TIM Q3 2026 Earnings Call Transcript

TIM (NYSE:TIMB) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

TIM S.A. reported a 5.3% year-over-year increase in third-quarter service revenues, with B2C mobile revenues growing by 4% and broadband (Ultra Fibra) revenue by 12.7%.

B2B revenue increased by 19.3%, driven by new partnerships and contracts, including developments in the automotive and smart city sectors.

The company successfully implemented AI in customer care, reducing average handling time by 86% in billing interactions and achieving 93% preventive maintenance on network sites.

Normalized EBITDA grew by nearly 7%, with a margin increase to 41.3%, while operating cash flow rose by 11.6% to almost 5 billion reais in the first nine months of 2026.

TIM S.A. maintained a strong capital position with 5.2 billion reais in cash, managed a 3.7% decline in gross debt, and kept leverage at low levels despite full payment of VA and I-Systems.

Future priorities include enhancing B2C mobile and broadband value propositions, expanding the B2B portfolio, and focusing on technology-enabled societal contributions through the Instituto TIM.

The company plans to continue growing EBITDA and cash flow while being open to selective M&A opportunities, supported by their strong capital position.

Management highlighted a stable competitive environment in postpaid mobile, with efforts to optimize prepaid offerings and generate positive responses in the market.

Full Transcript

OPERATOR

Good morning, ladies and gentlemen. Welcome to TIM S.A. 2026 Third Quarter Results video conference call. We would like to inform you that this event is being recorded and all participants will be in a listen-only mode. During the company’s presentation, there will be a replay for this call on the company’s website. After TIM’s remarks are completed, there will be a question and answer session for participants. At that time, further instructions will be given.

Hello everyone and welcome to TIM’s third quarter 2026 results presentation. Following today’s presentation, Alberto Griselli, CEO, Andrea Villegas, CFO, and the Investor Relations team will be available for the live Q&A session. Before we begin, please note that this presentation may contain forward-looking statements which are subject to risks and uncertainties. And now I’ll hand it over to Alberto.

Alberto Griselli (Chief Executive Officer)

Hello everyone. Our third quarter results reinforce the consistent trajectory we have followed throughout 2026. During the first nine months of the year, we continued to grow revenue, improve profitability, and convert our operating performance into cash. This reflects the discipline with which we are executing our strategy while maintaining a solid financial position. Service revenue increased by 5.8%, normalized EBITDA grew by 6.8%, and operating cash flow increased by 11.6%.

These results keep us on track to deliver our 2026 guidance. Looking specifically at the third quarter, service revenues reached approximately 6.9 billion reais, an increase of 5.3% compared with the same period last year. In B2C, we continue to evolve our portfolio across mobile and broadband. We are developing propositions for different customer needs, creating more value for our clients and strengthening our relationship with them over time. Within mobile, revenue grew 4% year over year, supported by ARPU expansion.

Postpaid continued a positive trajectory, while prepaid showed the first signs of recovery with higher-value recharges and an improved revenue trend despite a more challenging competitive environment. In broadband, Ultra Fibra revenue increased by 12.7% year over year, while the customer base recorded double-digit growth for the third consecutive quarter. In B2B, revenue grew by 19.3% over the last 12 months, increasing their contribution to our revenue mix. We continue to broaden our portfolio through new partnerships and contracts in established verticals and connected vehicles. For example, our partnership with BYD strengthens our position in the automotive segment, while in Smart Cities, the SmartView project expands our proposition beyond smart lighting into 5G-enabled public safety. Think Cloud AI by V8 also adds cloud, data, and artificial intelligence capabilities to our offering.

Together, these developments reflect the continued evolution of our B2B business beyond traditional connectivity. We are also making practical progress in the use of artificial intelligence in customer care. AI agents already support billing and collection journeys, with our billing agent reducing average handling time by 86% compared to human interactions. We are now expanding their use to offers and sales. In our network, predictive maintenance has helped prevent, on average, 93% of failures at the sites identified by the model.

Turning to our financial performance, revenue continued to grow faster than costs, with OpEx up 3.9% in the quarter. This supported normalized EBITDA expansion of nearly 7%, taking the margin above 52% on an after IFRS 16 basis. The result was even stronger: EBITDA grew close to 8%, while margin expanded by around 1 percentage point to 41.3%. Also benefiting from costs below inflation, our operating performance continued to translate into cash generation.

In the first nine months of 2026, operating cash flow reached almost 5 billion reais, an increase of 11.6% year over year. The operating cash flow margin reached 23.9%, improving by 1.3 percentage points. Cash generation remains an important part of our performance. It supports our ability to invest in the business while preserving financial flexibility. We ended the quarter with 5.2 billion in cash. Even after the full payment of VA and I-Systems, gross debt declined by 3.7% compared with the previous year and leverage remained at a lower level. This indicator shows that our operating performance continues to translate into a healthy balance sheet, solid liquidity, and controlled leverage.

As we move into the final part of the year, our priorities remain consistent. In B2C, we will continue to evolve our value proposition across mobile and broadband. In B2B, we will continue to expand our portfolio and develop our presence in established verticals. At the same time, we are renewing the Instituto TIM with a focus on technology-enabled education, dignity, and gender equity, contributing to a more inclusive and digital society. Our results reflect a business that continues to evolve, improve profitability, and generate cash. We will continue to execute our strategy with consistency and discipline. Thank you. And now let’s move to the live Q&A.

OPERATOR

Thank you, Mr. Alberto. We are now going to start the question and answer section of our call. To ask a question, please click on the raise hand button. You will then receive a request to activate your microphone. Please remember to use a headset to provide optimum sound quality. Our first question comes from Leandro Bastos with Citi. You can open your microphone.

Leandro Bastos (Analyst at Citi)

Hello guys. Good morning. Thanks. We have two questions on our side. First one about mobile, specifically postpaid. We saw the dynamics were basically flattish on a year-over-year basis, and you guys even mentioned kind of higher retention discounts and still kind of competitive pressures. Just to get a sense of where we are, if you continue to see deterioration in the competitive environment into the third quarter and, going forward, what’s kind of the environment you see for price, price ups, and ARPU evolution, at least a direction.

So this would be the first one. The second also is still in mobile, but looking at prepaid, which we saw kind of an improvement on the revenue trajectory, and you guys even mentioned kind of a new offer for prepaid. So just to understand the kind of traction we’re seeing for these new plans and how you’re seeing overall competitors reacting to these offerings as well. So those would be our questions. Thanks.

Alberto Griselli (Chief Executive Officer)

Hi Leandro, it’s Alberto speaking. So thank you for your questions. For the first one, when we look at postpaid, I would say that the competitive dynamics remains broadly unchanged versus the second quarter. So there’s not a specific new launch besides the typical promotional activities. So in the second quarter we said that the market was a bit more edgy and nervous. I think it remains as it was. So there has not been a progress in that. And this clearly reflects in the front-book prices, updates that full control didn’t happen so far and so the situation is largely unchanged.

This clearly impacts the ARPU dynamics to some extent in the sense that we had some pressure in the first and second quarter on churn that now is over the third quarter, as we reported in our churn rates that are in our presentation. So we saw some kind of ARPU erosion at the beginning of the year because of this increased churn. And when it comes to what we call contracted revenues that are based on the price point of the postpaid plans that we sell, they are pretty unchanged versus the second quarter.

When we move to the prepaid, what is happening is that we are optimizing a bit our portfolio. As you saw, we launched a new price point that sits together with the existing one. So in some areas of Brazil we launched an offer whereby the prepaid offer is roughly 30 reais, 30 days, for a specific amount of gigabytes. In a number of regions in Brazil we included a side offer whereby we offer 40 reais, 30 days, and a higher allowance of gigabytes. And the response so far has been positive, and you see some results appearing in our third quarter.

And what we’re looking at in October, November is pretty consistent with what we’re seeing in the previous quarter. In response to that, we saw that one of our competitors announced a prepaid offer of 35 reais. I don’t think it’s already implemented, but I would say that on prepay this is a positive news because we didn’t change the 30 reais offer. We just added the 40 reais on top of the existing one. And one of our competitors said that they were moving to 35, which is a positive outcome. On a more negative side, Claro apparently put back WhatsApp in their offering.

So let’s see. It’s a mixed sign. So there are some positive ones and potentially some less positive ones on one of our competitors. Was it clear, Leandro?

Leandro Bastos (Analyst at Citi)

Yeah, very clear. Thanks. Good day.

OPERATOR

Thank you. Our next question comes from Gustavo Mieli with Goldman Sachs. You can open your microphone.

Gustavo Mieli (Analyst at Goldman Sachs)

Morning, Alberto, Andrea. Thanks for the presentation. I also have two questions. The first one would be related to capital allocation strategy. So just to hear an update from you guys on how you’re thinking priorities in terms of capital allocation for 2027, especially in a context of long-term rates in Brazil going up, as per what we saw in the last weeks here in the country. So just to make sure whether dividends or maybe potential M&As gain ground in the priority plan of the company for the upcoming year.

This would be my first question. And the second one would be related to bad debt expenses. As it happened in the last quarter, we saw some pressure on the year-over-year comparison. You mentioned some effects coming from B2B clients, as it happened as well in the last quarter. So just to make sure whether you’re also seeing some pressure in the B2C segment as well amid the tough macro environment that we are going on. So those would be my two questions. Thank you.

Alberto Griselli (Chief Executive Officer)

Let me take the first one and then we’ll leave Andrea to complement on the first and the second one. So on the first one, I would say that our plan for capital allocation remains pretty much unchanged. So when you look at our shareholder remuneration, our message and performance have been consistent over the last many years. The more we grow our cash flow—that is our priority number one—the more we distribute to our shareholders. So that’s something that has been happening for many years and that’s the guidance that we are likely to follow for the years to come.

When it comes to M&A activities, as you know, we executed this year a couple of operations. The first one was with V8 on B2B and the second one on I-System on broadband. I think that we’re going to be selective and opportunistic. On B2B, we are doing well with the strategy that we’re putting on the ground, so there might be something appearing next year, but nothing, I would say, is more of a complement than something transformational. When it comes to broadband, after the acquisition of I-System, we are deploying our organic strategy and accelerated broadband.

As you saw in our results, it’s something that is performing quite well, and so the organic plan is in place nationwide and we’re going to follow that. As we discussed in previous quarters, you all know that we are also looking at potential M&A activities in this area. And I agree with you, Gustavo, that the situation for next year is going to be good for us given our strength in terms of capital. We’ve got 5 billion in cash, so we can execute potential M&A activities in the area. That is not decided yet, but the strategy remains unchanged. As soon as we find the target that is at the right price and with the right commercial and technical synergy, we are going to pursue it.

Andrea

Hi, Gustavo. Complementing the answer of Alberto, I’ll have to say everything about the dividends and M&A. We are just to complement that we are confirming our guidance for 26 related to the shareholder remuneration. On the bad debt this quarter, when we compare bad debt with last year, we still have pressure. We increased 30%, but when we see on a quarter-over-quarter basis, we see deceleration. We had the peak of B2B impact in the second quarter. Now we continue with this increase related to the previous years, but we expect this deceleration in bad debt going forward. I don’t know if I answered your question about that.

Alberto Griselli (Chief Executive Officer)

We just add another point on, let’s say, the wider macroeconomic impact on our consumer operations. Of course things may change in the coming quarters, so we are monitoring this on a regular basis, on a daily basis, especially on prepaid. When you look at prepaid, prepaid doesn’t look impacted by this macro situation so far. As a matter of fact, you will see that our spending is moving up, and so I think that so far it’s a sign of resilience. When you look at what we call the collection curves for consumer after the price-up period that we experienced in the first and second quarter, I would say they are pretty solid, both on broadband and postpaid. So far we don’t see a deterioration of those curves. Clearly the back-book price that we want to execute next year is going to put this a bit under pressure, but we know this and we are building the countermeasures to treat our customers accordingly when we will execute it.

OPERATOR

Thank you. Our next question comes from Silvio Doria with Safra. You can open your microphone.

Silvio Doria (Analyst at Banco Safra)

Hi, good morning everyone. Thanks for taking my question. Just one question here about brand royalties. The royalties agreement with Telecom Italia expires at the end of this year, if I’m not mistaken. Could the terms change in 2027, especially under post control? That’s my question.

Andrea

Good morning, Silvio. No, we have no change related to the royalty agreement. We are still under the Telecom Italia TIM Italia brand, so until there we will continue with our royalty agreements.

Silvio Doria (Analyst at Banco Safra)

Okay, thank you.

OPERATOR

Our next question comes from Luis Chagas with XP. You can open your microphone.

Luis Chagas (Analyst at XP)

Hi guys. Thank you for the opportunity. I have two questions here. The first one, I’d like to go back to the broadband point that Alberto mentioned. Could you comment how the TIM Ultra Combo has performed since launch in terms of net adds and ARPU as well? And the second question is about the change of controller. Could you share how the dialogue with the new controller is evolving and whether you expect any change in TIM Brazil’s strategic priorities?

Thank you.

Alberto Griselli (Chief Executive Officer)

Luis, thanks for the question. When it comes to broadband, I would say that the performance so far is quite positive from a number of perspectives. We are building it up. As of now, the offer has been available only in our physical points of sale, and what we see there is a number of things. The first one is that this is driving up our ability to grow broadband by itself. So that’s the first positive. The second one is that besides the positive impact on broadband, we also have a positive impact on mobile, so we sell more mobile as a consequence of that.

The third one is that we generally are selling at a price, and we have a specific data point in our presentation, at a price point that is not necessarily the one that we communicate. As a matter of fact, more than half of the convergent packages sold are at a price point that is significantly higher versus what we communicate. The only point that we still have to assess is the churn impact because it generally takes more time. We measure it on a monthly basis; we’ve got a couple of months now. We see that the result is positive there as well when we compare the curves in M0/M1 of the convergent products versus non-convergent ones, but we need to wait more time. I would say that from this perspective, the experience has been broadly positive.

Now, what is going to happen over the next quarters is that we are fine-tuning specific aspects of the value proposition just to make the selling experience, activation and everything smoother for our customers, and we are going to expand the breadth of the commercial channels that are providing this offering. So far it’s been limited to the points of sale. We are on a check on this one, it works well, so now we’re going to expand it a bit further on.

Let’s say the Black Friday campaign is working in that direction. Is that okay, Luis, for the first question?

Luis Chagas (Analyst at XP)

Yes, just great, thank you.

Alberto Griselli (Chief Executive Officer)

So when we move to the second one, this is in the dialogue with the controller. We have a representative of the new shareholder in our Brazilian board since March, so we have been working with them now together, clearly with our parent company, for a number of months, including a number of M&A operations that already happened with them in our board and understanding and supporting our strategy. I didn’t notice any change in our priorities, and this is related to the previous questions, primarily in terms of capital allocation, expanding dividends as we experienced over the last years, and appetite for growth in the areas that we discussed, B2B and broadband, to complement our business portfolio in Brazil.

Luis Chagas (Analyst at XP)

Thank you, Alberto. Very clear.

OPERATOR

Thank you. Our next question comes from Livia Mizobata with JP Morgan. You can open your microphone.

Livia Mizobata (Analyst at JP Morgan)

Hi Alberto, Andrea, Vicente, Luisa. Good morning. I have also two questions. The first one on your broadband strategy. I would like to double click on this one. I understand that you are growing well with expectations and 2027 should be also a year of acceleration following the merger approval. How should we think here about margins and capex for next year, having in mind this acceleration? And my next point is on the AI efficiencies that you brought up.

I thought it was quite interesting, the initiatives on customer care and also network operations. Are we already seeing some gains in terms of margins or is this still too early to tell? And could you tangibilize for us what level of gains you foresee for the next years given your studies in-house and if this could potentially be a driver for the next margin expansion cycle? Thank you.

Alberto Griselli (Chief Executive Officer)

If, when it comes to fixed broadband, as you said, we are already accelerating our expansion and it’s going to continue in the coming years. Clearly we are managing so far to keep our ARPU under control despite the competitiveness of this market. Remember, the broadband market is quite competitive, especially on a regional basis. So far we’ve been successful in defending our ARPU. When it comes to the impact on margins and capex at the growth that we are experiencing, this is not going to impact the sort of messages that we have been delivering over the last years in terms of expanding profitability and a conversion of revenues into free cash flow. This remains the main priority of the company, and this year we commented the guidance just for one year, but if you look at the previous years where you have a longer time frame, you will see that we are providing for an expansion of profitability at all levels, and certainly at free cash flow level.

So we don’t foresee an impact into this within the organic operations. For artificial intelligence—

Andrea

Good morning. Related to AI, as we see in our presentation, we still have very good results in what we are working now, and we see space to increase more gains in the future. But some of the gains we will reinvest in our opex; we have other things that we want to do. So some of the gains will not achieve the margin but will create space for more investments in the customer experience. I don’t know if you want to—

Alberto Griselli (Chief Executive Officer)

I would just complement a few things, Livia. Basically, as Andrea was saying, we have a number of initiatives within the company, and now we are in the process whereby some of them are scaling up. So the two that we put into the presentation, on the network side and on the customer care side, are gaining scale. When it comes to getting scale, what does it mean? Nowadays, if you want to complain on an invoice or you want to query some kind of adjustment in your invoice, it’s 100% AI-driven, and clearly this is one of the most difficult ones.

So we are gaining a lot of confidence that this wave of artificial intelligence can impact over the coming years a number of processes within the company, generating not only efficiency that we’ll utilize either to increase our margins or to support the growth in areas where we want to invest, but also translating into quite a positive outcome for the customer experience. When you look at the way that the system works—maybe we’ll organize something by the end of the year to make it tangible—you see that the call is more assertive, it’s clearer for the customers, it’s shorter, and the customer gets away with a solution at the end of the call. This is positive also for the quality of the service at the same time. I think that one of the important aspects that we’ve been tweaking—and now we are comfortable with it—is the sustainability of this initiative.

So you’ve got the savings, but you’ve got the cost, and now we have the cost under quite good control in terms of how we manage it. So we are quite comfortable that we have a net positive outcome of these initiatives at scale.

Livia Mizobata (Analyst at JP Morgan)

Perfect, very clear. Can I just do a follow-up on this margin front since we are elaborating on the topic? Could you discuss also any updates that you might have on Fistel? I’ve been seeing this process advancing on STF over the past days, so just wanted to know if there is anything new that you could share on this front. It would be interesting. Thank you very much.

Alberto Griselli (Chief Executive Officer)

On Fistel, there is no relevant news so far. Clearly there are a number of paths to reach a solution of this dispute. The first one is the legal one, and basically this one is the longest one. Then there is the second one that is the ADI. The ADI is with Alexandre de Moraes; it needs to be put into vote—has been—but since then it’s disappeared. And there is another one that is the congressional path that addressed the TFF. The sector has a positive outcome in the lower chamber; now it went to the Senate. So there are three paths going forward. But I think that we will need to wait a bit more.

Livia Mizobata (Analyst at JP Morgan)

Perfect, very clear. Thank you.

OPERATOR

Our next question comes from Gustavo Farias with UBS. You can open your microphone.

Gustavo Farias (Analyst at UBS)

Hi Alberto and the whole team. Thanks for taking my question. I’d like to start by talking about free cash flow. We noted that free cash flow grew 3% year over year, which is below the growth we saw in EBITDA. If you could comment, I believe the drivers were mainly working capital and taxes, so if you could comment if there was any kind of timing effect on that line. And a follow-up of that question related to leverage: if you could comment on at what leverage level you feel comfortable in maintaining, especially in light of potential further M&As in the future.

I would also like to touch on a second theme related to sales and marketing expenses. We observed some decrease as a percentage of revenues compared to previous quarters. I’d just like to see if there was any non-recurring event and what to expect going forward. If I’m not mistaken, you delivered this decrease in the intensity of this line despite the expenses related to Rock in Rio. So I just wanted to know how to think of this line going forward.

Thank you.

Andrea

Good morning, Gustavo, let’s go to the first one. Related to the free cash flow. We have an increase in worse working capital this quarter, basically two points. The first one, we have an increase in the inventories level due to the Black Friday purchase. We have a higher purchase than the previous year, so we have an increase in the inventory. And also we have an increase, as you mentioned, in the income tax. Cash flow, especially due to less interest on capital.

So this is why you have this difference between the cash flow and the free cash flow. Moving to the levels of our leverage. If you ask me, I’m in the comfort of what the leverage I have now. That is, considering the tax that we have in Brazil. I think we are in a very good position on the leverage today. Of course we have room to improve, but we are very careful where we’re going forward, considering again the tax. The third point, the commercial cost, as you mentioned, we don’t have any inorganic in this quarter. The commercial, yes, we have a little, little decrease in advertising. This is due to efficiency, what we are doing. But consider that the impact of Hocking Hill happens in the second quarter because we have previous cost in the previous the event. So the higher impact of Hocking Hill occurs in the second quarter. In this third quarter it is only efficiency and things that are going on for the forward quarter.

The next quarter you can expect the same level. Of course we have Black Friday and this impacts a little bit more.

Alberto Griselli (Chief Executive Officer)

Maybe it’s worth adding that in this commercial cost we have, besides the commercial cost, we got the call center cost as well. And so basically you got a number of things going on there, something is increasing, something is decreasing, so you see the net effect. So when you look at the operation of the call centers that we have, we just discussed in the previous question, you have a cost line that’s more efficient year over year, so it’s going down in nominal terms.

Gustavo Farias (Analyst at UBS)

That’s pretty clear. Thank you everyone.

OPERATOR

Our next question comes from Maria Clara Infantozzi with Itau. You can open your microphone.

Maria Clara Infantozzi (Analyst at Itau)

Hi everyone. Thanks for the opportunity. I have two questions here. The first one related to your pricing strategy. Considering 2027, a more inflationary environment could somehow affect the pass-through of inflation to your back book clients next year, and how do you balance pricing with churn given this macro context? And the second question related to profitability, also taking into consideration the macro headwinds, are you seeing further efficiency gains to absorb the more inflationary environment?

If you could comment on that, it would be helpful. Thank you.

Alberto Griselli (Chief Executive Officer)

Maria Clara, let me go quickly over the two and then I will ask Andrea to complement also. So when it comes to the price strategy for 2027, I would say that our back book approach is not going to be impacted. So we’re going to execute and we’re going to design that. We’re going to always improve our processes to make it in a way that creates less attrition to our customer base. So we put intelligence, and more intelligence every year, into the process.

Clear, there is all this market rationality scenario that we are looking at and at the end of the day we carried out a number of launches in the last quarters and now we are 100% focused in making them work and enter 2027 at a more robust pace in terms of net additions versus this year. So if you remember, this year we entered at a slower pace versus our typical speed. This speed has been improving over the last three quarters. It’s likely to improve in the coming quarters.

So we are working to improve volumes. And when you look at the way we launched a number of new initiatives, they also work on prices in a smarter way. So you look at prepaid, you look at the beta creators that we just launched. So we are managing the tool to be better positioned in 2027. When it comes to the profitability, of course a higher inflation has a direct impact on a number of cost categories. At the same time, we are used to this. It’s a number of years that we entered the year with an expectation of lower inflation in our industrial plan and then the inflation went up. So we got a number of initiatives, processes and attention in how we manage cost. And that’s the reason we’ve been increasing our profitability for the last—how many quarters, Vicente?—for 15.

Fifteen. So it’s, I would say, business as usual. Clearly we need to find the new levers. We already have some of them mapped out. Artificial intelligence is clearly one of them.

Andrea

Just to complement, Maria Clara, the answer of Alberto. Yes, we always have improvement to increase profitability. But we also have to understand what’s happened with the tax reform because we need to understand what will happen with the inflation of this. But we are working in our new plan now and we will create rooms to try to don’t have impact of the inflation. But again, we have to wait and see what will happen with the tax reform.

Maria Clara Infantozzi (Analyst at Itau)

Very quick. Thank you.

OPERATOR

Thank you. Our next question comes from Fanny Kanomuri with HSBC. You can open your microphone.

Fanny Kanomuri (Analyst at HSBC)

Hi, thanks for taking my question. The first one is regarding the building blocks for your service revenue growth. So if you look at 2026, your client-generating revenue in mobile has been well below inflation, but that has been offset by adjacent services and fixed broadband. Should we expect this to be the scenario going forward or do you expect some reacceleration in the client generation revenues in mobile? The second one that I wanted to ask is on how you’re looking at satellites.

Some of your competitors have some partnerships. Are you looking at partnerships with them going forward and do you see any threat for disruption from them? Thank you.

Alberto Griselli (Chief Executive Officer)

Okay, Fanny. So I think that on the building blocks of revenue generation, you sort of gave the answer in your question. So we are, yes, working on three main building blocks. I think that two of them are smaller and clearly we expect to keep on growing broadband and B2B. When it comes to mobile, when I mentioned we are focusing now to get more robust entry pace for 2027, it’s clearly because when you look at our client-generated revenues, or mobile revenues, you will see that basically you have a couple of things that go together but shifted in time.

If you look at this year, you see that our pace of volumes, let’s put it this way, at least for postpaid, has been milder at the beginning of the year, and therefore we are working to enter at a stronger pace next year because at the end of the day revenue will follow with a number of quarters of delay. So our objective is to work the volumes and be more dynamic in the way we enter 2027. So that’s the reason we are moving up quarter by quarter, recovering ground.

As for price, this is a bit trickier given the overall competitive environment. But as you see, we also have to maintain a certain rationality and basically we respond to some of our competitors if they do something that we think is a bit too aggressive, as in the case of the TIM fee, the discussion that happened last quarter and has been sorted out. So for mobile, our main focus is to improve the KPI, the operational KPI. If we are successful in doing this, and we have been accelerating over the last quarters, there will be a positive impact on revenues with a few quarters of delay.

As for broadband and B2B, we are already growing at a fast pace and our plan is to keep on with this pace in the coming quarters. When it comes to the satellite, it’s in my view a complementary value proposition that is relevant for Brazil and therefore, yes, we are looking at partnership for Brazil. I think that we got something by the end of the year. The point is that basically you have two main value propositions in Brazil. One is with SpaceX and the other one is with AST. Both of them have the specific benefits. I think there was a question in the last quarter from JP Morgan and I think when you look at SpaceX as of now, the trade-off between the cost and the value proposition is not good.

Because at the end of the day what is being offered, as we speak, is basic tech services, and the business model makes this service, in my view—let’s put it this way—the trade-off between these services and what is being asked by the satellite partner is not positive. When you look at the other opportunity in Brazil, it’s AST that closed some deals with some operators in Brazil. It looks also an interesting value proposition in the future because as of now there are a limited number of satellites in place.

I think that the positioning is structurally more complementary to mobile operators. So while SpaceX basically at the end of the day has a network of its own, end to end, AST designs its network to be complementary to us. So basically they have a passive antenna in space and they need to go through our network. So we like this approach as well. Both services will be commercially capable of delivering value at the end of next year. So it’s good that we have two options on the ground.

We are discussing with both of them and I think that we will announce something by the end of the year. Fanny, was it clear? Let’s assume so.

Fanny Kanomuri (Analyst at HSBC)

Yeah, it’s very clear. Thank you. Maybe one quick follow-up. I mean, you did discuss about the impact of tax reform. Can you just give some initial takeaways on what you think the impact of tax reform will be on TIM?

Andrea

Hi Fanny. The tax reform we are working since the beginning of the year is quite transformation because we have to review systems, all the contracts with the suppliers, tax credit and so on. But what we are focused is to maintain our margin and have zero impact in the free cash flow. So until now, some regulations are still being discussed. So we have to see in the end of the year what will be the effective tax. But we believe that we are prepared to do the transition and we are working with zero impact in our free cash flow exhibition.

Fanny Kanomuri (Analyst at HSBC)

Yeah, thanks Alberto, Andrea and the team.

OPERATOR

Thank you. Our next question comes from Jose with Bank of America. You can open your microphone.

Jose (Analyst at Bank of America)

Hi all. Thanks for the opportunity. I have just one follow-up on MSR growth. It has slowed 4%. Claro’s MSR in Brazil accelerated to 7. So if you could please share with us what is your view on these differences comparing with a peer, and do you think that pricing positioning is sustainable between players, including TIM, and your pricing strategy, or would it make sense to adjust prices versus peers to defend market share?

Alberto Griselli (Chief Executive Officer)

Thank you. So, Roger, the first one. When it comes to pricing, I think that our pricing is competitive. I don’t see any major differences versus our competitors. Prepaid has been stable for many years, and now we are making an attempt to monetize our customer base. As a matter of fact, it’s a more formal strategy and it’s working. When you look at control, we are in the same ballpark on the ATL offering, and when you look at postpaid, I think that Vivo is a bit higher than us, and there might be an opportunity to increase it.

We are not just doing it right now because we are working to increase our, a safe pace of net addition going forward. So I don’t think that there is a need to change our pricing strategy because the three of us are pretty much aligned. When it comes to convergence, if you refer to this, it’s true that one of our competitors is aggressive regionally and the other two are more, let’s say, more consistent in terms of a nationwide offering. Now, since we are now upselling a convergent product to our customer base, we don’t see a reason at this point in time to be as aggressive as our competitors because we are managing to grow at quite interesting price points. That’s the data point that we shared with you in the presentation. The fact that more than 50% of our customers subscribe to a higher value versus the one we come aggressive. If you take away the fact that, on a promotional basis, in some moments of the year it’s part of our business functioning that everyone is launching specific value propositions with, let’s put it, a better price point.

But it’s temporary. Black Friday is a clear example of this. So that’s for your second question. If you look at the first question, I think that what I was saying is that when you look at postpaid, what we are focusing on is increasing the speed of growth in terms of net additionals. We entered this year at a lower pace and since then we’ve been growing with a number of launches, and our expectation is that this trend may continue and therefore this will result in a better outlook for MSR growth going forward.

When it comes to MSR, or service revenue growth, I think we have a difference versus our players, that we are concentrating on mobile. So how you treat convergent products is something that you may want to ask our competitors versus us.

Roger (Analyst)

Okay, that’s very clear. Thanks very much.

Alberto Griselli (Chief Executive Officer)

Thanks, Roger.

OPERATOR

Thank you. Without any more questions from analysts, we will now return to Mr. Alberto Griselli for his final remarks. Please, Mr. Alberto, you may proceed.

Alberto Griselli (Chief Executive Officer)

So thank you all for joining our call today. As the market continues to evolve, we are driving our strategy to accelerate mobile operational KPIs and enter 2027 at a stronger pace, as we said. At the same time, we continue to expand opportunities in broadband and B2B. I would like to thank again our entire team for the commitment and focus to deliver on our strategy. And we are all looking forward to meeting you in the coming days. Ciao.

OPERATOR

Thus, we conclude the third quarter of 2026 conference call of TIM S.A. For further information and details of the company, please access our website tim.com IR. You can disconnect from now on. Thank you once again.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.