Good morning, ladies and gentlemen. Welcome to TIM Participações 2019 fourth quarter results conference call. We would like to inform 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 Participações 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, projects and goals of TIM Participações constitutes the beliefs and assumptions of the company's board of executive officers. Future considerations are not performed 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 Participações may affect their performance and lead to different results than those planned. Should any participant need assistance during this call, please press star zero to reach the operator. I will turn the conference over to the CEO, Mr. Pietro Labriola, so he can present the main message for the fourth quarter of 2019. Please, Mr. Pietro, you may proceed.
Good morning, everyone. Thanks for attending our results conference call. Less than a year ago, I arrived at TIM with the mission of leading growth and continuing with the sustainable evolution that the company started in 2016 when this new management team was being formed. I believe we are ending the year with solid results and on the right path to transform TIM into a 4.0 tech operator. Some adjustments were necessary along the way. We achieved important things with a back to the basic mindset and keeping the entire team focused on execution. The adjustment implemented in our strategy helped us to adapt to new realities, maintaining our DNA of innovation, our agility and efficiency. I will walk you through the main highlights of the third quarter. Then the team will help to answer your questions. 2019 was a year of remarkable achievements.
On the network side, we maintain our unquestionable leadership in 4G with the largest and best coverage. Our ultra broadband service was recognized as the best in the country. Network efficiency has become clearer with the implementation of new initiatives, and we are the first to conduct live network test for 4G in Brazil. We also adapted the go to market, adjusting our product and service portfolio while revitalizing the image of the company for all types of clients. With this, ARPU grew in our segment and TIM Live re-accelerated client acquisition. An efficiency mindset and focus on execution, directing the company to be more productive while employee engagement and climate are showing positive improvements. All of this is being translated into our financial numbers with consistent developments in all areas.
We started the year growing service revenue at 1%, we managed to accelerate our pace and close 2019 with 3.2% versus fourth quarter 2018. For the full year, service revenue summed BRL 16.6 billion, up 2.4% compared to 2018. EBITDA growth also accelerated, reaching more than 8% in the last quarter of the year and totaling BRL 6.8 billion in 2019. The EBITDA margin was just below 43% in the fourth quarter, bringing the 2019 margin above 50%, a target that was supposed to be achieved only in 2020. Cash generation remains strong. EBITDA and EBITDA minus CapEx surpassed BRL 600 million in the quarter and BRL 2.9 billion, which means a 16% year-over-year growth. This cash generation profile combined with strong margin prepares to participate in the development that our industry will certainly face in the near future.
Reflecting the strength of our financial position, the company received a AAA rating from Fitch on Monday. Another indication that our strategy is focused on the long-term sustainability of the business. Despite the challenges faced in the first half of the year by still weak economic activity and tough competition, mobile revenues accelerated and core generative revenues grew 2.3% in 2019 compared to 2018. This is a positive result, a solid annual growth in postpaid of almost 7% with the fourth quarter showing an inflection point in the deceleration trajectory of this segment. The recovery between gigantic revenues. Fourth quarter was the first period with positive annual growth in the last three years. Our mobile blended ARPU increased by roughly 6% year-over-year, reaching almost BRL 24, driven by incremental services.
Compared to 2018, postpaid ARPU, excluding Machine- to- Machine, grew by 0.6%. I'm pretty proud of the results served to the customer. Covering the fixed line, it was pretty pushing to spread and build the transition to the value of the new proposition supported by TIM Smart TV and the unique combo strategy of hybrid plug device. The commercial approach was adjusted to produce solid sales numbers, but more importantly, to boost income. As a result, the transition returned to positive in the fourth quarter, and we expect to maintain a reasonable level of client transition in the current quarter, but certainly not as high as in 2017, 2018. The complete segment is growing, improving, recovering. The current dynamics are showing a reversal of negative trends, and consumption is gradually growing.
Consistency in communication strategy after the introduction of TIM Pre Top at the beginning of the year is positively contributing to revenue recovery, customer experience, and brand positioning. The mobile segment improved in the second half of the year. Price aggressiveness was not as harsh as in the first half. The macro environment showed the first sign of improvement. Our operation is on track and focused on what matters. Consistency is a key priority. We will continue this path, executing what is planned and adjusting where necessary. Changing gears to fixed. Fixed service revenue growth by more than 11 % in 2019. TIM Live continued to be a highlight of this result, posting a very solid expansion of more than 30% versus 2018, while accelerating the shift to regional labs to complete the digital.
The combination of 8% data growth and 20+% customer base expansion will allow us to produce robust performance, flat line to exceed 50% of fixed service revenue in 2018. Client base dynamics improved over the year, with net addition accelerating in the second half and with FTTH technology representing more than 30% of our client base. We also maintained an optimized approach to CapEx and improved the quality of the service, being recognized in three third-party rankings as the best service in the country. To support the evolution of our business, a solid infrastructure is key. That is why we apply a smarter CapEx approach combined with the adoption of new technologies and the implementation of partnerships. This approach focuses on maximizing our asset and ensuring a higher customer experience, while always pursuing to further monetize our investment. On the CapEx side, I would highlight the following achievements in 2019.
Our 4G footprint reached 27 cities, representing 24% of the total population, and our fiber strategy coverage is accelerating fast. Coverage grew 50% ensuring leadership in some states of the Northeast and the South of the country. A bigger capacity in core utilization has been achieved by the acceleration of the 700 MHz rollout, 60% more city coverage with this frequency, and two additional regional projects that penetrate 80% of the mobile population. Voice over LTE and Narrowband-IoT are available in almost all cities where we have 4G coverage, including voice for new customers and connectivity for machine-to-machine solutions. Once again, the network experience metrics show the benefits of our strategy. TIM leads for geographical ability, maintaining a solid distance from the number two and three players. In latency, TIM has the fastest response time, ensuring a better experience for the customer.
During the biggest New Year's Eve celebration in the world, we explored the full potential of Massive MIMO, an innovative technology that helps TIM handle a huge and concentrated demand. Our clients consumed 3x more data with a 6x higher data throughput, on top of that, 5x to 6x more simultaneous connections. In 2020, we will be implementing Massive MIMO in different areas of the country to improve the quality of the mobile network. Innovation on the network front also comes in form of the infrastructure sharing agreement we signed with Vivo in December.
The scope covers a single grid nationwide 2G network, a 4G shared network for new coverage in cities below 40,000 inhabitants, the fiber of a full single grid solution involving all technologies in 50 cities. For the fixed network, the highlights were acceleration of FTTH coverage, reaching 2.3 million households, twice the number in 2018.
Fiber to the curb coverage reached 5.5 million households. 12 new cities launched TIM Live services in 2019. This expansion is using a cluster approach, shaping the best service. More than 100,000 km of fiber is a major milestone for TIM Brasil and reinforces that we are on the right path to continuously develop our transport network. The IT side of our infrastructure is also being developed to support the digital transformation of the company, with the goal of improving customer experience and gaining efficiency. However, the success of our digitalization journey does not depend only on the system. It also requires improvement processes to change the way we run our business. To monitor the evolution of our digital transformation program, we focus on four areas: pairings, billing and payments, acquisition of clients, and prepaid recharge.
In all of them, we have driven changes that empower customers and bring us closer to our three S goals: self-pairing, self-billing, and self-positioning. In the pairing front, we closed 2019 with more customers using our digital channels to meet their demands. While the unique users of MyTIM grew almost 20%, human interaction fell by almost 20%. Electronic bill and payment grew by solid double digits, increasing the penetration of digital solutions for both. Digital sales also grew strongly, both post-paid and control acquisition over electronic channels were up by 50% or more. For the electronic prepaid recharges, penetration is reaching almost 40%. The contribution of this and other traditional initiatives, we are managing well our OpEx levels. OpEx ended the year down by 0.3%, all in inflation. The fourth quarter showed the usual positive seasonality with minus 0.7%, presenting the best performer of 2019.
These solid results on cost could have been even better if it wasn't for bad debt. Normalized OpEx, excluding bad debt, decreased 2.3% year-on-year, even better than the target of our efficiency plan. Fourth quarter marked the first quarter-over-quarter decrease since 2017, pointing to a possible change in trajectory in the coming quarters. Although we are still being cautious, it seems that finally, our efforts on that front are materializing. That remains an area of growth improvement opportunity for TIM until 2020. The combination of a better trend in revenues with costs under control drove EBITDA to grow more than 8% in the fourth quarter and almost 7% in 2019. Expanded to 42.9% and 39.1% respectively. This confirms a trajectory that started years ago, which led the company to show marked improvement in the past six years.
Our bottom line came in strong. Fourth quarter net profit grew almost 50%, while 2019 annual growth surpassed 22%. Net profit reached a total of BRL 2 billion for the full year. EBITDA minus CapEx increased 16% year-on-year, reaching 17% of total revenue, leading normalized free operating cash flow to BRL 2.1 billion in 2019. The net financial position closed near zero for BRL billion, a significant reduction in net debt, leaving the company ready for the future challenges. Shareholder remuneration is consistently evolving, and in 2019, was close to R$1 billion in interest on equity, another promise effectively delivered. 2019 was a year of great achievement despite the headwinds faced. We posted a solid fourth quarter, which contributed strongly for us to reach our guidance, even though service revenue faced challenges.
The second half dynamics were better, with service revenue remaining above 3%, while in the first half, growth was below 2%. We delivered on our promises. We were able to renew our solution with a focus on the basics: value rather than volume, quality, innovation, brand, and customer satisfaction. We will update our strategic plan on March 11th, the pillars on which it will be built are already set. Expand the scope of efficiency, seeking for more opportunities. Increase the role of Internet of Things in our B2B segment. Accelerate volume towards a solution. Improve customer satisfaction, develop new sources of revenue. Thank you. We will now open the floor for questions. Please, operator.
Thank you, Mr. Pietro. Now we begin the Q&A session. First, we will take questions from analysts, followed by journalists, both in English. If you have a question, please press star one. We ask each participant to restrict himself to two questions at a time. To ask a question, please press star one. Our first question came from Victor Tomita.
Hi, good morning, Pietro. Good morning, all. Two quick questions on our side. The first is, given the Q2 decrease and bad debt this far, if you could give us an update on how the initiatives to improve bad debt and collections have been progressing in the last quarter and at what level we could expect this line to normalize if it continues to improve. Our second question would be about G&A. The earnings release mentions that G&A was mostly due to cybersecurity projects in IT. If you could elaborate more on this and on whether there could any specific goals or address any specific concerns, this would also be helpful. Thank you.
Thank you, Victor. Before to go to the answer, we understood that some of you perceived some issue on the line. I really apologize, and we can go over any gaps during Q&A. Related to your two questions, let's start from the second one that is related to our G&A and mainly to our cybersecurity expenses. Keep in mind that in 2020, in Brazil, specifically in the month of August, we entered the new law LGPD. That is for people that are coming from other countries, the new rules related to the data privacy. We started to prepare the company for that moment that is a key element, and people that are coming from other countries understand very well how much is important all these activities. Related to the first question that is bad debt, we are proceeding exactly as we stated in the previous quarter calls.
We highlighted to everybody that the third quarter should be the worst one, that the fourth quarter could improve related to the third quarter. We think that we can further improve during the next quarter-over-quarter. It's clear that is a factor. The early sign of improvement are coming also looking at the collection result of the first month of January.
Perfect. Thank you. This is Marcelo from with a question.
Hi. Good morning. Thanks for taking my questions. The first question is if you could please comment a little bit on, give us a competitive update on the mobile marketing pursuit. The second question is, if you could comment, how do you expect the 5G CapEx to play out and mix with the remaining of your CapEx? Do you expect any kind of expansion in that, or CapEx should remain roughly as it has been trending? These are the two questions.
Okay. First of all, competitive environment. As we stated, and I think that is something that was reiterated mainly by all the operators, we saw a second half compared to the first one, more rational. The movement that was made by Vivo, if I'm not wrong, in September and October to increase price was another sign of an improvement in this arena. I think that also the market consolidation that already started with the acquisition by Claro and Nextel is helping, because it was clear that there were some players with a more aggressive approach. So we are quite positive on the competitive environment. Also on the prepaid, we are starting to see some early sign of macro recovery that could help us if they will be confirmed during the year.
Related to the CapEx, I can leave the stage to Adrian and to Leo to elaborate more on that. We are respecting our guidance in terms of CapEx, and we will release more information on the eleventh of March when we'll present our three-year plan. As we stated several times, we don't imagine to have a specific difference from what we declared.
Yes. Thank you, Pietro. The thing is, regarding the effect of the 5G on our CapEx, we are not seeing significant effects going forward differently with what happened with the 4G during 2013 and 2014. If you remember here in Brazil, the 4G deployment has been accelerated because the country was hosting first the soccer World Cup and then the Olympics. It has a specific effect in terms of rollout of 4G. The 5G probably will be more collaborative with the 4G. It will be more stable in time if you follow what's the recommendations coming from the GSMA. There will be a lot of collaboration between the 4G and the 5G. Even the 4G will be operative even until 2030. We are not expecting significant effects on CapEx coming from the 5G. Probably, yes, it will depend a lot on how the auction is designed.
Not something as it happened in 2012, 2013, where the company reached almost 27%-28% of CapEx on revenues.
Thank you very much. Great to hear.
Our next question comes from Mr. Fred Mendes.
Good morning, everyone. Thanks for the questions. I have two questions as well. The first one related to the service revenue growth. I just want to get a better understanding of the dynamics of this line. Looking at the numbers, when I see the revenue generated by the client, it grew 3.8% in this quarter. Last quarter was 1.9%. Other revenues were likely weaker on this quarter. Overall, when I look at this picture, it seems that the quality of the top-line growth was much better. I just want to understand the dynamics here and what to expect for the next quarters. I think for the second question, when I look at the cash costs, a great job on this line, but it still did not kick in the MOU with Vivo.
I'm just trying to get an understanding here to incorporate the model. What kind of savings, I know this is not a guidance, but if you can just give us a light, what kind of savings we can somehow expect or anything that helps us to calculate and then eventually to incorporate in our models about these agreements with Vivo and how much more it could help for you to control your cash costs? Thanks very much.
Thank you, Fred. Related to service revenue, I have to remember that what is happening is exactly what we stated also in the other quarter. We explained that also the other revenues as part of our business, because mainly swap is an important component to control and help our company to further increase our network coverage, and it was something that it was healthy for us. In the meantime, we started to say that our service revenue could start to increase with the exception of other revenues. Also because the job that we did during the year should start to give us also better results. You can understand that the service revenue is the result of increase of customer base and the work that we do on the ARPU. We said that during all the other quarter, and now we can say that we are back.
We reported also finally positive net adds. January, we are again with positive net adds. If you look at our ARPU is growing. Let me say, we are proceeding exactly as we stated. The trend of other revenues, we cannot define that there's a trend, because they come based on the possibility to close agreement for the swap. What is important is the trend of the service revenue that is confirming that we are on the right path. Related to the cash cost, independently from the MOU with Vivo, again, I leave the stage to Adrian and Leo to elaborate more on that. We think that we still have, first of all, thanks to our control on cash cost, we reached in 2019 our goal that was for 2020.
My compliment to our whole team that was able to continue to perform in the cost controlling. Second, we think that we still have margin to further improve our cost. Just to share with you, we still have at the customer care level a lot of calls that today are answered by a human attendant. Each call, if it is prepaid, has a cost of BRL 3. If it is a controller call, is a cost of BRL 5. If it is prepaid call, is a cost of BRL 8. You can imagine the good level of saving that we can reach with the continuous improvement of our digitalization and the use of the App Meu TIM. I'm highlighting that just to show that. There are other areas like that where we can further improve. Related with the MOU with Vivo, I leave the stage to Adrian.
Yes. The effects of the MOU. We need to think that this agreement, because it's not anymore an MOU, because it's already agreements, are long-term. Yeah. Basically, you shouldn't expect significant reductions in terms of OpEx, even if the third agreement is not put in place totally. What you should expect is some future CapEx savings, because at the end, if you consider, first of all, the first agreement, the 2G agreement. Yes, it will bring some effects on the cost side, but basically, what the 2G agreement means is that we will need to focus less on that layer and will leave us space in order to focus on the future layer that will be the 5G, especially when we are talking in terms of space in our sites, in our radio stations.
The second one is probably the most important in terms of savings, is the single grid. What we are having with the second portion of the agreement is that we will increase our coverage in terms especially of the 4G, because we are agreeing with Vivo to enter in those cities where the other one is not present. We manage then, after the trial that we are doing, to put in place the full single grid in those cities below 30,000 inhabitants, there's where we're going to have the significant impact in terms both of cost and also of CapEx. This is more on the economic or financial side. I think that Leo can give you the most strategic view in terms of network, that it's also extremely important on this side.
Thank you, Adrian. In fact, Fred, I guess that we have to celebrate not just this contract. Remember that we are waiting for CADE and ANATEL approval. After that, what we have to celebrate is the new phase of the market team, as Adrian mentioned, for the collaborative environment.
The maturity to share the infrastructure and to face all the possible, let's say, challenges that they have in the future with the new technology of the 5G, the new obligation of the coverage in rural, on federal roads, et cetera. It's very important that now the marketing starts to think together how to face this challenge and how to do that in a more efficient way. Again, we are celebrating not just this agreement, but this new mindset to collaborating infrastructure.
Fred, if I may add something that is a more general statement, giving an answer to your question and to the previous one related to the 5G. Perhaps we are entering in a phase of market rationality, but we can say in a phase of competition. That means that we'll continue to compete, because this is our aim on all the core services, but we can cooperate with the other player on the next infrastructure, but also on the development of new source of revenues, because financial services and mobile advertising are two areas with different players can cooperate more than compete.
Perfect. Very clear. Thank you, Pietro, Mario, and Leo. Thank you.
Our next question comes from Susana Salaru.
Hi, guys. Good morning. Thank you for taking our question. If you could elaborate a little bit more on what are the visibility of the margin next year, what are the main levers that we should expect to continue to support margin expansion? We guess that we could see an improvement in bad debt and also on the prepayment recharges, we could see additional subscribers using the digital channels. We would like to hear from you. On the 5G auction, if you could elaborate what are your expectations for the format of the auction. If you are aiming for the bigger or the smaller spectrum band that's going to be offered. Thank you.
Susana, about how we can further improve our EBITDA, perhaps we can take some vacation because we reached in 2019 the goal of 2020. Clearly, it's a joke, but for sure, there are different areas in which we can further improve. As we stated last time when we discussed about our, let me say, not best practice performance of the bad debt. This is one of the areas in which we can have a further improvement to continue to perform on the EBITDA. Digitalization is a process that is not yet concluded. We will continue to proceed. I was mentioning the customer care as one of the areas where we can further improve. If we look at the speed with which we are transforming the recharge from traditional recharge to electronic one, this is another area where we can have further improvement.
I think that one of the next challenge for our company, that is something that is between 2020, 2021, is perhaps some activity that we cannot define as traditional BPO, but where in some areas that are not core, there are some players outside that are able to do automatization process that can be reflected in improvement of our EBITDA. What I mean is that we don't have one silver bullet to further improve our EBITDA. It's a job that we have to continue with our financial discipline culture that have to try to work in all the lines. I think that as we demonstrated also this year, what we promise, we delivered, and we'll continue in this way. Related to the 5G, I leave the stage to Mario that will give you more details. On these things, I want also to put a general statement.
It's quite difficult to define route for a 5G once it's not yet defined the market consolidation. If the market will be with five players, the rules for an auction are defined for five players. If the market will be of three players, the rules have to reflect a market with three players. If this is not yet defined, I think that is really difficult to define what will happen. I think that this factor will be a further accelerator on the market consolidation. I leave the stage to Mario for more details.
It's working. Yes.
Can you hear me? Okay. The point is that there's a portfolio of rules of the game about 5G, nothing is covering everything.
Our next question comes from Maria Tereza Azevedo.
Hi, guys. Thank you for the question. My first question is on the new revenue lines that you can deliver. If you can comment a little bit on your handset strategy going forward, if you think you have some opportunities there, as well as on TIM Pay and the advertising, what would be the business model that you are envisaging for the financial services revenue line? That'll be my first question. Thank you.
Thank you, Maria. The 11th of March, we will have the presentation of the new plan where we will disclose all the details related to all these areas. We mentioned also in the previous call, we think that financial services is one of the area where we can have further improvement. For mobile advertising, we cannot go through too many details because as it is our approach, we like to put on the table the element that we are safe, that is not only promise, but is something that we can deliver. I have to ask you to wait three weeks to show more in detail all the projects that we have in our portfolio.
Perfect. Thank you. As a second question, I have to ask, what are your expectations in terms of the mobile consolidation process in Brazil? Players are being a lot more vocal about it, and there's some expectation that TIM could be a leader in this movement. We also have some talks about a potential joint bid. Is there anything that you can share with us in terms of what are your views in terms of the mobile consolidation process, and if you think that this is going to happen before the 5G auction?
Okay. I think that some statement can be helpful for everybody. We clearly stated our interest in the market consolidation. Second, the market consolidation already start with the Claro and Nextel process. I agree with you that there are some signs that things are accelerating also because one of the player that is the trigger to accelerate this process seems that is accelerating this process. We think that is something that could happen, in any case, could start in 2020. Related to the 5G, again, I expect that there's the interest of all the system to accelerate the market consolidation to permit then an acceleration on the 5G auction. Without the consolidation, I think that it's quite difficult to have rules well-defined for an auction.
I understood that before Mario was unable to answer to the question. I leave the stage to Mario to further elaborate on the 5G.
Thank you.
Can you hear me? Okay. Perfect. Just to complement, of course, it is important first to notice that in this public consultation, there is a very important amount of spectrum available for 5G in Brazil. I think this is very good news because, of course, there are all the needed spectrum for an important investment in the new technology. The detail of the rules are not yet very known because the analysis was not yet published, but we can, of course, consider important to have some more information about the obligations, the minimum price, et cetera. There is a point that, of course, will be discussed in the next months about the role of the small players, that spectrum dedicated to the small players.
In principle, it's nothing that we can consider in a negative way. There is a condition that the spectrum should be considered an industrial asset and not a financial asset. The idea of someone to buy spectrum only to resell spectrum does not belong to the telecommunication industry. Probably this is something that should be very well fixed by the government and the regulator.
Perfect. Thank you very much, Mario and Pietro.
Our next question comes from Mr. Rodrigo Villanueva.
Thank you. Sorry. Good morning, Pietro, Adrian, Leo. I have a follow-up to the infrastructure sharing agreement with Vivo. Is it possible that the América Móvil complaint will cut or reduce the scope of this agreement, particularly related to the single grid? If so, which could be the implications of this complaint? A follow-up to 5G. To the 5G auctions, do you think it makes sense to have two 100 MHz blocks in the 3.5 GHz band and one 80 MHz block, considering that you, Vivo, and Claro are likely willing to get 100 MHz blocks? Thank you.
Before to leave the stage to Mario to answer related to the cut implication with Claro and the MoU between Vivo and TIM, it is important to clearly state that we always declared our availability to share this kind of approach with the other player. Always to be transparent, in the past, in the market, there were some trials to put on the table all the players at the same time. It was quite complex. It is kind of a difficult exercise at the same time to find agreement between more players. It is just mathematics. The idea was, let us start with one player, but to clearly state that we are more than happy to open this kind of approach to the other player because it will allow us to have further serving. Now, I leave to Leo and Mario to elaborate more on both the items.
Just to complement what Pietro said, we have to remember that the RAN sharing agreement in the past started with TIM and Oi.
In some moments, Vivo showed that he had the interest to come with us, and in the rest of the agreement, we have TIM, Vivo, and Oi. We are completely open for that. Let's see how CADE and ANATEL will approve this agreement. Again, it's not some kind that we are blocking, but it's, let's say, interest to have more efficient on the share and the competition on the market instead of the previous mindset that everyone will build their own infrastructure in place that we know that there is no return. Now, I leave with Mario.
Thank you. A couple of comments on the RAN sharing agreement. This is nothing new. This is a kind of agreement that was already approved by CADE in the case of Oi and also other cases. We, of course, understand that all the competitors, the players want to know exactly this agreement eventually to enter and cooperate with us. We are open to this. As soon as this agreement is approved by the authorities, of course, we can sit and negotiate with the other interested players, and this is our formal position written toward the authority. For the 5G side, of course, this is a game that should be played understanding, of course, who are the players and how many are the players.
The idea to having a correct number of blocks to be sold depends, of course, on the structure of the market that in the moment of the bid will be the real situation. Apparently, and arithmetically, we have a lot of spectrum to be sold. That means that we have the opportunity to buy this asset for the future development of the new technology. The real game will be known only in the moment in which the bid will occur.
Understood. Thank you.
The next question comes from Mr. Victor Tomita.
Hello. Just an additional question that came up in our discussion here. We see that in the presentation you mentioned that you might apply massive MIMO to network stress situations like the New Year's Eve in Copacabana. One thing we were wondering is whether if you roll that out to more sites, if that could create an opportunity in fixed wireless access, and if there could be a good addressable market for this, and if you could comment on this. Thank you.
Before to leave Leo to elaborate on that, it's important, related to the element of the Fixed Wireless Access, Massive MIMO with 5G for sure is an opportunity of, let me say, new source of revenue, but is more related to the traditional telco services. TIM is the player that can benefit the most from this approach because we don't have a legacy fixed network. About the possibility to increase with 4G, the Massive MIMO, this is something that you are among the first player in the world to experiment this technology. We have to thank you to Leo and the network team to continue to be at the leading edge of this approach. Leo, can you give more colors about that?
Yeah. Very well, Tomita, the question. In fact, we are seeing two different approach of the massive MIMO. One is to see that we can improve the quality and the capacity on the network, even with the existing spectrum and the existing towers, what means less CapEx and less OpEx in the future, to face all the challenge that we have with the, let's say, data explosion, is still on 4G. In the second, about the WTTx or FWA, what we are seeing is that part of the difficulty of the 5G to explore at maximum this capacity is the kind of spectrum that we will use on the 5G. That is, let's say, higher spectrum in 3.5 GHz or even above that.
The point is that with the Massive MIMO being applied still on the 4G, we will have capacity on the lower frequency as 1,800 and 2.1 GHz. It can be complemented now, capacity with the coverage. Again, you know that we are a company that have been very, very active in all the usage of the new technology with the refarming and now with the Massive MIMO. We are seeing that in a very optimistic way in terms to, let's say, open new opportunities of business.
Perfect. Thank you all.
Remembering, if you have a question, please press star one. Without any more questions from analysts, we'll now start the Q&A section with journalists in English. If you have a question, please press star one.
We have a question from Ms. Ana Lobo from Convergência Digital. She states, "Pietro talks about an acceleration in the consolidation process through the 5G, and TIM is supposed to be ready for strategic movement. Is TIM going shopping, and would Oi mobile be a target to be acquired?" Pietro, please, can you answer?
Yeah. First of all, I think that the sentence that repeat during all the calls at the end was that our financial position was constantly improving because we were preparing our company for the market consolidation. This is a journey that we started three years ago. Now from the financial point of view, we are ready to approach the market consolidation. In the meantime, we are starting to perceive that there are all the elements that can allow to further proceed with the market consolidation. From what we are perceiving, some assets can be put on sale in the next month. From this point of view, we clearly stated that in the case of a market consolidation, we would evaluate the acquisition of frequencies and clients, evaluating if it can generate value for our shareholders. The answer is yes.
Ladies and gentlemen, without any more questions, I'm returning to Mr. Pietro Labriola for his final remarks. Please, Mr. Pietro, you may proceed.
TIM Brazil has shown that it has solid fundamentals and is prepared to take full advantage of the economic recovery. This market is not easy, but it still has enormous potential, requiring focus and consistency to benefit from these opportunities. For this reason, I would like to thank the dedication and commitment of our team, who played a key role in delivering those solid results, overcoming many challenges. I would personally thank you, Adrian, Leo, Mario, Alberto, Renato, Bruno, Jacques, and Mariantonietta, and I'm thanking them in representation of all their team. Together, we can do more. [Non-English content ]. During the past year, we were also able to prepare the company to be a protagonist in the future development of the Brazilian market.
This ongoing preparation is key, as we expect that the pieces to start moving in 2020, and the work being done will help us to benefit from whatever shape the market takes. Thank you once again for participating in our conference call. Have a great day, and I hope we can meet soon in the coming events we will be doing with the financial market. See you soon.