,
positions and order limits established for storeowners and
the constitution of real collateral are the procedures the
subsidiaries adopt in order to minimize possible problems
in collecting from their business partners.
Strategy
Financial credit risk
The risk here involves the possibility of our subsidiaries
incurring losses arising from problems in redeeming shortterm financial investments and swap agreements because
of counterparty insolvency. The subsidiaries keep the risk
associated with these financial instruments to a minimum
by operating only with financial institutions whose soundness is acknowledged by the market, in addition to abiding
by a policy that determines maximum levels of risk concentration per financial institution.
sOCIAL AND ENVIRONMENTAL RISKS
TIM has identified environmental risks due to the National
Policy on Climate Change, which may also affect the telecommunications industry. TIM believes its presence in all
Brazilian states may be affected in the event the predictions
surrounding climatic events come to pass, interfering in its
business activity and leading to possible physical risks.
• Increased consumption of electricity to maintain network
equipment at the appropriate temperature;
• Increased cost of energy and shortage of its offer caused
by the fact that a large part of the energy generated in
Brazil comes from fluvial sources;
• Shortage of renewable energy sources;
• Influence of humidity and salinity on the useful life of
equipment ;
• Adverse impact on mobile telephone signals in the event
of higher rainfall levels;
• Adverse financial impact due to higher insurance prices
involving natural disasters;
• Impact on the employee health and well-being;
• Loss of income among consumers;
• Interruptions or deteriorations in telecommunications ser-
vices provision due to potential environmental disasters
on the network infrastructure.
In 2012, TIM carried out the Environmental Risk Prevention Program (PPRA) and the Occupational Health Medical
Control Program (PCMSO), also taking into account the
activities of the Customer Relationship Center. In addition,
we held the Internal Workplace Accident Prevention Week
(“SIPAT”) and set up the Internal Accident Prevention
Committee (“CIPA”).
18
Strategy
Growth
strategy
TIM works towards
universally extending mobile
telecommunications in
Brazil, and accomplishing its
stakeholders’ expectations
In a country with an expanding middle class, mobility services demand and repressed demand for internet services,
TIM positioned itself to provide relevant innovations and
transparent offerings to consumers in general.
In this context, TIM’s strategy has been improving, together
with changes in the Brazilian market, in order to provide
the best services to help achievement of universal mobile
telecom in Brazil while accomplishing expectations of the
various stakeholders.
Our growth strategy is characterized by leveraging TIM’s
unique position of an entirely mobile operator* to take advantage of the trend of replacing fixed traffic and lines with
mobile ones, while other operators need to be concerned
with protecting their fixed service revenue.
Also as part of this strategy, TIM takes advantage of the
growing demand for data services to provide internet access from mobile devices, enabling connectivity anywhere,
anytime.
With this strategy as a base, we develop our initiatives
through four waves of growth of the Brazilian market: growth
of the mobile customer base, growth in voice use, growth
of data use and development of the ultra broadband. The
details of the strategy for exploiting each one of these waves always maintained as main focus the balance between
growth and profitability.
Customer base growth:
expanding the community
Creating and nourishing a concept of community is the key
for growing the customer base and at the same time increasing the value in participating in such community. This perception transforms the relationship of users with the company
and creates a virtuous cycle for capturing new customers.
TIM is classified as a purely mobile operator because it has little exposure to
fixed telecommunications services: these represent approximately 5% of the
company’s income
Strategy
Based on this direction, we built a business approach with
attractive and segmented offerings and a capillary distribution
optimized for each type of service.
The result was an expansion of 10% (year over year) of the
customer base and a community of more than 70.3 million
users, who increasingly benefit from its size. For the three-year period of 2013-2015, the company’s objective is to reach approximately 90 million mobile users in 2015.
Growth of voice use: fixed to mobile substitution
The fixed to mobile substitution is a global trend, which gains
strength in the country due to the greater appeal presented
by mobility, thanks to convenience and, as is the case in Brazil, also for lower costs. This trend drives the migration of
users from fixed networks to mobile ones, creating a significant threat for integrated/convergent operators (with fixed
and mobile services) and opening a great window of opportunity for operators that have a purely mobile approach.
Our strategy tried to accelerate this trend and leverage the
concepts of unlimited use per month (Liberty post-paid plan)
or per call (Infinity pre-paid plan), generating real benefits to
users while consolidating new sources of revenue, such as
long distance calls.
This approach yielded a 14% increase (year over year) in
the monthly average use, reaching 150 minutes per user per
month in the fourth quarter of 2012, the highest level of the
industry in Brazil. The company forecasts a scenario in which
this number could surpass 200 minutes in 2015.
Growth in data use: internet for all
Offering the opportunity for everyone to connect to the digital
world through the internet is one of the country’s greatest challenges, particularly considering the weakness of the fixed broadband services. In this context, mobile data services are the most
efficient solutions, and taking advantage of this, TIM defined its
strategy of promoting the use of data through mobile devices.
The Liberty Web and Infinity Web offerings, which promote the
use of smartphones, tablets or minimodems, are a direct response to the repressed market demand for these services.
Supporting this strategy, the company invests in infrastructure to service the exponential growth of data traffic, with projects aimed at expanding the metropolitan transport and long
distance networks, through acquisitions and its own developments. In addition, it was important to encourage customers
to acquire handsets capable of using data, so that adoption of
new services by the users would have no barriers.
This strategy resulted in a penetration growth of smartphones, from 27% of the base in 2011 to 43% in 2012, and a 30%
increase (year over year) in data revenue, becoming approximately 20% of the company’s total income. Considering the
19
great opportunity represented by this segment, TIM projects
that these revenues will exceed 26% of the company’s total
income in 2015.
Development of the ultra broadband: high speed and
widely available internet
In 2012, TIM entered a new segment, the fixed ultra broadband, through the operation of TIM Fiber (formerly AES
Atimus, acquired in 2011), with the service named Live TIM.
This segment is viewed as a new opportunity of covering
a market with repressed demand for high speed and high
quality services.
OUR STRATEGY SEEKS TO
ACCELERATE THE TREND
OF REPLACEMENT OF FIXED
TELEPHONES WITH MOBILE
ONES, STIMULATING UNLIMITED
COMMUNICATIONS
We see in ultra broadband another way of participating in a
segment of telecommunications that we believe will grow significantly in the next few years. In addition, this is a way of weakening our competitors, considering that their strategies of
protecting fixed revenues are based in great part on the combination of fixed telecom services with broadband services.
Launched in August 2012, the Live TIM service ended the
year with approximately 10 thousand users in the cities of
São Paulo and Rio de Janeiro. The speeds delivered to
users are, on average, above the contracted speeds (delivered speed of 37 Mbps* on contracted 35 Mbps packages
and delivered speed of 53 Mbps in contracted packages of
50 Mbps) and the service is available for more than 500
thousand domiciles.
In the industrial plan published by the company, we estimate
that Live TIM service will reach a coverage of approximately 2
million homes in which the service is available for contracting.
2013: focus on quality and transparency
2012 imposed new challenges to TIM in the areas of regulation and positioning towards customers. The sales ban,
in July, and the accusation of dropping calls on purpose
demonstrated the need for reaffirming the commitment to
transparency, in an encompassing manner and with quality. These pillars became key parts of the foundation that
enables the growth strategy described above.
Strategy
20
Investments
4 Growth Waves
In 2012, investments reached R$ 3.8 billion, of which R$
400 million were used to acquire the fourth generation license in the 2.5 GHz band and the rest (R$3.4 billion) in organic
projects aimed at business development and infrastructure
reinforcement. The organic Capex represented 18% of the
total net revenue.
Customer
Base
> 90 million
Community
Expansion
Growth
Minutes
of Use
> 200 million
Voice Services
Data
Revenue
> 26%
Internet
for all
Coverage
~ 2 million homes
Ultra
Broadband
In this scenario, the CEO of TIM’s Board of Directors went
public reaffirming these commitments, and the company
started putting in practice a set of initiatives to recover the
users trust and reinforce the brand attributes. Among these initiatives were the development of the “Quality Website” site – launched in beta version in October 2012 and,
officially, in February 2013; the change in the company’s
structure so that the area in charge of quality started to
report directly to the CEO; and increased investments to
expand the network capacity, ensuring compliance with
the goals jointly defined with Anatel.
In 2013 there will be further initiatives focused on the
pillars of quality and transparency and maintenance of
the outlined path, following our strategic plan translated
in the four waves of growth.
Investments on infrastructure added up to 83% of the total and 93% of the organic Capex, showing TIM’s focus on
evolving its network and IT systems to provide services with
greater quality. Compared to the previous year, organic investments increased 11.9%, and investments on infrastructure grew 5 p.p.
Investment Profile
7%
10%
18%
65%
Network
Information Technology
4G License
Commercial/Others
Nevertheless, the company in 2012 faced strong criticism
regarding the quality of its services. The company thus
worked to strengthen itself, investing 13% above the plan
(R$ 3.4 billion versus R$ 3.0 billion).This effort became evident in the plan jointly outlined with Anatel for the 2012-2014
three year period, whose 2012 goals were fully achieved.
In the plan agreed with Anatel, several indicators were defined to measure the evolution of investments and the improvements achieved. Below, we present the main ones:
Strategy
21
Anatel Plan: Network development
Anatel Plan: Quality goals
(TRX Units, Kms of Fiber)
(Preliminary results)
Voice Capacity (TRX 000)
SMP5 – Traffic channel allocation rate (voice)
95%
205
Anatel
Plan
205
241
271
2012a
2013e
2014e
Anatel
Plan
97%
95%
95%
2012a
2013e
2014e
SMP7 – Call drop rate
Voice capability
(Elements of channels 000)
2.0%
328
Anatel
Plan
406
2012a
517
2013e
741
Anatel
Plan
2014e
1.7%
2.0%
2.0%
2012a
2013e
2014e
SMP8 – Data Connection Rate
Kms of optic fiber
(KM 000)
95%
38
Anatel
Planl
39
47
53
2012a
2013e
2014e
Anatel
Planl
99%
98%
98%
2012a
2013e
2014e
SMP9 – Data connection drop rate
Sites connected with fiber
optics (# of 000 sites)
5%
Anatel
Plan
2.7
Anatel
Plan
3.3
1.3
1.3
2012a
2013e
2014e
a: actual
3%
5%
5%
2012a
2013e
2014e
e: expected
Strategy
22
In parallel, investments were also directed to increase 3G
data services coverage, which is a key pillar of TIM’s strategy.
Revenue performance is expected to benefit from the contribution of the following pillars, as already previously remarked:
3G Coverage
Mobile Customer Base
72%
66%
54%
(Millions of lines)
712
64.1
488
> 90
70.3
51.0
210
2010
2011
2012
2010
% of Urban Population Covered
2011
2012
2013e
2014e
2015e
of Cities,
Minutes of Use per User
(per line)
Perspectives
> 200
Our strategic plan identifies great opportunities for operation
in the Brazilian market, leveraging a unique position in the
context of fixed-mobile replacement and the resulting revenue distribution remodeling in the telecom market. In addition, we also started to explore the large growth opportunity of
mobile and fixed data services and internet access.
150
116
129
Double digit
growth
In this context, the company expects to increase the total net
revenue in the next three years at a high single digit rate - between 6.7% and 10% (CAGR compound growth rate 2012-15).
2010
Revenue growth
2011
2012
2013e
2014e
2015e
Internet for All (Mobile Data)
(R$ BILHÕES)
(% of Data as gross revenue of mobile service)
High Single
Digit Growth
> 26%
14.5
17.1
18.8
19%
15%
Double digit
growth
13%
2010
2011
2012
2013e
2014e
(Total Net Revenue, R$ billions , CAGR12-15)
2015e
2010
2011
2012
2013e
2014e
2015e
Strategy
23
This scenario will demand continuous investment; therefore, TIM approved a R$ 10.7 billion plan for the 2013 to 2015
period, mainly focused on infrastructure (more than 90% of
the total). For 2013, the investment forecast is R$ 3.6 billion.
• TIM Fiber residential broadband: offer the broadband service
Capex
Strategy
Economic and
industry scenario
(CAPEX/REVENUE, INVESTMENT MIX)
19.6%
18.0%
18.0%
The Brazilian mobile
telecom market is number
four in the world, with
132.8 lines for every one
hundred residents
10.7
3.4
3.6
3.0
2.8
2.3
0.5
2010
2.7
3.1
0.3
0.2
2011
2012
2013e
in the two largest metropolitan areas of the country (Rio and
São Paulo), covering approximately 2 million residencies.
2014e
2015e
% of net revenue
Infrastructure investments (in R$ billion)
Other investments (in R$ billion)
This plan calls for investments in several fronts, with the
main ones being listed below:
• 2G network: improvement of indicators and perception
of voice quality, with 32% capacity growth (quantity of
TRXs) by 2014;
• 3G network: acceleration of coverage, reaching in 2015
more than 80% of the population covered, and growth
of the data traffic capacity by 83% (quantity of channel
elements);
• Fiber-to-the-site (FTTS) project: building optic fiber metropolitan networks in the 42 main cities of the country,
reaching 3.3 million sites connected through optic fiber;
• Backbone projects: building long distance network infrastructure interconnecting all regions of the country and reaching, approximately, 53 million km of optic fiber by 2014;
In 2012, the global economy continued to suffer with the
fiscal crisis of the United States and Europe. Even though
the risks of disruption have noticeably decreased in recent
months, the economic situation for the USA and Europe
continues to inspire caution. Global growth proceeds at a
slow and dissonant pace, with developed countries growing less than emerging ones. Specifically, the Euro Zone
recession will probably remain a concern, while in the
USA expansion should be positive, but insufficient to take
unemployment and inflation to levels considered tolerable
by the Federal Reserve.
In Brazil, the year of 2012 maintained the same trend observed in 2011, with continuous drops in GDP projections
(0.98%). The internal market was weaker than in 2011,
mostly as a result of deceleration in the credit market in
response to the rise in defaults and debt level of families,
and the lack of response of investments to governmental
incentives. The “SELIC” rate and the exchange rate were
used to drive growth in the country, thus keeping inflation
at a level above the objective.
Brazil’s official inflation rate (“IPCA”) ended the year at a
rise of 5.8%, below the 6.5% reported by the Brazilian Institute of Geography and Statistics (“IBGE”) in 2011. It is
worth stressing that the core of the objective established
by the Central Bank points towards an inflation rate of 4.5%
per year, with a margin of two percentage points higher or
lower. Therefore, the end result of 2012 was positioned
within expectations. The negative highlight of the year was
in the areas of food and housing, which generated inflation
rates of 9.86% and 6.79%, respectively.
Regarding monetary policy, the Monetary Policy Committee
(“COPOM”) maintained the trend towards “SELIC” rate reduction observed in the last months of 2011, starting at 11%
Strategy
in December and ending the year of 2012 at 7.25% (lowest
level in history). In addition to the consecutive reductions
in the economy’s basic interest rate, a significant pressure was observed from the government, exerted through the
Central Bank and Caixa Econômica Federal, to reduce the
financing rates offered by commercial banks.
Regarding domestic demand, the Brazilian government has
been reacting to the low growth with a series of incentive
measures for consumption and investments. The good levels of employment and income sustained consumption by
families throughout 2012.
The dollar rose in value during 2012, ending the year at
R$2.04, compared to R$1.88 in 2011, an 8.5% increase.
Euro also rose in value regarding the real, a 10.73% increase in 2012, ending the year at R$2.70, compared to R$2.43
in 2011. The economic instability in Europe and the United
States strongly contributed to the reported currency valuations, as a result of the currency flow from Brazil to their
countries of origin.
The trade balance ended the year at an accumulated surplus of US$19.5 billion in 2012, presenting a reduction of
34.7% regarding the year of 2011. This decline can be mainly explained by the reduction in the export line, approximately US$13 billion, resulting from the weak pace of global
consumption in 2012.
24
factors for growth in both sectors were the favorable economic scenario thanks to the credit expansion, improved income distribution (with part of the population migrating from
the D and E classes to the C one) and the competition in the
Brazilian cell phone telecom market.
According to Anatel, the fixed telecom sector presented a
slight growth of 2.1% when compared to the previous year,
ending the period at an access volume of 42.9 million, which is a penetration of approximately 22 lines for every one
hundred homes.
MOBILE TELECOM IS ALREADY
ESTABLISHED AS THE
COMMUNICATION METHOD WITH
THE BIGGEST PRESENCE IN
BRAZILIAN HOMES, ACROSS ALL
SOCIAL CLASSES
Industry specificities
Telecommunications sector
The Brazilian mobile telecom market reached 261.8 million
lines until the end of 2012, an annual growth of 8.1% (compared to 19.4% in 2011), and a penetration rate of 132.8%,
surpassing the 123.9% reported in 2011, according to Anatel. The growth of the mobile market has been supported
by three main factors: stimulus for local and long distance
on-net calls (creating the effect of multiple SIM Cards in the
pre-paid segment), the M2M (machine-to-machine) market,
and the growth in the demand for data services, particularly
in smart/webphones.
The Brazilian mobile telecom market is the fourth in the
world, and in 2012 reached a penetration rate of 132.8 lines
for every one hundred inhabitants. Cell phone telecom is
already established as the communication media with the
biggest presence in Brazilian homes among all social classes, thanks to offers on the market focused on calls within
the same operator.
Most of the growth is still concentrated in the pre-paid segment, which reached an access volume of 210.8 million
(+6.4% year over year), representing 80.5% of the market
total. The post-paid segment reached the milestone of 51
million lines, a 15.6% year over year expansion. The key
Mobile telecom in Brazil is a private industry in which prices
and rates are regulated by the market. Anatel is an agency
that regulates all telecommunications sectors in Brazil, with
the mission of “promoting development of telecommunications in the country in order to equip it with a modern and
efficient telecommunications infrastructure, capable of offering society appropriate and diversified services at a fair price, across national territory”.
The Brazilian mobile telecom sector is one of the most competitive in the world, being one of the few to feature four
competitors with national presence and market participation between 20% and 30%. The strong competition in
the market results in higher margin pressure on account
of commercial expenses on advertisement, commissions
and subsidies.
The subsidy practice as a competitive tool started being
used again, even though it proved to be a risky practice
considering high rates of “PDD” (provisions for questionable
debtors). TIM adopts a zero subsidy policy, focusing on its
service use offering. The recent move has been enabling
a drop in the average rate prices, compensated by higher
use. In 2012, TIM ceased to use the device subsidy tool and
focused its efforts in encouraging use.
Strategy
Intensive capital is also one of the main characteristics of the
telecommunications industry. In order to support the increase
in network traffic throughout the years, high levels of investment are needed in technology and infrastructure, in order to
ensure the scale and quality of the provided services.
As provider of an essential service for social and economic
development of the country, TIM firmly believes that Brazil is
consolidating itself in a standout position in the global economic scenario, and it is pleased to be able to contribute towards the country’s infrastructure development, promoting
universalization of telecommunications services. TIM reaffirms its commitment towards new investments in 2013 and
the constant search for more and better services, seeking to
meet all the needs of all its stakeholders.
TIM REAFFIRMS ITS COMMITMENT
TO PERFORM NEW INVESTMENTS
IN 2013 AND CONSTANTLY SEEK
MORE AND BETTER SERVICES
TO MEET THE EXPECTATIONS OF
ITS SHAREHOLDERS
In the year of 2012, faced with Anatel demands regarding
improvement in the quality of the services provided by the
industry, the company pledged to perform heavy investments in its networks in coming years, with investments
planned already for 2013.
According to the Network Improvement Plan presented by
TIM to Anatel at the end of 2012, investments in the amount
of R$8.2 billion will be performed until the end of 2014, focused on infrastructure and quality.
The company’s investments will prioritize projects for expanding its network, with a forecast of 30% increase in 2G
antennas and 24 thousand new kilometers of fiber optics
by 2014; optimization of network use, with adjustments to
improve the quality of the signal in the current coverage areas; and mapping of the main causes of drops and network
failures, as well as the measures needed to prevent these
events, ensuring the quality of the calls and data connection, enabling higher access capacity for users.
25
Regulation of the sector
The telecommunications sector is under the regulation of
the National Telecommunications Agency – Anatel, a special agency linked to the Ministry of Communications with
autonomous and independent management. Anatel is responsible for defining the rules regarding provision of telecommunications services and the relationship between the
different providers, under the terms of the General Telecommunications Law (Law #9.472, dated July 16th, 1997).
Specifically regarding the operational activities of TIM, Intelig and TIM Fiber, Anatel developed a strict regulation for
provision of services in the areas of mobile communications
(personal mobile service – “SMP”), fixed telecom (commuted fixed telecom service – “STFC”) and data transmission
(multimedia communication service – “SCM”). In the second
half of 2012, operators TIM Fiber SP and TIM Fiber RJ were
incorporated by TIM Celular, which took over continuity for
service provision.
Considering the significantly dynamic nature of the sector,
particularly on account of the accelerated technological progress experienced by providers, mainly in the “SMP” area,
the rules edited by Anatel are subject to periodic updates.
In order to share planning of its actions with society and
optimize execution of the public policies established by
the Executive Power, Anatel approved the General Plan
for Updating Telecommunications Regulations in Brazil –
“PGR” (Resolution 516/2008). On the “PGR”, Anatel establishes short, medium and long term actions, defined respectively for two, five and ten years.
This normative adjustment process takes into consideration the technical analysis of the specialized Anatel areas
and the discussions arising from public consultation, through which the regulation updating proposals are discussed
between Anatel, the government and society in general,
always monitored closely by TIM.
The publication of Presidential Decree #7.512, dated June
30th, 2011, established important milestones for the industry, such as the bid for fourth generation radiofrequencies
and the determination of broadband quality goals, resulting
in new regulation of “SMP” and “SCM” and attributing quality
parameters for the provision of fixed and mobile broadband.
In addition, the decree approved the new General Plan of
Universalization Objectives (“PGMU”), which must be followed by the concessionaires of Commuted Fixed Telecom
Service (“STFC”).
Strategy
As a result of the new “PGMU”, Anatel edited on October
2012 the Regulation for Universalization Obligations.
Throughout 2012, other important regulations with significant impact on the activities of TIM and Intelig were issued
by Anatel, with the following highlights:
• Regulation for Application of Administrative Sanctions,
issued on May 2012, revoking the previous regulation
about the topic. It is worth pointing out the redefinition of
minimum and maximum amounts for the application of
the fine sanction, according to the economic headquarters of the provider, as well as the suspension of enforceability of this sanction until Pado ends.
• Regulation for Industry Exploration of Dedicated Line
–“EILD”, issued on May 2012, revoking the previous regulation about the topic.
• Audit Regulation, issued on August 2012, revoking the
previous regulation about the topic.
26
Strategy
Network and
quality
Investments in
improvements focused
on customer satisfaction
are priorities for TIM’s
management
The year of 2012 was a very difficult one regarding the regulation environment and its resulting image damages. In the
third quarter, Anatel imposed the prohibition of sales in 18
states and the Federal District, claiming quality problems,
an action considered by TIM as out of proportion, not representing the company’s reality.
• Resolution that approved the General Plan for Competi-
tion Objectives – “PGMC”, issued on November 2012, introducing an important regulation milestone for the sector.
• Another important regulation milestone for the telecom-
munications sector was the publication of Law # 12.485,
on September 2011, which generated a new scenario for
the subscription TV services and the production and distribution of content, creating the Audiovisual Communication of Conditioned Access and the Conditioned Access
Service – “SEAC”. As a result of this law, Anatel published on March 2012 the “SEAC” Regulation, establishing
the provision conditions for this service, as well as for the
existing subscription TV services.
TIM PRESENTED TO ANATEL
AN IMPROVEMENT ACTION
PLAN INCLUDING EVEN BIGGER
INVESTMENTS IN NETWORK
INFRASTRUCTURE AND
CONNECTION, AS WELL AS NEW
GOALS FOR COMING YEARS
In order to overcome this situation, TIM presented to Anatel
on July 2012 the Action Plan for Improvement in Provision
of “SMP” Services. According to internal analysis conducted by the company, all the objectives pledged to Anatel for
December 2012 were reached in the national consolidated
view. The network expansion plan was implemented as
planned, with an increase of 30% in the volume of TRXs
installed in December 2012, compared to the same period
of 2011, and a 48% rise in the quantity of connected sites in
fiber optics, considering the same period.
Strategy
27
Customer service
In 2012, customer satisfaction remained one of TIM’s strategic priorities. The Quality Board started reporting to the
CEO, with the goal of developing and coordinating activities for constantly improving the services and forging a
closer relationship with the customers. The action plans for
quality are prepared according to the insight generated by
satisfaction surveys, feedback from customers in communications with the various relationship channels and other
important indicators reflecting their perception.
TIM ended 2012 reporting positive results, an evolution
demonstrated in the main public indicators. The company
in 2012 took the position of less mentioned operator in
the telecommunications sector in the general ranking of
“PROCONs” (consumer defense agencies) integrated to
“SINDEC” (National System of Consumer Defense Information), improving its performance regarding 2011, when
it came in second. Regarding “IDA” (Customer Service
Performance Index), TIM maintained its second-place position, and in October, the last official result published by
Anatel, it reached 89.35 points, 5.8 points below the leading operator and 16.2 points ahead of the last place. In
the month of June 2012, TIM scored 98 points on “IDA”, its
best score in the indicator.
“Quality Website”
Also in 2012, in a pioneer and innovative initiative,
the “Quality Website” site was launched, enabling
anyone to track the evolution of the service provided
by TIM. The site reaffirms the commitment towards
service quality and transparency, reinforcing TIM’s
innovative DNA. In this site you can find out relevant
information about the operator, coverage map, news
about the telecommunications market and, in the future, tutorial videos about the specificities of the services. The site also includes the Improvement Action
Plan presented to Anatel, so everyone can know the
commitment assumed towards the regulation agency
to improve network quality. In 2013, we will continue
to strive to continuously improve the satisfaction of
our customers.
Quality and customer service indicators
2010
2011
2011 X 2010
2012
2012 X 2011
SMP5 – Traffic channel allocation rate (voice)*
n.a.
n.a.
-
97% (goal = 95%)
-
SMP7 – call drop rate*
n.a.
n.a.
-
1.7% (goal = 2.0%)
-
SMP8 – data connection rate*
n.a.
n.a.
-
99% (goal = 95%)
-
SMP9 – data connection drop rate*
n.a.
n.a.
-
3% (goal = 5%)
-
Anatel Complaints Ranking by one thousand
access instances (last reported by Anatel)
0.470
0.300
-36.2%
0.420
40.0%
IDA – Customer Service Performance Index
(last reported by Anatel)
76.41
95.05
24.4%
88.95
-6.4%
*The “SMP” calculation formula was modified by Anatel on April 2012.
Strategy
Strategy
Offers and
commercial
approach
Innovation, optimized sales
channels and quality
customer services are
pillars of TIM’s strategy
TIM’s market approach is based on three fundamental
pillars: innovative offerings, optimized sales channels and
quality customer service. These pillars sustain TIM’s strategy of seeking unique positioning in regards to competitors,
growing in an accelerated and sustainable manner. Therefore, the company’s strategy is based on understanding and
segmentation of its customer base, enabling delivery, the
provision of services and the offer of products according to
customer profiles: Consumer and Business.
Consumer
For the consumer segment, TIM maintained its evolution in
the Infinity and Liberty platforms (respectively, for pre and
post-paid), adding the evolution of the Controle Plan to the
Liberty concept, in order to develop its pre-paid value base
with the migration to Controle, driving profitability in the segment, as it is a plan with hybrid characteristics, combining
benefits of Liberty and Infinity: the freedom and convenience of a post-paid plan while allowing customers to control
their expenses, like a pre-paid user.
The portfolio of plans continues its innovative path, both
in the delivery of voice access, with the rates for unlimited duration calls or for day of use in pre-paid (Infinity TRI
Offering in Rio Grande do Sul and TIM Beta Offering), and
the unlimited services of instant messaging and Internet on
the cell phone, with rates per day of use. On post-paid, the
company consolidates the Liberty concept, with unlimited
monthly access in the voice, Internet, instant messaging
and roaming services, with the flexibility and transparency
of the Smart concept, under which the customer pays for the
Added Value Services (“VAS”) only on the month in which
they are used.
28
Main marketed plans:
• Infinity (Pre-paid) – the customer is charged for unlimi-
ted duration calls to any TIM number and local fixed telephones. In the instant messaging and cell phone Internet
services, the customers are charged by day of use, with
delivery of unlimited service;
• Infinity TRI (Pre-paid in Rio Grande do Sul) – the customer from Rio Grande do Sul is charged by day of use
of voice services (to any TIM number and local fixed telephones), instant messaging and cell phone Internet;
• TIM Beta (Pre-paid) – segmented and restricted plan de-
signed for younger consumers, with daily charging of voice service (to any TIM number), instant messaging and
cell phone Internet;
• TIM Liberty – for a fixed monthly cost, customers can
speak with no limitation to any TIM number in Brazil, without restrictions of calls or call duration. It is also possible to add more advantages to the plan with the Liberty Radios service, for unlimited calls to any radio user
(SME), without using the package of minutes.
• Liberty Controle – for customers who want the benefits
of unlimited calls to the whole TIM community in Brazil
with full control of their expenses. Every month, the customer pays a fixed amount, speaks unlimitedly with TIM
numbers, and also receives credits to use on other types
of calls and services.
In the context of the evolution of the Infinity platform, TIM
launched the “Torcedor no Brasil” offering, with an innovative approach fully adapted to the needs of the soccer fan
audience. The offering is based on the free and qualified
delivery of relevant content from soccer clubs sponsored
by TIM, aimed at higher mobilization of the customer base.
This is one more step towards reinforcing the company’s
commitment to establish itself as an operator that empowers its customers with relevant deliveries.
In addition, throughout the year, faced with the increased
dissemination of smartphones and webphones among the
base, TIM added another recharge channel, the Recargas
TIM Android application, for the users of Infinity Pré and
Controle to recharge more conveniently, with a new portfolio
adapted to the segment’s needs, using amounts that range
from R$13 to R$100.
In November, TIM brought another evolution to the Controle
segment: Liberty Controle Express, integrating all the benefits of the Liberty Controle plan with the ease of payment
through credit card, simplifying the adoption of new customers and the migration of its pre-paid base to this segment.
Strategy
29
Corporate
Added Value Services (“VAS”)
In the corporate segment, the portfolio of plans followed the
same path as in 2011, but focusing on the plans with minute
packages, which resulted in a considerable reduction of Liberty Empresa Zero and a strong growth of Liberty Empresa
+50. This move indicates assertiveness in the guidance for
offerings and the consolidation of products in combos that
expanded the advantages in regards to minute package
plans, while also stimulating the use of Internet and added
value services, such as smartphones, modems and tablets.
The participation of smartphones in device sales grew significantly throughout 2012, reaching at the end of the year an
adoption rate of 43.1% of the total base.
The Added Value Services had a strong showing on TIM’s
market release agenda for 2012, always seeking to deliver
innovative offerings to customers.
The company also launched offerings with more added products and services, such as combos with tablet, further encouraging the use of Internet by providing devices that enable a broader use experience. The association with tablets
also serves to strengthen the company’s innovation image,
linking the data services to the TIM brand and thus expanding the portfolio of products in the minds of consumers.
Also in 2012, TIM increased efforts in offers designed for
larger corporations, offering in large negotiations, in addition
to a lower plan cost, options for leased devices in all plans
with minute packages.
THE SEGMENTATION OF THE
CUSTOMER BASE ENABLES
SERVING, SERVICE PROVISION
AND PRODUCT OFFERING
ACCORDING TO PROFILES
In addition to the plans of the Liberty Empresa line, TIM
continues to offer the Empresa Mundi plans, with packages
of 100, 400 and 800 minutes, allowing customers to use
voice services with the same rate on local calls, national
long distance calls and international long distance calls,
providing the user with the option of picking the plan that
best fits his needs.
In March, TIM launched Liberty Torpedo for the corporate segment, allowing customers to send unlimited SMS to
any operator for a fixed price per month, paying only on the
months in which it is used.
Infinity Torcedor, a partnership in the mobile segment, offered
customers free content about their favorite team (Flamengo,
Vasco, São Paulo, Palmeiras, Corinthians, Grêmio, Internacional, Bahia and Vitória), including daily news, score alerts,
exclusive wallpapers and the official song for download.
As part of its effort to design innovative services that make a
difference for its customers, TIM created its Mobile Learning
platform, with the “TIM+Inglês” and “TIM+Espanhol” products. These products allow users to learn another language through lessons by SMS and on the mobile site, offering
them the possibility of studying anytime, anywhere.
We also relaunched, at the end of 2012, the TIM App Shop,
a portal of applications available for webphones and smartphones, in which customers can download free apps and
purchase applications for the telephone paying with pre-paid credits or on the monthly invoice.
In another innovative promotion, TIM offered daily raffles
of R$1 thousand awards in the promotion “Prêmios grátis
para você”, plus two brand new cars at the end of the promotion. Over 13 million TIM customers participated in the
promotion, including free and paid users, with participating
customers also competing for an additional daily award of
R$5 thousand by paying only R$0,99+ taxes for participating. The success of this promotion was even bigger than
with similar promotions conducted in 2011.
In 2012, TIM extended to Business the same possibility of
unlimited use of the Liberty Empresa voice plans for the
SMS service. Liberty Torpedo, launched in March 2012 for
the SMB market, consists in offering unlimited SMS sending
for a fixed amount, paid only on the months in which the
service is used.
Financial services
In 2012, TIM strengthened its activities in the area of Financial Services, developing partnerships and products in the
areas of mobile banking, insurance, mobile payment and
mobile money, with the goal of generating new revenue,
while also supporting the company’s core business.
Insurance against Theft and Robbery of Cell Phones
In the beginning of last year, TIM commercially launched, in
its own stores, insurance against theft and robbery of cell
phones. Throughout the year, various sales and communi-
Strategy
cation incentive actions were executed to create an insurance sale culture in TIM’s brand stores. In addition, in November, TIM launched the “Loja Virtual de Seguros”, an online
sales channel. This insurance was developed in partnership
with Assurant and allows customers to protect their device
from the risk of theft and robbery, with low monthly costs.
30
Data offers - Internet on the cell phone
Liberty Web Smart In order to further encourage the use
of mobile Internet in the high value segment, TIM launched
the Liberty Web Smart offering on April 2011. With Liberty
Web Smart, customers of the TIM Liberty plans have unlimited Internet to use on smartphones for just R$29.90, paying
only on the months in which they use the Internet.
Protection Insurance with Awards
Liberty Web Smart is not a data package and does not need
to be contracted. Customers just need to have one of the
eligible plans in order to be able to browse freely, without
worrying about their consumption in megabytes or paying
any extra to access the Internet. In addition to not needing
to contract, customers also don’t need to commit towards
a monthly payment of the package – if they don’t use the
Internet in a given month, they won’t have the service cost
on their bill.
TIM Itaucard
BBM and free Internet With the goal of driving the use of
Internet among pre-payment customers with Blackberry devices, TIM launched on February the Blackberry Unlimited
service, which allows Infinity Pré and Controle Plan customers with Blackberry devices to use BBM and social network
applications, while browsing the Internet at will.
Trying out new concepts of low-cost insurance for the C and
D classes with the goal of seeking new sources of revenue, the “Proteção Premiada” was launched on July. It is a
specific kind of insurance for pre-paid customers, offering
coverage that reimburses funeral expenses by up to R$1
thousand and assistance services for crime victims, while
also randomly selecting winners for R$500 each week.
The TIM Itaucard was the first TIM payment product, a co-branded credit card in partnership with bank Itaú, based
on its benefits platform. In 2012, the challenge was to gain
market share, launching telemarketing actions and encouraging adoption of the card.
Liberty Controle Express
With the goal of creating a post-paid plan that could be marketed at large retailers without the need for credit evaluation, on November 2012 a new “controle” plan was launched,
paid exclusively by credit card. The plan can be acquired
by self-service using the Audible Response Unit (*144) and
TIM’s site, in addition to the physical stores.
Co-Branded Card
Supporting the mobile banking pillar, TIM established a partnership on December to distribute a customized chip by
BMG Bank, called BMG Tim Chip. It is a SIM Card with a
BMG application, including bank services such as verification of balance and credit request. The chip is offered to
BMG customers with BMG credit cards, and the expenses
become credits on the customer’s cell phone. Initially, the
marketed plans are Liberty Controle Express and Infinity.
Mobile money
In order to develop a product focused on pre-paid customers who do not use banks, the company established a
partnership with Caixa Econômica Federal and MasterCard
to develop new options of payments through the cell phone,
in the mobile money format, a virtual version of a pre-paid
bank card associated to a cell phone number. The product
is planned to be available in the Brazilian market on the second half of 2013.
By activating Blackberry Unlimited, customers agree to a
daily charge of R$1, to be debited from the recharge balance or contracted payment plan.
Infinity Web Launched in 2010, the Infinity Web services
enables unlimited Internet access through the cell phone for only R$0.50 per day in which the customer uses
the service. If the customer does not use the Internet, he
doesn’t pay anything for it. The service reached the milestone of 4 million unique users per day, a growth of 54% in
the annual comparison.
Internet on the computer or tablet
TIM features a full portfolio, with plan options allowing customers to choose which plan best fits his use profile and
type of equipment used to browse:
• For those who browse a bit on the computer, we have
Liberty Web Light, with an allowance of 500 MB and a
monthly payment of only R$35. Customers can browse
with speeds of up to 1 Mbps until they reach their allowance limit. If they consume this volume of data, they can
keep on browsing, but at a reduced speed.
• As for Liberty Web Tablet, it was designed for customers
who want an Internet plan to browse on this device. The
monthly allowance is 800 MB, for R$49.90/month.
On May 2012, TIM adjusted its offerings designed for use
on the computer, increasing their allowances and reducing
their prices.
Strategy
Therefore, for customers who constantly access the Internet
on their computers, TIM offers the Liberty Web Modem plan,
with an allowance that went from 2GB to 3GB, and a price
that went from R$79.90 to R$61 per month. For customers
who use the Internet very frequently, Liberty Web Modem
Plus received an allowance upgrade from 4 GB to 10 GB,
and its price was reduced from R$109.9o to R$101.
Long distance offering
TIM maintained its strategy of increasing the market share
of CSP 41 among its customers and promoting the migration
of long distance traffic conducted through fixed access from
other operators to TIM, launching actions to build customer
loyalty and retain high value customers. This move consolidated TIM’s leadership in the national long distance market.
The consolidation process of licenses 23 and 41 (return
of CSP 23) was concluded. The customer base of 23 was
migrated to 41, which absorbed 23’s plans and attributes,
enabling construction of a single brand of LD operator for
mobile and fixed.
International roaming offer
The company launched the Liberty Passport offer for voice
and data, bringing to the customer the innovative concept of
unlimited daily in foreign countries for post-payment customers (except “Controle”).
Aligned with the current national offerings of the Liberty family, with Liberty Passport TIM customers can talk or browse in an unlimited manner across the five continents by
paying a fixed value per day of use of each service (voice or
data), without the need to previously contract the offering,
thus simplifying adoption of the international roaming service, with attractive prices.
Fixed telecom
TIM, always seeking innovative offerings, launched on the
third quarter TIM Fixed Unlimited. This product allows users
to make unlimited duration calls to any fixed telephone in
Brazil, from any operator, in addition to unlimited calls to
local TIM mobile telephones, indicating a convergence between its products.
Devices
Regarding devices, TIM continued to sell them following the
strategy of the separate chip, started in 2009. Customers
can acquire unblocked devices, in 12 installments with no
interest, in post-paid plans.
During the first quarter of 2012, TIM started its special campaign
to promote iPad 2, reaching great numbers in tablet sales.
31
On the second quarter, TIM offered an exclusive launch, Samsung SII Lite, at R$999, the cheapest device in the Galaxy
S family. Also in this period, TIM launched the Nokia Lumia
line products, as a way of expanding its smartphone mass
marketing strategy.
On the third quarter, TIM and LG launched the L smartphone line, which are high value Single SIM and Dual SIM Card
smartphone products, showing once more the innovation of
Dual SIM Card products in its DNA.
On the last quarter of the year, TIM offered the Galaxy Pocket device at R$379, the cheapest Galaxy device on the
market, following the mass marketing strategy for the Android platform.
Commercial operations
TIM has a broad sales distribution channel for chips and recharges in all states of Brazil, consolidating its national presence since 2002. The company has over 10 thousand point
of sales, including Premium stores and resellers (exclusive
or multi-brand), while also leveraging the capillarity of large
retail chains. Our pre-paid service customers, in addition to
the traditional point of sales, can also use alternative channels for recharges, such as supermarkets and newsstands,
totaling over 470 thousand points spread across Brazil.
2012 was a year of significant challenges and achievements
for the Commercial area. The strategy included the expansion of capillarity for point of sales, highlighting the opening
TIM IS ACTIVE IN ALL BRAZILIAN
STATES AND HAS MORE THAN
10 THOUSAND POINTS OF SALE
AND RECHARGE FOR THE PREPAID SERVICE
of 50 more of its own stores in 2012, a record number for any
given year. In addition, there was also the launch of the School Store project, aimed at professional training of service personnel and employees of the operator’s stores, using training
centers across the country that simulate the real environment
of the sites. Innovative offerings were launched as well, including Liberty Passport and Liberty Controle Express. The
increasingly challenging regulation scenario provided additional motivation to continue on our innovation path, further
focusing on service quality and customer satisfaction.
Performance
Even with the interruption of sales between July and August
and the ban of the Infinity Day offer in November, right after
its launch, TIM reached the milestone of 38.1 million gross
additions, of which 34.4 million are pre-paid access and 3.8
million are post-paid. These numbers contributed to make
TIM market leader in pre-paid and consolidate its second
position in the market share ranking in Brazil.
In pre-paid, the main growth engine remained the Infinity
Pré plan, launched in 2009 and with its main value proposal
expanded by new partnerships for the Infinity Torcedor, as
well as offers like Infinity SMS and Infinity Web.
Recharge revenue rose 12.7% in the year, with over 98% of
recharges already conducted through the electronic channel. This great performance of the electronic channel is a
result of the TIM POS Project, which has been executed by
TIM since 2007, enabling expansion in the sale of electronic
recharges and significant capillarity of sales channels.
Meanwhile, in the post-paid area, the unique portfolio of the
TIM Liberty plans was maintained, with added value from
the launch of services such as Liberty Passport (voice and
web), enabling customers to use the voice and data service
in international roaming, across the five continents, in an
unlimited manner, paying a single amount for a period of 24
hours, thus making the TIM Liberty platform fuller and more
attractive. Another launch was the TIM Liberty Controle Express, combining the freedom of Post-paid with the control
of Pre-paid, under which customers can talk as much as
they want with any TIM in Brazil in local calls and DDD using
41, with full control of their expenses and paying directly
through their credit card invoice. TIM also maintained the
combo marketing mode, offering plans without mandatory
staying period and with a device paid in 12 installments with
no interest, using a fixed monthly charge.
In the corporate segment, TIM maintained the strategy of
offering customers, through its portfolio, a simplified experience with unlimited use: TIM Liberty Empresa and Tim
Empresa Mundi plans, focused on voice calls; Liberty Web
Smart plan, for unlimited use of data through the cell phone;
and the Liberty Web Empresa Tablet plan, for unlimited use
on tablets. In 2012, the Liberty Torpedo plan was launched,
enabling customers to experience unlimited instant messaging use. Also with the goal of driving data use, TIM was the
first operator in Brazil to market the iPad2, having also launched several offerings combining voice and data with the
TIM Liberty Empresa 100 plan, including leased smartphones, as well as tablet and voice offerings such as Samsung
Galaxy TAB with the Tim Liberty Web plan + Tim Liberty
Empresa + 50 with Samsung Galaxy Y
The strong sales growth in 2012, supported by innovations
in offers, demonstrated productivity gains without increasing
acquisition costs. On the contrary, unit SAC (Subscriber Acquisition Cost) dropped in comparison with 2011.
32
Performance
Operational
TIM leads in the pre-paid
segment in Brazil, with 59.6
million users, offering
transparent concepts
In 2012, the pre-paid market reached 210.8 million lines, representing 80.5% of the total Brazilian market. In fixed telecom,
TIM launched an ultra-wide broadband service, Live TIM, which achieved positive results in only five months of operations,
connecting approximately 4.2 thousand buildings.
Mobile BUSINESS
The Brazilian mobile market reached 261.8 million lines by
the end of the fourth quarter, representing an annual growth
of 8.1% (compared to 19.4% in the fourth quarter of 2011)
and a penetration rate of 132.8%, compared to 123.9% in
Q4 2011. The growth in the mobile market was supported
by: i) stimulus both to local on-net calls and long distance
ones (creating multiple sales effect of SIM cards in the pre-paid segment), ii) the machine-to-machine segment (M2M)
and iii) growing v
Brazilian mobile market
(millions of lines)
104.7
108.3
111.6
123.9
116.5
35.8
210.5
217.3
39.4
37.5
130.4
131.6
132.8
YoY%
8.1%
242.2
202.9
128.0
250.8
256.1
258.9
261.8
46.9
48.7
51.0
15.6%
6.4%
227.4
44.1
41.7
45.6
167.1
173.0
177.9
185.6
198.2
205.2
209.2
210.2
210.8
4Q10
1q11
2q11
3q11
4q11
1q12
2q12
3q12
4q12
Penetration % Source: Anatel
Post-paid Pre-paid
Performance
The net additions continued to decelerate on 4Q 2012, even
considering the seasonal effect, to a total of 2.9 million,
a reduction of 80% when compared with the 14.9 million
recorded in the same period of the previous year, mainly
because of the base cleaning process of companies.
• The pre-paid market reached 210.8 million lines (+6.4%
year over year), accounting for 80.5% of the total Brazilian market;
• The post-paid market reached 51 million lines (increase
of 15.6% compared to December 2011). It is important
to remark that the human post-paid (excluding M2M) reached 44.2 million lines (87% of the total), while M2M
stayed at 6.7 million.
In the full fiscal year of 2012, net market additions reached
19.5 million, a 50.3% deceleration in comparison with the
2011 total (39.3 million).
Also in 2012, TIM registered gross additions of 38.4 million
lines (compared to 39.8 million in 2011), resulting in a volume of 6.3 million total net additions (of which 0.9 million on
the fourth quarter, with market participation of 32% in the
year). These numbers were affected by the sales prohibition
and the rigid disconnection policy.
TOTAL MARKET SHARE
29.7%
3% 3%
29.1%
26.9%
25.4%
24.9%
25.1%
19.4%
4q10
Market Base
33
18.8%
1q11
2q11
3q11
4q11
1q12
2q12
3q12
4q12
TIM
14%
Vivo
Claro
Oi
Source: Anatel
80%
TIM ENDED 2012 WITH A TOTAL
COSTUMER BASE OF 70.3
MILLION LINES, A 9.8% GROWTH
COMPARED TO THE END OF 2011,
AND A 26.9% MARKET SHARE
Pre-paid
Post-Paid Voice
Post-Paid M2M
Post-paid broadband
Source: Anatel
The total subscriber base ended 2012 at 70.3 million lines, a
growth of 9.8% in comparison to the end of 2011, above the
total market growth of 8.1%, representing a market share of
26.9% (versus 26.5% the previous year).
Disconnections reached 32.1 million lines in the year, with a
turnover rate of 47.5%, a 20% increase regarding 2011. The
disconnection rate in the year was affected by our severe
disconnection policy for the pre-paid segment, disconnecting inactive lines while complying with the minimum periods
established in regulation. This disconnection policy is based on the efficient management of costs and expenses, as
each active line is exposed to the “FISTEL” payment.
Performance
TOTAL TIM BASE
1% 2%
12%
34
THE INFINITY PRÉ PLAN
REACHED OVER 58 MILLION
USERS, REPRESENTING 98% OF
THE BASE IN THIS SEGMENT
Fixed BUSINESS
85%
Pre-paid +9% YoY
Post-paid voice +25% YoY
Post-paid M2M -24% YoY
Post-paid broadband +11% YoY
Source: TIM
The post-paid customer base reached 10.7 million users, a
growth of 15.5% year over year (versus +24.4% in 2011).
In 2012, TIM added 1,397 thousand post-paid customers
(versus 1,826 thousand in 2011).
• Human voice access reached a volume of 8.7 million
users (+25% year over year);
• The machine to machine business reached 1.2 million
users (-24% year over year);
• The mobile broadband reached 827 thousand users
(+8.6% year over year).
In 2012, TIM launched its fixed ultraband service, Live TIM,
which achieved good results in just five months of operations. Live TIM connected approximately 4.2 thousand
buildings (out of approximately 8.5 thousand authorized),
ending the year with approximately 700 MSANs installed.
Additionally, approximately 160 thousand potential customers registered on the service’s website, helping in the project for evolution of Live TIM’s coverage area.
At the end of the year, the customer base had reached 10
thousand users, an accelerated evolution in the number of
sales as demonstrated in the following graph:
Live TIM: Customer Base AND SALES
(000 CUSTOMERS)
10
9
8
7
6
5
4
3
2
1
59.6 million pre-paid customers
In the pre-paid segment, the user total reached 59.6 million,
an 8.8% year over year growth, mostly driven by the Infinity Pré plan, which reached 58 million users, or 98% of the
base in this segment. TIM continues to lead the pre-paid
segment in Brazil, thanks to unique and transparent concepts. In addition, the company also consecutively added
innovative offers and resources to the Infinity line (that is
to say: Infinity Torpedo, Infinity Web Modem, Infinity Mais
and Infinity Torcedor), therefore remaining the most valuable choice in the market.
0
May/12
JUN/12
JUL/12
Customer base
Sales
Source: TIM
Aug/12
Sep/12
Oct/12
Nov/12
Dec/12
Performance
Performance
Finance
Data plans Infinity and
Liberty Web, as well
as Infinity Torpedo,
contributed to increase
revenue
In 2012, the total gross revenue reached R$27,756 million,
a 12.1% increase regarding 2011. The gross service revenue grew 9.6% when compared to the previous year, reaching R$24,350 million in 2012. AS for the gross revenue
of products, the amount reached R$2,541 million, a strong
63.1% increase in the year over year comparison.
Revenue
The growth of the gross service revenue in 2012 is explained by the gross revenue of mobile services, particularly
in added value services (includes data, instant messaging,
among others), which reported a 39.1% rise compared to
2011. This acceleration was generated by the strong adoption of the Infinity and Liberty Web data plans, as well as the
positive contribution of Infinity Torpedo.
GROSS REVENUE OF MOBILE SERVICES
(R$ MILLION / %)
22,880
20,692
17,480
15.3%
19.3%
35
In spite of the strong growth of the gross revenue of added
value services, it is worth highlighting the 2012 reduction in
the rate of VU-M interconnection by 13.6%, after February
24th, which prevented a bigger growth in the gross revenue
of interconnection (+3.1% year over year), and consequently in the gross revenue of services.
THE PORTFOLIO OF DEVICES IS
THE PILLAR OF OUR GROWTH
STRATEGY: 70% OF OUR
TOTAL SALES IN 2012 WERE
SMARTPHONES OR WEBPHONES
As for the growth in the gross revenue of products, it is
mainly due to the broader mix of devices: over 70% of the
total sales in 2012 consisted of smartphones or webphones
(compared to 61% in the previous year). It is worthy of note
that the dissemination of smartphones reached 43.1% of
our customer base, compared to 26.6% at the end of 2011.
The evolution in the spread of webphones and smartphones in our customer base is the pillar of our growth strategy
for data revenue, as it expands customer experience and
consumption through the use of our data service in his mobile device. In 2012, the data revenue expanded 30% (year
over year), achieving a share of approximately 20% of the
company’s total revenue.
PENETRATION OF SMARTPHONES / WEBPHONES IN
THE CUSTOMER BASE
PERCENTAGE OF TOTAL CUSTOMERS
12.8%
43.1%
26.6%
~12%
2010
2010
2011
2011
2012
2012
Source: TIM
SVA Revenue
Other Revenue Gross
Source: TIM
The total net revenue achieved R$18,768 million in 2012, a
9.8% increase (year over year). Meanwhile, the service net revenue registered an annual growth of 6.9%, reaching R$16,420
million. The net revenue for products totaled R$2,344 million, a
solid growth of 35.3% when compared to 2011.
Performance
which requires additional commercial and network expenses. Excluding the effects of non-recurring expenses, the
adjusted EBITDA would be R$5,052 million, an annual expansion of 8.5%.
TOTAL NET REVENUE
R$ MILLION
10%
18%
18,764
17,086
14,457
36
2,344
1,733
EBITDA evolution
5,052
886
4,658
4,213
15,353
16,420
5,010
13,572
2010
2010
2011
42
2011
2012
2012
Reported EBITDA
Product Net Revenue
Service Net Revenue
Source: TIM
Operational costs and expenses increased 10.7% in the
year, corresponding to R$13,754 million in 2012. The expansion is broadly explained by the following items: (i) effective growth in device sales, leading to a 26.3% year over
year increase in the cost of marketed products; (ii) 31%
expansion in outgoing traffic, generating 13.3% year over
year increase in network and interconnection costs; and (iii)
15.2% year over year increase in personnel costs, mainly
due to an increase in the number of employees (+10.3%
year over year).
Non-recurring events*
*Refers to Q3 2012
Source: TIM
The EBITDA margin ended at 26.7% for the year, a 0.6 percentage point drop. This annual decline is mostly explained
by the increase in the sale of devices, part of the strategy
to boost penetration of smartphones / webphones. The EBITDA margin after adjusting non-recurring expenses was at
26.9% in 2012.
29.1%
27.3%
26.9%
8.5%
It is important to notice that in the third quarter of 2012 there
were non-recurring expenses with a total amount of R$42.1
million, including R$16 million assigned for provisioning the
loss of advertisement credits and R$26 million referring to
the provision for Anatel administrative procedures (Pado).
10.6%
4,213
4,658
5,052
2010
2011
2012*
ebitda
EBITDA (earnings before interest, taxes, depreciation and
amortization) reached R$5,010 million in 2012, a R$352
million expansion during the year (or +7.6%). This growth
is a result of high outgoing revenue and data, slightly compensated by the increase in the number of subscribers,
EBITDA Margin (%)
EBITDA (R$ milhões)
**Adjusted EBITDA
Source: TIM
Performance
PROFIT
Depreciation and amortization were calculated at R$2,689
million in 2012, a 3.6% increase in the year, largely explained by the high level of investments performed in the period, which totaled R$3.8 billion.
37
ORGANIC NET PROFIT
R$ MILLION
17%
65%
For the full year, the net financial result was R$168 million, representing a drop of 29.7% regarding 2011, mostly resulting from
the drop in the “CDI” rate and the lower volatility of the dollar.
In 2012, financial expenses dropped 4.6% to R$428 million,
affected by the “CDI” reduction. Financial revenue declined
2.1% to R$304 million, also impacted by the “CDI” reduction. Lastly, the net foreign exchange variation was R$44
million (compared to R$101 million in 2011). This fall is explained by the smaller volatility of the dollar.
776
1,278
1,500
2010*
2011
2012**
Adjusted Net Profit
*Excluding tax credits in the amount of R$1,435 million
EBITDA REACHED R$ 5 MILLION
IN 2012, A R$352 EXPANSION
DURING THE YEAR. THE GROWTH
IS A RESULT OF REVENUE
COMPENSATED BY THE INCREASE
IN SUBSCRIBERS
Income tax and social contribution on profits ended 2012 at
R$705 million (or +29.1% year over year) for an effective
rate of 32.7% (versus 29.9% in 2011). This increase is explained by the rise in the taxable profit at TIM Celular and
the effect of calculations of regional incentives of “IRPJ” reduction – “SUDENE”/”SUDAM”, plus adjustments conducted on Q1 2012 totaling R$34 million, regarding deferment
of tax liabilities generated by depreciation of attributed cost
of Intelig assets.
Consolidated net profit reached R$1.449 million in 2012, a
13.4% rise compared to R$1,278 million in 2010. Excluding
the effects of R$42 million in aforementioned non-recurring
expenses, as well as R$9.1 million referring to monetary
adjustment of this amount, the organic net profit would be
R$1,500 million, 17.4% higher than in 2011.
** Excluding non-recurring expenses in the amount of R$51 million.
Source: TIM
capex
In 2012, investments reached R$3,765 million (or +24.4%
year over year), while organic Capex accounted for R$3,386
billion, an 11.9% year over year increase. It is worth noting that
93% of the total organic Capex was allocated to infrastructure.
Capex
R$ MILLION
3,386
2,836
82%
89%
93%
18%
11%
7%
2010
2011
2012
Capex Infrastructure
Capex Others
Source: TIM
3,025
Performance
Net financial position and free cash flow
In regards to the company’s gross debt, the main operation
of the company in the year happened on Q4 2012, when TIM
Celular contracted at “BNDES” an increase in the total credit
limit, from R$1,510 million to R$3,674 million. Of the total
amount of R$2,164 million referring to expansion of the credit
limit, R$ 1,983 million were assigned to finance investments
of TIM Celular and R$181 million to finance investments of
Intelig Telecomunicações for the years of 2012 and 2013. It
is important to note that these investments are designed to
expand the company’s infrastructure, with positive impact on
quality and network coverage on the medium term.
Also in Q4 2012, TIM Celular executed the first release
of this line, in the amount of R$1,000 million (thus increasing gross debt) with a full term of seven years, including
i) R$867 million at a cost of “TJLP” + 3.32% and ii) R$133
million referring to the first disbursement of the “PSI” financing line (Program for Sustaining Investment). This program
has subsidized interest rates (2.5% per year) when compared to the credit lines available on the market and even
when compared to the rates offered by “BNDES” itself, in
other operations, with similar purposes and terms.
With these moves, the gross debt totaled R$4,279 million
(including loans and financing, plus operations with securi-
38
ties), an increase of 15.5% when compared to the R$3,706
million in 2011, explained by the release of R$1,000 million
from the “BNDES” credit line.
The company’s debt is concentrated in long term contracts (79% of the total), consisting of financing from
“BNDES” (National Bank of Economic and Social Development), EIB (European Investment Bank), Banco do Brasil
and BNP Paribas, as well as loans from other local and
international institutions.
Approximately 35% of the total debt is in foreign currency
(US$) and is 100% protected by hedge in local currency.
The average debt cost was 8.47% in 2012, compared to
10.63% in the previous year.
Cash and cash equivalents reached R$4,431 million, leading the net debt position to –R$151 million, 35.7% more
than in 2011. Net debt/EBITDA accumulated over 12 months resulted in a proportion of -0.03x.
In 2012, the Free Operational Cash Flow was positive at
R$1,824 million, a 12.4% increase when compared with
2011. The result is mainly explained by a positive variation
in working capital thanks to the deferment in payment of 4G
licenses (90% will be performed in 2013).
FINANCIAL INDICATORS
DRE* (in thousands of R$)
2010
2011
2011 X 2010
2012
2012 X 2011
TOTAL GROSS REVENUE
20,319,295
24,757,565
21.8%
27,755,813
12.1%
Gross telecommunications revenue
18,761,384
22,217,049
18.4%
24,350,086
9.6%
Gross revenue of mobile services
17,480,139
20,691,604
18.4%
22,879,828
10.6%
Subscription and use
8,911,976
10,264,715
15.2%
11,086,671
8.0%
Added Value Services (“VAS”)
2,241,530
3,166,437
41.3%
4,404,832
39.1%
Long distance
2,374,341
3,181,215
34.0%
3,217,921
1.2%
Interconnection
3,679,365
3,849,408
4.6%
3,969,138
3.1%
Other mobile revenue
272,927
229,829
-15.8%
201,264
-12.4%
Gross revenue of fixed services
1,281,246
1,525,445
19.1%
1,469,795
-3.6%
Gross revenue of goods
1,557,910
2,540,517
63.1%
3,405,726
34.1%
Discounts and deductions on gross
revenue
(5,861,846)
(7,671,589)
30.9%
(8,991,865)
17.2%
Taxes and discounts on services
-5,189,759
-6,863,821
32.3%
-7,930,128
15.5%
Taxes and discounts on product sales
-672,087
-807,768
20.2%
-1,061,738
31.4%
Net revenue
14,457,449
17,085,976
18.2%
18,763,947
9.8%
Net revenue of services
13,571,625
15,353,228
13.1%
16,419,958
6.9%
Performance
39
DRE* (in thousands of R$)
2010
2011
2011 X 2010
2012
2012 X 2011
Net revenue of products
885,824
1,732,748
95.6%
2,343,989
35.3%
Operation costs
(10,244,399)
(12,427,669)
21.3%
(13,753,914)
10.7%
EBITDA
4,213,051
4,658,307
10.6%
5,010,033
7.6%
EBITDA margin
29.1%
27.3%
-2 pps**
26.7%
-1 pp**
Adjusted EBITDA
4,213,051
4,658,307
10.6%
5,052,163
8.5%
Adjusted EBITDA margin
29.1%
27.3%
-2 pps**
26.9%
0 pp**
Depreciation and amortization
(3,012,916)
(2,595,968)
-13.8%
(2,688,588)
3.6%
EBIT
1,200,134
2,062,339
71.8%
2,321,445
12.6%
EBIT margin
8.3%
12.1%
4 pps**
12.4%
0 pp**
Net financial result
(245,457)
(238,857)
-2.7%
(167,965)
-29.7%
Profit before taxes
954,677
1,823,481
91.0%
2,153,480
18.1%
Net profit
2,211,715
1,277,845
-42.2%
1,448,888
13.4%
Adjusted net profit
2,211,715
1,277,845
-42.2%
1,500,143
17.4%
* The consolidated operational and financial information, except when indicated
otherwise, are presented according to the International Financial Reporting Standards (IFRS) and in reais (R$) in compliance with the S.A. Law. The analysis of
the Statement of Results for the Fiscal Year refers to operations of TIM and Intelig.
**pps: percentage points
CASH FLOW * (in thousands of R$)
2010
2011
2011 X 2010
2012
2012 X 2011
Ebit
1,200,134
2,062,339
71.8%
2,321,445
12.6%
Depreciation and amortization
2,993,462
2,595,968
-13.3%
2,688,588
3.6%
Additions to permanent assets
(2,835,761)
(3,027,113)
6.7%
(3,764,726)
24.4%
Variations in operational assets and
liabilities
14,957
(7,994)
-153.4%
578,943
-7342.2%
Free operational cash flow
1,372,792
1,623,199
18.2%
1,824,250
12.4%
Net cash flow
697,473
543,160
-22.1%
591,883
9.0%
* The consolidated operational and financial information, except when indicated
otherwise, are presented according to the International Financial Reporting Standards (IFRS) and in reais (R$) in compliance with the S.A. Law. The analysis of
the Statement of Results for the Fiscal Year refers to operations of TIM and Intelig.
Performance
40
DVA analysis
2010
2011
2012
Revenue
18,622,780
22,239,785
24,467,812
Raw materials acquired from third parties
-8,039,805
-9,929,956
-11,120,343
Retentions
-3,012,917
-2,595,968
-2,688,588
Net added value generated
7,570,059
9,713,861
10,658,881
Added value to distribute
8,268,577
10,587,872
11,689,684
% of revenue
44.40%
47.60%
47.80%
Personnel and charges
503,542
519,303
602,531
Taxes, levies and contributions
4,297,729
7,369,285
8,056,332
Compensation for third party capital
1,255,590
1,421,439
1,581,933
Compensation for its own capital
2,211,716
1,277,845
1,448,888
Added value received in transfer
Distribution of added value
In 2012, TIM generated approximately R$11,690 million in
added value, approximately 47.8% of the total generated
revenue, discounted from provisions for risky debtors, discounts and returns. Out of this total, we have the following
distribution for the generated added value:
Distribution of added value
5.2%
68.9%
TIM DISTRIBUTED R$ 8
BILLION TO ALL GOVERNMENT
LEVELS, DEMONSTRATING THE
COMPANY’S CONTRIBUTION
TOWARDS SOCIETY
12.4%
13.5%
Out of the distributed total, it is worth noting the amount of
R$8.1 billion distributed to all government levels (federal,
state and city), demonstrating TIM’s contribution to Brazilian
society, not including the R$3.8 billion in investments performed in 2012.
Capital markets
The common shares of TIM Participações S.A. are negotiated in the São Paulo Stock Exchange (Bovespa) under the
TIMP3 code. The company also has a program of American
Depositary Receipts (ADRs) in the US market, in which they
are negotiated under the TSU code in the New York Stock
Exchange (NYSE).
Government
Third parties
Shareholders
Collaborators
The São Paulo Stock Exchange Index (“IBOVESPA”) ended 2012 at 60,952.08 points, accumulating an evolution
of 7.4% when compared to the previous year. Throughout
2012, Bovespa reported a daily average negotiated volume
of R$5.2 billion, practically stable or approximately 10% higher than in 2011.
Performance
41
PERFORMANCE AT THE STOCK EXCHANGE
140.0
120.0
100.0
80.0
60.0
40.0
20.0
JAN
2012
FEb
2012
MAR
2012
ApR
2012
May
2012
JUN
2012
JUL
2012
AuG
2012
SEp
2012
OcT
2012
NOV
2012
DEc
2012
JAN
2013
TIMP3
Ibovespa
TSU
The Dow Jones Industrial Average (DJIA), the main index
for NYSE, accumulated 7.3% gain in the year, ending 2012
at 13,104.14 points.
OUR MISSION IS TO OFFER
CUSTOMERS INNOVATIVE AND
DIVERSIFIED COMMUNICATION
POSSIBILITIES FOCUSED ON
THEIR EXPECTATIONS
In 2012, TIM’s negotiated shares totaled a financial volume of R$16,401.80 million, considering TIMP3, yielding a
daily average of R$44.8 million. At the New York Stock Exchange, TIM ADRs reached a total volume of US$12,333.26
million in the year, a daily average of US$33.6 million. The
company ended the year with its common shares priced at
R$8.20 in Bovespa, accumulating a 11.3% drop compared
to 2011, while ADRs at NYSE achieved a price of US$19.82,
an accumulative gain of 23.2% in the year.
Performance
Social and
environmental
With a focus on the
role of social agent, we
continue to invest in
products and services
The company’s performance is a result of its innovative services, which led the brand, for instance, to be identified as
the favorite of the middle class among mobile telecom companies, according to a survey from the Data Popular institute.
By focusing on the social evolution agent role, we continue
to invest in products and services aimed at promotion of full
mobility and communication without barriers. This positioning reinforces our mission to get closer to customers and
offer innovative connectivity possibilities, focusing on their
expectations and diversified needs.
Performance
The company’s performance is a result of its innovative
services, which led the brand, for instance, to be identified as the favorite of the middle class among mobile telecom companies, according to a survey from the Data Popular institute.
By focusing on the social evolution agent role, we continue
to invest in products and services aimed at promotion of full
mobility and communication without barriers. This positioning reinforces our mission to get closer to customers and
offer innovative connectivity possibilities, focusing on their
expectations and diversified needs.
Emission control
In order to understand and communicate information regarding gas emissions affecting the environment, since 2008
TIM has prepared the “GEE” Inventory, in compliance with
the GHG Protocol. In 2011, the Inventory was verified for the
first time by an independent third party, PricewaterhouseCoopers, adding further reliability to the final reported results.
This initiative will function as the basis for defining our Climate Change Corporate Policy, still in development phase.
These initiatives, in our view, are also integrated in a management focused on sustainable development, with topics that after 2012 were included in the meetings of the
Committee of Internal Control and Corporate Governance.
The recognition for this work came with the inclusion for the
fifth consecutive year in the Corporate Sustainability Index
(“ISE”), and for the third consecutive year in the Efficient
Carbon Index (“ICO2”) portfolio, both from BM&FBovespa.
Conscious disposal
The company is aware of the potential negative impact of its
industry, such as the waste from cell phone exchange turnover and electromagnetic emissions of Radiobase Stations
(“ERBs”). TIM’s strategy generates positive subproducts in
this area, as the sharing of networks and sites combined
with the modernization of technology and equipment optimize energy use and physical footprint, while reducing the
environmental impact of access systems.
In addition, TIM has the “Recarregue o Planeta” and “Papa-pilhas” programs (the latter one in partnership with the Santander bank), whose goal is to collect batteries, discarded
cell phones, simcards and recharge cards, among other accessories. In 2012, TIM collected 46 tons of electronic waste, handling and discarding it through companies certified by
Brazilian environmental agencies.
42
TIM constantly seeks further improvements in its environmental management. On April 2012, the company concluded
the expansion of ISO 14001 environmental certification to
the states of Rio de Janeiro, Espírito Santo and São Paulo,
in TIM Celular’s Network Management and Operation activities. This expansion included the company’s administrative
and industrial buildings and Radiobase Stations (“ERBs”).
Responsible work
The company also offers its collaborators opportunities to
contribute to a better world. In addition to the Sustainability course, offered since 2011 to all collaborators, in 2012
we created the ISO 14001 course, focused particularly on
employees involved in the certification scope. Training was
performed through the TIM Connection e-learning tool, and
was designed to expand the concepts of the environmental
management system.
As a reflection of this sustainability oriented management,
our Social and Environmental Responsibility policies, which
guide our actions and initiatives, are based on the UN’s Global Pact principles, a voluntary agreement of which TIM is a
signatory since 2008. Through this agreement, companies
of the whole world commit to ensure respect towards the ten
principles regarding human rights, work conditions, environment and fighting corruption.
Relationship with society
Committed towards Brazil and society, TIM established a
partnership with the “Pastoral da Criança” NGO to use cell
phones to transmit information about the quality of public
health services in the country. This partnership is aligned
with the World Health Organization, which defined as a
priority for the 2012-2017 period the e-health actions, which include using wireless and mobile technology to support
public health policies. So far, 180 volunteers who collaborate with the NGO were trained to work on the project. The
training process will continue in 2013, reaching up to 2,500
volunteers, who will be able to multiply knowledge to the
rest. Pastoral da Criança has approximately 120 thousand
volunteers across Brazil.
The company also deployed a new digital inclusion project.
The main goal of “TIM Plural Conectados”, still in testing
phase, is to promote social mobility through cell phones,
creating opportunities to generate work and income for people in the poorer communities of the city of Rio de Janeiro.
Through small workshops and two web tools, “Seu Trabalho” and “Seu Bolso”, participants receive guidance about
the world of work, personal finance, and safe Internet use,
among other topics.
Performance
In addition, Tim supported in 2012 one of the percussion
bands created in the “TIM Música na Escola” project, formed
by deaf students. The “TIM Música na Escola” percussion
band is formed by 15 students ages nine to 19, who study
at the National Institute for Education of the Deaf (“INES”),
plus four young project monitors, under the leadership of
master Mangueirinha. The learning process features a specific methodology that meets the needs of participants by
using repetition and body awareness. The repertoire of the
work is focused on the rhythmic diversity of samba schools
in Rio de Janeiro.
• Continuous Improvement and Prevention of Pollution
We will continue to keep up with market speed without losing sight of the long term view implicit in everyone’s efforts
towards a more sustainable development.
• Publicity
Volunteer work
In order to encourage adoption of volunteer actions, TIM established that each employee can dedicate one work day
in the year exclusively to the initiative. In 2012, 3% of the
company’s own personnel participated in the “Cidadão sem
Fronteiras” program, which raised 12 thousand items.
In addition, in different company units in Brazil other initiatives are conducted, such as the Post Office Santa, in Brasília. The action’s goal is to answer the letters children right
to Santa Claus. In 2012, almost all collaborators in the area
of Network and Assurance Implementation joined in the holiday spirit and contributed with gifts.
In São Paulo and Santo André (SP), collaborators also
supported the campaign and 70 people took over as Santa Claus assistants. They read and separated the letters,
considering eligibility criteria defined by the Post Office.
Another part of the collaborators organized the “Fábrica de
Presentes” initiative to collect toys for children who were
not godfathered.
Sustainability as a principle
Sustainability is one of TIM’s principles guiding decision
making, particularly regarding investments, in order to contribute to business resilience. The company’s participation
in the Corporate Sustainability Index (“ISE”) encourages it
to launch new actions in this area every year.
In order to ensure sustainability of its activities, the company
adopted a series of measures aimed at promoting continuous improvement of environmental performance, drawing inspiration from the Global Reporting Initiative (GRI)
directives and the ten principles of the UN Global Pact, of
which it is a signatory. In this manner, the company’s commitments include:
43
• Waste Management
• Electromagnetic Emissions
• Legal compliance
• Consumption of natural resources
• Technological innovations
With the goal of offering services and products that encourage communication without borders among all Brazilians, the
company works to prevent post-consumption damage, and
that is why it develops programs to collect and dispose potentially disruptive supplies and products in an environmentally appropriate manner. That is why the company invests
in the marketing of the separate TIM Chip, which enables
the reduction in turnover of cell phone device exchanging,
thus reducing electronic waste.
TIM has programs to collect devices, batteries and accessories, ensuring correct disposal of these materials. In 2012,
13.8 tons of these materials were collected, surpassing the
established goal, which was 13 tons.
At administrative offices, the collection is done selectively
with the separation of organic waste for public pickup, a responsibility of city administrations. The recycling percentage
for the waste generated in the offices, in 2012, was 74%,
16% above the goal for the year, which was 58%.
Paper consumption
TIM monitors paper consumption in four fronts: internal use,
bags, marketing and invoices. The invoicing area is the one
that consumes the most materials, as a result of having to
send bills to customers: in 2012, 1,736.5 tons were used,
and 1,068 tons were consumed in 2011. The increase is justified by the growth in the index of overdue customers, resulting in a bigger volume of collection letters. As a result of the
growth in the customer base, the campaigns for adoption of
the summary bill have yet to generate significant changes.
For 2013, the company plans to adopt the goal of recycling
A3 and A4 paper, used in administration (FSC and recycled),
as the recycling of plastic cups – an environmental development goal for 2012 – has been losing economic feasibility in
some regions of the country and resulted in the difficulty to
recruit skilled vendors to perform this activity.
Performance
Energy generation
The energy consumed by TIM is essentially obtained through the electrical grid, accounting for 95% of the total. Therefore, one of the operator’s goals is to eliminate waste in
energy consumption, particularly regarding administrative
offices. Some of the measures adopted for this purpose
include building maintenance actions, such as reduction in
the working hours of cooling and elevator equipment; replacement of high consumption equipment with more efficient
options; and intensification of maintenance routines.
The monitoring of energy consumption is performed by the
ecoefficiency indicator, which links the quantity of transferred bits (voice and data traffic) with consumed energy (fossil
fuel and electricity consumed to perform these services). In
44
2012, TIM Celular reported a growth of approximately 25%,
which represents a gain in ecoefficiency.
Water and effluents
TIM’s activities do not require intensive use of water, and
therefore do not impact availability of the resource. In spite
of that, the company does have initiatives to reduce consumption, such as adjustment work and inspections constantly performed in bathrooms and pantries to avoid water
leaks and deployment of more efficient equipment in bathrooms (faucets with timers and toilets with coupled boxes). In 2012, water consumption from its own recovery was
7,957 m³, with 207,617 m³ from supply grids.
SUSTAINABILITY INDEXES (GRI)
2011
2012
2,098,194Kg
100%
2,632,291Kg
100%
49,924GJ
49,947
1,342,931
1,311,878
176.4t
748t
222.6t
573.8t
EN2 – Recycled materials used
Total consumed paper
Percentage of recycled material compared to total
EN3/EN5 – Energy consumption
from its own sources (gasoline and diesel – vehicles
and generators) and third party sources (electricity)
EN22-Total weight of waste, by type and
disposal method
Hazardous
Non-hazardous
EN26- Initiatives to mitigate environmental
impact of products and services
Level of electromagnetic emissions
EN30-Total investments and expenses in
environmental protection
On 1,539 sites(139% more than in 2010)
R$ 235.5 thousand
On 2,058 sites (33.7% more than in 2011)
R$ 1037 thousand
In 2012, HR started a partnership with the
Certification & Quality area in order to develop
a project to adjust TIM to the National Policy
for Solid Waste (“PNRS”). In addition, the first
waste inventory is being developed, plus several
“PNRS” training courses.
PR5 - Practices related to customer
satisfaction, including results from surveys
measuring this satisfaction
received 20,174 complaints at “PROCON”
and solved 100% of its criticism and
complaints.
received 13,540 complaints at “PROCON” and
solved 100% of its criticism and complaints.
LA10 - Average training hours per year, per
employee
154.2h/year
679,675 h/year
SO8 - Total amount of relevant fines and
non-monetary sanctions resulting from noncompliance with laws and regulations.
TIM was the defendant in 8,156 labor
lawsuits and in the same period paid an
amount of R$798,000 in the proceedings
judged favorably.
TIM was the defendant in 10,823 labor
lawsuits and in the same period paid an
amount of R$2,705,000 in the proceedings
judged favorably.
CRedits
coordination
TIM Participações S.A. – Diretoria de Relações
com Investidores
editing
Report Sustentabilidade
Translation
Estado da Arte Produções Gráficas
Graphic design and layout
Report Sustentabilidade
Fonts
Teuton, František Štorm, 2005
Trade Gothic, Jackson Burke, 1948
Helvetica, Max Miedinger e Eduard Hoffmann, 1957

AnnuAl RepoRt tIM 2012 - report:sustentabilidade

Transcription

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