Telecom Italia Mobile (TIM) is the third-largest pan-regional mobile operator in Latin America, after Spain?s Telef?nica M?viles (TEM) and Mexico?s Am?rica M?vil (AM). TIM has been able to successfully leverage the relationship between the Italian parent company and its subsidiaries to stay at the cutting edge of technology and innovation. As a result, TIM has secured a strong following among the youth segment and carved a space for itself in the very lucrative corporate segment.

While TEM and AM are embattled in a race for regional supremacy, TIM is showing signs of retrenching. In November 2004, Venezuelan incumbent telco CANTV signed a letter of intent to buy mobile operator Digitel from TIM. Once TIM exits the Venezuelan market in 2005, it will be left with only its properties in Peru and Brazil, although it will continue to operate mobile units in Argentina, Chile, Bolivia and Paraguay. We believe that in the next few years, TIM?s strategy for growth will differ from the mass-market approach it adopted when it first entered the region. TIM will now engage in more selective expansion strategy to ensure it will see a return on its investments. Over the past four years, its EBITDA margins have been among the lowest of the top mobile operating companies in Latin America. Given its relatively smaller size and the impact this will have on equipment purchases and other costs, TIM must focus on continuing to attract higher-end customers that can contribute to its top line.