TIM’s Pivot: Owning the Fiber and Embracing AI

Brazil’s telecom incumbent repositions around converged offers, AI-driven efficiency, and a controlled network.

TIMB · Earnings Call · 2026-07-28

Q2 2026: Execution and Diversification

TIM S.A. reported a second quarter marked by consistent growth and strategic repositioning. CEO Alberto Griselli opened the call by noting, “The second quarter was marked by solid execution. We delivered revenue growth, profitability expansion, and cash generation in a balanced way, while continuing to diversify our revenue profile and strengthen our operation.” — Alberto Mario Griselli, CEO · 2026-07-28 Revenue approached BRL 4 billion, with service revenues up ~6% in the first half. EBITDA grew ~7%, and net income surpassed BRL 1 billion. The driving force behind this stability is a deliberate shift from a mobile-centric model to a multi-platform one, with postpaid now representing close to 70% of mobile service revenue.

Strategic Pivot: Owning the Fiber

The most significant strategic move is the acquisition of I-Systems, bringing the fiber network in-house. Griselli explained, “When it comes to I-Systems, for us, it is a kind of accelerator of our broadband strategy. Because now we control the network, the experience of the client, and to a better extent the financial profile of broadband.” — Alberto Mario Griselli, CEO · 2026-07-28 This marks a departure from the earlier neutral-network approach, as noted in the prior quarter: “The acquisition of control of a system provides us a number of benefits.” — Alberto Griselli, Chief Executive Officer (CEO) · 2026-02-11 The company is leveraging this control to launch Ultra Combo, its first convergent offering bundling fiber, mobile, and content. The CEO highlighted that it is already available nationwide, and early results are positive despite no major advertising push yet. This allows TIM to target new pockets of growth and improve customer stickiness, directly addressing the historical churn weakness in fiber.

AI as an Efficiency and Revenue Lever

Artificial intelligence is moving from pilot to production. Griselli cited collections as a prime example:

1 example is collections where artificial intelligence supports more personalized interactions with customers in debt collection and negotiating processes. Early results are encouraging with more than 2 million customers engaged in a meaningful improvement in recovery rates through the artificial intelligence agents.
Alberto Mario Griselli, CEO · 2026-07-28

This aligns with the broader industry trend of telcos embedding Artificial intelligence into operations, but TIM is applying it specifically to reduce bad debt and improve cash collection—a pressing issue given the recent volatility in that line. The CFO, Andrea Viegas, added, "We are working hard and mitigate these impacts besides the 1 off, of course. Working with our credit score more..." (component 7284134716887655557) This indicates a patient approach to normalizing bad debt after a one-off B2B client issue.

Competitive Dynamics and Revenue Growth

TIM faces a more promotional market, with BTL (below-the-line) offers becoming more widespread. Griselli acknowledged, “Nowadays, the market is more competitive because more competitive or it looks more promotional because these BTL offerings are more available and visible.” — Alberto Mario Griselli, CEO · 2026-07-28 Yet he framed it as a cycle and remained confident in TIM's ability to respond with differentiated propositions like Ultra Combo and the partnership with PicPay. The company's growth strategy is increasingly reliant on B2B and platform revenue. B2B now contributes ~7% of service revenues, and the CEO noted, "we have the best second quarter in the IoT solutions in our history." (component 5944972946418473608) This diversification is a deliberate answer to softer mobile customer base dynamics, a recurring theme in recent quarters. Indeed, the customer base dynamics have been pressured by price increases and competitive BTL offers, but management is confident that new offerings will reaccelerate growth.

Capital Allocation Discipline

The I-Systems acquisition raised net debt, but management is confident about absorbing it without raising CapEx. Griselli stated, "There should not be any material impact of I-Systems CapEx in our CapEx profile." (component 2343071337742096525) The company plans to monetize the acquired assets and maintain shareholder remuneration, aligning with its long-term value creation goal.

Conclusion

TIM is executing a dual transformation: vertically integrating fiber to control the customer experience and monetization, while leveraging AI to drive efficiency and improve collections. These moves are company-specific, but they resonate with global themes of AI adoption and convergent services. The market’s reaction will depend on execution, but the strategic direction is clear and credible.