Brazil’s second largest mobile operator by subscribers, TIM Participacoes (TIM Brasil) has reported a ‘very tough’ quarter as the impact of the regulator Anatel’s sales ban took its toll on the group’s public image. TIM Brasil reported net profit of BRL318 million (USD156 million) in the three months ended 30 September 2012, 0.4% higher than the corresponding year-ago period, on revenues of BRL7.02 billion – up 10.1% in the same period. The carrier said though that overall expenses and operating costs climbed 9.5% year-on-year to BRL3.52 billion, in what CEO Andrea Mangoni termed a ‘very tough’ third quarter.
Anatel imposed a ban on TIM Brasil in the period, alleging that it was deliberately cutting off its customers, while further issues surrounded a dispute with a minority shareholder over taxes and provisions, Mangoni said. Although the chief executive considers that these issues have now been overcome, he conceded: ‘These events, although they’re not necessarily related to the fundamentals of the business, ended up having a heavy impact on our image and to a lesser extent, on the financials’. Mangoni is a relative newcomer to the job having replaced Luca Luciani in May after his predecessor was forced to resign amid a scandal over the improper use of SIM cards while working in Italy.
On the operational front, TIM Brasil closed out September 2012 with a total of 69.4 million mobile connections, up 17.2% year-on-year. The cellco invested BRL772 million in 3Q12, down 9.6% on an annualised basis, although 9M12 CAPEX of BRL2.4 billion marks a 26.3% increase on the year-ago period.