Analyst Note
| Michael Hodel, CFA |TIM’s strategy to hold the line on pricing even if it loses market share continued into the third quarter. The firm still managed to grow its wireless customer base but not nearly at the same pace as rival America Movil’s Claro. The fixed-line business also produced disappointing results during the quarter. Management remains confident that the Oi transaction will close by the end of the year and that its participation in the upcoming spectrum auction will prove successful. We are reducing our fair value estimate to $12.50 from $15, reflecting the combination of lower market share expectations and weakness in the Brazilian real (strength in the real had in part propped up our fair value estimate earlier in 2021). We continue to prefer Telefonica Brasil for exposure to Brazil.