Tags: TIM | Brazil | wireless | TSU

TIM Aims to Dominate Brazil Wireless

By    |   Monday, 17 Oct 2011 04:16 PM

Brazil is Latin America’s largest telecom market. And it’s growing rapidly; the subscriber base increased 17.4 percent at the end of June 2011 from over a year ago. Brazilian wireless carrier TIM Participacoes (TSU) aims to dominate in a big market. For now, it’s the third-largest operator with 55.5 million subscribers, or 25.5 percent of the market, as of June 30.

The carrier faces off against three competitors, including Vivo, the market leader that’s a joint venture between Spain’s Telefonica and Portugal Telecom.

The scrappy company has some key strengths, though. TIM Participacoes operates in all Brazilian states, serving 173 million people. It has the largest GSM coverage in Brazil, reaching 94 percent of the urban population. S&P analysts think that this GSM dominance gives it an edge over Vivo, which is converting from a CDMA network to GSM.

TIM Participacoes also recently bought AES Atimus, which owns fiber optic assets in Rio de Janeiro and Sao Paulo.

TIM is growing strongly. Second-quarter revenues climbed 19.5 percent and the subscriber base rose 25 percent. Data revenues helped fuel growth, as they surged 35 percent.

Price pressure

TIM Participacoes has lots of fans. Of the 11 analysts followed by Thomson/First Call, four have strong buy recommendations and six have buys, with only one hold.

S&P analysts disagree, though. They deem the wireless carrier a hold, citing competitive wireless pricing that should dampen margins as other carriers build out their operations across Brazil. The company reports next Nov. 1.

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Brazil is Latin America s largest telecom market. And it s growing rapidly; the subscriber base increased 17.4 percent at the end of June 2011 from over a year ago.Brazilian wireless carrier TIM Participacoes (TSU) aims to dominate in a big market. For now, it s the...
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Monday, 17 Oct 2011 04:16 PM
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