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SUSTAINABILITY
REPORT
2013
TIM PARTICIPAÇÕES: 2013 SUSTAINABILITY REPORT
2
INDEX
Find out more about TIM
3 Sustainability33
PRESENTATION3
HIGHLIGHTS AND OBJECTIVES FOR 2013
33
Message from the CEO
4
ECONOMIC PERFORMANCE
35
LEADING OPERATOR IN PRE-PAID SEGMENT
6
Environmental management
37
SHAREHOLDER STRUCTURE
9
SOCIAL PERFORMANCE
49
CORPORATE SOCIAL INVESTMENT
60
STRATEGIC INVESTMENTS
10
2013 Highlights
11
CORPORATE GOVERNANCE 13 ABOUT THE REPORT
65
GOVERNANCE STRUCTURE
13
profile65
BUSINESS LONGEVITY
16
GRI CONTENT INDEX
67
AUDIENCE ENGAGEMENT
21
ASSURANCE STATEMENT
73
IBASE SOCIAL BALANCE SHEET 2013
75
STRATEGIES AND OUTLOOKS 27
PRESENCE AND EXPANSION
27
TIM COMMITMENTS
29
SERVICES, PLANS, AND PRODUCTS
31
3
LEARN MORE ABOUT TIM
PRESENTATION
Welcome to the 2013 Sustainability Report
of TIM Participações S.A. We present below
our main achievements, challenges and projects during the year, aimed at sustainable
development and the growth of our company. Since 2008, we have followed the directives of the Global Reporting Initiative (GRI),
a non-governmental organization defining international level standards for the reporting
of social, environmental, economic-financial
and governance aspects.
In this edition, we have initiated our transition
towards a new version of the GRI methodology, G4, which offers materiality as a key
element in selecting and organizing content
for the method of reporting the indicators.
This means that everything is evaluated on
whether it is relevant for the company in the
social, environmental and economic areas,
according to business impact on the related audiences.
This year we highlight our investments in infrastructure, offerings, and institutional and
social positioning, highlighting the launch
of the TIM Institute, the Mobile Broadband
Plan, the adoption of Active Sharing of 4G
Access Network (RAN sharing), and the development of the pilot project for small-cells
(small antennas that help ensure the quality of the 4G network). The positive results
of our operation, even faced with a fiercely
competitive market, have helped the company achieve the milestone of 73.4 million customers, maintaining its leadership position in
the pre-paid segment.
Through this report - a key channel of dialogue with our stakeholders - we reinforce
our commitment towards sustainable business practices and ethical and transparent
management.
4
MESSAGE FROM THE CEO
In a challenging year, TIM – focused on essential
pillars for its business – achieved positive results and
continued to prioritize customer satisfaction and the
search for sustainable management
The year of 2013 was a challenging and
very important one for TIM’s progress. In
March, I took over as CEO of the company
with the challenge of leading - together with
the company’s whole staff - a new phase of
institutional consolidation, with the expected commercial expansion but always focusing on the quality of provided services and
the search for sustainable management. The
scenario contributed to make the task harder, since the economic growth, below expectations, accelerated the competition.
In this context, we performed hard work,
aimed at managing our costs without hampering our efforts to accelerate business
growth with higher efficiency. In order to
achieve the proposed goals, four strategic
proprieties have guided our operation during the year: investments in infrastructure
and improvement of network quality; constant evolution of offerings and innovation;
strong institutional positioning and cooperation with the Government; and a focus on
TIM collaborators, in our culture and the values of our company.
This commitment assumed by all employees
in the companies led us to a positive result in
this period. The speculations about TIM’s future did not lead us to lose focus on the activities and goals of our company, which are
strategically relevant for the Telecom Italia
Group and Brazil.
OUR MAIN PRIORITY:
INFRASTRUCTURE
In 2013, we invested heavily in one of our
main priorities: infrastructure. Our engineering and technology team focused on network quality strengthening projects in many
regions, particularly in a group of 195 cities
that concentrate most of TIM’s traffic. Highlights included the work on expanding and
modernizing the next generation optic fiber
network. We ended 2013 with the conclusion of 95% of the two first phases of the
Fiber-to-The-Site (FTTS) project, which is
taking fiber to the antenna in 35 major cities. FTTS is one of the pillars of the Mobile
Broadband (MBB) Plan, which ended the
year covering approximately 40 cities with a
new technology that provided unique browsing performance for mobile broadband users. In addition, we developed many pilots
for small-cells (small antennas, important to
ensure quality in our new 4G network) and
Wi-Fi and inaugurated the Amazon fiber
transmission line.
We also started last year our fourth generation operation in Brazil. In order to comply with the schedule for deployment of the
technology, helping customers and developing the 4G network in the country, we signed
an unprecedented agreement in the Brazilian
market for sharing the radio access network,
going beyond the traditional model limited to
towers. This type of business is essential for
the development of telecommunications in
Brazil, and is an alternative for potential difficulties in licensing for the installations, while
also helping to deal with the challenges of
sustainability, urbanism and conscious use
of energy.
TIM Portas Abertas (“Open Doors”) launched in February 2013 - is a relationship portal in which customers can track the
progress of installation of antennas, network
capacity expansion and 3G coverage expansion. The platform contributed to improve the
relationship with this audience in 2013 and
received over 1 million visits throughout the
year.
All these actions are already showing effective results: TIM, in the fourth quarter of
2013, was the operator with the lowest volume of complaints at the national consumer
protection agency (SINDEC) and the second
lowest at Anatel, having reduced network
complaints by 18%, in comparison with the
first quarter of 2013. In addition, we have
maintained our competitive position, ensuring leadership in the pre-paid segment and
second position in mobile telephony in Brazil,
reaching the milestone of 73.4 million customers and with growth above the market average.
COMMITMENT TOWARDS SUSTAINABLE
PERFORMANCE
Throughout 2013, we had very interesting
projects that aligned our sustainable business strategy to the strategy of long-term
business growth and maintenance: sharing
of the 4G network (RAN sharing), the pilot
project for small-cells, virtual weather stations and rain monitoring by installation of
rain gauges in our antennas (a partnership
with the Ministry of Science, Technology and
Innovation) are solid examples of that.
In July 2013, we went to Brasilia to present
the TIM Institute to the minister of Science,
Technology and Innovation, Marco Antonio
Raupp. With this partnership established,
we started our work with the main goal of
creating and driving strategic resources for
the democratization of science and innovation, promoting human development and
using mobile technology as one of its main
enablers. The Institute’s initiatives have
reached 288 cities and involved approximately 100 thousand people. Among the
main projects we highlight TIM Makes Science, The Math Circle Brazil, TIM Tec and
the support for the federal program Science
without Borders.
Regarding environmental aspects, TIM constantly monitors the emissions of electromagnetic radiation in its activities and performs an inventory of GHG (Greenhouse
Gas) emissions, audited by an independent
company - yielding for the second time in a
row the gold seal of the Greenhouse Gas
Protocol (GHG Protocol). In addition, we are
5
voluntary members since the 2010 cycle of
the Companies for Climate (EPC) Platform,
and we answer the CDP questionnaire.
These initiatives were relevant during the
year, leading TIM to be confirmed for the
sixth year in a row as part of the Sustainability Index (ISE) and selected, for the fourth
year, as part of the Efficient Carbon Index
(ICO2), both portfolios of BM&FBovespa.
This recognition reinforces our commitment
towards sustainability and our best governance practices.
Our Social and Environmental Responsibility Policies are based on the ten principles of
the UN’s global compact, a commitment in
which TIM has been a signatory since 2008.
In this way, this report has the purpose of
being the Progress Statement (COP) of the
company under the Global Compact principles, while also reporting its actions under
the Global Reporting Initiative (GRI) model.
FUTURE CHALLENGES
Work will continue at a fast pace in 2014.
We have already revolutionized the voice
market, helping Brazil talk more. Now, in
accordance to our DNA, we will evolve so
Brazilians can browse more and further.
Our main challenges this year are: continue
to develop the potential of our base through
fixed-mobile substitution, especially in the
use of mobile data; proceed in the search
for market leadership in the telecommunications market, particularly leadership in revenue growth and financial results; continue to implement innovative solutions; and
further expand our quality of infrastructure
and coverage.
Always seeking operational excellence,
we continue to prioritize also our sustainable activities, strengthening our commitment towards corporate social responsibility
through actions of the TIM Institute, as well
as all other company initiatives described
in this report.
Rodrigo Abreu
President of TIM Brasil
LEADING OPERATOR IN THE PRE-PAID SEGMENT
In 2013, TIM maintained top rank in the
segment and reached year-end with a base of
73.4 million customers
With headquarters in Rio de Janeiro (RJ),
TIM Participações S.A. provides telecommunications services through its subsidiaries, Tim Celular S.A. and Intelig Telecomunicações Ltda. Operating in Brazil since 1998,
it has consolidated its position as a company
with national reach, starting in 2002. Today
it is a public company operating with mobile,
fixed and long distance telephone services,
as well as data transmission.
Controlled by TIM Brasil Serviços e Participações S.A. (subsidiary of the Telecom Italia
Group), the company is the second biggest
operator of mobile telephones in Brazil, with
a registered market value of approximately R$30 billion. In 2013, it maintained leadership in the pre-paid segment and ended
the year achieving the milestone of 73.4 million customers, 4.3% more than in the fourth
quarter of 2012 and above the growth of the
Brazilian market, which was 3.5%.
Through GSM technology, TIM reached in
2013 approximately 95% of the urban population active in 3,404 cities. TIM also provides broad data services with national coverage, 100% of which use GPRS (General
Package Radio Service). The company also
offers a Third Generation (3G) network that
serves 78% of the urban population in Brazil and 450 international roaming networks
in over 200 countries spread across six continents.
In 2013 TIM also started its 4G operation in
the country. Leveraging an innovative approach, the company adopted the infrastructure sharing model (RAN sharing) with operator Oi. In addition to enabling reduction of
initial investment costs and promoting efficiency in operation routines, the project will
allow a 50% reduction in equipment by 2016,
according to Anatel goals for 4G coverage in
283 cities. In environmental terms, the initiative reduces energy consumption and consequently GHG (greenhouse gas) emissions - it
is estimated that more than 500 tons of material will be saved.
In addition to all this, the strength of the Liberty (post-paid) platform was maintained to
position and market the 4G offering. As a result, this year the achieved market share was
almost 31% of 4G users.
In Europe, TIM signed an agreement with Italy to provide the international roaming service on 4G network. With this move, it became the first operator in Brazil to provide,
since December 2013, this technology to
customers travelling to that country.
Tim Mission is:
To be close to the client, providing innovative
possibilities of connectivity, focusing on its
expectations and diversified needs, contributing
as a social evolution player via a sustainable
management.
Tim Vision is:
To be the first choice amongst clients, providing
innovative and high quality services, becoming a
benchmark of profitability of the Brazilian telecom
market
VALUES
• Proactiveness
• Transparency
• Speed
• Professional excellence
• Focus on the customer
• Team spirit
• Innovation
• Entrepreneurial spirit
6
7
TIMELINE
Launch of official version
of Portas Abertas (“Open
Doors”)
Launch of TIM RI application
(for financial audience and stakeholders)
Launch of TIMPress
MARCH 2013
APRIL 2013
Launch of TIMmusic
Launch of 4G network
MAY 2013
(application for journalists)
JUNE 2013
Launch of MBB – MobileBroadBand (project to increase network
quality: optic fiber to antenna)
Gold seal of GHG Protocol
JULY 2013
30 Foundation of TIM Institute
AUGUST 2013
SEPTEMBER 2013
OCTOBER 2013
Integration to ISE portfolio
(referring to 2014)
NOVEMBER 2013
Conclusion of project LT
Amazonas
DECEMBER 2013
Integration to ICO2 portfolio
(referring to 2014)
JANUARY 2014
8
TIM IN BRAZIL
Through subsidiaries TIM Celular S.A. and
Intelig Telecomunicações Ltda, TIM operates
across national territory. Business expansion in the Greater São Paulo and Greater
Rio areas was possible with the incorporation of AES Atimus (100% of Eletropaulo
Telecomunicações Ltda. and 98.3% of AES
Communications Rio de Janeiro S.A.) to TIM
Celular in 2012. The acquisition of both companies in 2011 was essential to reinforce the
company’s strategy to modernize and expand its network capacity.
Company
Services
TIM Celular
Mobile telephone operator with activities across Brazil, TIM Celular is a leader in the pre-paid segment,
with a total base of 73.4 million customers in the mobile market and provider of infrastructure and high
performance communication solutions in the main cities of the metropolitan regions of Rio de Janeiro and
São Paulo. The company has a national reach of approximately 95% of the urban population, the broadest
GSM coverage in Brazil, active in more than 3,400 cities.
Intelig
Provider of fixed telephone voice and data services, Intelig offers integrated and customized solutions for
the corporate Market in the segment of government and operators (carriers), with national and international
coverage. The company has a network of optic fibers installed in 47 thousand kilometers and has
telephone centrals, satellite stations, connection to the major international networks and capacity in the
main submarine cable systems.
9
SHAREHOLDER STRUCTURE
The only operator to join the Novo Mercado (New
Market) list, TIM converted preferred shares into
common shares
TIM’s arrival in Novo Mercado in 2011
changed the shareholder composition of the
company, with the conversion of preferred
shares (PN) to common shares (ON), granting shareholders the right to vote in general meetings.
Telecom Italia
100%
Telecom Italia
International N.V.
MINORITY
SHAREHOLDERS
ON: 33%
(805,662,701)
ON: 67%
(1,611,969,946)
TIM Participações S.A.
100%
100%
TIM Celular S.A.
Intelig
SHAREHOLDER COMPOSITION
33%
The company is the only representative of
the telecommunications sector to be part of
this segment of BM&FBovespa, which presents the maximum level of corporate governance. Novo Mercado consists of shares of
companies with voluntary commitment towards adopting best practices and reporting information beyond what legislation
demands. Main characteristics of the companies listed in the Novo Mercado Regulation:
• The companies must have only common
shares, which is to say, all shares have voting rights in the Shareholders Meeting;
100%
TIM Brasil Serv. e
Part. S.A.
TIM is the only operator in Novo
Mercado
COMMON
805,662,701
COMMON
67% 1,611,969,946
Tim Brasil Serviços e Participações S.A
Other
Total: 2,417,632,647
• The Board of Directors of the company
must include at least 20% independent
members;
• In case of sale of shareholder control, the
buyer will extend the purchase offer to all
other shareholders, ensuring the same
treatment given to the selling controller
(100% tag along);
• Disclosure of financial information according to international standards and in more
depth, including quarterly reports with
statements of cash flow and consolidated reports reviewed by an independent
auditor;
• The regulation demands that the company
maintain a minimum percentage of 25% in
free floating shares.
10
STRATEGIC INVESTMENTS
Operator invests R$ 3.9 billion in 2013
In 2013, TIM presented positive results, both
operational and financial. Based on our strategic lines, we implemented the year’s priorities. For this purpose we invested R$3.9 billion in 2013, with R$3.5 billion allocated to
modernizing and expanding our network infrastructure and IT (Information Technology).
In 2012, the company invested R$379 million in optic fiber projects in Brazil to reinforce its information transmission network
(voice, data and signals). Two new routes
were created: the first one, the Belém-Brasília stretch, was activated in the beginning of
2013 and has 2.5 thousand kilometers, passing through four states: Maranhão, Pará, Tocantins and Goiás.
The second route, Belém-Manaus, is part of
the LT Amazonas consortium, enabling digital inclusion of population in remote areas
of the country. The system includes cables
through transmission line towers and power
substations throughout 27 cities in the states
of Amazonas, Pará and Amapá. The investment will yield an increase of up to 100 times
in the capacity for voice and data transmission in the region. In August, TIM completed the stretch from Tucuruí (PA) to Manaus
(AM). More than 1.4 thousand kilometers of
optic fiber were deployed in this step of its investment plan in the North region, which received R$200 million.
The successful investment to modernize the
data network between Belo Horizonte and
Salvador, in 2012, was a key incentive for
the company to extend the project to Rio de
Janeiro and São Paulo in 2013, applying approximately R$700 million.
In 2013, TIM also reaffirmed its commitment
towards quality in services and customer
support for the 2.1+ million customers in Rio
Grande do Sul. Investments in the state totaled over R$90 million during the year and
were focused mainly on network expansion.
With 291 cities in the state covered by 2G
technology and 44 by 3G, TIM expanded by
almost 60% its network capacity in the state,
where it holds a 14% market share.
With a focus on expanding and modernizing the network across the country using the
latest generation of fiber optics, TIM ended
2013 concluding 95% of the two first phases of the Fiber-to-The-Site (FTTS) project,
which takes fiber to the antenna in 35 major Brazilian cities. FTTS is one of the pillars of the Mobile Broadband (MBB) Plan,
which ended the year serving 39 Brazilian
cities with a new technology that provides
unique browsing performance for users in
mobile broadband, using sites connected to
high speed optic fibers.
In addition, we have invested over R$50 million in a new CRM (Customer Relationship
Management) platform. This new platform
will increase immediate response capacity
for customer calls in the call center, improving agility and quality in service.
According to the Improvement Plan, approved by the National Telecommunications
Agency (Anatel) in August 2012, the company will invest R$10.9 billion to improve
service and network quality until the end
of 2014.
2013 HIGHLIGHTS
Commitment towards a more sustainable
business model
Sustainability is one of the directives of our
strategic management. The Control and Risk
Board – directly linked to the Board of Directors – is responsible for taking the discussions about the Social Responsibility topic to the company’s high management, for
long term business growth and maintenance
while considering economic, environmental
and social aspects.
Validating its search for a more sustainable business, the operator was confirmed
in 2013, for the sixth year in a row, as part
of the Sustainability Index (ISE), and for the
fourth year it was selected to be part of the
Efficient Carbon Index (ICO2), both initiatives
of BM&FBovespa. In addition, each year TIM
prepares inventories and answers questionnaires related to its greenhouse gas emissions and its strategy concerning climate
change, participating in initiatives such as
the GHG Protocol, CDP and EPC (group of
companies for discussions about the topic).
Initiatives such as the RAN sharing projects
(sharing the 4G access network with another
operator), the rain monitoring platform (in order to improve management of national rainfall data and therefore better evaluate risks
of natural disasters) and the virtual weather station (in partnership with the Ministry of
Science, Technology and Innovation – MCTI)
bring innovative strategies to the company’s
core business, targeting sustainable development.
One of the key highlights for 2013 was the
launch of the TIM Institute in July 2013, created to consolidate the company’s Corporate
Social Investment strategy.
The main goal of the Institute is to create
and develop strategic resources for the
democratization of science, technology and
innovation, promoting human development
and leveraging mobile technology as one of
its main enablers.
TIM reached the milestone of 73.4 million
users across Brazil in 2013, which represents an increase of 4.3% in its total base of
lines - a result above the growth presented
by the Brazilian market. The company maintains second place in the market and leadership in pre-paid in Brazil, reaching a market
share of 27.1% Pre-paid users totaled 61.6
million, a 2.5% increase (year over year),
thanks mainly to the Infinity Pré plan, which
reached 59.5 million users or 97.4% of the
base in this segment.
TIM NUMBER HIGHLIGHTS IN 2013
• 73.4 million customers – 4.3% annual growth
• 39.6 million new lines (gross addition)
• 12,870 collaborators
• 95% of Brazil’s urban population serviced by 2G technology, in 3.4 thousand cities
• 78% of the urban population in Brazil covered by 3G
technology, and 27.1% by 4G
• 100% GPRS data coverage
• 450 international roaming networks, available in over
200 countries in the six continents
• R$3.9 billion in investments, with R$3.5 billion
allocated to the network and IT infrastructure
• 47 thousand kilometers of optic fiber network
• 39 cities served by the FTTS Project, with 95% of
phases 1 and 2 concluded.
11
12
AWARDS AND RECOGNITION
• In the international arena, the Live TIM project yielded the company an award in the Global Innovation Awards, held by British magazine Global Telecom Business in London, in the category of Innovation in Customer Service. The initiative recognizes unique projects in the industry for expansion
of broadband.
• Meanwhile, at the 13rd edition of the ABT Award (Brazilian Association of Teleservices), TIM received awards in four categories and was recognized as a Company of Excellence in Relationship
with the Customer. The 5 Star Consultant program received a gold trophy in the Human Resources
category; the Channel Generates Revenue Strategy case received gold in the Outsourced Operation category; the Portas Abertas case received bronze in Innovation; and the Reduction that Generates Quality case was awarded with bronze in the Quality Management category.
•T
IM was considered by magazine Isto é Dinheiro as one of the 50 “good” companies in the country.
The publication prepared a ranking of corporations that have initiatives in the categories of Technology, Management, Environment, Education and Community. TIM was recognized in Community, with the TIM ArtEducação project.
• Meanwhile, according to a study conducted by CK Capital, the company was considered as one of
the most transparent companies regarding disclosure of information related to sustainable development. Published by newspaper Valor Econômico, the report pointed out that TIM presented six of
seven indicators referring to sustainability, while also standing out as one of the 14 Brazilian companies that are leaders in their corresponding industries.
•T
IM was also awarded at the Top of Mind Internet as the most remembered brand in the telephone
segment. The award was created in 2007 by the UOL website to recognize professionals and brands
that value online media.
• In 2013, the TIM Investor Relations team was considered for the third year in a row as the best team
of Latin America in the sector of Telecom, Media and Technology (TMT) at “The 2013 Latin America Executive Team” ranking of Institutional Investor magazine.
The total base of lines
increased in 2013 by
4.3% (73.4 million users
throughout the country),
a result above the growth
presented by the Brazilian
market (3.5%)
There were also noticeable improvements in
the reacceleration of the post-paid segment:
the net addition percentage of this segment
surpassed the pre-paid segment. As a result,
the post-paid customer base grew 14.6% on
a year over year basis, leading the base mix
to reach 17% of post-paid customers.
Meanwhile, Live TIM maintained its leadership position for the ultra broadband service
in Rio and São Paulo (connections above 43
Mbps). The total base reached 60 thousand
customers. This performance is explained by
customer satisfaction, which consolidated a
word of mouth effect. At the end of 2013,
Live TIM had over 9,500 buildings connected to the network coverage area, more than
twice the volume at the end of 2012, and approximately 1.1 million addressable homes,
compared to 881 thousand on the previous
year.
13
CORPORATE GOVERNANCE
GOVERNANCE STRUCTURE
Conducting business with ethics and transparency is
one of the company’s principles
Committed to the highest level of corporate
governance, TIM is a public corporation,
managed by a Board of Directors and an
Executive Board, and supervised by a Fiscal Council. The Board of Directors has the
support of three boards: the Compensation
Board; the Control and Risks Board; and the
Statutory Audit Board (CAE), created at the
end of 2013, following the rules of the Securities Commission, also reflected in the Company’s Bylaws, and represents an element
strongly recommended by the Brazilian Institute of Corporate Governance (IBGC). Since
2011, the company has been at the forefront
INSTANCES OF CORPORATE GOVERNANCE
GENERAL MEETING
BOARD OF
DIRECTORS
FISCAL COUNCIL
STATUTORY
AUDIT BOARD
COMPENSATION
BOARD
CONTROL AND
RISK BOARD
COLLEGIATE
DIRECTORS
of the sector regarding governance structure,
being the only telecommunications company listed in Novo Mercado, the highest level
of Corporate Governance of BM&Bovespa.
The duties and responsibilities of the members of these bodies are determined in Brazilian legislation, the company’s Bylaws, the
internal rules of the boards, the company’s
internal rules and the Listing Regulation for
Novo Mercado. One of the company’s principles is conducting its business with ethics
and transparency, and the company is also
included in the portfolios of Differential Corporate Governance Index (IGC) and the Index of Shares with Differential Tag Along
(Itag).
The compensation of members of the Board
of Directors, Executive Board and other executives is not related to TIM’s social and environmental performance.
In 2013, the groups responsible for governance at TIM consisted of a total of 28 collaborators, most of them men between 36
and 45 years old and above 60. [LA13]
14
ATTRIBUTIONS OF THE BOARDS
COMPOSITION
ATTRIBUTIONS
Board of Directors
TIM’s Board of Directors consists of nine members,
elected and dismissed by the General Assembly for
a term of two years, with reelection allowed, of which
three of them are independent members, under the
terms of the Novo Mercado Regulation.
It is up to the members of the Board to choose
their president, and it is forbidden for a person to
accumulate the positions of president of the Board of
Directors and CEO or main executive of the company.
The composition of the Board of Directors is available
at the website www.tim.com.br/ri.
Responsible for high level management
of the company.
Statutory Audit Board
Consists of a minimum of three and at most five
members, appointed by the Board of Directors for
a mandate of two years, which coincides with the
mandate of members of the Board of Directors, with
their indication being allowed for a maximum period
of ten years.
It has the goal of issuing recommendations
and reports regarding the company’s audit
processes, internal and external.
Compensation Board
Consisting of three members, chosen by the Board
of Directors among its members.
Responsible for evaluating topics that are part of its
scope and issuing recommendations to the Board of
Directors, body to which it is connected.
Control and risk board
Formed by up to five members of the Board
of Directors, and at least two of these must be
independent advisors.
In charge of evaluating topics that are part of its
scope and issue recommendations to the Board of
Directors, body to which it is linked, including the
Social Responsibility topic in its discussions.
Executives
Formed by a CEO and six executive directors
chosen by the Board of Directors, for a mandate
of two years.
Executive management of the company.
Fiscal Council
Consisting of at least three and at most five
independent professionals without any other link to
the company, elected and dismissed by the General
Assembly for a term of one year. The composition of
the Fiscal council can be seen at the
website www.tim.com.br/ri.;
Works in auditing the acts of the company’s
administrations and information for shareholders.
TOTAL PARTICIPANTS IN THE GROUPS IN CHARGE
OF CORPORATE GOVERNANCE*
By Gender
2013
2012
Var. %
Men
25
29
-13.79%
Women
3
2
50.00%
By skin
2013
2012
Var. %
White
28
28
0.00%
Black
0
0
0.00%
Brown
0
2
100%
Yellow
0
1
-100%
Indigenou
0
1
-100%
By age range
2013
2012
Variation in %
18 to 35
years
1
4
-75.00%
36 to 45
years
7
8
-12.50%
45 to 60
years
5
7
-28.57%
Above 60
years
15
12
25.00%
*Doesn’t include interns, apprentices and third parties.
CONTRIBUTION FOR DEFINITION OF
PUBLIC POLICIES
The company actively participates in industry
discussions in forums, events and boards together with the federal government. In 2013,
it was active in debates regarding telecommunications infrastructure projects for the
Confederation Cup, World Cup, World Youth
Journey, Engineering Code for Tourist Spaces and improvements in implementation at
cities. Other highlights include discussions
about Reverse Logistics, whose participation happened through representation of the
National Syndicate of Telephone Companies
(SindiTelebrasil), which institutionally represents the operators authorized by Anatel to
provide personal mobile service in Brazil,
and the Brazilian Association of Providers of
Competitive Telecommunications Services
(TelComp), which has the mission of promoting a fair and neutral competition environment in the provision of telecommunication
services. TIM also participated in the Agenda 21 Forums at some locations in the country. [SO5]
15
In 2013, we also proceeded with the WiFi Project, through which we install access
points in the communities of Rocinha (RJ)
and Paraisópolis (SP), democratizing access
to the Internet at these locations. A partnership with the city of São Paulo allows users of
other operators of Paraisópolis with the technology to also access public utility websites
using the community’s Wi-Fi network.
As another initiative that contributes to a reflection about the definition of public policies linked to telecommunications in Brazil,
it is worth highlighting the Platform of Rainfall
Data Collection, a partnership launched between TIM and the Ministry of Science, Technology and Innovation (MCTI), which has the
goal of installing rainfall data collection platforms at Radio Base Stations (ERB) located
near areas with risk of natural disasters. [EC8]
In order to further bring people together, TIM
launched plans like Infinity Pré, which enabled
not charging calls by the minute anymore, and
instead offering unlimited calls anywhere in
Brazil; and Infinity Web, which allows combining Internet access and unlimited message
sending at the cost of some cents. With the
launch of these innovative products and services since the beginning of 2009, TIM believes it has generated positive contributions,
such as:
• Increase in employment level;
• Growth of the Gross Domestic Product
(GDP);
• Increase in corporate competitiveness;
• Encouragement for economic growth,
through changed habits and processes of individuals, companies and governments, with
impact on productivity and competitiveness.
• Encouragement for local human development;
• Industrial and technological development. [EC9]
Regarding political parties or related people
and institutions, TIM is formally forbidden by
the company’s Code of Ethics and Conduct to
make any kind of contribution. [SO6]
16
BUSINESS LONGEVITY
Set of codes and policies contributes to guide an
ethical and responsible management
The ten principles established by the Global
Compact, of which the company has been a
signatory since 2008, inspired the adoption
of codes and policies by the Telecom Italia
Group and by the company. This set of directives contributes to guide an ethical and
responsible management, reinforcing our
commitment towards issues in the areas of
human rights, environment, labor and anticorruption.
ENVIRONMENTAL AND QUALITY
CERTIFICATIONS
Always searching for continuous improvements in its internal processes and the services provided to its customers, we maintain
two key international certifications, which
were expanded in 2012. Focused on Management and Operation of the TIM Celular
Network activities, ISO 14001:2004 – Environmental Management was extended to the
states of Rio de Janeiro, Espírito Santo and
São Paulo in 2012 and maintained in 2013.
In the same manner, the ISO 9001:2008 –
Quality Management certification, regarding
Management of the TIM Celular Network,
was expanded in 2012 and maintained in
2013. The scope started to include all of the
national territory, including the internal company processes focused on continuous improvement and focus on the customer. At the
beginning of 2014, the company also presented national coverage for ISO 9001:2008
in Management of Post-Paid and Pre-paid
GSM Invoicing of the operator for mobile
telephones.
CODES, PRINCIPLES AND POLICIES
CODE OF ETHICS AND CONDUCT
Approved by the Board of Directors in May
2013, our new Code of Ethics and Conduct
expresses the company’s essential values,
particularly transparency, honesty and loyalty. The Code is designed for shareholder
organizations, employees, executives, and
service providers of TIM, as well as collaborators and third parties who have business
relationships with the company.
Following the Code, TIM rejects and condemns illegal and improper behaviors (including acts of corruption of any kind) in order to reach its economic goals. These goals
must be exclusively pursued through the
excellence of its products and services, in
terms of quality and cost-benefit.
TIM DUTIES EXPRESSED IN ITS CODE
OF ETHICS AND CONDUCT
• Business transparency
• Promoting fair competition
• Seeking excellence and
competitiveness in the market
• Contributing to well-being and
growth of communities in which it
operates
• Valuing its human resources
• Having sustainable development as
its goal
TIM promotes the distribution of the Code
among its audiences, performing training to
disseminate the values to be adopted by all
members of the company. The Code is available on the intranet for all collaborators, and
is also available at the company’s websites
(www.tim.com.br and www. tim.com.br/ri).
BUSINESS CODE OF CONDUCT
Establishes criteria for the relationship with
vendors, customers, consumers and community, preventing situations or behaviors that
are potentially harmful to the interests of the
company, aiming at a fair and equitable relationship with the market and the business
environment.
SOCIAL RESPONSIBILITY POLICY
Reports the directives followed by TIM in
matters such as health and safety, diversity
appreciation, child and forced labor, freedom
of association and right of collective bargaining, discrimination and harassment, work
hours and wages. Available at TIM’s website.
ENGAGEMENT POLICY
Guides and stimulates collaborators in the
participative conduction of relationships, in
order to encourage dialogue and better involvement of the main target audiences of
TIM companies in Brazil, promoting engagement initiatives and stimulating the multiplication of these practices in its areas of influence.
17
this policy that govern TIM’s relationship with
all its suppliers. Available at TIM’s website.
COMPETITION DEFENSE POLICY
The document has the goal of disseminating among employees and collaborators the
principles that guide the policy for defense
of competition in Brazil. In this manner, professionals, particularly those dealing with
the company’s stakeholders, become familiar with the antitrust legislation and the work
of the agencies responsible for applying it in
Brazil. They can thus identify and avoid the
occurrence of acts contrary to established
norms.
POLICY FOR CONTRACTING WITH RELATED
PARTIES
Defines the directives and the procedure to
be followed by TIM companies in Brazil, regarding each and every contracting with related parties since 2013. The policy prevents
individuals or corporations with any link that
could characterize a relationship of dependency or control to conduct negotiations between them. As described in the law, no favoritism is allowed in these operations.
CLIMATE CHANGE POLICY
Establishes principles to be applied to the
activities of TIM companies in Brazil, with
the goal of promoting appropriate and
efficient management of its greenhouse gas
emissions, particularly regarding climate
change, complying with current legislation,
regulation agencies and directives of the
Telecom Italia Group.
ENVIRONMENTAL POLICY
Establishes principles aimed at promoting
continuous improvement of the environmental performance and a sustainable and responsible management. These principles include: reduction of waste generation, support
for collection categories, recovery and recycling, and full compliance with current environmental legislation. Available at TIM’s website.
SUPPLIER RELATIONSHIP POLICY
Transparency, integrity, respect for worker’s
rights and commitment towards sustainability are some of the principles expressed in
POLICY FOR MANAGEMENT OF CORPORATE
RISKS
Published in 2013, this document has the
goal of defining the standard methodology
that should enable planning the production
of a standard process of risk management,
as reference for analysis, evaluation, handling
and information regarding existing risks in the
company.
POLICY FOR CUSTOMER DATA PRIVACY
Also approved since 2010, this policy defines
the criteria needed to ensure the privacy of
customer data, considered confidential by
Brazilian legislation and based on basic assumptions of access control.
COMMUNICATION AND MARKETING POLICY
This policy is aimed at ensuring alignment of
TIM’s marketing communication projects and
actions with its mission and its principles related to sustainability. Available at TIM’s website.
18
The company follows the regulations of the
National Council of Advertisement Self-regulation (Conar) and the Consumer Defense
Code for disclosure of correct, clear and full
information in its product and service ads.
In 2013, there were 15 ongoing complaints
against TIM at CONAR, 12 filed by competitors and three by the agency itself. Of these
complaints, seven were settled in the same
year. [PR6]
Development (CINDRA) and the Board for
Financial Audit and Control (CFFC) of the
Chamber of Representatives; and participation in the Seminars of the Paraná Chamber
of Representatives (ACAMPAR) to talk about
the Antenna Pact in the cities of that state,
signed by TIM and other operators with the
Legislative Assembly of Paraná. [PR6 and PR7]
TIM maintains a continuous dialogue with
society groups regarding questions or concerns about its products and services. In
2013, the company actively participated in
debates with groups that represent society
and the results were incorporated in the internal product chain. Some debates conducted in 2013: Public Hearing about the quality
of mobile telephone services at the Board for
National Integration, Regional and Amazon
Regarding unfair competition, trust and monopoly practices, we registered nine lawsuits
in 2013, some new and others already ongoing, but all under analysis. The proceedings
are described in the table below. [SO7]
LAWSUITS UNDER ANALYSIS
LAWSUITS ARISING FROM UNFAIR COMPETITION, AND TRUST AND MONOPOLY PRACTICES
Customers
Objective
GVT
Filed a lawsuit against TIM Celular S/A and other operators, aiming to declare null the contractual clause referring to the
practiced VUM value, as interconnection, claiming it is abusive and illegal. It also seeks to sentence the companies
to pay indemnification for values charged in excess since July 2004. All the defendant operators except TIM have
signed agreements with GVT, already homologated by the judge. Currently, TIM awaits analysis for its last petition,
but the process is concluded since November 2013..
Falkland
TIM filed a common lawsuit against this company to declare that the alleged credits the company claims to have due to its
interconnection with the SME (Specialized Mobile Service) can’t be demanded.
Hoje Sistemas de
Informática
Filed a lawsuit against mobile telephone operators TIM, Vivo, Oi and Claro, based on the justification that these companies
would be imposing abusive prices, without negotiation of the amounts charged for the use of the mobile network.
Vivo
Filed an indemnification proceeding claiming that TIM announced, among other information, the need for operators to
migrate to GSM technology and the lack of quality of the company’s coverage compared to TIM technology.
Central
Teleinformática
Ltda.
Central Teleinformática Ltda. claims that TIM improperly terminated an agreement for credentialing for negotiation of products
and services, mentioning violation of the established goals, while also establishing commercial goals that were impossible to be
reached and allowing unfair competition, failing to act regarding the sale of its chips at lower prices in other stores.
Acip Celular Ltda.
Business partner claiming that TIM did not perform payments regarding compensation for sale of products and services, while
practicing unfair competition by increasing the number of its own stores, giving preference to the supplies of products for its own
stores and slowing authorization of lines through the customer’s system.
Botafogo
Comércio e
Importação Ltda.
Reseller of TIM products, claims that the company is marketing the same product as the resellers and
using prices far below the market.
Dutra Fernandes
Ltda.
Claims it had an exclusivity contract with TIM, under which it promised to market only the company’s products, under penalty of
cancelling the contract. It claims that it faithfully followed the contract, but TIM practiced unfair competition by opening its own
stores and directly competing with it, selling without justification merchandise below cost price, which led to the store closing.
Pam Lite Ltda.
Asks for payment of moral and material damages and loss of profit allegedly suffered, claiming that TIM sold cell phone devices at
lower prices than the one its resellers obtained from equipment manufacturers.
19
ORGANIZATIONAL MODEL (MO)
ANTI-CORRUPTION POLICY
Based on Legislative Decree 231/01, which
describes the administrative responsibility of
the entity as a result of the practice of crimes
of interest/advantage for the same organization by the high management (executives
and administrators) or those under them,
TIM adopts an Organizational Model. This
principle prevents the personal responsibility
of those committing crimes described in the
law from extending to the corporation, while
being a necessary instrument to regulate internal processes. The Organizational Model
includes the Code of Ethics and Conduct, the
General Principles of Internal Control, Principles of Behavior towards Public Administration and Internal Control Structures. These
documents detail directives and establish
processes to avoid frauds and corruption.
Approved by the Board of Directors in 2013,
the new Anti-corruption Policy applies global
anti-bribery policies, forbidding the offer, payment, request or acceptance of advantages
of any kind, guiding its recipients on how to
act in these situations. The target audiences
of the policy include: shareholder bodies, administrators, executives, employees and everyone with a business relationship with TIM.
The new TIM Anti-Corruption
Policy was approved by the
Board of Directors in 2013.
More than 7 thousand
hours of training in ethics
were also completed
during the year.
RISK MANAGEMENT
Therefore, management based on ethics and
transparency contributes to the adoption of
diligent methods that avoid disrupting business feasibility while remaining capable of
minimizing potential impact. In the context of
mapping these risks, aspects related to corruption are taken into consideration, as well
as the impact and vulnerability to risk, in addition to the existence of mitigating internal
controls. [SO2]
With this purpose, we provide on the intranet
our Code of Ethics and Conduct, which establishes the principles of legality, honesty
and transparency to be adopted by our collaborators. These criteria are demanded by
the Sarbanes-Oxley (SOx) law, broadly recognized as an anti-corruption procedure for
financial issues, which consists of another
training of the company.
In order to reinforce our positioning against
corruption, in 2013 TIM’s online ethics
course was maintained, totaling over 7 thousand hours of training. Throughout the year,
more than 7,875 collaborators participated,
of which 609 were managers, equivalent to
82.5% of the total of managers, and 7,266
non-managers (63.5% of the staff of experts,
analysts, consultants and assistants) [SO3]
Anti-corruption training
Total hours dedicated to
anticorruption training
2013
2012
Ethics Course (1h)
7,088
3,003
Number of collaborators who received
training in anti-corruption policies and
procedures, by position
2013
2012
Managers
23
4
Supervisors
84
44
Relationship consultant
2,046
3,893
Directors
29
9
Managers
473
124
Experts
811
379
Analysts and consultants
3,733
795
Assistants
676
100
20
In 2013, the company registered two situations that were characterized as fraud, involving business partners. After analysis of
the Security (Antifraud) team, the company
disqualified the biggest offenders (with fraud
rates of higher than 40%), warned others
and also filed a lawsuit with the goal of recovering improperly paid commissions. [SO4]
CRC*
Holding, network, regionals, stores
POLICY FOR MANAGEMENT OF
CONFLICTS OF INTEREST
The new Policy for Management of Conflicts of Interest was approved by the Board
of Directors in 2013 and defines the reference framework for prevention, when possible, and management of conflict of interest
situations, in order to:
a) avoid or contain negative impact regarding the company’s interests;
b) support and protect the people involved,
from which a behavior of transparency is expected.
This policy applies to all TIM employees and
all corporate areas involved in managing potential cases of conflict of interest.
*Customer Relationship Central
The new Policy for
Management of Conflicts of
Interest provides guidance
to avoid situations with
potential negative impact
For the reporting of corruption cases, the
company offers channels that lead directly
to Audits or Security, areas that have access
to systems and tools for collecting and analyzing the information. The evidence is consolidated in reports that are distributed to the
relevant areas. In critical cases, the company
files legal proceedings against the responsible parties.
21
ENGAGING AUDIENCES
Through communications, the company strengthens
its relationship with its stakeholders
TIM believes that by communicating with its
stakeholders it can establish and strengthen
an engagement process. In order to perform
the materiality test and identify and prioritize
critical topics for communication and management of sustainability in corporate strategy, in 2011 the company developed the
stakeholder panel, one of the most important
actions in this process. It allowed the company to identify material topics for its strategic
planning, guiding the accountability through
the sustainability report and other communication channels.
In 2012, the company created the Policy for
Interaction with Stakeholders, with the goal
of guiding and stimulating collaborators in a
participative conduction of relationships, in
order to encourage dialogue and higher involvement of the main target audiences of
TIM companies in Brazil.
And in the beginning of 2014, a new materiality test was conducted, in order to identify
other topics and/or reevaluate those already
considered as priorities for TIM’s business
longevity. This process included involvement
of collaborators, suppliers, business partners, customers and government representatives – stakeholders prioritized by the company’s own collaborators for the engagement
process, who participated through personal
attendance methods, interviews and by answering questionnaires.
Below we present the actions, forms of relationship and objectives of the continuous investment in the relationships with our stakeholders. Customers, suppliers, competitors,
civil society organizations, environment (environmental regulation agencies), community, government and business partners are
the external audiences, while collaborators
and shareholders are the internal ones.
OBJECTIVES OF THE ACTIONS AND FORMS OF RELATIONSHIP WITH THE STAKEHOLDERS
Customers
Objective
Customer Relationship Central (CRC)
Receive requests, questions and complaints, while allowing customers to change
their data online. It is available 24 hours a day, seven days a week, through email, fax,
telephone or letter.
Exclusive area on the website for
self-service
Activate and deactivate services and queries in accounts.
My TIM
Check balance or status of invoices, perform recharges, access information
about promotions, update profile data, obtain barcode for payment of bills or
request second copy, among other options. Available for users of Android
smartphones and Apple handsets.
Portas Abertas website
(http://qualidade.tim.com.br)
Track the evolution of the company’s network and the improvement actions by state.
Portal *144#
Access, through the cell phone, to information and answers.
22
Twitter – channel TIMTIM por TIMTIM
(www. twitter.com/Timtimportimtim)
and channel TIM_Ajuda
(www.twitter.com/TIM_Ajuda)
Provide commercial and institutional information
Online monitoring of social media, such
as blogs, websites and networks
Identify relevant topics for stakeholders that do not show up on the formal channels.
Satisfaction surveys
Monthly evaluate satisfaction regarding CRC and every six months, the customer’s
general satisfaction regarding the company, identifying opportunities for improvement.
Audible Response Unit (ARU)
Enables self-service for consumers, including blocking and unblocking of lines and
requests for second copy of invoice.
Speak for the Customer
Channel in the corporate intranet through which collaborators can submit user
problems and questions directly to the CRC.
Suppliers
Objective
Sustainability Diagnosis
(evaluation)
Evaluate suppliers regarding issues of sustainability, helping them to identify
improvement opportunities.
Site www.timcommerce.com.br
Provide a channel for exclusive dialogue with suppliers, for registration,
questions and suggestions.
Competitors
Objective
Participation in several industry
associations, such as the National
Syndicate of Personal and Cell
Phone Mobile Service and Telephony
Companies (SindiTelebrasil), and in work
groups about technical topics
of the sector
Maintain a cooperative relationship, contributing to development of the industry
Information manual for defense of
competition
Inform TIM collaborators about the relevance of complying with competition laws.
Environmental regulation agencies
Objective
Contact with the main environmental
regulation agencies, such as the
state and city departments for the
environment, construction work and city
planning, as well as the Brazilian Institute
of the Environment and Renewable
Natural Resources (“IBAMA”)
Continuous improvement of environmental performance.
Channel of environment
and climate change:
[email protected]
Submit questions to be answered or suggestions about the environment
and climate change.
Community and civil society
organization
Objective
Permanent dialogue channels of TIM
with the community, through emails
([email protected],
[email protected] and
[email protected]) or through
regional offices; donations (occasional
support to specific good causes) and
investments in social action projects with
long-term involvement
Support social, cultural and educational initiatives aimed at improving the quality of
life of people; answer questions and provide suggestions or clarifications about the
environment and climate change; and contribute to the well-being of the community.
23
Internal Audience
Objective
Corporate intranet; SMS for
collaborators; TIM News (internal
corporate TV, with transmission in highly
attended areas); internal communication
emails with the main highlights
Inform employees and present the novelties of the company; motivate collaborators to
present their ideas and share their experiences, suggesting topics to be discussed.
Channel for Work Safety and Health
([email protected])
Identify and control occupational risks with preventive and awareness actions
through a specialized team.
Integration week for new employees
Promote integration of collaborators in the company.
Organizational climate surveys
Improve the work environment.
Shareholders
Objective
Website (www.tim.com.br/ri)
Disclose relevant information for investors, such as results, statements of relevant
facts, quotes and analysis, in compliance with the criteria of honesty, clarity and
equality in access to information.
Talk to RI
Answer questions from investors (current and prospects) and analysts and allow
submission of suggestions for the Board of Directors, which are analyzed and sent to the
organization’s secretary area, so it can study the suggested topic.
Integrated and complementary services
for the Investor Relations website.
Available tools: Slideshare(all investor
presentations are available for query at
www.slideshare.net/ritim); Twitter (www.
twitter.com/tim_ri); Mobile (version of
RI website for cell phones at www.tim.
com.br/ri); RSS (language standard that
enables announcement of news and
information, in a summary manner, at
websites and blogs); TIM RI Application
Increase the scope of information and transparency.
Business Partners
Objective
TIM World (Intranet)
Present administrative procedures and offerings.
Sales Business Information (e-mail)
With offers, procedures and incentive programs.
SMS sending
Message reinforcing offerings and announcing sales incentive campaigns.
Email marketing
Emails to reinforce incentive campaigns.
CUSTOMER SERVICE
One of TIM’s key challenges has been serving its customers in an increasingly better
manner, ensuring quality and efficiency. In
2013, we maintained our position regarding service quality indicators, having accumulated the lowest volume of complaints at
PROCON agencies registered on SINDEC
(National System of Consumer Defense Information), and also reaching the position of
second best operator in the Service Performance Index measured by Anatel. Considering complaints at the regulation agency’s
call center, the operator also holds a top position, as the second operator with the least
complaints.
The implementation of the Lean Six Sigma
Program, which reduces the number of flaws,
errors, waste and rework, while also developing collaborators and increasing customer
satisfaction, also yielded positive results. In
2013, eight projects were concluded, 14 collaborators were certified in the program, and
a financial return of approximately R$23 million as achieved in nine months.
TIM conducts monthly satisfaction assessment surveys through specialized external
institutes. In addition, two semiannual surveys and one annual survey are conducted
with a national scope, in which users evaluate all relationship areas of the company.
24
The average general satisfaction with the
company, in 2013, was 7.92 (on a scale
from 0 to 10), with 29% Dissatisfied (grades
of 0 to 7). The main reasons for dissatisfaction were those regarding coverage, quality
of calls (quality of signal, dropped calls, lack
of coverage) and Internet (access problems,
speed and downtime).
Our main channel for customer service remains the Customer Relationship Central
(CRC) - telephone service. The company has
four internal centrals and seven outsourced
ones. All contact is registered on the Customer Relationship Management (CRM) system, and the answers are provided online
(when by telephone) or within 5 days when
a more specialized analysis is required. Satisfaction with the service provided by CRC
is measured through an online satisfaction
survey. In 2013, 98% of received complaints
and criticism were resolved, with approximately 90% solved within 05 (five) business
days.
Customers can also receive service through
fax, letter and emails that are sent through
the TIM website ((www.tim.com.br), and
even personally, through its own POS with
the TIM Store concept, in which service area
personnel are available to answer post-sale
cases. In 2012, other service channels were
reinforced, such as the Portal *144#, which
uses technologies that enable activation of
INFORMATION REGARDING CUSTOMER SERVICE
2013
2012
Variação %
Total calls received by SAC
132,427,615
125,808,392
5.26%
Average waiting time on SAC telephone until
service begins
30
49
-38.77%
Total responses at Ombudsman
5,343
4,862
9.89%
2013
2012
Variação %
At the company
6,458,631
4,514,802
43.05%
At PROCON and other consumer protection and
defense agencies
5,540
13,540
-59. 08%
At ANATEL
329,138
274,241
20.02%
At the courts
87,174
73,942
17.90%
TOTAL COMPLAINTS RECEIVED
services on the cell phone device itself, as
well as the Audible Response Unit (URA),
which enables self-service, request of second copy of invoice and offers services such
as blocking and unblocking of lines.
In 2013, TIM also adopted the concept of
multi-channeling, which consists of alternative contact channels to expand and facilitate
answering user demands, while at the same
time improving existing channels. They are
offered in the form of applications for smartphones, online chat and constant improvement in the customer service section of the
website.
Using the Talk for the Customer channel,
available on the intranet, collaborators can
discuss problems and questions of users directly with the CRC. In 2013, the company
also invested in relationships through social
media, helping customers on Twitter under
TOTAL RESOLVED COMPLAINTS AND CRITICISM
2013
2012
Variation
in %
At the company
98.18%
90.30%
8.7%
At PROCON and other consumer
protection and defense agencies
87,17%
100.00%
-12.8%
At ANATEL
97.24%
95.44%
2.1%
At the courts
63.49%
62.47%
1.6%
INFORMATION REGARDING CONSUMERS AND CUSTOMER
SATISFACTION SURVEY:
2013
2012
Variation
in %
Average general satisfaction grade of
individuals
7.92%
8.03%
-1.37%
Average general satisfaction grade of
individuals through CRC
7.47%
7.43%
0.54%
25
the profile @TIMAjuda. Meanwhile, following the market trend, TIM created new digital
relationship channels, such as online chat,
a tool available on the TIM website, through
which the customer can interact directly with
a virtual responder, exchanging messages
in real time. [PR5].
As for the number of complaints regarding
TIM received at Procon and other consumer
protection and defense agencies, there was
a drop of 59.08%, comparing the number of
5,540 in 2013 with the 13,540 in 2012. Out
of this total of complaints and criticism, TIM
solved 87.17%. Below are all the consolidated data regarding customer service. [PR5]
PRIVACY POLICY
TIM has a Customer Data Privacy Policy,
which prevents unauthorized access and
improper use of the customers’ personal information. The policy only allows access to
profile records and user communication data
to collaborators and third parties that, as a
result of professional activities, need to access this information. Disclosure of the information, internally or externally, is forbidden,
allowed only in case of provision of data to
other telecommunications services operators
(as described in Resolution 343/2003 from
“ANATEL”) and to the Courts, under guidance of the appropriate internal area.
In 2013, TIM registered 44 proceedings regarding loss of privacy of customers with
pending trials. In 2012, there were seven
cases. This increase occurred due to the
work of a single attorney, who filed proceedings for some of his customers claiming violation of privacy due to the fact that TIM,
while defending against lawsuits that these
customers previously filed against the company, attached the CDR (Call Detail Record)
with the record of calls received and made.
In the cases in which there was already a
ruling, it was favorable to TIM, as the judges
understood that attaching these documents
was how the company could defend itself
against the claims of the plaintiffs in the initial lawsuits. [PR8]
QUALITY IMPROVEMENT PLAN
Presented to Anatel in 2011, the Quality
Improvement Plan has since then been helping to reduce the number of complaints received at the company. To deploy it between
2012 and 2014, TIM will invest approximately R$11 billion, of which 90% will go towards
network infrastructure. In December 2013,
compared to the same period of 2011, there
was a 11% increase in the volume of equipment installation, more than tripling the quantity of locations connected by optic fiber,
while also increasing the data transmission
capacity by 21%.
Below is a table with a summary of the main
topics handled by the Plan.
EXPANSION, RESILIENCE AND OPTIMIZATION
Network actions
Service actions
Expansion: increase in the access network
capacity of approximately 70% by 2014
(compared to 2011)
Multiple channels: projects to
implement alternative means of
contact to facilitate answering
user demands and improve
existing channels.
Network resilience: work on the main causes
of flaws in equipment, transmission and power,
which account for 98% of service downtime.
Simplification of processes: projects
that develop improvements in people
management and optimize procedures
with a focus on resolving demands,
relationship streamlining and service
excellence (reinforcement in training and
qualification and incentive programs
for consultants).
Optimization: program to adjust systems and
parameterization, working in partnership with
the main vendors, in order to increase the
satisfaction of our customers.
Technological renewal: improve
customer identification in any contact
channel and perform precise, efficient
and quick forwarding of demands.
26
CALLS ARE NOT DROPPED ON
PURPOSE
On May 2013, TIM received the final report
from Anatel, confirming that there is no evidence of purposeful dropping of customer
calls in the Infinity plan. This confirms that
the claims announced precociously on the
media were wrong.
Since the beginning of the process, TIM has
cooperated with Anatel, providing all necessary clarifications. Guided by ethics in its relationships, the company investigated the
call dropping cases through two independent
institutions, which confirmed that there was
no evidence at the Telephone Centrals and
the Ericsson Intelligent Network Solution indicating purposeful or intentional ways of disconnecting calls at the SMP (Personal Mobile Service) network.
PORTAS ABERTAS: COMMITMENT
TOWARDS QUALITY AND TRANSPARENCY
In February 2013, TIM launched the
Portas Abertas (“Open Doors”) website, which enables consumers to track
the evolution of the company’s network and improvement actions, reinforcing the commitment towards quality and transparency. Using the portal, it
is possible to track the main deliveries
of TIM, detailed by states: installation
of antennas, expansion of the optic fiber network and expansion of 3G and
4G coverages, among other initiatives.
Customers can also access the real
TIM coverage map, which shows an
effective image of the network and the
current and planned infrastructure. In
addition, they have a space to warn
about flaw alerts and scheduled maintenances that can be queried through
DDD. It also provides TIM results in the
main quality indicators.
For more information, access the
website www.tim.com.br/portasabertas.
27
STRATEGIES AND OUTLOOKS
PRESENCE AND EXPANSION
Focus on cost management but with investments in
business growth for higher efficiency
Faced with a scenario of transition in the
Brazilian mobile telephone market, which
presented fierce competition, we have maintained the focus on cost management without ceasing to invest in business growth, always seeking higher efficiency. With this
approach, the company’s strategic priorities in 2013 are still focused on infrastructure, offerings, institutional positioning, and
personnel.
With a focus on cost
management, without ceasing
investments in growth, the
priorities throughout the
year continued to be focused
on infrastructure, offerings,
institutional positioning,
and personnel.
INVESTMENTS IN QUALITY
Infrastructure was the main priority of TIM in
2013, focused mainly on improving the network quality. The results achieved throughout the year validate the operator’s efforts.
According to indicators disclosed by Anatel,
TIM continues to improve its performance.
The voice accessibility rate, voice network
drop rate, data network disconnect rate (including 2G and 3G) and 3G accessibility are
all in compliance with the goals of the regulation agency (only the 2G accessibility rate
is still falling short).
Regarding service quality indicators, TIM
maintained its position, having accumulated the lowest volume of complaints at
PROCON agencies registered on SINDEC
(National System of Consumer Defense Information), and also reaching the position of
second best operator in the Service Performance Index measured by Anatel.
This is mainly thanks to a specific program
developed after April by TIM to improve network quality and customer satisfaction, initially focusing on a set of cities that accounts
for nearly 50% of total voice traffic. The main
activities of this task-force are: build a technical diagnostic for each selected city; analyze key opportunities for improvement; establish control of critical failures based on
online monitoring of CRC; and improve network-related customer service.
These initiatives resulted in a significant reduction of 18% in the monthly average of
network complaints at Anatel (network repair + call complement) in the fourth quarter
of 2013, when compared to the monthly average of the first quarter of the year (before
the program’s starting point).
TIM also invested over R$700 million in IT
systems to support new processes and produce benefits such as reduced waiting time
and increased confidence. The new CRM
platform, for instance, will increase the immediate response capacity regarding customer calls. One of the main benefits is the
reduction of the current volume of customer
service software, from nine different systems
used by the attendants to only one.This platform is 100% available for the pre-paid customers, and until year-end of 2014, also for
post-paid customers.
EXPANSION OF OPTIC FIBER BETWORK IN 2013 (IN KM)
39,000
8,000
47,000
39 thousand referring to the period up to 2012, and 8 thousand referring to the period up to 2013
Constantly investing in
network quality improvement,
in 2013 TIM started offering
GSM coverage for 94.8%
of the urban population
of Brazil and 3G for
approximately 80%
28
The creation of the Portas Abertas website
was another pioneer initiative by the company. Launched officially in February, the portal enables customers to track the company’s
network evolution and improvement actions,
reinforcing TIM’s commitment towards quality and transparency. In this manner, the
company announces coverage maps and
investment indicators for the whole country, while also addressing user comments
through a specific website and a mobile application for smartphones. Throughout the
year, over 400 thousand contributions were
registered.
Regarding the evolution of network quality improvement in 2013, more than 23,000
TRXs (voice elements) were implemented,
while almost 200,000 elements of data channel and 8,000 km of optic fiber were added, reaching approximately 47,000 km. GSM
coverage reached 94.8% of the urban population, reaching 3,404 cities. Meanwhile, 3G
reached 75 new cities in the last quarter, totaling 78% of the urban population in Brazil,
while 4G reached 27.1% of the population.
Other key projects also maintained the acceleration of growth. We developed many pilots
for small-cells (small antennas, important to
ensure the quality of the new 4G network)
and Wi-Fi became available in 22 airports in
13 states, with expanded coverage in São
Paulo. The Mobile Broadband (MBB) Plan
ended the year with 39 cities, a result above
expectations. Meanwhile, Fiber-To-The-Site
(FTTS), closed the year having concluded
its second phase at 95% of sites in 35 cities. The project will continue in 2014, adding more cities and completing phase 3 at
the sites already included in the project. By
2016, over 200 cities will be supported by
the project.
TIM COMMITMENTS
Business conduction should take into consideration
stakeholder expectations
TIM believes that in order to keep its long
term business, it should conduct it always
according to stakeholder expectations. In this
context, it is committed towards the performance of its indicators related to sustainable
development and, since 2010, takes these
topics to be discussed at the meetings of the
Control and Risk Board, linked directly to the
Board of Directors.
THE TEN PRINCIPLES OF THE GLOBAL COMPACT
GLOBAL COMPACT
The Global Compact is a United Nations
(UN) initiative aimed at mobilizing the corporate community to adopt, in their business
practices, essential and internationally accepted values in the areas of human rights,
work relations, environment and anti-corruption. TIM joined in 2008 the Global Compact,
which is formed by ten principles, integrated in the organization’s strategy, culture and
daily operations.
Human Rights
1 Businesses should support and respect the protection of internationally proclaimed human rights; and
2 make sure that they are not complicit in human rights abuses.
Labour
3 Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
4 the elimination of all forms of forced and compulsory labor;
5 the effective abolition of child labor; and
6 the elimination of discrimination in respect of employment and
occupation
Environment
7 Businesses should support a precautionary approach to environmental challenges;
8 undertake initiatives to promote greater environmental responsibility; and
9 encourage the development and diffusion of environmentally friendly technologies.
Anti-Corruption
10 Businesses should work against corruption in all its forms, including extortion and bribery.
29
30
GRI
COMPANIES FOR CLIMATE (EPC)
Develop and globally disseminate directives
for the preparation of sustainability reports.
This is the mission of the Global Reporting
Initiative (GRI), an independent organization
that with the help of companies and partners
across the world has organized a standard
for sustainability reports. It is currently the
most widely accepted in the world and has
been adopted by TIM since 2008. GRI directives are an important tool to measure results
and reflect on the actions taken in the three
pillars of sustainability (economic, social and
environmental), identifying gaps and pointing
out possibilities for improvement.
Since 2010, TIM has participated in the
Companies for Climate (EPC). This voluntary initiative, coordinated by the Center of
Sustainability Studies of FGV (GVces) is a
permanent corporate platform, whose goals
are to mobilize, raise awareness and articulate corporate leaders towards management
and reduction of “GEE” emissions, climate
risk management and the proposal of public
policies and positive incentives in the context of climate change.
TIM has been part of the
UN Global Compact since
2008. The entity’s ten
principles are part of
the company’s strategy,
operations and culture
CORPORATE SUSTAINABILITY
INDEX (ISE)
For the sixth year in a row, TIM was included in the Corporate Sustainability Index
(ISE) portfolio, created by BM&FBovespa
together with organizations like the Ethos
Institute and the Ministry of the Environment. ISE has the goal of being a reference for socially responsible investments.
Evaluated as an inducer of best practices and encouragement for performance of
new actions every year, the index consists
of shares from companies with known commitment towards social responsibility and
corporate sustainability.
EFFICIENT CARBON INDEX (ICO2)
CDP
CDP is a non-governmental organization that
has built the largest global database of corporate information about climate change,
queried by investors, government agencies,
legislators, the academic community, and the
general public. Since 2007, the company has
answered the CDP questionnaire about its
GHG (Greenhouse Gas) emissions and its
strategy regarding climate change.
The company is part of the Efficient Carbon Index (ICO2) from BM&FBovespa since
its creation in 2010, with the commitment
to measure, disclose and monitor its GEE
emissions. As a result of this, the company develops the inventory of emissions according to the directives of the Greenhouse
Gas Protocol (GHG Protocol), a globally
used methodology that enables mapping
the main improvement points in emission
management, allowing identification of the
main emission sources.
31
SERVICES, PLANS, AND PRODUCTS
New approaches, such as the combination of SMS
and data, offer more savings and flexibility for
customers
With the focus on the launch of innovative
concepts in the Brazilian telecommunications
market, we seek unique approaches for our
plans and services to enable people to talk
more and use the Internet more, without a
concern with the barriers of cost and time.
MOBILE TELEPHONES
Leveraging the two main service platforms
offered by TIM – Infinity (pre-paid) and Liberty (post-paid) – the company presented
concepts that restructured national telecommunications. In the Infinity plan, calls are unlimited and customers are charged per call
(and no longer per minute) in local calls and
long distance calls with the 41 code to TIM
numbers. Meanwhile, on the Liberty plan,
use is unlimited in local calls and long distance calls with the 41 code to any TIM number, for a fixed monthly amount.
In 2013, TIM launched a unique offering for
With its two main service
platforms, Infinity (pre-paid)
and Liberty (post-paid),
TIM followed its directive
of launching innovating
concepts in the
telecom sector
customers of control and pre-paid plans,
InfinityWeb+Torpedo, which combines SMS
and unlimited Internet for R$0.75 per day of
use. With this new offering, customers didn’t
have to choose anymore between SMS and
data, gaining more freedom at a lower cost.
The agreed price is charged regardless of
the service used. Infinity Web and Infinity
Torpedo are still individually available.
FIXED ULTRA BROADBAND (LIVE TIM)
Launched in 2012 in the states of São Paulo
and Rio de Janeiro, the Live TIM ultra broadband ended the year of 2013 with over 60
thousand users at homes and offices. Most
customers have the 35 Mbps plan and the
remainder has the 50 Mbps plan – the speed
is guaranteed at a 80% rate (average speed:
38.9 Mbps), above Anatel requirements and
market average (2.7 Mbps).
At the end of 2013, Live TIM had more than
9,500 connected buildings, more than twice
when compared to the end of 2012. The
number of potential customers registered
on the Live TIM website reached more than
520 thousand (compared to approximately
160 thousand in 2012). Lastly, the coverage
area ended 2013 with approximately 1.1 million homes.
MOBILE INTERNET
The success of the 4G operation is translated in its customer base achieved in 2013,
which totaled 405 thousand users, presenting a substantial growth of 160% year over
year. Market share grew to 31% (compared
to 20% in the second quarter of 2013, when
the 4G was launched). The comparatively
low investment of R$340 million in the 4G
bid in 2012 and the low cost of implementation through the infrastructure sharing model
(RAN sharing) with operator Oi, associated
to an efficient strategy, justify these satisfactory results.
Also, thinking of users capable of surpassing
the data volume that triggers speed limits,
TIM introduced a solution for the post-paid
segment, enabling contracting of an additional package to continue accessing the Internet without a speed reduction. The process
is easily conducted through SMS. In addition, customers can change their data package using the same mechanism.
CORPORATE SOLUTIONS
After consolidating its position as leader among users of ultra broadband (above
34 Mbps) in the retail segment, Live TIM
launched at the end of the year a new offering for the business segment, Live TIM
corporate. The service ensures high speed
browsing, providing a unique experience with
the most competitive price in the market. The
company also launched the Liberty Empresa
Controle plan, which helps control telecommunication service costs, avoiding surprises
with high amount invoices.
smartphone portfolio
In 2013, TIM was the operator that sold the
most smartphones and tablets in the Brazilian market because it believes that this
strategy drives data use. The company also
launched the highly anticipated Apple devices in Brazil: iPhone 5S and iPhone 5C. Also,
the launch of Samsung Galaxy Note 3 was
marked by events at TIM stores. TIM also
launched in the fourth quarter the new LG
smartphone, LG G2.
32
All devices sold by TIM are unblocked and
don’t have loyalty agreements (without a
subsidy policy). This growing demand for
smartphones and the large volume of calls
of customers with questions about configurations and specifications led the company
to develop a device guide. This is an interactive web portal aimed at offering assistance
and quick solutions for configurations of cell
phone devices and tablets.
33
Sustainability
HIGHLIGHTS AND OBJECTIVES FOR 2013
Company’s ethical and responsible management offers
transparency in results and objectives of its indicators
Regarding the goals established for 2013
and others planned for 2014, below is the
progress of the main commitments assumed
by TIM.
Topic
Indicator
Measurement
Unit
Dec./2012
(performed)
2013 Goal
Dec./2013
(performed)
Result
2014 Goal
Volunteer work
A free day of work
for collaborators who
voluntarily participate
in the Citizen Without
Borders Program
% (internal
personnel)
3
1
4.06
Fulfilled
2
Training
Training (total hours: in
the class room + online
+ on-the-job)
Number of
hours (internal
personnel,
interns and
third parties)
679,675
600,000
1,751,748
Fulfilled
2,000,000
Training
Sustainability (quantity
of people participating
in at least one training
about sustainability in the
current year)
% (internal
personnel,
interns and
third parties)
35
30
31.37
Fulfilled
30
Environment/
batteries
Collection of unused cell
phones, batteries and
other accessories for
recycling
Tons
13.88
13
0.37
Not
Fulfilled1
13
Environment/
residues
Percentage of recycled
residues generated at the
offices
%
74
65
68
Fulfilled
68
Environment/
residues
Reduction in purchase
of A4 and A3 paper
for administrative use
(FSC+Recycled)
Fulfilled3
This goal will be
discontinued. Actions
to reduce consumption
of administrative paper
were already deployed
in 2013
%
N/A
5
13.52
Environment/
asbestos
1
Conclusion of
inventory, reports and
technical analysis
about the presence of
asbestos in 95 (82%)
of administrative and
multiple buildings4
Deadline
N/A
N/A
34
N/A
N/A
October-14
Energy/network
Reduction in specific
consumption of electricity
by equipment in mobile
network, in comparison
with previous year.
kWh/mobile
line
N/A
4.175
4.43
Not
Fulfilled6
The specific goal
will be replaced by
an absolute goal of
electricity consumption,
considering the
efficiency projects that
will be conducted in
2014
Energy/network
Reduction in expected
increase of energy
consumption for mobile
network.
% (limit for
increase in
electricity
consumption)
N/A
N/A
N/A
N/A
From 23% to 19%7
Supplier
management
Number of suppliers
evaluated in issues
related to sustainability.
Accumulated
number since
2009
188
228
228
Fulfilled8
Supplier
management
Number of main
suppliers evaluated
in matters related to
sustainability in
current year.
Number
N/A
N/A
N/A
N/A
In 2013, the program for recycling of devices, batteries
and accessories was reformulated and temporarily suspended. The program will be resumed in 2014 with a
communication plan for managers of retail stores, with the
goal of raising awareness among involved teams and encouraging the external audience to practice appropriate disposal.
2
Paper consumption for administrative use in:
• 2012: 60,346 kg;
• 2013: 52,186 kg.
3
his goal will be discontinued. Actions to reduce conT
sumption of administrative paper have already been deployed in 2013.
4
ultiple buildings share two or more functions, such as:
M
administrative, industrial, data center and commercial.
5
he total specific electricity consumption in 2012 in neT
twork equipment was 4.24 kWh/mobile line.
6
ven though electricity consumption during 2013 was
E
aligned with the planned objective, the goal was not reached due to the fact that the customer base on that year
fell short of estimates.
7
he forecast of increased electricity consumption of the
T
mobile network in 2014 is due to various actions to improve coverage, including:
• Expansion of the 2G technology network capacity;
• Activation of new coverage and expanded 3G technology network capacity;
• Activation of new coverage with 4G technology (LTE–
LongTermEvolution).
However, some energy efficiency initiatives will also continue, contributing to improve operational capacity and reduce energy consumption, such as:
• Modernization and swap project, which is the replacement of access equipment with more modern and efficient models;
• Implementation of roll-out of 4G network usingRAN sharing (sharing of infrastructure for the Long TermEvolution LTE (4G) network;
• Deactivation of obsolete equipment;
• Virtualization of data centers.
8
his goal will be modified. The company has changed the
T
calculation methodology and started using the number of
main suppliers evaluated in the current year. Up to 2013 it
considered the accumulated number of suppliers evaluated since 2009.
50
35
ECONOMIC PERFORMANCE
Company business influenced the economy in many
regions of the country, reaching an added value of
R$12.2 million in 2013
Through tax collection, the generation of resources for business partners and, more directly, the creation of job positions in many
regions of the country, company activities directly impacted the economy. In 2013, TIM
received R$151.3 million in help from the
government through tax reductions. And
in concessions and incentives for research
and development it received R$12.8 million.
These amounts were, respectively, 83.6%
and 54.5% higher than in the year of 2012,
which ended at R$ 82.4 million and R$8.3
million. [EC4]
Regarding the added value distributed by
TIM, the total was R$12.2 million (a growth
of 4.8% compared to 2012), of which 2.9%
went to shareholders, 9.3% in retained profits, 70.1% to the government and society
(taxes), 12.1% to financers (interest rate and
rental) and 5.6% to collaborators.
The added value shows the organization’s
capacity to generate wealth and the social
effects generated by the distribution of these
resources among shareholders, collaborators, financers, government and society. It
is calculated based on the difference between the earnings obtained from marketing
of products and services and the expenses
arising from paying for goods and services
acquired from third parties, as well as depreciation and amortization costs. [EC1]
GENERATION OF VALUE (R$)
2012
2013
1 – Earnings
24,467,812
26,225,901
2- Input acquired from third parties
-11,120,343
-11,894,210
3 – Gross value added (1-2)
13,347,469
14,331,691
4 – Retentions
-2,688,588
-2,767,870
5 – Net Value Added by organization (3-4)
10,658,881
11,563,821
6 – Value added received in Transfer
1,030,803
686,154
7 – Total Value Added to be Distributed (5+6)
11,689,684
12,249,975
2012
2013
Personnel and charges
602,532
686,149
Wages
352,447
407,365
Social security charges
48,573
55,075
Private social security
11,664
8,110
Benefits
125,304
128,033
Profit sharing
64,544
87,566
Government
8,056,331
8,575,353
Taxes, fees and contributions, excluding subsidies
(exemptions)
8,056,331
8,575,353
Financers
1,581,933
1,482,859
Interest rate and rental
1,581,933
1,482,859
Shareholders
344,111
357,583
Interest rate on owned capital and dividends
344,111
357,583
Retained
1,104,777
1,148,031
Profits/loss of fiscal year
1,104,777
1,148,031
Distribution of Value Added (R$)
36
between 2012 and 2011 (2%) and is a reflection of a more balanced growth between
Operating Profit after Income Tax and Invested Capital.
ECONOMIC PROFIT
The company calculates and tracks the
Economic Profit indicator as a way of evaluating the evolution of its operation under a
different point of view, considering the opportunity cost for its activities. TIM calculates its economic profit based on the Net
Operating Profit after Taxes (NOPAT) and
the Cost of Invested Capital.
GUIDANCE
In the beginning of 2013, the Company disclosed guidance of high single digit CAGR
2012-2015 growth for Total Net Earnings
and EBITDA, reflecting the company’s expectations at that time. With the deterioration of the Brazilian economic environment,
as shown by the fall in GDP projection and
increased estimates for inflation, interest rate
and foreign exchange rate, plus the acceleration of the competitive scenario, the company reviewed its expectations at the end of
2013 for a mid single digit CAGR 2013-2016
growth of Total Net Income and EBITDA.
Economic profit = operating profit after income tax in
the period - (average of capital invested in the period x
opportunity cost).
In 2013, the Economic Profit reached
R$172.5 million, presenting a growth of 6%
compared to the year of 2012 (R$162.9
million). This performance shows acceleration compared to the variation observed
INDICATOR
DEFINITION
MEASURE
2013
RESULTS in
billions of R$
GUIDANCE
Total Net Income
(TNI)
Earnings after payment of taxes,
sales return and discounts on
services
%
19.9
CAGR 2013-2016
mid single digit growth*
Ebitda
Profit before interest rate, taxes,
depreciation and amortization: net
revenue less costs and expenses,
representing cash generation
of operations
%
5.2
CAGR 2013-2016
mid single digit growth
Capex
Medium and long term
investments in purchase,
improvement, development
or extension of infrastructure,
equipment, systems and
properties. Estimated value to be
invested at the end of the three
year period of 2013-2015
Billions
of R$
3.9
Total Capex
2014-2016**
* Mid single digit is an average growth in the single digits, that is to say, between 3.3% and 6.7%. This growth is calculated using the CAGR methodology (Compound Annual Growth Rate), which is the year over year growth rate of a given
indicator regarding a specific time period. Its calculation is based on the compound average of annual growth, raised to
1 divided by N, minus 1, in which N is the number of years in the period under consideration (in this case 3 years), according to the following formulas:
CAGR =
R
LT 2016
RLT 2013
1
N -1
CAGR = E
BITDA 2016
EBITDA 2013
1
N -1
** 4G (700Mhz) licenses are not considered. Specifically for Capex, the goal defined by the company for the year of 2014
is R$3.8 billion.
37
ENVIRONMENTAL MANAGEMENT
Commitment towards sustainable growth is
strengthened by continuous tracking of
environmental performance
TIM’s Environmental Policy was inspired by
the directives of the Global Reporting Initiative (GRI) and the ten principles of the Global
Compact while establishing initiatives to be
applied across all company activities. This is
why the principles are correlated to the indicators reported by the company. Therefore, the commitment towards sustainable
development is reinforced through continuous tracking of environmental performance,
complying with current legislation, regulation
agencies and the directives of the Telecom
Italia Group. TIM’s commitments include:
• Continuous improvement and prevention
of pollution - Constantly evolve its work
processes, focusing on reducing their impact on the environment and seeking work
effectiveness, while adopting a proactive
attitude in the attainment of these results.
• Residue Management - Seek minimization of waste production and encourage
differentiated collection, recovery and recycling.
• Electromagnetic emissions - Control operational aspects of its sites, ensuring compliance with internal standards and legal
and regulatory demands, in order to minimize risks to the environment.
• Legal compliance - Seek full compliance
with current environmental legislation.
• Consumption of natural resources - Develop actions aimed at reducing the waste
of energy and materials, ensuring sustainable use of natural resources.
• Technological innovations - Stimulate
technological research capable of minimizing the negative impact of services
and products.
• Advertisement - Announce the directives
and encourage internal and external audiences to participate in awareness campaigns and initiatives, supporting responsibility towards the environment.
In 2013, TIM invested R$41 thousand in initiatives to train the internal audience regarding environmental issues and R$5.6 thousand in evaluations of processes related to
the topic. In addition, in 2013, our partnership with FAS (Sustainable Amazon Foundation), which includes an investment of R$300
thousand, helped families in five conservation units served by the Forest Grant Program, with community communication equipment, repairs in distribution networks and
medical transportation. [EN30]
CLIMATE CHANGE
The issue of climate change is strategic for
TIM in its business. On account of that, the
company monitors its GEE emissions as a
way of predicting challenges that the topic
presents and preempting growing societal
demand.
Part of this work is conducted through participation in national and international initiatives related to the topic, such as CDP – a
global system for reporting information related to emissions, risks and opportunities, and
the corporate initiatives associated to the climate change topic.
TIM is also part of the portfolio for the
Efficient Carbon Index (ICO2) from
BM&FBovespa and BNDES, and the Companies for the Climate (EPC) group, coordinated by the Center for Sustainability Studies
of the Getulio Vargas Foundation (GVces).
This group gathers industry leaders to discuss initiatives and offer corporate directives
regarding the inclusion of the climate variable in business strategies, and it is one of
the main national references for a low carbon scenario. In addition, among its collaborators, TIM also works to internalize the
topic, raising awareness about the relevance of energy consumption reduction and
selective waste collection. [EN16, EN17 e EN18]
TIM’s GREENHOUSE GAS (GHG) INVENTORY
A key tool for internal management, the
GHG emissions inventory of an organization enables identification of emission
sources, as well as the quantification of the
company’s participation in the intensification
of climate change. In this manner, it points
out clearer paths for the adoption of corporate policies related to this matter.
Following this guidance, we have prepared
our GHG inventory since 2008, based on
the most widely accepted directives in the
global and national scenarios regarding
quantification and disclosure of GHG emissions, such as the GHG Protocol, the most
widely used methodology on a global scale
for accounting, preparation and publishing
of greenhouse gas inventory, as well as the
directives of the Intergovernmental Panel
on Climate Change (IPCC). [EC2]
The results are reported in various platforms, such as the Sustainability Report,
CDP, Public Emissions Registry, among
others. In 2013, the company launched its
Climate Change Policy, approved by the
Board of Directors, establishing directives
for corporate work concerning management
of its GHG emissions. Many TIM services
and processes contribute to reduce emissions, such as TIM PDV, summary bill, online bill and modernization of network equipment.
In alignment with our strategy and in order to complement internally conducted efforts, in 2013 there was a purchase of carbon credits in a total of 3160 tCO2e, and
2,591 tCO2e were used for compensating
TIM direct emissions (scope 1), which selected for this compensation the Brascarbon
Methane Recovery Project, located in farms
and properties in inland São Paulo.
This project is aimed at mitigating and recovering methane emissions (CH4 – gas
with higher global warming potential than
CO2) generated in the treatment of effluents
38
related to animal waste, providing several
secondary benefits, such as: improvements
in the quality of air and sanitation conditions
and use of process residues, such as fertilizers. The reduction of emissions happens both by avoiding CH4 emissions and
by generating energy from the burning of
this gas, and therefore TIM’s direct emissions (scope 1) in 2013, which totaled 2,591
tCO2e, were fully compensated in a voluntary manner by the company. The credit residual will be used to compensate direct
emissions of the year of 2014.
For the base year of 2013, TIM’s GHG inventory was validated for the third year by
an independent third party, a measure that
ensures higher transparency and reliability for the information and yielding, for the
second consecutive time, the GHG Protocol gold seal.
Below, TIM reports its emissions according
to the division by scopes.
SCOPE 1 – DIRECT EMISSIONS
• Fuel burning from its own fleet.
• Diesel oil burning for energy generation.
• Fugitive emissions from gases used in
cooling devices.
SCOPE 2 – INDIRECT EMISSIONS ASSOCIATED
TO IMPORTED ENERGY GENERATION
• Consumption of purchased electricity.
SCOPE 3 – OTHER INDIRECT EMISSIONS
• Fuel burning from air travel of employees.
• Fuel burning from the daily commute of
employees.
• Fuel burning from outsourced fleet and
vehicles of sales consultants.
• Residue management.
• Burning of fuel arising from air transportation of load.
39
VARIATION IN THE TOTAL EMISSIONS (2012/2013)
Scope 1
2012
3,355.6
tCO2e
2013
2,591.5
tCO2e
SCOPE 2
373,036.28
MWh
24,374.81
tCO2e
403,772.44
MWh
38,775.61
tCO2e
2012
-8.2%
2013
EMISSIONS (BY TYPE OF SOURCE)
Emissions (tCO2e)
Factors
Emissions (tCO2e)
20121
Factors
2013
Scope 1
3,356
2,591
Internal Fleet
790
2006 IPCC Guidelines for
National Greenhouse Gases
Inventories
789
Inventories
Generators
425
Inventories
436
Inventories
Fugitive Emissions
2,141
IPCC Second Assessment
Report: Climate Change 1995
(HFC-134ª) Shrae Standard 34,
1997 (R407-c)
1,367
IPCC Second Assessment
Report: Climate Change 1995
(HFC-134ª) Shrae Standard 34,
1997 (R407-c)
Scope 2
24,375
38,776
Electricity consumption2
24,375
MCT – emission factor of national
grid for 2013
38,776
MCT – emission factor of national
grid for 2013
Scopes 1 and 2
27,730
41,367
Scope 3
16,881
18,391
Air travels
5,158
2011 Guidelines to
Defra/DECC’s GHG Conversion
Factors for Company Reporting
4,723
2013 Guidelines to
Defra/DECC’s GHG Conversion
Factors for Company Reporting
4,509
Inventories (car, motorcycle and
bus); MCT – Emission factor of
national grid for 2011 (train
and subway)
4,407
Inventories (car, motorcycle and
bus); MCT – Emission factor of
national grid for 2011 (train
and subway)
Employee transportation
(commuting)
40
Outsourced fleet – Logistics3
3,768
Inventories
6,419
Inventories
Outsourced fleet – Others4
1,462
Inventories
774
Inventories
Sale consultants
1,916
Inventories
2,038
Inventories
Residue Management
69
Inventories
30
Inventories
In order to maintain the capacity for historical comparison of the data, TIM’s GHG emissions for the year of 2012 were recalculated using the global warming potentials of the Fourth Assessment Report of IPCC (AR4), as the emissions related to
the year of 2013 were calculated with these potentials, according to guidance from GHG Protocol.
1
Emissions arising from electricity consumption increased significantly (60%) due to the increased emission factor for the
national grid provided by the Ministry of Science and Technology, which considers the Brazilian energy matrix and its provision through the National Interconnected System (SIN) emission factors: 2012 – 0.0653 tCO2/MWh; 2013 – 0.0960 tCO2/
MWh). During the same period, an increase of 8% was observed in the total consumption of electricity imported from SIN.
2
This increase was due mainly to the incorporation of emissions associated to air transportation of logistics loads (2,645
tCO2e).
3
This line registers emissions associated to outsourced transportation of network equipment, selective collection and recollection of devices, batteries and accessories. The reduction in emissions was thanks to improvements in the collection
of primary data, shared transportation of network equipment with other companies and optimization in transportation of network equipment and maintenance activities, in spite of the inclusion of emissions related to air transportation of network
equipment (161 tCO2e).
4
TIM also measures the emissions of ozonedepleting substances, which are used mainly in the air conditioning equipment at company units. [EN16, EN17, EN18 e EN19]
EMISSIONS OF SUBSTANCES THAT DESTROY THE
OZONE LAYER
In t-gas
2012
2013
R-22
1.26
2.10
0.07
0.12
IN t-eq CFC-111
R-22
Calculated based on total consumption of gases and their ozone-depleting potential, as presented in the Montreal Protocol of 2000
1
RAIN MONITORING
This partnership, established by the operator
with MCTI, consists in the installation of rainfall data collection platforms at Radio Base
Stations (ERB) located near areas with a risk
of natural disasters. In the first phase, it is
expected that automatic rain gauges will be
installed in approximately 200 TIM antennas
in the states of Ceará, Pernambuco, Minas
Gerais, Rio de Janeiro and São Paulo.
In this partnership, installation and maintenance for the equipment will fall under the
responsibility of technicians of the National
Center for Monitoring and Warnings of Natural Disasters (Cemaden) of MCTI, while TIM
offers, in addition to the location for installation of the rain gauge, chips for data transmission. The government’s goal is to install
a total of 2,800 automatic rain gauges across
the country, while expanding to 821 the number of monitored cities by the end of 2014.
VIRTUAL WEATHER STATIONS
The other partnership established between
TIM and MCTI in 2013 was the project for
virtual weather stations, a pioneer initiative in
Latin America. This time it also features the
support of the Planetary Skin Institute (PSI),
a global and independent non-profit research
and development organization with the goal
of improving development of national platforms for proactive management of natural
disaster risks and sustainable management
of natural resources.
In this partnership, TIM forwards to PSI and
Cemaden of MCTI the data from the operator’s radio links for development of an innovative virtual rain fall observation capacity across the country. This means eliminating
the need for high coverage of the physical
weather stations. With the information collected by the mobile telephone network, it
will be possible to create rain fall maps in
high resolution, in real time.
Another major advantage of a virtual weather station with national coverage is in the
possibility of creating a more resilient historical data series. This study can contribute to
studies of adaptation to climate change, minimizing the potential effects caused by climate changes.
OPPORTUNITIES AND RISKS
Each year, the company performs a preliminary evaluation of opportunities and risks according to climate changes. The results are
also available to the audience on the CDP
website (www.cdproject.net).
OPPORTUNITIES
• There is a trend among Brazilian companies of not measuring their emissions voluntarily, with this becoming a mandatory
measure through national or regional regulations. As TIM already performs the initiatives for quantification of its emissions,
as well as improvement of its inventory,
we believe we need less adjustment efforts when these activities become mandatory, gaining competitive advantages in
the market.
41
• Meanwhile, for prevention of a scenario
of scarcity in energy offering, provoked by
long periods without rain, TIM promotes
initiatives aimed at reducing consumption
of electricity in its services and installations. First, the company maintains a project for modernization and swap, which is
the replacement of access equipment
with more modern and efficient models.
Approximately 60% of the network was
modernized. This project will continue to
be implemented in 2014, when activities
will be focused on the whole state of Rio
Grande do Sul. Another action that will
promote reduction in energy consumption
will be the optimization of equipment installations in all industrial buildings of the
company. Lastly, there is the virtualization
of data centers and IT equipment located in industrial buildings, which will also
contribute to reduce energy consumption.
• For TIM, the opportunities arising from climate change for the telecommunications
sector refer to the creation of solutions
that promote mitigation of its emissions
and those of its customers, as well as
those that allow better adaptation regarding climate change. In this case, there is
the possibility of promoting the development of tools or applications for warnings about extreme weather events, like
weather forecasting, with the installation
of rain gauges in the Radio Base Stations
(ERBs) in risk areas.
• Strategic carbon management can contribute to a positive perception that customers and society in general hold regarding TIM’s image. In this sense, the
company quantifies and publishes GHG
emissions since 2008, in addition to responding to CDP, since 2007, and participating in the Companies for Climate platform since 2010.
• TIM offers its customers, who increasingly seek efficiency in products and services, options with advantages in reduction
of energy consumption or use of alternative energy sources. The TIM PDV, for instance, is the company’s online recharge
system, which reduces emissions associated to the lifecycle of prepaid cards.
42
• In addition, the company offers different
forms of payment in its telephone invoices, such as the summary bill (received
by text message through contract at the
Customer Relationship Central and at
the website), which is a significant incentive for reduction of paper waste.
9th, 2010, regulates the voluntary national commitment to reduce emissions assumed in this policy, presenting the projection of national GHG emissions for the
year of 2020 for different sectors of the
economy and establishing specific goals
that must be handled by the Sector Goal
Plans.
• The company also considers that its telecommunication services may be used in
order to reduce emissions resulting from
people transportation. In addition to being a base for optimization of production
processes and logistic flows in various
sectors, they contribute towards reduced
emissions of its customers.
• Climate change can also influence the
behavior of investors, who can start prioritizing companies that are transparent
regarding management of their emissions. In this sense, in 2013 the operator was confirmed for the sixth year in
a row as part of the Corporate Sustainability Index (ISE), and in January 2014
for the fourth year it was selected to be
part of the Efficient Carbon Index (ICO2),
both portfolios of BM&FBovespa.
• Additionally, the composition of ICO2
is based on the efficiency of corporate
GHG emissions, which means a lower rate of emissions will represent higher liquidity, and therefore a higher value for negotiated securities. Therefore,
TIM has participated in CDP Investors
since 2007 and has answered the questionnaire of CDP Supply Chain since
2012 (base year of 2011). With this, it
also provides information that contributes to sustainable development of the
value chain of its customers.
RISKS
• The National Policy on Climate Change
(PNMC) from 2009 confirms Brazil’s
alignment with international initiatives
aimed at reducing the impact of climate
change, establishing a voluntary reduction between 36.1% and 38.9% in estimated emissions until 2020.Meanwhile, decree # 7,390, dated December
• Even though the Telecommunications
Sector is not included in this decree, it
might open a precedent for other sectors to establish GHG emission reduction
goals. At the state level, there is a trend
for even stronger restrictions on emissions. In São Paulo and Rio de Janeiro, the two states that are most relevant
for our business, there already is specific
legislation for the issue of climate changes. Therefore, TIM considers that, even
though it is unlikely in the short term, in
the future it may be subject to emission
restrictions, if the telecommunications
sector also presents a voluntary goal plan.
• A major part of GHG emissions quantified
in TIM’s inventory is associated to energy
consumption (particularly by the network
infrastructure), to outsourced logistics activities and the home-work commuting of
company collaborators. Therefore, policies that apply to the energy sector tend
to raise the operating costs of services,
enabling the energy price to be forwarded to consumers, impacting TIM’s operating costs (even though expenses with energy acquisition represent less than 5% of
its operating costs).
• Similarly, rules that impact TIM’s suppliers, such as having emissions and carbon footprints regulated in the future, may
result in increased cost for products and
services contracted by the company. This
is particularly valid when considering suppliers of electronic equipment and infrastructure.
• If the subsidies applying on the price of
fossil fuels are removed and/or goals are
imposed for the reduction of emissions in
this sector, TIM can also be negatively affected.
• Any change in the rainfall extremes and
long periods without rain can also end up
compromising the water level at reservoirs
and affecting national energy offer. In this
case, TIM considers it might be subject
to energy rationing measures and oscillations in the average price of kWh due to
the effect of climate change.
• TIM believes that a higher frequency
and strength of storms could damage
transmission towers, increasing company expenses on the acquisition of new
equipment and maintenance of existing
equipment. This could also lead to an increase in insurance costs for goods susceptible to such events. The variations of
weather and the frequent occurrence of
floods could also increase the costs due
to absence and medical leaves for employees, as well as higher difficulty in
transportation.
• Interruption or loss of quality in the signal
of mobile telephone and other telecommunications services are also risks for the
company’s business. In addition, the loss
of use life in devices and electronic appliances whose performance is directly
related to their temperature of operation
could lead to higher consumption of electricity for the purposes of cooling, in case
of temperature increase.
MANAGEMENT OF RESIDUES
In addition to seeking to minimize the generation of residues, TIM encourages differentiated collection, recovery and recycling in its
activities. The company also works on the
prevention of post-consumption damage by
developing programs for collection and environmentally appropriate final disposal of potentially impactful products and inputs.
43
In 2013, the residues generated by the company were sent to landfills and recycling.
During the year, 709.8 tons of waste was
generated by the company, of which 314.08
tons (44.9%) was hazardous waste and
395.70 tons (55.75%) was non-hazardous
waste. Out of this total, 100% of the material
is picked up and transported by specialized
companies from the collection point to its final destination.
One of our programs maintained for waste
treatment is the correct disposal of burned
out lamps, through qualified companies that
collect the lamps, grind them in a vacuum,
separate solid and gaseous residues and
correctly dispose of the output. We also have
the Residue Management Program (PGR),
which operates in a general manner for the
whole organization. One of the initiatives in
this program is the selective collection of paper, cardboard, plastic, aluminum and nonrecyclable (organic) residues at the administrative sites and industrial buildings.
Cell phones, their accessories and the portable batteries discarded, as well as batteries, are collected and sent for proper disposal, through the Recharge the Planet and
Battery-Eater programs. They provide special urns to pick up used batteries at Internal
Stores, TIM Stores and headquarter buildings across Brazil. It also started collecting
unused cell phones and the corresponding
accessories. [EN22 e EN27]
Like in the previous year, there was no record of significant spills. [EN23]
44
Paper
TOTAL GENERATED WASTE (t) BY TYPE
709.78
654.03
395.70
415.66
2013
2012
314.08
238.37
2013
2012
Hazardous
2013
Nonhazardous
2012
total
Method of Disposal (t)
277.92
261.24
We maintain widespread printing procedures and directives focused on reducing internal paper consumption and related costs,
involving the replacement of independent
printers, fax, scanners and copy machines
with multifunctional equipment consolidating all these tasks. All regionals also employ FSC paper in their administrative headquarters and offices, for internal use of the
employees. Printing reduction policies, associated to internal campaigns for raising
awareness regarding reduced consumption,
have contributed to saving paper and other
resources, such as tonner.
During 2013, we performed campaigns for
customers to choose the TIM online account
through channel communications, such as
email marketing and messages on invoices, with the saying “Online Bill. Get this idea
out of the paper”. With the awareness focus supported by four pillars - convenience,
control, privacy and security - the initiative
CONSUMPTION OF PAPER (BY TYPE)
268.60
97+2+1
0.07%
222.51
134.46
36.16
147.06
15.86
2013 2012 2013 2012 2013 2012 2013 2012
Hazardous
TIM’s paper consumption monitoring is conducted in four fronts: internal use, bags,
marketing and invoices. Out of this total,
99.88% is FSC-Certified Paper, 0.07% is recycled paper and less than 0.05% is common white paper.
NonNonHazardous
hazardous
hazardous
0.05%
99.88%
Recycling
Landfill
Forest Stewardship Council (FSC)
Recycled Paper
Common White Paper
45
contributed towards reducing the volume of
paper used in invoice printing. [EN1, EN2 e
TOTAL MATERIALS USED BY WEIGHT (KG)
2013
EN26]
2012
Consumed
total
% of
consumed total
Total
Consumed
% of
consumed total
Total
2,970,716.80
100.00%
2,632,290.51
100.00%
Recycled
2,089.00
0.07%
94,399.00
3.59%
FSC
2,967,123.80
99.88%
2,534,175.51
96.27%
White
1,504.00
0.05%
3,716.00
0.14%
MATERIALS USED BY WEIGHT (KG)
Internal use paper
2013
2012
Variation in %
Total
52,185.80
63,038.00
-17.22%
Recycled
2,089.00
53,043.00
-96.06%
FSC
48,592.80
6,279.00
673.89%
White
1,504.00
3,716.00
-59.53%
Bags
2013
2012
Var. %
Total
89,800.00
41,356.00
117.14%
Recycled
-
41,356.00
-
FSC
89,800.00
-
-
White
-
-
-
Marketing
2013
2012
Var. %
Total
1,489,811.00
791,421.00
88.25%
Recycled
-
-
-
FSC
1,489,811.00
791,421.00
88.25%
White
-
-
-
Billing
2013
2012
Var. %
Total
1,338,920.00
1,736,475.51
-22.89%
Recycled
-
-
-
FSC
1,338,920.00
1,736,475.51
-22.89%
White
-
-
-
ENERGY
The energy consumed by TIM is essentially
obtained from the electricity grid, representing 96.4% of the total energy consumption,
with the remainder consumed by its fleet and
energy generators. The operator has Radiobase Stations (“ERB”) with operational autonomy in case of interruption of energy supply and generators that can be used in order
to ensure service operation in case of prolonged downtime of energy supply.
In order to reduce energy consumption, the
company develops educational measures to
raise awareness of the internal audience in
administrative offices, while conducting building maintenance actions, such as reduction
of operation hours for the cooling and elevator equipment.
Another action to reduce consumption is the
improvement of operation capacity, through
which TIM continued the Modernization and
Swap project in 2013. It consists of the replacement of access equipment with more
modern and efficient models, with 60% of the
network having been modernized. This project will continue to be implemented in 2014,
when activities will be focused on the whole
state of Rio Grande do Sul.
The optimization of equipment installations
in all of the company’s industrial buildings is
another initiative that will promote reduction
in energy consumption. The virtualization of
data centers and IT equipment located in industrial buildings will also contribute to reduce energy consumption.
TIM’s RAN sharing agreement with Oi, approved by Anatel in the beginning of 2013,
is aimed at sharing the network infrastructure for this service and ensuring coverage of 4G technology (LongTermEvolution
– LTE) within national territory. This innovative model based on the balance between
parties ensures longevity for the initiative,
which among many other benefits includes
estimated savings by 2016 of over 500 tons
of material, which will not be discarded, while
ENERGY CONSUMPTION BY SOURCE
Energy consumption1 (GJ)3
2013
2012
Var. %
Internal sources – non-renewable
Gasoline
46,942
43,114
8.88
Diesel – Vehicles
869
929
-6.50
Diesel – Generators
6,136
5,904
3.93
Total
53,947
49,947
8.01
Third parties
Electricity
1,453,581
1,342,931
8.24
Total
1,453,581
1,342,931
8,24
Total consumption2
1,507,528
1,392,877
8.23
1
Energy consumption refers to all units and vehicles of TIM Participações S.A. in Brazil, including its
two subsidiaries, TIM Celular S.A. and Intelig Telecomunicações Ltda. The amounts also cover activities of TIM Fiber, incorporated by TIM Celular in 2012.
2
In Brazil, it is not possible to determine the primary energy consumption for the production of indirect energy. The concessionaires (hydro, thermal, etc.) are not legally obligated to inform the source
of energy production in the country.
In order to calculate consumption in gigajoules, the conversion rates of the National Energy Balance of 2013 were used.
3
46
enabling estimated energy reduction of 37%,
thus reducing GHG emissions and facilitating management of climate risks. In alignment with the challenges of reducing environmental pollution and performing urban
planning, sharing is also expected to reduce
by half the number of websites, which means
a smaller need for manufacturing of these
components and thus savings of natural resources.
Another action is the activation of new coverages using next generation equipment offering
higher energy efficiency.
As for the “biosites”, a project being developed by the company, these are structures
similar to antennas that enable specific coverages with maximum efficiency in the use
of space and energy. The “biosites” can also
contribute to reduce visual impact on the urban landscape, increase security and democratize access to our services.
The increase in energy consumption compared to the previous year was due to the
expansion of the network, with the addition
of 1,261 sites. [EN3, EN4, EN5 e EN6]
WATER AND EFFLUENTS
TOTAL CONSUMED WATER, DIVIDED INTO THE
FOLLOWING SOURCES (M3)
209,603
20,276
7,957
2013
2012
Internal
Extraction
2013
229,880
207,139
2012
Supply Grid
2013
215,096
2012
Total
Even though our activities do not involve
heavy use of water, we monitor the volume
consumed in our units, both from the urban
supply grid and the volume we extract, which
is later used in gardens and to clean parking lots.
The source of the water used in TIM activities is primarily the urban supply grid. The
São Paulo office started consuming water
from an artesian well in June 2012, when the
license to use this asset was granted by the
local competent authorities.
The company implements initiatives to reduce water consumption in its operations,
such as adjustment work and inspections
constantly performed in bathrooms and pantries to avoid water leaks, as well as deployment of more efficient equipment in bathrooms (faucets with timers and toilets with
coupled boxes).
Regarding effluents, TIM does not have initiatives for their treatment and later reuse.
Therefore, all the volume produced by the
company is directed to the public sanitation
grids, responsible for controlling the effluent
treatment process. It is worth noting that
the company does not perform disposal with
high environmental impact and that no water body is significantly affected. [EN8 e EN21]
TIM evolved its site
verification work in
Permanent Preservation
Areas and expanded
monitoring of its
electromagnetic and noise
emissions in its installations
ENVIRONMENTAL IMPACT OF
PRODUCTS AND SERVICES
The Radiobase Stations (ERBs), structures needed for operation of the mobile
phone service, generate environmental impact in their deployment and through emission of electromagnetic radiation. According
to a publication by Acel Telefonia Celular –
Conheça Bem essa Tecnologia (“Know this
technology well”), studies conducted by the
World Health Organization (WHO) point out
that there is not sufficient evidence to prove
that the use of cell phones represents a
health danger, as long as the limits and precaution rules are observed.
Also according to this publication, the antennas emit an insignificant amount of radiation,
even considering continuous exposure. This
level to which the population is exposed is 50
to 1000 times lower than the safety threshold
established by Anatel regulations. Through
Resolution #303/2002, the agency establishes the exposure limits regarding electromagnetic fields in the radiofrequency range used
by cell phones.
47
TIM analyzes and monitors, based on the
methods of Resolution #303, electromagnetic emissions in all Radio-base Stations
(ERB), complying with established limits. The
data includes bases shared with other operators. The company prepares a theoretical report on electromagnetic emissions of all its
ERBs. This report is demanded at deployment time to ensure that the ERB has a license from Anatel.
In 2013, we evolved with the verification
work for sites that could be part of Permanent Preservation Areas (APP). In this step
of the project, 131 stations were identified in
preservation areas. In 2014, we will continue
the project, because there are still verifications to be conducted in antennas that might
be in an APP. [EN11, EN12]
The company also reinforced internal awareness campaigns about conscientious use
of energy, lamps and water in 2013. Even
though it has no direct goals for GHG reduction, the established goal for reduction
of electricity consumption in network equipment will directly result in reducing these
emissions.
Another relevant impact from TIM’s operation
is the emission of noise. In this case, usually monitoring of emissions is performed by
legal determination (state or city) or by demand from public agencies. In order to obtain a license for operation of the Radiobase
Station (ERB), it is also necessary to perform this measurement. In 2013, the company measured the level of electromagnetic
emissions in 3,120 sites (51.60% more than
in the previous year) and, in 32 of them, the
noise level was measured. In this case, the
field measurement is conducted when the
company is notified or when a site regularization process is requested. [EN26 e SO1]
In 2013, TIM was fined in the total amount
of R$798 million, referring to 39 fines for violation of environmental rules. There were
also 46 violation records, 507 active administrative processes, 33 judicial processes and
three conduct adjustment terms (TACs), still
ongoing.
48
ENVIRONMENTAL LAWSUITS (QUANTITY)
2013
2012
Administrative proceedings (active)
815
453
Administrative proceedings (filed)
62
248
Lawsuits (active)
33
46
Lawsuits (filed)
6
3
Ananindeua/PA – TAC established between
TIM Celular and the City with the purpose of
obtaining time grant for regularization of environmental licensing processes for all ERBs
installed in the city without the proper environmental licensing, while also settling the
debits of pending fines applied by the city.
The Environmental Legal
affairs department tracks
the cases involving
environmental issues and
produces a contingency
report about the topic,
updated monthly
Fortaleza(SEMACE)/CE – TAC established
between TIM Celular and the State Superintendence of the Environment – SEMACE,
with the goal of having the company present
all the documents corresponding to the 135
proceedings ongoing at SEMACE, regarding the ERBs deployed in the state of Ceará.
Ipueiras/CE - TAC established between TIM
Celular and the Public Ministry, for relocation
and regularization of a site. TIM obligations:
change the ownership of the terrain in which
the ERB is located for the property where
the tower is; and move the tower to a new
location.
Manaus/AM – TAC established between
TIM Celular S/A and the city due to irregular
installation of ERBs in the city. There was
a reduction of fines applied by the city and
TIM committed to conducting the licensing
for the ERBs.
Boa Vista/RO – TAC established between
TIM Celular S/A and the City, aiming at regularization of urban licensing for all ERBs installed in the city, which also enabled reduction of applied penalties.
Currently, there are 540 environmental cases
tracked by the Environmental Legal department. This is conducted through a contingency report, updated monthly, with the following objects: adjustment of structure, absence
of license due to Restriction in Legislation,
cancellation of License, ERB not activated,
environmental licensing, advertising, batteries, electromagnetic radiation and removal
of ERB. [EN28]
49
SOCIAL PERFORMANCE
The company considers respect for worker
rights as essential for the development of
its activities
The company stands for safety and health in
the workplace and considers respecting labor rights essential for performance of economic activities. Therefore, TIM seeks to invest in its collaborators through training and
tools for career development and expansion
of their qualifications.
TRAINING AND QUALIFICATION
TIM invests in programs that develop the
necessary competencies to achieve business results. In addition, these programs are
aimed at preparing its staff of collaborators,
considering future challenges and scenarios,
as well as technology and market progress.
The main initiatives are:
• Graduation Program, offering college-level education for up to 120 collaborators;
• International Training, offering overseas
experiences to collaborators;
• Specific technical training, focused on
technical qualifications and updates for
performing assigned functions;
• Institutional training, supporting integration of the collaborator in the company.
In April 2013, the operator held the Workshop Technology Evolution to Business Innovation event. The meeting was directed
towards 124 TIM professionals and leaders,
most from the areas of Network, Information
Technology and Marketing. This workshop
was one of the training actions planned in
the Technology Connection, a development
program for network and technology professionals of TIM.
Also on the same year, TIM offered 100 positions in the Administration graduation course
to its own collaborators lacking university
courses. The course offered by TIM is a result of the partnership with the International
Association of Continued Education (AIEC),
one of the best Internet colleges in Brazil.
PROFESSIONAL COMPASS
TIM created a guide for career planning and orientation for all its collaborators. The goal of the Professional
Compass program is to show possibilities of growth and mobility at TIM,
helping the collaborator choose the
best path inside the company. For this
purpose, it has provided on the intranet the Career Map, with all positions grouped by professional tracks,
and the TIM Career and Succession
System Curriculum, with a place for
the collaborator to maintain his or her
curriculum updated.
AVERAGE HOURS OF TRAINING PER YEAR, PER EMPLOYEE, LISTED
BY FUNCTIONAL CATEGORY:
2013
2012
Variation in %
Directors
690.6
455.4
51.65%
Management
20,517.5
16,652.6
23.21%
Other Positions
82,526.7
67,209.4
22.79%
Sales Force
42,791.5
454,997.5
-90.60%
Relationship Consultant (CRCs)
1,605,221.7
140,360.1
1,043.65%
Total hours dedicated to corporate
education programs (hours/year)
1,751,748.0
679,675.0
157.73%
Total amount invested in these
programs (R$)
14,517,187.97
10,221,265.4
42.03%
NUMBER OF COLLABORATORS WHO ATTEND FORMAL EDUCATION
CLASSES FINANCED BY THE COMPANY (R$)
2013
2012
Variation in %
Directors
4
22
-22.73%
Management
2
71
-35.21%
Other Positions
12
325
-33.54%
Sales Force
7
22
-59.09%
Relationship consultant (CRCs)
105
70
44.29%
VALUE INVESTED IN FINANCING FOR FORMAL EDUCATION OF
COLLABORATORS (R$)
Total
2013
2012
Variation in %
703,566.21
3,941,837.80
-82.15%
50
In 2013, R$14.5 million was invested in corporate education programs offered to employees. In addition, TIM supports 130 collaborators with financing of formal education,
totaling an investment of R$703.6 million.
The average number of hours of training per
year, per functional category, was distributed according to the table on the side. Professionals in termination process receive an indemnification for lay-off and for service time,
as established by law. In specific cases, it
is possible to extend the health plan benefit of a terminated employee, due to surgeries, for instance.
TIM continues to annually conduct a performance evaluation of its employees, based on
activities and goals established for the period and the group competencies defined for
each function. After the evaluation, manager and collaborator hold a feedback meeting,
in which they establish a consensus about
the competencies that should be developed
in the coming year, while also defining new
goals and objectives. This is the basis for
building the Individual Development Plan for
each collaborator, which defines the actions
that will be executed as support for development of these competencies. As a result of
the evaluations and development plans, the
moves related to career and merit are generated.
The Excellence Consultants program, applied to relationship consultants (CR), enables promotion of professional improvement
51
through monthly evaluations, with results
shared with the collaborators to function as
support for decision making regarding career
development. The annual average of the results is converted into a concept that summarizes the “CR” performance, aligned with
the Corporate Performance Management
process. [LA10, LA11 e LA12]
In 2013, 4,369 collaborators were laid-off,
54.9% voluntarily and 44.7% involuntarily and 0.4% for other reasons. During the
same period, 4,886 collaborators were hired,
of which 61.7% were women and 89.2%
were up to 35 years of age. The total turnover was 35.78%, which means a reduction of 11.45% compared to the previous
year. [LA2]
PERCENTAGE OF EMPLOYEES WHO
RECEIVED PERFORMANCE ANALYSIS
Total voluntary and involuntary terminations in the
period
2013
2012
Employees1
99.9%
99%
Relationship
consultants
100%
100%
% of total
employees
52.7%
41.5%
2013
2012
Variation in %
Voluntary
2,400
2,479
-3.19%
Involuntary
1,953
2,228
-12.34%
Other Causes*
16
10
60.00%
2013
2012
Variation in %
Up to 35 years
4,359
5,152
-15.39%
From 36 to 45 years
432
543
-20.44%
45 to 60 years
92
91
1.10%
Above 60
3
1
200.00%
Total hired collaborators per age range
The presented percentage refers to employees who received training as a result of the sample of employees eligible to
this activity. The eligibility criteria includes, among other specific items, the time since the employee joined the company.
1
Total laid off collaborators,
by gender
39+61
38+62
61.1%
38.9%
Men
Women
Total hirings conducted through different types of
recruitment
Total collaborators hired
61.7%
38.3%
Men
Women
2013
2012
Variation in %
Internal recruitment
77
0
-
External recruitment
4,809
5,780
-16.80%
2013
2012
Variation in %
The sum of nominal wages of
collaborators hired in the period
8,298,940.25
9,015,817.44
-7.95%
The sum of nominal wages of
collaborators terminated in the period
7,248,601.35
8,034,662.94
-9.78%
Sum of Nominal Wages
Turnover Rate
16
19.7
Voluntary
Involuntary
EMPLOYMENT OPPORTUNITIES IN
INTERNAL UNITS
TIM ended 2013 with 163 of internal stores
in Brazil, of which 32 were inaugurated during the year. In total, TIM has approximately 12 thousand points of sales, including premium stores and resellers (dedicated or multi
brand), while also benefitting from the capillarity of the large retail chains. Customers
of the pre-paid segment also have alternate
channels for recharging, such as supermarkets and newsstands, with a total of more
than 430 thousand points of sale distributed
across the country.
PROFILE OF COLLABORATORS
TIM prioritizes a healthy work environment in
order to stimulate professional development.
That is why collaborators are continuously informed about the company’s progress in the
telecommunications market and the established goals through the corporate intranet,
TIM News (internal corporate TV, with transmission in areas with significant circulation),
and internal communication emails.
At the end of 2013, the company’s staff of
collaborators included 12,870 collaborators1, of which 12,167 were direct employees2, 381 apprentices, 306 interns and 16
outsourced. Out of the total number of direct employees, most are concentrated in
the states of Rio de Janeiro, São Paulo and
Paraná. Approximately 91% have less than
10 years of company time. All collaborators
are full time and 95% have a work contract
for indeterminate time [LA1]
In 2013, TIM was named in 13,557 labor lawsuits and paid an amount of R$2.1 million in
proceedings with favorable rulings. [SO8]
DISTRIBUTION OF DIRECT EMPLOYEES BY REGION
2013
2012
Regional office in São Paulo - SP (capital and inland)
3,588
3,618
Regional office in Rio de Janeiro - RJ
3,835
3,606
Regional office in Rio de Janeiro - ES
14
15
Regional office in South Region - PR
1,213
1,119
Regional office in South Region - SC
123
107
Regional office in South Region - RS
228
202
Regional office in Center-West region - DF, GO, TO, MT, MS, RO, AC
362
316
Regional office in East region - MG, BA,SE
585
503
Regional office in Northeast region- PE, AL, PB, RN, CE, PI
1,956
1,931
Regional office in North region- PA, AM, MA, AP, RR
263
233
2013
2012
Full-time collaborators
12,854
12,255
Part-time Collaborators
0
0
QUANTITY OF COLLABORATORS PER WORK SHIFT
employees by contract type
5.3%
94+6
28+43+1981
94.7%
0.3% 0.2%
28.2%
19.4%
Collaborators: Internal employees, outsourced, interns
and apprentices.
Hired with signed work permit and labor rights directly ensured by the company, according to CLT. Does not include
interns and apprentices.
2
Indeterminate
Fixed
Number of employees by company time
8.4%
1
52
43.6%
Up to 1 year
1 to 5 years
5 to 10 years
10 to 20 years
20 to 30 years
More than 30 years
CLIMATE SURVEY
In 2013 there was no organizational climate
survey because TIM measures the quality of
the work environment of the Telecom Italia Group in partnership with Italian university Bocconi every two years. In 2012, according to the opinion of collaborators, the
average general satisfaction was 7.54 (on a
scale of 1 to 10), placing TIM as the company in the Telecom Italia Group in which
collaborators presented the highest levels of
satisfaction. In addition to the overall satisfaction rating, 22 items were evaluated (external image, market guidance, leadership,
diversity, among others) on a scale of 1 to 7.
The grades achieved by TIM remained between average values (4 to 5) and mediumhigh (5 to 6).
MARKET PRESENCE
Even though it does not have a structured
policy of contracting in local communities, in
external recruitment, TIM seeks to offer preference to local labor residing on the city of
the open position. In some cases, as a way
of mobilizing people for the recruitment and
selection process, neighborhood associations of nearby communities announce the
opportunities through the corporate posters,
by website or personal contact.
The Company also works in partnership with
some consulting companies that receive specific printed publicity materials, which are distributed to universities and channels they
consider appropriate for recruitment of candidates. The positions announced on social
networks are specifically focused on the internship and young apprentice programs.
Professionals from other geographic areas
are contracted only when there is no local
availability or training options. In 2013, the
14 contracted managers came from local
communities of the company in the Rio-São
Paulo area, locations in which there was a
need to hire these professionals. [EC7]
INTERNSHIP WITHOUT BORDERS
The total number of people who applied in the 2013 edition of the Internship Without Borders Program reached approximately 50 thousand candidates, from the states of São Paulo, Rio de Janeiro, Minas
Gerais, Paraná, Rio Grande do Sul, Pará and Pernambuco, competing for 123 positions at the operator. The approved professionals are
developed to occupy strategic and leadership positions at the company. The program also offers unique compensation, participation in the
profits and results, leadership and management development program,
job rotation, international training for those who stand out the most and
career tracking with TIM executives.
TRAINEE TALENTS WITHOUT BORDERS
TIM also invests in the development of young professionals through its
Trainee Talents without Borders Program, in which they can assume
strategic positions at the company after two years and three months.
In addition to acquiring new knowledge, challenges and opportunities
of professional growth, the professional receives unique compensation, participation in profits and results, leadership and management
program, job rotation, and international raining for those who stand out
the most, as well as career tracking with TIM executives.
The Internship Without
Borders Program attracted
approximately 50 thousand
candidates in 2013, with
positions in seven Brazilian
states. Those approved are
trained for strategic and
leadership positions
53
RESPECTING DIVERSITY AND FIGHTING
DISCRIMINATION
TIM believes that a diverse environment, including people regardless of gender, race,
sexual orientation, religion, social or physical conditions, is the way to promote a rich
exchange of ideas. Even though there are
no formal initiatives in place to ensure or expand diversity, as well as the participation
DISTRIBUTION OF EMPLOYEES BY GENDER AND
POSITION11
1
2013
2012
Variation
in %
Men
5,278
5,093
3.63%
Directors
42
44
-4.55%
Managers
462
470
-1.70%
Professionals
2,411
2,177
10.75%
Sales Force/Stores
1,272
1,312
-3.05%
Relationship Consultants / Fraud
1,091
1,090
0.09%
Women
6,889
6,557
5.06%
Directors
8
6
33.33%
Managers
226
237
-4.64%
Professionals
1,909
1,723
10.80%
Sales force/stores
1,385
1,239
11.78%
Relationship consultants/fraud
3,361
3,352
0.27%
Does not include interns, apprentices and third parties.
54
and representation of the various social
groups that make up society in the groups
responsible for governance, the company
makes its position clear through articles on
the intranet and other internal communication media. TIM values the diverse experiences and individual qualities of its collaborators as a way of stimulating innovative
thinking. [LA13]
TOTAL EMPLOYEES IN EACH FUNCTIONAL CATEGORY
2013
2012
Variation
in %
Board
7
10
-30.00%
Executives
50
50
0.00%
Management
688
707
-2.69%
Other functions
12,116
11,498
-0.60%
DISTRIBUTION OF EMPLOYEES BY AGE RANGE
2013
2012
Variation
in %
Less than 18
342
166
106.02%
18 to 35 years
9,423
9,407
0.17%
36 to 45 years
2,317
1,995
16.14%
45 to 60 years
745
666
11.86%
Above 60
27
21
28.57%
TOTAL EMPLOYEES BY FORMAL EDUCATION LEVEL
TOTAL EMPLOYEES BY COLOR/RACE
2013
2012
Variation
in %
Illiterate
0
0
-
8.87%
Primary School
287
14
1.950%
3,251
4.64%
High School
8,229
6,398
28.62%
140
95
47.37%
College
3,584
5,011
-28.48%
Indigenous
39
37
5.41%
Post-graduation/Masters/
PhD
754
832
-9.38%
Not Informed
88
83
6.02%
2013
2012
Variation
in %
White
8,461
8,124
4.15%
Black
724
665
Brown
3,402
Yellow
WAGES
The wage policy is not linked to any kind of
discrimination and reflects market behavior.
In 2013, the process of reducing the difference between the average compensation of
men and women continued. [LA14]
Aligned to best market practices, TIM’s compensation policy establishes that the base
wage for each position is defined according
to the activities developed and the business
55
contributions, with no segregation by gender.
In 2013, the relationship between the highest and the lowest wage paid at the company was 87 times. TIM establishes collective
agreements in all regions and no collaborator is subject to local minimum wage rules.
In 2013, the relationship between the lowest wage paid by the company and the local
minimum wage was calculated, as described
on the following page. [EC5]
SUM OF NOMINAL WAGES, BY POSITION AND GENDER (R$)
2013
Men
2012
275,660,203.36 247,446,097.42
Variation
in %
11.40%
Directors
19,267,680.00
18,202,142.00
5.85%
Managers
73,103,415.59
65,660,030.50
11.34%
Professionals
143,416,985.63
126,800,297.66
13.10%
Sales force/stores
29,399,555.80
28,258,288.89
4.04%
10,472,566.34
8,525,338.37
22.84%
Women
186,527,097.03 162,117,948.47
15.06%
Directors
2,460,000.00
1,448,600.00
69.82%
Managers
32,930,161.95
27,397,323.98
20.19%
Professionals
95,625,399.98
84,722,724.94
12.87%
Força de vendas/lojas
25.213.417,74
22.021.674,08
14,49%
Consultores de relacionamento/fraude
30.298.117,36
26.527.625,47
14,21%
PROPORTION OF BASE WAGES BETWEEN MEN AND WOMEN, BY
FUNCTIONAL CATEGORY (R$)
2013
2012
Variation
in %
Directors
1.49
1.71
-12.93%
Managers
1.09
1.21
-10.14%
Professionals
1.19
1.18
0.25%
Sales force/Stores
1.27
1.21
4.77%
1.06
0.99
7.74%
COLLECTIVE AGREEMENTS
The company ensures compliance with the
rights of freedom of association and collective bargaining, in accordance with current
Brazilian legislation. In 2013, TIM has 334
unionized employees in its staff and collective labor agreements cover 100% of its internal employees.
The main negotiations conducted in 2013
were the renewal of the economic clauses of the Collective Labor Agreement (ACT
2012/2014). Negotiations began in September 2013 and were concluded in November
of the same year, when five meetings were
held with both federations representing workers, and the deal was approved by absolute
majority in the assemblies conducted in all
27 states of the country. The set of clauses and conditions received the addition of
56
an adjustment with real gain for wages up
to R$2,000, the inclusion of the category of
managers in the wage adjustment and the inclusion of extended day-care support benefit for male employees. There was also a review of goals for the Program of Participation
in Results. [LA4]
REWARD POLICY
Appreciate and recognized collaborators for
achieved results and their individual contribution, that is the main objective of TIM’s
Reward Policy. For this purpose it works on
differentiating compensation according to
performance, recognition of results and retention of the best employees, plus the offer
of opportunities for growth and professional
development.
WAGE PARAMETER
Local minimum
wage (R$)
Lowest paid
wage
Percentage of
employees receiving
lowest wage
Ratio regarding
local minimum
wage
755.00
762.00
21.88%
0.93%
RJ
802.53
726.00
11.97%
-9.54%
ES
678.00
1,002.00
28.57%
47.79%
PR
914.82
726.00
38.50%
-20.64%
SC
765.00
1,002.00
39.84%
30.98%
RS
770.00
1,002.00
40.79%
30.13%
DF, GO, TO, MT,
MS, RO e AC
678.00
1,002.00
36.74%
47.79%
MG, BA e SE
678.00
946.00
12.65%
39.53%
PE, AL, PB, RN,
CE e PI
678.00
726.00
35.63%
7.08%
PA, AM, MA, AP
e RR
678.00
946.00
34.98%
39.53%
State
The reward modes are: merit, promotion, internal opportunities, high performance-based
bonus or extra (for the development of a specific project/activity). The application can result in wage increase or in a specific bonus/
extra.
Rules
Wage increase
Bonus/extra payment
Maximum adjustment
percentage for the year
Up to 35% of wage.
Up to 3.5 wages
Frequency
Up to two wage increases per year,
with at least 10% in each move, as
long as maximum limit is followed.
Minimum interval of three months
between actions.
One bonus/extra
payment per year
Combination of tools
It is possible to combine more than
1 tool, as long as the maximum
equivalent limits are followed (every
10% of wage increase corresponds
to one bonus wage, as equivalence
criteria.
SOCIAL SECURITY
TIM offers to all its internal collaborators an open
plan of supplementary defined contribution managed by Itaú. The contribution is 1% of the wage,
up to R$2,620, fully paid by TIM. If the employee receives a higher wage, 1% of R$2,620 is paid, and
after this amount, 6.6% is paid referring to the remainder of the wave, with the collaborator and TIM
participating with equal contributions. The employee can also make additional contributions to the
plan, according to choice.Participation in TIM’s Social Security Plan is optional, and participation advantages include the following highlights: the possibility of deduction in income tax; exemption from initial
fee (entrance in the plan) and exit fee; and the possibility of transferring resources from other social
security plans the collaborator may already have.
Collaborators coming from Intelig who were not transferred to TIM remain active in the Intelig ICATU
plan. [EC3]
57
All collaborators with at least six months at
the company who have had at least a result equal to “fully met expectations” in the
last Performance Management (PM) are eligible to participate in the policy. The better the performance evaluation, the bigger
the wage range limit that a collaborator can
reach. Within this policy, this level can reach
up to 150% of the market average.
Throughout 2013, 2,098 collaborators were
granted merit and internal opportunities actions, reaching 42.4% of the eligible population, with an average salary increase of
22.1%.
BENEFITS
TIM offers its employees a broad set of benefits. These include: medical and dental
plans, life insurance, private social security,
food/meal coupons, transportation coupons,
day care support and cell phone devices with
functional voice and data plan.
In the beginning of 2013, we offered to all our
internal collaborators and interns a modem
providing unlimited 3G Internet. The plan
also includes national roaming, speed of up
to 16 MBPS and has no surplus charges. At
the end of the year, expenses with benefits
totaled R$128 million.
Directors and managers have the right to an
international medical assistance plan and
high management representatives have the
right to a vehicle and fuel. All of them participate in the company’s program of profits and
results, and directors, managers, master experts and coordinators receive MBO (Management by Objectives). The other employees are covered by PLR (Participation in
Profits and Results). [LA3]
OCCUPATIONAL HEALTH AND SAFETY
Currently, TIM has 10 Internal Boards for
Prevention of Work Accidents (Cipas), distributed across company units with over 50
collaborators, and in 2013, 60% of collaborators were represented by these boards. At
the units without the minimum number of collaborators, a person in charge is trained to
perform these activities.
ACCIDENTS WITH EMPLOYEES
2013
to Prevent Environmental Risks (PPRA), in
addition to the TIM Quality of Life Program,
which guides and encourages employees to
cultivate healthy life habits.
Number of accidents without leave
3
Number of accidents with leave
24
Rate of frequency (%)
0.28
WORK GLOVES
Rate of seriousness (%)
5.58
Number of days lost
471
In 2013, the company supported its internal call center
consultants through a pioneer action in Brazil: the distribution of therapeutic gloves for working, a R$1.3 million project from the TIM Quality of Life Program. Approximately 4,200 collaborators were benefitted in the
customer service units in Santo André (SP), Rio de Janeiro (RJ), Jaboatão dos Guararapes (PE) and Curitiba (PR). The gloves help prevent and treat relief of
muscle pain.
Cipas operate according to Regulatory Norm
(“NR”)-05 in preventing work-related illnesses and accidents. These actions are conducted together with the Specialized Service
in Safety Engineering and Labor Medicine (“SESMT”) or with the company’s Labor Safety representative. The boards are
formed half by collaborators appointed by the
company’s management body and the other half by employees chosen by their peers.
TIM also has a channel for labor health and
safety (SST) including professionals specialized in labor health, safety and environment in all its regional sites. The team works
to identify and control occupational risks
through preventive and awareness actions.
In 2013, TIM did not register serious accidents involving its collaborators. All work accidents are registered on INSS through the
online CAT system. In addition to this INSS
report, accidents are analyzed and investigated through specific documents available
at the SSMA network. The procedures mentioned previously are described on the Work
Accident Communication Policy, available on
the corporate intranet.
TIM also keeps constant attention to activities in which there is higher risk or frequency of occupational illnesses, particularly at the Customer Relationship Center,
where there is cognitive risk. In order to reduce the possibility of damage, we have programs such as Work Gymnastics; ergonomic evaluations, Occupational Health Medical
Control Program (PCMSO) and the Program
We conduct each year the Internal Week for
Prevention of Work Accidents (SIPAT), the
Internal Board for Prevention of Accidents
(CIPA), the Work Gymnastics Program, flu
vaccination and the Voice Conservation Program. The company also offers health and
dental plans for employees, promoting quality of life with the distribution of information
through intranet and local actions.
FIRE BRIGADE
The company resumed in 2013 the TIM Fire Brigade,
formed by voluntary collaborators, previously trained
to offer response in emergency situations. Brigade
members receive theoretical and practical classes
to work in preventing and fighting fire, providing first
help and helping evacuate environments. The installation and maintenance of the Brigade answers legal
requirements and ensures quick and effective action
in case of emergency.
58
TIM also commits to seeking mitigation of
health risks of its collaborators, through collective and individual protection measures,
without conflict with the terms of article 191
of CLT and Decree #3.214/78, prioritizing
cessation or neutralization of agents that
present risks to the health of its employees. [LA6, LA7, LA8 e LA9]
In 2012, the company had the goal of reaching 180 suppliers evaluated according to
sustainability criteria, and in 2013 40 new
suppliers were added, totaling 220 evaluated suppliers.
PERCENTAGE OF LOCAL PROCUREMENT
Supplier Type
SUPPLIERS
The company does not have procurement
policies or practices and procedures that prioritize local suppliers, but it always seeks,
whenever possible, to establish business relationships with suppliers headquartered in
Brazil. The Process of Relationship with Suppliers in the Procurement Process establishes inclusion of social and environmental responsibility in the acquisition of goods and
services, as well as continuous improvement
of the company’s relationship with suppliers.
This is why all procurement contracts and orders include a clause that ensures compliance and fulfillment of the TIM Code of Ethics and the principles of the Global Compact,
such as respect for human and labor rights,
the principles of environmental protection
and the fight against corruption.
Since the implementation of the policy, the
company performs an evaluation of the
main suppliers in issues related to sustainability. In 2013, TIM maintained a business
partnership with 60 classified as significant,
and out of this total, 100% were submitted to
evaluations related to sustainable development. The answers to these evaluations are
not considered in the supplier qualification
and selection processes, functioning only to
strengthen mutual commitments regarding
the Relationship Policy and identify opportunities of joint progress.
59
Total expenses by type of
supplier (R$)
Share of total
procurement (%)
2013
2012
2013
2012
From local
suppliers
8,350,085
7,142,602
97.1%
96.9%
From other
suppliers
264,382
227,201
2.9%
3.1%
The company doesn’t have specific procedures for identifying operations or processes
in its production chain that present a risk of
forced labor, labor similar to slave labor and/
or child labor. However, when they become
a TIM supplier, registered companies sign
a statement confirming awareness that the
company guides its activities and business
according to the Code of Ethics and Conduct, under the principles of the Global Compact, clarifying its commitment to fight and
eradicate any form of exploitation of labor.
TIM provides the Code of Ethics and Conduct in the Internet, while promoting the principles of the Global Compact internally and
externally, but does not provide formal human rights training to its collaborators and
security professionals. In 2013, there was
no record of cases of discrimination or any
human rights violation within company limits. [EC6, HR2, HR3, HR4, HR6, HR7 e HR8]
TIM product and service suppliers need
to guide their activities according to the
Company’s Code of Ethics and Conduct,
available on the Internet
60
CORPORATE SOCIAL INVESTMENT
Tim Institute:
focus on science technology and innovation
Created in July 2013, the TIM Institute reinforced the company’s Corporate Social Investment strategy.
MISSION
Create and drive resources and strategies for the democratization of science,
technology and innovation, promoting
human development in Brazil and leveraging mobile technology among its
main enablers.
Headed by executive Manoel Horacio, the Institute invests in the creation and democratization of teaching resources and strategies
promoting the productive technological inclusion of youngsters. Its operations are defined
based on four pillars:
• Teaching, focused on education and science. The TIM Institute believes that each
child and youngster has the right to an education in science and mathematics. This
is why it invests in teacher training, supporting science and technology centers,
creating and democratizing strategies that
contribute to this teaching.
• Applications, with the goal of developing
new technology solutions. The TIM Institute believes that technological innovations are meant to serve human development. This is why it invests to find
technological solutions that contribute to
the improvement of work of institutions
striving towards this goal.
• Inclusion, with the dissemination of
information and communication technologies. The TIM Institute believes that people have the right to learn about new information and communication technologies.
This is why it invests in the creation and
democratization of strategies and resources for disseminating this knowledge.
• Labor, creating new ways to work through
technological expertise. The TIM Institute
believes that technological innovations
are the foundation for a new way of working. This is why it invests in the creation
and democratization of resources and
strategies that promote productive technological inclusion of youngsters.
RESPONSIBLE WORK
The TIM Institute invests in innovative projects, promotes the training of teachers in the
public school network, supports museums
and science and technology centers, and
creates and democratizes strategies and didactic resources, contributing to the teaching
of sciences and mathematics for youngsters.
The Institute’s investments in 2013 added up
to over R$19 million, reaching 288 cities and
approximately 100 thousand people.
61
HIGHLIGHT FOR OUR MAIN PROJECTS:
and Employment), one of the priorities of the
federal government. The courses are free
and include: Introduction to the Use of Databases and SQL; Introduction to HTML5 and
CSS3; Introduction to PHP Programming
Language; Editing and Treating Images; Information Architecture and System Design;
Preparation and Interpretation of Texts; Introduction to Programming Logic; Game design; and Digital Publication in Mobile Devices.
THE MATH CIRCLE IN BRAZIL
The project develops mathematical competencies in children in the first years of primary school. Created by Bob and Ellen Kaplan,
Harvard teachers, it disseminates a new approach for teaching the discipline. In Brazil, 7 thousand children from public schools
are participating in the project. More than 7
thousand classes were performed in schools
of Belém, Brasília, Fortaleza, Aracaju, Salvador, São Paulo and Porto Alegre in the
year of 2013.
The investments of the TIM
Institute in 2013 added up to
over R$19 million. Its projects
reached 288 cities and helped
approximately 100 thousand
people, with a focus on
teaching, applications, inclusion
and work
TIM MAKES SCIENCE
Teachers across the country can enroll to
participate in this initiative, which distributes
didactic material and ludic and interactive
tools (online) related to teaching of scientific thinking at public schools. The materials
will be focused on students of the 4th and
5th years of Primary School and will also be
available for download at the TIM makes
Science page (www.timfazciencia.com). In
2013, 2 thousand teachers from more than
200 cities enrolled in the project.
TIM TEC
More than 10 courses for technical school
students are in production phase in the TIM
Tec remote learning platform. The initiative
is aligned to the goals of Pronatec (National Program of Access to Technical Teaching
In 2013, a partnership was established
with the Federal Institute of Education, Science and Technology for Rio Grande do Sul
and the Center for Cultural Education of Tiradentes City (equipment from city of São
Paulo for execution of pilot course); the
HTML5:Introduction to Front End pilot course
production was completed; And 12 classes
were published from the pilot course with
126 videos on the project website, among
other actions. All launched courses are available at the project website (www.timtec.
com.br).
PARTICIPATIVE URBAN CONSERVATION (ZUP)
In partnership with the cities of São Paulo
and São Bernardo do Campo, TIM Institute
conceived this project to create more efficient channels for participation of the population through mobile technologies, while
expanding management and planning capacity for urban conservation actions (trimming trees, lighting, sweeping, garbage,
among others).
CULTURAL MAPS
In partnership with the City Department of
Culture of São Paulo, the TIM Institute is financing the production of a digital platform
to map cultural initiatives and manage and
generate culture indicators. The platform is
aligned to the goals of the National Culture
Plan and the National System of Cultural Information and Indicators of the Ministry of
Culture (SNIIC). In addition to preparation of
the platform, the project includes pilot mapping of the cultural activities of the neighborhood of Campo Limpo, on the outskirts of the
city of São Paulo.
In this project, 18 training meetings were
conducted throughout 2013, helping 20
youngsters with scholarships. The test environment for the platform has already been
published and is being used by cultural managers in the city.
AGENTS OF TRANSFORMATION
Equipped with tablets, 100 youngsters with
scholarships from 10 pacified communities
in Rio de Janeiro went out on the streets
to research and find out the reality of other youngsters. The training of these youngsters and the technology needed to collect
six thousand questionnaires were financed
by the TIM Institute and conducted in partnership with the Pereira Passos Institute
(IPP), an organization that is part of the Rio
city administration. According to IPP, initiatives that enable learning about the dynamics of the pacification process are essential
for formulating public policies and private initiatives in the communities. The project was
successfully concluded in 2013.
Betting on mobile technology
as a transformation force,
the TIM Institute supports
museums and cultural
institutions, non-governmental
organizations and initiatives
to disseminate scientific
knowledge
SCIENCE WITHOUT BORDERS
The Institute supports the federal government program, Science Without Borders,
which has the goal of expanding Brazilian
knowledge, innovation and competitiveness
in the area of science and technology, with
a focus on graduation and post-graduation
students.
Pastoral da Criança
Approximately 120 thousand volunteers of
the program collect and send information
62
about the health of children and pregnant
women. With the partnership of the TIM Institute, part of this information can already be
accessed through digital means (SMS, web),
freely, reducing from three months to a day
the average time for sending data. In 2013,
2,577 volunteers were trained and more than
5 thousand kits were delivered.
Support FOR MUSEUMS AND CENTERS OF SCIENCE AND TECHNOLOGY
In order to complement efforts of the Department of Social Inclusion of the Ministry of Science and Technology in promoting actions to popularize science, the TIM
Institute has created a financing line for museums and centers of science and technology. During 2013, the following organizations
received resources: Museum of Astronomy
and Related Sciences (RJ), Museum of Natural Sciences of Paraná and Pará Museum
Emilio Goeldi (PA); MST and Museum of
Natural Sciences signed donation and partnership terms; TIM UFMG Space of Knowledge and Science Space (PE).
In 2013, planning for the action Museum at
the Community started at five cities of Pará
Acará, São Miguel do Guamá, Curuçá, Bujaru and Igarapé-Açu) by the Emílio Goeldi Museum; over one Thousand people participated in the Science Goes to School
Program in teaching institutions of cities of
Paraná by the Museum of Natural Sciences;
and the Stimulated Visit to the Museum action featured over 8 thousand participants,
organized by the Museum of Astronomy and
Related Sciences; among other successfully
completed actions.
Para saber mais sobre a atuação do
Instituto TIM e seus projetos, acesse
www.institutotim.org.br.
SUPPORT FOR NGOS AND SOCIAL
INCLUSION INITIATIVES
•
•
•
•
•
Ayrton Senna Institute
Ronald McDonald Institute
Abrinq Foundation
Casa de Passagem
TIM Institute Drums Band
63
VOLUNTEER WORK
In order to encourage and support volunteer work among its employees, TIM develops the “Citizen Without Borders” program
since 2009, through which professionals can
dedicate one day of work per year exclusively to this activity. In 2013, 475 collaborators
participated in solidarity initiatives, encouraged by the program. The quantity of participants in the program was 32.6% superior higher than the number registered in the
previous year.
AMOUNT ALLOCATED TO CULTURAL AND SPORTS
SPONSORSHIPS (in thousands of R$)
37,106.54
By recognizing and managing the main impact of its activities in communities, TIM
voluntarily transfers private resources in a
planned, monitored and systematic manner
to public interest social, environmental and
cultural projects. In 2013, the company supported several initiatives. Below are some
highlights. [SO1]
FISCAL INCENTIVE USED
(in thousands of R$)
35,487.30
28,919.39
13,529.15
12,259.50
11,635.41
3,239.88
1,269.65
2013
2012
Culture
2013
2012
1,691.05
2012
Sports
2013
total
2013
2012
Other Fiscal
Incentives
329.27
2012
Internal
resources*
* investment without fiscal incentive
AMOUNT ALLOCATED TO SOCIAL ACTION PROJECTS,
BY INVESTMENT AREA (R$ MIL)
2013
2012
Education
13,222.93
1,093.32
Culture
995.19
511.02
Health and sanitation
94.38
87.45
Sports
3,646.26
759.29
Food safety and fight against hunger
0.00
0.00
Others. Specify: Social Actions
5,833.53
1,355.22
Total
23,792.29
3,806.31
2013
64
OTHER SOCIAL, ENVIRONMENTAL AND CULTURAL SUPPORT
Social and environmental
“TIM ArtEducAção”
Coordinated and created by the NGO Humanizarte, the program featured, in 2013, the
participation of over 4,360 youngsters in 12 cities of Minas Gerais. The initiative establishes
partnerships with the city administrations of the participating cities and seeks to drive
development of self-esteem and social inclusion of youngsters through workshops for music,
theater, dance, storytelling, capoeira and other forms of artistic expression.
FAS (Sustainable Amazon
Foundation)
TIM supports the Sustainable Amazon Foundation (FAZ) through the Forest Grant Program, an
initiative that rewards 37 families for maintaining environmental services of the Amazon State
Conservation Units.
Paraisópolis Ballet
Initiative offering free classic ballet lessons to children, ages 9 to 12, in the community of
Paraisópolis in São Paulo. The project’s goal is to show that dance, as well as discipline and
responsibility, are essential.
Abrinq Foundation
The Youngster Friend of Children Award is aimed at youngsters who have innovative ideas in
projects that prioritize the rights of children and teenagers. The ten best initiatives related to the
social cause receive a budget to help execute the idea.
Cultural
Multiculturas
Included support for projects in various cultural segments, such as: Sons das Praças, Verão
Cultural Salinas, Música na Praça, Verão Itinerante and Pará Cultura Mix. The event lasted for 12
days, with many attractions in the Verão de Salinas and also the Carreta Loja Itinerante, Carreta
Lan House and Palco Show.
Fundição Progresso
Festival celebrating the anniversary of the Fundição Progresso culture center. Major events
with musical shows gathering renowned artists and new talents, as well as debates open to the
community with a focus on discussing the culture market.
Citizen Musician
The program’s goal is to promote social inclusion through art, supporting children and teenagers
in vulnerable communities of Amaralina (BA).
Carnafavela
TIM participated in the sixth edition of Carnafavela, in Belo Horizonte, the biggest carnival of
slums in Minas Gerais. Many cultural events were held for all kinds of audiences.
NEOJIBA Group
This is one of the priority programs for the Bahia state administration, aimed at promoting social
integration through collective practice of music. This is the first governmental program to train
orchestras of children/youngsters.
Semana Farroupilha and
Traditionalist Movement of Rio
Grande do Sul
Event to remember the cultural history of Rio Grande do Sul. TIM’s activity was based on
Piquete TIM, including many activities during the 15 days, like the chimarrão circle, mouth
organ player, workshops and traditional dance.
TIM on the Road
Festival with shows featuring the main artists of country music in the following cities: Balneário
Camboriú, Campo Grande, Goiânia, Jaguariúna, Porto Alegre, São Paulo, Ribeirão Preto and São
José dos Campos.
ArtRio
With the goal of supporting universal access to art, the initiative aims to bring art to
the daily lives of people, in different formats and possibilities, including urban
interventions, creation of art itineraries in the public spaces of the city of Rio de Janeiro,
and guided visits to museums and collections. The height of the movement is the
international fair of modern and contemporary art.
Folklore Festival of Parintins
The Folklore Festival of Parintins is an annual event held in June. Marked by impressive
allegories represented by floats prepared by artists of Parintins, the dispute is based on local
legends, which year after year appear in popular imagination, representing the history of
Amazonian people through a great party.
65
ABOUT THE REPORT
PROFILE
Company reports the highlights, goals and
challenges of 2013 for the sixth consecutive
year based on GRI
For the sixth year in a row, TIM publishes its
sustainability report according to the directives of the Global Reporting Initiative (GRI).
In this manner, TIM reinforces its commitment towards ethical and transparent business management, reporting the highlights,
objectives and challenges of the period between January and December 2013.
The content of this report covers the activities of TIM Participações S.A. in Brazil, including its two subsidiaries, TIM Celular S.A.
and Intelig Telecomunicações Ltda. In order
to contact the company and obtain more explanations about the contents of this publication, send an email to sustentabilidade@
timbrasil.com.br.
APPLICATION LEVEL
This report reaches application level B+ of
GRI, self-declared. This application level determines the report of all profile items, information about management method and at
least 20 performance indicators, including at
least one indicator from the following areas:
economic, environmental, human rights, labor practices, society and product responsibility. 64 indicators are reported in this report.
The publication of a sustainability
report according to the directives
of the Global Reporting Initiative
(GRI) reinforces TIM’s positioning in
search of ethical and transparent
management of its business
66
MATERIALITY
In this 2013 Sustainability Report, TIM initiated the transition towards a new version of
GRI directives, G4, which includes the materiality principle as a key element in selecting and organizing content for the method of
reporting indicators. For this purpose, a new
materiality test was conducted in the beginning of 2014, in order to identify new topics
and reevaluate those already considered as
priorities for the company in the social, environmental and economic areas, according to
business impact for related audiences.
The preparation of the materiality matrix is
performed by converging the views between
factors that represent the perception of the
company itself – regarding the impact of its
products, services and operations (internal
axis) – and of society (external axis).
As internal perspectives, TIM’s 2014 materiality matrix considered: queries through
personal attendance dynamic and online
surveys among collaborators; face to face interviews with high management executives;
and analysis of strategic internal documents
(policies and directives). Regarding external
perspectives: analysis of industry studies,
online queries with customers, business partners and suppliers, and interview with government representative (Ministry of Communications).
The definition of the most relevant topics
for the company and its stakeholders must
be the main guiding principle of sustainability management. In this manner, materiality
enables the organization to manage its critical activity points through identification and
tracking of goals, while establishing action
plans for the main impact. In addition, the
process enables communicating the company’s commitment in the management of the
topics considered as having the highest impact.
1
At the end of the process, nine material topics were identified, related to the main social
and cultural, environmental, economic and
governance impacts of TIM.
1
Consumer satisfaction and quality of services and customer response
2
Stimulus for innovation applied to products
and services
3
Transparency and accountability regarding
stakeholders
4
Ethics in business
5
Digital inclusion
6
Dialogue with relationship audiences
7
Management of electronic waste
8
Investment in infrastructure and development of new technologies
9
Communication between the company and
its relationship audiences
2
5 4
1.5
3
7
8
External Axis
6
9
Internal Axis
1.5
Even though this new materiality process
has been conducted during this reporting
cycle, the result will guide the content of the
next TIM Sustainability Report for 2014, already in G4 version. The management of
material topics, however, will be initiated
from this point forward through discussions
conducted among the company’s stakeholders and establishment of action plans and
goals for each, which will be disclosed in the
next edition of the report.
67
GRI CONTENT INDEX
PROFILE
1. Strategy and Analysis
Indicator
Description
1.1
Mensagem do presidente
1.2
Descrição dos principais impactos, riscos e oportunidades
Page/response
Global Compact
4
-
3, 4, 5, 6 and 39
-
Page/response
Global Compact
2. Organizational profile
Indicator
Description
3 2.1
Organization Name
2.2
Main brands, products and/or services
2.3
Operational structure of organization
2.4
Location of organization headquarters
2.5
Countries in which the organization operates and where its
main operations are located
2.6
Type and legal nature of the property
2.7
Covered markets
2.8
Organization size
2.9
Main changes during the period covered by the report
2.10
Awards received in the period covered by the report
-
6
-
6, 8 and 9
-
6
-
6 and 8
-
6
-
6 -
3, 4, 6, 8, 9,10 and 11
-
6 and 8
-
12 -
3. Parameters for the report
Indicator
Description
Page/response
65 Global Compact
- 3.1
Period covered by the report for the presented information
3.2
Date of most recent previous report
3.3
Report issuing cycle
65 -
3.4
Data for contact in case of questions regarding the report or
its content
65 -
3.5
Process for defining the report’s content
66 -
3.6
Limit of the report
65 -
3.7
Statement about any specific limitations regarding scope or
report boundaries
3.8
Basis for preparation of the report
65 -
3.9
Techniques for data measurement and calculation bases
65 -
3.10
Reformulation of information provided in previous reports
July 2013
65
If they exist, they are
indicated on the tables
inserted in the text
-
-
-
3.11
Significant changes in scope, limit and measurement
methods applied in the report
3.12
Table identifying the location of information on the report
3.13
Current policy and practice regarding the search for external
verification for the report
68
No significant changes
to the scope, limit and
measurement methods
applied to the report
-
67
-
73
-
4. Governance, commitments and engagement
Indicator
Description
Page/response
Global Compact
4.1
Governance structure of the organization, including boards
of the top governance body
13
-
4.2
Presidency of the top governance body
13
-
4.3
Independent or non-executive members of the top
governance body
13
-
4.4
Mechanisms for shareholders and employees to make
recommendations
21, 22 and 23
-
4.5
Relationship between compensation and organization
performance
13 and 51
-
4.6
Processes to ensure avoidance of conflicts of interest
20
-
4.7
Qualifications of members of the top governance body
4.8
Mission statement and values, codes of conduct and
relevant internal principles and social policies
4.9
13 -
6 -
Responsibilities regarding the implementation of economic,
environmental and social policies
14 -
4.10
Processes for performance self-evaluation of the top
governance body
13
-
4.11
Explanation of if and how the organization applies the
precaution principle
5 and 47
-
4.12
Letters, principles or other initiatives developed externally
4.13
Participation in national/international bodies and/or
associations
4.14
List of stakeholder groups engaged by the organization
21, 22 and 23 4.15
Basis for identification and selection of stakeholders for
interaction
17 and 21 4.16
Approaches for interaction with stakeholders
4.17
Main topics and concerns raised by interaction with
stakeholders
15, 29 and 30 -
30 -
17 and 21
66 - -
69
PERFORMANCE INDICATORS
Economic performance indicators
Indicator
Description
Page/response
Global Compact
EC1
Essential
Direct economic value generated and distributed
35
-
EC2
Essential
Financial implications and other risks and opportunities
resulting from climate change
38
7 EC3
Essential
Coverage of obligations of the benefit pension plan
57
-
EC4
Essential
Significant financial aid received from the government
35
-
Market presence
EC5
Additional
Variation of proportion of lowest paid wage compared to
local minimum wage
55
EC6
Essential
Policies, practices and proportion of expenses with local
suppliers
59
-
EC7
Essential
Local employee contracting
53
6
1 and 6 Direct economic impact
EC8
Essential
Impact of investments in infrastructure offered for public
benefit
15 -
EC9
Additional
Description of significant indirect economic impact
15
-
Environmental performance indicators
Materials
EN1
Essential
Used materials by weight or volume
44 and 45
7 and 8 EN2
Essential
Percentage of used materials originating from recycling
44 and 45
8 and 9 Energy
EN3
Essential
Direct energy consumption discriminated by primary energy
source
46
8 and 9
EN4
Essential
Indirect energy consumption discriminated by primary
source
46
8 and 9 EN5
Additional
Energy saved through improvements in conservation and
efficiency
46
8 and 9 EN6
Additional
Initiatives to provide products and services with low energy
consumption
46 8 and 9 8 and 9 Water
EN8
Essential
Total extraction of water per source
46 EN9
Additional
Water sources significantly affected by water extraction
46 EN10
Additional
Percentage and total volume of recycled and reused water
46
8
8 and 9
Biodiversity
EN11
Essential
Location and size of owned area
47
8 EN12
Essential
Significant impacts on biodiversity from activities, products
and services
47
8 TIM PARTICIPAÇÕES: 2013 SUSTAINABILITY REPORT
70
Emissions, effluents and waste
EN16
Essential
Total direct and indirect emissions of greenhouse gases
38 and 40
EN17
Essential
Other relevant indirect emissions of greenhouse gases
38 and 40
EN18
Additional
Initiatives to reduce greenhouse gas emissions and achieved
reductions
EN19
Essential
Emissions of substances that destroy the ozone layer
EN21
Essential
Total water disposal, by quality and destination
46
EN22
Essential
Total weight of residues, by type and method of disposal
44 EN23
Essential
Number and total volume of significant spills
43
8
EN24
Additional
Weight of transported waste considered hazardous
43
8
44 to 47
7, 8 and 9
43
7, 8 e 9
48 7 and 8
37 7, 8 and 9
38 and 40 40
8 8 7, 8 and 9 8 8
8 and 9
Products and services
EN26
Essential
Initiatives to mitigate environmental impact
EN27
Essential
Percentage of products and their packaging recovered
compared to total sold products, by product category
Compliance
EN28
Essential
Amount of fines and total number of sanctions resulting from
violations of environmental laws
General
EN30
Additional
Total investments and expenses in environmental protection,
by type
Performance indicators referring to labor practices and decent work
Employment
LA1
Essential
Total number of employees, by type of employment, work
contract and region
52
LA2
Essential
Total number and turnover of jobs, by age range, gender and
region
51
LA3
Additional
Comparison between benefits for full time and part time
employees
57 6 6
- Relationship between workers and governance
LA4
Essential
Percentage of employees covered by collective bargaining
agreements
56 1, 2 and 3 Work safety and health
LA6
Additional
Percentage of employees represented in formal boards of
safety and health, consisting of managers and workers,
helping in monitoring and guidance about occupational
health and safety programs
LA7
Essential
Rate of injuries, occupational illnesses, lost days, absences
and deaths related to work, by region
58 and 59
LA8
Essential
Programs for education, training, advisement, prevention
and control of ongoing risks, in order to provide assistance
to employees, their families or members of the community
regarding serious illnesses
58 and 59
LA9
Additional
Topics related to safety and health covered by formal
agreements with unions
58 and 59
1, 2 and 3 1 58 and 59 1
1
71
Training and Education
50 and 51
6
LA10
Essential
Average training hours per year
LA11
Additional
Programs for managing competencies, continuous learning
and retirement
50 and 51 -
LA12
Additional
Percentage of employees receiving performance analysis
50 and 51
-
Diversity and equality of opportunities
LA13
Essential
Composition of top management and boards, plus
proportion by groups and genders
LA14
Essential
Proportion of base wage between men and women, by
functional category
54
55 1 and 6 1 and 6 Performance indicators regarding human rights
Investment practices and procurement processes
HR2
Essential
Contracted companies submitted to evaluations regarding
human rights
HR3
Additional
Policies for evaluation and treatment of human rights
performance
59 59
1, 2, 3, 4, 5 and 6
1, 2, 3, 4, 5 and 6
Non-discrimination
HR4
Essential
Total number of discrimination cases and measures taken
59 1 and 6 Child labor
HR6
Essential
Measures adopted to help abolish child labor
59
1 and 5 Forced or slave-type labor
HR7
Essential
Measures taken to contribute to the eradication of forced
labor
59 1 and 4
59 1 and 2
Security practices
HR8
Additional
Policies regarding human rights training for security
personnel
Performance indicators regarding society
Community
SO1
Essential
Programs and policies to evaluate and manage the impact of
operations in communities
47, 61, 62 63 and 64
1 Corruption
SO2
Essential
Units submitted to risk evaluation related to corruption
19 10 SO3
Essential
Percentage of employees trained in the anti-corruption
policies and procedures
19
10
SO4
Essential
Measures taken in response to corruption cases
20
10
Public policies
SO5
Essential
Positions regarding public policies and participation in the
preparation of public policies and lobbies
15 10
SO6
Additional
Policies regarding financial contributions to political parties,
politicians or institutions
15 10
72
Unfair competition
SO7
Additional
Number of lawsuits for unfair competition
18 -
52 -
Compliance
SO8
Essential
Description of significant fines and total number of noncurrency sanctions
Performance indicators regarding product responsibility
Product and service labeling
PR5
Additional
Practices related to customer satisfaction, including survey
results
24 and 25
-
Marketing communications
PR6
Essential
Programs for compliance with laws, rules and voluntary
codes
18 -
25 -
Compliance
PR8
Additional
Proven complaints regarding violation of customer privacy
73
ASSURANCE STATEMENT
LIMITED ASSURANCE REPORT FROM
INDEPENDENT AUDITORS REGARDING
SUSTAINABILITY INFORMATION CONTAINED
IN THE 2013 SUSTAINABILITY REPORT
TO THE ADMINISTRATORS AND SHAREHOLDERS
OF TIM PARTICIPAÇÕES S.A.
Rio de Janeiro – RJ
INTRODUCTION
We were hired by TIM Participações S.A.
to present our limited assurance report regarding the compilation of sustainability information contained in the 2013 Sustainability Report, also including information about
its subsidiaries TIM Celular S.A. and Intelig
Telecomunicações Ltda. (“TIM Group”) regarding the fiscal year that ended on December 31st of 2013.
MANAGEMENT RESPONSIBILITIES REGARDING
THE 2013 SUSTAINABILITY REPORT
TIM Group’s management is responsible for
the preparation and appropriate presentation
of the sustainability information contained in
the 2013 Sustainability Report, according to
the directives of the Global Reporting Initiative (GRI-G3.1) and the internal controls it
considered necessary to enable preparation
of this information free from significant distortion, regardless of whether caused by fraud
or error.
RESPONSIBILITY OF THE INDEPENDENT
AUDITORS
Our responsibility is to issue a conclusion
about the sustainability information contained
in the 2013 Sustainability Report, based on
the limited assurance work conducted according to Technical Communication CTO
01 - Issuing of Assurance Report Related
to Sustainability and Social Responsibility,
issued by the Federal Accounting Council
based on NBC TO 3000 - Assurance Engagement other than Audits or reviews, also
issued by the Federal Accounting Council
- CFC, which is equivalent to international
norm ISAE 3000 - Assurance engagements
other than audits or reviews of historical financial information, issued by IAASB – International Auditing and Assurance Standards
Board. These rules require compliance with
ethical demands, including independence requirements and that the work be executed
with the goal of achieving limited assurance
that the information included in the 2013
Sustainability Report, taken as a whole, are
free from relevant distortions.
A limited assurance work conducted according to NBC TO 3000 and ISAE 3000 consists
mainly of questions to the Company’s management and other Company professionals
involved in preparing the information included in the Sustainability Report, as well as the
application of analytical procedures to obtain
evidence that enables us to issue a conclusion in a limited assurance manner about the
information taken as a whole. A limited assurance work also requires the execution of
additional procedures, when the independent auditor becomes aware of issues that
lead him to believe that the information included in the Sustainability Report, taken as
a whole, may present relevant distortions.
The selected procedures are based on our
understanding of the aspects related to compilation and presentation of the information
included in the 2013 Sustainability Report
and other circumstances of the work, as well
as our consideration about areas in which
relevant distortions may exist. The procedures included:
(a) planning the work, considering the relevance, volume of quantitative and qualitative
information and the internal control and operating systems that functioned as the base
for preparation of the information included in
the 2013 Sustainability Report of TIM Group;
(b) understanding the methodology for
calculations and procedures for compilation of indicators through interviews with the
managers responsible for preparing the information;
(c) application of analytical procedures on
quantitative information and questions about
qualitative information and their correlation
with the indicators disclosed in the information included in the 2013 Sustainability Report;
(d) comparing the financial indicators with
the financial statements and/or accounting
records.
The limited assurance work also covered
compliance with the directives of the Global Reporting Initiative – GRI (GRI-G3.1) applicable to the preparation of information included in the 2013 Sustainability Report.
74
data informed for the previous fiscal years, or
data regarding future projections and goals.
Conclusion
Based on the conducted procedures, described in this report, we learned nothing
that led us to believe that the sustainability information included in the 2013 Sustainability Report of TIM Participações S/A and
subsidiaries (TIM Group), regarding the fiscal year ending on December 31 2013, were
not compiled, in all relevant aspects, according to the directives of the Global Reporting
Initiative – GRI (GRI-G3.1).
Rio de Janeiro, June 27 2014
We believe that the evidence obtained in our
work is sufficient and appropriate to justify
our limited conclusion.
PricewaterhouseCoopers
Auditores Independentes
CRC 2SP000160/O-5 “F” RJ
SCOPE AND LIMITATIONS
Sérgio Eduardo Zamora
Accountant CRC 1SP168728/O-4 “S” RJ
The procedures applied in a limited assurance work are substantially smaller in scope
than those that would be applied in a reasonable assurance work with the goal of issuing
an opinion about the information included in
the 2013 Sustainability Report. Consequently, they do not allow us to achieve certainty
that we have learned all issues that would
have been identified in a reasonable assurance work aimed at issuing an opinion. If we
had executed work with the goal of issuing
an opinion, we could have identified other issues and possible distortions that may exist
in the information included in the sustainability information contained in the 2013 Sustainability Report. In this manner, we do not express an opinion about this information.
The non-financial data are subject to more
inherent limitations than the financial data,
given the nature and diversity of methods
used to determine, calculate or estimate this
data. Qualitative interpretations of materiality, relevance and precision of data are subject to individual assumptions and judgment.
Additionally, we did not perform any work on
75
IBASE SOCIAL BALANCE SHEET 2013
December 2013
Accumulated (jan.-dec.)
December 2012
December 2011
1- Calculation Base
Amount (in thousands of R$)
Net Revenue (RL)
19,921,291
18,763,947
17,085,977
Operating Profit (RO)
2,438,873
2,323,270
2,067,442
Gross Payroll (FPB)
873,079
743,363
626,615
2 – Internal Social
Indicators
Amount (in
thousands
of R$)
% of FPB
% of RL
Amount (in
thousands
of R$)
% of FPB
% of RL
Amount (in
thousands
of R$)
% of FPB
Food
63,258
7.25%
0.32%
60,823
8.18%
0.32%
48,245
8%
0%
Compulsory social
charges
304,365
34.86%
1.53%
258,098
34.72%
1.38%
211,421
34%
1%
Private social
Security
7,921
0.91%
0.04%
11,664
1.57%
0.06%
-775
0%
0%
Health
53,883
6.17%
0.27%
47,603
6.40%
0.25%
39,475
6%
0%
Occupational safety
and health
3,840
0.44%
0.02%
2,866
0.39%
0.02%
2,746
0%
0%
Education
4,467
0.51%
0.02%
3,941
0.53%
0.02%
1,088
0%
0%
Culture
0
0.00%
0.00%
0
0.00%
0.00%
0
0%
0%
Professional training
and development
14,517
1.66%
0.07%
10,221
1.38%
0.05%
6,623
0%
0%
Daycare or
daycare supporte
3,852
0.44%
0.02%
2,922
0.39%
0.02%
2,738
1%
0%
Participation in
profits or results
91,904
10.53%
0.46%
67,918
9.14%
0.36%
66,718
0%
0%
Others
18,383
2.11%
0.09%
16,064
2.16%
0.09%
14,739
11%
0%
Total – Internal social
indicators
566,395
64.87%
2.84%
482,121
64.86%
2.57%
393,022
2%
2%
3 – External Social
Indicators
Amount (in
thousands
of R$)
% of FPB
% of RO
% of RL
Amount (in
thousands
of R$)
% of FPB
% of RO
% of RL
Amount (in
thousands
of R$)
% of FPB
Education
13,222
0.54%
0.07%
1,093
0.15%
0.05%
0.01%
Culture
29,914
1.23%
0.15%
12,771
1.72%
0.55%
Health and sanitation
94
0.00%
0.00%
87
0.01%
Sports
11,635
0.48%
0.06%
2029
Fight for food safety
and against hunger
0.00
0.00%
0.00%
Others
5,833
0.24%
Total contributions to
society
60,701
Taxes (excluding
social charges)
Total – External social
indicators
% of RO
% of RO
% of RO
% of RL
% of RO
% of RL
3,492
0%
0%
0.07%
12,201
1%
0%
0.00%
0.00%
102
0%
0%
0.27%
0.09%
0.01%
5,697
0%
0%
0
0.00%
0.00%
0.00%
0
0%
0%
0.03%
1355
0.18%
0.06%
0.01%
1,061
0%
0%
2.50%
0.31%
17,335
2.33%
0.75%
0.09%
22,555
1%
0%
0.00
0.00%
0.00%
7,929,831
1066.75%
341.32%
42.26%
7,255,760
351%
42%
60,701
2.50%
0.31%
7,947,166
1069.08%
342.07%
42.35%
7,278.315
352%
43%
4 – Environmental
indicators
Amount (in
thousands
of R$)
% of RO
% of RL
Amount (in
thousands
of R$)
Investments related
to the company’s
production/
operations
0.00
0.00%
0.00%
Investment in
external programs
and/or projects
46,599
1.91%
Total investments in the
environment
46,599
1.91%
% of FPB
76
% of RO
% of RL
Amount (in
thousands
of R$)
693
0%
0%
0.23%
342
0%
0.23%
1036
0%
% of FPB
% of FPB
% of RO
% of RL
241
0%
0%
0%
14
0%
0%
0%
255
0%
0%
Regarding the
establishment of
“annual goals”
to minimize
waste, overall
consumption in
production/operation
and increase
effectiveness in
the use of natural
resources, the
company
( ) does not have goals
(x) fulfills 51 to 75%
( ) fulfills 0 to 50%
( ) fulfills between 76 and 100%
(x) fulfills between 76 and 100%
(x) fulfills between 76 and 100%
5 – Collaborator
Indicators
2013
2012
2011
Number of
employees at end of
period
12,167
11,650
10,266
Number of hirings
during the period
4,886
5,787
4,522
Number of
outsourced
employees
16
9
18
Number of interns
306
289
278
Number of
employees above 45
years of age
772
668
569
Number of women
working at the
company
6,889
6,889
5,938
% of management
positions occupied
by women
42%
44%
43%
Number of blacks
working at the
company
3,849
3,916
3,239
% of management
positions occupied
by blacks
14%
14%
12%
Number of people
with disabilities or
special needs
33
35
36
6 – Information
regarding the
exercise of corporate
citizenship
2013
2012
2011
Relationship
between highest and
lowest pay at the
company
87
54
n.d.
Total number of work
accidents
27
39
n.d.
77
The social and
environmental
projects developed
by the company
were defined by:
( ) administrators
( x ) administrators and managers
( ) all employees
( ) administrators
( ) all employees
( ) administrators
( ) all employees
The standards
for safety and
health in the work
environment were
defined by:
( ) all employees
( ) all + Cipa
( ) all employees
( ) all + Cipa
( ) all employees
( ) all + Cipa
Regarding freedom
to unionize, the
right to collective
bargaining
and internal
representation of
the workers, the
company:
( ) does not get involved
( x ) follows WLO rules
( ) supports and follows WLO
Private social
security covers:
( ) administrators
( ) administrators and managers
( x ) all employees
( ) administrators
( x ) all employees
( ) administrators
( x ) all employees
Participation in the
profits or results
covers:
( ) administrators
( x ) all employees
( ) administrators
( x ) all employees
( ) administrators
( x ) all employees
When selecting
suppliers, the
same standards for
ethics and social
and environmental
responsibility
adopted by the
company:
( ) are not considered
( x ) are suggested
( ) are demanded
( x ) are suggested
( ) are demanded
( x ) are suggested
( ) are demanded
Regarding
participation of
employees in
volunteer work
programs, the
company:
( ) supports
( x ) organizes and encourages
( ) supports
( ) supports
Total number of
complaints and
criticism from
consumers:
at the company – 6,458,631
at Procon 5,540
at the courts 87,174
at the company - 4,514,802
at Procon -13,540
at the courts – 74,569
at the company n/d
at Procon – n/d
at the courts – n/d
% of complaints and
criticism received or
solved:
at the company – 98.18%
at Procon -87.17%
at the courts -63.49%
at the company – 90.3%
at Procon -100
at the courts - 64.75%
at the company n/d
at Procon – n/d
at the courts – n/d
Total added value
to be distributed (in
thousands of R$)
Distribution of added
value (DVA)
70.01% government
5.60% collaborators
2.92% shareholders
12.10% third parties
9.37% retained
68.92% government
5.15% collaborators
2.94% shareholders
9.45% retained
69.58% government
4.90% collaborators
2.87% shareholders
9.22% retained
7 – Other Information
Credits
Coordination
TIM Participações S.A – Department of Regulation and Institutional Affairs and Press Relations
GRI Consulting, Text and Editing
Report Sustentabilidade
Revision
Assertiva Produções Editoriais
GRAPHIC PROJECT AND LAYOUT
Report Sustentabilidade
Typeface
Teuton, František Štorm, 2002.
Helvetica, Miedinger e Eduard Hoffman, 1957.
Trade Gothic, Jackson Burke, 1948–1960.
78

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