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TIM SA ADR TIMB

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

TIM Continues To Lose Wireless Share During Fourth Quarter As It Holds The Line on Pricing

Analyst Note

| Michael Hodel, CFA |

TIM’s fourth-quarter results were the mirror image of rival America Movil’s in some ways. TIM’s wireless net customer additions during the period were modest: 274,000 in total, including 93,000 postpaid. Movil’s Claro added 3.1 million, with nearly 2 million of those postpaid. However, TIM continues to exercise pricing discipline. Average revenue per customer increased nearly 8% year over year to BRL 27 per month at TIM versus only about 3% (adjusted for the Nextel acquisition, by our calculation) to BRL 24 at Claro. TIM’s results are even more impressive considering its customer base slants more heavily toward the prepaid market than Claro. Still, we continue to believe TIM operates at a disadvantage to Movil and Telefonica Brasil, which both have extensive fixed-line businessesWe don’t expect to materially change our $15 per-ADR fair value estimate and we view the ADRs as modestly undervalued. 

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Company Profile

Business Description

TIM SA is a wireless carrier by subscribers in Brazil. The company provides Landline Switched Telephone Service (STFC) in Local, National Long-Distance and International Long-Distance modes, as well as Personal Mobile Service (SMP) and Multimedia Communication Service (SCM). It generates revenues from product sales such as telephones, mini-modems, tablets and other equipment.

Contact
Avenida Joao Cabral de Melo Neto, 850, Torre Norte, 12th Floor, Room 1212
Rio de Janeiro, RJ, 22775-057, Brazil
T +55 2141094167
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2021
Stock Type
Employees 9,700

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