Telecom Italia 9M 2007 Business Performance

Transcrição

1 Milan, November 9th, 2007 Telecom Italia 9M 2007 Business Performance RICCARDO RUGGIERO

2 TLCne P1 Agenda 9M 2007 business performance: Domestic European BroadBand TIM Brasil Appendix 1

3 9M07 Results on the way to full-year 2007 targets TLCne P2 Mln, % 9M 2007 Δ % YoY Organic 2007 Organic Target TI Group Excl. NNG* Revenues -0.7% +1.0% +1%/+2% % EBITDA Margin -1.2 pp -2.5/-2.0 pp Domestic Revenues Fixed Mobile -5.7% -7.4% -1.8% Excl. NNG* -3.8% -4.5% -3.5%/-2.5% -3.5%/-2.5% -3.0%/-2.0% % EBITDA Margin -1.1pp -2.0/-1.5 pp European BroadBand (reported values) Revenues (abs) ~1,1 Bln % EBITDA Margin (abs) 14.6% ~1,6 Bln >14% TIM Brasil Excl. Bill & Keep Revenues % EBITDA Margin (abs) +27.6% 22.9% +16.2% >15% ~23% >10% Target FY 2007 Excl. Bill & Keep * Excluding change in accounting for Non Geographic Numbers (-373 mln in 2006); In accordance with AGCOM deliberation 417/06/CONS, starting January 1st 2007, Telecom Italia invoices services rendered by OLO on NNG while does not assume credit risks. These services, since January 1st are thus no longer recorded for as revenues and costs in Telecom Italia accounts 2

4 Discontinuities impact on TI Group performance Organic data; Mln, % TLCne P3-152 mln. -0.7% 23, , Revenues Evolution 9M07 total discontinuities -1,016mln Bersani Decree net effect -273 mln +864 (+3.7%) +2.5% net of Bill&Keep Brasil -344 mln. -3.5% 9, , EBITDA Evolution 9M07 total discontinuities -494mln Bersani Decree net effect -273 mln +150 (+1.5%) 9M 06 NNG* Bersani Decree gross Int l Roaming cut F2M cut (Group level) Elasticity related to Bersani business performance 9M 07 effect Decree * In accordance with AGCOM deliberation 417/06/CONS, starting January 1st 2007, Telecom Italia invoices services rendered by OLO on NNG while does not assume credit risks. These services, since January 1st are thus no longer recorded for as revenues and costs in Telecom Italia accounts 3

5 TLCne P4 Agenda 9M 2007 business performance: Domestic European BroadBand TIM Brasil Appendix 4

6 TLCne P5 Domestic: Main Results 9M 07 vs 9M 06 Mln, % Reported Data Organic Data 9M'07 9M '06 Abs % 9M '07 9M '06 Δ Abs Δ % -3.8% excluding change in accounting for Non Geographic Numbers* (-373 mln in 2006) Revenues 18,108 19,223-1, % 18,108 19,196-1, % of which fixed 11,748 12, % 11,748 12, % of which mobile 7,429 7, % 7,429 7, EBITDA 8,440 9, % 8,590 9, % % on revenues 46.6% 48.0% -1.4 p.p. 47.4% 48.5% -1.1 p.p. -4.5% excluding change in accounting for Non Geographic Numbers* (-373 mln in 2006) EBIT 5,184 5, % 5,323 5, % % on revenues 28.6% 30.6% -2.0 p.p. 29.4% 30.5% -1.1p.p. CAPEX 2,817 2, % % on revenues 15.6% 13.6% 2.0p.p. * In accordance with AGCOM deliberation 417/06/CONS, starting January 1st 2007, Telecom Italia invoices services rendered by OLO on NNG while does not assume credit risks. These services, since January 1st are thus no longer recorded for as revenues and costs in Telecom Italia accounts 5

7 TLCne P6 Domestic Business Highlights: Revenue mix improvement.. Wireline: solid performance of profitable businesses 4Q '06 1Q '07 2Q '07 3Q '07 Valuable growth strategy on BroadBand BB VOIP CB BB Revenues (YoY %) 8.9% 10.5% 9.5% 12.8% Successful strategy in defending Core Business Continuous focus on Top Clients and ICT development Quarterly line loss TI M/S on Traffic volume (%) Business Data revenues (YoY %) % 71.4% 71.5% -19.4% -11.4% 0.5% % -1.4% Mobile: volume and value strategy in progress 4Q '06 1Q '07 2Q '07 3Q '07 Sound growth in Service revenues Service revenues* (YoY %) 3.8% 3.8% 6.5% 5.3% High teen growth on VAS revenues driven by innovative services Improving Quality of customers % VAS on Service Rev. UMTS CB increase (quarterly net adds 000) 17.9% 19.8% 20.0% % Browsing Revenues (YoY %) 31.3% 46.4% 48.9% 55.7% % Post-paid on TIM CB 13.0% 13.3% 14.1% 14.3% +581 * Service revenues growth net of discontinuities (Bersani Decree net effect, Int l Roaming and F2M termination cut) 6

8 TLCne P7.with a positive impact on domestic profitability Mln, % EBITDA YoY trend (Organic and Net of Discontinuities*) % % -7.5% +0.1pp EBITDA Margin YoY trend (organic) -2.3pp -0.9pp EBITDA Margin (organic) 48.1% 46.4% 47.9% 1Q07 2Q07 3Q07 * Bersani Decree net effect (30mln IQ 07, 133mln 2Q 07, 110mln 3Q 07), Int l Roaming (8mln 3Q 07) and F2M termination cut (17mln in 1Q 07, 11mln in 2Q 07, 14mln 3Q 07) 7

9 TLCne P8 Agenda 9M 2007 business performance: Domestic Fixed business performance Mobile business performance Cost Analysis European BroadBand TIM Brasil Appendix 8

10 TLCne P9 Domestic fixed: Revenue Analysis -4.2% excluding F2M termination cut (71 mln ) Mln, %, Reported Data -586mln. -4.8% Subs., Adj. & Other , , Wholesale 2, % +8.1% -4.2% -2.8% -4.2% 2,854 Business Data Internet 1, % excluding F2M termination cut F2M (71 mln ) Of which International Wholesale -281mln (-20.0 %) 1,236 1,071 Voice 6,811 6,294 9M 06* Voice Internet Business Data Wholesale Subs., Adj. & Other 9M 07 * Restated figures, excluding different accounting for Non Geographic Numbers (-373mln : -214 mln on Voice and -132 mln on Internet) 9

11 TLCne P10 Domestic fixed: Retail* Revenues trend improvement 4Q 06 1Q 07 2Q 07 3Q 07 Retail* Revenues YoY trend -3.8% Of which: -8.0% -6.7% -5.6% Voice -7.2% -7.8% -8.4% -6.4% Internet +3.5% +8.0% +5.3% +11.2% Business Data -19.4% -11.4% +0.5% -1.4% * Voice + Internet + Business Data revenues 10

12 TLCne P11 Domestic fixed: Voice Revenues Mln, %, Reported Data -517 mln. -7.6% Handsets Voice VAS 6, % -4.0% -1.5% -23.8% 6, Access 3,098 2, % excluding F2M termination cut (71 mln) Traffic 2,909 2,645 9M 06* Traffic Access Voice VAS Handsets 9M 07 *Restated figures, excluding different accounting for Non Geographic Numbers (-241 mln : -27 mln on Traffic and -214mln on Voice VAS) 11

13 TLCne P12 Domestic fixed: Voice Traffic Performance Italian market voice traffic trend Telecom Italia retention campaign YoY % chg. in traffic volume 06 vs vs 06 1Q 2Q 3Q 4Q 1Q 2Q 3Q 000, Number of lines Families Business % -3.7% -3.4% -4.4% -4.0% -5.3% -5.0% Telecom Italia traffic market share trend %, Total traffic monthly M/S -0.5% +0.3% 71.9% 71.4% 71.5% 71.7% Telecom Italia Voice flat offers 000, Voice Flat/Semi-Flat offers Q 2Q 3Q 9M ,321 6,468 6, % 20.2% 26.1% New Offers F2F/F2M Dec 06 Mar 07 Jun 07 Sep 07 % on total accesses Dec 05 Dec 06 Sep % 31.5% 33.5% Source: Company Data, Analyst Estimates, NRA 12

14 TLCne P13 Domestic fixed: Internet Revenues Mln, %, Reported Data +80 mln. +8.1% ,071 Broadband ,9% +10,9% 1,007 Narrowband M 06* Narrowband Broadband 9M 07 * Restated figures, excluding change in accounting for Non Geographic Numbers (-132 mln on narrowband) 13

15 TLCne P14 Domestic BroadBand: Portfolio Evolution BroadBand Portfolio BB Retail portfolio net growth 000 Access lines 000 Access lines Wholesale Dec Dec 06 1,131 Sep 07 1,180 Δ Dec06 vs Dec Δ9M07 vs EoY Retail 4,817 5,639 6, Total Domestic 5,707 6,770 7,395 +1, M06 9M07 Total TI BB Portfolio (Domestic + European): 10.7 mln customers In 9M 2007 BB Retail Portfolio growth in line with 9M

16 TLCne P15 Domestic BroadBand: Focus on Flat and VoIP Offers Flat Offers development VoIP portfolio % on Residential Portfolio 000 access lines ,099 +3pp +5pp +1pp % 53% 58% 59% Dec-06 Mar-07 Jun-07 Sep-07 Dec-06 Mar-07 Jun-07 Sep-07 % on BB access lines 6.4% 9.3% 15.2% 17.7% * Including Residential, SOHO and SME s customers 15

17 TLCne P16 Domestic fixed: Business Data Revenues Mln, %, Reported Data -54 mln. -4.2% 1, ,236 ICT % -62.0% +10.8% -15.9% +12.0% 448 Equipment mln (-10.3%) 153 BB Data % in 1Q % in 2Q % in 3Q Traditional Data Leased lines M 06 Leased lines Traditional Data BB Data Equipment ICT 9M 07 16

18 TLCne P17 Agenda 9M 2007 business performance: Domestic Fixed business performance Mobile business performance Costs Analysis European BroadBand TIM Brasil Appendix 17

19 TLCne P18 Domestic mobile: Revenue Trends by Quarter Total revenues Service revenues Organic YoY trend 0.4% 1.7% 0.2% 3.0% -0.2% -2.3% -2.7% -1.1% -1.0% 0.9% 2.4% 0.5% -1.3% -2.2% Organic YoY trend (Net of Discontinuities*) 5.3% 6.2% 4.5% 4.2% 2.9% 4.6% 4.4% 4.0% 3.9% 5.4% 3.8% 3.8% 6.5% 5.3% 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 * Bersani Decree net effect (30 mln IQ 07, 133 mln 2Q 07, 110 mln 3Q 07), Int l Roaming (8mln 1Q 07, 12 mln 2Q 07, 27 mln 3Q 07) and F2M termination cut (36 mln in 1Q 07, 37 mln in 2Q 07, 46 mln 3Q 07) 18

20 TLCne P19 Domestic mobile: Revenue Analysis +4.0% net of discontinuities* Mln, %, Reported Data -136 mln -1.8% Handsets Visitors and other VAS 7, , ,225-3,4% -9,4% +14,5% +4,0% -11,9% 1,403 Incoming Voice 1, % net of discontinuities* 1, mln. -1.0% Outgoing Voice 4,134 Service Revenues +5.2% net of discontinuities* 3,994 9M 06 Outgoing Voice Incoming Voice VAS Vis. & other Handsets 9M 07 Bersani Decree net effect (273 mln ), Int l Roaming (47mln ) and F2M cut (119 Mln ) 19

21 TLCne P20 Domestic mobile: Customer Base Trend SIM, , KPIs: +2,042 34,312 35,310 ~1 mln Net Adds in 3Q 07 +1,824 32,450 and stable market share +2,459 30,408 Postpaid ~ 24% of gross adds in 9M ,259 26,117 28,576 Around 1.5mln UMTS customers added and UMTS penetration over 16% Dec '04 Jun '05 Dec '05 Jun '06 Dec '06 Jun '07 Sept ' % 39.4% 40.0% 40.5% 40.4% 40.3% 40.3% Market Share TIM EoY (%) 2,170 3,421 4,206 5,147 5,728 UMTS* Customers 7.6% 11.3% 13.0% 15.0% 16.2% UMTS penetration (%) * UMTS customers that generated traffic on TIM s 3G network in the last 90 days 20

22 TLCne P21 Domestic mobile: Post paid Gross Acquisitions SIM 000, Not Human included Business Mass Market Q '06 2Q '06 3Q '06 4Q '06 1Q '07 2Q '07 3Q '07 % on total gross acquisitions 17.0% 20.5% 14.7% 18.6% 21.8% 30.5% 19.9% 21

23 TLCne P22 Domestic mobile: Voice Traffic Performance Total Traffic Volumes* Outgoing voice Bln. Minutes +1.6% 10,5 10,4 +6.3% 10,8 11, % 10,8 12,0 Outgoing voice revenues YoY trend Outgoing traffic volumes** YoY trend 2.3% 1.4% 1.8% 2.3% -5.6% 9.5% -5.7% 17.6% o/w +24.1% YoY on-net Q 2Q 3Q Outgoing traffic price** YoY trend -0.6% -0.6% -13.9% Net of Recharge fees -0.5% -20.0% -7.5% * Incoming + Outgoing, excluding Visitors and roaming ** Roaming not included 4Q 06 1Q 07 2Q 07 3Q 07 22

24 TLCne P23 TIM Accelerates UMTS and Interactive VAS Penetration Handsets sold VAS Revenues 000, % mln UMTS ,430 1,507 5,324 2,042 Interactive VAS 1, % 1, % +14.5% +30.6% 2,923 3,282 Messaging 61.5% 56.2% +4.5% % UMTS 34.0% Mobile Office Devices Sold* (000) 9M 06 9M % % in 1Q % in 2Q % in 3Q 07 % VAS/Services Revenues 9M 06 9M % 20.2% Of which Browsing Revenues +76mln (+51%) * PDA, BlackBerry, PC Card 23

25 TLCne P24 Agenda 9M 2007 business performance: Domestic Fixed business performance Mobile business performance Costs Analysis European BroadBand TIM Brasil Appendix 24

26 TLCne P25 Domestic: Cost Analysis 9M 07 vs 06 Reported Data; Mln, % +126mln (+4.2%) in 1Q 07-20mln (-0.6%) in 2Q 07-69mln in (-2.2%) 3Q mln. +0.4% 9,630 9,667 Other Domestic Opex -11.0% +6.1% +9.1% -2.4% -2.8% +157% 3,817 4,069 mainly due to: increase in power costs mobile broadband network coverage expansion Mktg & Sales 2,484 Of which Fixed: 978 Of which Mobile: 1,440 Of which Fixed: 1,183 (+21.0%) Of which Mobile: 1,439 (-0.1%) 2,634 Interconn. Costs 3,329 Of which Fixed: 2,829 Of which Mobile: 1,260 Of which Fixed: 2,387 (-15.6%) Of which Mobile: 1,236 (-1.9%) 2,964 Interconn. Costs Mktg & Sales Industrial Costs 9M 2006* G&A Personnel Other** 9M 2007 Other Domestic OPEX * Restated figures, excluding change in accounting for Non Geographic Numbers (-373 mln ) ** Includes Other Income, provisions, charges and capitalized costs 25

27 TLCne P26 Domestic: revenue mix improvement and variable costs Reported Data; Mln, % 27.9% +2.1pp 30.0% 32.4% +0.9pp 33.3% 32.1% -2.8pp 29.3% % Variable costs* on revenues 1Q 2Q 3Q Variable costs 06* 1,726 2,096 1,991 Variable costs 07* Δ YoY 1,804 2,055 1, Strong reduction in variable costs thanks to improvement in revenues mix * Interconnection Costs + Marketing & Sales Costs. Calculeted on costs and revenues excluding change in accounting for Non Geographic Numbers 26

28 TLCne P27 Agenda 9M 2007 business performance: Domestic European BroadBand TIM Brasil Appendix 27

29 TLCne P28 European BroadBand: an integrated approach Common guidelines 9M 07 highlights Common, recognizable Brand across footprint Alice Germany: stylish, uncomplicated, clear, value for money * Alice France: leading brand in fashion, clarity and transparency * Alice Netherlands: launch of Alice retail offer in mid August Valuable customer growth Germany: France: ~65% total lines are 2/3P (+4pp since AOL consolidation) 207k MVO customers portfolio since Alice Mobile launch (May 07) ~93% portfolio is 2/3P (+6pp YoY) driven by 3P take-up >80k IPTV customers, ~10% of BB customer base Netherlands: 5,000 2P retail customers in ~ 6 weeks from launch ULL Coverage expansion and improvement of client mix Focus on profitability Germany: France: Germany: France: 55% ULL coverage, on track with ~60% 2007 EoY target ULL ~54% of client portfolio (+6pp since AOL consolidation) 48% ULL coverage already hit annual target ULL ~64% of new client acquisitions (+31pp YoY) strong margin progression following merger of AOL 25.7% EBITDA mg 9M 07 already > 2007FY target solid development thanks to improved portfolio mix and efficiency program -18.1% EBITDA mg 9M 07 vs % 9M 06 (+18.5pp YoY) *Source: Brand and advertising awareness of full service operators and only broadband providers.. for Germany and France GfK Eurisko (Sept. 2007) 28

30 TLCne P29 European BroadBand: Customer Base Evolution Broadband Portfolio Total customer portfolio: BB+NB 000 BroadBand Access +140k net AOL Access +1,223 3, , , The Netherlands The Netherlands 180 France 1, , , ,118 2,180 2,244 Germany* Germany* 3, France Total customer portfolio: 4,275,000 Dec-04 Dec-05 Dec-06 Mar-07 Jun-07 Sep-07 * Including AOL Customers, as of March 1 1,083 BB customers and 2,089k total customers 29

31 TLCne P30 European BroadBand: Main Results 9M 07 vs 06 Mln, % Reported Data 9M07 9M06 Δ Δ % Organic Growth Δ Δ% Revenues 1, % % Ebitda % % Ebitda margin 14.6% 6.0% +8.6pp +6.6pp Ebit % % Ebit margin -5.3% -16.0% +10.7pp +3.3pp Capex % on revenues % % 52.0% -19.2pp 9.9% in 1Q % in 2Q % in 3Q 07 30

32 TLCne P31 European BroadBand: Main Results 9M 07 vs 06 by Country Mln, %, Reported Data TI France Hansenet + AOL BBNED 9M 07 9M 06 Δ Abs Δ% 9M 07 9M 06 Δ Abs Δ% 9M 07 9M 06 Δ Abs Δ% Revenues % % % Ebitda % % % Ebitda margin -18.1% -36.6% +18.5pp 25.7% 26.4% -0.7pp 26.3% 40.7% -14.4pp Ebit % % % Ebit margin -52.1% -67.4% +15.3pp 11.7% 10.7% +1.0pp 0.0% 16.9% -16.9pp CAPEX % % % % on revenues 33.3% 73.6% -40.3pp 34.2% 44.0% -9.8.pp 12.3% 22.0% -9.7pp 31

33 TLCne P32 Agenda 9M 2007 business performance: Domestic European BroadBand TIM Brasil Appendix 32

34 TLCne P33 TIM Brasil: Solid Positioning Customer Continuous value segment growth Awareness Recognized TIM Brand 29.2mln customer in Sept 07 (+3.8 mln net adds in 9M07) reaching 25.9% Market share Improving client mix: postpaid lines reach 23% on total (+2.1pp YoY) vs 20% of market average Solid ARPU premium vs market average: >15% Top of Mind for the third consecutive year as the most remembered mobile operator company * The first mobile operator choice according to all recent key independent surveys Recognized again as the Most Admirable Company ** Innovation acceleration in convergence strategy TIM Web: mobile internet TIM Mais Completo: convergent solution (M+F+BB) TIM Casa Flex: prepaid and postpaid Home-Zone offer launch low-arpu offer: Plano 1: new business model addressing wider market and ensuring profitability via lower distribution charges & ownership cost Profitability Solid Financial growth +27.6% Organic revenue growth in 9M07 EBITDA margin expansion (22.9% EBITDA margin Reported in 9M07, +1.3pp YoY) 3Q 07 impacted by non-recurring bad debt from writeoff of receivables (18.5% reported margin vs 23.2% net of impact) FY2007 target EBITDA margin ~23% confirmed * According to Datafolha Institute Survey ** According to CartaCapital/TNS InterScience Survey 33

35 TLCne P34 TIM Brasil: Market Performance TIM Brasil Customer Portfolio Market Share Gap vs. main competitors mln Lines Vs 1 st player Vs 3 rd player % GSM 82% 85% 87% 89% 91% 92% 94% 95% +1.8pp+1.5pp+1.5pp+1.2pp+1.1pp Market Share Dec % Mar % Jun % Sep % Dec % Mar 07 Jun 07 Sep % 25.8% 25.9% -6.8pp -3.7pp -1.9pp -2.6pp -11.1pp Postpaid customers base at Sept 07: 6.6K (23% of total customer base) Dec. 05 Jun. 06 Dec. 06 Jun. 07 Sep. 07 Dec. 05 Jun. 06 Dec. 06 Jun. 07 Sep

36 TLCne P35 TIM Brasil: Main Results 9M 07 vs 9M 06 IAS/IFRS Data Reported - Euro Data Reported - Reais Million Euro, % Million R$, % Organic Growth % 9M 07 9M 06 Δ Abs Δ % 9M 07 9M 06 Δ Abs Δ % Δ % RICAVI 3,603 2, % EBITDA % Ebitda margin 22.9% 21.6% 1.3 p.p. EBIT Ebit margin 1.2% -1.7% 2.9 p.p. CAPEX % on revenues 12.3% 11.8% 0.5 p.p. 9,694 7, % , % 22.9% 21.6% 1.3 p.p % -1.7% 2.9 p.p. 1, % 11.8% 0.5 p.p % net of B&K 27.6% 34.0% 22.9% margin 35

37 TLCne P36 TIM Brasil: Revenue Trends by Quarter IAS/IFRS Total revenues Service revenues 33.9% 28.0% 37.4% 34.6% 34.7% 37.3% 40.8% 40.8% YoY Growth (Organic) 14.6% 19.2% YoY Growth (Organic, net of B&K)* 19.0% 12.7% 19.1% 17.2% 12.9% 17.7% 18.2% 20.4% 20.1% 17.2% 3Q06 4Q06 1Q07 2Q07 3Q07 3Q06 4Q06 1Q07 2Q07 3Q07 *Growth net of B&K calculated on a like-for-like basis 36

38 TLCne P37 TIM Brasil: EBITDA Trend by Quarter on a like-for-like basis IAS/IFRS - Million Reais, % 3Q06 3Q Adjustments 2006 Restated 2007 Adjustments 2007 Restated Revenues Reported EBITDA Reported Ebitda Margin 23.4% 21.6% 18.5% 23.2% Exceptional Items EBITDA Organic Ebitda Margin 22.9% 21.1% 18.5% 23.2% +2.1pp Different SAC accounting between 06 and 07 One-shot write-off in accounts receivable from handsets sales Full Year 2007 Target confirmed 37

39 TLCne P38 Agenda 9M 2007 business performance: Domestic European BroadBand TIM Brasil Appendix 38

40 TLCne P39 Domestic: Main Results Organic Trend 9M 07 Mln. 9M M 2007 Organic trend 2006 Reported (IAS) Change in Perimeter Exchange rate impact Except. items 2006 Organic 2007 Reported Except. items 2007 Organic 2007 vs 2006 Δ Abs Δ % Revenues 19, ,196 18,108 18,108-1, % Ebitda 9, ,304 8, , % Ebit 5, ,853 5, , % Real estate Projects: 123 mln Restructuring Charges: 86 mln Restructuring Charges: 96 mln Settlement with OLO: 33 mln Antitrust Fine: 20 mln Real estate project: 10 mln 39

41 TLCne P40 Fixed Access lines EoY 2003 EoY 2004 EoY 2005 EoY 2006 Sep 2007 million access TI Wireline Retail Access '000 access OLO Access (on TI infrastructure) ULL ,117 Shared Access (ADSL)* n.a ,706 Virtual ULL n.a. n.a. n.a , * Included in TI Retail Access 40

42 TLCne P41 Domestic fixed: Wholesale Services Revenues Mln, %, Reported Data -82 mln. -2.8% ,936 2,854 International Wholesale 1, % -20.0% 1,124 National Wholesale 1,531 1,730 9M 06 National Wholesale International Wholesale 9M 07 41

43 TLCne P42 TIM Brasil: Main Results 9M 07 vs 06 Organic Growth in LC IAS/IFRS - Million Reais, % 9M M 2007 Organic Growth 07 vs Reported Exceptional Items 2006 Organic 2007 Reported Exceptional Items 2007 Organic Delta ass Delta % Revenues 7,595 7,595 9,694 9,694 2,099 27,6% Ebitda Ebitda % 1, % +10 1, % 2, % - 2, % ,0% Ebit Ebit % % % % % 235 Includes TIM Brasil merger costs 42

44 TLCne P43 TIM Brasil: Revenue Analysis IAS/IFRS; R$ Mln Handsets VAS Voice Voice revenues* VAS Revenues Handset revenues 7,863 5, % 9M06 9M % 9M 06 9M % 854 9M 06 9M 07 * Excluding visitors & others 43