ranking the world's biggest network operators - Total Telecom

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CONTRIBUTED PROFILE TiM BrASiL UPWARDLY MOBILE Brazilian mobile operator TIM sets out its strategy for expansion in a highly competitive market,with 3G services, differentiated tariffs and the iPhone central to its plans TIM Quick Facts (as of 3Q10) Net Revenue R$3.6 billion (3Q10) CEO Luca Luciani Headquarters Rio de Janeiro, Brazil Employees 9,231 Subscribers 47 million (39.7 million prepaid); (7.2 million postpaid) ARPU R$23.4 MOU 123 minutes/customer/month Market Capitalisation R$15.0 billion (Sept 2010) This year turned out to be an exciting one for telecoms services in Brazil, with a spate of M&A activity. Latin America’s biggest market is also its fiercest battleground (see article in Total Telecom Plus, June), and competition in Brazil is set to intensify further as the regulator opens up the market to MVNOs and more 3G spectrum is auctioned, and as operators seek to integrate their fixed and mobile services. Telecom Italia-owned TIM Brasil (TIM Participacoes) is one operator well positioned to expand in the market, with a very clear mobile-focused strategy and a solid infrastructure. For the past two years the company has focused on maintaining a balance between growth and financial returns , and now is set for new challenges. TIM plans to make 3G services available to around 60% of the population by 2012, and is investing about 2.5 billion reais (about $1 billion) this year. Over the past 18 months the operator has carried out a turn-around strategy, and although not complete posted net revenues of 3.6 billion reais (about $1.5 billion) in the third quarter, up 6.1% from 3.44 billion reais in the same period a year earlier. Ebitda rose 19.6% to BRL924 million in the third quarter, and the Ebitda margin was 25.3%, up from 22.5% in the third quarter of 2009. As well as substantial improvements in financial results, there is other evidence of a successful turn-around. Sound results can be seen in terms of improvement in network quality metrics, skyrocketing total minutes of traffic and subscriber growth . Subscribers grew 18.5% year-on-year to 46.9 million at the end of the third quarter, and the company is aiming for 50 million subscribers by the end of the year. During the past 18 months, TIM has also adopted a new tariff strategy, moving from charging per-minute to charging percall and removing the traditional long distance barrier in Brazil. At the end of last year TIM bought local long-distance operator Intelig for about $70 million. “Now we can see the Brazilian market as a single market, and we are happy to enable the creation of the largest community base in the country with 44 million users,” says Luca Luciani, the company’s CEO. voice central to growth As the sole pure-play mobile company in Brazil, TIM sees voice services as the central element of its strategy: more than 85% of the operator’s revenues come from voice services. In turn, the Brazilian telecoms market is worth around R$100 billion per year, and the largest part of that comes from voice services. According to analyst company Hot Telecom, 80.3% of all telephony subscribers in Brazil were mobile users in 2009, and that proportion is set to rise to 83.5% in 2013. With that in mind, TIM’s strategy is focused firmly on stimulating higher minutes of use from its customers, and on fixed-to-mobile substitution. In the second quarter, TIM’s outgoing traffic more than doubled to 12.2 billion minutes compared to the previous year, and average minutes per customer reached 110 minutes per month compared to 73 minutes a year earlier (that has now risen to 123 minutes). When looking at the long distance business, traffic increasedfifteen-fold compared to a year earlier and put the company in a leadership position in a competitive domestic sector with some 40% market share. Unlocking data value TIM’s network supports the fast-growing data traffic of its customers. In the post-paid segment the company in July launched TIM Web, a transparent data card plan based on charging according to time spent rather than megabytes used. In the pre-paid segment the company is pursuing the as-yet unexploited market of internet cafés for lower social classes. TIM offers, via customized smartphones, a substitute option for internet cafés enabling connectivity to social networks such as facebook and twitter for a pre-paid daily charge. Infinity Web, launched in August, provides internet access for lower income customers for the cost of 0.50 reais per day. During the past 18 months 28 million users have joined the company’s Infinity and Liberty plans. In 2011, the company plans to also concentrate on sales of Blackberry and iPhone handsets and services, with updated Internet navigation and other applications. n 12 www.totaltele.com November 2010
XCoNNeCT PEERING INTO THE FUTURE XConnect is the global leader of federation-based interconnection and peering services. Through its Interconnect 2.0 suite of services, the company solves the challenges of next-generation interconnection (NGN) by enabling seamless interworking and interoperability between fixed, mobile and IP networks. Interconnect 2.0 is the most comprehensive suite of secure and scalable carrier-class Enum Registry and IPX hub interconnection services. It meets the need for interconnection of IP networks, to efficiently deliver new revenue-generating multimedia services on a cross network basis while increasing service quality and reducing costs. Xconnect operates the largest worldwide Enum-based IP peering federation, the Global Alliance, and the world’s first national VoIP/NGN interconnection federations in North America, Scandinavia, Korea and South Africa. Headquartered in London, with offices and points of presence in the US, Europe, Africa and Asia, XConnect provides services to over 100 service providers in more than 20 countries. High-defi nition voice In 2010, XConnect continued to enhance its position as the market leader for next-generation federation interconnection services. In January, the company announced the world’s first high definition (HD) voice peering federation, the HD Alliance. HD voice increasingly is being deployed by service providers to deliver clearer, higher quality voice calls than is possible on the PSTN. The HD Alliance interconnects HD enabled networks, preserving an all-IP call path, which allows HD calls to be delivered between networks—an essential requirement for the mass adoption of the service. The HD Alliance launched with nine charter members and is backed by leading vendors Polycom, Dialogic and Broadsoft. As the explosive growth of IP continues globally, the need for interconnection between NGN/IP networks on a national level is paramount. In April, XConnect partnered with Multisource to launch a national federation in South Africa. The partnership, known as XConnect South Africa, will combine CONTRIBUTED PROFILE XConnect sets out its position on interconnection and peering services, including the latest international alliances and agreements to promote high-defi nition voice services XConnect Quick Facts Founded 2004 CEO Eli Katz Headquarters London Services Multimedia interconnect and IP peering Customers Over 100 service providers in 20 countries POPs US, Europe, Africa, Asia Global Alliance Enum-based IP peering federation HD Alliance High-defi nition voice peering federation Multisource’s extensive market knowledge and network capability with XConnect’s expertise in providing multimedia interconnection and carrier Enum registry services. The full suite of XConnect’s Interconnect 2.0 services will be deployed, enabling South African operators to interconnect their networks and route calls seamlessly and efficiently through a scalable, multilateral interconnection hub. Next-generation networks XConnect further enhanced its market leading position by announcing the first IP eXchange (IPX) platform to offer seamless integration with PathFinder, the GSMA’s Number Translation Service, enabling interoperability and convergence between fixed and mobile networks. Based on standards and specifications developed by the GSMA, the XConnect IPX platform enables network operators to optimise routing and signalling and deliver new IP services via a high-quality, secure, managed IP connection with support for multiple commercial models. A full suite of IPX services is available within XConnect’s national federation environments in North America, Korea, Europe and South Africa, as well as accessible from XConnect’s points of presence globally. XConnect’s strategy and focus for 2011 remains on utilising its industry leading technology, capability and experience to capitalise on emerging next-generation network opportunities as adoption of IP networks continues. This includes increasing deployments of national federation hubs in partnership with established in-country partners, continued growth of Global Alliance members, product innovation and development to introduce new features and service including HD video, instant messaging and presence. Core to the company’s strategy will be working with unified communications solutions providers to offer the benefits of federations within UC environments. And it will use its Enum registry technology to extend the benefits of UC from intraenterprise to inter-enterprise. n www.totaltele.com November 2010 13
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ranking the world's biggest network operators - Total Telecom

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