TIM Participacoes SA (TSU) Q2 2021 Earnings Call Transcript

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TIM Participacoes SA (TSU)
Q2 2021 Earnings Call
Jul 27, 2021, 9:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, ladies and gentlemen, and welcome to TIM SA 2021 Second Quarter results conference call. We would 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 SA remarks are completed, there will be a question and answer session for participants. At that time, further instructions will be given. We highlight that statements that may be made regarding the prospects projections and goals of TIM SA constitute the beliefs and assumptions on the company's board of executive officers, future considerations are not performance to warranties. They involve risks, uncertainties and assumptions as they refer to events that may or may not occur. Investors should understand that internal and external factors to TIM SA may affect their performance and lead to different results than those planned. [Operator Instructions]. I will turn the conference over to the CEO, Mr. Pietro Labriola, so he can present the main messages for the second quarter of 2021. Please Mr. Pietro, you may proceed.

Pietro Labriola -- Chief Executive Officer

Good morning everyone. Thanks for attending our conference call. We are becoming more optimistic about the situation of the country and the business. After the second wave of the pandemic in Brazil between March and May, we started to see some light at the end of the tunnel following the vaccination acceleration. Overall the economic activity is coming back and so is the speed of our business. In the second quarter, we continue to present a solid recovery with our revenue lines improving on an year-over-year basis and the quarter-over-quarter. For the telecom sector, the first wave was the worst moment of the pandemic, but an easy comparison base doesn't explain all the evolution we see in the business. That is why we are very confident in delivering the company's targets. Second half expectation have had not only due to the recovery process, but also because of the spectrum auction and the closing of the deal with [Indecipherable]. Without further delays, let's move to the results.

Once again, the quarter was marked by admirable execution. We accelerated our recovery growing solidly in all major lines and more rapidly than our recent results. We closed the quarter with service revenues growing near 9% year-over-year, EBITDA coming a very solid close to 6% versus last year. We are crossing yearly growth for the past 20 quarters. Not all businesses reached such consistent and sound performance. In July, we announced another venture of our customer platform strategy, this time in the Ed-tech arena[phonetic] with the Cogna Group. This last partnership led to a new control offered in mobile. So we took the opportunity to refresh the entire mobile portfolio. In parallel, we also updated TIM Live's portfolio. In the second quarter, we continued with the financing plan for the new acquisition and issue, the first sustainability linked bond in TIM's history. We issued BRL106 billion in debentures attached to ESG targets, the largest in Brazil. By achieving social and environmental goals, we used the cost of funding while producing positive impact for society. Still on this front, we improved our disclosure of information following the release of our Annual ESG report and a brand new section IR website. We focus our environmental actions on reaching our long term targets as being 15 renewable energy plants and reaching 1,7000 Biosites. On the social front, we also had a great quarter. I was personally engaged in launching the partnership with the Mulheres Positivas initiatives together with nine other large companies to foster career development and women's access to the labor market. We also adhered to the LGBTI Plus Rights form and finally we received recognition for our work winning the [phonetic]GISMA [phonetic]Award for Diversity impact.

Detailing our revenue acceleration, we show positive contribution coming from mobile and fixed services with all major lines posting better growth rates than the first quarter. Mobile service revenue accelerated to grow 8.5% year-over-year with the postpaid segment also speeding up to reach almost 9% while prepaid expanded more than 5% reverting the past quarter contractions. In parallel fixed services also posted a solid evolution, up by 11% with this assumption contribution from TIM Live expanding more than 20% year-over-yet. The critical element for our mobile recovery amid the second wave of the pandemic is the ability to execute the volume to value strategy. Despite having still some so close across the country impacting our commercial activity.

Our mobile ARPU grow more than 10% year-over-year and 1.2% versus the first quarter. It's worth noting that our ARPU is growing for 22 consecutive quarters. Since March, we have seen an improvement in the recharge level. This trend was confirmed in the second quarter and drew prepaid ARPU up more than 11% year-on-year with the quarter report expansion as well. Postpaid ARPU also increased by more than 5% year-over-year backed by positive performance in intra-segment migrations. The quest to differentiate our offers by moving away from the price [phonetic]per GR [/phonetic]is clearly paying off. As I mentioned earlier, we refreshed our mobile portfolio adding unlimited music with Deezer GO to our main prepaid proposition.

In few postpaid, the Inter [phonetic]TIM grew exception with the addition of HBO Max. While in controlling offers, we added the education content from the Ampli platform under our Ed-tech partnership.

Going into more details of this new venture, we're joining forces with the largest education player in Brazil, the Cogna Group to accelerate the Mobile plus Ampli platform. In exchange for the usage of our mobile operator assets, TIM will be remunerated in the form of cash revenues and the equity up to the 30% of Ampli capital. With this, we expect to accelerate student intake creating value for both companies. Regarding financial services, we continue to accelerate every month the number of additional TIM clients to open induce a bank account at C6 generating new revenues and improving the lifetime value of the TIM customers. With that, we are hitting the targets for equity and book in addition, our stake in the second quarter, which bring us to a total of approximately 2/9% of C6 Capital. Our mobile advertising project is maturing day-by-day. We keep growing our with more than 19 million [phonetic] opt-ins [phonetic ]price. We developed Insights platform respecting all the data privacy requirements. We are developing new channels such as TIM funded associates Games with Ads and TIM News with the dual content plus Ads.

First results from the TIM Ads platform are coming out. Campaigns are reaching millions of people. We are doing large scale service rewarding user for their engagement with Ads. Brick-by-brick, we are building a new revenue stream.

Completing the discussion around the revenue drivers, let's move to fixed service, specifically TIM Live operations. The main drivers for the double-digit revenue growth we see every quarter in the fixed broadband, continue to be ARPU and customer base uplift. In the second quarter, blended ARPU was up by more than 8% with FTTH ARPU reaching close to BRL110 per connection. Our customer base continues to evolve toward higher speeds. The new portfolio accounts with 500 and 600 megabit per second speeds and more OTT contents. FTTH coverage also expanded reaching 3.8 million homes pass. A quick update on the FiberCo deal. In June, we got the approval from CADE and now we are waiting for Anatel's constant. Closing is expected for September or October and we are planning a smooth transition without disruption in the FTTH rollout. We are pleased with the arrival of IHS as a partner in the FiberCo and wish to be great things with them. Maintaining our discussion on infrastructure developments, I'd like to remark that it was not only the broadening corporate that grew solidly, mobile coverage all responded soundly, 22% more cities were covered with 4 G and 20% more in 4.5 G. We are also preparing our network to receive all customers. M-MIMO and Site modernization are accelerating for these part [Indecipherable]. Transport network keeps growing with more than 1,000 cities connected with fiber and consequentially more kilometers being made up. [Indecipherable] is anticipating TAC commitments. The network sharing agreement with Vivo continues to evolve, now all 3 fronts are showing progress. Combined coverage expansion went above 350 cities. Single grid trials are being run in 20 cities while 2G switch-off test are underway. Our commitment to efficiency is a driver for this project and many orders.

Talking about efficiency, this quarter it is crucial to go into some details of our opex dynamic to clarify any misinterpretations. our opex went up at 15% year-on-year, but this is basically due to the return on variable costs and expenses reduced due to the first wave of pandemic and other volume-related impacts. To confirm these understanding, we can compare this quarter against the second quarter of 2019 and we get a flat variation while versus the first quarter of 2021, we posted a slight decline of 0.6%. So, it is fair to see our opex is still under control. Digitalization efforts continue to play an essential role in TIM's efficiency program and we have robust improvements in all leading indicators; e-billing, e-payment, digital caring. In sense of [Indecipherable] recharges keep growing in adoption. Despite this specific situation with opex, EBITDA growth also accelerated to 5.9% year-over-year summing BRL2.1 billions. Margin should close to 48%. This performance had net income to grow at both BRL681 million representing 2.5[phonetic]increase. Our investments reached BRL900, an growth of more than 30% year-on-year.

In this context, operating free cash flow for the first six months of the year grew more than 50% surpassing BRL1.6 billion which drove our net debt down 27% in the cash position of BRL7.1 billion. It is worth mentioning, our financing plan for the year position is underway and going simultaneously. Beside the debenture issuance, we took BRL1.1 in bilateral loans and we also add the cash proceeds from the FiberCo deal. We expect to take additional debt lines for approximately BRL1 billion in the second last. Closing my comments, I want to remark on the sound results we've been delivering amid the complex environment confirming the company's solid fundamentals and a positive momentum.

Let's summarize in the first half, we posted a 6% service revenue increase while expanding EBITDA by more than 5%. Customer platform revenues summed BRL46 and considering the new partnerships, we have a clear path to reach our year-end goal of BRL100 million. A year ago, those initiatives were only a PowerPoint chart; however, today we are proving we can create value with them.

On the M&A front, we are executing well what we set our [indecipherable]. As I said at the beginning of my speech, we are more optimistic about the future. We are confident the Oi deal will be approved; however, we always knew, this is a complex transaction that will require much attention from the regulators. Bottom line, all that has happened so far is not a surprise. We are working with answering their request and clarifying all that is necessary. Another good news is related to the spectrum auction. The process is moving forward. So we should be there but it happening between September and October. The essence of an infrastructure focus auction is being confirmed.

Before I conclude my presentation, I'd like to give a special thanks to Adrian Calaza, my friend Adrian Calaza, our CFO. By the end of August, he will be returning to Argentina as starting a new carrier there. I personally was delighted to work with Adrian for 5 plus years. He had has accomplished many things and for that TIM Brasil, and I will always be grateful. I wish him all the best. But I still count on him to complete the transition in these last weeks. Thank you.

We will now open the floor for questions, please, operator.

Questions and Answers:

Operator

Thank you, Mr. Pietro Labriola. Now we will begin the Q&A session. [Operator Instructions]. Our first question comes from Marcelo Santos with JP Morgan. Please Mr Santos. You may [Technical Issues]

Marcelo Santos -- JP Morgan -- Analyst

Hi, good morning. Thanks for taking my question. Can you hear me well?

Thank you. I would like to ask a bit about TIM Live. So you had a slowdown in Ads this quarter -- I understand that you are adding a lot of FiberCo to the home, but you're losing our fiber-to-the-curb. So, could you please comment on the outlook for this? And the second question also on broadband-- how do you see the outlook for Brazilian fiber broadband given that you have many players that are coming to the market that are creating infrastructure companies and have aggressive plans of fiber deployment? Do you think there'll be space for everybody? Do you think there'll be overlap and competition? How do you see this outlook? Thank you.

Pietro Labriola -- Chief Executive Officer

Thank you, Marcelo. Let's start from the second question, that is more related to the outlook of the evolution of the ultra broadband market. Yes, it's true that we have a lot of players that in this moment that are fighting to find some rooms for a possible development, but we have to try to understand which are the real capabilities of all the different player in this market. Because if you look at that everybody want to compete and FTTH is the key element for this competition. So other technologies are less comparatively compared to that. Part of the actual coverage in FTTH of some of these player are unable to reach high speed services. What I mean that, for example, is not for everybody to be able to supply service at 1 or 2-gigabit per second. So I'm very happy to announce that to clarify better on the market who is able to compete to stay this market, we are going to launch by the end of October, our two new offers at one and two gigabit per second, it will be clarified who is really able to stay in this market with a network that is able to manage this kind of speed. Second, it's clear that the FTT--always on the second question--sorry, it's a second point related to the second question--it's clear that Brazil is a continent as I'm used to say every time. And so there are rooms to have more than one player to cover the different state. It's clear that it's really important to understand where it makes sense to go and compete because there are--there are no place in the world where you can have more than two or three players able to make this business, a profitable business investing on FTTH. I think that there would be natural process in terms of competition where someone will move from as logan to a reality. So I think that I'm very curious to see what will happen in the following months related to this item, but I'm quite confident that our strategy that is based on a reliable network with the support of IHS will allow us to continue to compete in the different area, and again let's see very well the evolution. There are some players more least[phonetic] that if they want to really compete, they have to grow. To grow, they are going to lose some of the fiscal [phonetic]advantages that are related to the sides of the company. So again, let's see and in that we have the possibility to further increase our development. Coming back to the first question that you related to our speed, this is true that we have slightly slowed down in the second quarter. This is mainly related to the FTTC. Just to clarify, when we discussed about TIM Live, usually we look at tower revenues as an overall. If I should try to compare TIM Live as we discussed over other player, we should divide our revenues and our net debts in FTTC and FTTH and if you look at the FTTH, FTTH continue to grow for more than 40% year-over-year--sorry, FTTH continue to grow more than 40% year-over-year while, what is happening is that FTTC is slowing down and we are in a negative trend in terms of revenues. But on this area, jointly with IHS, we are working also on the possibility of an upgrade of the existing FTTC to FTTH. Our expectation for the second half is that perhaps our revenue will be slightly below 20% for Live because we will continue to have a decrease of FTTC revenues, an increase of FTTH. But as a math, we would be back in the first quarter of the next year with the growth that will be closer to 20% because FTTC, we continue to reduce and the contribution will be lower and lower and lower, but the numbers, I leave this to Alberto, that can give a different light on the real number of the second quarter. Alberto, please.

Alberto Griselli -- TIM -- Chief Revenue Officer

Yes, thank you, Peitro. Hi, Marcelo. Just a few additional points in terms of overall performance [Technical Issues] in fiber access and when it comes to the FTTC that is suffering more in terms of churn rate over the last months, we as a structure and moreover decided to start an overlay in Rio de Janeiro and Sao Paulo an brownfield overlay. We are pretty well advanced in Rio de Janeiro where we are already seeing an improving performance in terms of reducing churn and we started also in Sao Paulo, this year and so basically, we are putting an overlay FTTH on top of our FTTC in order to lock in our customer base. Last point to mention is that we--we made the price adjustment in the second quarter. This will have a specific effect on the churn rate of this quarter, that is not going to repeat in the next quarters, at least at the same intense.

Marcelo Santos -- JP Morgan -- Analyst

Thank you very much.

Operator

Our next question comes from Frederick Mendez of Banco Bradesco. Please, Mr. Mendes, go ahead.

Frederick Mendes -- Banco Bradesco -- Analyst

Good morning everyone and thanks for the call. I have two questions as well. I mean, the first one is strong performance of the mobile service revenue, you mentioned that upselling continues to play an important role, so just want to get a little bit more visibility where that is mainly happening-- it looks like it's not as it was in the past from prepaid to hybrid, so just wondering if you are doing that mainly in the pure postpaid and where you see a more opportunities to do for the next quarters? That's my first question. And then my second question is on the customer platform --it's still at an early stage, but this quarter reported a significant growth almost the [indecipherable]. So just trying to stand how close do you feel about these line of growth and if the margins on these, on this platform, it is similar to what you've been reporting for the consolidated company or the early slightly different? Thank you.

Pietro Labriola -- Chief Executive Officer

Thank you, Fred. About the first question, that is ready to the upgrade. We are proceeding with exactly the same strategy that we are declaring since a lot of time. If you remember, I can check also chart that we show I think three or four years ago where we were showing that our idea was to start to migrate prepaid customer from prepaid to control and then progressively move from controlled to postpaid. It's clear that at the beginning, the volume of customer on the prepaid and so-called [Indecipherable] pool was so big that it was possible to have focus mainly on the migration from prepaid to control. And then the fact that we have to control also the rentability of the migration because we have to remember that we have to continue to create and generate value in these activity and not just the posting some numbers. We are more focusing on the migration from control led to postpaid. It doesn't mean that we are not continuing to migrate customers from prepaid to control, but we are doing that with much more attention looking at the bad debt, the cost and the level of our of ARPU and it is also demonstrated by the continued increase in the prepaid ARPU growth. On the control in the migration from the control to the postpaid, what is important to realize this, we have always to check the amount of giga that we put in our plan because what we are doing is that we define a certain amount of giga on the control that are not big enough to keep the customer on that plan to try to solicit data migration from control to postpaid, to reach also in higher level of giga. In the meantime as we are used to say, we don't want to compete just on gig and price is the strategy that we call [foreign speech] giga and and so if you look at our offer what we are doing, we are voting in all our package, a different level of services to justify also an increase of price in ARPU. just to give you an idea on the postpaid, we have a service for our customer base, where our customer do not interact in the call center with live wire. So with an automatic machine but yes the possibility to have the [Indecipherable] service. So I think that perhaps say and discuss only about giga, it's partially incorrect because we are trying to build a differentiation that come through the amount of giga, the level of service that we supply to the customer and the content with the so-called the entertainment app strategy. And another important element there again to guarantee the maximum level of efficiency in our commercial activity, we are continuing to develop our next best section platform that thanks also to artificial intelligence tool allow us to understand where makes sense to upgrade the customer, sometimes for ARPU increase and sometimes to share control.

Let's move to the second question that is customer platform. Yes. So we are satisfied about our strategy. As we announced, we closed the agreement with the Cogna and I personally want to thank you, Cogna team to have chosen team as a partner for these new journey. I think that is also important to remember that we want to continue in this way, we are planning to close three other deal by the end of this year. We have already announced the second --the telemedicine and financial services with the digital wall later, but we have been planning to launch another one that is much more related to the value-added services environment. Last but not least, I think that we will have real good opportunities coming from the mobile advertising filled. Here again, I call to action to all the telco player to join forces because if we put together all the asset that we have, we are able to stay in the market competing with big player as Google, Facebook in a market that is much bigger. Now about the marginality, Adriana.

Adrian Calaza -- CFO & Investor Relation Officer

Just complementing. Hi, Fred. It interesting your question about the margin but it probably is the first time we discuss about margins of this kind of revenue. So the thing is, as you know, we are booking revenues coming from commissions of the activations of new accounts of each of these of these business. So in this end, obviously, the marginality is much higher than the normal one because we do not have additional direct associated costs. You may think about our efforts in total in terms of communication that are are high, as always, but at the same time there is a lot of synergy because it's the same communication that we use for our products embedding also the different new offers, the first one the C6 now in the partnership with Cogna. So, at the end in terms of the business itself, yes, it has a higher marginality but there is another variable, probably for us much more important that these offers --these new business for us are extremely important in terms of increasing the lactam of our customers. So obviously, they're reducing the churn helps instantly to increase the margins. So, on the overall--obviously in terms of--in terms of margins, it's extremely positive. We are very happy in terms of how it's going--these new businesses and obviously, we are probably expecting to go above the initial target that we have for this year. So again, it was interesting,your question because it help us because it's the first time we discussed about margins on this.

Pietro Labriola -- Chief Executive Officer

And the fact that if you can finalize the answer of Adrian not related to the margin, but again a statement about the strategy, we foresee for our company but I think for our industry a few trend, which we have to work more and more, more and more on services, quality of the service and this kind of partnership because it is the only way to attribute value to a service that differently could become a commodity and this is what sustain our strategy from volume to value.

Frederick Mendes -- Banco Bradesco -- Analyst

Perfect Very clear, Pietro and Adriana, thank you and then, Adriana, thanks for the great work, and the best of luck on new challenge. Thank you.

Adrian Calaza -- CFO & Investor Relation Officer

Thank you, Fred. Thank you again.

Operator

Our next question comes from Vitor Tomita with Goldman Sachs. Please Mr. Tomita. You may proceed. Mr Vitor. Your line is open. You may go ahead. [Technical Issues]

Our next question comes from Soomit Datta with New Street Research. Please, you may go ahead.

Soomit Datta -- New Street Research -- Analyst

Yeah, I'm hoping you can hear me. Thanks very much for taking the questions. And also, Adrian, thanks very much for your help over the years and good luck with everything in the future. A couple of things for me, please. First of all financial services-- just to delve into a little bit of detail there if I could-- can I firstly -I saw the news about JPM taking a stake in C6. I just wondered, does that change anything in terms of your perspective on the future outlook--does it change anything in terms of deal economics please? And secondly, can you say anything around the contribution of TIM subscribers to the overall C6 subscriber total any?I don't think you'll be able to give numbers, but any sort of sense as to your contribution there and then thirdly, please. I just wondered, there is a comment in the presentation about Digital Wallet launch in the thrd quarter--I just wondered, specifically on monetization, how does that--how does that help things going forward? I think at the moment, essentially you sign up a subscriber and you get paid a share of that. I just wondered what if and when you launch a digital wallet, how does that change that monetization process please? And then I had one more on the Oi deal, but maybe we could do the FinTech stuff first, please?

Pietro Labriola -- Chief Executive Officer

Well, Soomit. I was waiting for your question related to Oi ideal, but I will not start from that. Let's start from the easiest one that are, the first one about the JP Morgan C6 acquisition, this is something that jointly with the second question, that is related to the contribution TIM subscribers in the customer base of C6 our information that have to be asked, primarily to C6 because it's clear that we don't to have all kind of detail. We've some details about the JP Morgan process and the once we will receive the formal answer, we will be able to give you some more details. Related to the digital wallet or it's really an interesting question, because again sometimes when we discuss about the telco industry every bad, they ask us if in the next quarter we will improve our EBITDA, our cash, the return on investment on a weekly basis and then there is another world outside that these digital. One, it seems that cash is not the king, profitability is not important and what is important, it's only the amount of customer that will get this kind of services waiting in the future for a possible monetization, it's clear I'm doing a provocation but I'm joking. What we remind is that why don't we try to enter in this field, getting all the best that we have from this new wave of the industry without put on the table a so huge amount of capex and opex to develop that--what they mean if you look all this project of consumer platform and for us project on which we work on a marginally basis in terms, capex, opex--so with our traditional financial discipline approach while creating or helping to create a larger amount of customer base in the future, we can exploit the monetization. When you discuss about the digital wallet and I cannot and I don't want to mention the amount of different players that are doing evaluation, unbelievable evaluation about the digital wallet in Brazil. I never seen any kind of a number that explain how this player will monetize really this kind of business. So, which is our idea in synthesis, let's use our asset that will permit us to stay in these new fields with marginal capex and opex contribution to try to get the opportunity from evaluation that's far from the traditional telco evaluation. It doesn't mean that our team we lose one second in the execution of the core business that it, what is going to pay our salaries in the next future. Then, only a couple of minutes to Renato to give some more details about the digital wallet if you want, but again this is the philosophy and loss and let's answer to Renato and then we move to Adriana.

Renato Ciuchini -- VP, Head of Strategy & Transformation

Hi, Soomit. Thanks for the question. The digital wallet as you know pretty well it's market it has several players in the Brazilian market now and there is a trend of consolidation in the next years. So we are looking to that market, we are looking to the players, and we are waiting for the right partnership with that player that we believe will be a survivor in the consolidation of this market because there are--it's easy to launch our wallet. Now, there are many solutions, which are off the shelf now that we could quickly launch. But that is a future that insecure a success. So we better wait and find a right partner for doing the right solution that will have a likelihood to be a survivor in the consolidation market and generate value for our customers and to our shareholders.

Pietro Labriola -- Chief Executive Officer

---let us some number, we are in it--finalization of at least of two potential partner. So we are not still thinking what to do and now. We have to choose which of the two makes sense and that we are evaluating that also without a player or that telco players in the market because this is another area where jointly we can create more value for all our shareholders. Here, we discuss about Corporation unless about competition. Coming to the Oi deal, I really thank you for the question, because sometimes you are too polite to us. But again, I think that in the press, there were some indication that perhaps are generating a misunderstanding--now, I leave the stage to Mario and that we will not tell you what we think about. Mario will mentioned to you numbers that better than everything explain, which is the real situation, Mario. Please.

Mario Girasole -- Regulatory & Institutional Affairs Officer

It is working? Thank you. Thank you for the question. And now, the point is that some press today described better the meaning of these procedural step now that this called declaration of complexity is a technical step provided in the law that aims to request additional information and eventually works as a necessary step to to ask for an extension of deadline, but this did not occur--the deadline is the same of the original process. So, during this complementary step, CADE as expected ask at some questions about the MVNO[phonetic] market access to infrastructure is something that was absolutely expected in this stage and just to give some numbers over the past 13 months, CADE has made 22 declaration of complexity, now in 3.3 cases are still in progress. Including our case one was the part withdrew from the transaction and then 18 cases were approved and the nine of these 18 cases without any conditions. So we consider that this is quite a natural step for an operational such dimension and in the timeline for approval in the third or fourth quarter, we think are absolutely without --without pressures.

Soomit Datta -- New Street Research -- Analyst

Okay, that's very clear. Thank you. Thank you for clarifying that.

Mario Girasole -- Regulatory & Institutional Affairs Officer

Thank you.

Operator

Our next question comes from Vitor Tomita with Goldman Sachs. Please, Mr Tomita, go ahead.

Vitor Tomita -- Goldman Sachs -- Analyst

Hello, can you hear me now? Hello?

Pietro Labriola -- Chief Executive Officer

Do you hear us? Hello?

Vitor Tomita -- Goldman Sachs -- Analyst

I hear yours.

Pietro Labriola -- Chief Executive Officer

Yes, we're hearing you. So, please.

Vitor Tomita -- Goldman Sachs -- Analyst

Okay, so thank you very much for questions, sorry for the technical issues here earlier. So, two questions on our side. The first one is, if you guys could provide any additional visibility on expected timing for the partnership with Cogna and the second question would be on the competitive environment in mobile during the quarter, if you could give us any additional views on how competition has behaved during the quarter? And specifically on the dynamics of postpaid net ads. Thank you.

Pietro Labriola -- Chief Executive Officer

Okay, Vitor. About the Ampli visibility I leave to Renato to give you some more details.

Renato Ciuchini -- VP, Head of Strategy & Transformation

So, Vitor, if I got your question right, you, you asked about the timing of the partnership?

Vitor Tomita -- Goldman Sachs -- Analyst

Yeah.

Renato Ciuchini -- VP, Head of Strategy & Transformation

Okay. So as you, as you probably got to the news and through our announcements, we have signed a contract earlier the month, we have announced it already the first offering in our national sales convention on the 7 and 8 from July. This is the first joint offer that we have done with them. Right now, we are working on our product roadmap-- this is a long-term contract, it is a five-year contract. We expect to be launching new offers with them either in Q4 or Q1 of next year. So there is a whole roadmap that is being worked now, but we have very quickly launch in the first half for that is has hit our commercial sales channel already in July, because as you probably know the education market has a peak in July, August, so we are taking advantage of the peak of the second semester registrations which happens in July, August, with this new first offer and right now we are working on roadmap and will be probably announcing this roadmap of new offers with them in the third quarter results call for the fourth quarter and for the first quarter of next year.

Adrian Calaza -- CFO & Investor Relation Officer

Thank you, Renato. Related to the orders--two questions competitive environment and postpaid net debts. I leave to Alberto to answer, but just a quick answer the market continue to stay rational competing putting services increasing sometimes amount of giga in some offer that related to some price up because we did a press up but also at the end of the day we have clarity that depressed. I think that it was a natural move related to the fact that during this pandemic the customer be able change with the any significant increase in terms of data consumption. So it's a natural process that allow us also to proceed with the monetization of the data grow. About postpaid net debts second quarter was it also by the as usual and plan, but we are coming back to post even net debts in this quarter but Alberto can give some more color some both of that.

Alberto Griselli -- TIM -- Chief Revenue Officer

Yes. I will dig on Pietro. I would say that yes is confirmed that the postpaid is rationale overall. So on our side, we carried out on Control customer base or a piece of the price up in this quarter. On a price adjustment, I would say it's a more for more strategy. So it's a, it's a price adjustments in exchange for additional giga for our customers. Our competitors in this quarter increased the price of the postpaid offers. So these happen, we do collateral and therefore we see, let's say this rationality to maintain with this adjustment on acquisition plans. At this point, I would say that we are sort of aligned because we were among the two of them and when it comes to our outlook for net addition for the following months, I would say that we are going, we are expecting to go into positive net additions in the following months on the postpaid and prepaid segments.

Vitor Tomita -- Goldman Sachs -- Analyst

Very clear. Thank you very much.

Pietro Labriola -- Chief Executive Officer

Thank you, Victor.

Operator

Our next question comes from Victor Liu II [phonetic], with UBS. Please, Mr. Liu II, go ahead.

Unidentified Participant

Hi, good morning, everyone. Thanks for taking my questions. I also had one question regarding the competitive environments in the mobile segment. [Indecipherable] target our growth and the others, isn't there a risk of lower growth for you in the future compared to that market and I think just on being said alone without [Indecipherable] mobile, how should we see the question. Thank you.

Pietro Labriola -- Chief Executive Officer

Victor, first of all I think that your surname being Italian [Indecipherable], just to point that.

Unidentified Participant

Yeah. Yes, yes, it is.

Pietro Labriola -- Chief Executive Officer

As Italian, but again, if we catch in the right way your question is related to the fact if our strategy --let me phrase that in a less polite way from volume to value with the lower number of net debts is something sustainable in the medium, long-term. So again, I think that the answer is quite easy to be posted. Looking at the trends and the comparison that I cannot do, but you can do on your own related to the trend of the net debts year-over-year in terms of growth of all the different player, the trend of revenues growth year of year and quarter-over-quarter of the player and and you can see that we are progressively, reducing the gap and we are close with one of the other two player to fill the gap and go to the breakeven. The other element I'm always to say that I think that is not right to look at the number of TIM Brasil in pieces and bytes, what I mean-- we are the player that is putting in the market number of revenue growth, EBITDA growth, cash growth, everything under control. I don't want to exceed in some element that can have impact in all the other numbers because again if we want to increase the number of net debts if we consider that this is a proxy of value, but I don't think so. It's quite easy for us, but the certain point the ARPU will be diluted, the increase of commercial costs will explode, the risk of debt can increase. So again, you are asking me as shareholders or potential shareholders to continue to perform in a financial way in all the line of our profit and loss. It means revenue EBITDA, cost control and then the fact that Brazil as customer that continue to ask for an increase of data consumption allow us to continue to say that there are rooms to further increase in term of ARPU and last but not least, let's remember and I'm proud about that that every time we were the first mover in the Brazilian market to set up new approach in the market, we were the first one to start with the migration pay to postpaid and a certain point, we started to understand that a strong portion that do not create value. We were the first one to start to migrate from controlled to post. Now, we were-we were the first one to move toward a content included services in our package to have a competition that is beyond connectivity and last but not least, we were the first one toward to a consumer platform strategy, all of that are the pieces that allow me to say that we think that in the medium, long-term, our strategy, continue to be sustainable but to be clear, I'm not spelling that we don't want to grow in terms of net debts. And the next quarter, we'll be back in positive net debt. I don't want to grow at any cost because net debts at any cost are a proxy of value generation for our shareholders.

Unidentified Participant

That's very clear. Thank you very much.

Operator

As a reminder, if you'd like to ask a question [Operator Instructions]. Without any further questions, Ladies and gentlemen, I would like to answer--- Without anymore questions, Ladies and gentlemen, I'm now returning for Mr. Pietro Labriola for his final remarks. Please Mr. Pietro. You may proceed.

Pietro Labriola -- Chief Executive Officer

I'm happy with the results we delivered in the first half. This second, we serve as great opportunities and many challenges that is why we will focus on the execution to complete the pending project and close an excellent year. I'm sure years from now when we look back to 2021 and mark this year as a key milestone in the transformation of this company. I want to thank you really, thank you, our team's commitment and dedication and for the leading at high level despite all the challenges of the moment. We are really a great team. Thank you once again for participating in our conference call.

I hope we can meet soon, maybe even in person.

Operator

Thus, we conclude the second quarter of 2021 Conference call of TIM SA. For further information and details of the company, please access our website on TIM.com.BR/ir. You can disconnect from now on. Thank you once again.

Duration: 54 minutes

Call participants:

Pietro Labriola -- Chief Executive Officer

Adrian Calaza -- CFO & Investor Relation Officer

Renato Ciuchini -- VP, Head of Strategy & Transformation

Mario Girasole -- Regulatory & Institutional Affairs Officer

Marcelo Santos -- JP Morgan -- Analyst

Alberto Griselli -- TIM -- Chief Revenue Officer

Frederick Mendes -- Banco Bradesco -- Analyst

Soomit Datta -- New Street Research -- Analyst

Vitor Tomita -- Goldman Sachs -- Analyst

Unidentified Participant

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