Tim SA (TIMB) 2022 Q1 法說會逐字稿

I would like to start our day by talking about lots of interesting stuff, some strategies, some results. It will be really cool to have your presence here.

But as you know, our events needed to have that little bureaucracy, which is our disclaimer. So let's go through it.

We would like to explain that such forward-looking statements, which speak only as of the date of the presentation. Future guarantees are not guarantees of future performance and involve risks, uncertainties and actual results may differ materially from those projected as a result of various factors. Financial figures are presented considering impact that materially -- differ materially from those projected as a result.

First, I would like for us to start by saying that there are quite a few changes in our market and analysts and investors who did not follow telecom, started following us. And we had some management changes, and I would like to discuss them. Alberto, he was our Chief Revenue Officer. Today, he is our CEO. So this is someone who brings quite an interesting history and knowledge to keep on the continuity of what the company has been doing.

Camille has joined our team in our second half of the year to be our CFO and IRO. Leonardo, you've known him very well. He is our Chief Technology Information Officer. Mario also works on regulatory and ESG and institutional affairs. And Renato that you know pretty well, is working on new business and client customer platform.

Fabrizio Bozzetto is a new addition to our team. He has just arrived. He's taking care of our strategy and customer experience areas. So I think it will be really interesting to have him in our management.

Maria Antonietta, I think you remember her from our TIM Day last year, our VP for Human Resources. Jaques Horn, our legal officer. And Bruno Gentil, who has been with us for quite a while as the Business Support Officer.

To go through our general, not to extend our time, we opened this event with our first quarter results, they were published last night. So some of you should already know our numbers. I think, after our assessment, we have had solid numbers and very interesting growth of our business. And then we are going to have Alberto talking about our long-term vision, our aspirations and ambitions for a 6-year plan.

Then we will see how we will reach our aspiration, not just what we want, but how we want to get there. And then we are going to have joining Alberto, we're going to have Leonardo Capdeville and Rentao Ciuchini. And then we move to Mario Girasole and Camille to say why TIM can be the best value proposition for the investor community. And then we have our closing remarks by Alberto. And then we move into the Q&A.

So I would like to invite Alberto to the stage, please.

Good morning, everyone. The production said I shouldn't do this, but I'm going to do it. I want a real good morning, and afterwards, I'll go at the line there -- where is my cue?

I'm really happy to be here, and I'm back to my place. So this event with the results we're going to present today in this TIM Day, doing this in a hybrid way, and we have on-site people here.

The first slide is concerning our results. We've had first quarter of 2022 that was really solid. Afterwards, we're going to elaborate in our long-term vision. We've had a growth of service revenue of 8.4%, that's a record high. We've got an EBITDA growth of 5.1%.

But here, we need to clarify something. In the first quarter of this year, we've had a business model that was different from last year's. Those who follow us know that in the end of last year, we've had [Carvalto]. We've had a cost of -- more cost on a [EBITDA]. If we see this 5.1% comparing to last year without the outsourcing of the (inaudible) 5.1% would be 8.8%.

We have another growth in the quarter in pre and postpaid. We've had several brands and operational issues that are very important. We've had the full implementation of the 5G, and we've had our C6, which is our bank partner. We've launched a unique partnership with Apple this quarter that will be extended in the next month with more novelties. We chose Apple, Apple chose TIM Brasil for this partnership.

And for the first time, we've had the Sustainability Yearbook from the S&P Global. And we've had the Oi deal closing in April.

Now in more details. We've had this income -- revenue growth. We've had a growth of 8.2% in the mobile world in broadband and in the new revenues that doubled from one quarter to the other. And more details in terms of dynamics and value-to-value segments.

When we see the image on the right, you see that our revenue is growing 8.2% -- 8.9%, sorry. And we can say, in postpaid, we're taking about [3%] but we've had a consistent growth results from last year. At that moment, we've had a record long of churn rate And now, we've had a new record in churn rate.

We've had the lowest churns TIM Brasil had. We're going to have worse numbers next quarter because in March and in May, we've implemented the new strategies of adjustment strategies. And typically, this changes the churn as it's implemented.

What really makes me proud is the prepaid results. Those who follow TIM, we've had this prepaid revenue for a long time. And we've had a positive increment in the first quarter of last year, but we've had the shutdown from the pandemic in 2020.

And in the postpaid segment, we've had -- we've got recharges, up by 1.8% and spending by 1.1% So the revenue comes from the recharges and spending.

In April, the trend is confirmed. May still early to call. And what determines this? We've had several factors. We've got to -- now we don't have the restrictions of the pandemic, people have more mobility using mobile.

Also, we've had the (inaudible) Brazil, which is a subsidy for people -- for low-income people here in Brazil with promotional, also marketing as well. Also, we've had this innovative initiative, which is TIM+ sales, which is the uberization of SIM card sales. So the first results of the campaigns are very positive.

From the point of view of business, we've had TIM Live results, our broadband. As I said in the beginning, we've had a partnership with the I-Systems from the end of last year. Every partnership, there's a moment of adaptation. And now we have the I-Systems with the rollout acceleration. We've launched Joinville. We've launched the new classes. So it's going to be a growth leverage now.

And now our base mix is more focused in FTTH. You know that FTTC is an older technology. We had some competitive dynamics because of FTTC in our mix, so we have now positive issues. And also, we've won The Best Broadband Service Award. So we have a commitment with quality.

Now, I'd like to call Camille to talk a little bit about the financial results.

Thank you, Alberto. Good morning, everyone. Good morning for those who are watching us online. I will try to control my mic thing because you know that CFOs like numbers, they don't like presentations.

But looking at our results, when we took the lower left-hand side, we see the reduction of our costs. We have to remind us that, like Alberto mentioned at the beginning, that we had a little reduce in our margin, and we started with the I-Systems that impact OpEx. So it leads our costs for the quarter to increase 12.1% in relation to the first quarter last year.

But when we use the same parameter when expurge the I-Systems cost, our cost growth is aligned with our revenue growth. And this leads our EBITDA margin to have dropped a little. We had a 5.1% growth of EBITDA with a little decrease in margin.

But when we talk about parameter, we have an EBITDA margin aligned with the first quarter and the growth aligned with our revenue in about 8.8%. So it's quite an interesting growth in our EBITDA.

The counterpart of this extra cost line is where we look at the right-hand side of our slides and we look at the bottom. When we see cash generation, EBITDA minus CapEx, we see a growth of our EBITDA margin of about 16% in the first quarter. '21 to [16.8%] for 1Q '22, reminding you that this year, we started our first Q with ASD growth, even having the 5G deployment, which is impacting our cash generation with the I-Systems movement.

Looking into our leverage, cash leverage, you know that our company was getting -- has been preparing itself their balance for two important events of '22, which was Oi acquiring and 5G. And that led us to a cash position of over BRL 10 million. In our first quarter, we had some important disbursements. So we had regulatory fee payments. We also had the 5G licensing payments.

We ended the quarter with [BRL 8 billion], which is quite a robust cash position. Now in April, as you know, we had an Oi reimbursal for mobile assets with BRL 6.3 billion disbursement. In our second quarter, we have another share of [AIR] of BRL 8.5 billion for the 5G auction. And we had a payment over own capital use of BRL 5.3 billion. We have almost BRL 700 million of retained price by Oi for some adjustments that we may have to reimburse in 120 days.

But despite all those numbers, we ended our leverage of 0.63 over our EBITDA year-on-year. And we have our position of minus 1.7 to the company, which is quite positive.

Thank you, Camille, and thank you to the whole leadership team who are here. So we're going to have another quarter of solid delivery of -- deliveries.

So before showing the plan, I'd like play a video. It's an institutional video that we've launched last year -- last week, and it's part of our position and pillar. We have [DNA] association that is very strong. It represents very strongly the positions of our brand, the values of our brand to connect our brand to people. Watching with the video again after it was launched, I thought that the images of the video and the music describe very well the spirit of what we -- of the song of the next generation and our director of -- Institutional Regulatory Directors decided to call us our next-generation team.

(presentation)

So this film is the introduction to our second phase of the presentation, which is a next-generation deal. In terms of commercial strategy and brand engagement, we have the Rock in Rio Festival, which is the greatest -- which is one of the greatest festivals in the world. And next week, we're going to have one of the great free festivals that's going to happen next week in the Copacabana Beach.

And we're going to have the consequence of several stages that happened in previous years. And that the next transformation stage of TIM Brasil, it will happen.

I'm going to tell you a few of these steps. In the last years, we've consolidated our positioning, in terms of leadership and innovation, in what we call the volume-to-value strategy. We were pioneers in introducing this and working towards it. Second is the inorganic operations that happened in the market, I'm talking about Oi and the neutral network. Third highlight is the launch of the customer platform.

These 3 huge components -- we have also the 5G, but these 3 huge components allow us to have the ambition. In the consumers' point of view, it allows us to provide best combination of offer and service to Brazilian consumers.

And when we talk about the financial community, the mix of volume-to-value is something unique because we're going to grow above market -- the marketplace. And we see we have leadership in revenue. Being leaders, we're going to expand our profitability, and this will allow us to have some policies.

Also, we have the -- ESG is done -- is executed as integral part of our plan. We have some recap -- a few recap of our work.

So we are the company with the greatest profitability in Latin America in operation revenues. So we're one of the companies with greatest EBITDA value of Latin America. So we're going to expand even more of these numbers in the next years. This will allow us to grow what our stakeholders receive.

Second element, the Oi operation. This operation, as we see it, we have two great winners, the Oi clients and TIM Brasil. Why do I say this? Because on the structural point of view, we get a lot from this operation. From the commercial point of view, clearly, we have a broader market, but we're getting clients in two different areas that are strategic for us, Sao Paulo and Rio.

So this is a boost of a plan that we were already executing. And now also, we'll have our commercial footprint in different areas, such as Rio Grande do Sul state. And also, we'll also have a critical mass. And with critical mass, we can invest to grow in a simpler way than we do today.

On the other hand, and you see on the right of the slide, we have the infrastructure. We have the greatest mobile coverage in Brazil right now, from the point of view of covered cities and population. Before, it was only in 4G. Now, it's in general. And also, we have the #1 spectrum per client, and we're going to integrate this. And it allows us to have the CapEx more efficient and also scale up the service level.

So there is a strategic advantage for TIM that is really high. This is reflected in the synergy numbers that we've launched last year. So I'm not going to talk a lot about this. We're talking about BRL 4 billion with about 9 to 12. So we have this commercial synergy. We have about this net value creation of BRL 16 billion to BRL 19 billion. So this is the transformational issue for us.

Having said that, okay, that's where it comes our value proposition that provides growth of the top line. I'm going to talk about top line growth. And afterwards, I'm going to talk about value generation.

But here, we have two messages. One, we're going to grow above marketplace. Two, we're really anchored in our core business, and we have a head start in our new revenue generation because we have partners which launched this in last years.

Also, we're talking about the mobile world, we have the ambition to become the best mobile carrier in Brazil and in a market that is a mature market. And what does that mean? It means best -- offer best quality or service for the client and the best EBITDA in terms of efficiency. So we're going to grow 1.5x in the next year.

So when we see the broadband, it's different because the market is growing, and we have 10 million clients more in the next 6 years. So we're going to double our size in asset-light modality. And this partnership with I-Systems will allows this. You'll see soon that I-Systems will be an accelerator, and we're going to show this.

On the right side, we can see the area that has an exponential growth play. We have B2B IoT, which isn't 5G, it's something real now. The keyword is to -- we need to get to verticals, to get clients to develop new platform in the future. We're going to talk about this in the future as well.

Also, we have the consumer platform, and Renato is going to talk about this. And we've got from the start positioning and customer lifetime value in core business world. So here we're going to grow above market. So we have a good future growth mix going ahead, in terms of value growth. I've talked about growth, now we're talking about double-digit growth.

In the long term, we're talking about from -- we're going from mid-single digit to high single digit. Then, we have profitability. I've shown that we are leaders in profitability in Latin America. We have a strong positioning. This is something that is in our DNA. We're facing a couple of challenging years because of inflation that impacts some of our cost categories.

Having said that, we have a solid plan, in terms of digitalization certification delaying, to defend our EBITDA on one side. And we have two powerful leverages, that is Oi and 5G, and we're going to talk about this more ahead. And we have an improvement on CapEx and services.

Having said that, we have the -- what we're going to do, we're going to review our situation for our stakeholders because it's going to improve for them, and it's going to change this in 2022. And Camille is going to talk about this later on because we want to keep you hooked till the end.

When we talk about the ESG agenda, this is embedded in our business strategy. And we have a huge achievement, in terms of energy. We've had an improvement in constant eco-energy. We are very proud to -- because we're #1 in the world of internal engagement that is really high.

So from the point of view of good governance, we are the first Brazilian carrier to get the (inaudible) stamp and also a commitment in the ESG agenda fully integrated to improve the quality of service for the clients.

So after this, the message that growth above market have started, we're a step ahead in generating new revenues, growth of profitability, commitment with stakeholders, ESG -- and with ESG.

Since I am still here in this position, I'm going to start with our verticals. We are going to talk about mobile. We're going to talk about broadband, B2B.

So when we said mobile, our mission is to become the best Brazilian mobile operator. But what does it mean? As I mentioned the numbers, I'm going to skip through that. The best offer; second, best service; third, best network.

Best offer. We already have been acknowledged as a leader in this field. So it's to keep the gap.

When we talk about the best service and quality, we know that all operators, they work about the same. But here, the opportunity we are going to see something is about widening the gap. We want to distance ourselves, and we want to lead this new competitive lever.

When we talk about network, as Leo says, we have several achievements. We have an enhancement in our 4G in Brazil. We have the best video and video calling experience. We're still going to jump ahead of that.

And fact is that in our consumers' perception, this is still not a reality. So we need -- we have the challenge of correcting the perception by our consumers. Here, the goal is to close the gap.

We are now moving forward towards each of them. And I'll start by offer and then service and then Leo is going to talk about the best network.

When we talk about best offer, so just to remind you, we were the first one to launch Netflix in 2019. We were the first to offer choice bundle. And we are still the first one. We launched -- we were the first to launch the first service -- quality service for prepaid -- and the prepaid services. We have launched now an exclusive partnership with Apple that is going to be developed over the next quarters.

We have a lot to offer, still, the best 4G coverage now. We're going to also be the TIM in the Sky service, integrating -- and also plan to integrating PIX. So we want to have -- be a step ahead before -- of our competition.

I want to show another video, since we are in our Mother's Day campaign. Let's watch it, please.

(presentation)

So we have a new TIM Black offer with loads of Internet to enjoy the best 4G coverage in Brazil. Now with 5G, and on this Mother's Day, a discount on your [Galaxy S21].

And now, this new Samsung version, we have a partnership with Apple. So now, we are talking about toys bundle on iMusic with us, the best iPhone by Apple right now, iPhone 12. So we are working our perception from our consumers' perspective.

We are talking about best service now. Best service is an area that we have been working for quite some time now in several lines and in all areas of the company. We have a digitalization area, digital interactions. We have more than 80% interaction with the company that work digitally.

We are introducing and we are evolving our carrying models through IA, Alex will talk about it. And the new carrying model, [VIP Concierge], fast tracking for TIM Black customers. And we are revisiting the journeys of the client -- client journeys to improve our NPS. We have had over twice better results in our NPS carrying in 2 years.

So let's see our satisfaction surveys on the screen. We have been first for the past 13 months. The most coherent indicator that we have is the Reclame Aqui evaluation. We have the ambition of entering the Excellent club, RA1000. And by the end -- today, we are working on an 8 out of 10 grades. So we are already in an excellent range, but we want to work until RA1000, which is the top-notch.

Thank you, Alberto. Good morning, everyone. Good to see some faces after 2 years. First of all, I was a bit fearful because there was so much music, I thought we'd have to have a performance. But Vicente canceled this idea, and I didn't have to come in dancing.

Let's talk about next generation. I want to remind you what was the first quarter of this year. We're a company that we've always had to deal with historical gaps, basically 2, spectrum and coverage. We were a carrier who had a spectral disadvantage. And you know that spectrum in mobile is really mandatory for efficiency. We've had almost 50% less spectrum than our competitors.

And in terms of coverage, we are [A-band] only in a few places in Brazil, [Parana] , Santa Catarina, (inaudible) in the Northeast. Also, we've had a gap in terms of comprehension. But how did we overcome these gaps to become not only competitive, but in the few moments, we've reached the best carrier in Brazil?

Through innovation. Innovation was always part of TIM's DNA. And from the technological point of view, this is something that we also calculate. And we try to do things differently.

I'm going to remind you of a few cases that helped us to overcome this gaps and will work -- these things will work as accelerators for the future. The first thing has to do with the technological view, we're a carrier that noticed that the 3G cycle was getting over and we were entering a 4G cycle.

If you see this graph on the left, from 2014, '15, TIM decided to invest in 4G. This gives us the coverage leadership in terms of 4G in Brazil. You saw that a few competitors reacted a year later, others 2 years later, others who are tired in the middle of the way. But our focus was on 4G. And from now -- until now, we have coverage as leading point, reaching 98% of population.

The part of this perception in the 4G coverage acceleration had to do with the spectrum reforming. What we did was to get the spectrum that was on 2G and 3G and change it to 4G, trying to use part of the equipment.

Also, when we think ahead, we talk about innovation criteria that we used, and we talk about the 700 megahertz. We've had the 700 megahertz auction in Brazil 4 years ago. We were the first carrier to use it and we've had a coverage that is totally different from the rest of the market. We're talking about that urban population coverage.

But also, we have the accessibility, which shows what's the percentage in time in which a client stays in this line. And we not only have the most extensive network in terms of cities but also in terms of presence, so that the client stays longer in our 4G network.

Also, it allowed us to launch the VoLTE. We were the first carrier to launch the VoLTE, and we're the only one to have VoLTE on scale. We're talking about 4,700 cities. When we adopt VoLTE, we have a better quality in terms of voice, in terms of video and avoiding some calls dropping.

With VoLTE, we have a reduction of 50% of calls dropping. This is already -- this is also part of our customer experience. It's very important.

With 5G -- the 5G standard, it doesn't foresee the continuity of the call when -- for the 3G. The only way to keep a voice call in 5G when you have no 5G, is using the VoLTE. So the carrier that has VoLTE, especially in the beginning, where the 5G carrier is growing, is something very important to be able to launch voice in 5G.

Second thing. As we've had less spectrum than the competition, we needed to be more efficient in terms of capacity and quality delivery. And we were the first in Brazil to launch massive [MIMO]. It's a technology that -- in MIMO -- in 5G, we decided to use massive MIMO in Brazil. And we've increased 4x our capacity.

When we compared to the previous version, we are one of the operators that we use massive MIMO in a larger scale in Brazil. And we're going to see our next-generation concept. And we will see that this is a future-proof investment. We also were ensuring quality, but we've had coverage gap. And we've worked a lot, in terms of infrastructure.

Let's remember biosite. TIM was a company that created the Biosite design, where we had a pole, looks like a light pole. And within that, we put the equipment. The use of Biosite was really paramount to grow in several cities without bringing any kind of visual impact because this pole is mixed -- mingles with the urbanistic outlook of the cities.

But we reached coverage in places that we couldn't imagine, so we created the concept of Sky Coverage, which is an autonomous site. We can install this when we don't have access to backhaul and not even electric power. And we use the lithium battery and we can use it as a satellite information.

And it doesn't demand a lot of capacity, it demands a lot coverage. So the satellite backhaul in terms of statistic use, it starts being really efficient because we've reduced 80% of the costs that we've had before in this kind of solution.

Now TIM has more than 1,000 Sky Coverage sites, and we will -- we intend to reach more than 3,000 in the next years. This is one of the pillars that we had.

We have, too, have leadership in agribusiness, to reach regions where it wasn't possible to reach before.

What I've told you, you were seeing until the fourth quarter of this year. What's going to be TIM in the next years? All the time, we were like in the better from fighting an enemy with the double of ammunition that we had. Now, it's different with our new assets.

First, in terms of spectrum, if we see what we are receiving from Oi and we've got in the 5G auction, now we are the best-positioned carrier in terms of spectrum megahertz per client. From the carrier that had the greatest gap, now we have the best positioning in terms of growth and quality delivery.

The second asset that is important from Oi is the towers. First, efficiency dimension, we're going to decommission about 60% of Oi towers. We're going to bring Oi clients to our network with Oi spectrum. And then we'll have a more efficient network in terms of cost.

But the 40% of the towers will keep on being active. And these active towers will help us to consolidate the coverage in the few cities and (inaudible) regions or even and also adding to our city portfolios new 264 cities, where we were not present. And Oi was the second asset that brings us, till this moment, is the 5G.

We also remember -- remind you that the 5G auction in January had a really important work from our team with our partners to show that we needed a different auction, in which it balanced investment in infrastructure and payment on the spectrum.

And with that, we managed to be victorious. And we've got the spectrum of 3.5 gigahertz in -- with 100 megahertz band in the national. Also, we have a spectrum of 2.3 gigahertz in strategic regions and also 26 gigahertz.

With this action, we've had some coverage obligations. These obligations will take us up to 2029 to cover all -- every city in Brazil above 30,000 inhabitants. With 5G, we have two huge expectations and a third one that I'll tell you afterwards.

First, to improve quality of the client experience in the mobile. It comes with less latency and increase of speed. The second thing is generating new revenue and services opportunity. In the B2B before, TIM couldn't be so present because we didn't have this fixed capillarity. But 5G changes this completely. And in 5G, we were not only to play in the same level, but we want to be better.

So we have several opportunities, where we will overcome, in terms of industry and agribusiness and also smart cities, which is the next path we've launched an MOU partner to work in Curitiba. And we'll do this in other cities.

So we'll have this opportunity, first, with 5G, improve the clients' experience and have new revenues and services.

The second has to do with efficiency. As the 5G has a lot of capacity, the spectrum brings this capacity, we can reduce significantly the cost by gigabit for our clients. So it's a lot cheaper to grow our traffic and hold this demand in 5G than in 4G.

So what's interesting now? Once we have to create a network by coverage, so we have low use. If instead of investing in 4G for growth, I can maximize the use of this 5G network. It means that we are more efficient in this CapEx allocation.

Here, we have 3 curves that show different possibilities in adopting the 5G device by the market because those who are going to drive these abilities of the device, were not the network.

If we see the blue curve, which is the more conservative, it's where we have our plan, but we are seeing in world such as Asia, as in the U.S.A, we can see greater scale of 5G. So it brings us a cost reduction and a [spill-up] of these curves. So (inaudible) with the 4G, we took 4.5 years for the 4G technology to overcome the 3G technology, in terms of traffic volume. We believe that in 5G, it will be -- it will happen in lesser time.

So if we take it to the highest curve, we can have more than 2 million [highs], in terms of efficiency. That is not counted in the goal that we had until 2024.

I was talking about our innovation DNA that made us reach this moment with this -- even with this huge gap. TIM is always an innovative company, and I'd like to share a few achievements that we've had in 5G.

We were the first carrier in Latin America to launch the 5G stand-alone form. When Anatel allows us to have the spectrum, we will be able to upload to the network. We've had a very interesting test about the activation of new 5G software to see what was the most capacity we can have by cell.

And we've reached a huge number of 7.1 gigabits per second. If we -- a cell in 4G, it reached 150, 200 megabits. You can see the dimension of 5G, 7.1 gigabit in one cell. Usually a tower has 3 cells, we're talking about 21 gigabits per second per tower. It's really a huge capacity. It really reaches very close to what we have in fibers, for instance.

So back then, we had a difference in terms of cycle from 3G to 5G -- to 4G. The cycle 4G is reaching its turning point. Probably the traffic from '23 to '24 will be stabilizing, and the growth will come from 5G. From the next year onwards, all our efforts will be focused on 5G, and 4G will be a maintenance technology.

But back there, we did reforming of 2G and 3G to 4G. We were already testing this from 4G to 5G. The spectrum -- the [radios] of massive MIMOs that we have, we did this recently a test of getting this radio -- the same radio, the same spectrum and used it on 5G. And we've reached a new number between 7x to 9x within the conventional speed. So with innovation, we can have investments that are future-proof.

This reforming to 5G will depend on the curve acceleration. The more we accelerate this curve, more opportunities we'll have to the reforming and use of the investments that we've had on 4G and use it on the 5G. This is what gives us security, in terms that we're going to deliver the best network in Brazil.

In terms of coverage pillar, Alberto said that from 2015, we are the 4G leaders. Now, we are leaders, final stop. So we can reach more than 5,000 cities. You should remember that we've done a promise of being in all cities in Brazil in 2024, but we intend to do this now. We have the best video and video calls.

And we talk about this because these are real-time services. It's not an issue of giving a good capacity. The important is stability. The video comes in real-time. It's not good at being just really fast and afterwards, slow. We need a continuous good quality. We are bringing this to 5G. And we have the commitment of delivering the best network in Brazil.

Well, to make it tangible, a bit tangible, I'd like to call a video.

(presentation)

So also, this campaign is -- I really like it. But I don't know if I told you that, Leo, it was the greatest of our campaign. There are several success indicators that it has been very pleasant for our public.

Let's talk a little bit about broadband. Here, we are talking about accelerating growth in new asset-light model, when we talk about the I-Systems chip SIM card. The market has grown 2.4 -- 1.4%, and we grew to 2%, 3%. What are the main levers that we can overcome the next few years?

Here, in fact, we are talking about increasing our footprint. So we have already launched the cluster. Here, we are competing here together, accelerating the migration of FTTC to FTTH. We are doing lots of brownfield in Rio de Janeiro and Sao Paulo, so that we can convert our clients from a -- to a fiber technology. So we have a reduction turn goal.

And when we talk about our -- an upgrade on our value proposal, that has to do with the synergy between not lead line in mobile, not [a correct thing], but to seize more opportunities and using [bad pigging] on our brand and so on.

Joinville, it's an area where we are leaders in market share. So our strengths there, we want to have it as an accelerator. So I'm going to have Fabrizio (inaudible) here that in [Sierra] is -- enhanced broadband officer.

And before we start asking questions to Fabrizio, we're going to have another video.

(presentation)

So Fabrizio, I think that increasing footprint, it is something that we can do. Can you talk a little bit more about this migration that we are doing from FTTC to FTTH?

Of course, Alberto, We have a good opportunity on focusing on fiber. As you can see, market is going to (inaudible) and we want to be simpler and simpler. And for that, this is fundamental. We have more than half of our HPs and the market that we can address to fiber now to FTTC. We have 2/3 of our clients in fiber, and we're getting 1% per month. And more and more, we have clients being sold and migrating them to fiber. And we have several advantages in the short term and we have long term.

What is the client's -- churn reduction of a client once he has been migrated?

Well, we get 30% in churn. This gives us a client value that is higher in the future. We don't need to work with the arch. We have this 30% change in churn. That's interesting. And when we go to brown field -- region, we have a client capture, and we have a double of clients being captured, especially in different region.

So here, we have the benefit of a churn reduction and new client capture in FTTH and growth in areas that previously we couldn't because fiber was not competitive. So Fabrizio, can you also talk a little bit about the synergy and this TIM Live even livelier?

First, the TIM Live is -- we have to see an important thing. We need to work with TIM Live. It was a separate company and they joined, and we're going to have a real joining work in terms of all issues. We want to be more TIM. We want to be more present in different elements. And when we talk about more live, we need to bring the complexities that are not small. Broadband is different from mobile for the -- we have to bring this for the company process. And we need to simplify and integrate them in our value proposition and work dynamics.

In terms of results, we have the synergy, and we have a lot of opportunities to bring this. We are able to be successful in Brazilia, Guiana and jointly with this synergy. And we have a lot of space in terms of channels. We have no -- we don't even have 3% of the sales in open channels, which are the stores and digital process. We can even grow 20% to 30% in this channel. And we can do that without adding value to the company -- cost to the company. We have a huge brand, and we can use the top of mind of several places. We can use TIM's brand to get more market and to strengthen the TIM Live and fiber in all of Brazil.

Our clients see the market as a boutique. We don't need to be this boutique. We can serve everyone because, as you said in the beginning, we're already the best broadband company in Brazil. Also, we got the kind of tech [award] that is specializing in several regions. So the clients see us as the best carrier, so -- in terms of broadband.

So using this growth in terms of footprint, we're reaching with the I-Systems, and we are specialists in working with neutral network. So this metal (sic) [model] can be also brought into other partners. And we can triple this. We have a growth avenue that is huge.

This asset-light issue that you've talked about, we can have a business model not only in a lighter way, which is different from what our competitors can do in terms of channel and commercial aggressiveness.

What happens in the marketplace today? Companies spends billions to create a network and then billions in discounts, channels and commissions to occupy this network. So it's money after money. What we want to do, we want to be -- to exponentiate this lightness in strategy. We want to leverage neutral brands and networks. Also, we don't need to spend millions in terms of condition to spend with channels and offers because we have this huge growth avenue, which is the footprint. And we have this opportunity in this avenue of growth which is the synergy capture. With these, two things we can be lighter, simpler without losing profitability and being more profitable and also faster.

This is key to grow, keeping the trade-off between volume and value that led our great evaluation to today. What Fabrizio said is a market that in the past few years has grown. And this approach, which is very singular to us, allows us to keep on growing and not losing this trade-off we are managing by now. So thank you, Fabrizio.

Now here on broadband, I'm going to bring two new themes that are typical from our agenda, which are opportunities of M&A, and then I'm going to talk about the FW (sic) [FWA].

When we look at the right graph, we're going to see the market share on the main fiber players in Brazil. We're going to talk about fiber because fiber is the future. This is what I'm talking about.

Now when we look at this graph, and we understand that actually the broadband world is capital intensive. And of course, this market structure will be consolidated.

On the left-hand side, we represent the EV per customer over time since GVT acquisition until this semester. So you can see that we have a reassessment on customer value that is decreasing. This is clearly a movement that makes our market consolidation easier and gets closer to what we have internally calculated as a customer acquisition cost.

Here, I would like to send you a clear message that we have just concluded the Oi acquisition. We are talking about billionaire synergies. Our focus on the short term is to lend those synergies. So we have a team that is being led and whose objective is to make synergies happen. Optionality is our focus, and we want to focus on capturing synergies.

Another theme that I would like to talk about is FWA. FWA is very exposed in certain markets, especially U.S.A. As a team, we have a small FWA base that we call FTTX. We were the first to experiment in 5G [ISS] in Brazil. So we were the first ones to understand how this technology works. We understand the market.

The mark here is represented by 2 million, 3 million accesses. To give you another point of view, according to the studies we are running, we can have 80, 100, 150 clients per site, and we have 20,000 sites. So we have a potential for the market that we can think of launching the FWA, which will be part of our portfolio.

We are hoping that some conditions will allow us to deploy this technology in a meaningful and commercially interesting. We are talking about the CPE cost. It's about $60. We are talking about an average of 100 -- $250 to $400. So the costings are dropping. And as our bottleneck is dissipated and this market will be selective and complementary to our portfolio, the conditions that are present today in the U.S.A. are not immediately applicable to the Brazilian markets.

Ladies and gentlemen, let's move to our next presentation, and we are going to join our exponential growth category. We were talking about businesses and broadband, and we are going to talk about our potential exponential growth. The first one is the B2B.

In B2B, we are building and working on building this growth platform. We are in a leadership position when we talk about agri business, we'll get into more details later on, and how we're going to move forward.

I'm going to -- we have selected the verticals we want to operate. We -- once the vertical is selected, we are commercially working on gaining clients and leaders in those verticals as we can build an ecosystem acquired into vertical and clients to supply solutions. So it's a simple strategy. We need 5G for that? No, we are doing it in 4G with -- quite successfully.

Here are the verticals we have chosen. Agri business -- agriculture, logistics, mining. Then we had utilities and health care. When we talk about utilities, we are talking about the smart cities that Leo mentioned.

Why have we chosen those verticals? They have some conditions that are special. One of them, they are large verticals involving lots -- volumes of money. We have intelligence. Technology is especially useful to improve profitability on a vertical. Third, on many of them, the process happens in Brazil. So here, we are debating with decision-makers on technical -- on technological solutions.

Let's say we have Stellantis who is a global operator. We are partners with this operator so we can be connected, talking to car manufacturers and not necessarily decisions were made here in Brazil.

What is the development? We are the leaders in agro world. We are building and consolidating our position in logistics and mining, while we are experimenting pilots and cases in utilities and health care.

I would like to invite [Paolo Umberto]. Paolo Umberto Is our B2B vertical for [CRO] member. And before we talk a little deeper about it, let's watch a little video.

(presentation)

We are back. So I'd like to ask you something, which is -- it's usually relevant for our analysts. How do we make money out of it? What is the business model?

In terms of business model, when we define the verticals, our team works in the demand analysis and then in proper financial model for each vertical.

For instance, in terms of agri business, if we use number of users, density for -- by square kilometer, the financial model won't work. So we create a new business model for the agri business with a setup fee, initial service plus the service revenue in a medium/long-term agreement. With this, our service revenue tripled in 2021 compared to 2020.

For each segment, there's a new segment model in CapEx when we see the utilities services. That's what we're doing for each segment, analyzing the best financial model for that vertical.

Now we're talking about 4G. But we have launched the first 5G farm a few weeks ago. Can you tell us a little bit more about our plans on technical evolution?

We can see this agri business model. We're consolidated. We're part of the agri business ecosystem in Brazil. We see the numbers that we've seen. We have more than 7 billion -- million acres with mobile coverage. And we see -- we can grow this to 13 million hectares with the NB-IoT.

But also, we have a social and digital inclusion of more than 900,000 people. It's 15% of the Brazilian population. 25 kilometers (sic) [25,000] of roads. More than 50,000 small producers benefited by the investments in the agribusiness coverage.

And about the other verticals, [Paolo], what do we have here, energy, mining and so on?

Let's talk about the other verticals. With the leadership and scaling up in agribusiness, we extended this model and this vertical view for other segments. This is a reality. When we see the access bases of IoT connected in 4G, this base has doubled last year.

And some examples. The partnership with Enel, Energisa and Engie implementing solutions of smart cities, for instance, not here only in Sao Paulo but in projects in agri with the program Light for All. We took a Sky Coverage project in a border with Bolivia, for instance. So these partnership are quite visible, and we're increasing in the market.

In terms of mining, we are working in this road map process in cases with Anglo American, Alcoa, Lundin Mining.

And then in terms of industry with Stellantis, we've been working for a year in this project, connected cars. We started in February of last year, and we have connected more than 100,000 vehicles.

And also, we have the first 4.0 Industry (sic) [Industry 4.0] case using the LTE 5G SA with edge computing and artificial intelligence. This was done in a partnership with Accenture. And what we're using today is to build our -- this new position in the value chain growth with Accenture, with engineering, Microsoft and Talent. We want to join connectivity, integrate those new platforms and services of IoT to have a new solution for the Brazilian industry. So a few details in terms of Talent and Microsoft partnership. We're going to publicize that in a press release in the next days.

Thank you, [Paolo]. So here indeed, as verticals gain clients and set up ecosystems, we are leading actors in that, as Paolo mentioned.

Last week, we had Agrishow in Ribeirão Preto in the state of São Paulo, the greatest agrobusiness affair in Brazil. There, we had the Agrishow highlights. And TIM was there with their Agropalma partnership. This is an agri event, and we are there and we are highlight among the highlights of the event. Leaders and leaders. So there is -- I would like to give the floor to Renato to talk about customer platform.

Thank you, Alberto, and good morning, everyone. Everyone is connected online. I have -- we have a few slides, but we have more time.

I'm going to talk about five things here. The first thing, we're going to have a recap on our strategy we presented last year. But I think we can have a recap on what is our strategic intention.

We're going to talk about our secret, our magic sauce. What are we doing that is working within the strategy?

And the third thing is the results that we've had before. Where are we going towards?

Then we'll talk about the new partnership that we have in terms of security.

So it's about 6, 7 slides, 5 topics, and we're going to talk very briefly about those. But we're going to have a complete view of things.

First thing that we want to state is that we're going to generate value outside of our core business through partnerships and not only internal development. We're looking for partnerships. We have few partnerships and partnerships with a high potential. We -- it's what we call going after unicorns. We don't want to do what telecoms did last year, a huge number of partnerships but irrelevant partnerships. We want few partnership but very good partnerships that can bring a high value.

Which are these partners, these ideal partners, these companies that we consider that are ideal for this process? They're not startups. They don't have a proven product. They are companies that have proven their product, and they are looking for an exponential growth of their client bases. That's important because when we talked about this, several start-ups started calling us. We're not looking for that. We want companies that have their product proven, they have a market fit and they need to grow their clients exponentially. We cannot do a pilot for a CD or first date. Our coverage is national. We want the -- all our client base.

What's our working model? It's a model that we call a channel-as-a-service or a churn -- channel that work as a service and we exchange customer base for equity.

And we want these companies to have a disruptive offer. They need to be very well positioned in their sector. And we will receive an equity that has a high value in those companies. So we look for companies that are about to have an exponential growth in client base. They have their product proven as -- and we'll work as a channel-as-a-service, and we're going to exchange customer base for equity.

What are we getting as well? We're going to bring a unique and disruptive offer for our clients. These are credit cards, cheaper courses, safety -- security offers. So it will add value to our base -- client base.

And we have several studies that prove that the client that is more engaged, that has more services with us, they have a lower cancellation rate. And one of the intentions is to reduce churn in the next years. So it will generate values in the core business and have a lower churn.

So we'll have a distinctive value proposition. It brings several information and data that no one has. So we'll begin to have telco data with financial service, with educational service and health service data. It will allow us to have new revenues. It will allow us to have a solution portfolio in advertising that is a lot more powerful because we'll have more channels and more data. And it will generate an equity for high-value companies. This is strategic framework.

And why do we think that we are relevant in this ecosystem? Why is TIM relevant for a company's statistics? And we have a few assets are unique. With the Oi acquisition, we have 16 million clients. That's 1/3 of the country. Very few companies have a client base such -- as big as this. We have 550 data points per client in our big data. This is what we call TIM's insights. We have -- we do these integrations with partners, and we can create unique offers in the market because we can use our data and the data that they have on their side. We create a service offer integrated with a partner offer, which is very differentiated.

And when we began working with this many months ago, we had a doubt. Why are they -- our clients interested to change their consultant with all this information? And our clients were interested in being part of this partnership and receive this giga bonus. We have a real benefit to provide to our bases in exchange of this partnership. We have a unique capillarity. And we -- Brazil is a huge country, continental country. We want to have a national presence. We have a point of sale everywhere. We have more than 100,000 salespersons. Very few companies have this capillarity. We have this ability of getting for 70 -- 65 million clients.

And we have a top-of-mind brand which is solid and very few digital companies have. We have several research. And 2 years ago when we began our research, we saw that several digital banks were coming because of the (inaudible). We need a digital bank and TIM choose this bank. And this must be a serious, good bank. So this is very important. That's why we chose C6. And we believe that we have a package to offer, and we see that this is very important for these partnerships.

And who -- what are we looking for? We're looking for the segments in which the value per client is much more than we have in terms of telco. So first, we look for financial services, and that was between $600, $500 per client and $2,000 per client, which is different from telco service that goes from around $100 per client. Health care, for instance, or other services are around $500 to $600.

So all these companies add value to the client -- have a value in -- for -- with the client that is higher than we have. We're taking clients for that company. And as a -- in exchange, we had -- one part of that equity, part of that value that was added on the other side. And our goal was to have a set of participation that in 2027, it will have a market value around BRL 3 billion to BRL 5 billion.

And another key [value] we're going to tell this year is --- which is a bit of our magic sauce, is how can we implement this within a carrier?

First, we did a partnership with Accenture that allowed us to bring dedicated teams to the project with specific expertise of that industry. We don't have in-house experts in health service, education service, financial service. And we did a partnership with Accenture that brings teams that are specific of that industry. This is very important.

Second, we created a whole communication of the partners' offer within the whole journey within TIM. And we have now 14 communication channels. We began with 1 -- 2 channels, then we started building up. And afterwards, I'm going to tell you how it works in practice. We have 14 channels.

Second pillar of this execution is a new segmentation. We have 550 data points, and we can do a new segmentation. And we can do an offer that is contextualized and it keeps the relevance for that client. This is really important to operate within an environment with simultaneous partnerships.

Third, everything is done based on tests and results. Every day, we do thousands of tests. We test the segments, the channels, the medias. We test the day of the week, the week of the month, the time of the day.

For example, it's a bit out of this context, we did a partnership with a betting company in terms of advertising. When we sent the advertising at the time of the Champions League game, there was a 40x higher conversion rate. So this contextualization of the segment, the time and the channel is very important.

And we don't have pre-created answers. We need to test. We do thousands of tests every month in which we validate channel, segment, day, time. And when we see the highest conversion rates, we amplify and massify that.

And last but not least, we have a TIM that is really top in terms of process and technology. We're using the most -- what -- top of the -- really modern TIM. We have a conversion capacity that is very high. And we can only do this with technology. So we have process and technologies and specialized teams.

And another example. It's good to exemplify why do we believe that TIM is the only one, not only in Brazil but in the world, in the point of view of our solution. And what do we have in terms of channels and processes?

Can you play the video?

So we'd begin in the store. So the communication of our partner in the store. When they do the onboarding, we begin to have the communication messages that give the offer of our partner. Then we innovate it, and we've had an innovation with pictures and multimedia, which brings a higher engagement.

This client is going to do a recharge process, and there's a communication. And they receive an incentive to download our app and loyalty. There's a mission and they use this mission to incentivate to download the C6 app. And when it intercepted, when the data package finishes and they receive a message -- when they go into the app, there are specific messages.

When they receive our email marketing, within that, there are partner's offers. When they access our website and do a digital migration for prepaid to control, there's a specific journey. When they receive their bill at home, they -- there's also a partner's message. When they call in our call center, they receive the message -- a message. Also, they receive a push communication. And last but not least, we have in -- our metaverse TIM store. In there, they have the opportunity of signing up with a partnership.

We have 14 channels. It was a bit detailed, but to simplify that, throughout the whole client's journey, we've managed to insert communication of our partner. Why is this important? Because we have noticed that we need to have coverage and frequency. We need to talk to -- the whole days. We need to talk in a relevant way, contextualized and -- throughout all the time. And if we don't do this, we won't be able to reach the exponential base growth that we intend to do. Next slide.

Let's talk about the results. We've reached 4.8% equity stake. So we've had this top performance for 7 quarters. So we've reached a growth in the first quarters, and we've managed to keep this performance throughout all this time. This is amazing. And we thought this would fall and it's not happening. We are managing to keep a top performance throughout the 7 quarters. We've managed to engage 2 million customers from our base with Ampli. 70,000 customers have registered the Ampli platform in terms of free courses, graduation and post graduation.

All our communications, we've reached more than 100 million people. And more than 6 million customers have -- were converted to our partners' offers. And also, with -- they get more than 14 million Internet bonus awarded. So we do the ATL communication -- BTL communication throughout the whole customer journey, and we see an adoption of the clients, which is quite high, and this motivates us. And because of that, several companies are looking for us.

And this leads us to this slide. What are -- where are we in this process? What are the partners that we are looking at and what we intend to do? All the partners that we have on top, we -- several companies have looked for us. We've received several propositions. But it's very important to highlight that we're not going to do any kind of agreement. We'd build an agreement that has a high value possibility so that our partner can grow, become a unicorn. And it's a joint decision with these companies.

And that's -- we are -- we've been discussing with this partner for 6 months. We're refining the proposition so that we are -- we can build something that can generate value to our client base, it can be disruptive for the clients and it can add value to TIM. These were the conditions that were needed to make sense.

And to close, I'd like to talk about the partnership that we're talking today in terms of security partners that we've done with the FS company.

Companies more and more digital, more and more connected. The payment process is -- really grew in the last 2 years. PIX a success. More than 117 million Brazilians have at least 1 PIX key, more than 9 million companies have a key -- a PIX key and there are several million things -- operations -- transactions per day. And -- but there are also several issues in terms of criminality associated to that.

So today, we are launching the first product at the -- that we're launching in the next month that is going to use technology and data science to allow a solution for two important aspects.

The first one is this is not a problem of a social strata. This is for all the social classes. So with technology and data science, we will be able to be accessible to all our clients, whether they're prepaid, control or postpaid.

Second thing. There's not only one person with only one account -- bank account in only one institution. It's a product that works to our reality for multiple bank accounts, whether it's a financial institution or a payment institution. This is the reality of the market. No one has just one bank account. So the product that we have with the digital protection, it will work in terms of price accessibility to our client base, and it will work for the present market with multiple financial institutions and payment institutions.

How is this deal and how we've built this with them? It has a few innovative factors in terms of what we've done in the past and what -- based on what we've done in the last 2 years.

So we'll have -- a NewCo will be formed between this -- TIM and FS. And TIM will receive a commission per customer captured for this NewCo. And also, we will earn equity in the NewCo up to 35% based on revenue generation. It will vary in customer base for equity, as I said in the beginning of my presentation. So we'll have up to 35%.

What's the difference of this deal compared to the others? Within this negotiation, we have a provision that will allow other -- the entry of other partners in the same modality and in the same conditions, and also other telcos. Well, we believe that the bigger this company is, bigger is its chance of success and higher its value will be. So we want to consolidate this market for this company. It will have a higher value, and we will have a higher value as well. The other -- having other telcos also is really positive because there's less conflict. TIM clients are not Claro's or VIVO's clients, so the channel with less overlapping is the telco market. So this is why we did an agreement that allows other partners in the same modality and in the same conditions. And as all our other business, we allowed this company to do an IPO in the time frame of 3 to 5 years.

This is what I had to present. Back to you.

This is great, Ciuchini. Well, we are going to have a break, a 10-minute break, so that everybody can rest a little, absorb and digest all this information. People from home can also refresh -- get a refresh. So we're going to have a brief, 10-minute break. We'll be back soon. Thank you.

(Break)

Hello, guys. We are back. Let's resume our event. Let's move to the last set of contents.

This communication moment we have now, we are working with our intention to generate a better value proposal for investors with our ESG agenda when we're going to have Mario Girasole. Then we have the three pillars that are going to be proposed -- presented by Camille.

Mario, the floor is yours, please.

Thank you, Vicente. Good morning, everyone. It's very important to begin this last synthesis session because it's synthesized as a value creation. Where is the best value for the community?

The ESG agenda at TIM is not a lateral agenda. It's an integrated -- structurally integrated agenda. Some pillars -- in some pillars, the ESG has been dealt with. And here, we can synthesize this.

In the center, we have our business strategy. We have our pillars: environmental, social and governance. And in TIM, there are forms of integrating key elements in the business. And that means people in terms of social; for the environmental, the resource -- natural resources; and for governance, the values system. These three elements create a business, and we create a different agenda. But it is actually a philosophy for value creation. And then this is what we're trying to synthesize today. And soon, Camille will summarize this.

And then we have this whole agenda that is structured in goals, in initiatives, metrics that involves the whole company. We have an ESG plan, we -- certain goals, medium- and long-term goals. And also, we have some ambitions.

Here, we have the environmental pillar. We can see the main -- on the left side here, we can see the main targets and what we've achieved in 2021. As we can see the environmental terms, we could have a strategy mix in terms of energy generation and compensation strategy with a 100% renewable energy also because of the eco efficiency, which is data volume for -- based on the consumed energy. Here, there's an environmental significance but also a business significance. And as Leo has said this morning, we have the Biosite coverage. It has an industrial agenda that will become also sustainability agenda. And because of this picture, in 2021, we've had one of the greatest sustainability-linked bonds that today places us in the -- we can say that we have a sustainable finance.

Going towards social layer, we can see, as it was highlighted by Alberto, we have -- we are really proud of being -- we are first in terms of diversity and inclusion policies in terms of telecom company in world. So we're really proud of that. But it's not a surprise because this has been a long journey.

I'd like to highlight the relevance and the inspiration of the -- our HR VP, Maria Antonietta. So it's -- this acknowledgment came first in Diversity in Tech of the diversity GLOMO. So we are acknowledged in a place where these values are present whether internally or externally.

At the same time, there's an industrial agenda that has been said of -- that TIM is the first company that has declared its - -a commitment to have 4G in all municipalities in Brazil. This goes beyond any target in Anatel. This was our goal. And this is perfectly coherent with our industrial journey and with the possibilities that a 4G connection in all Brazilian municipalities will create for the population. And once again, we want to share the ESG agenda -- industrial agenda. There are two phases of the same coin.

And of course, this last pillar is the governance. In governance, we're the first telco, as it has been said -- we've received the Pró-ética seal . Also, together with that, we had the anti-bribery management system, ISO. And we've -- we're acting very strongly in this agenda.

And within the ESG environment, we have our commitment with the consumer. In one of the last interviews, the relation -- consumer relationship supervisor, before he left, he said that the consumer agenda has to be present in the ESG agenda. We're doing this since 2019. And since then, we've managed to have significant reductions in terms of consumer complaints, trying to simplify consumers' lives. And we are first in the Anatel ranking for customer satisfaction related to Anatel demands. And also, we're the company that is present -- longer present in the ISE-B3, for 14 years. And since 2011, we are at the Novo Mercado stock market. So we have a commitment of transparence and disclosure, and this is being recognized because of -- also because of an assessment of disclosure of these issues that you can find in our channels. This is considered to be, in an international level, to be excellent -- of excellency.

So we have several metrics and goals that is structurally integrated with the value creation philosophy, and we have several opportunities.

Now I'll pass the floor to Camille. Thank you.

Thank you, Mario.

Well, moving back to numbers. What we tried to do in the slide was try to summarize and translate into numbers the efforts that my colleagues here have been informing you since the beginning of our presentation.

So basically, what we see is this additional effort, and all those initiatives that have been presented here are the ones who are going to lead us to a growth in our revenue that, in the absence of those initiatives, we would have a single-digit growth probably, which is probably the expected medium-term inflation rate. And these initiatives are going to allow us to double this growth and have a growth of our revenue up to 2027 of about -- high single digits. So double the speed of our revenue growth due to everything we have presented so far.

When we look a little closer to this graph, I think that what catches our eye, and it's not surprising, that great share of this additional growth comes from our mobile initiatives, which is our greatest revenue generator. Here, we have Oi and 5G followed by broadband and then B2B, IoT and lastly, the customer platform.

But I believe there are three points here we'd like to highlight, which is, first, necessary capital to make them happen. So truly, the mobile initiatives, they are parts. They have a greater percentage participation, but they also demand greater capital, especially in 2022, as we mentioned, that as we migrate towards the right side of the graph, these are an effort -- initiatives that we can leverage our revenue with lower capital from our company.

Another point I would like to highlight in this graph is that it does not reflect the creation of value by the company. It only reflects the revenue increase. And as we tend to move towards the right-hand side of the graph, the multiples tend to be larger. So as -- our expectation is as we move to the right and those little squares start representing a greater share of our total revenue and total business, that will also represent a larger multiple by the company. We are great -- we add great value to the stock exchange.

And lastly, specifically in our customer platform, this graph doesn't also capture the value creation by equity. One of the pillars of our customer platform strategy is clients in exchange for equity, and we believe that this can be a great value-add strategy. So when we have the increase in revenue due to the expansion of this multiple, we have the value creation via equity and the equity we get through the customer platform.

And the last message here and what we're going to explore in the next slides is that we have thought of those initiatives in a way that the necessary capital for their deployment grant us a great balance in growth perspective and shareholders' earnings. So this is something that we have in mind for our journey towards 2027.

We also must remember profitability. This company has worked very hard to be in the level of profitability that we have today, as being recognized as one of the sector's leaders. And we are going to keep this journey. We are not going to grow despite anything, we're going to grow increasing our profitability.

And here, we show the expected evolution of our EBITDA minus CapEx over net revenue besides having the traditional initiatives of cost reduction that we are constantly implementing and also digital transformation that we are going to use to leverage profitability.

We have some one-offs and extraordinary facts that, throughout time, help us leverage profitability. We have first the transition and integration of Oi that weighs on our P&L. As you can see, that will happen between 2022 and 2023. And from then on, we're going to be able to use 23% of this margin contribution that Oi brings.

We also eliminate by 2024 this initial 5G additional costs that we're going to have with deployment. And then we'll start having a reduction of CapEx and OpEx apart from revenue.

And moving up to 2024, we're going to have the full benefit from the infrastructure we acquired from Oi. We showed the present value of this acquisition. And we're going to start to have the initial 5G payback.

With that, we expect that our margin that in 2021 was about 24%, that it should grow to 94%, as presented in our guidance, and it keeps increasing up until 2027. We are not giving a guidance for 2027, but I think that through the graph, we can say that we do not establish -- we do not set -- in 2027, we want to keep -- remain the most profitable carrier in the sector.

I think that everything that we have talked about here is pretty well portraited in our picture on the left-hand side. It's a virtual circle of cash flow. We increased our revenue. We have goals of growth. We focus on profitability and efficiency. We have sustainable growth. We generate more cash. And I believe that everyone here knows that the company had been adopting this position of preserving liquidity, especially with 5G and Oi in 2022.

It's important to remember that the final conditions of Oi and 5G were only known in the second semester last year. And after these events, we still have some reimbursements, but they are known and predictable. I believe the company now is ready to enter a new area for shareholders' earnings. We had been getting questions from the market, and we have been answering that because we believe that 2022, those large and important events will be in our past.

So now we would like to announce we have already released the relevant fact, which is the intention of the company already referring to the year of 2022 to start distributing double the cash as previously as in the 4 years in the form of profit over own capital and dividends, and we should go -- do so moving forward.

Of course, we have all the caveats as we confirm all the cash generation -- generators for this year. We believe that they will be confirmed, except for some chaotic external factor, but this is our expectation and the recommendation we have taken to our Board.

Why do we believe that this is key to us? We had our Achilles heel. And we believe that everything we had been pretty well positioned in the market, but we believe that in our yields, we were still behind. So when we look at the graph on the slide, we understand that this new level will grant us that position on the right-hand side that is among the telco is the best compensate their shareholders to the right. So this is the level that we intend to perpetuate for the next few years, and I think this is the cherry on our cake in our history.

To summarize what do we see today as a value proposition for our shareholders, we are probably the company that have most short-term benefits for market consolidation. We have a strong balance in several areas. We have fewer consolidation problems and antitrust and so on. That allows us to be the one to benefit the most to do a convergent offer, even more and more convergent. We are innovation and partnership leaders, so we extract additional value from our consumer base, and this improves the experience to our consumer, too.

We talk about profitability. We are leaders in profitability and with concrete plans to become more and more profitable and remain in this leadership position. We do not have any exposure in phaseout businesses, which I believe it's a plus. We do not have a copper legacy. We do not have pay TV. So we do not have to be concerned about how to substitute this consumed revenue. Our revenue tends to grow in all aspects.

As Mario well said, profit is an integral part. Everything we have is an integral part of our strategy. And finally, we can say that from 2022, we are comparable to the best dividend payer among our peers in Latin America, which complements the left side of the graph and positions us as a vehicle of choice for our telecom shareholders.

Now I will turn the word back to Alberto.

Thank you, Camille. So we will spend a couple of hours sharing with you the fundamental elements of our strategies that are summarized here in this last slide. I think we've covered very well our commercial strategy in terms of core business, and it has its distinctiveness in terms of market growth. We have solid plans. Camille just said about our profitability expansion. This is already foreseen in our 3-year plan. We've seen a few upsides in our presentation numbers.

Also, we have a very strong track record to run this profitability. So we're totally committed so this happens, and we've seen how it translates in our policy review in shareholders' policies. Also, we have a deep transformational process that is a possibility of generating millions of [revs] to us. And also, this will be the focus in the next years and months because this is paramount so that this growth platform really happens in the next year.

I'd like to thank Vicente for organizing this event. Carol, who's not here, she's working with Vicente to build up the structure, this next-generation structure for all of us. I'd like to thank the whole team, the whole leadership team for another solid delivery in this quarter. And also, we have people behind me, a few of them in front of me. Also, I'd like to thank the whole team for this amazing results and the amazing results we are still to be seen.

We have still a few moments before we conclude our event. I would like to thank you for your acknowledgment. And since this is a hybrid event, we are going to have events from our on-site audience. Should you be interested, please raise your hand, identify yourself and bring your question, our executives will be ready to answer all your questions.

People who are watching us through the platform, you will have a button to press where you can write your question. Please feel free to send your questions in English once we will translate the questions. The questions will be entered in Portuguese, and we're going to have simultaneous translation into English for the answers. Please feel free to ask all your questions. We are fully available for the next 30 to 40 minutes so we can answer all the questions that may still be with you.

With that, we can start our Q&A. We are just concluding some last-minute arrangements, but I would like to thank you for your presence here. This event has made us very happy both with the on-site participation, but also with our online participation. We have over 1,300 people that connected. It's quite a number, and it makes us very proud knowing that an Investor Day like that, speaking of so many interesting themes, can attract so much demand from the market, the desire to learn more about TIM and its results. Now that our organization has been done, I would like to -- a round of applause to Vicente, please, and to all of us. Let's go until the very last mile of this journey.

First question, we have [Bernardo] and then we have Diego.

Congratulations for the event. I have 2 questions for Renato. First is about the new partnership announced. If you could explain a bit more about the product in terms of security vertical.

And the second is about the arbitrage process with the C6 Bank, if you have -- when are we concluded this?

Thank you for the opportunity to explain our partnership on security that we have announced today. How is such a partnership born? There are several partners that offer several services, and we are just a pass-through channel. And the PIX is highly innovative in a market that has also represented a great problem. So I carried out several studies, and we are launching a product that is based on PIX payment, and we will associate this offer. It's not fully ready to be announced. But the idea here is that PIX becomes a key central in our payment process. And PIX has this issue of all primes associated due to its penetration.

So we are going to say, are we going to once again be a passthrough of a project with little margin is there an opportunity that we can work with [FS]? That is a company specialized in security working with carriers for over 10 years. It's been doing it for over 10 years. We have partners. And we drive this as we drove C6 and [Ampli]. And the valuation of the company per client, consumer per company, it's way larger than [Tal]. So it is born as a proctor.

There is a digital protection is a software application that is installed in the person's cell phone. And within you have a PIX insurance. And then we can use the entire technology and data science to reduce fraud. By reducing fraud, we manage to have a more accessible price and more possible price for all kinds of customers, including the prepaid that increases our mass hugely. Because otherwise, we won't have the penetration that we need for high-value products.

FS is an expert in this business, they have a technical capability, a technological capability to create this product to using data science for that, and they use the power of our sales channel. If we try to do it separately, it's going to take too long. So they develop. We are not just a pass-through channel. We are partners in this business. And then it is justified that we drive throughout the journey design that I have presented. And this company, we expect to have a valuation as a tech company and not as a telco company and then we can generate value. So PIX protection is the first product.

Next, we are going to have our marketing teams and their market team to create a series of digital products. One of the -- one of the goals that we see is that our digital assets increase our advertising audience. We start having more audience, advertising apps, and it increases our data lake. We get more data, we get more consumer insights and create more products. So there is an immediate benefit that we become partners with a company with security expertise, with a technology company valuation, and we collect several other benefits when we talk about advertising, data monetization. And we're going to get our teams to work together and create new products.

The digital world, fortunately -- or unfortunately gets reinvented every 3, 6, 12 months. So it's not a product that we launch now, and we're going to remain with the product for 5 years. We need to have a product line to machine, and that's what we're going to do with them. In a traditional partnership, it wouldn't be possible. That's why this model that we created here, we believe to be disruptive. And once again, an innovative factor that we -- and we have already foreseen the entry of a new partner because as we scale up, we're going to get a better return.

So this was relatively prudent in the launching of the new product. You know that we have this prepaid control and postpaid products. So the payment process of billing, (inaudible) And credit card. And in our commercial way, several clients do not access this client because they have credit problems, availability issues and so on. So the idea of launching a PIX control combines all these elements.

First, the market innovation. It's a newer control. The PIX process is growing a lot. So the value proposition is to launch a new product process, adding value with the PIX insurance and also having a future process for the client for those clients who have the possibility of associating both also an advantage of this partnership.

On the C6 arbitrage, I am looking at Jaques, and he's already -- Jaques would like to answer.

No, we can't say much. This is a confidential process. I believe that what we can say is that the partnership is standing. We have reached 4.8% equity on the bank.

Let's go for the next question. I think it's Diego Aragão.

Diego Aragão from Goldman Sachs. My first question, on ARPU, we saw this great trend in the last quarter, and it has been going on for a few years. But when we think of this consolidation of market moving from 5 to 3 carriers over 2 years, I start thinking of 5G as something that can improve the consumer value proposition. How can we imagine a ARPU that was historically deflationary in Brazil? Do you see a next step for us to see an ARPU almost like a same-store sales, just growing with inflation or even above inflation? This is my first question.

And my second question is maybe to Camille. When we look to the cash flow, obviously, with Oi integration, you start having a totally different level of profitability as in the past. But at the same time, the company is doing some movements to become more asset light and less asset heavy, selling towers and data centers. So we are going to have some part of the costs that are going to be like a lease under EBITDA. If we were to do a calculation to adjust, are you expecting a simple cash flow margin of 30% for 2025, if I'm not mistaken? So what should be this cash flow margin considering the leases? These are my questions.

Okay. First, the ARPU question, then Camille will talk about the insurance. If you get the ARPU, and we have this growth proposition for a while, and I think that we could divide this question in 2 answers. We have the prepaid and postpaid worlds. They are quite different between them. The postpaid, yes, we're going to grow this year and in the next years. The inflation now is particularly high. But we have several tools, and we are using them to do this to make it happen.

What are these tools? We have the more-for-more adjustments. And the 5G is coming in the end. We have all this activity in terms of profitabilization that is working very well. And after all, it's more for more. If we analyze the clients' profiles, we can migrate, giving more benefits, extracting more value. And as we have also the customer -- the Oi customer base that we can work in the same way. So we have a very positive answer because we can grow the ARPU in the postpaid in the next years.

In the prepaid world, the situation is a bit more -- technically, it's more -- it's harder to act in terms of offers. First, I'd say that the ARPU is -- we can -- there, we need to see the spending. We can increase spending in this last quarter. This is being diluted. How are we doing this? We're adjusting, fill things in our offer that has to do with face value and some benefits that we are providing to our clients, relocation of our clients. And there's a [BTL] activity below the market analytics that is working. So it's harder to grow in the postpaid speed, but certainly, it's in our priority to increase our postpaid spending. Camille?

As for margin, I believe that it's important that we should separate mobile from broadband because these are completely different worlds. In mobile, we do not have additional disinvestment forecast when we're talking about the IFRS and EBITDA or we are de-investing from towers and other assets that will have costs lower than EBITDA and that they will increase or reduce our EBITDA without IFRS.

Quite the opposite, since we have -- as we mentioned in the Oi event, as we bring this Oi mobile, to us, we are bringing 600 million, 18 months on costs below EBITDA with towers, which will sum up to a little less than 900 million. But with our decommissioning plan and our accelerated plan that we mentioned today, the idea is that we manage to reduce those costs quite drastically almost as a proportion as the number, not of towers, but of the commission sites.

We do not expect that in mobile, we're going to have EBITDA margin dilution after leasing because there are no initiatives in this sense. I think that quite opposite, Oi is contributing to the decommissioning plan when we look. And then we have all the gains that we have mentioned, we have a CapEx over margin over time reduction, and we have our current margin that will lead us to the growth of our EBITDA minus CapEx margin.

When we look at broadband, then we can see that we have opted for the asset-light model, but it's important to remember that the I-Systems costs, they are costs above EBITDA. And they have been fully reported. As the broadband business starts having a participation share in our revenue, greater share in our revenue, there is a trend of diluting our EBITDA IFRS because it is an asset-light business.

So the -- on the other hand, on EBITDA minus CapEx, this effect is 0 because it tends to have a lower EBITDA margin because it's a service agent, but on the other hand, the requirement for CapEx is much lower, especially when we think of a moment where the business growth is more stable. When we are growing -- when we're still lacking stability, the asset-light business still needs some backbone adjustments, especially for additional traffic. But once we have stability, the requirement for CapEx is minimal. And we have basically all the EBITDA generated by the converted business in our cash. So EBITDA minus CapEx, in the future, they will be both equivalent, but with different components.

Mobile with a higher EBITDA margin subtracting CapEx, as we mentioned, and the broadband with a lower EBITDA margin, but almost fully converted into cash when we look at EBITDA minus CapEx margin.

So for the next question, Marcelo Santos, feel free to ask your question.

I have 2 questions. First is to Camille. I'd like to hear about your optical leverage vision. I think TIM has always had a low leverage. How do you see it going forward? And on the fixed CapEx. In I-Systems model, CPE is next to I-Systems or next to TIM? Because even if you stop the growth, you have a natural churn and that would generate -- that would create a [gap].

I'll answer first. Based on our side, what happens, it's true what you're saying. If we stop growing, we're going to have a [CP] exchange to churn your position or for technological reposition. But anyway, looking at the I-Systems deal, it interesting isn't part of our CapEx. It refers our repairing, for instance. And we're exchanging a CapEx for the OpEx. They're not exactly equivalent, EBITDA minus CapEx. Then we have the CPA spot is on our side. And we have this CapEx. And this CapEx, when there's the growth in the next years, it will happen anyway.

Moving to the second question, I don't believe we have an internal debate on setting. This is 2x or 3x or 1x is the optimal level of leverage. I think the normal process for strategic decision making, especially on 5G and so on, it is leading us to a leverage a little lower than 2x EBITDA. We also need to consider that we are leaving more stressful moment even domestically or internationally, we have higher interest rates. So it's normal that we should be more conservative in this moment.

But moving forward, looking forward, we should read how the market moves and see the conditions that -- of investments that are in our favor and what comes in our future and state right now that we are comfortable with 2x or 3x. We are now at 2x leverage. If you look at our recent standards, we feel comfortable with the 2%, but we raised the payment level, and we need to take one step at a time.

Well, next question, I'll read a question from the platform. This question is coming from Summit Data. So I'm going to translate it to you. So sorry if I take a while. The first quarter numbers suggest that you are able to keep EBITDA growth [year] next to the inflation. Do you believe that excluding I-Systems and Oi, this will remain?

Also looking with this theme prices in the first quarter suffered some adjustments. What's the foreseen in terms of prices looking forward?

Let me talk about pricing and then EBITDA. The prices suffered some adjustments at our customer base. The adjustment took place from March on for the control plan and on May for postpaid. Just reminding you that we implemented this adjustment and adjustment once a year in our customer base, the adjustment that we are forwarding to our customers is essentially connected to inflation.

In control, we have had the adjustment of BRL 6 with an ARPU that is churning about 93. This is -- we're talking about an adjustment aligned with inflation rates. We also understand that we have the possibility, as we did in the past, to keep on adopting those policies in the next few years for both customer bases, TIM and Oi. And for the cost dynamic evolution and when we talk about EBITDA, of course, we have several elements that play for and against when we talk about I-Systems and [Linux] and 5G play a little against, and we have some organic, but we are at an even number.

When we talk about our cost categories, we have some electricity issues when we moved from the red flag into the green flag. So this influences our cost. We have HR. We have real estate. We have from Leo here, the passive network costs. Besides that, we have very anchored plans, actually, since last year because inflation started last year again. But part of this inflation rate, we can recover through our plans. And these plans are digitalization. We are still advancing in that field. We have BPOs that we are implementing. One of those are in network that is connected with the after lease.

Then each area already has a plan to recompose the inflationary increase that we have identified. So we are relative -- we are quite confident that as for inflation, we will be able to absorb it.

Alberto, if you allow me, in terms of the guidance that we've published to the market, the 3-year plan, we didn't open several layers that Alberto said, the 5G, the I-Systems and Oi effect. This is not open in the guidance, but we did this very well segregated in-house, and our EBITDA profit margin is quite constant.

So I think it reflects all these efforts that Alberto was saying and the EBITDA margin maintenance, with all the oscillations work are coming from these new factors and that have differentiated effects, for instance, the Oi and -- so it also diminishes the 5G owners. And there's a very constant baseline.

I'm going to have one more question from our platform. Our next question comes from [Fred Mandis] from Bank of America. He addressed it to Leo, but I think that Alberto should tip in with his CEO hat. Now that you have this competitive advantage in terms of spectrum and speed given the legacy of other players, how does it work on to [texture] of TIM so that this advantage can be profitable?

Leo and myself, we always have this positive constructive dialectics in terms of offer and network use. We have years of positive dialectics in the top line point of view doing something that is rational and commercially valid to go beyond what was the network capacity. It's a dynamic that we have that works very well. And then we have the spectrum abundance, so we're not losing that.

So our goal is to monetize is to do data monetization. We've managed to do this within a scarcity in context versus competitively versus with something that we're not going to lose in the next years because we have spectrum. And now we went from scarcity to abundance, so this is important for us for revenue. So we want that this happens in the same way.

Just adding to when Roberto was still CRO, we have this regular committee on traffic where we analyze not just the general but region per region, how is traffic growing? How is traffic monetization going? And we also set -- analyze what is free traffic and non-free traffic depending on supply. And it's not because we have abundance, not that we are not going to try to monetize. I think this only reinforces the more-for-more logic because it gives us a new road, a new pathway where we can differentiate services.

There is something that we do not comment on our presentation, but 5G bring us slicing opportunity. And when you have that, you start not just bringing opportunities to bring gigabyte packages, but soon you will start working with mapping resilience and mapping resilience. So we believe that we need to look at this abundance in a different way, monetizing our core business and more for more and bring opportunities to be -- to have differentiated services that we can bring to the market.

An interesting concept that is not related to scale is that we have this agreement with a TV broadcaster, where we have this SIM card with a differentiated link to use footage transmission, maybe in a moment on the street where you're watching some piece of news. But then you have this monetization to use some network assets. With 5G, this is even more possible. Next step is to go beyond the more for more, start a differentiation in services categories.

Thank you, Alberto and Leo. We're going back to the audience. We have a few journalists here. If they'd like to ask a question, feel free to do it, raising your hand. We have someone there. Please identify yourself.

This is [Brunomar Amarao]. I would like to ask 2 questions. Just to understand and complementing Diego's questions on cash flow. The April payments to Oi, wouldn't it influence your cash flow, so the expectation is that we start having a positive cash flow for the second quarter?

And the second question is, when we are indeed going to have the integration of Oi systems, Oi-based? Because at this very beginning, we're going to have Oi servicing you, right?

Our generation of operational cash flow is very positive because we have EBITDA minus CapEx, which is really strong. In 2021, it was 24%. In 2022, we have a few specific events, more specifically at the Oi payment and the what's heavier, what are the contributions of the funds, [AAF] and of 5G, which is around BRL 5 billion to BRL 8 billion, for instance, in terms of payment in 2022. But the company was already prepared for that. So in 2021, we finished with about 10 -- BRL 9 billion to BRL 10 billion of cash provision.

So when we see this negative cash flow, actually, it's a result of a positive cash operational -- operations, and the company was already prepared that, and we already had the resources to -- for that. So after we pay this, we will have a total positive operational. So of course, it happened because of extraordinary events.

Well, talking a little bit about Oi integration, let's remember that we have 2 great phases. The first one is the network integration that we come to home like and then we have the customer migration into TIM's systems on billing, et cetera. So we want to accelerate the network optimization, and we expect to conclude it in 3 months, counting that the deal was signed at the end of April.

In this phase, we first opened our network. I said the Oi customer can use the roaming at TIM, remembering that Oi was sub-vesting in the coverage. So right now, the TIM customers, the TIM -- Oi customers start having access to TIM cover. The second phase, we turn off Oi network, and we're being the Oi spectrum to TIM.

So in this moment, the customer -- Oi customers start being completely embedded in the TIM base with an improved enhancement in quality because they're going to be on a network with a biggest -- the highest spectrum. And for TIM's clients, also -- they also gain laterally with Oi coverage. We showed the graphs of where Oi was and we weren't. But TIM's client also will have a benefit on having a greater spectrum and a higher quality.

This period of the network lasts for 3 months. We have already started with our local code of [O-19], which was the pilot. We had extremely favorable results. And I can say that Oi clients started receiving a different use experience both in coverage and quality. And we are now extending local codes for local codes. TIM on the local codes and towers that we -- TIM has acquired, we have 6 months to implement, the same way that we have to return some of the spectrum because we did not buy 100% of the spectrum, we bought 55% of the spectrum.

After this first phase, we enter the second phase, which is the system customer migration. We're going to get a customer from the billing system from Oi and embedded into TIM's. And the second phase should last for 12 months counting -- starting in April, we will start first migrating the prepaid and control clients, and then we move towards migrating the postpaid and the B2B clients. So all the entire timeframe between network and customer base, it's about 12 months, and we expect to capture all synergies, not only by improving quality, but also having the practice of more for more, delivering more qualities and services to our clients.

So our next question is from the audience. Please, those who ask as well as identifying yourself, please stand up. Otherwise, we cannot show you in the streaming. So if we have more questions from the audience?

[Andreas Sales] from UBS. I have 2 questions. The first is about market as a whole. How do you see the growth dynamics of customer base in the mobile market? Because we saw this great growth in 2021 that throughout the first quarter, it's slowed down -- it warmed up.

But the second question is about, how do you see your CapEx dynamics that you guided for this year so that BRL 1.3 million CapEx this quarter, if we analyze, it's a little above of the BRL 4.8 million that you had foreseen for 2022.

Let me answer the first one. The second one is simpler. Okay. The first -- the market dynamics, we're talking about a market that is mature. There's not a great growth in it. What happened in the pandemic period that on one hand, we had a significant growth of prepaid, especially in 2020 related to the government grants to the lower classes. But it was a momentaneous growth, but it's because of someone who changed their SIM card.

And the second is concerned to -- related to the business world. In the public sector, there were several auctions and bids in Sao Paulo and practically in every street to enable to SIM cards for distance for e-learning. So there was a lot of SIM cards from our competitors to create this plan in the public sectors and also in partly in the private sector.

So it helped a part of the growth in terms of mobile numbers. Some of these agreements are being extended and others are being canceled because there are -- COVID restrictions are eliminated. So we've had a few elements that are specific from that moment that allowed this market to grow. If you see the SIM card ratio per person increased, if you see the business indicators, you don't notice the increment of line number.

So this will be accommodated. It's already being accommodated by -- because part of these contracts are automatically canceled. In terms of the CapEx question, when we see the quarter CapEx, there's clearly a specific view of the moment. So we're not going to see this CapEx for 2022. In this first quarter, we have 2 main drivers that are more intense now on one side -- on the one hand, 5G that Leo -- that we're going to have in all capsules. And soon, all the frequencies will be free and the integration CapEx and the preparation and integration with Oi. These are the 2 main cost drivers that we have now.

In terms of the whole year guidance, we're not going to spend more than we said we would.

Let's move back to one more question from the platform. It comes from Daniel Federle from Credit Suisse. Congratulations on the event was indeed very good. I have 2 questions. In a scenario of an early adoption of 5G compatible phones, you talked about 5 million. I'd like to see the metrics for that. Is it EBITDA CapEx?

Well, Daniel, answering your question and explaining a little bit again, why do we expect this efficiency? Because it depends on the increase of this penetration. We have a network that is growing in terms of coverage. If we increase the use of this network, removing the traffic pressure on the 4G, we can generate this efficiency. We can focus our investments on 5G, and it's part of our plan. And we reduced the investments on 4G that practically will be a legacy network.

When we talk about 600 million, we tend to capture that adoption curve. It will be increased in CapEx until 2024.

Just adding here to Leo's explanation that if we look it happens and the commercial also assists helps. So if we look today, as the curves that Leo showed, the 5G penetration at the basis, 3%, but we are at the very beginning of this curve. So we need to wait a little, but we are above of what we had expected, which was 2%, at the lower end of the curve.

Another positive piece of news is that when we look at the terminals that we sold in our stores, we are almost at 70% of terminals that are 5G. As we launch 5G, and then we're going to have a heavier communication on the topic, I don't know if anyone knows -- everybody knows, but we have the total mobile market, which is only 4% is in the hands of the carriers. The other is held by other markets. So we are talking about 5G. And as we communicate, it is probable that consumers' interest is awakened. So we are going to have the sale of terminals, and we're going to have a more aggressive penetration scenario as it had -- as it just had worked in other markets, it may actually take place here.

Well, Daniel, I think we lost your second question, sorry. But I'll pass it on for another one for the platform. It comes from [Bruno Hayes]. I believe it's for Camille. Do you intend to modify formally the dividend policies to have a higher return?

No, this is not idea to touch policy. We -- you said we had the practice of paying dividends. The company would pay like BRL 0.5 billion in dividends up until 2017 or 2016 in a very consistent way. But then when the company announced a new level of payment, about BRL 1 billion has been quite consistent for the past 4 years keeping this level. So what we are doing here is we are announcing an intention of changing the practice of dividend payment, and we believe we're going to have the same frequency and reliability as we have done in the past 4 years, but it is not a different formal policy change.

Thank you, Camille. To conclude our Q&A session, is there any other question from the audience? Please stand up.

This is (inaudible) From (inaudible). You mentioned the possibility of consolidation in ESPs. You also -- we said that this is not your priority, that we have a priority on Oi mobile synergies capture. But I'd like to know if you can talk a little bit about more what you can see for regional providers, what you think about consolidation? What kind of assets would have an adequate profile to be in TIM's radar and the timing of those operations?

Well, I'll begin, and then I'll let Camille complement. If you see the market structure where you see big national players and you have a group of regional players with -- we have gray zones with different actions in terms of footprint. The great -- the big national players such as we do, we work in big capitals, in big cities and also these -- they build a market in the smaller municipalities, and they managed to have competitive protections, putting fiber in areas where it didn't have fiber. So we have the big ones in the richer areas and the ISP. So it's big -- smaller municipalities. Of course, there are several overlapping areas.

And within the ISP, we have a small ISP, we have more mature ISPs, and they entered where there are competition with great carriers. These dynamics and networks of this capital from ISPs generated a certain -- a harder competitive scenario within a marketplace where you need to invest a lot to build the network and then you need to invest a lot to get clients. And the competitive scenery is more complicated for everyone.

From our point of view and changing a little bit from your question, it's a more limited action in terms of footprint. And with this mobile operation, we tend to keep on in the next years to grow with a good trade-off of volume and value. When you see the consolidation, we see several movements. The small ones becoming mediums, and the medium ones aiming operations that might happen from now on.

So this is a bit of the scenario that we see. There are several peculiarities, regional peculiarities. These players are regional players with the regional footprint. And also they have -- there's a dynamic between neutral networks and integrated carriers. So there's a geography size network and service. For us, we are a carrier within the big ones with the best footprint. We intend to have a consolidation in the future, but we need to have this commercial and strategic focus. So this happens -- this can happen.

Just complementing Alberto's words. It's in no way an extreme strategy shift, just another step. Our strategy remains being an organic growth mainly. What we have observed is first M&As take place when someone is willing to sell. So we are not going to be the poachers and knock on ISPs' doors asking to buy.

So the message here is that in the past, we used to -- we saw a situation that even though there was some sellers selling an asset, we would not waste our time because the valuation did not make sense vis-a-vis the value that would cost us to build the base. What we see today are valuations that are worth sitting down and run the math. But as Alberto said, it's not us who are going to be knocking on ISPs' doors.

We're going to react to market opportunities, and we need to have this opportunity of generating value because in this region, we have a relevant base that allows us post-sell and upsell, and that can help us take a step within rationalizing the market and then we can bring more profitability from this market.

So there is a set of factors that specific operations at this opportunity approach can make sense to us and that can be something that we did not use like in 0the past and we're going to start pay attention, but our focus on broadband is still organic growth.

Well, we've had a longer Q&A than expected, but we have to conclude. I know there are a few questions, especially from the platform that haven't been answered, but all of them will be answered later on with -- now we begin communication process with (inaudible) In Brazil, in U.S.A., several conferences with -- so we'll have all these road shows, and we will be available to answer all your questions. And when possible, we will call our executive team to answer.

So I'll pass the floor to Alberto. Thank you all for your participation.

I'd like to reinforce my acknowledgment to our team here by my side, he is sitting in front of me. We have the leadership team. I'd like to thank everyone who has been in our journey. We're going to have a road show. We're going to have several opportunities of answering more questions and deepen into the theme. We are going to have one-to-ones from now on for the following weeks. And thank you, TIM Brazil.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]