Brazil’s third largest mobile operator by subscribers, TIM Participacoes (also known as TIM Brasil), said on Friday it returned to profit in 3Q09 despite a small drop in quarterly revenue as its performance was aided by a large tax refund and declining expenses. The Sao Paulo-based cellco posted net income of BRL61 million (USD35.3 million) in the period under review, reversing a net loss of BRL12 million in the year earlier period. In its company filing, TIM Brasil noted it booked a BRL15.2 million loss in the second quarter of 2009, but subsequently reported a BRL27.6 million tax rebate after signing up for a fiscal refinancing plan with Brazilian tax authorities. In addition, the operator’s financial expenses dropped 60% y-o-y after the real currency rallied 10% in the third quarter, making servicing for TIM’s dollar-denominated debt cheaper, Reuters notes. However, third quarter revenue slipped 2% year-on-year to BRL3.34 billion while operating costs slid 1.1% to BRL2.58 billion, and churn rose to 10.9% from 8.6% in the previous quarter an 9.4% y-o-y. EBITDA also fell, by 5%, from BRL798.5 million to BRL758.8 million, although interconnection and network-related costs dropped 10.5% because of the lower base of post-paid mobile phone users. Average revenue per user (ARPU) slumped 12% y-o-y from BRL30.1 to BRL26.5, it said, but the operator’s third quarter economic recovery was reflected in strong subscriber uptake with the overall customer base up 12.5% y-o-y at 39.6 million clients, it said. Incremental net share reached 1.8 million net new users, or 27.3%, in 3Q09, well above the same period of 2008 (18.3%), it added.