TIMB

Good morning, ladies and gentlemen. Welcome to TIM S.A. 2026 first 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.A. remarks are completed, there will be a question and answer session for participants. At that time, further instructions will be given.

Hello, I'm Vicente Ferreira, Investor Relations Officer of TIM Brasil. Welcome to our earnings call. We will review our recent results and the evolution of our strategic plan, then open the floor for Q&A with CEO Alberto Griselli and CFO Andrea Viegas. Before we begin, please note that management may make forward-looking statements, so please refer to the disclaimer on the screen and on our investor relations website. Now, let's review our results.

Hello, everyone. I'm Alberto Griselli, CEO of TIM Brasil. In early 2026, we prioritized execution amid rising external volatility and increasingly unpredictable conditions in Brazilian telecom. The year began with relevant M&A activity, preparation for a spectrum auction, and the new below-the-line offers, among other minor news. Despite that, mobile remains rational in broad terms, so much so that operators were able to recover inflation during these first months of the year. For TIM, clearly outlining our priorities has been essential. We aim for disciplined growth and cash flow generation as we advance our strategic initiatives. To summarize, in first quarter 2026, we finalized the agreement with V8, are close to completing the I-Systems deal, rolled out our annual mobile offer updates, enhanced our new B2B approach, and consolidated our broadband recovery.

On top of that, the first quarter confirms our consistency of our financial performance and strengthened TIM's long-term foundations. From first quarter 2026 financials, I want to highlight service revenue growth of 6.5% year-over-year, driven mainly by mobile and supported by continued improvement in fixed. Mobile service revenues grew 5.6%, confirming the resilience of our core business. Profitability also evolved positively. EBITDA grew at a solid pace, and the EBITDA after lease increased 7.8%, reflecting efficiency initiatives and disciplined cost management. At the same time, operational cash flow grew 16.8%, reinforcing the strength of our cash generation. These results reflect consistent choices around commercial discipline, cost control, and capital allocation. To provide further insight, let's discuss our recent mobile performance. Postpaid remains the main contributor to growth.

In the quarter, postpaid revenues increased 7.5% year-over-year, supported by customer base expansion and disciplined monetization. We continually adjust our go-to-market strategy to achieve balanced growth and profitability, attract suitable customers, manage churn, and offer sustainable propositions. In prepaid, revenues are still contracting year-over-year, since a part of this loss is self-inflicted by pre to post migrations, we see, for now, stabilization in the pace of decline as a good news. We continue to work on prepaid offers to better monetize them while improving the customer journey. Our 3B strategy, best network, best offer, and best service, continues to drive our consistent performance in mobile. In best network, we are advancing network swaps in Brasilia and Belo Horizonte, modernizing over 1,400 sites, and benefiting 3 million customers with the upgraded 5G.

These upgrades improve capacity, quality, operational efficiency, and strengthening the foundation of our mobile business under an AI-supported network. Under best offer, our Big Brother Brasil sponsorship supported brand engagement and commercial traction during the quarter, translating visibility into tangible business impact. In best service, the MyTIM app remains central to our digital strategy. The app reached 18.4 million monthly unique user and expanded its role in customer interaction, sales, and recharges, contributing to a more efficient service model. Our three B strategy will continue to be developed to deliver results in the mobile core, while we also seek new revenue opportunities through partnerships. At the end of the quarter, we closed a partnership with PicPay. The third largest digital bank in Brazil, marking our return to financial services through an ecosystem-based model.

This partnership brings together two strong brands and massive, rich platforms to build a unique value proposition for clients with the potential to create significant value for both companies. PicPay brings scale with 67 million accounts, BRL 550 billion in consolidated TPV, and strong engagement in digital payments. By joining forces, we aim to enhance customer engagement, increase interaction frequency, and create cross-selling opportunities through simple, fully digital journeys, ultimately delivering a more complete and integrated experience. Next, I like to turn to broadband and share recent developments. In first quarter 2026, the fixed business continued to show operational improvements. Revenues were up for the second consecutive quarter, supported by ARPU growth and by fourth consecutive quarter of positive net additions. These results reflect better execution, improved sales quality, and a more disciplined commercial approach in selected markets.

If broadband is a game of consolidating our recovery, B2B is about acceleration and delivery. As you all know, B2B has become a key pillar of our strategy to diversify revenues and expand beyond traditional connectivity. Our focus continue to be on connectivity-led solutions, particularly network as a services and IoT across verticals such as agribusiness, utilities, logistics, and industry. In the quarter, contracted revenues reached approximately BRL 1.1 billion, representing 30% year-over-year growth. This performance reflects both new projects and the scaling of existing contracts, supporting by our capillarity, technical expertise, and disciplined execution. A relevant milestone this quarter was our partnership with Axia. Together, we will implement the first hydro-powered plant in Brazil with 5G connectivity. This project illustrates how advanced connectivity can support safer operations, higher efficiency, and new digital use cases in critical infrastructure, reinforcing our position in utilities and energy.

Another strategic step was the acquisition of V8. This transaction adds capabilities in cloud, data, analytics, and digital solution, along with strong relationship across corporate accounts. By combining V8 expertise with TIM Scale and Connectivity's assets, we expand our ability to deliver more integrated solution and accelerate cross-selling opportunities. Since we are talking about technology, I want to give you an update on our artificial intelligence initiatives. Our AI program is becoming increasingly more transformative for the company, changing the way we do our daily activities, the way we hire and manage our people, and the way we plan and roll out our products. We are adopting agentic AI and other AI-based solution across the organization to run a range of tasks with varying levels of complexity. Productivity gains are becoming more pronounced. Early results in areas such IT shows gains of above 20% in software development.

Faster cycles, lower IT costs, and improved system performance are supporting the first phase of a long-term transformation. Additionally, we are expanding our partnership with Google and Microsoft to deploy AI solution across the entire organization while managing token usage through FinOps approach. Looking ahead, our priorities remain clear. We will continue to strengthen our mobile business by improving network quality, evolving our offers, enhancing service, while expanding our ecosystem through partnership. We will sustain operational improvements in broadband, and in B2B, we will continue scaling capabilities through connectivity, digital solutions, and V8 integration. The first quarter of 2026 demonstrate our unwavering commitment to progress, innovation, and disciplined execution. We are building sustainable value step by step, and we are well-positioned to seize future growth opportunities. Thank you for your continued trust and support. Now, let's move to the live Q&A session.

Thank you, Mr. Alberto. We are now going to start the Q&A session. To ask a question, please click on the Raise Hand button. If your question has already been answered, you can leave the queue by clicking on the Put Hand Down button. Our first question comes from Gustavo Farias with UBS. You can open your microphone.

Hi, everyone. Thanks for taking my questions too, on my side. The first one about V8.Tech and B2B in general. What could we expect on this line in terms of growth going forward? Just a consultation. Is this line already embedded in the guidance for the year? Well, in general, how you're thinking about B2B, both organically or inorganically going forward? The second question, if you could comment on about margins, okay? How you're seeing the pace of margin expansion going forward. In the quarter, we've seen some headwinds on OpEx.

If you could help us separate what are the recurrent effects from the seasonal or one-off effects, maybe roaming costs, maybe renegotiation of contracts with tower companies, it would be very helpful. Thank you.

Hi, Gustavo. Thanks for the question. Let me address the first one and then I will hand it over to Andrea for the margin expansion. When it comes to our revenue growth, as we outlined in our strategic planning at the beginning of February, we got 3 vectors to support our revenue growth going forward. We got clearly the mobile core business, the broadband expansion, and the B2B expansion. The B2B expansion, the B2B vertical has been growing overall over the last years at a double-digit rate. Clearly, our base is relatively small within our total revenues, but the growth has been going forward at a double-digit rate. We expect this to continue in the coming quarters.

Clearly, this year we have, we finalized the closing of V8 in January and therefore, we have the V8 contribution starting in February. We have around BRL 40 million already in our numbers for February and March this quarter. V8 is also on a growth trajectory, and we expect to contribute to the double-digit growth, but on a larger base. To your question, if this is included in our guidance, yes. The answer is yes. It is. Okay, Gustavo, if it's clear, then Andrea can address the margins for you.

Yeah, it's very clear. Thank you.

Hi, Gustavo. Related to the margin, this quarter we have some pressure in OpEx, as you see. We have two major impacts. One is in the interconnection. In interconnection, we have two impacts. International roaming, that is a seasonal impact. We always have this in the first quarter, in our interconnection costs. This quarter is the higher one. The second is in providers. Providers, we mentioned before, we launch the control plans with the stream the beginning of the last year and the cost is a result of the growing of this plan. The second impact is in bad debt. Bad debt we have a higher level than the previous quarter. We have more pressure in the bad debt.

This is related, even to B2C also, and to B2B, a consequence of our macro environment. For the second quarter, we expect to continue the pressure, especially because we have a price up in the first quarter. Related to the towers, ATC, as we announced in the last quarter, we have this renegotiation with American Tower. The renegotiation impact several lines. Was a structure negotiation. We're talking about more than 8,000 towers and more than 40 contracts. One of the impact, we have impact in the reduction of our debt, reduction of the lease. We also have reduction, change of the rate. We have several impacts.

One of them is one-off in this quarter is related to the deferred deferred revenue but is in other expense. When we sold our towers to American Tower, around 4,000 towers, we received BRL 900 million. This gain was deferred during the period of the contract, around 20 years. When we renegotiation with American Tower, this contract related to this sold also was included. This period was reduced in about 2 years. In an average of 2 years. With 2 years less, we have the positive impact of less time to defer this gain. This is the impact that we have in this line, other income. We have another impact in the lease, another positive impact in the lease, referred to incentives.

As I mentioned, we have several impacts to relate, several positive impacts related to American Tower. I'm sorry that was a long explanation, but I don't know it was clear.

Yeah, very clear.

Gustavo, I can add one point in terms of margin expansion. Clearly we are going to expand our margins in the coming quarters. You have, as Andrea said, something seasonal, something that is more related to the macro environment or the price up like bad debt. At the same time, there are a number of initiatives that we are working on leases and on cost to keep optimizing the productivity of our company.

Thanks for the answer. Just a follow-up, if I may, related to how we could think about margins, or margin impact coming from this consolidation of V8.Tech. I'm assuming a different margin profile, potentially more dilutive, than the overall connectivity business. Is that correct to assume?

Yes, it's correct to assume. V8 is dilutive in terms of, it's not coming with an EBITDA margin like the mobile business, but it's accretive on the bottom line. At the end of the day, on the EBITDA margin, you have a dilutive effect, which is specific of the business. Your assumption is correct.

All right. Perfect. Thank you all.

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

Hi, guys. Thank you, thank you for taking my question. From my side, I have two questions. The first one is, how do you perceive the current competitive landscape in mobile? The second question regards fiber. Your fiber results have been improving sequentially. Would you consider M&A or JVs to accelerate growth in this segment? How do you see the current environment in terms of M&A deal opportunities? Thank you

Let me start with the competitive landscape. The competitive, Luis, landscape, it's constructive and on a above the line, broadly, rational. Of course, there are a number of discussion because, you know, this rationality, it goes up and down. There was some, let's say noise, in the in this first few months of the year. Overall, it's remain rational. I think that there are a couple of milestones that happened already and some that needs to happen. The first one that I think it's a good development is the price up in pure postpaid in the front book.

just to remember everybody, the pure postpaid remain roughly unchanged during the course of 2025, with the exception of some 1 competitor increase it, and 2 of us didn't do it. It's good news that this year, a few weeks ago, we increased our entry price and clearly all the other plans of around BRL 10. We moved from BRL 120 to BRL 130. 1 of our competitors already implemented the front book adjustment I think in February. The third one moved along a few weeks ago, also moving the entry point from BRL 120 to BRL 125.

This, I think it's a good message in terms of market rationality. It's above inflation in general. When it comes to the next milestones to look for is the control, so the hybrid plan. The hybrid plan is something that we did last year at around June, and we are assessing to implement this again this year for the third quarter, let's say, in a safe mode in terms of a hybrid plan. We would expect that it's something that everybody's considering. I got a positive outlook in my mind related to this.

On prepaid, I think that we are considering a number of options to make it balanced, because if you move up control, then there is something to be considered to be done in prepaid. Something is already being implemented on our side below the line, and we are looking at opportunities to do this in a More for More approach on the ATL front as well. This is for the competitive landscape. If it's okay, Luis, I will move to the other one.

Yeah. It's okay.

And you-

Thank you.

Okay.

Thank you.

When you move to the fiber, I think that our priority now is to come to the closing of I-Systems. That is pretty close. The integration of I-Systems in our operation. This will further support our organic plan because we're gonna have control of the network in some key markets, like Rio de Janeiro and São Paulo. This is the short-term priority related to the fiber. The incorporation of the I-Systems deal is going to close pretty soon. In terms of non-organic, I think that here the question is, we have been analyzing opportunities, we are analyzing opportunities.

It's a mixture between strategic value, commercial value, and the impact on our role, P&L and the cash flow projections. We are looking for an accretive deal if this needs to happen. We are assessing, but there is nothing defined yet. I don't know if, Andre, you want to add something on the broadband. No, it's okay? Luis, good for you?

Yes. Thank you. Very clear.

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

Hi, everyone. Thanks for the opportunity. I have two questions from my side. The first one is related to AI. It called our attention, the focus of your speech and the potential profitability expansion coming from AI and the opportunities in terms of growth in the report. Can you please elaborate more how we should think about the opportunities coming from AI going forward? The second question is related to the PicPay partnership announcement. Can you please elaborate more on how should we think about this partnership? What is the opportunity here and the potential going forward? Thank you.

With the PicPay, we'll hand it over to Andrea for the artificial intelligence in general productivity. PicPay is a partnership that fill a spot in our customer platform strategy related to the combination of telco and fintech. As you guys all recall, we already had an initiative that has been running for years with the previous digital bank. We consider that as accretive to our revenue and cash flow generation. That was an equity partners. The PicPay differs in the fact that we are in a different phase of the market and the partnership is commercial. The idea is pretty simple.

We want to create a value proposition for our customers and PicPay customers that is better than the standalone value proposition. The cross-upsell our customer bases, generating revenue growth or commission payments. Loyalty, because we know that when we cross-upsell different packages to our customers, they tend to be more loyal. This is proved. At the same time, to develop lower customer acquisition cost channels for PicPay to cross-upsell on our customer base and vice versa. This is the idea behind the partnership. We're going to work with the two different brands. We associated the brands in the value proposition to our customers. We are looking for a commercial launch in the third quarter of this year.

Hi, Maria Clara. Related to AI opportunity, as you know, we are working for the past two years. Now we are expanding the adoption of AI, rolling out to agents in the key verticals. We define two priorities, call center and network operation. Network operation, especially in the past part of maintaining. Also we are using agents to help some staff parts like legal areas, human resource, the, also the physical area. We are now starting to use agents also to collect. We are seeing the benefits. It's not a game change, but it's showing we are seeing positive impacts. The, our expectation is this continues to improve and improving our productivity.

We are doing with very careful because all these initiatives needs CapEx, and we only start the initiatives when the accounts proves positive. That's why I mentioned it's not a game change, but it's a continuous improvement in our productivity. I don't know, Alberto, if you want to.

I think it's okay. Unless Maria Clara has some follow-up questions.

Yes.

Very clear. Thank you so much.

Our next question comes from Rogerio Araujo with Bank of America. You can open your microphone.

Hello, Alberto, Andrea, Vicente, Luisa. Thanks, all for the opportunity. I have a couple here. First one, inside the other operating expenses and revenue line where you recognized the gains with American Tower. There is also higher legal provisions of BRL 115 million this quarter versus an average of 55 in the past couple of years. If you could, please talk about the potential recurrency of these incremental provisions and the reason for that. Second question is regarding leases. Is there a strong potential for further lease renegotiations going forward, or most of that has been done? If you could also say, like, for example, American Tower, have you done already all the contracts have been renegotiated? Same for IHS. If you could talk about that.

Also on leases, there is an incentive included in lease payments of BRL 66 million this quarter. Will that amount remain over upcoming quarters, maintaining the level of lease payments, or is this one-off and linked to quarterly renegotiations? If you could also talk a little bit about this recurrency. Thank you so much.

Rogerio, let me start with the leases with a general view, then we'll pass to Andrea for incremental information on the leases and the other question. When you look at the leases, basically we are working with 3 main approaches to keep optimizing our cost. Remembering that the cost they suffer an increased pressure that is coming from network expansion and inflation. In order to control this driver of cost increases, basically we are working on 3 different approaches. The first one is the negotiational approach, like the American Tower one. The deal that we closed with them, the renegotiation that we finalized with them.

The second one is the IHS that you mentioned, whereby basically we go on a make versus lease approach. The third one is sharing with other competitors. What is the status on each one of them? When it comes to the negotiation approach, we finalized the negotiation last year, and the benefits are appearing from this year onwards. We still have a couple of negotiation ongoing with other partners, and this will be information that we'll release in the coming quarters if we manage to finalize the negotiation. The impact is gonna be similar in logic to the American Tower one.

The make versus lease approach is going to be implemented over time, and therefore we substitute leases with CapEx and the overall economic analysis, it is positive for the CapEx one. This primarily is going through the objective of towers in area where a tower company have less interest because there is less ability to have two tenants, like for example, some of the regulatory coverage and the B2B segment. We also develop an ultra-cost solution that optimize our CapEx investment. The third one is the more medium term approach that is related to the sharing, that you know we are discussing with one of our competitor.

We did some progress, but we can enlarge the scope of this agreement, both in terms of number of competitors and the scope within the competitor we are working with. I would say that this is going to kick off more in the medium term because it needs time to be executed. Because basically you need to optimize and move electronics from one tower to another, so it takes a bit more time. This is for the general approach in terms of lease control management.

Hi, Rogerio. Complement to the lease information that Alberto said, we have a one-off of BRL 65 million payment in lease. This is also a reflect of ATC agreement. As I mentioned before, we have several impacts. This is a one-off and was in this quarter. What we have with ATC that is recurring is the downsize in the lease that we have with them. This will be a recurring impact. Considering the other income that you ask, we have a positive one-off that was ATC also, that I explained was the fair revenue. We have some impact, also impact in the provision. A provision increase is a normal course what the event of analysis that we have, and it also is a one-off.

You can expect that in the second quarter, this line will be, will return to the path that we normal have.

Well, that's very clear. Thank you so much all.

Our next question comes from Phani Kanumuri with HSBC. You can open your microphone.

Hello. Thank you for taking my questions. The 1st one is on what is the reaction from the customers after you had increased your prices this quarter? Are you seeing an increase in churn? The 2nd one is regarding the recent 700 MHz auction. How does that change your competitive scenario in mobile? Thank you.

Let's start with the churn one, Phani. As we mentioned in the previous call, we executed back book prices in between the first quarter, second quarter. The impact on churn, it's expected. Basically this year, we noticed a smaller increase in the voluntary churn that is it's slightly higher versus the previous quarter but is still in the range of 0.8. That is the number that we share with you guys in previous earning calls. There was an increase in involuntary churn that then is reflecting also a bit in the context of the macroeconomic in the bad debt.

Generally speaking, this impact is higher in the first quarter and then tends to phase down in the second quarter. This is what we are going to expect going forward, and the end of April is already showing some sign of this trend happening. At the same time, you see that the effect is more pronounced in our postpay net additions. In January, there was a lower number. It was 30K, then it moved up to 50. In March, it's moving up to 80. We close April is going to be higher than 80. Basically, we are ramping up back to post price up impact. This is for the first question, Phani.

When it comes to the 700 MHz frequencies, these frequencies sort of crystallized a situation whereby some of our competitors are. This frequency, I don't know if you guys remember, that has already been assigned in secondary use to the small ISP in last year. Some of them are already using this frequency to provide voice services or extend 5G services to their customer base. From a practical perspective, these frequencies are already being used, and therefore, the auction crystallized the use from a secondary use to a primary use.

As the press has been reported, Conexis, this is the association of the mobile operators, and TelComp, which is the association of the ISP, have a number of objections related to the way the auction is being carried out. There are legal proceedings happening related to the overall auction mechanisms and clear results.

Thank you.

To you, Phani.

Our next question comes from Mathieu Robillard with Barclays. You can open your microphone.

Hello. Good morning. Thank you for the presentation. I had a few questions. The first one was on energy costs. Now, I understand you do not disclose your energy costs, but obviously there's quite a bit of volatility in some of the prices, at least globally. I also understand that you have long-term agreement, but maybe if you could give us a bit of color in terms of what potential impact we could see if the situation stays as it is at the tier rates. Are you hedged? Are you in long-term contracts? That would be helpful. The second question was on tower, just to follow up. Can you clarify if you have caps on inflation for your leases? The third one was a bit broad, on D2D.

Obviously, we're seeing a lot of the players launching D2D services across different countries. I think you guys also have an agreement with one of the potential providers. Just wanted to see how interesting you thought this vertical could be in Brazil. Thank you.

Mathieu, do you want to address the energy and?

On inflation.

inflation, yes. sorry, Mathieu, I didn't get your last question.

Yeah. Okay. D2D as in direct to device. direct to cell.

Sorry, satellite.

Satellite.

Okay, cool.

Yeah, yeah.

Understood. Yes.

Sorry.

Okay.

Not B2C.

Okay.

Hi, Mathieu. Let's just start with energy. We don't disclose very much the energy cost, but we work with three lines of energy. We have the normal contracts, the open market. Then we have what we call Mercado Livre, that's when you buy a package, and we have the third one that is, how do you say? Farms of energy plant for renewable generation. With these energy plants, we have long-term contracts, and this also is including in our lease costs. And these energy plants give us a very good gain and protect us to the energy with the open market.

In Brazil, we have a lot of impact related to rains and what we call red flag here, because the government that consider this tariffs. The energy plants protect us to this kind of a lack of predictability. We are starting invest in the energy plant in the, 3 years ago. I think 3 years ago. Now we have half of our costs are managed in this kind of plant that is also one of pressure that we have in leasing. We have a positive impact between in the general cost of energy. Relation to-

Andrea, just to complement Mathieu, there is an important issue that we launched last year, which is called auto generation, whereby we will extend this predictability, this control in a wholesale agreement to a larger proportion of our overall energy consumption. This project, it's in the process of being implemented. The expectation is gonna be live by the end of basically in the 4 quarters this year. We're gonna be farther edged versus price, potential price increases.

Okay.

Yes. There is, sorry, on this, there is this gasoline that it runs on generators as a backup solution. We made sure that we provided some, let's put it this way, safety buffer for months to come.

Okay. If I got it right, about 50% of your volume consumption, I don't know if it's the cost, but it's basically under the energy plan scheme, and that will increase throughout the year.

Yes

above 50%. Okay.

Yes. Yes. Related to the tower inflation, we have all the contract is have inflation rates. We have the impact. What we work very hard and our goal is always have to least increase the inflation. Putting in other words, we observe the impact of the volume 'cause we have more towers related to the expansion of our network. We our goal is to increase leases at the maximum the inflation of the year. We observe the volume driven.

Okay. Thank you.

As for the D2D solutions, this is clearly something, Mathieu, that we see as interesting in a continental country like Brazil. Because clearly as operators, we provide coverage to a limited surface area within the country. Therefore, it's something that is potentially interesting. Now the point is that while from a fixed broadband the product is up and running, and it's something that it's already gaining share in Brazil, for the same reason of continental coverage. The D2D solution, we understand that in the current format, it's a niche value proposition.

Therefore, here I think that the big question is, the cost of this sort of agreement versus the benefits that we deliver to the value proposition. This is something that we are looking at. Today it's basically, and if you look at the launches in many markets, it's something that is very specific or very segments in remote areas with text-like sort of capabilities. This is going to change in the years to come, so it will become more appealing. Therefore, I would guess that the cost-benefit analysis are likely to change over time.

Makes sense. Thank you very much.

Our next question comes from Marcelo Santos with JP Morgan. You can open your microphone.

Hi. Good morning to all. Thanks for taking my questions. The first question is regarding the higher delinquency. You said that you expect this to continue in the next quarter. Would that prompt a more cautious credit analysis and potentially a slowdown in postpaid adds as you seek to control this? Because we saw the bad debt, we also saw the NPLs, the 1 to 30 days NPLs that had a big increase. Just wanted to say how to understand how you're going to react to this. The second question is a bit more technical. It's about the deferred revenue regarding a renegotiation with ATC. When you look at that line, like in the past, you always had a certain revenue on that line.

Is just a part of the BRL 83 million debt that is known, kind of one-off-ish? You're going to continue to have a level but below? Just wanted to understand how this BRL 83 million are going to go forward given that you had this in the past.

Hi, Marcelo. related to the bad debt, as I mentioned, yes, we are seeing a more pressure of bad debt in this quarter. A consequence of a deterioration of payment of our customers, B2B and also B2C, more B2C. I mentioned that we expect the pressure continue because we have the price up in the first quarter. As a consequence, as always, we have the price up, a consequence we have bad debts continues. You mentioned another thing about the debt.

Yes. No, but the debt, let me just put another piece of information. Marcelo, basically how we deal with it. Basically, because it's a credit. He was talking about the credit. You have a number of different mechanisms to control it, and clearly, the credit analysis is one of them. Then there are also some offer construct you can think of, like relying more on clients on credit cards, for example, on prepayment. There are a number of things that we are implementing already and assessing to cope with the current scenario.

Okay

finalize on this.

Related to the other income. When we sold the towers for American Tower, this gain was around BRL 900 million, was deferred during the period. Each month since 2018, we have around BRL 4.5 million in this line. This was for 20 years, beginning in 2018. When we make the agreement with ATC, this part of the contract that relates to the towers sold, was reduced in around 2 years. This reduction of 2 years is the impact that we have now. Once that we have 2 years less, we recognize this around BRL 80 million related to the 24 months that because our contract will end it sooner than we expect. We recognize this in this one-off operation.

I don't know if I addressed your question.

going forward it should go back to the 40-.

We will continue for 4.2 because we also decommission some towers, so as will not be any more 4.5, it will be around between 4 and 4.2.

Okay

This will continue from as always. We always have this BRL 13 million impact each quarter related to this line, but this quarter we have BRL 13 million plus around BRL 87.7.

Okay. Look, crystal clear on the ATC. On the higher delinquency impact on growth. Alberto, I understand that you have some options that you don't need to tough and crystallize, is it reasonable to say you'll be a bit more cautious in adding, like could we expect some pressure on adds or we cannot say that?

No. I wouldn't say, no, we couldn't say that. I say we're going to try to be more intelligent and selective. I mean, that I would say is rather than cautious. If you look at our net additions, as a matter of fact, it's performing well. There are a number of initiatives always in place because it's always a fine-tuning. Marcelo, when you go to the migration or acquisition in terms of you explore different segments, you explore different payment mechanisms, different offer construct. Basically this is something that is going on and we're gonna keep optimizing.

Of course, the macro, it's unknown, it's uncertain. We need to readjust our approach to the evolution of the macro environment. For example, this enroll plan, at the end of the day, can have a positive impact because it can release a bit of pressure on the level of debt of families. In general terms, what is happening is acquisition is improving bit by bit, as we move month-over-month. This is something that has been, and we highlight in the presentation.

When you look at the big broader impact, our acquisition has been improving, and this has been driving the net additions up in the first quarter and the churn has been dragging down a bit. Over time, the churn increase due to price up is going to slow down, involuntary, and the acquisition are likely to level off. The acquisition side is improving bit by bit.

Okay. Thank you. Thank you very much.

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

Thanks for taking my question. I have a question about FISTEL. FISTEL is going to be discussed at the STF this week. What's the company expectation regarding the outcome?

Well, Silvio, we believe that we have, as we always say, a strong legal case. It's good news that FISTEL is now to be treated, starting next week, the 8th. It's going to start. We think that the discussion will take some months to articulate and move forward. What we think as a sector, we have a solid legal case in terms of the moderation of these tariffs related to their objective.

Let's see what it comes out, the 8th, where the Alexandre Moraes will put forward his point of view, and then there will be a discussion that will involve all the ministers there. We believe that it's gonna take some months yet to be addressed, hopefully by the end of this year.

Got it. Thank you.

Our next question comes from Daniel Federle with Bradesco BBI. You can open your microphone.

Hi. Good morning, everyone. Thank you very much for taking my questions. The 1st 1 is a follow-up on the competitive landscape, but more focused on the hybrid, the control segment that I understand is more relevant for revenue dynamics than the pure per postpaid. By the same time last year, 2 of the 3 operators had already increased prices, 1 in February, the other 1 in the beginning of April. Far this year, no 1 has increased price. I would like to hear your thoughts on why that's happening. That's a very important development for the sector. There seems to be some rationality, but so far, no price increase. hear your thoughts here. The 2nd 1 related to clients generated revenue that decelerated from 6.3% growth to 5%.

I would like to understand it if we should understand this as a deceleration trend or that's more volatility and should rebound going forward. Thank you.

Daniel, let me go on the first one. I would say that for the. Let's say the price up, you are right. They're quite important, especially for control. Not a lot in terms of the revenue they generate for that year. Basically the alignment between front book and back book is something important for the sustainability of the More for More strategy. This is therefore an important point. As for us, and then I will give you my reading for the others. As for us, we executed our adjustment last year, roughly in, I think it was June, after Mother's Day.

It now we are in a promotional period. It's Mother's Day. This sort of More for More strategy is going, is likely to happen afterwards. My view is that in our scenario, current scenario, we are seeing this happening in the third quarter across the board. As for the reason, in terms of why the other competitors didn't do it in February, that was something that I mentioned at the beginning. You know, this market repair, the More for More strategy and this constructive approach, and it's already happened, by the way, in the past. They got ups and down, right? We already saw ups and down in the past.

Daniel Federle, you follow the sector very closely, so you might remember that one of our competitors at a certain point implemented a More for More strategy in control, and then it went back again. It depends on each company targets strategy. It's not like a linear thing. I still think that as a whole, my outlook in terms of this happening in the third quarter is positive. The, I think, if you ask the same question to the other guys, you're gonna have a more complete answer. This is my view in terms of the overall process. It's never been linear in the past, and it's always ups and down.

My outlook is that This will unfold positively in the following months. At least this is the intention on our side. When it comes to the client-generated revenues, I would say that when you look at our revenue portfolio, you see that we have mobile. Now, we said in February that we wanted to complement with the growth from broadband and the B2B. This is happening. We always say that mobile is hinged upon postpaid growth in terms of ARPU and customer base and to a less extent a lower deceleration of prepay. Let's put it this way.

Nothing of this is changed. What is changed in this quarter, and you see that everything is accretive, mobile product, B2B, and broadband. When it comes to mobile in specific, we always say that the almost double digit would have come down to a higher middle digit, and this is basically what is happening. The mechanics in the engine remain the same with a slightly different intensity.

Very clear. Thank you very much, Alberto.

Yeah, I got it too, right? Okay.

Ladies and gentlemen, without any more questions, I am returning to Mr. Alberto Griselli for his final remarks. Please, Mr. Alberto, you may proceed.

Guys, thank you all for joining today's video call. I want to thank the tireless efforts of our team for the consistent results and solid start of 2026. The environment is a bit more volatile, we focus on execution as a critical element to our strategy. I look forward to meeting all of you in the coming days on the one-to-one and group meetings. Thank you, everybody.

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

Good morning, ladies and gentlemen, and welcome to TIM S.A. 2025 Fourth Quarter Results Video Conference Call. We would like to inform you that this event is being recorded. [Operator Instructions] There will be a replay for this call on the company's website. [Operator Instructions]

Hello, everyone. I'm Vicente Ferreira, Investor Relations Officer of TIM Brazil. Welcome to our earnings conference for the fourth quarter of 2025. Today, joining me to discuss the highlights of our results, I have the CEO, Alberto Griselli and the CFO, Andrea Viegas. As usual, we close our call with a live Q&A session. So let's get started. Alberto, great to have you here. What can you tell us about the main highlights of the 2025 results?

Thank you, Vicente. Hello, everybody. It's a pleasure to share results that represent more than another solid quarter. They depict a consistent execution of our strategy and full delivery of our promises confirming the track record of TIM Brazil in meeting its target. From a financial standpoint, service revenue grew above inflation with a year-on-year expansion of 5.2%, check. EBITDA margin expansion, reaching 51% as EBITDA increased 7.5%, check, as well. CapEx was essentially flat versus 2024, check. Operating cash flow grew at double digit, closing the year expanding at 16%, check. And with the dividend anticipation, we closed the shareholder remuneration at BRL 4 billion in cash, plus BRL 750 million in share buyback, check. In all, guidance was delivered with a combination of strong cash generation and disciplined capital allocation.

Really impressive financial performance of Alberto. But beyond the numbers, what can you tell us in terms of operational results and other achievements that the company made during 2025?

Sure, Vicente. You're right. We had many deliveries that go beyond financials. In 2025, we continue to reinforce our strategic position. TIM remains the leader in 5G in Brazil with coverage of more than 1,000 cities, 52% more cities than our second player. And we, once again, the most awarded operator in Opensignal latest report, winning in key categories such as consistent quality and reliability. In B2B, we surpassed BRL 1 billion in total contracted value across all verticals and for the third consecutive year, TIM was featured on the CDP A list, confirming our leadership in climate and ESG practices. On top of that, we continue to capture productivity gains, applying digitalization, artificial intelligence and strict discipline in capital allocation.

Great list of achievements. But Alberto, what can you tell us in terms of the contribution of each area of the company and the support that those different areas were able to deliver for our results as a whole.

Okay, Vicente. When we look inside the business line, 2025 tells a coherent story. In mobile, we strengthened the pillars that have been driving our performance in recent years. Net service revenues grew at a solid pace, supported mainly by mobile services, which increased 5.4% in the year. Postpaid was again the central engine. Postpaid revenues grew 9.5% in the fourth quarter, and our base expanded by 8.4% with another year of positive net additions. ARPU in postpaid, excluding machine-to-machine, reached almost BRL 55, growing 3.1% year-on-year, which reflects our ability to combine volume and value strengthening value capture across our customers, migrating them to higher value offers while keeping churn under control. At the same time, the prepaid segment began to show more encouraging signs. The revenue decline has accelerated for the third consecutive quarter, indicating that our actions to stabilize this space through more targeted offer, better segmentation and improved customer experience are starting to gain traction. The combination of robust postpaid expansion and more stable dynamic in prepaid, supports a healthier, more balanced growth profile of our mobile business. None of these achievements would have been possible without the strength of our network. Throughout 2025, we further consolidated what has become a structural advantage for TIM, our leadership in coverage and technical quality. We maintain the broadest 4G and 5G footprint in Brazil and delivered tangible benefits for our customers. TIM's excellence was recognized in the latest Opensignal report, where we took home 6 national awards demonstrated that our investments are not just expanding coverage, but actively enhancing customer experience. One of the year's more significant milestones was the completion of our network modernization project in Sao Paulo, which has transformed the experience in the country's largest market by modernizing every site in the state, we expanded 5G and 4G coverage, increase capacity and improve overall quality performance. We are now extending this modernization to other cities with a plan that includes around 6,500 sites to be swapped in major capitals until 2027, establishing new standards of holiday and experience of our customers across Brazil. In fixed services, 2025 was a turning point for our broadband operations team, Ultrafibra. After a period of adjustment and portfolio optimization, broadband revenues returned to growth in the fourth quarter, supported by an improvement in net additions and nearly complete migration from FTTC to fiber. By the end of the year, we reached 850,000 customers and FTTH ARPU of roughly BRL 95. TIM Ultrafibra revenues grew 6.2% year-on-year in the fourth quarter. This shows that our strategy of focusing on quality, rationality and operating efficiency is working. And we are building a more sustainable broadband business for the future. Another significant milestone in 2025 is our progress in B2B our solution have achieved meaningful impact across key industries. In Agribusiness, TIM coverage surpassed 26 million hectares enabling precision agriculture, automation and greater productivity across vast rural areas. In logistics, we expanded to more than 10,000 kilometers of highways connecting major corridors and enabling monitoring, safety and operational intelligence. In Utilities, we sold nearly 470,000 smart lighting points, helping cities modernize infrastructure at scale with efficiency and control. And in mining, our advanced connectivity spanning 4G, 5G and IoT support safer and more automated operators. These verticals combined allow us to surpass our important milestones of BRL 1 billion in total contracted revenues since the beginning of this journey, confirming B2B as a structural growth engine for TIM, not a future possibility. It is already real, scaled and part of our core. Vicente, in sum, we saw relevant contribution and strong support from every single line at TIM Brazil.

Thank you, Alberto. We'll come back to you for your final remarks later on. Now our CFO, Andrea will walk us through the details of our financial performance. Andrea, thank you for joining us.

Thank you, Vicente. Hello, everyone. We closed the year with another strong set of financial results reflecting the disciplined execution of our strategy in 2025. This quarter reinforced a story that has been present all year long, cost optimization, expanding profitability and a clear focus on sustainable value creation. Over the last 12 months, our efficiency program has continued to reshape our cost structure. Operation costs again grew well below inflation with OpEx rising just 1.8% year-on-year in 2025. This reflects the structural initiatives underway across the company, showing that this approach is not a temporary effort for a core part of how we operate. This strongest execution contributes to another year of high level improvement in productivity with EBITDA increasing by 7.5% and our margin achieved 51%, making an important milestone. We also advanced a lease-related efficiency initiatives already contribution to a strong result in 2025. EBITDA after lease grew 8.3% year-on-year, supported by continued optimization of our industrial cost structure and margin sustainability. This operation year-on-year. In total, we delivered what we committed, BRL 4 billion in dividends and IoC plus BRL 750 million in buybacks reaching 139% payout ratio. This demonstrated not only our strong financial performance, but also delivered another quarter of double-digit expansion in operation cash flow, grew 15.7% year-on-year in 2025 and lifting the margin to 22.7%. Throughout the entire year, we maintained a solid cash conversion, supported by margin expansion and well management CapEx. Finally, our balance sheet remains a source of stability and resilience. Our leverage remains highly comfortable giving us the flexibility to continue investing with discipline while sustaining attractive shareholder returns. These results give us confidence as we enter 2026. We've seen well positioned to continue creating value for all stakeholders. Back to you, Alberto.

Thank you, Andrea. So as we step back and look at 2025, the conclusion is clear. It was a year of execution, consistency and evolution. We delivered exactly what we promised and build the foundation for advancing our strategy in 2026. Our direction is that we will drive value creation through mobile, B2B and broadband, supported by 3 key enablers that run across the entire company. Artificial intelligence, efficiency and ESG. In mobile, our focus remains on strengthening profitability through a customer-first approach, continuously improving the experience and reinforcing the values of our offerings. In B2B, we are ready to capture a new wave of opportunities with a wider and more scalable portfolio that integrates connectivity, infrastructure and digital services. The acquisition of V8 was an important step to enhance our capabilities. And in broadband, we entered 2026 with a more efficient operation, a more reliable service and portfolio aligned with sustainable expansion. Supporting all this, artificial intelligence becomes a transformational layer in our operating model helping us automate, simplify and accelerate decisions across every area. Our efficiency agenda remains a hallmark of execution ensuring discipline in capital allocation and allow us to explore new growth avenues while protecting margins. And ESG continues to be a structural component of who we are shaping our culture and guiding long-term value creation. Confirming this long-term deal in 2025 after many years, we finally reached an important milestone for our shareholders and the financial community. Our return on capital is higher than the consensus cost of capital. Now let's move to the live Q&A session, Vicente.

Thank you, Alberto. See you a bit, guys.

Before proceeding to the Q&A session, I will pass the floor to Alberto Griselli. Please, Mr. Alberto, the floor is yours.

Introductory note, -- good morning, everybody. Today, we took an important step in our broadband strategy by acquiring full control of I-Systems. This will allow us to improve the efficiency of our broadband operation to deliver a better end-to-end customer experience and position ourselves for future movements. Now we can actually proceed to the live Q&A session.

[Operator Instructions] Our first question comes from Bernardo Guttmann from XP.

Congrats on the solid results. again. Actually, I have 2 questions here. The first one on margins and efficiency. You delivered strong margin expansion this quarter with EBITDA growing much faster than revenues. How much of this efficiency is structural and how much was more temporary or specific to this quarter. And if I may, the second one on I-Systems. With the consolidation of the company, how should we read this strategic move? Does this suggest a stronger long-term commitment to the asset and a lower probability of a potential sale of the fiber business. And looking ahead, what would be natural next step? Does it make sense to revisit M&A opportunities, maybe looking at regional fiber players? Or is the focus now fully on organic growth?

Bernardo, let me go with the second one, and then I will pass to Andrea for the margin expansion. So the -- when you look at our broadband operation, I think that this quarter has been marked by a positive news on the industrial performance because after the fine-tuning, we managed to get to a revenue growth. So we are back on track on something that has been underperforming in the previous quarters for last year. So in the last quarter, we managed to return to a growth pattern and consolidate and optimize our model. At the same time, we need to recognize that the neutral model that we wanted to implement face a number of challenges. And so the benefits of scale that were supposed to happen as a matter of fact, that didn't happen. So the acquisition of control of a system provides us a number of benefits. The first one is that we get control of the end-to-end operation of our customers that support one key indicator that is churn management and customer level of service. The second one is that we will be able to increase our efficiency of operations. So this measure is going to be accretive on the margin expansion and a bit dilutive on CapEx, but overall, it's going to be to be neutral on free cash flow generation. And the third and most strategic one is that we position ourselves for our next step. So the question is what is our next step is and we addressed this in previous calls, whereby we said that we are looking at a number of different options. And as a matter of fact, the sale of our -- the sale of our broadband operation has never been actually on the table, right? So we say that we have extreme opportunities. We are assessing them but all of these opportunities have the intention to increase the value generation of our business. Sale was not there as an option since you mentioned, we just want to clarify this.

Bernardo. Refer to the margin efficiency. This is the consequence of the cost optimization that we are working for the past years. This year, we mentioned several times. We have an efficiency program that's in place and the result is the structure, the major parts. This quarter, we have some effects that first one is the visitor, the interconnection cost for visitors. This is effect in this quarter. If you look in the first quarter, we have increase in the visitor interconnection. And in this quarter, we have a decrease. Remembering that the cost of interconnection refers to the full year. So we have this balance between quarters. Another effect in this quarter was in the reduction of our taxation in the overtime pay. But again, these 2 effects affect this quarter, specifically the fourth quarter, but the results is the efficiency that we have in the structural way and as a consequence, we are delivering what our commitment to expand the margin.

Our next question comes from Gustavo Farias from UBS.

First of all, congrats on the results. So my first question regarding margins. We saw a decrease in the network and interconnection expense, which was really a highlight to us. If you could comment on the main drivers behind that. You mentioned in the release a cost optimization of digital content providers? And how to think about this line going forward? My second question is on mobile competition. We've been seeing some less positive figures on mobile portability in Q4 based on data from the regulator compared to past periods for TIM. How do you see this competition, especially given this mobile portability numbers we have been seeing lately? And if this -- you think this comes from any new cell impacts?

Okay, Gustavo. So let me take, again, the second, and then I will pass the word to Andrea for the first one. So when it comes to the dynamics of portability, the -- when you look at our report, you see that our churn level is almost stable over the quarters. And therefore, the increase of portability means as a matter of fact, that the share of portability within our churn is increasing. And this depends on a number of things. One of them being the commercial practices of our competitors. But our churn level is fairly stable during the quarters of last year. When we are looking for order, you will see that in the first quarter, we are executing our price adjustments, and this tends to pressure a bit the churn level as normal. So we are executing it as a matter of -- we started with messaging and informing our customers in December. And as a consequence, churn is going to be a bit higher in the first quarter, resulting in softer net additions. When you go to the new cell impact in market dynamics. I would say that if you look from a general perspective, I believe that the market is pretty rational and keep on being rational. And that our ability to attract customers remain as it was as a matter of fact. Unfortunately, Anatel stopped sharing the number of new cell subscribers. And therefore, we cannot rely on an independent source to measure the growth of the numbers. So what we see, it's our internal view and our internal view is based on a number of KPIs that we use and the impact is not material at this stage.

Gustavo. Related to the network and interconnection. We have some items that are increasing and others that are decreasing. Once that is decreasing is the visitors that I just mentioned. What is increasing -- for example, the content provides that is related to the offers that we launched last year where we put a stream for our customers. So we have an increase in this item and we also have an increase in the network related to the expansion of the 5G.

Our next question comes from Marcelo Santos from JPMorgan.

I just wanted to zoom in a bit more on the personnel expense, the tax the overtime hours. Was there any retroactive recognition of this gain? I just wanted to understand better this understanding, like, is this something that's going to change going forward? And did the fourth quarter include changes that were, let's say, retroactive to previous periods. Just to understand the sustainability of these gains over time or how enough is they are. I think that's the first question we have. The second question is there was an improvement in broadband ARPU. Does this sign away more rational market in your view? Or is it more like TIM-specific effect?

So I'll start, Marcelo with the second one. The ARPU dynamics. I think this is as a matter of fact, in our numbers a bit more our doing in terms of ARPU expansion. So we optimize throughout 2025, a number of things in order to serve better our customers and increase the efficiency of our operations. As we discussed in previous quarters, one of the things that we did was to evolve our commercial distribution in a way that is today more pull and less push. And the results of this is beneficial in a number of ways because at the end of the day, but at the end of the day, the quality of the customer that we are getting in is better. So it is one driver. Then there is a second benefit that the pull channels tend to be less expensive than the push channels. So this is one driver. The other driver is more related to the, what we call below the marketing activities, whereby we manage our customer base and move it as mobile from one plant to another plan or when they call to renegotiate. So it's a number of commercial activities related to customer management and we have been tweaking things in the right direction. And this result, it's a positive effect on the ARPU. So it's more how we're doing than the overall market dynamics that remains competitive.

Marcelo, the impact of the overtime pay is affect the past and the future. But in the fourth quarter, the impact is higher because concentrate the past -- of the past few years. So in the future, we will continue with this impact, but will be a small amount considered the fourth quarter. But bear in mind, these gains are not that sizable in our overall OpEx.

[Operator Instructions] Our next question comes from Rog�rio Ara�jo from Bank of America.

I have a couple here. First, on tower leases, if you could mention how the negotiations are evolving with lessors? And are you renegotiating terms ahead of maturities or mailing upon renewals? Also, incentives stepped up in the 4Q. What has driven that? And how should we think about incentive trajectory in the upcoming quarters? And last on tower leases, what is our latest view on lease expenses as a percentage of revenue over the next 2, 3 years? And can ongoing renegotiations offset incremental 5G and tower needs? This is the first one. And the second on Brazil's tax reform. Do you have any early estimates to share with us about the impact of the effective sales tax from 2027 onwards. And also, if an increase is expected, how much of that do you believe is passed through to consumers versus absorbed by the company?

Rog�rio, let's talk about -- first about the tower lease. The tower lease is at the end, reflects is what the results reflect what we are doing in the past years. We are working very hard in several efficiency levels in the lease. We -- this year was a challenge because we have the impact in the increased towers and also impact inflation and saying that we delivered an expansion of margin in EBITDA after lease. So moving -- this continues -- this efficiency continues. We have a lot of agreements doing with the TowerCo. We announced one of them a few weeks ago. What we expect about the ratio between the lease and revenues is main things with a slight decreasing considering that we are continuously expanding our network related to 5G. Moving to the tax.

Andrea, just a few complement, Rog�rio, on the tower. So when you look at our lease costs, there are a number of things inside. So you have -- the big chunk is clearly is the network cost. But there are other elements. Complementing Andrea, we finalized the negotiation with American Tower in the last year. When we look forward, and so challenges and objectives for this year. We have another ongoing negotiation that is in our -- on the table that is quite important. And there is -- this is part of our plan. And there is -- as you know, the network sharing discussion that are proceeding where I see that there is opportunity in the future to do more. So this initiative is a part of the overall portfolio besides the buy initiatives that we put together. So when you look at our guidance and what we shared with the market is that besides the network deployment that is a pressure on our cost besides the inflation, there is a pressure on our cost, we're going to manage to keep these leases growing a maximum with inflation and so slower than revenues. So when it comes to the share of this cost versus revenues, this is the answer, looking forward. That's what we have been sharing and implementing over the last years, and we plan to do this in 2026 as well. For the tax, I will hand it back to Andrea again.

Regarding the tax reform, what we can say now is 2026 has no impact and 2027, that's the year that we already put in our guidance is neutral on free cash flow.

Okay. And can you share maybe after all the transition period by 2033, if there is any early estimates on the impact?

Rog�rio, we didn't announce yet our guidance. So we are talking only about the numbers -- the years that we already announced and that's '25 to '27.

Our next question comes from Daniel Federle from Bradesco BBI.

Congrats for the strong results. The first one is just if you could provide more color on the price increases in the first Q. If it's front book, back book and the magnitude, if possible. The second question regarding CapEx. CapEx end up a little bit closer to the top of the range. So any update in terms of CapEx demands, requirement pressure from FX, I think it's helpful.

Okay. Daniel, let me go to the price increase first, and then we'll hand it over to Andrea for the CapEx one. So when you look at the more for more strategy, just recapping generally what we do, we upgrade our back book prices and front book prices. The back book prices for postpaid is happening as we speak. So it's the -- it's the one that I mentioned in the previous answer. So it's underway as it was last year, so we're executing it. And the magnitude is fairly similar to the one that we had last year. The -- of course, it's not 100% of the customer base we discussed we -- it happens in a couple of phases throughout the year. But the mechanics in the first is fairly similar to the amount that we executed last year. We are also discussing the -- internally, the front book prices adjustment in control, we executed this June last year. So we are planning to follow a similar pattern this year. And we are pretty confident that we can do something on postpaid as well this year. For the CapEx, Andrea.

Daniel, we are on track in CapEx. We maintain the CapEx that we announced in the guidance. The point here is when we see an opportunity to anticipate CapEx, we have -- if we generate some efficiency and we have an opportunity to anticipate CapEx, we are going to. But again, 2025 was exactly what we expect in the investments. I don't know if I answer your question. And we also -- we are always controlling CapEx. We focus on the free cash flow. I don't know if I answer your...

[Operator Instructions] Since there are no further questions, I will now turn the floor back to Mr. Alberto Griselli for any final remarks. Please, Mr. Alberto, the floor is yours.

Thank you all for joining today's video call. I would like to share a big thank to the effort to our entire team for the great results that we achieved together 2025...

This does conclude the fourth quarter of 2025 conference call of TIM S.A. For further information and details of the company, please access our website at tim.com.br/ir. You can disconnect from now on. Thank you once again and have a wonderful day.

Good morning, ladies and gentlemen, and welcome to TIM S.A. 2025 Third Quarter Results Video Conference Call. We would like to inform you that this event is being recorded. [Operator Instructions] There will be a replay for this call on the company's website. [Operator Instructions].

Hello, everyone, and welcome to our earnings conference for the third quarter of 2025. I'm Vicente Ferreira, Investor Relations Officer of TIM Brasil. This video highlights our recent financial and operational performance as well as the initiatives that support our strategic plan. Following the highlights, we will have a live Q&A with our CEO, Alberto Griselli; and CFO, Andrea Viegas. Please note that management may make forward-looking statements, and this presentation may contain them. Refer to the disclaimer on the screen on our Investor Relations website. Now let's review our results.

Hello, everyone. I'm Alberto Griselli, CEO of TIM Brasil. Today, we'll explore how our commitment to innovation, customer experience and operational excellence is driving sustainable growth and value creation. Let's dive into the highlights and key achievements that are shaping our journey this year. We've achieved a 5.2% year-over-year increase in service revenues for the first 9 months of 2025, a sustainable growth pace that combined with our robust cash conversion machine is fueling solid value creation. We keep evolving our B2B to expand new revenue streams. The TIM Smart Mining solution is gaining traction with a new partnership with Vale, the mining company. Additionally, EBITDA rose 6.7% year-over-year with a 50.3% margin and net income up 42.2% year-over-year. Our disciplined approach to CapEx has kept investment efficiency and operational cash flow reached BRL 4.5 billion. Notably, we announced BRL 1.8 billion in interest on capital and repurchased BRL 369 million in shares, reinforcing our commitment to shareholder remuneration. Once more, we stood out in ESG practices. TIM reached the top 10 of the FTSE Russell Diversity and Inclusion Index, being the only Brazilian company and the only telco to appear on the list. As I pointed out, our net service revenues continues to grow at a solid pace, driven by the mobile segment. Postpaid expansion remains a key contributor, supporting overall growth. The more-for-more strategy is helping ARPU evolution and mobile service revenues increased 5.6% annually over 9 months and 5.2% in the third quarter. This quarter, we added 415,000 postpaid lines, with prepaid to postpaid migrations up by double digits. Postpaid monthly churn remains low at 0.8%, reflecting efficient customer base management. Our more-for-more approach optimizes the cost benefit equation by balancing offer attractiveness and revenue growth. Exclusive Black Friday offers, including iPhone 16E and PlayStation 5 are enhancing our value proposition, and we expect them to help maintaining a solid trend in postpaid. In prepaid, we are seeing first sign of stabilization, supported by targeted offers and improved customer experience. TIM ULTRAFIBRA is also showing operational improvements with broadband ARPU at BRL 94 in the third quarter. Stable ARPU and the client base resuming growth at 3.7% year-over-year marking 8 consecutive months of positive net adds should reduce the negative dilution for broadband to our numbers. TIM is reinforcing its leadership in network with 5G now available in 1,000 cities across Brazil. We have the broadest 4G and 5G coverage in the country. Sao Paulo's network modernization case is setting the base for next-generation connectivity. The project reached its completion with 100% of sites upgraded this November. We are now leaders in download speed in all rankings that measure throughput. We expanded our leadership in consistent quality indicator, leaving the second player even further down the scale. On top of that, we are seeing the first sign of operational improvement with churn linked to network reasons reducing by 1 quarter. All in all, our modernization efforts are successfully supporting customer base management and delivering superior network quality, and we are expanding this project to other cities. Completing our 3Bs approach, let's talk about service. Providing excellent service is at the heart of our strategy. The revamped MyTIM app is transforming the customer experience and selling journey. With over 17.7 million unique users and 33% penetration, the app is driving digital engagement and e-commerce growth. We are the first telco to integrate with Apple Pay and Google Pay, enabling secure direct recharges for prepaid customer, simplifying the journey and encouraging recurring transactions. Digital service Net Promoter Score for postpaid and prepaid are on the rise, signaling that we are on the right path to elevating the experience with our service. Our more than 60 million customers are TIM's most valuable asset. Having this thing in mind, we are always trying to improve our relationship with clients and better monetize this asset. TIM Mais is our enhanced loyalty program, offering more benefits, experiences and convenience. Since its launch at the beginning of the year, we have seen over 2 million monthly active users enjoy the program's benefits. We have distributed 120,000 movie tickets and 20,000 Uber Rides gift cards. The program NPS is over 80 points and reflects strong customer satisfaction. In parallel, we are accelerating base monetization with mobile ads. We reached over 1,000 campaigns and 270 advertisers by September. Through the combination of our own inventory with Google and Meta, we are boosting digital engagement and expanding revenue streams beyond connectivity. Mobile ads revenues closed the quarter growing in double digits versus last year. B2B is a key aspect of our strategic plan and another way to diversify our revenue base. Since we have little legacy, the evolution of connectivity through coverage as a service is the main driver for expanding our presence. B2B IT solutions now cover with 4G and NB-IoT, 23.5 million hectares, over 7,600 kilometers of highways, and we have sold almost 400,000 smart lighting spots, generating BRL 435 million in contracted revenues since first quarter '24. The mining vertical is gaining traction, and now we have another anchor customer. Vale is joining our portfolio of clients and will be able to enjoy the benefits of TIM Smart Mining solution. We offer 5G, 4G, IoT and artificial intelligence solutions to create safer, more efficient and more sustainable environment for our customers. TIM Smart Mining can be a key enabler of automation and reduce environmental impact in the mining industry. With that, I'll hand it over to Andrea Viegas, our CFO, who will walk you through the financials.

Hello, everyone. I'm Andrea Viegas, CFO of TIM. This quarter, we delivered another chapter of consistent and disciplined execution. We've stayed focused on what matters most: sustainable growth, productivity gains and creating value for our shareholders. Our efficiency program remains one of the basis of our strategy. Thanks to effort across all areas, we kept cost growth at just 1.8%, well below inflation. This discipline translated into a 7.2% increase in EBITDA with margin reaching 51.7%. EBITDA after lease also advanced 8.3% year-over-year with robust margin expansion, a direct result of our industrial cost optimization strategy, which we've been executing across 3 fronts: our make model, contract renegotiations and network sharing agreements. Also, CADE approved the expansion of our own sharing agreement with Vivo 2 weeks ago. These initiatives are helping us to keep lease costs stable and margin expanding even in a challenging environment. Our net income rose by a solid double digit in the quarter, reaching BRL 1.2 billion and bringing the year-to-date figure to almost BRL 3 billion. This performance enabled us to distribute BRL 1.8 billion in interest on capital and repurchased BRL 369 million in shares, reaffirming our commitment to create value for our shareholders. Building on this momentum, our operational cash flow measured as EBITDA after lease minus CapEx reached BRL 1.7 billion in the quarter, up 8.1% year-over-year, supported by a resilient financial structure. In 9 months, this metric is up by double digits, reaching BRL 4.5 billion. With a strong balance sheet, we are well positioned to sustain growth and deliver long-term value. Now back to Alberto.

Thank you, Andrea. As we close, I want to reinforce that in Brasil is on track to achieve its 2025 goals and set the stage for 2026 of continuous evolution. We are delivering on our full year guidance across service revenue, EBITDA, CapEx and shareholder remuneration. With results on the right track, we are confident we can finish the year successfully and continue delivering value through the following drivers: one, our mobile postpaid and B2B segments to keep performing strongly; two, prepaid and broadband to continue recovering; three, efficiency are keeping costs and leases under control; and lastly, the buyback program is accelerating, and we are maintaining strong momentum in shareholder returns. Thank you for your attention. Now let's move to the live Q&A session.

[Operator Instructions] Our first question comes from Bernardo Guttmann from XP.

Congrats on the solid results again. My question is about mobile service revenues. We saw a slight deceleration this quarter. How much of that comes from competition versus the natural normalization of growth after the strong cycle we had over the last years? And if I may, I have a second one. There has been a lot of market talk around potential moves and M&As in the fiber space. How do you see this environment? Could this wave of consolidation change your strategy or timing around your fiber business?

Bernardo, thank you for the question. So let's start with the first one. So when you look at the mobile service revenues, I think that we anticipated in the previous quarter, this sort of dynamics, and it's pretty consistent with what you see in other years as well. So we have a curve whereby we are at a higher growth at the beginning of the year when we do our price adjustment, and then it tends to decelerate going forward. I think that in this quarter, looking at the revenue dynamics on our side, we have pretty favorable outcome in terms of maintaining our postpaid engine growth, double digit, whereby reducing the deceleration of prepaid. And this is a trend that we are going to expect in the coming quarters, whereby we are likely to balance a bit the growth with postpaid maintaining the growth momentum and prepaid, we are working to decelerate less year-over-year. So I would say that it's less dependent on the competitive dynamics that remain rational and more related to our own strategy and seasonal patterns. This is for the revenues, okay? And when we look at the M&A, I think that the -- we always say that he Brazilian market being hyper fragmented is a market that is not attractive at this point in time because of the pressure that we have on ARPU and churn. And therefore, we are looking to optimize our capital allocation in terms of how we allocate capital to broadband. So we got our specific strategy that is dependent on our specific situation whereby broadband for us is a limited revenue line. So the broadband is something that the market has been expected for many years. Given the number of players, it is going to be a process that will take some time. And we have our own strategy, organic and inorganic towards this space, and it is unchanged versus what we discussed in the previous calls. What has changed a bit is the results that we are having on broadband because as you see now, we have a quite better operating momentum in terms of net additions. ARPU is still under pressure. We posted still a negative revenue growth this quarter on broadband. But given the fact that on the net additions, we are on a positive territory or we have been on a positive territory for 8 months now. We are likely to see improvements on the top line as well as we move forward. That's okay, Bernardo?

Yes, it's very clear, Alberto.

Our next question comes from Marcelo Santos from JPMorgan.

The first is, if you could just paint a bit what's the competitive environment on mobile? And the second, do you see room to increase pure postpaid prices maybe this year or maybe the next. This year maybe already over, so maybe in the next.

Okay. Yes, Marcelo. So when you look at the competitive environment, I would say that the competitive environment on mobile remains positive in our view. So of course, there are promotions here and there. But overall, I think that the price adjustment this year went through quite nicely. And we are coding in our systems as we speak, the price adjustment that we're planning to execute the back book prices for next year. The -- as for -- so the market dynamics remain favorable. Of course, you have the smaller players that are a bit more aggressive. But all in all, they're not disrupting the national market dynamics in terms of pricing. And when you look at pure postpaid, I think we have an opportunity to adjust it. Now we are on a promotional campaign because we just launched the Black Friday promotions. So it's -- from now to the end of the year, it's unlikely that we are considering an adjustment, but it's something that we are certainly assessing for the beginning of next year.

Our next question comes from Leonardo Olmos from UBS.

Can you give us more color on the lease efficiency plan, especially in terms of timing of the expected impacts coming from the partnership with IHS and rent sharing agreement and leasing contract renegotiations?

Leonardo, related to the -- our lease efficiency, as we mentioned, we are in a continual discussions with all the partners that we have. Specific about the agreement that we made with IHS was we wanted the [ operation ] to make sites. And we made this agreement with someone who have the acknowledgment and the people to construct sites for us. So this kind of site is for some specific customers like agrobusiness or mining. And we will fund a financial and they will build for us these sites. What we expect in the leases is -- or our goal for this year, as we mentioned before, is to have the leases growing related to the inflation, although we have an increase in the number of sites for our increasing in coverage of 5G. But our goal is to increase just the inflation tax this year. I don't know if I answer your question.

Yes. Yes. Your mentioned about IHS and the overall goal. I was just wondering if -- I don't know, maybe you could talk a little bit about the RAN sharing and maybe if it's not so delicate about the renegotiations.

Yes. Sorry, you mentioned about RAN sharing. RAN share cards just allowed us to continue. We changed a little bit the series that we have before with Vivo. So we will continue our plan to make the RAN shares especially for the 3G and 4G. And we are continuing to discuss -- we are continuing to renegotiate our partners on the towers company to achieve our plan that is to not reduce the lease because we can, but growing the lease only related to inflation. We have another agreement, but we are not -- now we can't disclose it. But as soon as we achieve our new agreements, we will disclose for you.

Okay. Okay. Sounds great. And you have been delivering quite excellent development on that front. Congratulations.

Our next question comes from Vitor Tomita from Goldman Sachs.

Two main questions from my side. One is a quick follow-up on the fiber business. Just if you have an update on the organic side on what has been supporting those improving net additions, if it's the same initiatives that you had in place before, such as focusing more on higher-end customers, higher value customers [indiscernible] churn or if there is anything new that's interesting on the strategy there? The other question is a bit of a follow-up on what people are asking about the competitive environment. Very specifically, there has been some noise in markets in October due to new banks, new sell MVNO, increasing commercial outreach in some areas, promotions to some extent. Was that noticeable at all from the standpoint of our commercial teams or very -- or something in my mind or just noise?

Sorry, Vitor, I had my mic switched off. So going to the fiber business. So what happens -- what happened on the fiber business are primarily a number of things. primarily related to the quality of the acquisitions and the management of the customer life cycle. So when you go into the quality of the acquisitions, it's primarily related to optimization on our credit scoring of the customer base and local targeting and the commercial channel footprint. So there are some channels that are naturally -- that provides naturally more quality, whereby other channels provide less quality. And so we changed over time the mix of our acquisition, and we targeted better high-value segments within the footprint. So this is for the entrance of customers. On the other side, there has been a lot of improvements on the churn management side. And this is partly related to the first question because if you get more quality at the beginning, you lose less customers because of bad debt and delinquency rates. And at the same time, we improved the quality of the service as a whole. So these are the 2 main areas when we had some relevant progress that moved us into net growth. When you go to the competitive environment, you're right that over the last quarter since the launch, [indiscernible] has been increasing progressively the allowances to their customers. So they started with 3 plants with a specific allowance. And then over time, this is, I think, the third time where they're increasing their allowance, so more gigabyte per price. And to some extent, I think they reduced the price in some plants on some BTL offer to our knowledge. I would say that the -- playing the gigabyte per revenue side is something that we can respond quickly because it's our network. It's -- we are deploying 5G. We've got [ 4 ] of spare capacity. We didn't do so yet because so far, the -- what we see, it doesn't request an answer on our side. And so we keep monitoring the progress in terms of losing customers or potentially losing customers to them. So far, no need to respond.

Our next question comes from Maria Clara Infantozzi from Itaú BBA.

I would like to [indiscernible], please, how do you see the growth opportunities coming from B2B and IoT? You have been vocal about the monetization coming from the market. So just wanted to ask you about how do you see the size of the opportunity, your long-term goals and how you see the evolution of revenues in the short term?

I'm not sure that, Maria, understood correctly your question. I will try to rephrase it. And basically, if I understood correctly, is how we are going to maintain the growth in the BIoT segment? What is the question?

Yes. Actually, I asked you to please explore more how you see the long-term growth coming from B2B as you have been vocal about the monetization opportunities. And if you could please comment how short-term and long-term goals are perceived by you, and where are the opportunities would be great.

Okay. So -- and Maria, just to be clear, it's just B2B or it's in general?

B2B and IoT, which is...

B2B and IoT, okay. Got you. So, Maria, it's basically, the way we're -- as you know, our legacy on B2B is pretty small. So if you compare us to other players in the market, we don't have a legacy. And therefore, we put together a strategy that is specific to our DNA. So we selected some verticals and the verticals we selected, for the time being, are agribusiness. It is the first one that we launched. Infrastructure was the second one. We got utilities that it's quite promising in Brazil and mining. And we selected these verticals because we think they got a larger fit with our technological, let's say, DNA, let's put it this way. And the way we look at this is that we started organically now, and we got quite a traction on these 4 verticals on a concept that we call coverage as a service, primarily. And this has been driving in the -- as we speak, the growth in these verticals. When you look more at the medium term, we have the ambition to increase our portfolio of solutions to include security, to include cloud that we can cross upsell to our services and possibly to expand the number of verticals we are servicing. As an example, the one that we are working is manufacturing. And these competencies and capabilities, we can grow them internally, and we are working on that already. We've been working on that already. But we are also looking at ICT inorganic moves that will provide us the ability at a faster pace to win a larger share of wallet of our customers. So this is not something that -- so we moved -- it's something new within our strategy. It's been launched a few years ago. We almost reached BRL 1 billion of contracted revenues over these years. We are recognizing as a leading partner in the verticals where we operate. If you look at the clients we have there, we've been successful commercially. And now we have, in the coming years, the objective is to consolidate our positioning and expand the portfolio of services and the relationship with our customers. And therefore, if you look more on the medium term, it's going to be a mix of organic and inorganic growth.

Our next question comes from Phani Kanumuri from Santander.

So I have a couple of questions here. The first one is on your operating cash flow after lease. In the first 9 months, it has a growth rate of 11.8%, but it's trending slightly lower than the 14% to 16% for this year. So what is driving that? And the second one is looking at the competitive situation now, how do you -- how confident are you on your 3-year plan in terms of revenue guidance and results?

Let me take the first one, and I will pass the second one to Andrea. I will repeat it just to be sure that we understand it correctly. So the first one in terms of competitive environment, we -- as I mentioned, I think, to Bernardo in the first question, we -- the overall -- at least on mobile and not on broadband, but on mobile, the competitive environment remains rational. And therefore, we are in the position basically to keep growing the top line according to the guidance that we shared with you last year. Of course, as every year, in February next year, we're going to upgrade it. And therefore, when you look at the overall mobile environment, I would say that it didn't change versus the picture that we presented when we shared our guidance in February. And therefore, everything is confirmed. Of course, there are nuances whereby we see postpaid in mobile driving the growth. and a potentially improving situation in the prepaid environment. When you look -- and the second question, if I understood correctly, is the operating free cash flow dynamics, 11.8% versus our guidance of 14%, 16%. Was that the question, Phani?

That's the question, Alberto.

Yes, that's the question. Basically, if you look at our dynamics, we are confirming our guidance. And we believe that when you look at how revenue growth, EBITDA expansion, EBITDA after lease expansion and CapEx will combine in the next quarter. This will put our operating free cash flow expansion within the range of our guidance. Now since we are at the end of the year, basically, you can easily do the calculation and see what this will imply in our numbers, but I'll leave this to you, but we are confirming our guidance for the full year.

Next question comes from David Lopes from New Street Research.

Just a couple of follow-ups. On the price increase you did in Q3, I was wondering if you could give a bit more color like maybe the magnitude and what's the percentage of the base affected? And now that prepaid trends are easing, I was wondering if next year, do you have a possibility to do a price increase next year on prepaid? Or is it still too early? And the second question is on B2B. I was wondering if you could give any maybe color on margins you're getting from B2B? Is it dilutive to your margins or not?

Okay. David, I got the last 2 questions. I will address. I lost the first one. So on the second one, this is a prepaid price increase. Just an overall comment. Basically, the -- when you look at the more-for-more strategy, this is the way we implement it. So generally, it's a price adjustment that always comes with some extra benefits for our customer base. And on prepaid, given the construct of the offer, it's a bit trickier to change the price -- as today, we're basically marketing BRL 1 per day. So it's deeply linked in the offer construct as a sort of easy to deconstruct. I would say that we are exploring as a way to monetize our customer base, the prepaid to control migration. And that's a way that we found very effective to monetize our customer base. We'll keep doing it. And the other thing we are looking at is the way we balance the benefits between prepaid and control to make sure that the migration makes sense as we increase prices. And so therefore, not entering into a lot of details into how we're going to do this, we can explore this in the one-to-one section, where we got some plans there as well. When you look at the marginality of B2B, so the marginality of B2B, generally speaking, when you look, we got 50-plus EBITDA margin, the B2B offering goes below typically this number. But when you look at what really matters, which is cash flow generation, they are accretive. So they generally tends to be dilutive on the EBITDA margin, but that tends to be accretive on the bottom line. And that's it. The first question, I'm not sure I got it. There was a first question or was these 2 questions, David?

It was just on the -- if you could comment on the magnitude of the price increase you did and what percentage of the base? Did you do the price increase just to hybrid or some pure postpaid customers?

This year, we did -- there are 2 types of price adjustments. We classify front book and back book adjustment. On the back book adjustment, we impacted both control and pure postpaid. We did it already. And it's not 100% of the customer base because we personalize this depending on a number of things in order to minimize attrition and churn management. But we did the back book price adjustment at the beginning of the year for both control and pure postpaid. When you go to the front book price adjustment, we did those adjustments in midyear for control, and we didn't do it for pure postpaid. And I think that was the question from a colleague of yours before. And basically, what we are looking at is to make this adjustment. We are assessing. We didn't decide yet, but we think that there is space to adjust them, not now because we are in a promotional -- in a seasonal period of the year with the Black Friday and the Christmas campaign. So it's something that is probably going to happen in the first quarter of next year.

[Operator Instructions] Ladies and gentlemen, without any more questions, I will return the floor back to Mr. Alberto Griselli for his final remarks. Please, Mr. Alberto, you may proceed.

So thank you all for joining today's video call. We are arriving at the end of the year with strong momentum. We are executing our strategy with discipline and consistency. Despite being just 2 months away from 2026, we still have a lot to accomplish in '25. This year-end will be very exciting, and we expect to deliver on the promises we made to the market. I really want to thank the entire team for their commitment and relentless drive. Thank you. And I look forward to catching up with you guys in the one-to-one session. Lastly, a final message to our sales team. We put together a special Black Friday offer for our customers. Let's go for it.

We conclude the third quarter of 2025 conference call of TIM S.A. For further information and details of the company, please access our website, tim.com.br/ir. You can disconnect from now on, and thank you once again.

Good morning, ladies and gentlemen. Welcome to TIM S.A. 2025 Second Quarter Results Video Conference Call. We would like to inform you that this event is being recorded. [Operator Instructions]

Hello, and welcome to our earnings conference for the second quarter of 2025. I'm Vicente Ferreira, Investor Relations Officer of TIM Brazil. This video highlights our recent performance and how we see the market evolving in the first half of the year. After that, we have a live Q&A with our CEO, Alberto Griselli; and our CFO, Andrea Viegas. Please note that management may make forward- looking statements in this presentation may contain them. refer to the disclaimer on the screen and on our Investor Relations website. Now let's review our results.

Hello, everyone. I'm Alberto Griselli, CEO of TIM Brazil. The first half of 2025 has been marked by strong execution and clear strategic vision, driving solid financial and operational results. Service revenues grew by 5.4% year-over-year, supported by mobile services, while EBITDA increased by 6.5%, reflecting improved profitability with a 49.5% margin. Operating cash flow expanded significantly, while we maintain our commitment ramping up distribution to shareholders. We continue to lead in 5G technology, which allow us to offload traffic from 4G. Today, 30% of traffic flows via our 5G network. Additionally, TIM was recognized as the most sustainable Brazilian company, topping the B3 Sustainability Index. Global volatility has increased by end of the semester, but we march forward implementing our strategic initiatives. Network modernization accelerates with new regions, partnerships expand and new revenue opportunities are developed. We are on track to meet our 2025 targets. As I mentioned, our service revenues evolution is driven by mobile. In quarter 2, total service revenue grew 5.1% year-on-year, while mobile sustaining a faster pace at 5.6%. TIM's strategy to combine volume and value initiatives to offer innovation and rational commercial approach is working as the company posted the highest mobile ARPU in the industry at close to BRL 33 per month, expanding at mid-single digits. At the same time, we added more than 450,000 new postpaid customers in the second quarter. Postpaid services have increased in importance with a penetration rate close to 70% of mobile service revenues, confirming the shift towards more stable and higher value customer segments. It's been 14 consecutive quarters of rapid postpaid revenue expansion. In quarter 2, we maintained the double-digit pace closing the first half with 12.2% year-over-year growth. Again, a combination of solid ARPU dynamics, held by control to pure postpaid upselling, and healthy customer base trends with low churn levels and pre to post migrations. In the first quarter, we introduced the concept of 360 degrees presence in specific markets. Sao Paulo was the first and now we are expanding this approach to other regions of the country. Under this project, we work with a tripled network, brand and channels, aiming to translate our network leadership into changes in customer experience and perception. In Sao Paulo, we have completed the modernization of half of the sites we committed to already benefiting nearly 250 cities and approximately 10 million people. The network swap improves coverage, capacity and reduce energy consumption. Following this implementation, we expanded our overall download leadership versus our peers. And for the first time, we became leaders in 5G as well. Speed with our coverage is not enough. That's why our coverage leadership comes first, followed by capacity to improve throughput. Minas is next there, we doubled the number of cities with 5G, benefiting around 10 million people as well. Commercial presence is expanded with 13 new stores in 2025, including 1 flagship location. Changing gears to new revenue streams. Our B2B IoT strategy is performing well. We have seen substantial growth in contracted revenues, particularly in agribusiness utilities and logistics, specifically in the last vertical, we are consolidating our leadership amid an increasing interest from our peers in these projects. We expect that the sector can maintain a rational approach as we have seen in traditional mobile. As pioneers in bringing digital connectivity to Brazilian highways, we have reached about 7,000 kilometers of roads covered, almost half of those are in partnership with large logistics players such as [indiscernible] and EcoRodovias. It's worth highlighting that we are starting to move up in the value chain, adding solution to our connectivity. Video monitoring and specialized road lighting are now part of our portfolio. TIM is committed to provide the integrated solution that enhance operational efficiency for clients in various sectors. Further developing the B2B IoT opportunity, we will expand our addressable market and open new avenues for growth. with similar goals, our digital ecosystem continues to expand. Our collaboration with Eletrobras is materializing as we launched the first 2 markets with energy sales to corporate clients. Nationwide expansion is expected by September. Under this partnership, we are offering to high-voltage clients up to 30% discounts on the energy bills, targeting approximately 2 million customers. Sales, we leveraged TIM's existing SME engines. Additionally, our 5G fund is bearing fruit. This technology-driven investment is performing well as investee grow their business and improve their valuation contributing positively to the fund's performance. A new investment is on the way, a financial service company named [ Kat ] Investimentos. They are developing and delivering financial solution through a credit as a service model, facilitating access to capital and reducing the dependence of traditional banks. Moving ahead to infrastructure, I would like to recap how TIM is leading the way in 5G development in the country. It's been 3 years since we began rolling out the technology that will change the way we view investments in the telecom sector. Today, we cover 70% of the urban population, and we are #1 in cities with 5G. The rapid expansion of our coverage has helped the number of 5G devices to grow fivefold since 2022. And now it represents 28% of total devices. This pairing, availability plus adoption, is playing a major role in enabling traffic to shift from 4G to 5G. In state capitals, 5G accounts for 30% of data traffic. And in Sao Paulo, offload is at 36%. Customers spend over half of their time on 5G networks, reflecting strong adoption. Thanks to this scenario and 5G lower cost per gigabyte, just 30% of 4G, TIM is using its resources more efficiently. Another technology is also a key driver of operational efficiency and cost savings. Artificial intelligence is at the center of present and future opportunities to improve productivity. The company has mapped 100 use cases, prioritize 56 for strategic feeding value, piloted 24, and executed 7 projects focused on operational improvements. Most pilots target cost efficiency with some addressing commercial opportunities. 6 new projects are scheduled for development in the second half of 2025. This structural II pipeline demonstrate team's commitment to leverage advanced technology and innovation to optimize operation, enhance business performance. Now let's move on the financial details with our CFO, Andrea.

Hello, everyone. I'm Andrea Viegas, CFO of TIM. I'm pleased to share that we've delivered another quarter of consistent performance, reinforcing our ability to stay on track with our guidance dynamic environment. Once again, we are seeing the benefits of the disciplined cost control. Our efficiency program is running at full speed, helping us keep cost growth below inflation. It's important to note that this multidisciplinary initiative impacts all expense lines and enable us to continue investing in key areas of our business. This strategy has consistently driven improvement across all major operating metrics. We have sustained positive momentum in both EBITDA and EBITDA after lease, showing another quarter of margin expansion. On the lease strong, as I mentioned last quarter, we have several initiatives underway to optimize our industrial costs and lease like tower contract negotiation, evolution of our rail sharing and also new partnerships tower development. Our bottom line continues to expand as a healthy pace, marking at another quarter of strong earnings growth and reinforcing the consistency of our financial delivery. As Alberto mentioned, we've now completed 3 years of 5G operations. Since then, we have been bearing fruit from the efficiency brought by this technology, which has become one of the key levers in our CapEx management strategy. All of this supported our operational cash flow, which once again posted double digit growth. This performance highlights our strong first half results and confirms our commitment to our strategy. Now back to Alberto.

Thank you, Andrea. Before we conclude, I would like to highlight our ESG achievements. We disclosed our annual report with significant strides in our commitments, among other, use of renewable energy, promotion of diversity and inclusion policies, prioritization of accessibility for people with disabilities. These efforts have earned TIM recognition across multiple sustainability indexes and awards, reinforcing our leadership in corporate responsibility. Looking ahead to the second half of 2025, TIM is focused on executing its strategic initiatives to meet its targets. Key areas include: first, developing new partnership with a special focus on financial services. We expect to announce new initiatives in the coming months, filling the space left by C6 Bank expanding our presence within the financial service sector. Second, advancing B2B IoT solution with the expansion of our portfolio and services and reinforces the presence in selected verticals. Third, accelerating implementation of efficiency initiatives under our program, supporting our ability to expand margins. Fourth, securing the implementation of a new approach to leases, renegotiation with reduced prices, tower company switch is a key lever, share infrastructure and reduce exposure and building is now an option. Fifth, improving broadband operation while proactively monitoring market movements. I want to emphasize our consistent trajectory of progress the company's commitment to innovation, operational excellence and sustainable growth as it drives forward into the remainder of the year. Thank you all for your attention. And now let's move to the live Q&A session.

[Operator Instructions] Our first question comes from Marcelo Santos from JPMorgan.

I have 2 questions on my side. The first is -- the first question is the outlook for lease lines in the remainder of the year. So I think the first couple of quarters, the line didn't increase that much. So just wanted to see how we should expect to progress, especially now that you have these new tower projects. So an update would be great. And the second I would like to see if there's an evolution on management thought about the fixed business. So I think in the previous call, you have discussed that you're considering a full spectrum of possibilities for what to do, what team wants to be on this business? I just want to see if something has evolved from the last call to this call.

Marcelo. So let me take the second one, and then I will pass to Andrea for the first one on the tower. So when it comes to the fixed business, in terms of inorganic progress, there is no additional news to be shared at this stage. So we are on the organic side, focus to optimize the businesses. So you see that for us, it's more, the scenario remains competitive. And we are tweaking our operations. So you will see that basically, we are losing less and increasing our customer base. And so we're doing some small adjustments and progress there. In terms of nonorganic opportunities, we are at the same stage like last quarter. So basically, we got from one extreme divestment of the asset, whereby we will lose our strategic optionality on the other extreme some kind of largest deal that are, by definition, more complex. And in the middle, some more balanced opportunities that are the ones where we are focusing. And as soon as we are going to have some update, we're going to share with the market, nothing to date. And will pass tower to Andrea.

Marcelo, related to the towers, as we mentioned before, this year is a very challenging to the lease, especially for inflation and also of our rollouts. We are keeping negotiations with our partners, that our company is a very hard negotiation, very tough, but we are positive that we will achieve our goal in this year that is the increased lease in the path of the inflation rate. We also are studying some alternatives as I mentioned. And as soon, we have news about this, we will show you. But we are constantly keeping the negotiations with our partners.

If I can add on the negotiation a few points, Marcelo, basically, what we've found over the last months is that some of the main players are more willing to negotiate than in the past, whereby other one are less willing to negotiate in the past. What we are literally looking is some win-win situation whereby we got towers that are above market price of what we consider to be a fair market price to a fair market price, and we got some negotiation, let's put this way, counter positive things to be put on the table like extension of the contracts and this sort of time. Then there is some -- in the case of the tower companies, and this is specifically one that is less inclined to negotiate with us. We already communicated that we are going to decommission all towers that are above what we consider to be fair market prices. Of course, it's not something going to happen in the super short term because we need to wait for contract leases to expire. And so there is a pattern there and not to pay fees or fines related to the early termination but we are committed to the commission towers that are not in line with market prices. And we're already doing it.

Our next question comes from Gustavo Farias from UBS.

Congrats on the results. Two from my end. The first one, if you could give a little bit more color on CapEx and leasing efficiency measures and the outlook for CapEx intensity for the second semester and especially in the light of this whole network modernization in Sao Paulo, and the 5G expansion in Mina Gerais. And the second one, if you could comment on the sales and marketing expenses and how to think about this line going forward, and also considering the ongoing commercial efforts in Sao Paulo at the opening of new stores and so on and so forth.

Okay. Let me go with the first round of answers here. When it comes to the CapEx efficiency, as we said, we -- the -- these are related to a modernization of our infrastructure, basically that has been negotiated last year. And basically, the good news is that what we were expecting in terms of improvement in TCO are materializing. We are in the middle -- let's put this way, in the total swap of Sao Paulo capital. So the swap is performing well in terms of network performance. So if you look at the benefits of what we are doing for the customers, you will see that we reached the #1 position in -- we already had in coverage and average speed, meaning 4G and 5G. Now we are best-in-class in both 4G and 5G and, of course, in the average. And so you see that from that perspective, the modernization project is delivering what was expected to deliver in terms of increased coverage capacity, better service to our customers. At the same time, when you look at the efficiency, what we are measuring now is that what we were expecting, it's also materializing. So some of this is more negotiating like the unit pricing, this sort of stuff. Some is related to TCO and that this includes other costs like wind space, like energy consumption. And all these benefits are materializing. So what we designed in our plan and is reflected in our guidance is being delivered in Sao Paulo and therefore, now the expansion in our big capital, same approach to capture the same benefits. And of course, this is then coupled with increased commercial penetration in those regions. As we say, the 206 approach that is made up of -- is built on network robustness and to deliver in the midterm, increased commercial performance, and this comes also with new point of sales and increased communication. So we are putting all the levers. When it comes to the second question, which is related to marketing and sales, in there, you've got a lot of cost categories, each one with different dynamics. So you've got some structural project like -- I will mention a few. So in that category, you have carrying costs and you know that we are implementing a number of initiatives to increase the level of efficiency there, like the artificial intelligence project that are reported in the presentation. Then you have commercial costs. And if you look at what is happening, we are shifting a bit more of our sales to e-commerce, for example, and e-commerce is more efficient for us versus other channels. And at the same time, I don't know if you remember, we internalized the e-commerce migration 1.5 years ago, gross addition more recently, when you internalize, basically, you put CapEx to internalize, but then you don't pay commissions. And also the...

E-billing -- also the e-billing and fixed peak payments that we have a reduction in our costs related to this. But if you look forward second half, we have more campaigns than the first half. So in this first half of the year, we have a very good performance related to the last year. But in the second half, we have more campaigns, Father's Day, Black Friday and Christmas Day. So there is a seasonality first half of the year.

It's okay? Did we answer your questions?

Yes. Super clear.

Our next question comes from Vitor Tomita from Goldman Sachs.

Two questions from my side. The first one is more on the mobile revenue side, the release sites that there was growth on the on customer-generated revenues driven by the customers, but also driven by roaming revenues and some interoperator agreements. Could you give a bit more color on this and whether this was due to any major new agreements since I remember that's the initial booming roaming was more related to a change in our plans to include the more international roaming. And my second question would be a bit of a follow-up on the tower efficiency point that other questions raised. If you could give a bit more color on that initiative of a new RFQ partnership for 1,000 new towers and on how that differs from the way you typically negotiate or think about start construction. You also cited that building towers is more of an option now. So I just wanted to dig a bit more on that.

Okay, Vitor. So let me go with the first one, and will pass to Andrea for the second one. If -- when you look at the revenue generation drivers, basically got user generated in our report, you see different lines. So all of them are improving. And basically, when you look at this set of drivers, you have the user generated revenues and the postpaid we said is driving it. And when you look at the other categories, you will see a number of different things. What is there? You have a combination of a roaming agreement that is related to what we commented on the previous calls. Then you have the B2B IoT progress that is also inside these numbers. And then you have -- when you look at the customer platform level revenues, you will see that you have a different mix of drivers. So if you look overall, you see a flattish number. But remember that you have something that we had last year, like C6 that we don't have this year. And so we have some line of business like mobile advertising, and t data that are growing double digit. This is all related to our core strategy that is mobile and incremental revenues that we are working -- and roaming would be in that category because it's part of the evolution of our main offerings. And then you have new revenue streams like the B2B IoT or mobile advertising and t data that are growing faster and contribute to the overall growth, exactly in line with our strategy to diversify our revenue portfolio.

Vitor, the negotiation that we made with our -- with the tower companies is more related to extend time of the contract and get discounts with this. When we are talking about AFT and another opportunity that we are studying is plus -- for example, as Alberto mentioned, we have some partners that we are not achieving an agreement with them and have very high monthly fee with this tower company. So the alternative will be to build a tower. Another thing is in the contract of B2B sometimes, we are in place that it's only us and the tower company is not interested in building a tower in this agro business or road. So this also is alternative for us. So -- but until now, we already negotiated 30% of our tower contracts, and we believe that we still have room to negotiate a lot more. I don't know if there was...

If I may add, look at this way. It's like we have a cost line that we really want to dominate. And so we are putting in place all the levers and alternatives that we have to drive the cost where we want, as Andrea said. So you have the negotiation, you got the RAN- sharing agreement, you got a make versus buy option. So we are putting all the options in place because we think that we've got more flexibility and more levers to get this cost line where we want to go.

Our next question comes from [ Luis Shagas ] [indiscernible]

From my side, I have to 2. So the first one is regarding OpEx. What are the main drivers behind the increase in network and interconnection costs? Are these pressures likely to persist? Or do you expect normalization in the coming quarter? And the second question is regarding competition. What's your view on the competitive pressure from new entrants in regions like the Northeast. How are you responding to protect market share there?

So Luis, let me go on the first one and then I will pass the OpEx question to Andrea. So if you look at the overall market, it's our view that we are in a rational market with competition focus on quality by our main players and our peers, let's put this way. And you see some positive movements in the last quarter, whereby the -- some of the more for more from book price adjustment has been executed. I believe, and we're starting some potential adjustment in -- according to more strategy front book prices for pure postpaid also. And so overall, the -- am I reading on the competitive dynamics is that it's rational. Of course, there are some regional competitors that tends to be a bit more aggressive and they're playing more on the price levers as we commented on the first quarter, we are looking at it very closely. We are not reacting on prices at this point in time, we're more focusing on our levers in terms of quality of services to make these customers more happy and less sensible to the price movement or the regional competitors. So far, my take is that the threat is limited, but we look at this and we'll respond as things will evolve over time.

Luis, the increase of the network interconnection is related to the increase in the International roaming costs and also in provider costs. International roaming, we increased the customers that actually are using the service. And the provider cost increased because we launched a new portfolio with streams on board and also because more customers are acquiring this kind of plan. For us, it's a positive view, I can't say this because all these have a good margin for us probably if we have an increase in our provider cost because we have more revenue related to this. And in the roaming international, as we mentioned in the past time, we have an adjustment between cost and revenue that in the year, this is also a positive margin. So the increase of this expenses is related to more customers and more revenue.

Okay. Luis, did we answer your question?

Yes.

[Operator Instructions] Our next question comes from Gustavo Farias from UBS.

One additional question. I'd like to take a look on prepaid. We've seen sequential growth in ARPU versus the first quarter. Just wanted to have an outlook for the how you're seeing the segment perspectives ahead and especially in the light of numbers from AMX last week, which also showed some improvements.

Okay, Gustavo, now when you look at prepaid, one or the main driver of our dynamics, I would feel our competitive dynamics also is related to the prepaid to control migration. So this is something that we will keep doing. We have been doing is accretive to our revenue growth and it's one of the drivers of the revenue performance of prepaid. As we commented that we saw in the previous calls, we are also working on opportunities of improvement in the frequency of recharges and we have employees a number of initiatives on the offer side, channel side that will increase capillarity and communication that we're putting in place. And this basically, if you look forward, should allow us to soften the decline of prepaid revenues from one side while sustaining the postpaid revenues with prepaid to control migration. It's a general trend, I would say. I don't comment on others. On our peers' performance, I would say that a lot of what you see is strongly related to the prepaid to control migration strategies of each operator and each one of us has its own.

[Operator Instructions] Without any more questions from analysts, I'm turning the floor to Mr. Alberto Griselli for his final remarks. Please Mr. Alberto, you may proceed.

So thank you all for joining today's video call. I think we wrapped up the first half with strong momentum. And despite external challenges, we are staying true to our strategy and consistently delivering solid results. Looking into the second half, I'm generally excited for what the second half holds for us. We've got a robust plan in place and the confidence to make it happen. I would like also to provide my heartfelt thanks to our entire team for their commitment and drive. And I look forward to catching up with some of you in the upcoming one-to-one meetings. [Foreign Language]

This will conclude the second quarter of 2025 conference call of TIM S.A. For further information and details of the company, please access our website at tim.com.br/ir. You can disconnect from now on, and thank you once again, and have a wonderful day.

Good morning, ladies and gentlemen. Welcome to TIM S.A. 2025 First Quarter Results Video Conference Call. We'd like to inform you that this event is being recorded and all participants will be in listen-only mode during the company's presentation. There will be a replay for this call on the company's website. After TIM S.A. remarks are completed, there will be a Q&A section for participants. At that time, further instructions will be given.

Hello, I'm Vicente Ferreira, head of Investor Relations. Welcome to China Say's earnings conference for the first quarter of 2025. This video highlights our recent performance and how we see the market evolving in 2025. Afterward, we'll have a live Q&A with our CEO, Alberto Griselli, and our CFO, Andrea Viegas. Please note that management may make forward-looking statements and this presentation may contain them. Refer to the disclaimer on the screen and on our investor relations website. Now, let's review our results.

Hello, everyone. I'm Alberto Griselli, CEO of Team Brazil. Despite a volatile external environment in the first quarter, we have seen a solid start to the year. We successfully implemented our strategy and delivered consistent numbers. Our mobile revenues increased by 6.2% year-over-year, driven by strong post-pay growth. Our EBITDA grew by 6.7% yearly, with margin expansion reflecting our efficient operational execution. We also saw a double-digit expansion in operational leakage flow, reaching R1 billion. In the quarter, we announced R690 million as interest on capital. Our strategic initiatives are paying off. Following the launch of a fully updated version of the Meu TIM app, we saw significant growth in users. We are boosting our presence in Sao Paolo with a 360 degrees approach to customer experience, modernizing the network and revamping our go-to-market strategy in the region. The first quarter was also marked by notable development in the new business initiatives, with the launch of a new partnership and a special focus on the B2B utilities vertical. Service revenues started the year at a solid pace, growing 5.6% year-over-year. As mentioned before, the postpaid segment drove the revenues dynamics with close to 14% yearly growth. The 6.2% growth in mobile revenues results from robust human postpaid-based growth, almost 7% year-on-year, and sound ARPU performance in postpaid and blended. The increase in mobile ARPU indicates effective customer monetization strategies, which emphasizes team successful upselling efforts. Now, 50% of our base is composed by postpaid lines, with revenues representing almost 70%. While we celebrate our postpaid performance, we continue to work on recovering the prepaid. Our three-step plan is designed for the medium-term, so resilience and consistency are keys for the plan to bear fruits. Sao Paolo is the focus of a special project that aims to apply a 360 approach to translate our network leadership into customer experience and perception change. We are modernizing over 3,000 sites, which will significantly improve network capacity. In this network swap so far, we have seen a 40% increase in coverage and capacity, while energy consumption is falling 15%. This infrastructure evolution will expand further our network quality leadership. Attested by Opensignal network consultancy, we already had the best quality in the state and were awarded the best experience during Carnival. Now, we will have absolute leadership in all neighborhoods of Sao Paolo City. We are adjusting our go-to market in the region to help bridge this art evidence to perception. We just launched a flagship store on Oscar Freire Street, an area famous for its sophistication and luxury spots. It is the Brazilian version of Rio Drive. This marks a significant milestone for us, showcasing to customers a different positioning where quality and value are prime. Adding to this boost in presence in Sao Paolo, we had the first edition of team music event in the city. The results were fantastic. Tickets were distributed out in minutes. We achieved massive engagement levels on social media and it was a PR success. The concert was all over the media. The successful team music event and the new iconic store reflect a force to boost brand perception and customer engagement. Sao Paolo is the country's richest state, so it's natural to be the focus of our attention, but we will apply similar tactics in other regions of the country. We are commencing a new stage of our 3B strategy. Changing gears to new revenue streams, our B2B IoT strategy is performing well. We've seen substantial growth in contracted revenues, particularly in agribusiness, logistics and utilities. Specifically, in the last vertical, we are ramping up our presence. We are expanding the services we sell on our own and with partners, showcasing team's commitment to provide integrated solutions that enhance operational efficiency for clients in various sectors. In addition to our well-known solution for public smart lighting, we are now prized in water management, gas distribution telemetry and energy distribution metering. We are committed to further developing the B2B opportunity, expanding our addressable market and opening new avenues of growth. Our digital ecosystem continues to expand, with significant growth in customer registrations and transaction volumes. Now we are launching new initiatives in the energy sector, partnering to create value in both B2B and B2C markets by exploring different energy distribution methods. We are set to initiate a pilot project in collaboration with Electrobras. In this project team, we will act as a channel for Electrobras, selling its energy to corporate clients. With Toppen, we have just initiated a pilot project within the distributed generation model under a revenue share agreement. This initiative allow our B2C clients to participate in solar power plant cooperatives, enabling them to reduce their energy expenses. Our proactive approach to diversifying offerings and enhancing customer value through innovative solutions confirms our intention to take TIM’s value proposition to the next level. Now let's move on to the financial details with our CFO, Andrea.

Hello everyone, I'm Andrea Viegas, CFO of TIM. I'm pleased to share that we ended the first quarter with solid figures, reinforcing our progress in cash generation growth and shareholders' value creation. This quarter, I want to highlight our efficiency program, which will help us deal with the impact of inflation, both this year and in the coming years. The program we have been implementing since last year aims to improve productivity and customer experience, while ensuring margin expansion. The focus on technology and organizational levers reflects a commitment to innovation and operational excellence. Our outlooks running below inflation reflect an effective cost management strategy, key to staying competitive and reinvesting in activities that can more directly impact clients' perceptions. This approach supports TIM consistent EBITDA growth and margin expansion. Our EBITDA grew by 6.7% year-over-year, adding 80 basis points to our margin, which surpassed 48%. EBITDA after lease also presents a solid increase with margin improvement. Lease payments were stable compared to last quarter, but grew high single-digit year-over-year. We have specific initiatives to control leases, so we'll focus on this in the coming quarters. Our net income grew more than 50% year-over-year, marking the 80th consecutive quarter of double-digit expansion and reaching the highest net income level for our first quarter in TIM’s history. To finalize our review of the financial results, it's worth highlighting our operational cash flow performance, another double-digit increase of almost 20%, with our cash flow margin reaching almost 16%. Despite seasonal effects, working capital improved significantly in the quarter. We also maintain a robust balance sheet with strong liquidity and manageable debt levels. Again, all these numbers reflect TIM’s capacity to turn revenues into cash and demonstrate our strong financial health. Now back to Alberto.

As we conclude, I want to summarize TIM’s strategic focus areas for the quarter ahead. First, our commitment to competitive rationality in the market is evident. We want to intelligently enhance our mobile value proposition. We are applying that to the prepaid recovery plan and expect progress in the coming months. Second, the emphasis on expanding the B2B IoT portfolio and growing our partnerships under the digital ecosystem reflects a proactive approach to innovation. Adding these new revenues opportunities will help us deliver sustainable growth. Third, the focus on operational efficiency translates into a more conservative view of TIM Ultrafibra evolution in a challenging broadband market. Fourth, this efficiency mindset permeates all the areas of the company and, as Andrea mentioned, we have a program in place that covers OPEX, for this one we presented the levers we have today, working capital, in this case we are finalizing a set of actions to help our performance throughout the year, and leases. As you know, since the days of the commissioning of Oi Towers, this is an area where we need to transform the sector. We need to change the relationship we have with the tower company. Before we conclude, I'd like to highlight that we have been listed on the CDPA list for the second year in a row. Today, we are the only operator in Brazil with this status. This is a clear demonstration of our commitment to sustainability. In conclusion, we have started 2025 with solid momentum, paving the way to meet our annual guidance. Our strong cash flow evolution and commitment to operational excellence position us well for the challenges ahead. Thank you for your attention. Now, let's move to the live Q&A session.

Before we start the Q&A session, I will hand the floor to Mr. Roberto. Please, Mr. Roberto, you may proceed.

Thank you. Good morning, everybody. Before we start our Q&A, just a quick remark. This morning, we were confirmed as the most sustainable company in Brazil. We ranked first among all companies in the Corporate Sustainability Index of the Brazilian Stock Exchange. This result reinforces our leading role in ESG among Brazilian publicly traded companies, and it's worth remembering that we have been in the selected group of companies for 17 consecutive years, the longest streak for a telco. Now, we can proceed with the Q&A. Please, operator.

Thank you. We are now going to start the Q&A session for investors and analysts. [Operator Instructions] Our first question comes from Bernardo Guttmann from XP. Please, Mr. Bernardo, your microphone is open.

Hi, good morning, everyone. Thanks for taking my question. Actually, I have two here. The first one is related to mobile growth. The postpaid segment remains quite resilient, but the prepaid continues to perform below expectation. Could you elaborate on the adjustment made and the levers for improvement in the prepaid segment? And my second question concerns costs in the current inflationary environment. What are the main efficiency levers for improving margins throughout the year? Thank you.

Well, thank you, Bernardo. So, I will take the first one and pass to the second one to Andrea for the cost one. So, on the revenue growth, so we are seeing in this quarter a similar set of dynamics like the last quarter. Postpaid is the main driver of growth, primarily sustained by price adjustment and pre-to-control migration and control to postpaid migration that was pretty strong in this first quarter, whereby prepaid is suffering. Just remember, Bernardo, prepaid is suffering in general. So, the market for recharges is decreasing as all operators are migrating prepaid customers to control, and there is some constraint on the demand side. So, we put in place a plan on our side that is made up of a combination of the three levers that we discussed in the previous quarter, the offer itself that received a boost in this first quarter, the communication that we are trying to make it a bit more consistent in time in order for the value proposition to come across to our customer, and some tactical actions on the channels. The objective of these are twofold. From one side, increase the loyalty of our customers to us. As you know, the churn rates in Brazil are still high, and the second one is to get a larger share of the share market to us. We have in our plan a negative growth for prepaid throughout the years, and what we are working on is to slow down the decrease over time. So, Andrea, maybe you can take the one on cost.

Yes. Hi, Bernardo. Related to the cost and the margin, we are, as you know, always working very closely to reduction in the cost and in our efficiency program. We have several initiatives, AI, digitalization, make-or-buy, and also a very cost-controlled approach in several initiatives inside the company. But considering inflation, our biggest concern this year is related to the lease, because lease have a direct impact from inflation, and we are working several initiatives related to lease for mitigating these impacts. Renegotiations, with the towers, another program that we are putting in practice, and we are very focused in mitigating this specific line that is our biggest concern related to inflation.

Very clear, Andrea. Thank you very much Alberto.

Bernardo.

Our next question comes from Marcelo Santos from JP Morgan. Please, Mr. Marcelo, your microphone is open.

Hi, good morning, Alberto, Andrea, Vicente, Luisa, thank you for taking my questions. I'll focus my questions on the growth, on the mobile service revenue growth. You already talked about prepaid, but I want to turn the attention a bit to postpaid. It was very strong, but I understand it was impacted by a different seasonality in the price increases. So, I wonder if you could help us a bit understand, like, how much did bringing the price increase from April, May to March help the growth of postpaid in this first quarter. And if you could give more details, like, when during March was this increase applied, how much of the base was affected? I don't know, anything you could give there. What was the average increase? Just for us to understand how much of this increase could be propagated going forward. Thank you very much.

Okay, Marcelo. So, when you look at the revenue growth for postpaid, it's made up of three main drivers at the end of the day. So, we are talking about the price adjustment, and at this point in time, we are talking about back book price adjustment. We are talking about prepaid to control migration, and we are talking about control to postpaid migration. So, when you look at the combination of these three factors, they all impact what we are looking at in terms of the results of this quarter. They came up pretty strong. And the three elements are in place. So, our postpaid customer base is growing healthy. This is the first note. We have a pretty strong intra-postpaid migration. It's a double-digit growth. And then we got a different personality, yes, in terms of price adjustment that, as we mentioned in many one-to-one meetings, occurred in between the first quarter and the second quarter, with some anticipation of some cycles in the first quarter. So, overall, all these effects, they sum up to the strong performance in the year. When you look at the drivers going forward, we intend to have, for mobile service revenue, the postpaid as our main growth engines in the coming quarters. And as generally happens, you will see that growth tend to slow down on the subsequent quarters. And so, this will be a typical trend that we are likely to see in the coming years. So, when you look at the overall composition, we're going to have, or we are working on, sustaining a solid growth on postpaid, whereby we are working to have a slower decrease on prepaid going forward.

Perfect. Just a clarification, was the full postpaid base and control affected by the price increases?

We generally don't impact, and this is as in every year, we do the price adjustment on a subset of the postpaid customer base. We tend to keep some of the customers out, depending on the level of propensity and insurance or complaints. And we generally also have a few different moments in time when we do this adjustment. So, there is an in-one that occurred in between the first and the second quarter, but there are further adjustments down the line of minor intensity.

Perfect. Thank you very much.

Our next question comes from Vitor Tomita from Goldman Sachs. Please, Mr. Tomita, your microphone is open.

Hello. Good morning, all. Two questions from our side. The first one is a bit of a follow-up on Marcelo's question. I imagine that this price up still had a smaller effect in March. So, thinking specifically about, had a small effect in the quarter, given that it was only implemented in March. So, we had some interesting ARPU improvement in this quarter. So, do you believe there is room for the ARPU in postpaid to improve further in the next quarter and maybe be a bit more of a boost to revenues? And the second question, on the same note, how are you thinking about full-year guidance for revenues at this point, given the good result in this quarter? Do you see rooms for upwards revisions or do you believe you are still thinking more about the guidance target as it is now, given that, as you mentioned, you expect some deceleration in that growth in the next few quarters? Thank you very much.

So, Vitor, let me take the second first, because it's easier to respond. We are committed to deliver our guidance. We just communicated a couple of months ago. So, that's our commitment is. So, we're talking about roughly a 5% revenue increase over time. When it comes to ARPU, you need to remember that the ARPU has been growing, our ARPU has been growing over time, postpaid and compound. And you got a number of different drivers for this ARPU to grow. And so, we need to see how this play out in the coming quarters. Because you have something that is clearly accretive, like a back book price adjustment or a front book price adjustment, whereby there is something that is more dilutive, like a prepaid to control migration. So, generally speaking, it's one key metric. We are number one in terms of ARPU. We still have to implement some front book price adjustment in the coming months. So, we got some forces pushing forward, but we also have some forces diluting the numbers, which is related to prepaid to control migration. So, that's for the first question.

Clear. Thank you very much.

Our next question comes from Gustavo Farias from UBS. Please, Mr. Farias, your microphone is open.

Hi, everyone. Good morning. Thank you for taking my questions. Two on my end as well. So, the first one, if you could comment a little bit more on leasing payments. I realized from last conference call that most of contracts are already tied to IPCA. And I would like to know if there is more room to negotiation, even considering this or any other levers that you are able to tackle to control leasing payments going forward. And the second one related to working capital, we've seen a pretty strong performance from working capital and contribution to cash generation. I would like to know what can we expect as sustainable level of working capital and any other levers you are able to use to optimize it going forward. Thank you.

Hi, Gustavo. Related to the first one, the lease payment, the lease in this quarter was almost at the same level of the last quarter. But you are right, we have IPCA and AGPM that impact this contract. But the most part started in the end of March and April and May. So, in the second quarter, you see the start of an impact on inflation in our lease. What we expect and what we already declared as a lease, we are working to keep the increase of the total lease in the year lower than our revenue. This is what we are working very hard to achieve. Besides the negotiation that you mentioned and I mentioned before, we also have another leverage that continues to our decommission, where we see which towers that we have are coming to the end of the contract and try to negotiate these two. Or renew the contract or move it to another lower cost tower. With the second question.

Let me just add something on the list. So, Gustavo, on the list, so you have a set of levers. Which are these levers? So, as Andrea was saying, we got the negotiation. Negotiation is something that is on the table once we need to deploy new towers. And there are some towers that are getting to the end of the period and we have the opportunity to renegotiate them to a value that is in line with market values. On the other hand, you have another set of levers that are the decommissioning of towers. They have been a focus of our company throughout 2024. We decommissioned thousands of towers. So, we get good to do it. We can move towers. And then we got partnership with other operators, whereby we share the infrastructure, like the RAN share agreement with Vivo, for example. So, we have a large set of levers in our place that we are going to deploy in order to keep these line costs in check. It's something that is not like super short term. Something that it's the effect sum up in years, because there is some infrastructure required, but we are committed to use all the levers in place to meet the guidance that we share at the beginning of the year.

Thank you. And related to our working capital, we are working very hard with this working capital, with several initiatives also that we have. But remember, we have a seasonality. In the first half of the year, the first half of the year, we have a negative working capital. In the second half, we have a positive working capital. We are still in this trend, but we improve a lot. As you can see, the first quarter of this year relates to the first quarter of last year. And we still have some initiatives to put in place and we can discuss it as we did. Once we do this new opportunity, we will discuss to you.

Very clear. Thank you very much.

Our next question comes from Felipe Cheng from Santander. Please, Mr. Chang, your microphone is open.

Good morning, everyone, and thank you for taking my questions. My first question is maybe zooming in a little bit on the pricing dynamics, particularly here for front book. Our understanding is that your main competitors have already increased front book prices. So I was just wondering if TIM has any schedule here to eventually also implement price increases to the front book offers. And secondly, if I may also zoom in a little bit on TIM Live, I just wanted to understand a little bit the dynamics this quarter, right? What were the main drivers or reasons here to see a decline in revenue growth, right? And eventually, if you are studying any potential M&As, be it via selling your TIM Live operation or potentially buying other assets here to fortify here this business. So that's it. Thank you.

So, Felipe, going to the first question, we are fully committed to market rationality. And so we are actually working on our front book price upgrades. So they will come in the coming months. So that's something that we are going to do. For the second question, the main drivers are basically the following. Before going to our performance, I would like to stress again that the market remains highly competitive. And therefore, this pressure, both the ARPU, and we have quite a good ARPU, and churn level. When it comes to our performance, the second point of attention is that when we report our numbers, we need to remember that we have copper and fiber in the same numbers, differently from other market players. And copper is a technology that is fading out. So we are losing customers there. And the result that you see on this quarter is basically the effect of a customer base that has been decreasing over the last nine months until January this year. And there's some pressure on the ARPU that has been going down a bit. On the positive side, you have, on February and March, a customer base that is growing. I can confirm that in April it's also growing. But we are not pushing hard on this, because as we mentioned in many occasions, it's Team Ultra, our broadband service, is diluting on our numbers. And therefore, we are sort of moving sideline on this line of business, while we are assessing all the options on the table on the inorganic front.

Very clear. Thank you.

Our next question comes from Phani Kanumuri from HSBC. Please, Mr. Phani, your microphone's open. Mr. Kanumuri, your microphone's open. Seems there's a problem with your audio, Mr. Kanumuri. I'll ask you to rejoin to the conference and join the queue again. So our next question comes from Lucca Brendim from Bank of America. Please, Mr. Brendim, your microphone's open.

Hi. Good morning, everyone. I have two questions on my end. I wanted to mainly double-click on the OPEX dynamics for the company. First, we saw a reduction in terms of the sales and marketing expenses. It was down 2% year-over-year. You mentioned it was the reduction in fiscal fees, but the sales and marketing is down even more than the reduction in human user base. So I wanted to understand a little bit more on those dynamics, if that's something that should continue, if it's something that should go mostly in line with the user base expansion or any other dynamics here. And the second one, regarding network and interconnection, it is going up considerably year-over-year. This is something that was happening in previous quarters already, but how can we think about this going forward? When will this stabilize and how we can think about it for the next years? Thank you.

Hi, Luca. Related to the second one, the interconnection and the roaming expenses increase in this first quarter relates to the content provided, because we launched a program in November. We stimulated the use of streams, so we have an impact in this quarter. And also the international roaming relaunched. We simulate our -- we put as a matter of fact, we put roaming internationally in several plans, in postpaid, and the cost increase really reflects these customers going abroad. So we have this impact in relation to the roaming and the content provided in this first quarter. Related to the sales and market, this was a seasonality. It still decreased a little bit related to the net ads, but it was a little bit. And also we have some only seasonality things, but we expect the sales expenses to increase this year. As we mentioned, we put efficiency in some parts of the cost for generators, a space for increase, something that we know is important for us to increase, like advertising. So when you see the full years, you see an increase. In this first quarter, it was just a punctual decrease. I don't know if I addressed your questions.

No, very clear. Thank you for the answers.

[Operator Instructions] Our next question comes from Mr. Phani Kanumuri from HSBC. Please, Mr. Kanumuri, your microphone is open. Mr. Phani, seems you still have problems with your microphone. Mr. Phani, can you hear me? So I'll ask you to check your audio device and try joining again, Mr. Phani. Our next question comes from Machie Robillard from Barclays. Please, Mr. Robillard, your microphone is open. Please, Mr. Machie, just activate your microphone and ask your question. [Operator Instructions] Our next question comes from Mr. Phani Kanumuri from HSBC. Please, Mr. Phani, if you want to try again, please. You sent your question through written form. Your audio isn't working yet, so I'll read that. Our next question comes from Phani Kanumuri and it is, how do you see the competition involved from new and regional operators like Resonet? Thank you.

So, Phani, clearly the smaller players are gaining some traction in the regions. I would say that so far the impact has been limited on us and it didn't change our competitive dynamics in some response. It didn't trigger specific response to them. We say that they are getting market share, but they're not changing the competitive environment as a whole. We are continuously monitoring if they are making an impact on our customer base. There is some, but it's not material to react at this point in time.

Thank you. Since there are no further questions, we would like to close the Q&A session and I will pass the word to Mr. Alberto Griselli for his final remarks. Please, Mr. Alberto, you may proceed.

Thank you. So, guys, we set off the year at a robust pace. Despite the external environment, we are successful in implementing our strategy and delivering consistent numbers. Although we expect a challenging year, we have a solid game plan in our hands that we intend to implement with confidence. So, I would like to thank you for participating in our video call today. Special thanks to our team for its commitment and focus and I look forward to meeting some of you or all of you in the coming one-to-one sessions. Thank you and ciao.

This does conclude the fourth quarter of 2024 conference call of TIM S.A. For further information and details of the company, please access our website at tim.com.br/ir. You can disconnect from now on. Thank you once again and have a wonderful day.

Good morning, ladies and gentlemen, and welcome to TIM S.A. 2024 Fourth Quarter Results Video Conference Call. We'd like to inform you that this event is being recorded [Operator Instructions] There will be a replay for this call on the company's website. After TIM S.A. remarks are completed, there will be a Q&A session for participants. At that time, further instructions will be given. Now I'll pass the word to Vicente, Head of IR. Please go ahead, sir.

Hello, and welcome to TIM S.A's. fourth quarter 2024 Earnings Conference. I'm Vicente Ferreira, Head of Investor Relations. This video highlights our recent performance and the updated 3-year guidance. Afterwards, we will have a live Q&A session with CEO, Alberto Griselli; and CFO, Andrea Viegas. Please note that management may make forward-looking statements in this presentation may contain them, refer to the disclaimer on the screen and on our Investor Relations website. Now let's review our results.

Hello, everyone. I'm Alberto Griselli, CEO of TIM Brasil. I'm pleased to present to you a robust set of results in a dynamic year when we overcame challenges and took advantage of our strengths to meet all of our targets. 2024 was marked by powerful cash generation, thanks to solid financial and operational results. We closed the year with service revenue growing 6.4% at the top of the guidance range. At this speed, we outpaced inflation even with the second half of tougher macro environment, an unfavorable comparison base. In the fourth quarter, service revenues grew 5.1%. Our revenues were driven by mobile services, which expanded by 6.6% compared to 2023. In mobile highlighted the excellent performance of postpaid rising close to 9% year-over-year as a consequence of an expanding customer base with migration and a low churn of 0.7%. Our EBITDA ended 2024, increasing by 8% when compared to 2023 with another year of margin expansion. This show the consistency and ability to operate efficiently. Our proxy for operating free cash flow grew close to 23% year-over-year. As a percentage of revenue, will reach more than 20% in 2024. Innovative offers, continuous infrastructure development and service improvements supported these strong financial results behind our 3B strategy lays an idea of delivering what clients value the most. We are focused on providing exceptional customer value through network quality, affordability and service excellence. Under best network, we focus on expanding 5G coverage across Brazil to migrate traffic and clients and start to impact client perception positively. We have more than 600 city cover, 20% more than the second player. As a result, 5G traffic has more than doubled compared to a year ago. For 2025, we will ensure consistency in network development while promoting the message of network quality leadership to consumers. The emphasis on technology innovation and network densification to address network gaps demonstrates a proactive stance in meeting customer needs and expectations as network quality becomes a core brand attribute. In best offer 2024 was marked by innovation through content portfolio expansion while guaranteeing data monetization. We launched new concept in postpaid and prepaid in parallel with turning an historical gap into a differentiation element. We expect to deepen our distinctiveness with digital ecosystem expansion, and a renewed more-for-more approach. Innovation will again play a role in using next best action tools to personalize and revamp our prepaid go-to-market strategy. To deliver the best service through 2024, we use technology in our favor to maintain service quality indicators at the highest standards. Digitalization continues to be an important source of opportunities, and our new app should become a relevant driver for that change. In 2025, customer journey evolution will continue aiming at reducing pain points and improving overall quality. A seamless experience in our digital channels associated with resolvability features and value-driven management of our clients showcases TIM's dedication to provide a tailored solution that meet diverse customer needs. In recent months, we have seen growing concerns about TIM's ability to overcome challenges imposed by its mature peers and new entrants, but we are sure of our strength in client attraction and retention, client monetization and service and experience. TIM outpaced its peers at growing the postpaid base by 7.3% year-over-year, reinforcing the idea that net addition should be rate relative to the size of the customer base and not only in the absolute number. We were the only large player to defend our market share in postpaid against the new entrants. As we've been explaining nowadays, this is primarily a game of migration and churn reduction. Thus maintaining postpaid churn at low level is vital to have a strong client base profile. Another area of clear strength for TIM is the monetization of its client base. We have the highest ARPU of the industry, above BRL 31, growing 6% versus 2023. To accomplish this, we combine more for more strategy plus upsell tactics to move clients up the ladder and cross-sell initiatives to expand our relevance in clients' pockets. Higher customer engagement also helps increase loyalty and consequently reduce churn. About 28% of our customers have more than one product. It is fair to say we have a diverse universe of metrics and sources when it comes to measuring caring service quality. There is the sector regulator, Anatel, private protection agency, like Reclame Aqui; public consumer protection agencies such as Procon and [indiscernible] and also internal metrics. When looking at the numbers from these different sources, it is clear that TIM has an outstanding resolvability being champion in most of them, solving the problem faster and according to clients' expectations. We still have room to improve when it concerns the number of complaints. We are the least complain about in some of these sources, but we have yet to close some gaps in others. Finally, we have the network evaluation. There is no doubt that TIM has the best network in Brazil. We start being present in more places than anybody else, both in 4G and 5G. And according to the recent report of Opensignal, TIM was the most awarded operator in the Mobile Network Experience report. We won 7 out of 14 categories leaving behind our peers, and this outstanding results highlight that we are the #1 operator in consistent quality for 3 years in a row, according to Opensignal, this metric connects the most of the clients experience. The challenge we face for network and you know well, is related to perception, but this is a marathon and not a sprint race. Consistency in having the best network metrics and consistency in communicating this leadership to consumer is essential. In sum, we have our strengths and work to ensure they remain a differentiating factor for TIM. At the same time, we transform our weaknesses into opportunities to improve TIM's overall operational performance even further. Now I will talk about areas of opportunity to generate new revenue streams. They are becoming more and more relevant to our mobile performance, and this will be the case for 2025 and the years ahead. Throughout 2024, we were regaining momentum in the development of our digital ecosystem. Our 5G fund managed by Upload Ventures reached 3 investees and more recently, Minerva Foods became an LP, the arrival of a new major investor further strengthens the fund's pioneering performance within an innovation ecosystem. Customer platform projects are evolving accordingly and bearing fruits in different segments. In health, Cartao de Todos reached more than 160,000 families enrolled over the last 6 months. In education, Descomplica maintains a solid rhythm to reach 800,000 enrollments in courses. In digital and entertainment services the Exa partnership reached an important milestones with TIM earning the right to subscribe to 27% of the company. Finally, our mobile apps and data monetization business rapidly expands as we integrate our proprietary inventory with Google and Meta and maintain a consistent rollout of TIM insights new products. Another frontier for revenue growth is B2B IoT. Since the beginning of this project, we sum more than BRL 700 million in contracted revenues. In 2024, we added BRL 270 million in new contracts, most of these contracts refers to 3 verticals. First one agribusiness, where we have close to 20 million hectares covered with 4G. The second one, logistics with highways representing most of the growth, and our coverage span more than 5,600 kilometers of roads. Third one, utilities for which we sold more than 340,000 smart lighting units with connectivity services. During 2024, we focus on structuring sales processes and internal operations in a proactive approach to capturing market opportunities and becoming a reference among B2B clients of these verticals. For 2025, we need to further develop this opportunity, aggregating solution and expanding our addressable market. We are working with a robust pipeline of prospective clients across various verticals, so the future looks promising. Now we move along to more financial details with our CFO, Andrea.

Hello, everyone. I'm Andrea Viegas, CFO of TIM. I'm pleased to share that we ended the year with solid figures overall, confirming our capacity to increase cash generation and create more value for our shareholders. Once again, we delivered an EBITDA that grew more than inflation with a 6.2% year-over-year increase in the fourth quarter. This contributed to a strong year with an 8% year-over-year increase in a margin reaching 49.6%. After accounting for lease impact, EBITDA after lease rose by double digits in 2024, with the margin expanding by 1.7 percentage points. This was a consequence of our efforts to conclude the decommissioning tower projects faster than expected, and to renegotiate our contracts. It's worth mentioning that most of the fines were paid with only a small part remaining for 2025. Our net income grew double digits for the seventh consecutive quarter, consolidated a year delivering the highest organic net income in our history, reaching more than BRL 3 billion. Our shareholder remuneration achieved a new level totaling BRL 3.5 billion with a yield of 10%. Our consistent operational performance, combined with discipline in capital allocation result in CapEx over revenues reaching 17.9%. This drove strong growth in operating cash flow, which increased by almost 23% year-over-year with the margin expanding to 20.5% in 2024. Our balance sheet remains strong, supporting shareholders' remuneration and future projects. The 2024 results affirm our ability and commitment to fulfill our promise even in the face of challenge. Now back to Alberto.

Before we conclude our results discussion, it is worth recapping some ESG developments in 2024, confirming TIM's commitment and highlighting partnership and projects that generate positive social impact. Under the partnership with Gerando Falcoes, we have transformed Favela Marte into a fully connected 5G community, illustrated TIM's dedication to bridging the digital divide. As always, our ESG initiatives are embedded in the company broad strategy. So we are testing FWA solution learning how customers and network behave in an actual network condition. In addition, we continue to perform outstandingly in multiple indexes and certifications. By integrating social responsibility into its core strategy, TIM enhances its brand reputation and contributes to long-term value creation. To conclude this section, it is worth highlighting that we met all of our targets. We stood at the top of the service revenue guidance range with excellent postpaid performance, check, EBITDA grew above revenues with margin expansion. Check, CapEx remained flat in the middle of the range, check operating cash flow with a robust performance grew by more than 20%, check. Last but not least, shareholder remuneration is confirmed at BRL 3.5 billion, following our proposal for the shareholder meeting to approve BRL 2 billion in dividends, check. Looking ahead, setting the stage for TIM's strategic direction in the coming years, will enforce our focus on sustainable growth by adding new revenue opportunities and putting renewed efforts into efficiency, reflecting a commitment to long-term value creation. Our updated plan reflects changes in macro and telecom market conditions. We evolved our priorities to extract the most from our 4 strategic pillars, mobile, B2B, efficiency and broadband. Each area is supported by specific strategies aimed at enhance our value proposition in mobile, double down on B2B, extracting the most from our assets and resources, while monitoring for opportunities to complement or transform parts of our business. The emphasis on people, society and environment underscores TIM commitment to responsible business practices. By prioritizing these areas, TIM aims to strengthen its market position and drive sustainable growth in a competitive landscape. With that, we introduced a new guidance for '25, '27 remembering that our projections are always subject revisions in the face of material changes in the macro environment and business development assumptions. Our strategic guidelines for sustainable growth, focus on revenue and EBITDA progress with margin expansion. This is a combination of mobile core evolution, increased relevance of new revenue streams and renewed efforts in efficiency. Our investment plan points to a flattish CapEx despite ForEx oscillation and maintenance of the leadership status of our network. Once again, this reflects a commitment to efficiency and operational excellence. These dynamics translate into strong cash flow evolution with margin expansion. And this cash being generated is returning to shareholders in the form of interest on equity and dividends. Once more, we are upping our targets for that as well. Reaching the end of this video, I want to thank our entire team for delivering such robust results. We endure main challenges and found solutions to keep our ship in the right direction and running at a solid pace. Now let's move to the live Q&A session.

Thank you, Alberto. Before proceeding to the Q&A, I would like to pass the floor to Alberto Griselli for initial remarks. Please, Mr. Alberto, the floor is yours.

Thank you, and good morning, everybody. Before we start the Q&A, just a remark on the material fact we just disclosed about C6 Bank, basically went into an agreement that settles all the disputes, terminates the partnership and monetize our participation subject to some regulatory approvals. The settlement confirms that the strategic importance of customer platform initiatives in generating value of the company and its shareholders. We will continue to work to expand the ecosystem of partnership, including new opportunities now in the financial services. Additional details of the financial and economic impacts of this deal will be disclosed in due time. So we can now pass to the live Q&A session, please.

Thank you, Roberto. We will now start the Q&A session for investors and analysts. [Operator Instructions] Our first question comes from Marcelo Santos from JPMorgan.

I have 2. First, on the guidance, what are the main macroeconomic assumptions embedded, like perhaps inflation effect, what are you considering to put those numbers? And the second is if you could discuss a bit outlook for prepaid. And if there are relevant initiatives that you were targeting to perhaps improve the trends that you can control?

Sorry, Marcelo, I was in mute. So when we look at the guidance, basically, this has been elaborated -- our budget has been elaborated a few months ago when the situation was a bit easier on inflation, specifically on the other elements we are sort of aligned in terms of ForEx and GDP growth. But since the guidance has been issued basically today, over the last week, we've been working with more -- with assumption on inflation that are in line with the current trends, the one that we are seeing now. Of course, there is a lot of volatility of inflation. A few weeks ago, we were below 5. Now we are below 5. So we need to deal with this. We are used to deal with this since we operate in Brazil for a long time. But basically, the main difference was inflation when we prepared the budget and we updated this on more actual numbers as we issued the guidance today or yesterday night. When it comes to prepaid, so our performance are basically driven by a number of factors. The first one is related to the migration of customers from prepaid to control. So this is part of our strategy. And of course, this drain revenues from one side to move in a accretive way on the other side. So the benefits of doing this is that the revenue becomes a larger revenue in postpaid and our ability to monetize postpaid and control is better than in prepaid. Then there is another factor that is basically related to everybody, every -- ourselves and our competitors perform this strategy. So if you look at the recharge market as a whole, it's decreasing over time. And so this is decreasing as the market. So this is the context where we operate. In our case, in the fourth quarter, we have a tougher comparative base because in the same quarter of the previous year, we were issuing a price update from BRL 15 to BRL 17, so this is explained the intensitive of the decline for the last quarter. And just anticipating a bit, also the first quarter of this year, it's a tougher competitive basis versus the first quarter of last year, because this year, for example, we have Carnival in March, and this tends to reduce the number of available days for recharge. Having said that, we have been working for a while now on revamp or turnaround of our prepaid business. We launched a new offer, a new communication campaign as you probably remember, last year. And so we are working across the board on the offer, on the communication and on the channel and our own customer base to increase the performance of prepaid going forward. This takes some time, but our commercial team is fully focused on that.

Our next question comes from Bernardo Guttmann from XP.

Actually, I have 2 on my side. The first question is related to CapEx. Your guidance seems quite fair, but it's somewhat surprising that CapEx remains stable, leading to a decrease in CapEx to sales in the coming years. We have already discussed the topic of greater efficiency and the structural changes in the industry. But it would be interesting to understand more about the company's main efficiency levers. Is this level sustainable considering a higher exchange rates? And the second one is about your fiber operations. You mentioned that you are open to multiple options. I understand that the market is more challenging today and more competitive but valuations also reflect these dynamics to some extent. In this context, what is your appetite in this segment, would you consider selling the current operation as well? Or is that off the table?

Okay, Bernardo, let me go for the first one on CapEx. So when you look on CapEx, we have a number of levers. And I will start with the easiest one. So if you look at CapEx, first of all, a big chunk of this CapEx is network CapEx. So as you know, we have been able to reach the largest 4G coverage a couple of years ago. We closed 2024 with the largest 5G coverage also. And once you look at the drivers of this cost going forward, primarily it's less about coverage, and it's more about the quality of service and capacity. So this is the main driver. How do we address the efficiency of the CapEx deployment, while maintaining the leadership in quality of the network service that we offer because that's the trade-off. The first one is primarily related to the way we negotiated already with our main providers of the 5G and network services whereby we put together last year, we discussed this, I think, primarily one-to-one calls a quite competitive tender where we were quite successful in lowering the TCO of our network cost. And by doing this, of course, we took some execution activities on our side like the swap of the network in Sao Paulo that we are shifting from one vendor to another vendor. By doing so, and we optimize the TCO. And so when you look at the numbers, $1 in 2025 will deliver more than $1 in 2024 because of the economies that we achieved. So this is the first driver. And this is primarily achieved because it's something that we did last year. The second one, it's primarily related to the assertiveness of the investment. So we've got a quite strong methodology, whereby we allocate CapEx where we have or we expect to have commercial advantages. And we call this AAA approach, and so we align everything CapEx, commercial and communication in order to increase the efficiency of our capital allocation. Then you have your last comments about the risk of the ForEx related to our contract. I will pass this over to Andrea to just explain a bit how it works for us.

Bernardo, we have a minimum exposure to exchange rate consider that the majority of our contracts have an exchange rate band. So as I mentioned, we have a very little exposure to fluctuation of the exchange rates.

Going to your second question about fiber. So a few comments before articulating the answer on the nonorganic option. So if you look at the market itself, as you rightly pointed out, the market is very competitive. There are a number of reports from the sales side highlighting this every month. So there is a lot of competitive especially on price. So it's not very attractive, irrespective of valuation because it's difficult to address this without a stronger and widespread consolidation process. That is not happening at the end of the day. For us, it's a small business because it's below 4% of revenues, and it's dilutive on our free cash flow generation. So our organic stance is basically to optimize the operation. Of course, when we say that we are open at all options, you have the option, one extreme where we consolidate and on the other extreme, where we sell and there are a number of variety of options in the middle. And when we say that we are open on all of them, that we are looking at all of them. And so we just need to find the right target at the right moment to move forward with one of these options.

Our next question comes from Leonardo Olmos from UBS.

I have a couple of them. The first one is regarding the C6 partnership. I know you cannot disclose how much are you actually monetizing of that partnership. We understand that, but it will probably be below what was on the balance sheet, right? So we may see a write-off that may be purely -- that will likely be noncash, but could that affect dividends even though it is noncash, even in a nonrecurring base. So that's my question on the C6 impact on dividends. And the second one, unrelated is if you could discuss a leasing, how much of the leasing is adjusted by IGP-M? And what are other inflation metrics that are used to just leasing?

Leonardo, so I will take the first one, and then I will pass the floor to Andrea for the leasing question. On the first one, actually, the monetization factor is there. So we are talking about at BRL 270 million in gross revenues that have been accrued over the length of the partnership and the other BRL 520 million. And this is a positive impact on our cash. And I think that here, the answer is we always say that we are going to generate more cash over time. So our cash flow are expanding, and this is going to be a positive contribution on expanding. And when it comes to the expanding cash flow, as you see in our guidance, we are increasing shareholder remuneration, concentrated in dividend and interest on equity. And therefore, we got something more now coming to us over the course of 2025 that was not in our guidance. So the approach is always the same. If we don't distribute 100%, you know this because we are looking at opportunities in some verticals and some of our business lines, but it's a positive on our cash profile.

Leonardo, regarding to leasing, as you know, the -- these items, the major impact that we have in inflation. We are continuing to negotiate all our contracts, and now we have a part in EPCA and a part in [ EJPM ], but the major part is EPCA. But we are continuing to have negotiation considering that we ended the commission program with the sites that came from Oi, but Oi increased the network related to 5G. So we still have space to negotiate this contract.

So obviously, Andrea, the guidance already assumes all the current inflation situation, right?

Right.

Very good. And very good answer on the dividend, Alberto.

Our next question comes from Vitor Tomita from Goldman Sachs.

We have 2 questions from our side. The first one is on the guidance. If you could give us a bit more color on the drivers for further margin expansion given that your profitability is already quite high for the sector and given the inflationary pressures ahead? And our second question would be on the -- more on the balance sheet side. We have noticed the receivables increasing faster than revenue continually over the last 3 quarters, even though receivables had been growing more in line with revenue prior to that, could you give us some more detail on the dynamics for receivables?

Vitor, related to the guidance. As the previous guidance, we are confirming that we increased the EBITDA margin revenue. We will do this with the continuing of our productivity. We have a very good result in the last quarter in margin related. And the margin expense will continue to happen in 2025. This will come with our continued focus to work in zero-based approach. We are looking for new opportunity in digitalization our process. Also, as I mentioned, renegotiation of all the contracts that is related to inflation and continues to see opportunities in makeup our initiatives. Related to the free cash flow, the second question about the increase in receivables. This is the functionality of our dynamics. Remember that we have a first semester over the year with seasonality in the second semester with another seasonality. This is inside our expectations, we don't have any kind of extraordinary effects that affect this. I don't know if I address your question?

Just a quick follow-up. Looking at the previous quarters, there was already an increase in receivables in the second and third quarter. So thinking more about the underlying trends there than just the seasonality.

No, sorry, if the seasonality works now. The seasonality of the -- because you see an increase in the third quarter and the fourth quarter, right?

Yes.

So moving [indiscernible] the second semester, and we have -- also we have an increase in the IoT receivables plus we increased the B2B and the B2B have a very different dynamic from the mobile -- the consumer mobile. So we will see a near increase but this relates to the increase of the IoT revenues.

Our next question comes from Phani Kanumuri from HSBC.

So my first question is related to your revenue guidance. Is it fair to assume that most of this revenue growth that you have is coming from postpaid growth considering that your fixed segment and prepaid segment continue to be under pressure? And what part of -- what percentage is actually attributed to the new initiatives that you have in terms of the revenue guidance? The second one is, last year, there has been more challenges in terms of pricing up and giving more for more. Do we see that challenges continue this year? And is the price up possible for the next few years near you?

Okay. I will take the 2. So when it comes to the growth drivers for the revenues going forward, there are a number of drivers that we are considering. So one of the -- big one is clearly postpaid, we're being performing well over many quarters. And we foresee this to happen going forward, driven by the price adjustment that we do and that will come a bit more on this on the rationality of the market as we see it now. The prepaid to control migration and that will continue, and the intra postpaid migration that is happening at double-digit rates, and that continues to drive revenues up. So yes, postpaid it's an important driver for revenue growth. I think it is fair to add that there are 2 other important business lines in the revenue growth. One is related to the customer platform strategy that we just discussed at the beginning of the of the call, whereby we see monetization opportunities in the partnership that we are running plus the new one that we are building. If you look at Cartao de Todos, for example, this is something that we launched some time ago. We have been tweaking the value proposition. And in the last 6 months, we brought in at 160,000 subscribers. So it's a good numbers in our own assessment in terms of the progress of the thing that we are doing. We are open again to work on financial services. This is another large set of parties that we can work on. Then we got the energy. That is another priority. So the overall customer platform can contribute in our revenue growth going forward. The third one is the B2B business line, where we have been capturing revenues over the last 2 years, so it started basically the IoT solution from zero. And we will continue to push this going forward in the verticals that we identified including an expansion of the portfolio and capabilities that we are offering to our customers. So obviously, when you look at these, these 3 lines are the main revenue growth drivers. When you look specifically on mobile and the rationality of the market, we see and I see still a constructive market context. It is true that last year, there has been more, let's say, has been a bit more erratic in the second quarter. So especially one of our main competitor has been rethinking some of the price up that have been implemented. It went down. But at the end of the day, it went up at the end of the year. So differently from last year, and you are right on this. At this time in time of last year, we were executing a front book price upgrade that is not foreseen at this point in time in the first half. But the situation may change because we still believe that the market environment is being rational. Having said that, the back book price increase are happening between the first quarter and second quarter like last year. And I think this has been executed. The fact that we are not upgrading front book prices at the same time or at the beginning of the year can produce some, let's put this way, some churn temporary increase versus last year because we are disaligning customer base and gross additions, but it's something that we know how to face.

Our next question comes from Cesar Davanço from Santander.

First of all, congrats on the fourth quarter results. My first question is regarding revenue growth and your revenue growth expectations. I would like to understand how much of this guidance comes from -- would come from price increases? And regarding this, how do you see the company evolving in a competitive scenario, okay? So do you imagine TIM potentially be more aggressive? And my second question is regarding the C6 partnership. As you mentioned, this opened a path -- the end of this partnership opens a path for you to operate again on the financial sector. Do you have anything on mind, anything you can disclose on the stock?

Okay, Cesar. So let's address the first one. So as I said, we see the market rationality still in place with some more erratic behavior in the last half of 2024, we are not planning to be more aggressive. We tend to try to be more intelligent the way we monetize our customer base. And so I don't see on our more aggressiveness on our side. If you look at the drivers for revenue growth on mobile, especially on postpaid, we generally look at a balanced growth pattern that combines customer base growth and ARPU growth. And if you look at the way we grew in 2024, so if you look at the [ pay-per ] [indiscernible] analysis of the evolution of our revenues from -- in 2024, you will see that we moved on a quite balanced way in between the volume impact and the price impact. And you can see also that we managed to grow faster than our competitors in the postpaid. So price adjustments are important because they are an element of the P factor. But what we are aiming at is a balanced growth in between quantity, price within price, price adjustments are important as well as intra plan migration. You don't see this because it's not disclosed, but the number of pure postpaid is increasing significantly because we are moving control also to postpaid. And this has a positive impact on revenue growth for postpaid. So it's a combination of this fact. On [ fintech ], going to the second question is we just closed as we just said with C6. So we now analyze the options that are available in the market in the coming months. Clearly, the combination of financial services and telco is quite powerful. We believe it's powerful. So we believe it can be material again. And we will start working on this as the settlement with the previous partner is completed.

Our next question comes from Carlos de Legarreta from Itau BBA.

Two very quick questions. The first one on cost and expenses. You're actually decreasing the selling and marketing expenses both year-over-year and quarter-over-quarter while growing revenues. Can you help us make sense of that, especially in this particular competitive context? And secondly, just a follow-up on C6, do you have any timing as to when you can actually receive the proceeds from this ending of this partnership?

So I will take the first one, I will leave Andrea on the second one. When it comes to the sales and marketing in general, A lot of -- I will make some examples, a lot of improvement comes from digitalization. Digitalization is something that is proceeding across the board and across a number of activities. I will give you some example. This is basically primarily the main driver of the increased efficiency. When I talk about digitalization, I'm talking about digital recharges, digital sales, the -- one of the latest example has been quite important was the PIX adoption within our postpaid customer base. PIX it's a unitary cost that is lower than any other cost. And so we move from 0 to 50% over the last 12 months -- a bit more than 12 months over the last 18 months. And -- if you look at the call center, if you look at the ability for us to retain calls on digital channels are there. So this basically is the main driver behind the optimization of the sales and marketing cost. Looking forward, we still have opportunities and this is the opportunity that we are going to pursue going forward, an example, consider the customer relation. We are just issuing a new app. So the new app is being launched at the end of last year, it's in soft launch. So it doesn't address now 100% of our customer base and the functionalities that we are going to put in the new app are going to be effective in improving the relationship with our customers, like for complaints. And therefore, by launching this, we are going to reduce further our customer service cost on the human side. So we got all these packages of initiatives within sales and outside sales, but within sales, it was the main driver of the reduction.

Carlos, as Alberto mentioned, at the beginning of the call, we cannot give much detail on the effects of this statement. The BRL 520 million is pretax and all the balance sheet effects will come in the future quarters.

[Operator Instructions] Our next question comes from Daniel Federle from Bradesco BBI.

I had 2 questions, if I may. The first one, I would like to know if you are feeling any impact from [indiscernible] over the past 30 days since they started to onboard clients? Second question, if you see any structural reason for TIM to grow less than peers or more than peers in mobile revenues going forward? And third, just to understand the impacts of inflations in revenue growth in the future, should we expect the higher the inflation, the higher the price increases and then the higher the revenue growth, or that's a very simplistic and that's not the way you should think?

Okay, Daniel. So coming to the first one. In terms of the impact on new bank, we don't see it. If -- and so that's a simple answer so far. When it comes to our growth in mobile, as you know, we have more prepaid versus our competitors. And so when I say that the recharge market is shrinking, basically, this is something that -- since we have more prepaid revenues versus the others in the overall revenue composition of clearly this with more for us versus the others. And that's the reason why we are deploying a number of initiatives, the B2B one that we discussed or the customer platform that we've been discussing in this call to be able to maintain a sustainable revenue growth pattern going forward. When it comes to passing inflation to our customers, you know that we do this at specific times of the year. So we believe that it can impact inflation to our postpaid customer base. As a matter of fact, we are over the last years roughly the extent of inflation they have been passing over. Of course, there is then a limit that it depends on how much demand is impacted by these increases. And this, in turn, has to do also with the overall economic context. And so the -- what is available for customers to spend. We are executing for you to know the price adjustment in a similar fashion this year versus last year. And what we do is that we look afterwards a response of customers in terms of churn levels and collection curve, so our ability to collect. And this is a sort of empirical approach. As we go forward, we pass this and we check if demand is able to compensate for this adjustment. As for the year, we are going with the same intensity as of last year.

Ladies and gentlemen, since there are no further questions, I'm turning the floor to Mr. Alberto Griselli for his final remarks. Please, Mr. Alberto, you may proceed.

Thank you all. So I want to thank you, everybody, for participating in our call today. A special thank you to our team. We are fully focused on executing 2025, address the challenges that the macro scenario present and also pursue the upside risk that we have in our plan. I would like also to invite you at Telecom Italia, TIM Italia call the 13th, so in a couple of days, when we will have the chance to complement how we plan to create additional value to shareholders, addressing a topic that we get question frequently. So thank you for your participation today. And hopefully, we'll see you again in a couple of days on TIM Italia conference call. Thank you, everybody.

This does conclude the fourth quarter of 2024 Conference Call of TIM S.A. For further information and details of the company, please access our website at tim.com.br/ir. You can disconnect from now on. Thank you once again, and have a wonderful day.