Telecom Italia’s Brazilian unit announced that its second quarter net revenue grew 7% year over year to U.S.$2.23 billion(R$4.547 billion). Total gross revenues were U.S.$3.28 billion (R$6.7 billion), 10.2% more than 2Q11 and 2.6% more than 1Q12. However, the carrier’s net income fell 0.9% to U.S.$170 million (R$346.8 million). Earnings before interest, taxes, depreciation and amortization, a gauge of operating profit known as EBITDA, rose 6% percent to U.S.$ 595.09 billion (R$ 1.214 billion).
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The company presented its financial results for the second quarter of 2012 yesterday at a delicate moment, since it was recently suspended by Anatel from selling mobile services in 19 states because of an increase in customer complaints. TIM also noted its second quarter performance was affected by the macroeconomic slowdown in the first half, the MTR (mobile termination rate) cut and the competitive environment.
During a conference call with investors about the second-quarter results, TIM representatives once again said they expect Brazil’s telecom regulator to end the ban on its mobile line sales in the coming days. When visiting Brazil, Franco Bernabè, the CEO of Telecom Italia, TIM’s parent company, said he expected the situation to return to normal by next week.
On July 20, TIM filed injunctions of mandamus in the Federal Court of Brasilia, requesting the revocation of the suspension on the sale of chips and service activation. This request was denied by the Federal Court on July 23. The next day, on July 24, TIM submitted its improvement plan to Anatel and is now waiting for the regulator’s approval and subsequent suspension revocation.
At the moment, the carrier said it is not possible to measure the impact this event will have on the company accurately. TIM said in a statement that it has been making significant investments aimed at improving services and is making its best effort to comply with the determinations of the regulatory agency.
Live TIM
As RCR Wireless reported earlier, TIM Brasil was preparing the launch of its ultra high speed broadband service using VDSL networks. On the same day that the company announced its financial results, TIM also revealed that it anticipates the launch of its residential broadband service in Sao Paulo. Branded with an English name, ‘Live TIM’ has been in trials since May 7, and the service is expected to begin during the third quarter of this year.
As of August 1, the service will be available for about 200,000 households in the city of São Paulo. This move follows TIM’s acquisition of AES Atimus in July last year, which operated a 5,500-kilometer fiber-optic network in Sao Paulo, Rio de Janeiro and other major Brazilian cities.
At that time, Flavio Lang, chief marketing officer at TIM Brasil, explained that the telecom operator had chosen to use VDSL instead of fiber-to-the-home (FTTH) due to its low broadband speed consumption. The average fixed broadband speed contracted in Brazil is about 2 Mbps per month.
(Currency exchange rate at time of this report: 1 USD = 2.04 BRL)
