TIM Brasil calls for 5G auction

Unlike some of its main competitors, TIM wants Brazil to hold a 5G auction "as soon as possible" to avoid being left behind in the new technology's development race.

That's a different approach compared to América Móvil - which already called for no new auctions in Brazil at least until 2020 - and Telefónica's Vivo, whose CEO said that his company is not focused on 5G at the moment.

"We embrace the idea of ​​the 5G auction as quickly as possible. We are working with the different stakeholders for this to happen. The faster Brazil goes to 5G, the better. The more we wait, the farther back Brazil gets," TIM Brasil CEO Sami Foguel told analysts in an earnings call.

Telecom regulator Anatel is discussing the use of the 3.5GHz spectrum for 5G. A public consultation on the topic has been held and an auction could take place in late 2019 or early 2020.

"It's important for Brazil. The competition gap towards other markets will only increase without the 5G. We expect the auction to be more or less one year from now, and we expect the first network deployments a year later," Foguel said.

Despite that, TIM Brazil regulatory affairs director Marco Girasole stressed that a 5G auction must be rational, less focused on collecting fees for the government and more on network investments by encouraging the sector to spend on the infrastructure, not the spectrum.

CONSOLIDATION

Questioned about M&A moves, CFO Adrian Calaza said it is a matter of time for Brazil.

"This market will have consolidation, especially if we think other established markets have three, two strong nation-wide carriers," while Brazil has four.

He said TIM is now more financially solid, in a completely different situation from four years ago, and much less leveraged; meaning it would be more prepared to acquire, rather than being acquired.

Nonetheless, Calaza stressed that TIM does not intend to make any consolidation move at the moment.

"We believe consolidation will come one day, and we want to be prepared. We are not seeing anything today. Let's see what happens in the near future."

CAPEX

TIM's capex fell 15.2% y-o-y in Q4, to 1.4bn reais (US$376mn). In 2018, investments decreased 4.1% to 3.97bn reais.

Revenues grew 5.2% in Q4, ending the year with annual growth of 5.0%, to 17bn reais.

Net income was 592mn reais in Q4, down 2.1%, and 1.56bn reais in the year, up 26.6%.

TIM's full results can be accessed here.