TIM sees profit jump 155% thanks to growth in postpaid cell phone | Telecommunications

THE TIM released the financial results for the 2nd quarter of 2021, and the company had a 154.7% jump in net profit. The operator registered an increase in the postpaid customer base and also grew in the TIM Live broadband internet service.

TIM store (Image: Edi Pereira/Disclosure)

TIM financial results – 2nd quarter 2021

See below the financial indicators for the 2nd quarter of 2021 and the comparison with the same period of the previous year:

Indicator 2nd quarter of 2021 2nd quarter of 2020 Difference
Net Revenue BRL 4.4 billion BRL 3.98 billion +10.5%
Normalized net income BRL 681 million BRL 267 million +154.7%
normalized cost of operation BRL 2.3 billion BRL 2 billion +15.1%
Capex (investments) BRL 906 million BRL 673 million 34.5%

TIM has positive results in mobile telephony

The mobile telephony service is TIM’s flagship, and represented 90.3% of the operator’s net revenue. The company reduced the number of lines by 1.3%, and this retraction was caused by the disconnection of prepaid lines.

Even with a drop, prepaid revenue also increased by 5.3% thanks to the increase in people who recharge. On average, users in this category spend R$12.70 per month, which represents an increase of 11.2% compared to the same period last year.

However, postpaid and control are doing very well: tele saw a 3.9% jump in customers with these types of contracts, who have higher cell phone expenses compared to prepaid and guarantee monthly recurrence.

Postpaid revenue also rose 8.9%, and TIM claims that a readjustment in May contributed to the positive performance. On average, customers in this category spend R$45.80 per month with the operator, which represents an increase of 5.6% compared to the previous year’s quarter.

4G coverage growth

TIM committed to reach all Brazilian municipalities with 4G technology by the end of 2023. The operator ended the quarter with fourth generation coverage for 4.3 thousand cities, and 3,600 municipalities already use the 700 MHz frequency , which ensures greater signal range with fewer antennas.

TIM antenna covers stretch of road in General Salgado/SP (Image: Reproduction/TIM)

TIM antenna connected via satellite covers stretch of road in General Salgado/SP (Image: Reproduction/TIM)

The operator is betting on the installation of cell towers connected via satellite and powered by solar energy. There are already 224 project sites Sky Cover, which allows taking 4G signal to remote locations without electricity infrastructure and terrestrial connectivity.

TIM Live Internet grew, but remains shy

The fixed services modality generated R$ 283 million in revenue for TIM. Of this total, TIM Live broadband had revenues of R$179 million, which is very little compared to the company’s entire net revenue. Tele ended the period with 666 thousand internet customers, 10% up on the same period last year.

Fixed internet service is present in 28 municipalities plus the Federal District, covering 3.8 million homes with fiber optic technology to the user’s home (FTTH) and another 2.8 million with metallic cables (xDSL).

In May, TIM modified its broadband plans: there are two new speeds, 500 Mb/s and 600 Mb/s, delivered via optical fiber. The packages are more expensive than the traditional 60 Mb/s and 400 Mb/s, but include Paramount+ and Netflix subscription, depending on the option chosen.

To expand its operations, TIM entered into an agreement with IHS Brasil for the sale of 51% of its fixed network business. A new company was formed, FiberCo, which will maintain and expand an open network that can be rented by other internet providers; these companies will be able to offer their services without the need to build infrastructure from scratch.

However, TIM needs to run to remain relevant in the broadband market: growth was shy, and the company was already overtaken by regional provider Brisanet in March 2021.

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