TIM Q1 2025 Earnings Report

TIM EPS Results

• Actual EPS: $0.28
• Consensus EPS: $0.25
• Beat/Miss: Beat by +$0.03
• One Year Ago EPS: N/A

TIM Revenue Results

• Actual Revenue: $1.09 billion
• Expected Revenue: $6.38 billion
• Beat/Miss: Missed by -$5.29 billion
• YoY Revenue Growth: N/A

TIM Announcement Details

• Quarter: Q1 2025
• Date: 5/5/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, May 6, 2025
• Conference Call Time: 9:00AM ET

TIM (NYSE:TIMB), a telecommunications company, provides mobile voice, data, and broadband services in Brazil. The company offers in mobile, landline, long-distance, and data transmission services. It also offers fixed ultra-broadband, fixed ultraband broadband, and digital content services. The company serves individuals and corporates, as well as small, medium, and large companies. TIM S.A is based in Rio de Janeiro, Brazil. The company operates as a subsidiary of TIM Brasil Serviços e Participações S.A.

TIM Q1 2025 Earnings Call Transcript

Key Takeaways

• Solid Q1 performance: Mobile revenues rose 6.2% YoY driven by postpaid growth, EBITDA grew 6.7% with an 80 bp margin expansion above 48%, operational cash flow hit BRL 1 billion, and net income jumped over 50% to a first-quarter record.
• Network leadership in São Paulo: A 360-degree project modernized over 3 000 sites, boosting coverage and capacity by 40% while cutting energy use by 15%, complemented by a new flagship store and a high-profile music event to strengthen brand perception.
• B2B and digital ecosystem expansion: Strategic launches in IoT for agribusiness, logistics and utilities, plus pilots with Electrobras and Topen in the energy sector, underscore TIM’s push into new revenue streams beyond traditional mobile services.
• Efficiency program: OpEx growth remained below inflation thanks to digitalization and organizational levers, while targeted lease negotiations and tower decommissions aim to contain lease cost inflation and optimize working capital.
• Strategic outlook and sustainability: Management reaffirmed full-year guidance, prioritizing postpaid value, prepaid recovery, B2B diversification and conservative fibre growth, and highlighted TIM’s position as the only Brazilian operator on the CDP A-list for sustainability.

Presentation

[Operator]

Good morning, ladies and gentlemen. Welcome to Chinasay twenty twenty five First Quarter Results Video 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 GINA's remarks are completed, there will be a Q and A session for participants.

[Operator]

At that time, further instructions will be given.

Hello, I am Vicente Ferreira, Head of Investor Relations. Welcome to TinSA's earnings conference for the first quarter of twenty twenty five. This video highlights our recent performance and how we see the market evolving in 2025. Afterward, we will have a live Q and A with our CEO, Alberto Griselli and our CFO, Andrea Villegas. Please note that management may make forward looking statements and this presentation may contain them.

Refer to the disclaimer on the screen and on our Investor Relations website. Now let's review our results.

Hello, everyone. I'm Alberto Griselli, CEO of TIM Brasil. Despite a volatile external environment in the first quarter, we have seen a solid start to the year. We successfully implemented our strategy and delivered consistent numbers. Our mobile revenues increased by 6.2% year over year, driven by strong postpaid growth.

Our EBITDA grew by 6.7% yearly, with margin expansion reflecting our efficient operational execution. We also saw a double digit expansion in operational cash flow reaching BRL1 billion. In the quarter, we announced BRL690 million as interest on capital. Our strategic initiatives are paying off Following the launch of a fully updated version of a Mailteam app, we saw significant growth in users. We are boosting our presence in Sao Paulo with a 360 degrees approach to customer experience, modernizing the network and revamping our go to market strategy in the region.

The first quarter was also marked by notable development in the new business initiatives, with the launch of a new partnership special focus on the B2B utilities vertical. Service revenue started the year at a solid pace, growing 5.6% year on year. As mentioned before, the postpaid segment drove the revenues dynamics with close to 14% yearly growth. The 6.2% growth in mobile revenues results from robust human postpaid based growth, almost 7% year on year, and sound ARPU performance in postpaid postpaid and blended. The increase in mobile ARPU indicates effective customer monetization strategies, which emphasizes TIM's successful upselling efforts.

Now, 50% of our base is composed by postpaid lines, with revenues representing almost 70%. While we celebrate our postpaid performance, we continue to work on recovering the prepaid. Our three step plan is designed for the medium term, so resilience and consistency are keys for the plan to bear fruits. Sao Paulo is the focus of a special project and aims to apply a 360 approach to translate our network leadership into customer experience and perception change. We are modernizing over 3,000 sites, which will significantly improve network capacity.

In this network swap, so far, we have seen a 40% increase in coverage and capacity, while energy consumption is falling 15%. This infrastructure evolution will expand further our network quality leadership. Attested by OpenSignal Network Consultancy, we already had the best quality in the state and were awarded the best experience during carnival. Now we will have absolute leadership in all neighborhoods of Sao Paulo City. We are adjusting our go to market in the region to help bridge this our evidence to perception.

We just launched a flagship store on Oscar Frade Street, an area famous for its sophistication and luxury spots. It is the Brazilian version of Rodeo Drive. This marks a significant milestone for us, showcasing to customer a different positioning where quality and value are prime. Adding to this boost in presence in Sao Paulo, we had the first edition of team music event in the city. The results were Tickets were distributed out in minutes.

We achieved massive engagement levels on social media and it was a PR success. The concert was all over the media. The successful successful team music event and the new iconic store reflect efforts to boost brand perception and customer engagement. Sao Paulo is the country's richest state, so it's natural to be the focus of our attention, but we will apply similar tactics in other regions of the country. We are commencing a new stage of our three b strategy.

Changing gears to new revenue streams. Our b to b IoT strategy is performing well. We have seen substantial growth in contracted revenues, particularly in agribusiness, logistics, and utilities. Specifically, in the last vertical, we are ramping up our presence. We are expanding the services we sell on our own and with partners, showcasing Teams commitment to provide integrated solutions that enhance operational efficiency for clients in various sectors.

In addition to our well known solution for public smart lighting, we are now pricing in water management, gas distribution telemetry, and energy distribution metering. We are committed to further developing the b to b opportunity, expanding our addressable market and opening new avenues of growth. Our digital ecosystem continued to expand with significant growth in customer registrations and transaction volumes. Now we are launching new initiatives in the energy sector, partnering to create value in both b to b and b to c market by exploring different energy distribution methods. We are set to initiate a pilot project in collaboration with Electrobras.

In this project team, it will act as a channel for Electrobras, selling its energy to corporate clients. With Topen, we have just initiated a pilot project within the distributed generation model under revenue share agreement. This initiative allow our B2C clients to participate in solar power plant cooperative, enabling them to reduce their energy expenses. Our proactive approach to diversifying offerings and enhancing customer value through innovative solutions confirms our intention to take STEAM value proposition to the next level. Now, let's move on to the financial details with our CFO, Andrea.

Hello everyone, I'm Andrea Viegue, CFO of Tiene. I am pleased to share that we ended the first quarter with solid figures, reinforcing our progress in cash generation growth and shareholders' value creation. This quarter, I want to highlight our efficiency program, which will help us deal with the impact of inflation, both this year and in the coming years. The program we have been implementing since last year aims to improve productivity and customer experience while ensuring margin expansion. The focus on technology and organizational levers reflects a commitment to innovation and operational excellence.

Our OpEx running below inflation reflects an effective cost management strategy, key to staying competitive and reinvesting in activities that can more directly impact clients' perceptions. This approach supports team consistent EBITDA growth and margin expansion. Our EBITDA grew by 6.7% year over year, adding 80 basis points to our margin, which surpassed 48%. EBITDA after lease also presents a solid increase with margin improvement. Lease payments were stable compared to last quarter, but grew high single digits year over year.

We have specific initiatives to control leases, so we will focus on these in the coming quarters. Our net income grew more than 50% year over year, marking the eighth consecutive quarter of double digit expansion and reaching the highest net income level for our first quarter in TIM's history. To finalize our review of the financial results, it is worth highlighting our operational cash flow performance, another double digit increase of almost 20%, with our cash flow margin reaching almost 16%. Despite seasonal effects, working capital improved significantly in the quarter. We also maintained a robust balance sheet with strong liquidity and manageable debt levels.

Again, all these numbers reflect capacity to turn revenues into cash and demonstrate our strong financial health. Now back to Albert.

As we conclude, I want to summarize TEAM's strategic focus areas for the quarter ahead. First, our commitment to competitive rationality in the market is evident. We want to intelligently enhance mobile value proposition. We are applying that to the prepaid recovery plan and expect progress in the coming months. Second, the emphasis on expanding the b to b IoT portfolio and growing our partnerships under the digital ecosystem reflects a proactive approach to innovation.

Adding these new revenues opportunities will help us deliver sustainable growth. Third, the focus on operational efficiency translate into a more conservative view of TIM Ultrafibre evolution in a challenging broadband market. Fourth, this efficiency mindset permeates all the areas of the company. And as Andrea mentioned, we have a program in place that covers OpEx. For this one, we presented the levers we have today.

Working capital. In this case, we are finalizing a set of actions to help our performance throughout the year. And leases. As you know, since the days of decommission of Voyage towers, this is an area where we need to transform the sector. We need to change the relationship we have with the tower company.

Before we conclude, I'd like to highlight that we have been listed on the CDP A list for the second year in a row. Today, we are the only operator in Brazil with this status. This is a clear demonstration of our commitment to sustainability. In conclusion, we have started 2025 with solid momentum, paving the way to meet our annual guidance. Our strong cash flow evolution and commitment to operational excellence position us well for the challenges ahead.

Thank you for your attention. Now let's move to the live Q and A session.

[Operator]

Before we start the Q and A session, I will hand the floor to Mr. Roberto. Please, Mr. Roberto, you may proceed.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

Thank you. Good morning, everybody. Before we start our Q and A, just a quick remark. This morning, we were confirmed as the most sustainable company in Brazil. We ranked first among all companies in the Corporate Sustainability Index of the Brazilian Stock Exchange.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

These results reinforces our leading role in ESG among Brazilian publicly traded companies. And it's worth remembering that we have been in the selected group of companies for seventeen consecutive years, the longest streak for Atelco. Now we can proceed with the Q and A. Please, operator?

[Operator]

Thank you. We are now going to start the Q and A session for investors and analysts. Our first question comes from Bernardo Gutmann from XP. Please, Mr. Bernardo, your microphone is open.

[Bernardo Guttmann, Equity Research Analyst at XP Inc.]

Hi. Good morning, everyone. Thanks for taking my question. Actually, I have two here. The first one is related to mobile growth.

[Bernardo Guttmann, Equity Research Analyst at XP Inc.]

The postpaid segment remains quite resilient, but the prepaid continues to perform below expectation. Could you elaborate on the adjustment made and the levers for improvement in the prepaid segment? And my second question concerns costs in the current inflationary environment. What are the main efficiency levers for improving margins throughout the year? Thank you.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

Well, thank you, Bernardo. So I will take the first one and pass to the second one to Andrea for the cost one. So on the revenue growth, so we are seeing in this quarter the a similar set of dynamics like the last quarter. Postpaid is the main driver of growth, primarily sustained by price adjustment and pre to control migration and control to postpaid migration. That was pretty strong in this first quarter, whereby prepaid is suffering.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

Just remember, Fernando, prepaid is suffering in general. So the market for recharges is decreasing as all operators are migrating prepaid customer to control, and there is some constraint on the demand side. So we put in place a plan on our side that is made up of a combination of the three levers that we discussed in the previous quarter. The offer itself that received a boost in this first quarter. The communication that we are trying to make it a bit more consistent in time to in order for the value proposition to came across to our customer and some tactical actions on the channels.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

The objective of these are twofold. From one side, increase the loyalty of our customers to us. As you know, the churn rate in Brazil, they are still high. And the second one is to get a larger share of the churn market to us. We have in our plan a negative growth for prepaid throughout the years.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

And what we are working on is to slow down the decrease over time. So Andrea, maybe the

[Andrea Palma Marques, Chief Financial Officer at TIM]

Hi, Bernardo. Related to the cost and the margin, we are, as you know, always working very closely to reduction in cost and in our efficiency program. We have several initiatives, the digitalization, make or buy. And also a very cost control approach in several initiatives inside the company. But considering the inflation, our biggest concern this year is related to the lease, because lease have a direct impact from inflation.

[Andrea Palma Marques, Chief Financial Officer at TIM]

And we are working several initiatives related to leads for mitigates these impacts. I have negotiations with the towers, another another programs that we are putting projects. And we are very focused in in in mitigate this specific line that is our biggest concern related to inflation.

[Bernardo Guttmann, Equity Research Analyst at XP Inc.]

Very clear, Andreea and Alberto. Thank you very much.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

Bernard.

[Operator]

Our next question comes from Marcelo Santos from JPMorgan. Please, Mr. Marcelo, your microphone is open.

[Marcelo Santos, Equity Analyst at JP Morgan]

Hi, good morning, Alberto, Andrea, Vicente, Luisa. Thank you for taking my questions. I have I'll focus my questions on the growth on the mobile service revenue growth. You already talked about prepaid, but I want to turn the attention a bit to postpaid. It was very strong, but I understand it was impacted by a different seasonality in the price increases.

[Marcelo Santos, Equity Analyst at JP Morgan]

So I wonder if you could help us a bit understand like how much did bringing the price increase from April, May to March help the growth of prepaid of postpaid in this first quarter? And if you could give more details, like, when during March was this increase applied? How much of the base was affected? I don't know anything you could give there. What was the average increase?

[Marcelo Santos, Equity Analyst at JP Morgan]

Just for us to understand how much of this increase could be propagated going forward? Thank you very much.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

Okay, Marcelo. So when you look at the revenue growth for postpaid, it's made up of three main drivers at the end of the day. So we are talking about the the price adjustment. And at this point in time, we are talking about back book price adjustment. We are talking about prepaid to control migration, and we are talking about control to postpaid migration.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

So when you look at the combination of these three factors, they all impact what we are looking at in terms of the results of this quarter. They came up pretty strong. And the three elements are in place. So our postpaid customer base is growing healthy. This is the first note.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

We have a pretty strong intra postpaid migration. It's a double digit growth. And then we've got a different seasonality, yes, in terms of price adjustment that, as we mentioned in many one to one meetings, occurred in between the first quarter and the second quarter, with some anticipation of some cycles in the first quarter. So overall, all these effect, they sum up to the strong performance in the year. When you look at the drivers going forward, we intend to have, for mobile service revenue, the postpaid as our main growth engines in the coming quarters.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

And as it generally happens, you will see that growth tend to slow down on the subsequent quarters. And so this will be a typical trend that we are likely to see in the coming years. So when you look at the overall composition, we're going to have or we are working on sustaining a solid growth on postpaid, whereby while we are working to have a slower decrease on prepaid going forward.

[Marcelo Santos, Equity Analyst at JP Morgan]

Perfect. Just a clarification, was the full postpaid base and control affected by the price increases?

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

Not we generally don't impact and this is as in every year, we do the price adjustment on a subset of the postpaid customer base. We tend to keep some of the customers out depending on the level of propensity in churn or complaints. And we generally also have a few different moments in time when we do this adjustment. So there is a main one that occurred in between the first and the second quarter, but there are further adjustment down the line of minor intensity.

[Marcelo Santos, Equity Analyst at JP Morgan]

Perfect. Thank you very much.

[Operator]

Our next question comes from Victor Tomita from Goldman Sachs. Please, Mr. Tomita, your microphone is open.

[Vitor Tomita, Analyst at Goldman Sachs]

Two questions from our side. The first one is a bit of a follow-up on Marcelo's question. I imagine that the that this price up still had a smaller effect in March. So thinking specifically about a small effect in the quarter given that it was only implemented in March. So, we had some interesting ARPU improvement in this quarter.

[Vitor Tomita, Analyst at Goldman Sachs]

So do you believe there is room for the ARPU in postpaid to improve further in the next quarter and maybe be a bit more of a boost to revenues? And the second question, on the same note, how are you thinking about full year guidance for revenues at this point given the the good result in this quarter? Do you see rules for upward revision? Or do you believe it's more of a you are still thinking more about the guidance target as it is now, given that the as you mentioned, you expect some deceleration in that growth in the next few quarters? So

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

Victor, let me take the second first because it's easier to respond. We are committed to deliver our guidance we just communicated a couple of months ago. So that's our commitment is. So we're talking about roughly a 5% revenue increase over time. When it comes to ARPU, you need to remember that the ARPU has been growing in our ARPU has been growing over time, postpaid and compound.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

And you got a number of different drivers for this ARPU to grow. And so we need to see how this play out in the coming quarters because you have something that is clearly accretive, like a back book price adjustment or a front book price adjustment, whereby there is something that is more dilutive, like a prepaid to control migration. So generally speaking, it's one of our key metric. We are number one in terms of ARPU. We still have to implement some front book price adjustment in the coming months.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

So we've got some forces pushing forward, but we also have some force diluting the numbers, which is related to prepaid to control migration. So that's for the first question.

[Vitor Tomita, Analyst at Goldman Sachs]

Clear. Thank you very much.

[Operator]

Our next question comes from Gustavo Farias from UBS. Please, Mr. Farias, your microphone is open.

[Gustavo Farias, Analyst at UBS Group]

Hi, everyone. Good morning. Thank you for taking my questions. Two on my end as well. So the first one, if you could, comment a little bit more on, leasing payments.

[Gustavo Farias, Analyst at UBS Group]

I realized from last conference call that most of contracts are already tied to, IPCR. And, I would like to know if there is more room, to negotiation even considering this or any other levers, that you are, able to tackle, to control leasing payments going forward? And the second one related to working capital. We've seen a pretty strong performance from working capital, a contribution to cash generation. I would like to know what we can expect at sustainable level of working capital?

[Gustavo Farias, Analyst at UBS Group]

And any other levers you are able to use to optimize it going forward? Thank you.

[Andrea Palma Marques, Chief Financial Officer at TIM]

Hi, Gustavo. Related to the first one, the lease payment. The lease in this quarter wasn't almost at the same level of the last quarter. But you are right. We have have EPSR and a GPM that impact this contract.

[Andrea Palma Marques, Chief Financial Officer at TIM]

But the most part started in the end of the March and April and May. So in the second quarter, you see the start of an impact on inflation in our lease. What we expect and what we already declared as lease, we are working to keep the increase of the total lease in the year lower than our revenue. This is what we are working very hard to achievement. Besides the negotiation that you mentioned and I mentioned before, we also have another leverage that continues to our decommission, where we see which towers that we have to are coming to the end of the contract and try to negotiate these two.

[Andrea Palma Marques, Chief Financial Officer at TIM]

Or renew the contract or move it to another lower cost tower. With the second question about

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

Let me just add something on the leases. Andrea. Gustavo, on the leases, so you have this set of levers. Which are these levers? So as Andrea will say, we've got the negotiation.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

Negotiation is something that is on the table once we need to deploy new towers. And as Andre was saying, there are some towers that are getting to the end of the period, and we have the opportunity to renegotiate them to a value that is in line with market values. On the other hand, you have another set of levers that are the decommissioning of towers that were being very they've been a focus of our company for throughout 2024. We decommission thousands of towers. So we get good to do it.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

We can move towers. And then we got partnership with other operators, whereby we share the infrastructure, like the run sharing agreement with Vivo, for example. So we have a large set of levers in our place that we are going to deploy in order to keep this line cost in check. It's something that is not like super short term, something that it's the effect sum up in years because there is some infrastructure required. But we are committed to use all the levers in place to meet the guidance that we shared at the beginning of the year.

[Andrea Palma Marques, Chief Financial Officer at TIM]

Thank you. And related to the working capital, we are working very hard with this working capital, with several initiatives also that we have. But remember, we have a seasonality. In the first half of the year, we have a negative working capital. In the second half, we have a positive working capital.

[Andrea Palma Marques, Chief Financial Officer at TIM]

We are still in this trend, but we will prove a lot. As you can see, the first quarter this year relates to the first quarter of last year. And we will still have some initiatives to put in place. And we can disclose it as we once we do this new opportunity, we will disclose to you.

[Gustavo Farias, Analyst at UBS Group]

Very clear. Thank you very much.

[Operator]

Our next question comes from Felipe Chang from Santander. Please Mr. Chang, your microphone is open.

[Felipe Cheng, Senior Equity Research Analyst at Banco Santander]

Good morning, everyone, and thank you for taking my questions. My first question is maybe zooming in a little bit on the pricing dynamics, particularly here for front book. Our understanding is that your main competitors have already increased front book prices. So I was just wondering if Tim has any schedule here to eventually also implement price increases to the front book offers. And secondly, if I may also zoom in a little bit on Tim Live.

[Felipe Cheng, Senior Equity Research Analyst at Banco Santander]

I just wanted to understand a little bit the dynamics this quarter, right, what were the main drivers or reasons here to see a decline in revenue growth, right? And eventually, if you are studying any potential M and As, be it via selling your TIM Live operation or potentially buying, right, other assets here to fortify here this business. So that's it. Thank you.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

So Felipe, going to the first question, we are fully committed to market rationality. And so we are actually working on our front book price upgrades. So that will come in the coming months. And when it comes so that's something that we are going to When for the second question, the main drivers are basically the following. Before going to our performance, allow I would like to stress again that the market remains highly competitive.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

And therefore, this pressure, both the ARPU and we have quite a good ARPU and churn level. When it comes to our performance, the second point of attention is that when we report our numbers, we need to remember that we have copper and fiber in the same numbers differently from other market players. And copper is a technology that is fading out. So we are losing customers there. And the result that you see on this quarter is basically the effect of a customer base that has been decreasing over the last nine months until January.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

And there's some pressure on the ARPU that has been going down a bit. On the positive side, you have on February and March, a customer base is growing. I can confirm that in April, it's also growing. But we are not pushing hard on this because, as we mentioned in many occasion, it's ultra, TIM Ultra, our broadband service is diluting on our numbers. And therefore, we are sort of moving sideline on this line of business, while we are assessing all the option on the table on the inorganic front.

[Felipe Cheng, Senior Equity Research Analyst at Banco Santander]

Very clear. Thank you.

[Operator]

Our next question comes from Fani Kanemuri from HSBC. Mister Kenneth Murray, your microphone's open. Seems there's a problem with your audio, mister Konemari. I'll ask you to rejoin to the conference and join the queue again. So our next question comes from Luca Brinjin from Bank of America.

[Operator]

Please, mister Brinjin, your microphone is open.

[Lucca Brendim, Equity Research Associate at Bank of America]

Hi. Good morning, everyone. I have two questions on my end. I wanted to mainly double click on the OpEx dynamics for the company. First, we saw a reduction in terms of the sales and marketing expenses.

[Lucca Brendim, Equity Research Associate at Bank of America]

It was down 2% year over year. You mentioned it was the reduction in fees tail fees, but the sales and marketing is down even more than the reduction in human, in the human user base. So I wanted to understand a little bit more on those dynamics if if that's something that should continue, if it's something that should go mostly in line, with the user base expansion or any other dynamics here? And the second one, regarding network and interconnection, it it is going up, considerably year over year. This is something that was happening in previous quarters already, but how can we think about this going forward?

[Lucca Brendim, Equity Research Associate at Bank of America]

When will this stabilize? And how we can think about it for the next years? Thank you.

[Andrea Palma Marques, Chief Financial Officer at TIM]

Hi, Luca. Related to the second one, the interconnection and roaming expenses increased in this first quarter related to the content provides, because we launched a program in November. We stimulated the use of streams, so we have an impact in this quarter. And also, the international roaming relaunch. We stimulate our we put, as a benefit, we put roaming international in several plans in postpaid.

[Andrea Palma Marques, Chief Financial Officer at TIM]

And the cost increase reflects in these customers going abroad. So we have this two impacts in relation to the homing and the the content provided in this first quarter. Related to the savings in market, this was a seasonality. The fixed sale decreased a little bit related to the net adds, but was a little bit. And also, have some only seasonality things.

[Andrea Palma Marques, Chief Financial Officer at TIM]

But we expect the sales expenses increase this year. As we mentioned, we put efficiency in some parts of the cost for generators, a space for increase, something that we know that is important to us to increase, like advertising. So when you see the full years, you'll see increase. In this first quarter, it was just a control decrease. I don't know if I addressed your questions.

[Lucca Brendim, Equity Research Associate at Bank of America]

No, very clear. Thank you for the answers.

[Operator]

Our next question comes from Mr. Fani Kanemuri from HSBC. Mister Fanny, seems you still with problems with your microphone. Mister Fanny, can you hear me? So I'll ask you to check your your audio device and and try joining again, mister Fenny.

[Operator]

Our next question comes from Machee Hoblard from Barclays. Please, mister Machi, just activate your microphone and ask your question. Just as a reminder, if you wish to ask a question, please use the raise hand button. Wait while we pull for questions. Our next question comes from Mr.

[Operator]

Fenny Kanemori from HSBC. You sent you sent your your question through written form. Your audio isn't working yet, so I'll read that. Our next question comes from Fani Canemori, and it is, how do you see the competition involved from new and regional operators like Brisonette?

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

Funny, clearly, smaller players are gaining some traction in the regions. I would say that so far, the impact has been limited on us. And it didn't change our competitive dynamics in terms It didn't trigger specific response to them. So we say that they are gaining market share, but they're not changing the competitive environment as a whole.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

We are continuously monitoring if they are making an impact on our customer base. There is some, but it's not material to react at this point in time.

[Operator]

Since there are no further questions, we would like to close the Q and A session, and I will pass the word to Mr. Roberto Griselli for his final remarks. Please, Please, Mr. Roberto, you may proceed.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

Thank you. So guys, we set off the year at a robust pace. Despite the external environment, we are successful implementing our strategy and delivering consistent numbers. Although we expect a challenging year, we have a solid game plan in our hands that we intend to implement with confidence. So I would like to thank you for participating in our video call today.

[Alberto Griselli, Director & CEO of TIM Brasil at TIM]

Special thanks to our team for its commitment and focus. And I look forward to meeting some of you or all of you in the coming one to one sessions. Thank you, and ciao.

[Operator]

This does conclude the first quarter of twenty twenty five conference call of Qin SA. For further information and details of the company, please access our website at qin.com.brir. You can disconnect from now on and thank you once again and have a wonderful day.

Participants

Executives

• Alberto Griselli, Director & CEO of TIM Brasil
• Andrea Palma Marques, Chief Financial Officer

Analysts

• Bernardo Guttmann, Equity Research Analyst at XP Inc.
• Marcelo Santos, Equity Analyst at JP Morgan
• Vitor Tomita, Analyst at Goldman Sachs
• Gustavo Farias, Analyst at UBS Group
• Felipe Cheng, Senior Equity Research Analyst at Banco Santander
• Lucca Brendim, Equity Research Associate at Bank of America