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SAO PAULO, July 31 (Reuters) - Brazilian wireless carrier Tim Participacoes SA sees revenue growth accelerating in the second half of 2019, after seeing initial signs of improvement in both pre-paid and post-paid mobile plans in July, executives said on Wednesday.
The company expects a more positive scenario in Brazil in coming months, boosted by a stimulus package that was recently announced by the government and ahead of the expected approval of a long-awaited pension reform, they added.
“We are positioned to take full advantage of the economic recovery that should accelerate in the second half of 2019,” Chief Executive Officer, Pietro Labriola, told analysts in a call to discuss quarterly results. “The road will be bumpy but we’re on the right track,”
He said TIM is adjusting its strategy to upgrade customers from pre-paid to post-paid plans “without pushing the price too much.” For example, he said, the company launched a family plan offering music and movie streaming services in June.
Labriola also criticized what he called the “pricing irrationality” of rival carriers, calling out rival Oi SA’s offerings on TV as “unsustainable” in the long run. Oi currently offers users 50 gigabytes of data for 99,90 reais ($26.33) a month.
He added that delinquency levels continue to be a challenge for the Brazilian subsidiary of Telecom Italia SpA, but said these are likely to reach an inflexion point in the second semester of 2019.
As part of an ongoing cost-cutting plan, TIM is pushing forward digital initiatives to have most of its customer care operations automated by year-end, the CEO added.
On Tuesday night, the company beat expectations and posted a 26% rise in second-quarter net profit compared with the same period a year earlier, after adjusting for one-off factors.
“After a disappointing showing last quarter, we were relieved to see mobile service revenue growth accelerating again,” analysts at BTG Pactual wrote in a note to clients, adding that TIM’s valuation looks relatively attractive despite a challenging competitive environment.
TIM shares were trading 1.25% up on Wednesday at 12.17 reais, accumulating gains of over 4% so far this year.
$1 = 3.7594 reais Reporting by Gabriela Mello Editing by Marguerita Choy
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