TIM Participações S.A. (NYSE:TSU) Q3 2017 Earnings Conference Call - Preliminary Transcript

Nov 08, 2017 • 08:00 am ET


TIM Participações S.A. (NYSE:TSU) Q3 2017 Earnings Conference Call - Preliminary Transcript


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Good morning, ladies and gentlemen. Welcome to TIM Participacoes 2017 Third Quarter Results Conference Call. We would like to inform you that this event is being recorded and all participants will be in listen-only mode during the company's presentation. There will be a replay for this call on the company's website. After TIM Participacoes remarks are completed, there will be a question-and-answer session for participants. At that time, further instructions will be given. We highlight that statements that may be made regarding the prospect, projections and goals of TIM Participacoes constitute beliefs and assumptions of the company's board of executive officers, future considerations and our performance warranty, they involve risks, uncertainties and assumptions as they refer to events that may or may not occur. Investors should understand that internal and external factors to TIM Participacoes may affect the performance and lead to different results than those planned.

Now I'll turn the conference over to the CEO, Mr. Stefano De Angelis, so that he can present the main message for the third quarter of 2017. Please, Mr. Stefano, you may proceed.

Stefano De Angelis

Good morning, everyone, and thank you all, once again, for attending our earnings release conference call. This quarter results confirm we are stepping out from a recovery path and entering the real growth phase. The work that has been done during the turnaround is evolving towards a consistent and sustainable growth. In this context, I would like to highlight our company's capacity to deliver solid numbers in all its main business fronts. Accelerating mobile net service revenues growth by 5.8% year-over-year, while ultra-broadband net revenues showed 54% on the same period.

The main driver for such important results was the company's ability to capture high-end customers in both ultra-broadband and mobile postpaid, more than doubling its net addition in both services in the third quarter, when compared to the same period of last year. Such combination boosted our net service revenues by 5.9% year-over-year, gaining even more traction when compared to the 5% growth of the previous quarter.

Following the revenues performance, we also experienced a strong expansion in EBITDA of BRL1.5 billion reaching its highest level for the third quarter. At the same time, the EBITDA margin of 37.4% was the highest among the major telecom players in the country. If today we are able to deliver a remarkable evolution in financial terms, this is largely a result of the company's ability to reposition itself in terms of network infrastructure. The 4G leadership provides us the best and largest coverage in the country, helping repair the perception of high value customers in places TIM back in competition in this segment. Such movement becomes clear on the next slide, where we can see the transformation of our customer base.

Postpaid customers and prepaid, with recurring offers, already reached 50% of the total base, representing more than 70% of the client generated revenue. Such a profile is a consequence of a 39% increase in postpaid additions plus migration year-over-year and also 39