UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

Commission file number: 001-39570

TIM S.A.

(Exact name of Registrant as specified in its charter)

TIM, Inc.

(Translation of Registrant’s name into English)

THE FEDERATIVE REPUBLIC OF BRAZIL

(Jurisdiction of incorporation or organization)

João Cabral de Melo Neto Avenue, 850 – South Tower – 12^th12th floor

22775-057, Rio de Janeiro, RJ, Brazil

(Address of principal executive offices)

Adrian Calaza
Alberto Mario Griselli
Chief FinancialExecutive Officer and Investor Relations Officer

TIM S.A.

João Cabral de Melo Neto Avenue, 850 – NorthSouth Tower – 12^th12th floor

22775-057, Rio de Janeiro, RJ, Brazil

Tel: 55 21 4109-4167

ri@timbrasil.com.br

(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes☒ No ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐No☒

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer☒ Accelerated Filer ☐ Non-accelerated Filer ☐ Emerging growth company ☒☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

☐ U.S. GAAP

☒International Financial Reporting Standards as issued by the International Accounting Standards Board

☐ Other

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

☐Item 17 ☐Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐No☒

table of contents

Page

Presentation of FINANCIAL AND OTHER Information

In this annual report, TIM S.A. (formerly known as Intelig Telecomunicações Ltda., or “Intelig”), a publicly held company (sociedade anônima) organized under the laws of the Federative Republic of Brazil, is referred to as “TIM” or the “Company”. References to “we,” “us” and “our” are to TIM together with, where the context so requires and as explained more fully below, Cozani RJ Infraestrutura e Rede de Telecomunicações S.A. (“SPE Cozani”) which was merged into the company on April 1, 2023, TIM Participações S.A. (“TIM Participações”), our prior parent holding company, which was merged into the company in September 2020, TIM Celular S.A. (“TIM Celular”), which was merged into the Company in October 2018, TIM Sul S.A. (“TIM Sul”) and TIM Nordeste Telecomunicações S.A. (“TIM Nordeste”), both of which merged into the Company in May 2005. Collectively, these transactions are referred to herein as the Reorganization.

References in this annual report to the “common shares” are to the common shares of TIM. References to the “American Depositary Shares” or “ADSs” are to TIM’s American Depositary Shares, each representing five common shares. The ADSs are evidenced by “American Depositary Receipts,” or “ADRs,” which are listed on the New York Stock Exchange, or the NYSE,“NYSE”, under the symbol “TIMB.”

Market Share Data

We calculate market share information based on information provided by Brazil’s National Telecommunications Agency (Agência Nacional de Telecomunicações), or Anatel. (“Anatel”). We calculate penetration data based on information provided by the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística), or IBGE. (“IBGE”).

Presentation of Financial Information

We maintain our books and records in reais. The consolidated financial statements included in this annual report were prepared in accordance with International Financial Reporting Standards or IFRS,(“IFRS”), as issued by the International Accounting Standards Board or IASB.(“IASB”) (“consolidated financial statements”). As a complement to the IFRS principles, the Company also applies accounting practices established under Brazilian corporate law and rules issued by the Securities and Exchange Commission of Brazil (Comissão de Valores Mobiliários) (“CVM”), or CVM, for the Brazilian Stock Market Exchange and Anatel to comply with the regulatory requirements. The selected financial information for the Company included in “Item 3. Key Information—A. Selected Financial Data” should be read in conjunction with, and is qualified in its entirety by, the IFRSconsolidated financial statements of the Company and “Item 5. Operating and Financial Review and Prospects” appearing elsewhere in this annual report.

The Merger, which occurred in 2020, as defined below, was accounted using the predecessor method of accounting, through which the historical operations of TIM Participações are deemed to be those of the Company. See “Item 4. Information on the Company—A. History and Development of the Company—Historical Background.” Accordingly, the consolidated financial statements included in this report reflect:

The preparation of financial statements in conformityaccordance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying our accounting policies. Those areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed in Note 3 to our consolidated financial statements.

All references herein to the “real,” “reais” or “R$” are to the Brazilian real, the official currency of Brazil. All references to “U.S. dollars,” “dollars” or “U.S.$” are to United States dollars.

Solely for the convenience of the reader, we have translated some amounts included in “Item 3. Key Information—A. Selected Financial Data” and elsewhere in this annual report from reais into U.S. dollars using the commercial selling exchange rate as reported by the Central Bank of Brazil (Banco Central do Brasil) (“Central Bank”), or Central Bank, aton December 31, 20202022 of R$5.195.218 to U.S.$1.00. These translations should not be considered representations that any such amounts have been, could have been or could be converted into U.S. dollars at that or at any other

exchange rate. Such translations should not be construed as representations that the real amounts represent or have been or could be converted into U.S. dollars as of that or any other date. See “Item 3. Key Information—A. Selected Financial Data—Exchange Rates” for information regarding exchange rates for the Brazilian currency.

Certain figures included in this annual report have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

The “Technical Glossary” at the end of this annual report provides definitions of certain technical terms used in this annual report and in the documents incorporated in this annual report by reference.

Forward-Looking Information

This annual report contains statements in relation to our plans, forecasts, expectations regarding future events, strategies and projections, which are forward-looking statements and involve risks and uncertainties and are therefore, not guarantees of future results. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update publicly or revise any forward-looking statements after we file this annual report because of new information, future events and other factors. We and our representatives may also make forward-looking statements in press releases and oral statements. Statements that are not statements of historical fact, including statements about the beliefs and expectations of our management, are forward-looking statements. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “plan,” “predict,” “project” and “target” and similar words are intended to identify forward-looking statements, which necessarily involve known and unknown risks and uncertainties. Our actual results and performance could differ substantially from those anticipated in our forward-looking statements. These statements appear in a number of places in this annual report, principally in “Item 4. Information on the Company” and “Item 5. Operating and Financial Review and Prospects,” and include, but are not limited to, statements regarding our intent, belief or current expectations with respect to:

Because forward-looking statements are subject to risks and uncertainties, our actual results and performance could differ significantly from those anticipated in such statements and the anticipated events or circumstances might not occur. The risks and uncertainties include, but are not limited to:

Part I

Not applicable.

Not applicable.

A.       [Reserved]

Selected Financial Data

The selected financial data presented below should be read in conjunction with our audited consolidated financial statements, including the notes thereto.thereto, included elsewhere in this annual report. Our consolidated financial statements included herein, the consolidated balance sheets as of December 31, 2020,2022 and 2021 and for each of the results of operations and cash flows forthree years in the yearperiod ended December 31, 20202022 have been audited by Ernst & Young Auditores Independentes S.S.S/S Ltda. (“EY”). The audit report of Ernst & Young Auditores Independentes S.S.S/S Ltda. on such consolidated financial statements appearappears elsewhere in this annual report.

Our consolidated financial statements included herein and the selected consolidated financial data as of December 31, 2022and 2021 and for the yearyears ended December 31, 20202022, 2021 and 20192020 derive from the respective year-end audited consolidated financial statements audited by Ernst & Young Auditores and for the year ended December 31, 2018, derive from the year-end financial statements audited by PricewaterhouseCoopers Auditores Independentes.statements.

The following table presents a summary of our historical consolidated financial and operating data for each of the periods indicated. Solely for the convenience of the reader, real amounts as of and for the year ended December 31, 20202022, have been translated into U.S. dollars at the commercial market rate in effect on December 31, 20202022 (as reported by the Central Bank of R$5.195.218 to U.S.$1.00). See “—Exchange Rates” for information regarding exchange rates for the Brazilian real. You should read the following information together with our consolidated financial statements and the notes thereto included elsewhere in this annual report and with “Item 5. Operating and Financial Review and Prospects.”

Brazilian Economic Environment

Our business, prospects, financial condition and results of operations are dependent on general economic conditions in Brazil. The table below sets forth data regarding gross domestic product or GDP,(“GDP”), inflation, interest rates and real/U.S. dollar exchange rates in the periods indicated:

(1)       Brazilian GDP was calculated using the new procedures adopted by the IBGE.

(2)       The General Market Price Index (Índice Geral de Preços do Mercado), or IGP-M, as measured by Fundação Getulio Vargas, or FGV, represents data accumulated over the 12 months in each year ended December 31.

(3)       The National Consumer Price Index (Índice Nacional de Preços ao Consumidor Amplo), or IPCA, as measured by IBGE, represents data accumulated over the 12 months in each year ended December 31.

(4)       This is the average adjusted rate of daily financing determined in the Special Settlement and Custody System (Sistema Especial de Liquidação e Custódia), or SELIC, for Brazilian federal securities (end of period).

(5)       The DI rate is the end of period interbank deposit rate in Brazil.

(6)       The long-term interest rate (Taxa de Juros de Longo Prazo), or TJLP, represents the interest rate applied by the Brazilian Development Bank (Banco Nacional de Desenvolvimento Econômico e Social), or BNDES, in long-term financings (end of the period).

(7)       Average exchange rate of each year.

Sources: BNDES, Central Bank, Bloomberg, FGV and IBGE.

In contrast with 2019, which was marked by the improvement of the Brazilian economy andSimilar to 2021, 2022 continued recovery of GDP, 2020 was definedto be significantly impacted by the COVID-19 pandemicpandemic. Following the commencement of wide scale vaccination globally in late 2020, and itswith the advance of vaccination in Brazil throughout 2021 and 2022, combined with the consequent societal and economic impacts, which contributed to a declineeasing of mobility restrictions, Brazil’s gross domestic product (GDP) grew by 2.9 % in GDP of 4.1%, related to government lock-down and social distancing measures during the year that resulted in general declines in business levels and trade. The2022. Brazilian trade balance closed the year with a surplus of U.S.$50.9 billion, representing a growth of 8.3%flow grew 21.5% compared to 2019. Of note was2021, and reached US$ 607.7 billion in 2022. It is worth mentioning the -10.4% decrease19.3% increase in imports that mostly offsetand the -6.9% decrease24.3% increase in exports. Inflation, measured by the IPCA, achieved 4.52%reached 5.62%, its highest annual rate since 2016, exceeding the midpoint of the target set by the Central Bank, which was 4.00%3.5% for the year. The performance is explained byAmong the impactsfactors that impacted such result, the food industry recorded an increase of the growth of foods and beverages prices, driven by the strong demand for these products, the rise of dollar and the prices of commodities11.6%, compared to 7.9% in the international market.previous year, as a result of worse weather conditions during the period. Increases in commodity prices, mainly oil, also played a role in pushing inflation above the target ceiling for the second year in a row. The SELIC, or basic interest rate, was further reduced inlowered progressively to 2.00% on August 5, 2020 before increasing again and closed the year at a historical lowreaching 13.75% as of 2.0%, a continued reduction of 2.5 percentage points compared to the SELIC rate of 4.5% at the end of 2019.December 31, 2022. This movement is explained by stimulus measures being undertaken to prompt an economic recovery following lock-down measures implemented by the government in response to the COVID-19 pandemic and a temporarythe impact of high inflation impact expectation.which followed. The Brazilian government and Central Bank have taken and will likely continue to take actions to change or adjust economic policies as a reaction to turmoil in the financial markets and increased volatility caused by the COVID-19 outbreak.

Despite the overall positive economic impact of the approval of the public pension reform, instabilityInstability has continued to characterize Brazil’s political environment, leading to uncertainties regarding the approval of other necessary reforms such as fiscaltax and politicaladministrative reforms. We cannot predict the effects of further political developments on the

Brazilian economy, including the policies that President Jair BolsonaroLuis Inácio Lula da Silva and his economic team will submit for congressional analysis,to Congress during his term in office, which may be approved or not and mightmay affect our business and the Brazilian economy.

In Europe, levels of economic activity entered a slower growth trajectory, as the war between Russia and Ukraine, political tensions within the Eurozone and the effects of the United Kingdom formally leaving the European Union on January 31, 2020, or Brexit, continue. The United Kingdom is expected to continue to follow certain European Union rules during the transition period; however, the ongoing process of negotiations between the United Kingdom and the European Union will determine the future terms of the United Kingdom’s relationship with the European Union, including access to European Union markets, either during a transitional period or more permanently (see “Item 3. Key Information—D. Risk Factors—Risks Relating to Brazil—We may be impacted by volatility in the global financial markets”). In the United States, it is unclear the degree to which current political divisions in the country will continue intothroughout the nextcurrent four-year presidential term of President Biden, as well as the policies that will be adopted by a new presidentialthe current administration and the effects of any such policies, if implemented.

Exchange Rates

In respect ofrelation to foreign exchange, the Brazilian real depreciated 28% appreciated 6.5% compared to the U.S. dollar in 2020. During the year, the exchange rate showed2022, primarily as a depreciationresult of the real since December 31, 2019 due primarily to the impact of uncertainties regarding inflation in the COVID-19 pandemic onUnited States and external factors such as the Brazilian economyongoing war between Russia and the uncertainties related to the Brazilian fiscal policy.Ukraine. There can be no assurance that the real will not appreciate or further depreciate against the U.S. dollar or other currencies in the future.

In the past, the Brazilian government has implemented various economic plans and utilized a number of exchange rate policies, including sudden devaluations, periodic mini-devaluations during which the frequency of adjustments ranged from a daily to a monthly basis, floating exchange rate systems, exchange controls and dual exchange rate markets. Since 1999, the Central Bank has allowed the real/U.S. dollar exchange rate to float freely, and, since that time, the real/U.S. dollar exchange rate has fluctuated considerably. We cannot predict whether the Central Bank or the Brazilian government will continue to let the real float freely or intervene in the exchange rate market by returning to a currency band system or otherwise. The real may depreciate or appreciate substantially against the U.S. dollar.

During the first part of 2021,2023, the real continued to depreciate considerablyappreciated as compared to the U.S. dollar. On April 29, 2021,27, 2023, the selling real/dollar exchange rate was R$ 5.3665.015 to U.S.$1.00. The real/dollar exchange rate fluctuates and, therefore, the selling rate aton April 29, 202127, 2023 may not be indicative of future exchange rates.

B.       Capitalization and Indebtedness

Not applicable.

C.       Reasons for the Offer and Use of Proceeds

Not applicable.

D.       Risk Factors

Summary of Risk Factors

This section is intended to be a summary of more detailed discussions contained elsewhere in this annual report. The risks described below are not the only ones we face. Our business, results of operations or financial condition could be harmed if any of these risks materializes and, as a result, the trading price of our shares and our ADSs could decline.

Summary of Risks Relating to our Business

Summary of Risks Relating to Brazilthe Brazilian Telecommunications Industry

Summary of Risks Relating to Brazil

Summary of Risks Relating to our Common Shares and the ADSs

Risks Relating to our Business

We face various risks related to the COVID-19 pandemic and other health epidemics and outbreaks, which may have material adverse effects on our business, financial condition, results of operations and cash flows.

We face various risks related to health epidemics and other outbreaks, including the global outbreak of COVID-19. The COVID-19 pandemic, changes in consumer behavior related to illness, pandemic fears and market downturns, and restrictions intended to slow the spread of COVID-19, including quarantines, government-mandated actions, stay-at-home orders and other restrictions, led to reduction of demand for our services and our ability to provide those services, disruption and volatility in the global and Brazilian capital markets and had a negative impact on global, regional and national economies and disrupted supply chains and reduced international trade and business activity.

During 2020, the COVID-19 pandemic adversely affected our financial condition and operational results, with a decrease in net revenues in 0.6%, mostly impacted by the reduction of commercial activities due to the COVID-19 pandemic, with the temporary closure of certain of our retail locations and other points of sale, which caused a 22.7% drop in Goods Sold due to decreased demand as a result of the reduced disposable income available to certain customers and to the temporary closure of certain of our retail locations and other points of sale. The COVID-19 pandemic and government measures in response thereto continues to impact our business and operations, to a lesser extent, and depending on the duration of the epidemic, related restrictive measures as well as the effect of governmental regulations imposed in response to the pandemic, we may continue to be adversely impacted by the pandemic. If the pandemic continues for an extended period, it may also reduce demand from our post-paid clients for more expensive plans or certain services (e.g. roaming) or even lead to plan cancellations or increased delinquency. Protracted restrictive measures could also lead to disruptions in our logistic chain, in our suppliers’ production or deliveries or in our ability to deliver our products (such as new devices or SIM cards) or to service our network on a timely basis, which may have a material adverse effect on our business and results of operations. If significant portions of our workforce are unable to work effectively as a result of the COVID-19 pandemic, including because of illness, quarantines, facility closures, ineffective remote work arrangements or technology failures or limitations, our operations would be adversely impacted. Our availability indicators, repair performance and installation of new accesses/projects can be impacted by the effects of increased absenteeism in the field workforce and in our experts teams, or even by the imposition of Lockdown by COVID-19 that act as obstacle or hinders the displacement and access of field maintenance teams to equipment stations. We may have our supply chain for technological product inputs (like spare parts, transmission and commutation equipment, handsets and modems) impacted by any delay in the manufacturing process of vendors in their countries of origin, due to a new wave of COVID-19 that can imposes a new Lockdown. Our business could be adversely affected in many ways, potentially for a prolonged period of time, for example as a result of the impact of overall market declines and increased market volatility due to the COVID-19 pandemic, which could also ultimately negatively impact our ability to refinance our debt or raise capital in favorable terms.

To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this ‘‘Risk Factors’’ section, such as those relating to our ability to successfully implement our business strategy (see “—We may be unable to successfully implement our business strategy”) the credit risk of our customers (see “—We are subject to credit risk with respect to our customers”), our dependence on key suppliers and contractual relationships with other telecommunications providers (“—We depend on key suppliers, certain inputs and contractual relationships with other telecommunications providers which are critical to our ability to provide telecommunications services to our customers”) the Brazilian government’s influence over the Brazilian economy (see “—Risks Relating to Brazil—Risks related to Brazilian economic and political conditions may negatively affect our business,” “—The Brazilian government has exerted significant influence over the Brazilian economy and continues to do so. This involvement may have an adverse effect on our activities, our business and on the market prices of our shares and ADSs”) and volatility in global and domestic financial markets. See “—Risks Relating to Brazil— We may be impacted by volatility in the global financial markets” and “—Risks Relating to Brazil—Developments and the perception of risk in other countries may adversely affect the Brazilian economy and market price of Brazilian issuers’ securities.”

In an attempt to mitigate the impacts of the pandemic in the telecommunications industry, the Brazilian federal government, or the Federal Government, issued Decree No. 10,282/2020, establishing that telecom and internet

services were essential during the COVID-19 crisis period, as well as services related to information technology and data processing (data center) to support other activities, including call centers.

This measure ensured that Internet and telecommunications companies would not be subject to the same level of restrictions in face of the limitations that were imposed by local governments, allowing workers to carry on under exceptional working conditions, such as doctors and security officers.

Furthermore, Provisional Measure No. 952/2020 postponed the payment of the Fundo de Fiscalização das Telecomunicações, or FISTEL, taxes due between March 31, 2020 and August 31, 2020. This amounted to R$509 million in postponed taxes for us, with payment date not yet defined. The main objective of this measure was to ensure that users of telecommunications services were adequately served and did not experience massive interruptions, given the contraction of economic activities caused by the COVID-19 pandemic, while seeking to reduce the negative impact on telecommunications operators’ cash flow in the first half of 2020.

As economic activity contracted, an increase in defaults in the telecommunications sector would be expected, which would hurt operators’ cash flows at a time that connectivity is even more relevant for society. With social isolation measures in place to contain the virus, the broadband connection fostered remote communication, allowing for continued operation of various economic and educational activities, as well the population’s access to information.

We may be unable to successfully implement our business strategy.

Our business will be adversely affected if we are unable to successfully implement our strategic objectives. Factorsobjectives and factors beyond our control may prevent us from achieving our strategy.doing so.

Our business strategy is aimed at improving revenues and selective growth, while maintaining financial discipline. To achieve this goal, we seek to strengthen our market position by leveraging mobile telephonyaims to increase cash-flow generation to support new avenues of growth and increase shareholder returns and can be divided into two key focuses: (1) Core, being our mobile and broadband usagebusiness; and by exploiting opportunities arising from emerging technologies(2) Beyond connectivity being our business-to-business (B2B) / Internet of Things (IoT) and customer behavior changes.platform strategy.

In respectStrengthening our core business requires managing and expanding our infrastructure, including with the deployment of our strategic efforts regarding broadband, we are seeking to increase our presence in the residential broadband market by investing significant efforts and resources to expand our footprintnew technologies such as 5G and the densityintegration of the assets we acquired from Oi Mobile. Additionally, our fiber optic broadband service (“FTTx”), providing a higher-speed fixed connection closer to theCore strategy requires successfully monetizing our mobile customer residence, branded as TIM Live,base and launchingexpanding our fixed broadband service through mobile network,business.

Alongside Core, we implement a solution known as fixed wireless access (“FWA”)strategy of Beyond Connectivity, when wewhere our principal goal is to attract and expand partnerships that can offer broadband through LTE or 4G wireless communication networks as a type of fixed wireless access. The provision of fiber optic broadband service is a highly capital intensive business that brings a long-term return on investmentsexponential growth opportunities, while scaling-up our B2B and increases the risks to our operation. As a new business, fixed wireless access also brings new risks, particularly related to market response and customer behavior, that could negatively impact the use of our mobile network resources.

Additionally, in December 2020 we initiated to deploy a new technology in our mobile network, commercially called as 5G DSS (Dynamic Spectrum Sharing). 5G DSS is a new feature that allows the deployment of LTE and 5G in the same frequency band and dynamically allocates radio resources between the two technologies based on user demand. This technology brings some benefits like a smoothing handover between 4G and 5G networks, a correct Time-to-Market for the launching of the 5G, technology, and a better use of the spectrum between technologies as the penetration of 5G terminals increases, without the need for a spectrum reframing.IoT presence.

Our ability to implement our strategy is influenced by many factors partially or completely outside our control, including:

As a result of these uncertainties, there can be no assurance that our strategic objectives can effectively be attained in the manner and within the time frame described.

Future acquisitions of,partnerships or investments in, other companies, products, or technologiesjoint ventures that we enter into may not bring the expected financial results and could require significant management attention, disruptcause harm to our business, dilute stockholder value, and adversely affect our operating results.image as well as financial costs

We may enter into relationships with other businesses in order to expand our platform, which could involve preferred or exclusive licenses, additional channels of distribution, or discount pricing or investments in other companies. Negotiating these transactions can be time-consuming, difficult, and expensive, and our ability to close these transactions may be subject to third-party approvals, such as government regulatory approvals, which are beyond our control. Consequently, we can make no assurance that these transactions, once undertaken and announced, will close.

Any acquisitions,Furthermore, our established partnerships are subject to common litigation risks and we can make no assurance that these established partnerships or future partnerships will not become involved in any type of dispute. We may also be required to initiate litigation to protect our interests, including, among others, to enforce our intellectual property rights arising from our investment and development of new technologies as part of such partnerships or joint ventures that we makeventures.

Any acquisitions or enter intoinvestments in other companies, products, or technologies could require significant management attention, disrupt our business, dilute stockholder value, and harmadversely affect our financial condition.operating results.

Our business strategy has included, and may in the future include, acquiring other complementary products, technologies, or businesses. We evaluate and expect in the future to evaluate potential strategic acquisitions of, and partnerships or joint ventures with, complementary businesses, services or technologies. For example, in 2021, we entered into the Oi Agreement, as defined herein, with respect to the Acquisition of Oi Group’s UPI Mobile Business, which we expect will add value for us and our shareholders. However, we may not ensurecannot assure you that any benefits will materialize, and we may suffer losses in connection to the used funds and to the opportunity costs related to such transactions.

Acquisitions or investments may result in unforeseen operating difficulties and expenditures and we may not achieve the anticipated benefits from certain acquisition, partnership and joint venture due to a number of factors, including:

In addition, we may not be successful in identifying acquisition, partnership and joint venture targets or our competitors may be willing or able to pay more than us for acquisitions, which may cause us to lose certain acquisitions that we would otherwise desire to complete.

Also, to the extent we pay the purchase price of any acquisition in cash, it would reduce our cash reserves, and to the extent the purchase price is paid with our common shares, it could be dilutive to our shareholders. To the extent we pay the purchase price with proceeds from the incurrence of debt, it would increase our level of indebtedness and could negatively affect our liquidity and restrict our operations.

Furthermore, even if any such transaction is consummated, we may be unable to successfully integrate the new operation, business or partnership contemplated thereunder or to realize expected benefits and synergies in a timely and effective manner due to difficulties in negotiating or aligning interests with potential partners or counterparties.

We face various risks related to health epidemics, pandemics and outbreaks, such as COVID-19, which may have material adverse effects on our business, financial condition, results of operations and cash flows.

We face various risks related to health crisis such as epidemics, pandemics or outbreaks (including COVID-19). These events can trigger changes in consumer behavior related to illness, death, fear and market downturns.

Additionally, restrictions intended to slow the spread of a health epidemic, pandemic or outbreak, such as quarantines, government-mandated actions, stay-at-home orders and other restrictions, may lead to: (i) a reduction in demand for our services, (ii) hinder our ability to provide services, (iii) disrupt supply chains; (iv) reduce international trade and business activity; and (v) create volatility in the global and Brazilian capital markets and have a negative impact on the local economy.

If significant portions of the workforce are not able to work effectively because of a health crisis, such as in the case of epidemics, pandemics and other outbreaks, including due to illness, quarantine, facility closures, ineffective remote work agreements or technology failures or limits, our operations could be significantly disrupted. Network availability, performance, maintenance, condition, repair and our ability to setup or install new connections may be affected by the effects of increased absenteeism in the field workforce, or by the imposition of restrictions such as the type implemented during the COVID-19 outbreak, for example, by hindering the movement and access of our field maintenance teams to equipment stations. The supply chain for technology products, and their underlying components (such as spare parts, transmission and switching equipment, appliances and modems) can be impacted by any delay in the manufacturing processes of suppliers in their countries of origin.

As a result of health epidemics, pandemics and outbreaks, our business can be adversely affected in many ways, potentially for an extended or unpredictable period of time. For example, as a result of impacts on the global economy, market declines and increased market volatility, which could also adversely affect our ability to refinance debt or raise capital on favorable terms.

To the extent any health crisis, epidemic, pandemic or outbreak (such as COVID-19), adversely affects our business and financial results, it could also have the effect of heightening many of the other risks described in this ‘‘Risk Factors’’ section, such as those relating to our ability to successfully implement our business strategy (see “—We may be unable to successfully implement our business strategy”) the credit risk of our customers (see “—We are subject to credit risk with respect to our customers”), our dependence on key suppliers and contractual relationships with other telecommunications providers (“—We depend on key suppliers, certain inputs and contractual relationships with other telecommunications providers which are critical to our ability to provide telecommunications services to our customers”) the Brazilian government’s influence over the Brazilian economy (see “—Risks Relating to Brazil—Risks related to Brazilian economic and political conditions may negatively affect our business”) and volatility in global and domestic financial markets. See “—Risks Relating to Brazil— We may be impacted by volatility in the global financial markets” and “—Risks Relating to Brazil—Developments and the perception of risk in other countries may adversely affect the Brazilian economy and market price of Brazilian issuers’ securities.”

Goodwill impairments may be required in relation to acquired businesses.

We have made business acquisitions in the past and may make further acquisitions in the future. It is possible that the goodwill which has been attributed, or may be attributed, to these businesses may have to be written down if our valuation assumptions are required to be reassessed as a result of any deterioration in the underlying profitability, asset quality and other relevant matters of the businesses. According to the relevant IFRS accounting standard, impairment testing in respect of goodwill is performed annually, or more frequently if there are impairment indicators present, and comprises a comparison of the carrying amount of the cash-generating unit with its recoverable amount. There can be no assurances that we will not have to write down the value attributed to goodwill in the future, which would adversely affect our results and net assets.

We face increasing competition from other providers and services, which may adversely affect our results of operations.

We face competition throughout Brazil from many providers in the personal communications service or PCS,(“PCS”), market. We compete with providers of mobile telecommunication, VoIP services (“Voice over Internet Protocol”), and landline telecommunications services – including by bundling voice and data to customers in a single offer. Due to this increasing competition, we may incur higher advertising and commercial costs as we attempt to maintain or expand our market share. Other than TIM, the following main competitors also hold authorizations to provide PCS with national coverage: Claro S.A., under the brand name Claro and Telefônica Brasil S.A., or Telefônica Brasil, under the brand name Vivo Oi S.A., under the brand name Oi and, Nextel Telecomunicações Ltda., under the brand name Nextel, which was acquired by Claro.(“Vivo”). Moreover, all PCS providers with national coverage offer third generation, or 3G, and fourth generation, or 4G, fifth generation, or 5G mobile telecommunications network technology, reducing differentiation. Possible marketWith the recent acquisition of Oi Mobile assets by TIM, Vivo and Claro, we believe that the likelihood of further consolidations in the near future,Brazilian telecom market among the main competitors are remote, but if further consolidations driven by our main competitors were to occur, those consolidations may favor their strategic advantage with increased market power and access to greater financial resources, thereby weakening our market position.

We also expect to face increased competition from other services outside the telecommunications industry. Technological changes, such as the development, roll-out, and improvement of 4G and 5G mobile networks, may create new revenue streams but also hinder traditional services, introducing additional sources of competition, such as OTT competitors providing communicationis already the case with services like VoIPVoLTE calls, messages and messages.SMS. These OTT communication apps are often free of charge (i.e., no subscription fee), accessible by smartphones, and usually allow their users to have access to potentially unlimited messaging and voice services over the Internet, bypassing traditional and more profitable voice and messaging services, such as SMS, which no longer represent significant revenues. As penetration of smartphones in Brazil increases and OTT application services become widespread, SMS is becoming irrelevant.services. As a result, voice traffic is migrating to data and offers from almost all competitors have started to include unlimited voice, thereby accelerating commoditization. Furthermore, very often OTT applications become so important to customers that they are bundled as zero-rated services, or OTT applications for which data usage is free. These and other factors, including the regulatory and tax asymmetry, are responsible for the increase in the competitive pressure we are facing in the mobile market.

OTT application service providers also leverage existing infrastructures and generally do not operate capital-intensive business models associated with traditional mobile network operators like TIM. Technological developments have led to significant improvements in the services provided by OTT applications – particularly in speech quality delivered by data communications apps, strengthening their positioning and relevance as competitors. In addition, providers with strong brand capability and financial strengths have turned their attention to the provision of OTT application services. In the long term, if non-traditional mobile voice and data services or similar services continue to increase in popularity, as they are expected to do, and if we and other mobile network operators are not able to address this competition, this could contribute to further declines in mobile monthly average revenue per user or ARPU,(“ARPU”), and lower margins across many of our products and services, thereby having a material adverse effect on our business, results of operations, financial condition and prospects.

OTT service providers concentratehold most of the content, the means to create it and the distribution channel. WithTogether with these resources they are dedicateddedicate themselves to creating new ways the user canfor their customers to interact with and consume content. As a result, it can be challenging for network operators, like TIM are challenged to rethink Value-Added Services and may stumble upon limitations beyond technology, such as regulation, thereby not having enough leverageourselves, to compete.design value-added services that are beneficial to our customers. In addition to technological, we may face other hurdles to offering value-added services, such as regulation.

Additionally, we expect that the 3.5GHz rights that were acquired by regional providers may provide them with an opportunity to become mobile network operators (“MNOs”). In addition, the new neutral network, which is proposed to be offered by Winity Telecom (the winner of the 700 MHz spectrum), may leverage mobile network capacity for internet service providers (“ISPs”), thereby allowing the ISPs to extend their offerings to their current broadband customer base with bundle offerings, which may increase their competitive offering in the marketplace.

In addition, Anatel promulgated a new “Spectrum Use Regulation” (RUE) based on a “use it or share it” principle to ensure the availability of radio frequencies. With the aim of increasing competition, Anatel is preparing changes to the rules to encourage the more efficient use of spectrum bandwidths, including frequencies that were acquired by operators but that are not actively being used. The RUE is designed to assist in establishing a secondary market for radio frequencies, in addition to requiring the wholesale offer of unused bands.

We expect that new products and technologies will be created with frequencydeveloped frequently and that those already established will be in continuous evolution, implying a variety of potential consequences for us. These new outcomes may, in the best scenario, reduce the price of our services by providing lower-cost alternatives or, in the worst scenario, render our products and services obsolete, requiring significant investments in new technologies. If such changes occur, our main competitors in the future may be new participants in the market without the burden of an installed older infrastructure. The amount of investment needed to upgrade our premises and to stay effectively competitive could be significant.

Rising competition may increase our churn rate and could continue to adversely affect our market share and margins. Our ability to compete successfully will depend on the effectiveness of our marketing efforts and our ability to anticipate and adapt in a timely manner to developments in the industry, including the technological changes and new services that may be introduced, changes in consumer preferences, demographic trends, economic conditions and discount pricing strategies by competitors. It is difficult to predict which of many possible factors will be important in maintaining our competitive position or what expenditures will be required to develop and provide new technologies, products or services to our customers. If we are unable to compete successfully, our business, financial condition and results of operations will be materially adversely affected.

We may be unable to respond to the trend towards consolidation in the Brazilian telecommunications market.

The Brazilian telecommunications market has been subject to consolidation.several movements towards market consolidation since its privatization in 1998. For example, in September 2014, Telefónica S.A., or Telefónica, entered into a stock purchase agreement to acquire from Vivendi S.A., or Vivendi, all of the shares of GVT Participações S.A., the controlling shareholder of Global Village Telecom S.A., or GVT, and such acquisition, the GVT acquisition. The GVT acquisition increased Telefónica’s share of the Brazilian telecommunications market, anddetailed information on transactions we believe such trend could continue in the industry as providers continue to pursue economies of scale. In March 2019, Nextel Brazil was acquired by Claro S.A. and the Economic Defense Administrative Council (Conselho Administrativo de Defesa Econômica), or CADE, definitively approved the purchase of Nextel by Claro (America Movil group) in December 2019. In December 2020, we presented a jointly offer with Telefônica Brasil S.A. (VIVO) and Claro S.A. (CLARO) for the acquisition of Oi Group’s UPI mobile business, as part of Oi Group’s judicial reorganization (a form of bankruptcy protection under Brazilian law) started in June 2016. The closing of such transaction is subject to the approval of Anatel and the CADE and is expected to occur by the end of 2021. Seehave undertaken see “Item 4. Information on the Company—A. History and Development of the Company—Recent Developments—Acquisition of Oi Group’s UPI Mobile Business.”Historical Background.

TheMore recently, the economic and regulatory environment faced by some relevant telecommunications companies in Brazil suchcould be understood as Oi, Sercomtel,having played an important role in encouraging a local phone and Internet service provider in the state of Paraná, and Sky, could also be expected to encourage the consolidation trend or even the entry of a new competitor in the Brazilian telecommunications market. towards market consolidation.

In 2018, via a new resolution, Anatel reduced one of the main regulatory barriers to consolidation in the mobile market.

Resolution No. 703/2018 changed the spectrum cap regulation which increasedby increasing the amount of spectrum bandwidth an operator is allowed to retain, depending on frequency range and applicable antitrust measures. If suchOn November 5, 2020, Anatel Resolution No. 736/2020 amended Resolution No. 703/2018 by establishing new maximum limits for the spectrum for SMP licenses. These changes together with financial distress of two major participants in the mobile market, Nextel and Oi Group, led to a new wave of mergers and acquisitions activity.

In the fixed broadband market, consolidation occurs, itmovements have been frequent among regional internet service providers, as well as spinoff transactions which separate formerly integrated operations between client focused companies and network infrastructure focused companies. Movements like those may result in increased competition within our market. We may be unable to adequately respond to pricing pressures resulting from consolidation in our market, adversely affecting our business, financial condition, and results of operations.

We may also consider engaging in merger ormergers and acquisitions activity, as we did by participating in the acquisition activityof Oi Mobile, in response to changes in the competitive environment, which could divert resources away from other aspects of our business.

In this regard, potential acquisitions have inherent risks such as increasing leverage and debt service requirements, combining company cultures and facilities, potential exposure to successor liability, and the need to raise additional capital, which may not be possible at that time. Any of these and other factors could adversely affect our ability to achieve the anticipated cash flows at acquired operations or realize other anticipated benefits of acquisitions, which could negatively affect our reputation or operations.

We may face difficulties responding to new telecommunications technologies.

The Brazilian wireless telecommunications market is experiencing significant technological changes, as evidenced by the following, among other factors:

card setup, and which will enable our customers to switch faster to other providers, thereby increasing competition.

We may be unable to keep pace with these technological changes, which could affect our ability to compete effectively, and the investment required to adopt these new technologies will be significant, both of which could have a material adverse effect on our business, financial condition and results of operations.

Our operations depend on our ability to efficiently operate our systems and controls that are subject to failure that could affect our business and our reputation.

Our success largely depends on the continued and uninterrupted performance of our controls, network technology systems and of certain hardware. Our technical infrastructure (including our network infrastructure and information technology, or IT, systems for mobile telecommunications services) is vulnerable to damage or interruption from information and telecommunication technology failures, power loss, floods, windstorms, fires, terrorism, intentional wrongdoing, human error and similar events. An unexpected increase in volume on our network and systems could cause them to malfunction, such as in periods of increased demand or unexpected circumstances that may reduce our ability to service our infrastructure, such as in a health crisis similar to the current COVID-19 pandemic. Our controls are dependent, not exclusively, on these technological systems and are also subject to the interruptions and failures. Unanticipated problems with our controls, or at our facilities, system failures, hardware or software failures, computer viruses or hacker attacks could affect the quality of our services and cause service interruptions. Any of these occurrences could result in reduced user traffic and reduced revenue and could harm our levels of customer satisfaction, our reputation and compliance with certain of our regulatory obligations.

Our availability indicators, repair performance and installation of new accesses/projects can be impacted by the effects of increased absenteeism in the field workforce and our experts teams in technology, or even by the imposition of Lockdown by COVID-19lockdowns as a result of any health crisis that prevents or hinders the displacement and access of field maintenance teams to equipment stations.

We may have ourOur supply chain for technological product inputs (like spare parts, transmission and commutation equipment, handsets and modems) may be impacted by any delay in the manufacturing process of vendors in their countries of origin, due toincluding as a new waveresult of COVID-19a health crisis or military conflicts that imposes a total Lockdown.could impact logistics and global supply chain.

Our operations and reputation could be materially negatively affected by cyber-security threats or our failure to comply with new data protection laws, mainly the Brazilian General Data Protection Law (Law No. 13,709/2018), or the LGPD, which came into effect on September 18, 2020, following the President of Brazil’s veto of article 4 of Provisional Measure No. 959/2020, which established that the LGPD would only come into effect on May 3, 2021. However, the administrative sanctions provisions of LGPD will only becomebecame enforceable as of August 1, 2021, pursuant to Law No. 14,010/2020. Once the administrative sanctions of the LGPD become enforceable, cybersecurity incidents and data breach or leakage events may subject us to the following penalties: (1) warnings, with the imposition of a deadline for the adoption of corrective measures; (2) a one-time fine of up to 2% of gross sales of the company or a group of companies limited to a maximum amount of R$50,000,000 per violation; (3) a daily fine, up to a maximum amount of R$50,000,000 per violation; (4) public disclosure of the violation; (5) the restriction of access to the personal data to which the violation relates, until corrective measures are implemented; (6) deletion of the personal data to which the violation relates; (7) partial suspension of the databases to which the violation relates for up to 12 months, until corrective measures are implemented; (8) suspension of the personal data processing activities to which the violation relates for up to 12 months; and (9) partial or full prohibition on personal data processing activities. The postponement of the administrative sanctions does not prevent the competent authorities from overseeing activities or enacting additional rules to be complied with prior to such effectiveness date, nor does it prevent individual or collective lawsuits based on violation of data subject’s rights and subject to civil liability. Any proceeding or action and related damages could be harmful to our reputation, force us to incur significant expenses, divert the attention of our management, increase our costs of doing business or result in the imposition of financial penalties.

In addition, Decree No. 10,474/2020 created the regulatory agency of the National Data Protection Authority, or ANPD. The ANPD must ensure the protection of personal data and will deal with cases regarding commercial and industrial secrets in Brazil.

ANPD is also responsible for developing guidelines for the Protection of Personal Data and Privacy National Policy and for inspecting and applying sanctions in the event of data breaches. ANPD also fosters studies on national and international practices for the protection of personal data and privacy and also encourages the adoption of standards applicable to a variety of services and products seeking to ensure owners have control over their personal data,breaches according to the activitiesresolution CD/ANPD No. 1, of those involved.October 28, 2021. Moreover, ANPD can issue regulations and procedures to protect personal data and privacy, as well as responsible for assessing the impact of personal data protection in scenarios that may be deemed as a high risk to personal data protection principles. As a result of ANPD’s new regulations and procedures, we may be required to change our business practices and implement additional measures to adapt our personal data processing activities. This could adversely affect our business, financial condition, or results of operations. We cannot assure you that our LGPD compliance efforts will be deemed appropriate or sufficient by regulatory authorities or by courts.

The company is performingWe performed a deep-gap analysis in order to identify the main problems and, based on this analysis, intendsare now in the final phase of implementing resolutions to implement a master planall the issues identified in order to achieve full compliance with the new LGPD requirements. However, deficiencies in the full adoption of data security measures, implementing personal data processing and retention requirements and reporting data measures within a narrow mandatory time frame could lead to disputes with data protection authorities, fines or harm to our reputation.

Sophisticated information and processing systems are vital to our growth and our ability to monitor costs, render monthly invoices, process customer orders, provide customer service and achieve operating efficiencies. We cannot assure that we will be able to successfully operate and upgrade our information and processing systems or that they will continue to perform as expected without any failure. A severe failure in our accounting, information and processing systems could impair our ability to collect payments from customers and respond satisfactorily to customer needs, which could adversely affect our business, financial condition and results of operations.

Our business is dependent on our ability to expand our services while maintaining the quality of the services provided and a positive customer experience.

Our business as a telecommunications services provider depends on our ability to maintain and expand our telecommunications services network. We believe that our expected growth will require, among other aspects:

We believe that these requirements will place significant demand on our managerial, operational and financial resources. Failure to manage successfully our expected growth could reduce the quality of our services and result in

an inadequate customer experience, with adverse effects on our business, financial condition and results of operations.

Our operations are also dependent upon our ability to maintain and protect our network. Damage to our network and backup systems could result in service delays or interruptions and limit our ability to provide customers with reliable service over our network. The occurrence of an event that damages our network may adversely affect our business, financial condition and results of operations.

We face various cyber-security risks that, if not adequately addressed, could have an adverse effect on our business.

We face various cyber-security risks that could result in business losses, including, but not limited to, contamination (whether intentional or accidental) of our networks and systems by third parties with whom we exchange data, equipment failures, unauthorized access to and loss of confidential customer, employee and/or proprietary data by persons inside or outside our organization. We are also exposed to cyber-attacks causing systems degradation or service unavailability, the penetration of our information technology systems and platforms by malicious third parties, and infiltration of malware (such as computer viruses) into our systems.

Cyber-attacks against companies have increased in frequency, scope and potential harm in recent years. Further, the perpetrators of cyber-attacks are not restricted to particular groups or persons. These attacks may be committed by companyour employees or third parties operating in any region, including jurisdictions where law enforcement measures to address such attacks are unavailable or ineffective. We may not be able to successfully protect our operational and information technology systems and platforms against such threats. There can be no assurance that we will be successful in preventing cyber-attacks or successfully mitigating their effects. Similarly, there can be no assurance that we or our third-party providers and other contractors will be successful in protecting our customers’ personal data and other data that is stored on our and their systems. Further, as cyber-attacks continue to evolve, we may incur significant costs in the attempt to modify or enhance our protective measures or investigate or remediate any vulnerability.

The inability to operate our networks and systems as a result of cyber-attacks, even for a limited period of time, may result in significant expenses to us and/or a loss of market share to other communications providers. The costs associated with a major cyber-attack could include expensive incentives offered to existing customers and business partners to retain their business, increased expenditures on cyber-security measures and the use of alternate resources, lost revenues from business interruption and litigation. If we are unable to adequately address these cyber-security risks, orour operating network and information systems could be compromised, which would have an adverse effect on our business, financial condition, reputation and results of operations. In order to mitigate such risks, we are currently adopting ISO 27001 standard best practices and expect to be certifiedobtained the certification in the future.November 2022. As of the date of this annual report, such certification process is still ongoing. Additionally, due to the recent Russia-Ukraine conflict, there have been publicized threats to increase hacking activity against the critical infrastructure of any nation or organization that retaliates against Russia for its invasion of Ukraine. Any such increase in such attacks on our third-party service providers or other systems could adversely affect our network systems or other operations. We have measures in place that are designed to detect and respond to such cyber-attacks and data security incidents, but there can be no assurance that our efforts will prevent or detect such cyber-attacks and data security incidents.

We depend on data centers operated by third parties and third-party cloud computing platforms, and any disruption in the operation of these facilities or platforms or access to the Internet would adversely affect our business.

Our business requires the ongoing availability and uninterrupted operation of internal and external systems and services. We have adopted new technology infrastructure solutions, which carries with it some risk to business continuity. With the adoption of cloud computing technology, key IT systems are being migrated to the public cloud. Despite cloud computing reducing some risks, such as delays in the supply of equipment by suppliers (like spare parts, servers, etc.), the adoption of cloud computing means that the control and responsibilities for the proper functioning of the systems are shared between ourselves and the third parties. In all cases, the third parties will be responsible for the physical infrastructure, connectivity, energy supply, cooling and all the capabilities related to infrastructure availability. Depending of the cloud service type involved for any specific system (e.g. for IaaS, PaaS, SaaS), other capabilities will be the responsibility of the third party, according to the principles of the Shared Responsibility Model defined by the Cloud Security Alliance, and incorporated into our contracts with the third-party providers

These third-party providers may experience connectivity disruption, outages and other performance problems, which may be caused by a variety of factors, including infrastructure changes, human or software errors, viruses, security attacks, fraud, spikes in customer usage and denial of service issues. As such, our success also depends directly on the continuity of the provision of computing capacity and the availability of connectivity between the cloud computing provider’s datacenters, including the connectivity with our datacenters and internal networks. An intermittent failure or complete lack of connectivity or system availability, may cause interruption to our services, affecting our availability indicators as well as our revenue and reputation.

Having data hosted on a public cloud also poses a risk to our ability to comply with data protection principles or law (such as the LGPD). As such, our success depends on our ability to certify that cloud providers are adopting security best practices, as well as complying with the terms of data protection laws in accordance with our contractually agreed terms.

Certain debt agreements of our subsidiary contain financial covenants and any default under such debt agreements may have a material adverse effect on our financial condition and cash flows.

Certain of our existing debt agreements contain restrictions and covenants and require the maintenance or satisfaction of specified financial ratios and tests. See “Item 5. Operating and Financial Review and Prospects.” The ability of our subsidiary to meet these financial ratios and tests can be affected by events beyond our and their control, and we cannot assure that itwe will meet those tests. Failure to meet or satisfy any of these covenants, financial ratios or financial tests could result in an event of default under these agreements. As

Our ability to meet these financial ratios and tests can be affected by events beyond our control, and we cannot assure you that we will meet those requirements. Failure to meet or satisfy any of December 31, 2020, we had approximately R$2,345 million in consolidated outstanding indebtedness, of which 100% was denominated in foreign currency (primarily U.S. dollars), for which we use derivative instruments to offset exposure to foreign currency. these requirements may have a material adverse effect on our financial condition and cash flows.

If we are unable to meet these debt service obligations, or comply with these debt covenants, we could be forced to restructure or refinance this indebtedness, seek additional equity capital or sell assets.

Due to the nature of our business we are exposed to numerous lawsuits, consumer claims and tax-related proceedings.

Our business exposes us to a variety of lawsuits and other proceedings brought by or on behalf of consumers in the ordinary course of our operationsbusiness as a mobile telecommunications provider in Brazil. We are subject to a number of public civil actions and class actions that have been brought against mobile telecommunications providers in Brazil relating principallymainly related to network quality, the expiration of prepaid usage credits, minimum term clauses, subscription fees, quality of service and the use of land to install our network sites. These suits include claims contesting certain aspects of the fee structure of our prepaid plans, hybrid (monthly billed fixed price), or so-called Controlcontrol plans and postpaid plans, which are commonplace in the Brazilian telecommunications industry.

In addition, federal, state and municipal tax authorities have questioned some tax procedures we have adopted, and have raised questions regarding the calculation of the basis for certain sector-specific contributions (FUST and FUNTTEL, as each are defined in “Item 4. Information on the Company—B. Business Overview—Taxes on Telecommunications Goods and Services”). As of December 31, 2020,2022, we are subject to approximately 3,2103,487 tax-related lawsuits and administrative proceedings with an aggregate value of approximately R$16,98618,645 million classified as “probable loss” and “possible loss” by our legal advisors. In addition, there are tax proceedings arising from the acquisition of the former Intelig business (currently TIM S.A.) by the former parent company of the TIM Participações group, relating to the purchase price.

An adverse outcome in, or any settlement of, these or other lawsuits could result in losses and costs to us, with an adverse effect on our business practices and results of operations. For some of these lawsuits, we were not required to and have not established any provision on our statement of financial position or have established provisions only for part of the amounts in controversy, based on our judgments or opinions of our legal counsel as to the likelihood of winning these lawsuits. In addition, our senior management may be required to devote substantial time to these lawsuits, which they could otherwise devote to our business. See Note 2325 to our consolidated financial statements.

Any modification or termination of our ability to use the “TIM” trade name may adversely affect our business and operating results.

Telecom Italia S.p.A., or Telecom Italia, as Licensor, and TIM S.A., TIM Participações, which merged into TIM S.A,S.A., and Instituto TIM as Licensees, entered into a trademark license agreement, or the Trademark License Agreement, where Telecom Italia granted the Licensees a non-exclusive and non-transferable license of 196 trademarks (including the TIM trademark) to: (i) promote and render Licensees’ services, including co-branded services; (ii) use the trademarks as domain names of websites owned by the Licensees, dedicated to the promotion and/or the rendering of the Licensees’ services; (iii) use the TIM trademark in events, campaigns, commercial partnerships, sponsorship projects and other activities in order to promote Licensees’ services; and (iv) use “TIM” as part of Licensees’ corporate names. The Trademark License Agreement is limited to Brazil and valid until December 31, 2023, unless terminated earlier. Telecom Italia, who owns the rights to the “TIM” trade name, may prevent us from using the TIM trademark by termination of the Trademark License Agreement. The loss of use of the trademark “TIM” may have a material adverse effect on our business and operating results.

We are subject to credit risk with respect to our customers.

Our operations depend to a significant extent on the ability of our customers to pay for our services. Under Anatel regulations, we are allowed to undertake certain measures to reduce customer defaults, such as restricting or limiting the services we provide to customers with a history of defaults. If we are unable to undertake measures to limit payment defaults by our subscribers or that allow us to accept new subscribers based on credit history, we will remain subject to outstanding uncollectible amounts, which could have an adverse effect on our results of operations. See “Item 5. Operating and Financial Review and Prospects.”

We may be subject to liability related to outsourcing certain functions to third-party service providers.

We may be exposed to contingent liabilities due to our outsourcing of certain functions to third-party service providers. Such potential liabilities may involve claims by third-party providers who claim that they are treated as direct employees as well as claims for secondary liability resulting from work placeworkplace injury, wage parity and

overtime pay complaints. Our financial condition and results of operation may be adversely affected in the event that a material portion of these liabilities are decided against us.

The Brazilian Supreme Court has recently declared the outsourcing of any company’s main activities as legal, which indicates a probable favorable outcome regarding the matter. However, it is worth to mention that,In any case, regardless of the decision in Supreme Court, we would also be subsidiarily and jointly liable with the service provider in connection with any violation of labor obligations related to the outsourced workers.

If the contracting of third partythird-party services are considered to involve the main activities of the company, it may be characterized as a direct employment, which would significantly increase our costs and as a result we may be subject to administrative proceedings by the relevant labor authorities and may be required to pay fines to the third partythird-party service providers.

We depend on key suppliers, certain inputs and contractual relationships with other telecommunications providers which are critical to our ability to provide telecommunications services to our customers.customers or may have a material adverse effect on our operations.

We rely on various vendors to supply network equipment, mobile handsets and accessories necessary for our business. These suppliers may, among other things, delay delivery periods, increase their prices, limit the amounts they are willing or able to supply to us, or suffer disruptions in their own supply chains. If these suppliers are unable or unwilling to provide us with equipment or supplies on a regular basis, we could face difficulties in carrying out our operations, which could negatively affect our results of operations and limit our ability to execute our agreements. Further, in 2020 we have had to face the negative effects due to the COVID-19 that increased prices and delayed delivery.

Geopolitical, sanitary, financial and sanctions aspects, among others, could cause an interruption of materials and services supply. Supplier exclusivity or dependence increases exposure to risk. Interruption can impact not only the acquisition of new materials and services, but also the maintenance of existing equipment and operations.

We rely on certain telecommunications providers and partners, through contractual arrangements, to supply key infrastructure and other services. Termination, non-renewal and/or non-renewal of current agreements by suppliers or partners, such as SWAP (partnerships with Operators); Indefeasible Rights of Use (IRU); lease of circuits (e.g. EILD, IP Peering, IP Transit and Satellite bandwidth/capacity); co-sites deals with others telecommunications companies and private partners (e.g. Tower Co.); and rights of use with private companies and public authorities, as well as the interruption in the negotiation of biosites and/or sites destined to infrastructure services and rental areathose agreements, may have a material adverse effect on our business.

Anatel permits such agreements between telecommunications providers in order to avoid unnecessary duplication of networks and infrastructure, and to lower costs and increase the reach of telecommunication services in Brazil.

Some (non-exhaustive) examples of these agreements include:

For detailed information on these contracts see “Item 4. Information on the Company—B. Business Overview—Site-Sharing and Other Agreements”. 

Furthermore, the constant changes in the telecommunications industry, such as the growth of broadband, may result in a limited supply of equipment essential for the provision of services. The restrictions on the number of manufacturers imposed by the Brazilian government for certain inputs pose certain risks, including susceptibility to currency fluctuations and the imposition of customs or other duties for those inputs which are imported. Inputs produced domestically are available from a limited number of domestic suppliers, and accordingly we are highly dependent upon their ability to accurately forecast the domestic demand and manage inventory.

The need to hire many key suppliers requires complex deals, detailed and timely analysis of contractual documents and an integrated, end-to-end management process.

The potential positive impact of 5G networks on multiple industries, specifically the optimization of energy usage; cloud computing; ultrafast broadband; internet of things (IoT); innovation, including self-driving cars, transportation; agribusiness; education; health; and factory equipment. The necessary features for a company to benefit from the 5G network supply chain are software-based, and our supply chain is increasingly based on cloud computing and software.

We also rely on certain other telecommunications providers, through contractual agreements with us, to supply key infrastructure and other services, such as Industrial Exploration of Dedicated Lines (Exploração Industrial de Linhas Dedicadas), or EILD, interconnection and co-billing (see “Item 4. Information on the Company—B. Business Overview—Site-Sharing and Other Agreements”). Anatel permits such agreements between telecommunications providers in order to avoid unnecessary duplication of networks and infrastructure, and to lower costs and increase penetration of wireless services in Brazil.

Discussions regarding data safety of equipment provided by Chinese suppliers could have side effects across the global ICT sector, also significantly affecting our supply chain, infrastructure deployment and costs, and impacting the future of the industry as a whole.

In June 2016, one telecommunications provider that we maintain a contractual relationship with, Oi, filed for judicial reorganization (a form of bankruptcy protection under Brazilian law), acknowledging its inability to sustain its financial obligations. The judicial reorganization plan was approved at Oi’s general shareholders meeting in December 2017, after intense negotiations among credit holders and shareholders, and was judicially ratified in January 2018 subject to certain reservation regarding the terms of the judicial reorganization, mainly regarding Oi’s relationship with its creditors. In March 2018, through a joint withdrawal of proceedings, TIM and Oi settled their claims, which were generally related to infrastructure and interconnection, via a dedicated conflict resolution process at Anatel. For additional information regarding recent transactions with Oi, see “Item 4. Information on the Company—A. History and Development of the Company—Recent Developments—Acquisition of Oi Group’s UPI Mobile Business.”

Our operations could be suspended or interrupted as a result of natural or man-made disasters or other unexpected events.events, such as those related to climate change.

Our operations may be suspended or interrupted for an indeterminate period in case of adverse events, such as a result of energy shortages, damages to our transmission bases, natural disasters, climate change or other environmental events or natural or man-made disasters, including fire, explosion, storms, geopolitical disruptions,conflict, civil unrest or health crises (such as the COVID-19 pandemic) or any other unexpected damage events. Such impacts may present disproportional geographic impacts, which may vary from impacts to a single address to an entire city or region. If we are unable to mitigate or prevent such damages in the event of a natural or man-made disaster and any other unexpected events, the suspension or interruption of our operations could have a material adverse effect on the continuity of our operations, our financial results and the compliance with regulations.

In order to avoid or reduce indeterminate periods of suspension or interruption of operations caused by damages to our transmission bases, natural disasters or any other unexpected events, we have implemented an internal policy aimed at a continuous mapping systemic vulnerabilities in order to improve the selective process of key projects, intended to expand the robustness of the technical network infrastructure and make it gradually more resilient.

We use demand forecasts to make investments, however such forecasts may ultimately be inaccurate due to economic volatility and result in lower revenues than expected.

We make certain investments, such as the procurement of materials and the development of our network infrastructure, based on our forecasts of the amount of demand that customers will have for our services at a later date. However, any major changes in the Brazilian economic scenario may affect this demand and therefore our forecasts may turn out to be inaccurate. As a result, it is possible that we may make larger investments based on demand forecasts than were necessary given actual demand at the relevant time, which may directly affect our cash flow. Unanticipated improvements in economic conditions may have the opposite effect and equally pose a risk.

The management of our cash and our financial investments are also subject to the country’s economic conditions. We may make financial allocations in which the results of operations are not as expected, generating lower profitability or costs.

Our governance and compliance processes may fail to prevent regulatory penalties and reputational harm.

We operate in a global environment, as we have agreements with companies all over the world. Our governance and compliance processes, which include the review of internal control over financial reporting, may not prevent future breaches of all applicable legal, accounting or corporate governance standards. We may be subject to breaches of our Code of Ethics, anti-corruption policies and business conduct protocols and to instances of fraudulent behavior, corrupt practices and dishonesty by our employees, contractors or other agents. Our failure to comply with applicable laws and other standards could subject us to fines, loss of operating licenses and reputational harm.

Improper use of our networks could adversely affect our costs and results of operations.

We may incur costs associated with the unauthorized and fraudulent use of our networks, including administrative and capital costs associated with detecting, monitoring and reducing the incidence of fraud. Fraud also affects interconnection costs and payments to other carriers for non-billable fraudulent roaming. Improper use of our network could also increase our selling expenses if we need to increase our provision for doubtful accounts to reflect amounts we do not believe we can collect for improperly made calls. Any increase in the improper use of our network in the future could materially adversely affect our costs and results of operations.

We may be unable to implement our plans to expand and enhance our existing networks in Brazil in a timely manner or without unanticipated costs, which could hinder or prevent the successful implementation of our business plan and result in revenues and net income being less than expected.adversely affect our results of operations.

Our ability to achieve our strategic objectives depends in large part on the successful, timely and cost-effective implementation of our plans to expand and enhance our networks in Brazil. Factors that could affect this implementation include:

Although we believe that our cost estimates and implementation schedule are reasonable, we cannot assure you that the actual costs or time required to complete the implementation of these projects will not substantially exceed our current estimates. Any significant cost overrun or delay could hinder or prevent the successful implementation of our business plan and result in revenues and net income being less than expected. We employ structured control tools and procedures in order to meet deadlines and avoid impacts on our business and results of operations.

Risks Relating to the Brazilian Telecommunications Industry

Anatel classified us as an economic group with significant market power in some markets and we are now subject to increased regulation.

In July 2018, Anatel published Resolution No. 694/2018, or the New PGMC,“New PGMC”, revising the general plan for competition goals (Plano Geral de Metas de Competição), or (“PGMC 2012.2012”). Under the New PGMC, TIM has been classified as having significant market power in the following relevant markets: (i) mobile network; (ii) national roaming; and (iii) high capacityhigh-capacity data transport.

Due to such classification, we are subject to increased regulation under the New PGMC, which could have an adverse effect on our business financial condition, results of operations and compliance with regulations. In the national roaming market, we must also offer roaming services at regulated rates to other mobile providers.

The values of mobile termination rate, or the “Valuenew PGMC is currently under review by Anatel and a new regulation is expected to Use the Mobile network” (VU-M), are freely negotiated between operators. Anatel, however, would serve as arbitratorcome into force in the casesecond half of disputes, and Anatel can determine2024, after a reference value accordingpublic consultation to regulatory criteria. From January 2013,be held in the reference values set by Anatel comply with a “glide path”, which led to cost-oriented values to SMP operators, starting as from 2016. On February 24, 2017, considering the glide path provided for by Act No. 6,211/2014, VU-M were again reduced, dependingsecond half of 2023. See “Item 4. Information on the Plano

Geral de Autorizações do Serviço Móvel Pessoal (PGA-SMP) Region, to approximately R$0.03 reais and, on February 24, 2018, it was reduced to R$0.01.

In December 2018, Anatel publishedCompany—B. Business Overview—Regulation of the corresponding Acts Nos. 9,918/2018 and 9,919/2018, which determined the specific reference rates, effective as of February 2020. Before coming into force, Anatel started the revision of these acts and, on February 24, 2020, it published the new Acts Nos. 986/2020 and 987/2020.Brazilian Telecommunications Industry—Significant Market Power”.

Our radio frequency or RF,(“RF”), authorizations for the 800 MHz, 900 MHz, 1,800 MHz and 1,8002,100 MHz bands that we use to provide PCS services started to expire in September 2007 and are renewable for one additional 15-year period, requiring payment at every two-year period equal to 2% of the prior year’s revenue net of taxes, by way of investment under the Basic and Alternative Service Plans, which are intended to increase telecommunications penetration throughout Brazil. Anatel has stated that the revenue on which the 2% payment is based should be calculated as including revenues derived from interconnection as well as additional facilities and conveniences. As a result, we are currently disputing these radio frequency, or RF authorization renewal payments both administratively and judicially. Although there are administrative procedures still pending on analysis, Anatel has denied the Company’sour appeals and issued Precedent No. 13, determining that revenues from interconnection as well as additional facilities and conveniences should be considered on the basis of the calculation of the price due to the renewal of the spectrum licenses. Judicially, the matter is also still under dispute. In December 2018, under Judgment No. 706 and No. 707, Anatel approved a new radiofrequency revenue segregation methodology to be applied. The application of this new methodology allows the segregation of significant market power revenues by the percentage of radiofrequency extended in relation to the total of existing radiofrequencies, both expressed in the amount of MHz.

We cannot assure that we will be able to fully comply with eachMHz, and addresses part of the dispute about the values to be paid by us due in connection with the initial renewal process.

After the expiration of the second renewal of radiofrequency use rights, there may be new administrative and judicial discussions and disputes regarding the applicable laws, regulationscalculation methodology and authorizations ordeadlines after the approval of Law No. 13,879, of October 3, 2019. The Federal Court of Accounts ruled that we willsuch renewal process may be ablesubject to complya new bidding procedure. However, Anatel has granted us and other competitors extensions for shorter terms until a decision has been made on how to proceed with future changes in the laws and regulations to which we are subject. These regulatory developments or our failure to comply with them could have a material adverse effect on our business, financial condition and results of operations.radiofrequency use rights.

As a telecommunications provider, we are subject to extensive legal and regulatory obligations in the performance of our activities which may limit our flexibility in responding to market conditions, competition and changes in our cost structure or with which we may be unable to comply.

Our business is subject to extensive government regulation, including any changes that may occur during the period of our authorization to provide telecommunication services. Anatel, which is the main telecommunications industry regulator in Brazil, regulates, among others: (i) industry policies and regulations; (ii) licensing; (iii) rates and tariffs for telecommunications services; (iv) competition; (v) telecommunications resource allocation; (vi) service standards; (vii) technical standards; (viii) quality standards; (ix) consumer rights; (x) interconnection and settlement arrangements; (xi) coverage obligations; and (xii) spectrum.

In addition to the rules set forth by Anatel, we are subject to compliance with various legal and regulatory obligations, including, but not limited to, obligations arising from the following: (i) PCS authorizations under which we operate our cellular telecommunications business; (ii) fixed authorizations (local, national long distance, international long distance and multimedia service) under which we operate our telecommunications business; (iii) limited private services authorization under which we operate a private network formed by point-to-point radio communication (radioenlaces); (iv) the Consumer Defense Code; (v) the General Telecommunications Law (amended by Law No. 13,879/2019); and (vi) the Data Protection Law (Law No. 13,709/2018, as amended); and (vii) the Brazilian Competition Law (Law No. 12,529/2011).

In addition,Further, the Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica) (“CADE”), the Brazilian Antitrust Enforcement Agency, is currently investigating (i) claims that the alleged formation of a consortium by the applicants (us, Claro and Vivo) for jointly acquiring Oi’s mobile assets was an infraction to Brazilian antitrust laws, by the consummation of the referred transaction before the antitrust authority reached a final decision; and (ii) the occurrence of collusive and exclusionary practices among competitors (with Vivo and Claro) regarding Oi’s mobile assets acquisition. The files for the second investigation are not yet public and we have not been officially notified. However, CADE’s final decision on Oi’s assets transaction expressly referenced the opening of such proceeding.

We are also subject to applicable national and international anti-corruption laws. We believe that we are currently in material compliance with our obligations arising out of each of the above referenced laws, regulations and authorizations.

Brazil is a highly competitive mobile market, having four companies operating networks with national coverage, plus other regional players and mobile virtual network operator or MVNOs.(“MVNOs”). Any potential deals involving such playersparticipants is likely to be carefully analyzed by CADE and Anatel, on a state-by-state basis.

On December 14, 2020, See “Item 4. Information on the Company—A. History and Development of the Company—Recent Developments—Acquisition of Oi Group’s UPI Mobile Business.”

Through the 5G spectrum auction, Anatel auctioned licenses. In addition to bidders in the auction being required to offer made by TIM, Vivo (Telefonica Brasil S.A.) and Claro (controlled by America Movil)a certain price, the competitive biddingcondition of the auction requires the successor licensee to acquire Oi’s mobile operations, which include subscribers, spectrum and mobile access sites,commit to certain minimum investments. There may be risks associated with being able to fulfill such commitments or for R$16.5 billion (US$3.2 billion). The closing of such transaction is subjectfailing to the approval of Anatel and the CADE and is expected to occur by the end of 2021.

The approval, evencomply with a weighted division of Oi’s assets between the buyers, is still being analysed by competent authorities, CADE and Anatel, as the deal generates different and complex circumstances for the telecommunications market.an investment commitment.

Over the last few years, Anatel has instituted certain administrative processesproceedings against the Companyus and other Brazilian telecommunications providers to investigate certain alleged nonconformities related to quality goals and other regulatory obligations. In response to the initiation of such Anatel proceedings, the Company,we, as well as other active telecommunications companies in the Brazilian market, opted for the negotiationto negotiate and conclusion ofenter into a Term of Conduct Adjustment or TAC.(“TAC”). The TAC aims at the remediation ofto remediate the underlying causes of the ongoing administrative processesproceedings by setting commitments forto adjust conduct adjustment and investmentan agreement with respect to general investments on additional projects in general.future projects. The TAC was approved by Anatel on August 22, 2019, and on June 19, 2020, our Board of Directors approved the execution of the TAC byTAC. On October 18, 2022, the Company.first amendment was signed following renegotiation of chapter X, section I, which included the adjustment of obligations related to certain quality indicators. See “Item 4. Information on the Company—B. Business Overview—Regulation of the Brazilian Telecommunications Industry—PCS Regulation.”

We cannot assure that we will be able to fully comply with each of the applicable laws, regulations and authorizations or that we will be able to comply with future changes in the laws and regulations to which we are subject. Moreover, compliance with this extensive regulation, the conditions imposed by our authorization to provide telecommunication services and other governmental action may limit our flexibility in responding to market conditions, competition and changes in our cost structure. These regulatory developments or our failure to comply with them could have a material adverse effect on our business, financial condition and results of operations.

The Brazilian government under certain circumstances may terminate our authorizations or we may not receive renewals of our authorizations.

We operate our business under authorizations granted by the Brazilian government. As a result, we are obligated to maintain minimum quality and service standards, including targets for call completion rates, geographic coverage and voice accessibility, data accessibility, voice drop, data drop, data throughput, user complaint rates and completion rates to our call center. Our ability to satisfy these standards, as well as others, may be affected by factors beyond our control. We cannot assure that, going forward, we will be able to comply with all of the requirements imposed on us by Anatel or the Brazilian government. Our failure to comply with these requirements may result in the imposition of fines or other government actions, including, restrictions on our sales and, in an extreme situation, the termination of our authorizations in the event of material non-compliance.

Any partial or total revocation of our authorizations or failure to receive renewal of such authorizations when they expire would have a material adverse effect on our financial condition and results of operations.

These regulations may have an adverse effect on our financial results given the dynamics of our revenues and costs related to interconnection fees. In addition, Anatel may allow more favorable prices to operators without significant market power.

Actual or perceived health risks or other problems relating to mobile telecommunications technology could lead to litigation or decreased mobile communications usage, which could harm us and the mobile industry as a whole.

The effects of, and any damage caused by, exposure to electromagnetic fields has been and still is the subject of careful evaluation by the international scientific community, but until now there is no scientific evidence of harmful effects on health. We cannot rule out that exposure to electromagnetic fields or other emissions originating from wireless handsets will not be identified as a health risk in the future.

Our mobile communications business may be harmed as a result of these alleged health risks. These concerns could have an adverse effect on the wireless communications industry and, possibly, expose wireless providers, including us, to litigation.

In addition, although Brazilian law already imposes strict limits in relation to transmission equipment, these concerns may cause regulators to impose greater restrictions on the construction of base station towers or other infrastructure, which may hinder the completion of network build-outs and the commercial availability of new services and may require additional investments. The expansion of our network may be affected by these perceived risks if we experience problems in finding new sites, which in turn may delay the expansion and may affect the quality of our services.

Anatel Resolution No. 700/2018 sets limits of emission and exposure for fields with frequencies between 8.3 kHz and 300 GHz, and Anatel Act No. 458/2019 and Law No. 11,934/2009 establish limits related to the magnetic and electromagnetic emissions recommended by the World Health Organization and require that operators have to maintain a record of the measurements of the levels of the magnetic and electromagnetic emissions of each transmitting station.

In 2021, Law No. 14,173/2021 came into force, which amended Law No. 11,934/2009, revoking the mandatory sharing of towers with less than 500 meters between them. The withdrawal of this obligation was considered essential for the implementation of 5G in Brazil, allowing for the expected increase in density for the new technology. Further, in 2022 Law No. 14,424/2022 came into force, which allowed operators to be authorized to install antennas, even if the competent authority does not respond within a period of 60 days.

Any of these or any other additional regulations could adversely affect our business, financial condition and results of operations. Government authorities could pass more restrictivereview the regulation of wireless handsets and base stations as a result of these health concerns, or wireless companies, including us, could be held liable for costs or damages associated with these concerns, which could have an adverse effect on our business, financial condition and results of operation. We cannot assure you that further medical research and studies will refute a link between the mobile technology in question and these health concerns.

Risks Relating to Brazil

Risks related to Brazilian economic and political conditions may negatively affect our business.

Political conditions in Brazil may affect the confidence of investors and the public in general, as well as the development of the economy. Political crises have affected and continue to affect the confidence of investors and the general public, historically resulting in economic deceleration and heightened volatility in the prices of securities offered by companies with significant operations in Brazil. The recent economic instability in Brazil has contributed to a decline in confidence in the Brazilian market, as well as to a deteriorating political environment.

PresidentialBrazil’s most recent presidential elections took place in 2018 and the first year of Jair Bolsonaro as presidentOctober 2022. Luiz Inácio Lula da Silva was marked by discussions over the reforms and political instability, whereas the second year of its presidential term was marked by attempts to deal with the current COVID-19 pandemic and consequent economic and social crisis. Despite the approvalelected President of the pension plan reform in 2020,Republic.

There are uncertainties regarding the policies to be followed by the newly inaugurated government, the ability of the president and his teamthis new government to implement policies and reforms, as well as the external perception of the Brazilian economy and political environment, all of which could have a negative impact on our business and the price of our securities. In addition, a tax reform proposed in 2021, which has not been voted on by both houses of the Brazilian Congress, has proposed the revocation of the income tax exemption on the payment of dividends, which, if enacted, would increase the tax expenses associated with any dividend or distribution by Brazilian companies and could impact our capacity to receive future cash dividends or distributions net of taxes from our subsidiaries. The Brazilian administration that took office on January 1, 2023 has stated that tax reform is among their priorities. Any such new policies and other reformsor changes to current policies may reduce investor and market confidence, and ashave a result we arematerial adverse effect on us.

In addition, if the Brazilian government is unable to predictimplement any necessary reforms, this may lead to diminished confidence in the country’sBrazilian government’s budgetary condition and fiscal stance, which could result in downgrades of Brazil’s sovereign foreign credit rating by credit rating agencies, negatively impact Brazil’s economy, and lead to depreciation of the real and/or an increase in inflation and interest rates. Any such developments may have a material adverse impact on our business, results of operations, financial condition, and prospects.

Uncertainty about the Brazilian government’s implementation of changes in policies, or regulations that affect such implementation, may contribute to economic instability in Brazil and increase the volatility of securities issued abroad by Brazilian companies, including our securities.

Any of the above factors may create additional political uncertainty, which could harm the Brazilian economy and, economic direction in coming years.consequently, our business, and could adversely affect our financial condition, our results of operations and the price of our common shares.

The Brazilian government has exerted significant influence over the Brazilian economy and continues to do so. This involvement may have an adverse effect on our activities, our business and on the market prices of our shares and ADSs.

The Brazilian government has frequently intervened in the Brazilian economy and occasionally made drastic changes in economic policy. To influence the course of Brazil’s economy, control inflation and implement other policies, the Brazilian government has taken various measures, including the use of wage and price controls, currency devaluations, capital controls and limits on imports and freezing bank accounts. We have no control over, and cannot predict what measures or policies the Brazilian government may take or adopt in the future. Our business, financial condition, revenues, results of operations, prospects and the trading price of our securities may be adversely affected by changes in government policies and regulations, as well as other factors, such as: (i) fluctuating exchange rates; (ii) inflation; (iii) interest rates; (iv) fiscal and monetary policies; (v) changes in tax regimes; (vi) liquidity in domestic capital and credit markets; (vii) economic, political and social instability; (viii) reductions in salaries or income levels; (ix) rising unemployment rates; (x) tax policies (including those currently under consideration by the Brazilian Congress); (xi) exchange controls and restrictions on remittances abroad; and (xii) other political, diplomatic, social or economic developments in or affecting Brazil.

Uncertainty regarding changes by the Brazilian government to the policies or standards that affect these or other factors could contribute to economic uncertainty in Brazil and increase the volatility of the Brazilian capital market and of securities issued abroad by Brazilian companies.

Additionally, interruptions in the credit and other financial markets, and the deterioration of the Brazilian and/or global economic environment may, among other effects: (1) have a negative impact on demand, which may reduce sales, operating income and cash flow; (2) decrease consumption of our products; (3) restrict the availability of financing for our operations or investments, or for the refinancing of our debt in the future; (4) cause creditors to modify their credit risk policies and restrict our ability to negotiate any of the terms of our debt in the future; (5) cause the financial situation of our clients or suppliers to deteriorate; or (6) decrease the value of our investments.

Changes in Brazilian tax laws may have an adverse impact on the taxes applicable to our business and over our prices.

Our business is substantially affected by the tax regime in Brazil on telecommunications goods and services, as disclosed in detail in “Item 4. Information on the Company—B. Business Overview—Taxes on Telecommunications Goods and Services.”

In the past, therecent years, there have been several changes to Brazilian tax on financial operations, or IOF, was levied on investments madelaws and their interpretation, which has created uncertainty for our business in the Brazilian financialhow it calculates and capital markets by foreign investors. However, since October 2014, any financial operation related to these foreign investments benefits from a 0% IOF tax rate.

Due to COVID-19, the IOF rates applicable to loans and financing operations were reduced to 0% by Decree No. 10.305, published on April 1, 2020. The 0% rate comprised the operations carried out between April 3, 2020 and November 26, 2020. Later, Decree No. 10.572, published on December 11, 2020, reduced the IOF rates applicable to the same operations mentioned from December 15, 2020 to December 31, 2020.

On July 1, 2015, Decree No. 8,426 came into effect. It restored the obligation of companies to pay Programa de Integração Social, or PIS, contributions and Contribuição Social para o Financiamento da Seguridade Social, or COFINS, contributions on financial revenues at a combined and cumulative rate of 4.65% (previously set at 0% by Decree No. 5,442/2005). From that date, all financial revenues became taxable, except for financial revenues related to exchange variations of: (i) exportation of goods and services; (ii) obligations undertaken by the company, including loans and financing. Revenues related to hedging transactions on stock exchange values, also maintain the tax rate at 0% as long as it is related to operating activities and the main objective is to protect the rights and goods of the company.

In March 2017, there was a favorable decision of the Brazilian Federal Supreme Court, or STF, published in October, on the composition of the calculation bases of PIS and COFINS. In summary, the court recognized the unconstitutionality of including the major tax applicable to goods and telecommunication services (Imposto sobre Operações relativas à Circulação de Mercadorias e sobre Prestações de Serviços de Transporte Interestadual, Intermunicipal e de Comunicação), or ICMS, in the calculation of PIS and COFINS, deciding in favor of its exclusion.

Provisional Measure No. 687, published on August 18, 2015 (and converted into Law No. 13,196, which was published on December 2, 2015) authorized the monetary adjustment, based on the IPCA, of the Contribution to the Development of the National Film Industry (Contribuição para o Desenvolvimento da Indústria Cinematográfica Nacional), or CONDECINE, which is a tax levied on telecommunications servicescomplies with the objective of promoting the Brazilian audiovisual industry.

Since January 2018, therelevant tax over Value-Added Services has increased with the inclusion of Value-Added Services revenues in the calculation of Municipal Tax on Services (Imposto Sobre Serviços), or ISS, due to Law No. 157/2016, which is a municipality tax which rates vary from 2% to 5%.

There have been relevant modifications in tax legislation in 2018. Since January, 2018, the tax incidence over Value-Added Services has increased with the inclusion of those receivables within the ISS basis of calculation due to Law No. 157/2016, which is a municipality tax with rates varying from 2% to 5%. Also, income tax and social

contribution were regulated by Decree No. 3,000/1999 in addition to other federal laws and decrees. In December of 2018, this decree was substituted by Decree No. 9,580, which consolidates the main provisions related to income tax and social contribution.

burdens. Further changes in tax regulations, such as a possible tax reform already mentionedpreviously announced by the new Federal Government, or the previously announced increase of the PIS and COFINS tax rates that the Federal Government was studying to implement in order to restore public accounts after the decision held by the STF authorizing companies to exclude the ICMS from the PIS and COFINS basis of calculation, could impact our financial assets and liabilities as well as our pricing, which could have a material adverse effect on our business, financial condition and results of operations.

In September 2021, the Brazilian Federal Supreme Court (“STF”) ruled that the Corporate Income Tax (“IRPJ”) and the Social Contribution on Net Income (“CSLL”) are not levied on interest amounts received by taxpayers due to the application of the base SELIC interest rate applied to the refund of overpaid taxes. Currently, no temporal limitations on this granted right have been determined. However, the process has not yet been finalized in the STF.

In order to limit the ability for state governments to undertake aggressive taxation, the Brazilian Federal Constitution prescribes that the ICMS can be variable, according to the essentiality of the goods and services. As such, the most essential goods and services should generally have lower rates than luxurious goods and services.

Accordingly, in December 2021, the STF also ruled that telecommunications services must be taxed at the general ICMS rate provided for in each state’s law. In the leading case, taxpayers required recognition of the unconstitutionality of the rate of 25% levied on the supply of communication services in the State of Santa Catarina where the general rate is 17%. The STF decided that communication services should be taxed at the general rate and softened the effects of this decision on the state by providing that it becomes effective only in 2024.

Despite this decision, the Federal Congress enacted, on June 2022, Complementary Law No. 194/2022, which provides that communications and other activities, such as fuels, natural gas, electricity and public transportation, are essential goods and services, and, consequently, limited the ICMS levied on such transactions to the minimum tax rate of each State, which varied at the time from 17% to 18%. Therefore, the imposition of ICMS rates higher than the general rates of each State for the goods and services was prohibited by law from June 2022 onwards.

Due to this reduction, states were expected to have a significant tax collection decrease by the end of 2022, estimated at R$33.5 billion. In order to address and prevent the expected loss, a study by COMSEFAZ, a council of state finance secretaries, recommended state governments raise their general ICMS rate by 4 percentage points from 2023 onwards. In the same cases, the COMSEFAZ study also recommended the ICMS general rate increase of 7 percentage points.

As a result, many states have elected to raise the ICMS general rate as a way to offset their otherwise reduced tax collection. In some states, the general rate of the ICMS has been raised to 22%. The impact of this reduction on our business cannot currently be accurately measured due to a number of variables, such as customer base, future market and, price.

Also in 2022, Complementary Law No. 190/2022 was enacted to regulate the ICMS levied on interstate operations with final consumers or non-ICMS taxpayers. On interstate sales to final consumers, the ICMS should be split between the state of origin and state of destination, as follows: (a) to the state of origin, the ICMS is calculated with the interstate rate (4%, 7% or 12%); and (b) to the state of destination, the ICMS is calculated based on the difference between the interstate rates used in the transaction and the rate applicable to internal transactions in the state of destination (usually from 17% to 21%), also known as ICMS DIFAL.

According to this law, the ICMS DIFAL should be determined based on a double basis calculation. For us, it should mostly impact our fixed assets acquisitions and, although it should represent an increase in the cash out, the additional tax should be mainly recovered as a credit input on a monthly basis throughout the following four years.

In relation to other taxes, there were some relevant changes regarding the Federal Excise Tax (IPI). In February 2022, the Government issued a decree reducing the tax by 25% on average for several products sold in Brazil. In April, a new decree was enacted, increasing the IPI reduction to 35%, except for products produced in the Manaus Duty-Free Zone (“ZFM”). However, both decrees were suspended by a decision of the Supreme Court to preserve the competitiveness of the ZFM region, which could be harmed by the IPI reduction in the other regions of the country. Companies operating in Brazil are awaiting new determinations by the tax authorities regarding these issues.

From a federal tax perspective, at the end of 2022, there was new relevant tax legislation enacted, including Provisional Measure (“MP”) No. 1,152, which changed the legislation on IRPJ and CSLL, providing for new transfer pricing rules. MP No. 1,152/2022 aims to align the Brazil’s rules with international standards and results from a process aimed at adapting Brazilian standards to those recommended by the Organization for Economic Cooperation and Development (OECD). To this end, there was an amendment to the arm’s length principle and changes to transfer pricing rules which used to be exclusive to Brazil. Its effects are optional from 2023 and mandatory from 2024 onwards. Note, however, that the Provisional Measure has to be converted into Law in up to 120 days (i.e. by June 1, 2023), in order to be current for fiscal years 2023 and 2024.

The other relevant change in 2022 refers to PIS and Cofins. In December of 2022, the Brazilian Federal Revenue Office (“RFB”) published the Normative Instruction (“IN”) No. 2,121/2022, regulating the PIS and COFINS social contributions. In essence, IN No. 2,121/2022 – which replaced IN No. 1,911/19 – consolidated the new guidelines on ascertainment, inspection, collection and administration of the contributions for: (i) PIS/Pasep; (ii) Contribution for the Financing of Social Security (Cofins); (iii) PIS/Pasep-Import; and (iv) Cofins-Import.

Furthermore, on December 30, 2022, Decree No. 11,322/22 reduced by half the PIS/Cofins rates levied on financial income earned by companies subject to the non-cumulative regime. The rates changed from 0.65% and 4% to 0.33% and 2%, respectively. According to the Decree, the reduction would take effect from January 1, 2023. However, on January 2, it was revoked by the newly inaugurated Government, reestablishing the PIS and Cofins rates levied on financial income to its original values.

The tax reform that had been expected for 2022 was not passed into law by the Brazilian legislature. Therefore, a bill that proposed changes in the Corporate Income Tax (“CIT”) regarding: (i) IoE non-deductibility; (ii) the taxation of dividends; and (iii) in an effort to balance these new taxes, a reduction in the CIT rate (from 34% to 29%) was not enacted and so was not applicable for taxable events in 2022. The reduction in the CIT rate presented in the bill was not enough to neutralize the impacts of the end of the IoE deductibility and the taxation of dividends, which would increase the impact on our cash out by 23-26p.p. and generate a negative economic impact on net income of approximately R$185 million in 2022 and approximately R$156 million in 2023. In addition, the minority shareholders will have a negative impact of 5 p.p. on their remuneration and some specialists believe that the impact on TIM’s valuation could reach -10%. Finally, in addition to the changes aforementioned, the bill could interfere in the behavior of economic agents, especially in relation to possible mergers and acquisitions, and stimulate rent-looking at the expense of entrepreneurship, since investments in investment funds will have less taxation than dividends distributed by the companies to their shareholders. However, as the law was ultimately not enacted in 2021 nor 2022, its effects should not apply to the tax periods in 2022 nor 2023.

There is a project, the Social Contribution on Operations with Goods and Services bill, which intends to unify PIS and COFINS into a single contribution of 12% on gross revenue and with a broad credit basis. The bill’s text is under discussion and many sectors are arguing in relation to the relevant increase in their respective tax burdens. At the moment, the text remains undefined and so there are no impacts for our tax liability. Any such changes in tax law could have a material adverse effect on our financial assets and liabilities, if enacted.

Inflation, and government measures to curb inflation, may adversely affect the Brazilian economy and capital market, our business and operations and the market prices of our common shares or the ADSs.

In the recent past, Brazil has experienced high rates of inflation and the government’s measures taken in an attempt to curb inflation have had significant negative effects on the Brazilian economy. The COVID-19 pandemic has increased market volatility, enhanced existing risks and, despite the resulting contraction of economic activity, the Brazilian economy was still subjectcontinued to suffer from high rates of inflation rates during 2020.2022.

Uncertainty regarding certain future government fiscal measures which may be taken to reduce inflation could affect the confidence of investors and the market in general, and, consequently, affect our operating and financial results and increase volatility in the Brazilian capital markets.

Exchange rate movements and interest rate fluctuation may have an adverse effect on our business and the market prices of our shares or the ADSs.

Appreciation of the real against the U.S. dollar may lead to a deterioration of the country’s current account and the balance of payments, as well as to a dampening of export-driven growth. Any such appreciation could reduce the competitiveness of Brazilian exports and adversely affect net sales and cash flows from exports. Devaluation of the real relative to the U.S. dollar could create additional inflationary pressures in Brazil by increasing the price of imported products, which may result in the adoption of deflationary government policies. The sharp depreciation of the real in relation to the U.S. dollar may generate inflation and governmental measures to fight possible inflationary outbreaks, including the increase in interest rates, which reduces the purchasing power of consumers and raises the cost in the credit market. Devaluations of the real would reduce the U.S. dollar value of distributions and dividends on our common shares and ADSs and may also reduce the market value of such securities. Any such macroeconomic effects could adversely affect our net operating revenues and our overall financial performance.

We acquire equipment and handsets from global suppliers, the prices of which are denominated in U.S. dollars. Depreciation of the real against the U.S. dollar may result in a relative increase in the price of our equipment and handsets. Thus, we are exposed to foreign exchange risk arising from our need to make substantial dollar-denominated expenditures, particularly for imported components, equipment and handsets, that we have limited capacity to hedge. See “Item 5. Operating and Financial Review and Prospects.”

AllAt present, 45% of our current indebtedness is denominated in foreign currency mainly in U.S. dollars(U.S.$), 49% linked to inflation (IPCA) and all subject to cross currency swaps that are tied to Brazilian floating interest rates. Only 6% of the indebtedness is tied to TJLP (Taxa de Juros de Longo Prazo), a rate that is calculated using inflation targets and estimates. Any increase in the interbank deposit certificate (certificado de depósito interbancário) (“CDI”), or CDI, rate may have an adverse impact on our financial expenses and our results of operations. See “Item 11. Quantitative and Qualitative Disclosures About Market Risk.”

The effects of the weak domestic economy could reduce purchases of our products and services and adversely affect our results of operations, cash flows and financial condition.

Although there were expectations for a strong global economy recovery, upon the lifting of the COVID-19 related restrictions due in part to the accelerationsuccess of vaccination campaigns worldwide and the evolution of the pandemic response, the expectations for a full domestic economic recovery are stillin Brazil remain low when compared to certain other countries, dueespecially considering potential economic and political problems. The recent economic instability in Brazil and the deterioration of the political environment have all contributed to a decline in market confidence in the Brazilian economy. Unfavorable macroeconomic conditions in Brazil are expected to continue throughout 2023 as uncertainty remains as to the slower vaccinationshort, medium and long term consequences of the financial, monetary and other policies implemented in response to the COVID-19 pandemic, such as high inflation. Brazil’s slow rate of economic growth, increases and maintenance of high base interest rates, high unemployment rate and to concerns regardinggeneral price increases may limit the national fiscal policy. The Brazilian economy has gone through a steep recession in recent years,availability of credit, income and purchasing power of our customers, thereby adversely affecting demand for our products and impacting our economic results.

there are uncertainties related to the approval of fiscal and political reforms, and to the new policies to be implemented by the current president.

The economy’s performance directly impacts our results of operations as a result of certain of our assets and liabilities being subject to inflation adjustment, and if inflation rises, disposable income of families may decrease in real terms, leading to lack of purchasing power among our customer base. In response to such tighter credit, negative financial news or declines in income or asset values, consumers and businesses may postpone spending, which could have a material adverse effect on the demand for our products and services. A loss of customers or a reduction in purchases by our current customers could have a material adverse effect on our financial condition, results of operations and cash flow and may negatively affect our ability to meet our growth targets.

We may be impacted by volatility in the global financial markets.

We are susceptible to swings in global economic conditions, typified most recently by difficult credit and liquidity conditions and disruptions leading to greater volatility, which is enhanced by continued tensions between the United States and other commercial partners, such as China. The global economy has largely recovered from the crisis of 2007, however markets remain subject to ongoing volatility factors including interest rate divergence, geopolitical events such as the consequences of Brexit and global growth expectations, and there is no assurance that similar conditions will not arise again. In the long term, as a consequence, global investor confidence may remain low and credit may remain relatively lacking. Hence, additional volatility in the global financial markets may occur.

In June 2016, the United Kingdom had a referendum in which the majority voted to leave the European Union (so-called “Brexit”), and the British government will continue to negotiate the terms of its withdrawal. The exit officially occurred on January 31, 2020. Brexit has created significant economic uncertainty in the UK and in Europe, the Middle East, and Asia. In addition, the terms of Brexit, once negotiated, could potentially disrupt the markets we serve and the tax jurisdictions in which we operate and adversely change tax benefits or liabilities in these or other jurisdictions, and may cause us to lose guests, suppliers, and employees. In addition, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the UK determines which EU laws to replace or replicate. These developments, as well as potential crises and other forms of political instability or any other as of yet unforeseen development, may harm our business and the price of our shares and ADSs.

The COVID-19 pandemic, addedand the short, medium and long term consequences of the financial, monetary and other policies implemented in response to the COVID-19 pandemic, has been a new source of uncertainty tofor global economic activity. AuthoritiesDuring the peak of the pandemic, governments and central banks around the world have takenundertook unprecedented measures to try to contain the spread of the disease sincewhilst seeking to protect local economies and consumer confidence. Although the contagion rate for the virus has spread globally. Restrictions willsubsided, the effects of financial and monetary policy put into effect during the pandemic are likely remainto have a continuing effect on the global economy, including in place forBrazil. At the unforeseeable future, suppressing economicbeginning of 2023, markets and social activities, if the contagion rate does not subside.global economy have continued to also be further adversely affected by the ongoing war between Russia and Ukraine and the related sanctions imposed on Russia by the United States and its allies. The materialization of these risks has affected global growth and may decrease investors’ interest in assets located in Brazil, and in other countries in which we do business, which hasmay adversely affectedaffect the market price of our securities, possibly making it more difficult for us to access capital markets and, as a result, to finance our operations in the future.

Additionally, we are subject to impacts resulting from political tension between the United States, Iran and Iraq, as well as other related conflicts in the Middle East. If there is an escalation in tensions and sanctions between the United States, Iran, Iraq and possibly European countries, these tensions can generate political and economic instability around the world, directly impacting the capital market.

Developments and the perception of risk in other countries may adversely affect the Brazilian economy and market price of Brazilian issuers’ securities.

The market value of securities of Brazilian issuers is affected by economic and market conditions in other countries, including the United States, European countries, as well as in other Latin American and emerging market countries. Although economic conditions in Europe and the United States may differ significantly from economic conditions in Brazil, investors’ reactions to developments in these other countries may have an adverse effect on the market value of securities of Brazilian issuers. Additionally, crises in other emerging market countries may diminish investor interest in securities of Brazilian issuers, including our securities. This could adversely affect the market price of our securities, restrict our access to capital markets and compromise our ability to finance our operations in the future on favorable terms, or at all.

In the recent past, there was an increase in volatility in all Brazilian markets due to, among other factors, uncertainties about how monetary policy adjustments in the United States would affect the international financial markets, the increasing risk aversion to emerging market countries, and uncertainties regarding Brazilian macroeconomic and political conditions. These uncertainties adversely affected us and the market value of our securities.

In 2022, the military conflict between Russia and Ukraine contributed to further increases in the prices of energy, oil and other commodities and to volatility in financial markets globally, as well as a new landscape in relation to international sanctions. It is unclear whether these challenges and uncertainties will be contained or resolved, and what effects they may have on the global political and economic conditions in the long term.

In addition, we continue to be exposed to disruptions and volatility in the global financial markets because of their effects on the financial and economic environment, particularly in Brazil, such as a slowdown in the economy, an increase in the unemployment rate, a decrease in the purchasing power of consumers and the lack of credit availability.

Disruption or volatility in the global financial markets could further increase negative effects on the financial and economic environment in Brazil, which could have a material adverse effect on our business, results of operations and financial condition.

Risks Relating to our Common Shares and the ADSs

Our controlling shareholder has power over the direction of our business.

Telecom Italia, through its ownership of TIM Brasil Serviços e Participações S.A., or (“TIM Brasil,Brasil”), our controlling shareholder, has the ability to determine actions that require shareholder approval, including the election of a majority of our directors and, subject to Brazilian law, the payment of dividends and other distributions. Telecom Italia’s single largest shareholder is Vivendi, which is able to exercise significant influence over Telecom Italia. Telecom Italia may pursue acquisitions, asset sales, joint ventures or financing arrangements or may pursue other objectives that conflict with the interests of other shareholders and which could adversely affect our business, financial condition and results of operations.

Holders of our ADSs are not entitled to attend shareholders’ meetings and may only vote through the depositary.

Under Brazilian law, only shareholders registered as such in our corporate books may attend shareholders’ meetings. All common shares underlying our ADSs are registered in the name of the depositary. A holder of ADSs, accordingly, is not entitled to attend shareholders’ meetings. Holders of our ADSs may exercise their limited voting rights with respect to our common shares represented by the ADSs only in accordance with the deposit agreement relating to the ADSs. There are practical limitations upon the ability of ADS holders to exercise their voting rights due to the additional steps involved in communicating with ADS holders. For example, we are required to publish a notice of our shareholders’ general meetings in certain newspapers in Brazil. Holders of our shares can exercise their right to vote at a shareholders’ general meeting by attending the meeting in person or voting by proxy. By contrast, holders of our ADSs will receive notice of a shareholders’ general meeting by mail from the ADR depositary following our notice to the ADR depositary requesting the ADR depositary to do so. To exercise their voting rights, ADS holders must instruct the ADR depositary on a timely basis. This voting process will take longer for ADS holders than for direct holders of our shares.

We cannot assure you that holders will receive the voting materials in time to ensure that such holders can instruct the depositary to vote the shares underlying their respective ADSs. In addition, the depositary and its agents are not responsible for failing to carry out holder’s voting instructions or for the manner of carrying out your voting instructions. This means that holders may not be able to exercise their right to vote and may have no recourse if our shares held by such holders are not voted as requested.

Holders of our ADSs or common shares in the United States may not be entitled to participate in future preemptive rights offerings.

Under Brazilian law, if we issue new shares for cash as part of a capital increase, we generally must grant our shareholders the right to purchase a sufficient number of shares to maintain their existing ownership percentage. Rights to purchase shares in these circumstances are known as preemptive rights. We may not legally allow holders of our ADSs or common shares in the United States to exercise any preemptive rights in any future capital increase

unless we file a registration statement with the SEC with respect to that future issuance of shares or the offering qualifies for an exemption from the registration requirements of the Securities Act. At the time of any future capital increase, we will evaluate the costs and potential liabilities associated with filing a registration statement with the SEC and any other factors that we consider important to determine whether to file such a registration statement. We cannot assure holders of our ADSs or common shares in the United States that we will file a registration statement with the SEC to allow them to participate in a preemptive rights offering. As a result, the equity interest of those holders in us may be diluted proportionately.

Cash dividends, interest on shareholders’ equity and other cash distributions, as well as judgments seeking to enforce our obligations in respect of our shares or ADSs in Brazil will be payable only in reais.

We pay any cash dividends, interest on shareholders’ equity and any other cash distributions with respect to our common shares in reais. Accordingly, exchange rate fluctuations affect the U.S. dollar amounts received by the holders of ADSs on conversion by the depositary of dividends and other distributions in Brazilian currency on our common shares represented by ADSs. Fluctuations in the exchange rate between Brazilian currency and the U.S. dollar affects the U.S. dollar equivalent price of our common shares on the Brazilian stock exchanges. In addition, exchange rate fluctuations may also affect our dollar equivalent results of operations. See “Item 5. Operating and Financial Review and Prospects.”

If proceedings are brought in the courts of Brazil seeking to enforce our obligations with respect to our shares or ADSs, we will not be required to discharge our obligations in a currency other than reais. Under Brazilian exchange control limitations, an obligation in Brazil to pay amounts denominated in a currency other than reais may only be satisfied in Brazilian currency at the exchange rate, as determined by the Central Bank, in effect on the date the judgment is obtained, and such amounts are then adjusted to reflect exchange rate variations through the effective payment date. The then prevailing exchange may not afford non-Brazilian investors with full compensation for any claim arising out of or related to our obligations under our shares or the ADSs. See “—A. Selected Financial Data—Exchange Rates” for information regarding exchange rates for the Brazilian real.

Holders of ADSs or common shares could be subject to Brazilian income tax on capital gains from sales of ADSs or common shares.

According to Article 26 of Law No. 10,833 of December 29, 2003, which came into force on February 1, 2004, capital gains realized on the disposition of assets located in Brazil by non-Brazilian residents, whether or not to other non-residents and whether made outside or within Brazil, are subject to taxation in Brazil. Since January 1, 2017, the rate of the income tax on capital gains accrued by non-Brazilian resident individuals may vary between 15% and 22.5% depending on the capital gain amount. Ultimately, a 25% rate may apply if the capital gain is realized by investors located at Low or Nil Tax Jurisdictions (i.e., a country that does not impose any income tax or that imposes tax at a maximum rate of less than 20% or 17%, depending ifon whether the country is aligned with the international standards of fiscal transparency). Although we believe that the ADSs will not fall within the definition of assets located in Brazil for the purposes of Law No. 10,833/2003, considering its general and unclear scope and the absence of any judicial guidance in respect thereof, we are unable to predict whether such interpretation will ultimately prevail in the Brazilian courts. See “Item 10. Additional Information—E. Taxation—Brazilian Tax Considerations.”

Gains realized by non-Brazilian holders on dispositions of common shares in Brazil or in transactions with Brazilian residents may be exempt from Brazilian income tax or taxed at a rate that may vary between 15% and 25%, depending on the circumstances. Gains realized through transactions on Brazilian stock exchanges are exempt from the Brazilian income tax, provided that the transactions are carried out in accordance with the Brazilian National Monetary Council’s (Conselho Monetário Nacional), or CMN’s, Resolution CMN 4,373 (that replaced Resolution CMN 2,689) and the foreign investor is not located in Low or Nil Tax Jurisdictions. Gains realized through transactions with Brazilian residents or not executed on the Brazilian stock exchanges are subject to tax at a rate (1) that may vary between 15% and 22.5% depending on the capital gain amount if the investors are located in regular taxation jurisdictions, or (2) of 25% if the capital gain is realized by investors located in Low or Nil Tax Jurisdictions.

Please refer to “Item 10. Additional Information––E. Taxation––Brazilian Tax Considerations––Taxation of Gains.”

An exchange of ADSs for common shares risks loss of certain foreign currency remittance and Brazilian tax advantages.

The ADSs benefit from the certificate of foreign capital registration, which permits J.P. Morgan Chase Bank, N.A., or (“J.P. Morgan,Morgan”), as depositary, to convert dividends and other distributions with respect to common shares into foreign currency, and to remit the proceeds abroad. Holders of ADSs who exchange their ADSs for common shares will then be entitled to rely on the depositary’s certificate of foreign capital registration for five business days from the date of exchange. Thereafter, they will not be able to remit non-Brazilian currency abroad unless they obtain their own certificate of foreign capital registration, or unless they qualify under Resolution CMN 4,373, which entitles certain investors to buy and sell shares on Brazilian stock exchanges without obtaining separate certificates of registration.

If holders of ADSs do not qualify under Resolution CMN 4,373, they will generally be subject to less favorable tax treatment on distributions with respect to our common shares. There can be no assurance that the depositary’s certificate of registration or any certificate of foreign capital registration obtained by holders of ADSs will not be affected by future legislative or regulatory changes, or that additional Brazilian law restrictions applicable to their investment in the ADSs may not be imposed in the future.

Brazilian law allows for the Brazilian government to impose temporary restrictions, whenever there is a significant imbalance in Brazil’s balance of payments or a significant possibility that such imbalance will exist, on the remittance to foreign investors of the proceeds of their investments in Brazil, as well as on the conversion of the real into foreign currencies. The Brazilian government may, in the future, restrict companies from paying amounts denominated in foreign currency or require that any such payment be made in reais.

If similar restrictions are introduced in the future, they would likely have an adverse effect on the market price of our shares and ADSs. Such restrictions could hinder or prevent the holders of our shares or the custodian of our shares in Brazil, J.P. Morgan, from remitting dividends abroad.

A more restrictive policy could also increase the cost of servicing, and thereby reduce our ability to pay, our foreign currency-denominated debt obligations and other liabilities. If we fail to make payments under any of these obligations, we will be in default under those obligations, which could reduce our liquidity as well as the market price of our common shares, shares and ADSs.

A.       History and Development of the Company

Basic Information

TIM S.A., formerly known as Intelig Telecomunicações Ltda., a publicly held company (sociedade anônima) organized under the laws of the Federative Republic of Brazil, incorporated in the Federative Republic of Brazil for an indefinite period on March 9, 1998.

Our headquarters are located at João Cabral de Melo Neto Avenue, 850 – South Tower – 12^th floor, 22775-055, Rio de Janeiro, Brazil and our telephone number is +55 (21) 4109-4167.

Our agent for service of process in the United States is Puglisi & Associates located at 850 Library Avenue, Suite 204, Newark, Delaware 19711.

The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at http://sec.gov. Our web site address is http://www.tim.com.br. Information contained on, or that can be accessed through, our website does not constitute a part of this Annual Report.annual report.

Historical Background

Privatization and summary

In July 1998, as part of the privatization of Telebrás, the Brazilian state-owned telecommunications monopoly, the Federal Government sold substantially all its shares of the 12 holding companies into which Telebrás had initially been broken up, including its shares of Tele Sudeste Celular Participações S.A. (“TSU”), or TSU, and Tele Nordeste Celular Participações S.A., or TND. (“TND”). Following a series of acquisitions, corporate reorganizations and corporate name changes, TSU and TND merged to form TIM Participações in 2004.

We continued to expand and restructure our operations through a series of corporate reorganizations, mergers, acquisitions and name changes as described below, and we area majority of our share capital is currently held, directly and indirectly, by Telecom Italia (which began operating in Brazil in 1998 as Telecom Italia Mobile) through its wholly owned subsidiary, TIM Brasil, formed in 2002 as the holding company of Telecom Italia’s operating companies in Brazil. In turn, the single largest shareholder of Telecom Italia is Vivendi, which is able to exercise significant influence over Telecom Italia. In 2019, Telecom Italia delisted all of its U.S. listed securities and deregistered from the SEC, having filed Form 15F on July 9, 2019. On February 17, 2023, TIM Brasil obtained registration by the CVM as a publicly-held company in category B. See “—C. Organizational Structure” for a description of our current corporate structure and Exhibit 8.1 attached hereto for a list of our significant subsidiaries as of the date of this annual report.

Acquisition of Intelig

In 2009, the acquisitionwe acquired 100% of Intelig’s share capital from Holdco Participações Ltda., or Holdco, holder at the time of 100% of Intelig’s capital, was approved and As a result, Intelig became a wholly owned subsidiary of TIM after this transaction.our wholly-owned subsidiary. The acquisition of Intelig (known since(prior to being renamed TIM S.A. in September 2017 as TIM S.A.)and being merged in the Reorganization) brought material advantages through significant synergies with its network, such as its metropolitan optimal fiber optic network and its large backbone that allowed us to accelerate the development of our 3G network and generate significant operational cost savings.

Merger of TIM Celular

In 2011, TIM Celular which(which was subsequently merged into the Company as a result of the Reorganization,Reorganization) entered into an agreement with Companhia Brasiliana de Energia and AES Elpa (the AES Group in Brazil) for the purchase of all of AES Elpa’s equity interests in Eletropaulo Telecomunicações and 98.3% of the interest of AES RJ, or the (“AES Atimus Acquisition.Acquisition”). In connection with the acquisition, Eletropaulo Telecomunicações changed its corporate name to TIM Fiber SP Ltda., or (“TIM Fiber SP,SP”), and AES RJ changed its corporate name to TIM Fiber RJ S.A., or (“TIM Fiber RJ.RJ”). Both entities were collectively referred to as TIM Fiber. In accordance with the corporate reorganization of TIM Fiber, TIM Fiber RJ and TIM Fiber SP were merged into TIM Celular in 2012, which was the former entity that used to own and operate the fiber optic network in metropolitan São Paulo and Rio de Janeiro (and which, as discussed below, itself was merged into the Company in October 2018 as a result of the Reorganization). The purpose of this reorganization was to simplify our organizational structure and improve the administrative, operational and financial efficiency of the companies controlled by us.

In 2013, Instituto TIM was founded with the mission to create and strengthen resources and strategies for the democratization of science, technology and innovation that promote human development in Brazil. In order to accomplish this mission, the Institute works around four pillars: Education, Inclusion, Technological Applications and Work, encouraging the democratization of free technological solutions and the creation of innovative approaches to the teaching of science and mathematics in Brazil.Reorganization

On July 25, 2017, TIM’s Board of Directors approved the corporate reorganization or the Reorganization,(the “Reorganization”), of its then subsidiaries, TIM Celular and Intelig. On September 6, 2017, as the first phase of the Reorganization, Intelig altered its articles of association to change the company from a limited liability company to an unlisted limited liability corporation, and to change its corporate name to TIM S.A.

As will be discussed in more detail below (see “—C. Organizational Structure”), in October 2018, the reorganizationReorganization resulted in the merger of TIM Celular into the Company. This merger achieved its objective of capturing operating and financial synergies, through the implementation of a more efficient operating structure, as well as accounting and internal control systems.

In 2018, Instituto TIM was acknowledged by the Ministry of Justice in Brazil as a qualified Civil Society Organization of Public Interest, or OSCIP, which reinforced the commitment to transparency in the activities of the Institute. This achievement also brings more credibility and confidence to expand the network of partners and institutions that wish to take part in the projects supported by the TIM Institute.

Merger and succession of NYSE and B3 listing

On July 29, 2020, the shareholders of TIM Participações (our former parent holding company) and theour shareholders of the Company approved, by a majority of votes, the merger of the first into the latter, pursuant to the terms of the Protocolo e Justificação de Incorporação. On July 29, 2020, the boards of directors of each of TIM Participações and the Company approved the execution of a Merger Agreement (protocolo de incorporação) with the Company. TIM Participações merged with and into the Company, previously a wholly owned subsidiary of our former parent holding company TIM Participações (the “Merger”), which became effective on September 28, 2020. Consequently, TIM Participações, our former parent holding company, was merged into the Company as a result of the Merger. The common shares of TIM Participações had been listed on the Novo Mercado segment of the B3 S.A. – Brasil, Bolsa, Balcão or the B3,(the “B3”) (the São Paulo stock exchange) since 2011. In order to be listed on the Novo Mercado, we are required to comply with heightened requirements relating to corporate governance and the disclosure of information to the marketrequirements and we are not permitted to issue preferred shares, participation bonuses or any kindtype of shares withthat have restricted voting rights. On September 28, 2020, as a result of the Merger, TIM Participações ceased to exist as a separate entity, and TIM continued as the surviving corporation in the Merger, with TIM succeeding to all rights and obligations of TIM Participações pursuant to Brazilian corporate law and TIM became the successor registrant under Rule 12g-3(a) under the Exchange Act. On September 28, 2020, the B3 approved the listing of the Companymerged company and the admission to trading of its shares on the Novo Mercado.Mercado. On September 28, 2020, TIM filed a form 6-K pursuant to Rule 12g-3(a) promulgated under the Exchange Act to report this succession in accordance with Rule 12g-3(f) promulgated under the Exchange Act. Pursuant to Rule 12g-3(a) under the Exchange Act, TIMTIM’s common shares and TIM ADSs, as common shares and ADSs of the successor issuer, were deemed registered under Section 12(b) of the Exchange Act. TIM Participações S.A.’ses’s common shares and ADSs continued to be traded until October 13, 2020 when Company’sour common shares and ADSs started to trade on the B3 and the NYSE, respectively. See “Item 9. The Offer and Listing—A. Offer and Listing Details.”

Joint acquisition of Oi Group’s mobile business

On March 10, 2020, we disclosed to the market that we, jointly with Telefônica Brasil S.A. (“Vivo”), expressed to Oi Group’s financial advisor, Bank of America Merrill Lynch (“BofA”), our interest in a potential joint acquisition of all or a part of Oi Group’s UPI mobile business. On July 18, 2020, we, together with Vivo and Claro S.A. (“Claro”), submitted a binding offer to Oi Group for the acquisition of all of the mobile assets of the Oi Group, or the UPI Mobile Business. The offer was revised on July 27, 2020 and September 7, 2020 and the latter offer was accepted by Oi Group on December 14, 2020. On December 14, 2020, TIMwe, along with CLAROClaro and VIVO, wasVivo, were declared the winnerwinners of the competitive process of the sale of assets of the mobile telephony operation (Personal Mobile Service) of the OIOi Group. In February 2022, the transaction received regulatory approval from CADE and Anatel. Closing of the transaction occurred on April 20, 2022. See ―”2022 Important Events.”

As a result of closing the transaction, we became the owner of 100% of the share capital of SPE Cozani, a company that holds part of the assets, rights and obligations business unit of Oi Móvel S.A. – Under Judicial Reorganization (“Oi Móvel”). The price for 100% of the shares of SPE Cozani, after all the adjustments provided for in the Share Purchase Agreement (“SPA”), was R$6.98 billion. Pursuant to the SPA, of the Adjusted Closing Price: (i) R$ 634.33 million was withheld by us, mostly for the purposes of covering any additional price adjustments that may need to be made and which may be identified in the 120 days following the closing; (ii) R$2.06 billion was transferred directly to BNDES - National Bank for Economic and Social Development, per a contractual provision; and (iii) the balance of R$4.29 billion was paid directly to the Seller.

With the acquisition completed, our business has taken a significant step forward at a national level, allowing us to compete even more effectively with our main competitors with regard to infrastructure and broad geographic representation of our customer base.

Following the closing of the acquisition, on October 3, 2022, we, Claro and Vivo commenced an arbitration procedure before the Market’s Chamber of Arbitration (“CAM/B3”) against Oi Group in order to dispute the post-closing price adjustment of the transaction. TIM, Claro and Vivo are seeking an indemnification of R$3.1 billion of which TIM is entitled to approximately R$1.4 billion.

Partnership with C6 Bank

On March 26, 2020 we entered into a commercial agreement with Banco C6 S.A. (“C6 Bank”), pursuant to which we have been granted, on February 1, 2021, the right to subscribe for an indirect equity interest of approximately 1.4% of C6 Bank through the exercise of subscription bonuses, subject to certain agreed upon thresholds. By the end of 2022, we had vested rights to subscribe for an indirect equity interest of approximately 5.52% of C6 Bank.

However, certain elements of this partnership are currently being disputed and so we may not obtain all of the expected benefits of the partnership. We commenced an arbitration procedure No. 28/2021/SEC8 before the Arbitration and Mediation Center of the Brazil-Canada Chamber of Commerce by TIM against C6 Bank, Carbon Holding Financeira S.A. and Carbon Holding S.A., pertaining to the interpretation of certain contractual clauses of the contracts governing the partnership between the parties. As a potential result of this arbitration, the strategic partnership may be terminated.

TIM and Vivo new sharing agreement

In September 2020, the competent authorities (CADE and Anatel) approved the new sharing agreement established between TIM and Vivo, for: (i) sharing of the 2G network, allowing one operator to switch-off its 2G network, where both parts are currently present, and the remaining operator will provide “roaming like” services for the customers of both operators and (ii) establishing new infrastructure sharing agreements for the 3G and 4G network (Single-Grid), directed to cities with fewer than 30,000 inhabitants, which in the future may be expanded to larger cities. We believe that carrying out this agreement will result in synergies and efficiencies that could help support us in continuing to provide innovative and standard-setting offerings and services, as well as synergies and efficiencies in the allocation of investments and operating costs.

In relation to our sharing of the 2G network, the renowned GWCN (Gateway Core Network) technical solution was approved and carried out during 2021, while quality KPIs were monitored. As a result of the sharing agreement, TIM switched-off its 2G network in five cities in the state of Espírito Santo and seven cities in the state of São Paulo; Vivo switched-off four cities in the state of Rio de Janeiro and eight cities in the state of São Paulo. All the switched-off cities had less than 30,000 inhabitants and were each already covered by access to 3G or 4G.

With respect to the single grid agreement, each party was able to increase its 3G and 4G coverage in more than 300 cities with a total of 422 shared sites, as of May 2021. The agreement remains in force and includes a detailed rollout that is now expected to be concluded by 2024.

TIM and Stellantis connected cars partnership

In October 2020, we and Fiat Chrysler Automóveis (FCA), now known as Stellantis, established a partnership to offer connectivity solutions embedded in vehicles of the Fiat, Jeep and RAM brands in Brazil from the first half of 2021. As part of the global strategy of developing ecosystems for connected services and to enhance the digital experience of customers, future Stellantis launches in the country will rely on eSIM, with the LTE coverage quality and our IoT network. As a result, future Stellantis vehicle launches in Brazil will have access to native Wi-Fi onboard eSIM and the cars’ active and real-time communication with the user, the Stellantis and the dealer network. In addition to such features, this technology will focus on safety, allowing remote identification of possible vehicle failures with the possibility of more agile and accurate diagnoses.

During 2021, a Proof of Concept (“PoC”) was launched in the Stellantis factory in Goiana/PE using 5G connectivity to investigate the benefits of this technology and enabling the use of new applications on a large scale, from the use case of artificial intelligence to the automated processing of images. The PoC evolved in 2022 to a new phase which will enable an Edge 5G SA Private Core and an Edge Cloud environment, achieving greater computing capacity, greater scalability, and allowing the application to perform in an environment with higher throughput and low latency.

Partnership with TIP and INATEL

Also in October 2020, we announced a partnership with Telecom Infra Project (“TIP”), for developing OpenRAN (Open Radio Access Network) technology by means of the Open Field Program. The initiative will be hosted by INATEL (Instituto Nacional de Telecomunicações) in the city of Santa Rita do Sapucaí, in the state of Minas Gerais, Brazil. The goal is to create an adequate environment (living lab) to test, validate and accelerate products and new functionalities of open and disaggregated technologies solutions for Radio Access Network, by performing network testing, product validation, feature analysis and recommendation based on friendly users’ usage and feedback. The program has taken place since 2021. Additionally, at the end of 2022, the Open RAN 5G SA TIP test plan for network access with the vendor was completed and the TIP internal process to obtain the Silver Badge began and is expected to be completed after the review and approval of the deliverables. This Silver Badge demonstrates testing of a product, combination or solution for alignment with TIP-defined requirements, typically in a controlled environment. The specific tests required for a particular badge are established by TIP’s project groups and comprise a significant subset of all tests required for deployment.

I-Systems (formerly FiberCo) Formation and Sale of Equity Interest

On December 10, 2020, our Board of Directors approved the formation of FiberCo, in preparation for a possible future segregation of assets and provision of fiber infrastructure services. This process is under evaluationone of CADE.

2020 Important Events

Mergerthe intermediate steps in the transformation of TIMour broadband services, and it aims to create an open fiber infrastructure vehicle to allow us to attract a strategic partner as a shareholder of FiberCo. We expect FiberCo to operate in the wholesale market and to provide fiber connectivity services for last-mile and a transport network, for all market operators, having us as an anchor customer. We expect FiberCo to allow us to achieve our expected growth in the Brazilian fiber market in the coming years, taking advantage of the open network approach and using a focused operating model. This transaction aims to accelerate the growth of our residential broadband business and unlock additional value from our existing infrastructure. Accordingly, on March 3, 2021, we entered into an exclusivity agreement with IHS Brasil Participações S.A.Ltda. (“IHS”), a large and diversified provider of telecommunications infrastructure, to negotiate the terms and conditions for the acquisition of an equity interest in FiberCo by IHS. The operation was approved by CADE on June 16, 2021 and by Anatel on November 11, 2021.

On November 16, 2021, after regulatory authorizations from Anatel and CADE, IHS Fiber Brasil – Cessão de Inraestruturas Ltda. (“IHS Fiber”), acquired from us an equity interest in FiberCo, a company that was incorporated by us to segregate network assets and provide infrastructure services.

As a result of the transaction, IHS Fiber changed the name of the acquired entity to I-Systems and currently holds 51% of I-Systems’s share capital, with the remaining 49% held by us.

Partnership between TIM and Cogna

On July 29, 2020,7, 2021, we informed our shareholders, the boards of directors of TIMmarket in general and other stakeholders that, together with Anhanguera Educacional Participações S.A. (“AESAPAR”), a subsidiary of Cogna Educação S.A. (“Cogna”), jointly referred to as “Partners”, it completed the negotiations regarding a strategic partnership (“Partnership”) with the objective of developing offers combined with special benefits aimed at providing distance education through the Ampli platform, reaching over 280,000 users enrolled in undergraduate courses and open courses in 2022.

On February 15, 2023, the partners agreed amicably to call off the partnership. We are negotiating a new partnership with an educational group in Brazil to offer greater value and exclusive benefits to our customer base and expand access to digital education services.

Partnership between TIM and FS Group

In line with our customer platform strategy, following on from a number of other strategic partnerships, in May 2022 we entered into a new strategic partnership with FS Security to establish a new company dedicated to digital security solutions and entertainment for end consumers while also making it available as a white-label model for other operators.

FiberCo’s operations include approximately 15,000 km of fiber in a secondary network, covering approximately 7.5 million homes (homes passed), 4.5 million of which are FTTH (fiber to the home) and 3.4 million are FTTC (fiber to the curb), which constitute the initial base of assets transferred by TIM. The homes connected account for approximately 700,000 over which FiberCo will provide operation and maintenance services to TIM. Moreover, approximately 140 employees were transferred to FiberCo, as well as other assets and contracts, all exclusively related to the scope of its activities.

With the completion of the Companyacquisition, FiberCo changed its corporate name to I-Systems, and began its journey as an infrastructure vehicle with the mission of deploying, operating and maintaining last-mile infrastructure for broadband access to be offered in the wholesale market, having us as an anchor customer.

5G Auction in 2021

In November 2021, the 5G auction was held. In the auction, we acquired 11 lots, with a total value offered of R$1.05 billion, in three frequency bands: 3.5 GHz, 2.3 GHz and 26 GHz. The acquired bands have a set of obligations that must be met with financial contributions or the construction of mobile and fixed network infrastructure. As a result, we have rights to the spectrum capacity that we consider necessary to follow our growth journey in the mobile telephony market nationwide, as well as preparing ourselves for customers’ demands and the ability to explore new use applications and develop innovative solutions that require high-speed connectivity and capacity.

The main commitments associated with each band are as follows:

2022 Important Events

TIM elects new Chief Executive Officer (CEO)

On January 31, 2022, our Board of Directors announced that Mr. Alberto Mario Griselli would replace Mr. Pietro Labriola in the positions of Chief Executive Officer (“CEO”) and Board member. Mr. Griselli, who held the position of Chief Revenue Officer (CRO) from July 2019 to August 2022, holds a degree in Electronic Engineering from La Sapienza University in Rome and an MBA in finance from Columbia University. With over 20 years of experience in the telecommunications industry, he has held relevant positions such as Vice-President for Latin America at TIM, a global provider of mobile engagement solutions for telecom operators, and Chief Executive Officer for Brazil and for Latin America at Value Partners, a management consulting global firm. In addition, on February 1, 2023, he assumed the positions of Investor Relations Officer and Chief Financial Officer on an interim basis, the latter of which he held until a replacement was appointment on February 27, 2023.

Anatel grants consent to transfer control of Oi’s mobile telephony activities

On January 31, 2022, Anatel, unanimously granted its consent to the closing of the sale of the mobile telephony activities of Oi Móvel S.A. – Under Judicial Reorganization (the “Oi Transaction”), via three specific purpose entities, which correspond to the assets acquired by us, Vivo and Claro S.A. (together, the “Buyers”).

The consent provides for certain conditions, in line with a transaction of this nature, which mainly aim to guarantee access by small providers to nationwide networks, maintain commitments linked to the transferred radio frequencies, establish the minimum parameters of the communication plan linked to the transaction and grant users certain rights in the migration phases.

CADE approves the acquisition of most of the Oi mobile assets by TIM

On February 9, 2022, CADE under the of Concentration Act 08700.000726/2021-08, approved the Merger,closing of the Oi Transaction, subject to certain conditions, mostly behavioral, and which became effectivewere recorded in a Concentration Control Agreement (the “CC Agreement”) between the Buyers and CADE. These conditions can be used by new entrants and smaller operators to reduce entry barriers and enable the exploration of different business models, without affecting TIM’s main objective of strengthening its infrastructure and closing the capacity gap spectrum compared to its main competitors. The CC Agreement was designed to strike a balance between creating value while mitigating competition concerns.

We have continued to comply with all the measures put in place by Anatel and the CC Agreement, for example:

On April 19, 2022, we provided Anatel with a reference offer for the national roaming market. The reference offer was approved by Anatel on September 28, 2020. The Merger was part of a reorganization of TIM’s corporate group. The business carried out by TIM following the Merger was21, 2022. On the same asdate, we provided a reference offer for providing the business previously carried outmobile services through a virtual network, which was approved by TIM Participações priorAnatel on September 26, 2022.

On July 4, 2022, we independently offered to the Merger. Upon the consummation of transaction and the approvalsell up to 50% of the listingRadio Base Stations (“ERBs”) that we had purchased from Oi Móvel (“ERBs Public Offerings”).

On July 5, 2022, we, together with Oi, signed a letter of Company’s common sharesintent to ensure the maintenance and ADSs by B3 and NYSE, respectively, TIM Participações S.A.’s shareholders received one sharecontinuity of mobile services provided at the Comandante Ferraz Antarctic Station - EACF until the end of the CompanyCooperation Agreement no. 12000/2019-001/00, February 21, 2024, concluded on February 21, 2019 by the Union, through the Navy Command, and by Telemar Norte Leste and Oi Móvel.

On August 15, 2022, we signed a Radio Frequency Availability Agreement with Oi Móvel in exchangeorder to allow Oi Móvel to meet its targets for each TIM Participações share that they held,implementing fixed wireless access systems to ensure compliance with the General Plan for Fixed Telephony Services in Public Regime (“PGMU-IV”), approved by Decree-Law 9,619/2018.

On October 20, 2022, we published reference offers to enable the execution of the Industrial Network Exploration Agreement and Onerous Temporary Agreement Assignment of Rights to Use Radiofrequency, in accordance with the terms defined by the CC Agreement.

On December 20, 2022, we published offers to enter into a contract for the Onerous Temporary Agreement Assignment of Rights to use the Merger Agreement.900 MHz radiofrequency that we had acquired in the Oi Transaction.

Capital Expenditures

Capital expenditures totaled R$3,891 4,730 million in 2020, up 1.0%2022, a decrease of 40.6% as compared to 2019, as found2021. This result was mainly due to the registration of investments in the Industrial Plan 2020-2022. This increase wasacquisition of licenses in the frequency auction in 2021. Excluding this effect, capital expenditure for 2022 would have grown 8% year-over-year due to the investments linked to expand coverage, installing more equipment and fiber.. Approximately 92%the integration of capital expenditures were dedicatedOi’s mobile assets, in addition to infrastructure, mainly transportation network projects, 4Gthe implementation of 5G technology and information technology.in Brazil. The actual amount and timing of our future capital expenditures may be affected by foreign exchange oscillations and other impacts from financial or economic crisis, such as the one arising from the spread of COVID-19.crises. For a detailed breakdown of our capital expenditures in 2018, 20192022, 2021 and 2020 and those currently in progress, as well as the total amount each year and method of financing, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Uses of Funds—Material Capital Expenditures” and “—Sources of Funds.”

On March 16, 2020,December 30, 2021, we released our Industrial Plan for 2020-2022,2022-2024, which demonstrates our transformation as a resultillustrated some of the executiontransformation that we have been able to achieve as the result of our previous Industrial Plans. These changesachievements include, notably, network improvements and an improved customer experience, as recognized by independent third parties, and ongoing innovations in network evolution, including our 5G trials,rollout – pursuing traffic offload, multiple-input multiple-output technology, or Massive-MIMO, repurposing frequency bands that have historically been allocated for 2G mobile services and that are being migrated to other frequencies

(known (known as refarming), and the Vivo MoU (see Item“Item 4. Information on the Company—B. Business Overview—Our Business)Business”). Through specific and disciplined investments in new technologies and processes, we seek to reach a position that allows us to act on new opportunities to sustain revenue growth, increase profitability, develop our infrastructure and expand cash flow generation. We focus on improvement of returns on investment as well as customer experience maximization, but we are also committed to our role in society by promoting environmental, social and governance initiatives that in our view will result in a positive transformation for all stakeholders.

We expect that our IT initiatives such as our big data evolution, the rollout of “next best action,” or NBA, cognitive systems, and our application and architecture review, in a two-year time frame will enable us to advance our IT systems in such a mannerway that will provideenable us withto have an enhanced view of our customers’ lifecycle and consumption patterns, as well as allowing for faster time-to-market, development of new capabilities, process automation, and increased efficiency. Our approach to investment in our network has a five-part focus, as follows: data growth, 5G, ready, IoT, fixed broadband, and new initiatives. The benefits expected are network decommissioning savings, a convergent architecture, fixed wireless access improvement, network densification, innovative solutions, and new IoT business opportunities.opportunities and network decommissioning savings.

The capital expenditure expected to support the Industrial Plan for 2021-2023 is2022-2024 was approximately R$13.0 billion, considering TIM S.A. operationour operations on a standalone approach, andbasis, or R$13.5 billion considering the combination of our operations with the UPI Oi Mobile Assets as a result of the Oi Transaction for that three-year period. Some smart capital expenditure initiatives in development our infrastructure areinclude disruptive business models withfor our infrastructure. With the usageuse of new technologies, such as Massive-MIMO technology, and with network sharing agreements, we expect it will be possible for us to achieve localitiesprovide services in locations that were not previously financially viable orviable.

On February 23, 2022, we updated our strategic plan following a year of consistent improvements, which included the Massive-MIMO technology;successful achievement of our short-term objectives outlined in our previous strategic plan for 2021-2023. We managed to implement our strategy to achieve these objectives despite a more pressured and unstable macroeconomic environment that had generally frustrated previous market projections. In this context, our focus on execution, with flexible decision making and appropriate prioritization, was crucial.

For the next three year period, our plan takes into account (i) the estimated effects of the acquisition of the assets of Oi Móvel since the transaction received regulatory approval from the sector regulator (Anatel) and the competition regulator (CADE) (see material facts of January 31 and February 9, 2022); (ii) the effects of the beginning of the adoption of 5G technology and the obligations and commitments that we agreed to as part of our competitive bids in the 5G frequency auctions, (see material fact disclosed on November 5, 2021) in Brazil; and (iii) the change to a new coverage growth model for our residential broadband service after the segregation of our network sharing agreements.assets and incorporation of I-Systems, (see material fact disclosed on November 16, 2021). Under this new set of assumptions, we also reaffirm our commitment to (i) the sustainable evolution of service revenue; (ii) the improvement of our operating cash generation; (iii) maintain an adequate capital allocation, characterized by the capital expenditure allocated to network and IT infrastructure that improve our operational efficiency and customer experience; and (iv) the continuous expansion of cash flow as a combination of all of the above factors.

In additionOn February 14, 2023, we updated our strategic plan for 2023-2025, which reflected the full achievement of our short-term goals outlined in the 2022-2024 Plan, demonstrating the success of the strategy and consistent execution throughout 2022. These results were achieved in a year of great challenges and uncertainties in the external environment, but of great opportunities and sectoral transformations, in which we are the protagonist: the launch of 5G technology and the end of the cycle of consolidation of the mobile market. For this new triennium, we project an improvement in overall business dynamics, driven by the combination of a larger revenue base with a solid margin recovery trend and better capital expenditure efficiency opportunities and a clear path to optimization of lease spending. This dynamic will provide an expansion of cash flow, generating additional space for shareholder remuneration.

5G launched in 2022

Following our investment in network infrastructure, in March 2022, we announced the assumptions listed above, the processcompletion of integrating Oi’s mobile assets, acquiredour standalone 5G network core. This was necessary for us to be able to provide fifth-generation services in accordance with government requirements. Anatel approved a revised schedule for granting access to the Material Facts published3.5 GHz spectrum band in order to activate the 5G network in the Brazilian capital and Federal District of Brasília after August 2022, commencing the commercial operations of 5G Standalone (5G SA) throughout Brazil. In 2022, we began the rollout and now have 5G coverage in Brasília and all 26 state capitals, with a special focus on the market on December 14, 2020cities of São Paulo, Rio de Janeiro and January 29, 2021, but still pending approval by regulatory bodies, will significantly transform our results, which is why we present a long-term vision focused on the continuity of our operations considering the impactsCuritiba, where 100% of the merger.neighborhoods were covered, and where we have the highest number of sites compared to our competitors.

Recent Developments

FiberCo FormationIn early 2023, we became the first and Sale of Equity Interest

On December 10, 2020, our Board of Directors approved the formation of FiberCo Soluções de Infraestrutura Ltda., or FiberCo, in preparation for a possible future segregation of assets and provision of fiber infrastructure services. This process is oneonly telecommunications operator covering 100% of the intermediate stepsmunicipalities in the transformation of our broadband services, and it aimsBrazil, in addition to create an open fiber infrastructure vehicle to allows us to attract a strategic partner as a shareholder of FiberCo. We expect FiberCo to operate5G coverage in the wholesale market and to provide fiber connectivity services for last-mile and transport network, for all market operators, with the Company as an anchor customer. We expect FiberCo to allow us to achieve the expected growth in the Brazilian fiber market in the coming years, taking advantage of the open network approach and a focused operating model. This transaction aims to accelerate the growth of the residential broadband business and unlock additional value from our existing infrastructure. Accordingly, on March 3, 2021, we entered into an exclusivity agreement with IHS Brasil Participações Ltda., or IHS, a large and diversified provider of telecommunications infrastructure, to negotiate the terms and conditions for the acquisition of equity interest, by IHS, in FiberCo.state capitals. As ofat the date of this annual report, this negotiation is still ongoing.

TIMour network covers 100% of 5570 Brazilian cities, making us what we believe to be the first and Vivo new sharing agreement

only private service company to be present in all cities in Brazil. In September 2020,Brazil, 4G connectivity continues to prevail throughout the competent authorities (Cade and Anatel) approved the new sharing agreement established between TIM and VIVO, for: (i) sharing of the 2G network, allowing one operator to switch-off its 2G network, where both parts are currently present, and the remaining operator will provide “roaming like” services for both customer base; and (ii) establish new infrastructure sharing agreements for the 3G and 4G network (Single-Grid), directed to cities with fewer than 30,000 inhabitants, which in the future may be expanded to larger cities. We believe that implementing the concepts set forth therein will result in synergies and efficiencies that could help support us in continuing to provide innovative and standard-setting offerings and services, as well as synergies and efficiencies in the allocation of investments and operating costs.country.

TIMOn January 17, 2023, Ms. Camille Loyo Faria resigned from the position of Chief Financial Officer (“CFO”) and Fiat Chrysler Automóveis (FCA) connected cars partnership

In October 2020, TIM and Fiat Chrysler Automóveis (FCA) have established a partnership to offer connectivity solutions embedded in vehiclesInvestor Relations Officer (“IRO”) of the Fiat, Jeep and RAM brandsCompany, remaining in Brazil from the first half of 2021. As part of the global strategy of developing ecosystems for connected services and to enhance the digital experience of customers, future FCA launches in the country will rely on eSIM, with the LTE coverage quality and TIM's IoT network.office until January 31, 2023. As a result, future FCA vehicle launchesfrom February 1, 2023, Mr. Alberto Mario Griselli, our CEO, assumed on an interim basis, the positions of CFO and IRO of the Company.

Registration of our controlling shareholder as a Category B public company in Brazil will have access

On February 17, 2023, TIM Brasil, our controlling shareholder, obtained registration in Brazil as a publicly held company in category B. Public companies registered in category B in Brazil may issue securities other than shares, share certificates or depository receipts, or securities convertible into such securities.

On February 27, 2023, the Board of Directors appointed Ms. Andrea Palma Viegas Marques to native Wi-Fi onboard eSIMthe position of CFO while Mr. Alberto Mario Griselli retained his position as CEO and IRO. Ms. Viegas has a degree in Business Administration from Cândido Mendes University, and a Master’s in Business Administration from Ibmec and currently holds the cars’ activeposition of Executive Director of Planning and real-time communication withControl at the user,Company. Ms. Viegas has more than 20 years’ experience in the FCAtelecommunications sector, including 17 years within the TIM Group, performing different functions in the financial, marketing and technology areas. Throughout her career she has also worked in the dealer network. In addition to such features, this technology will focus on safety, allowing remote identification of possible vehicle failures with the possibility of more agileOil &Gas industry, Audit and accurate diagnoses.Human Resources sectors.

Also in October 2020, TIMOn February 28, 2023, we announced a partnership with TIP (Telecom Infra Project), for developing OpenRAN (Open Radio Access Network) technology by means of the Open Field Program. The initiative will be hosted by INATEL (Instituto Nacional de Telecomunicações) in the city of Santa Rita do Sapucaí, in the state of Minas Gerais, Brazil. The goal isUpload Ventures Growth, LP (“Upload”) – an independent venture capital manager – to create an adequate environment (living lab) to test, validate and accelerate products and new functionalities of open and disaggregated technologiesinvestment fund (“5G Fund”) focused on solutions for Radio Access Network, by performing network testing, product validation, feature analysis and recommendation based on friendly users’ usage5G technology. The investments aimed to develop early-stage companies (including startups and feedback. The program is scheduledscaleups) from different sectors, particularly those that already have established business models. In addition to beginfinancial contributions through the 5G Fund, the companies we invest in 2021,will be able to rely on having access to our industrial and will last until 2022.

Partnership with C6 Banktechnological assets in order to leverage their growth.

On March 26, 2020 we entered into30, 2023, our shareholders approved our merger with SPE Cozani (then a commercial agreement with Banco C6 S.A. (“C6 Bank”),wholly-owned subsidiary) pursuant to which we have been granted, on February 1, 2021, the right to subscribe an indirect equity interest of approximately 1.4% in C6 Bank through the exercise of subscription bonuses,SPE Cozani would be merged into us, subject to certain agreed upon thresholds.

Oi Group’s Mobile Assets Acquisition

conditions, including authorization by Anatel and the closing processes that are required under Brazilian corporate law to consummate the merger of two companies, pursuant to the Protocol and Justification of incorporation. On March 10, 2020, we disclosed to31, 2023, our Board of Directors confirmed satisfaction of all the market that we, jointly with Telefônica Brasil S.A. (VIVO), expressed to Bank of America Merrill Lynch, or “BofA”, Oi Group’s financial advisor, our interest in a potential joint acquisition of Oi Group’s UPI mobile business, in whole or in part, so that, in the event of the completion of the operation, each of the interested parties would receive a portion of that business.

 We believe that the transaction would have the potential to add +14.5 million clients, +7.2 thousand sitesclosing conditions and towers, +49 MHz of spectrum to our operations, enabling us to close historical operational and structural gaps, generating benefits for our customers and shareholders, by accelerating our growth, increasing operational efficiency and quality of service.

On July 18, 2020, we submitted, together with VIVO and Claro S.A. (CLARO) a binding offer to Oi Group for the acquisition of the totality of the mobile assets operation of the Oi Group, or the UPI Mobile Business, as revised on July 27, 2020 and September 7, 2020. The latter was accepted by Oi Group on December 14, 2020.

Pursuant to our offer, the total amount of the transaction is R$16.5 billion plus the value of the compensation offered to the Oi Group for certain take-or-pay data transmission capacity agreements, to be executed at the time ofapproved the closing of the transaction. Such agreements have a net present value corresponding to approximately R$819 million as of December 31, 2020. The R$16.5 billion amount includes R$15.7 billion related to the base price of the offer and R$756 million corresponds to transition services to be rendered for up to twelve months by Oi Group, ofmerger with SPE Cozani, which TIM will be responsible for R$318 million. We expect to disburse R$7.3 billion, or 44% of the total base price and transition services. Concerning the capacity agreements, we expect to be responsible for payments of approximately R$476 million, or 58% of the net present value of the agreements.became effective on April 1, 2023.

B.       Business Overview

Market Characteristics

The telecommunications sector in Brazil is marked by stronga high degree of competition and by the effective regulation of the National Telecommunications Agency, or Anatel, whose mission is “to promotewhich has a stated purpose of “promoting the development of the country’s telecommunications in Brazil, in order to provide it

with a modern and efficient telecommunications infrastructure, capable of providing theoffering society with adequate,appropriate and diversified andservices at fair prices throughoutnationwide”.

Throughout 2022, the entire national territory.”

The mobile market has been characterizedtelecommunications sector continued to suffer the impacts brought on by the process of migration from prepaid to hybrid (Control plans) and postpaid plans. This movement can be seenglobal COVID-19 pandemic, as a resultwell as restrictions aimed at curbing the spread of the growing demand for access tovirus. However, despite these challenges, the sector maintained a growth trajectory in terms of data driven by use of OTT solutions to communicate at no extra cost, and content services. At the same time, the operators sought to retain their customers with offers that are characterized by recurrent consumption, and consequently, of revenue, in line with the strategy of offering more for more.

In 2020, the sector also reflected the tendency toward increased data consumption, requiringas such, operators were required to adapt their networks and face the challenge of delivering an increasingly robust infrastructure in an environment which requires greater rationality of investments, including on projects such as the densification of sites, frequency refarming, and the aggregation of carriers on two or three frequencies. Furthermore, we continue to advance in sharing initiatives focused on 4G and transport network, despite accelerating the rollout of our 5G coverage in order to optimize traffic offload. This network evolution has allowed for a better usage experience, both in terms of performance – with higher download and upload speeds and lower latency – as well as in indoor coverage and greater penetration.

Demand for the evolution of technology and investments in the sector has also continued. In particular, this can be seen in relation to the 5G auction, which was held in the last quarter of 2021 and in additional to a financial component established a series of special commitments undertaken by successful bidders related to the right-of-use of frequencies, which forces the sector to undergo a new cycle of investment. The deployment of 5G technology is expected to bring about significant technological advances, enabling the generation of new business models, encouraging an increasingly connected society, and paving the way for advances in research and development.

Throughout its history, the Brazilian telecommunications sector has always been impacted by fierce competition, evidenced by the presence of aggressive marketing offers, including the add-on content offered to customers and strong price competition. However, in recent years, we have observed this competition begin to focus more rational investments. Additionally,towards quality and service. This trend continued in 2022.

During 2022, we closed the industryOi Transaction, following satisfaction of all the conditions, including regulatory consents by Anatel and CADE. However, following the closing, the Buyers, including us, initiated an arbitration proceeding relating to the adjusted closing price, after learning that there were differences in assumptions and calculation criteria, which the Buyers only had access to following the closing. The sale of the mobile operation was part of the Court-Ordered Reorganization Process of Oi S.A. – Under Judicial Reorganization.

Lastly, 2022 was marked by increased integrationthe launch of digital services into portfolios5G technology in orderBrazil, which seeks to monetize offerings.

Finally,address the growing demand for fixed broadband and the strong migrationfaster connection speeds. We ended 2022 having launched 5G technology in all 27 state capitals of Brazil, with a much higher number of antennas than required by Anatel, allowing us to higher speed service offerings (especiallyprovide an even better experience for ultra-broadband, with speeds above 34Mbps) reflected the new perception of Internet access as an essential asset for the population.our customers.

Mobile Market Developments

The following table shows the data of Brazilian mobile market during the periods presented.

Differently from the dynamics perceived on previous years,The Brazilian mobile market reported a growthdecrease in subscriber base of 3.3%1.1% year-on-year (“YoY”). The total base, breaking a trend towards growth pace has been observed forfrom recent years. During 2022, postpaid users reached 140.1 million users. Since the last time in 2015, when postpaid segment began its consolidation. Duringend of 2020, postpaid net additions reached 9.6 million users (63% were human postpaid lines) and surpassed the 2.3 million drop in prepaid users for the first time in five years. With the contraction of the prepaid customer base by 1.9% over the course of 2020, itis no longer represents the market’s largest component, constituting 49%shrinking even further relative to postpaid customers in the years ended 2021 and 2022. It now constitutes only 44.4% of the total subscriber base as of December 31, 2020,2022, as compared to 52%47% as of December 31, 2019.2021. The significant reduction in the overall number of prepaid users is mainly due to the acceleration in users consolidating multiple SIM cards tointo a single one,SIM, high penetration of mobile service and the rapid substitution of voice with data usage, resulting in a decrease in the so-called “community effect,” where consumers value a telecommunications system more as more users adopt it. The postpaid segment, however, experienced an increase of 8.8%3.2% during 2020, achieving 51%2022, reaching 55.6% of the total subscriber base as of December 31, 2020,2022, as compared to 48%53% as of December 31, 2019,2021, driven by operators’ efforts to monetize their customer base, offering more data, content and digital services, and the migrationsmigration of customers from prepaid to Controlcontrol plans, and from entrance plans to postpaid.postpaid plans.

Mobile Competitors

TIM is the brand name under which we market our mobile telecommunications services, offering 5G DSS, 4G, 3G and GSM technologies. Currently, our subsidiarieswe hold mobile licenses for each of the ten wireless areas of Brazil recognized by Anatel, making us a mobile operator in Brazil offering complete nationwide coverage. In two of our ten areas we are the Telebrás legacy provider. See “—A. History and Development of the Company—Historical Background.” Our network covers approximately 96%100% of the country’s population based on Anatel’s coverage criteria.Brazil’s municipalities.

In addition to TIM, as at the end of 2022 there are threewere two other major participants in the Brazilian mobile market that offer nationwide coverage in all Anatel wireless areas: Vivo and Claro, since Oi was acquired by the trio (us, Claro and Oi.Vivo) in April 2022. See “—A. History and Development of the Company—Historical Background.”

The Brazilian mobile telecommunications industry is highly competitive. Any adverse effects on our results and market share from competitive pressures will depend on a variety of factors that cannot be precisely assessed and are beyond our control. Among such factors are our competitors’ size, experience, business strategies and capabilities, the prevailing market conditions, and the applicable regulations.

Other Competition

We also compete with landline telephone service providers, of which the incumbent providers in Brazil (Oi, Vivo and Embratel Participações S.A. (owned by America Movil), as well as Algar Telecom, a regional incumbent), and some other relevant players (GVT, acquired by Vivo, and Net Serviços de Comunicação S.A., owned by America Movil), offer packages including voice (both fixed line and mobile), broadband and pay-TV services in bundled offers. Landline providers are, however, required to offer their services to unaffiliated mobile providers on the same basis they are offered to affiliatedaffiliate mobile providers. Our acquisition of Intelig (now known as TIM S.A.) and AES Atimus (later TIM Fiber, which was merged into TIM Celular in 2012, and TIM Celular was merged into the Company in 2018) broadened our participation in the fixed telecommunication sector.

We compete in the corporate telephony business with Nextel, a former provider of digital trunking (based on push-to-talk technology which was discontinued during 2018), or specialized mobile services (serviço móvel especializado), or SME, and currently a regular mobile provider, (significant market power only), using 3G and 4G technology in some regions. Nextel became the fifth mobile telecommunications competitor, but its network deployment was focused mainly in the states of São Paulo and Rio de Janeiro. In 2014, Nextel also entered into a national roaming agreement with Vivo, whereby Nextel’s significant market power customers can use Vivo’s 2G and 3G mobile network in regions where Nextel does not have coverage. In 2019, Nextel Brazil was acquired by Claro S.A.

On November 6, 2018, Anatel issued Resolution No. 703/2018, which established new maximum limits for the amount of spectrum bandwidth that a single telecommunications service provider of collective interest, as well as its affiliates, subsidiaries or controller company, when operating in the same municipality, may hold on a primary basis. This regulatory change increases the competitive environment of the sector and facilitates consolidation of operations among the main players in the market.

In recent years, in preparation of certain anticipated market events, the Brazilian telecom sector has experienced a series of broadband-centric capital markets and mergers and acquisitions activity, resulting in a mixture of organic growth and strategic acquisitions. The 3.5GHz rights that were acquired at auction by regional providers will open an opportunity for them to become mobile network operators. Additionally, the new neutral network, which is expected to be offered by Winity Telecom, using the 700 MHz frequency will be able to leverage mobile network capacity for ISPs. One of the main opportunities for ISPs in the mobile market will be for ISPs to leverage their current broadband customer base with bundle offers combining their existing broadband offering with mobile offerings that utilize the mobile neutral network.

The consequence of this has led to a growing number of strong market participants in the sector. Brazilian ISPs pursing IPOs aim to use the IPO proceeds to strengthen their regional presence across the country. In July 2021 alone, three of Brazil’s largest ISPs, Desktop, Unifique and Brisanet, staged their IPOs. Shares of the companies were listed on the B3 stock exchange in São Paulo. The wave of Brazilian ISP capital markets and mergers and acquisitions activity reinforces the companies' expansion plans, with regional providers continuing to add new acquisitions to their post-IPO portfolio by acquiring smaller ISPS to complement their existing footprint. Other groups are undertaking this same strategy, for example Grupo Vero, Grupo Conexão, Grupo EB Capital, and Grupo mhnet.

Our Business

We are a telecommunications company that offers mobile voice and data services, broadband Internet access, Value-Added Services, and other telecommunications services and products. For a breakdown of our total revenue by category of activity, see—Item 5. Operating and Financial Review and Prospects—Results of Operations for the Year Ended December 31, 2022, compared to the Year Ended December 31, 2021.

TIM isWe believe that we are well recognized in the market for itsour strong brand, “TIM”, and for itshaving a reputation as an innovative and disruptive company capable of setting new consumption standards for the market. Our proactive approach allows the Companyus to be in a leading position in the transformation of the telecommunications business model. The change in consumer profiles and the emergence of new technologies foster a rupture in the telecommunications industry based on the consumption of digital data, content and services.

The Company isWe are characterized by itsour pioneering and innovative offerings, among a complete portfolio for individuals as well as corporate solutions for small, medium and large companies. Besides traditional voice and data services, TIM offerswe offer a fixed-line ultra-broadband service, TIM Live,UltraFibra (formerly TIM Live), WTTx technology through UltrafibraUltraFibra service, and is startingwe have started to offer IoT solutions, with successful examples in agribusiness.agribusiness, while also looking for new opportunities in other industrial segments such as mining, transport and logistics, healthcare, public safety and industry 4.0.

The CompanyWe also offersoffer a variety of digital content and services in itsour portfolio of packages, aimed at increasing for its clients the day-to-day functionality of theirour customers’ mobile devices. The ability to manage a complete and varied portfolio gives TIMus the possibilityopportunity to offer customized packages to itsour customers and to provide offers bundlingwhich bundle services, like voice and data, to customers in certain regions.

In 2020, TIM maintained a position as a competitive player2022, we continued our innovative and pioneering strategy in all consumer market segments (prepaid, control and postpaid). In the postpaid segment, the biggest launch of the year was the new plan with “TIM Black” tariffan Apple TV+ subscription included for no additional fee. Settled at the same price point as our other postpaid plans providing a better service usage experience and continuously innovating offerings, which have differentials like data rollover and international roaming (data package for usecompetitively positioned in the Americas). The biggest 2020market for postpaid launch wasoffers, the “new TIM Black Família”,partnership with innovative flexible bundle for streaming subscription where the

customer can choose between Netflix, HBO GO or YouTube Premium in their plan. We’ve also includedApple allows us to provide a new data package for international roaming to useunique offering in the Americas,Brazilian market. Furthermore, we started to establish our position in the 5G market. We launched an extra “5G Booster Package” to postpaid customers, enabling them to enjoy the best of our 5G capabilities. In addition, we believe we are currently the only carrier in the Brazilian market to allow our customers to choose their favorite subscription among HBO, YouTube or Netflix without the need to switch plans. This feature also permits customers to easily change their choice whenever they want. We still maintain other advantages such as “data rollover”, “concierge service” and the new “TIM in flight”, to contribute to a better customer service with new channels available for customers such as voice message in WhatsApp and the option to schedule customer service in store, and a new app experience with an online store where customers can buy premium streaming services, like a “one-stop-shop”. We also made innovations in our portfolio of control and prepaid offerings.experience. In the control segment, which tends to be a gateway to postpaid plans, we wereincreased our focus on the first to offer a new tariff plan, the TIM Social Networks Control plan (“TIM Controle Redes Sociais), with” (TIM Control Social Media) plan, which grants unlimited access to social networks, unlimited calls to any operator, plus data and digital services packages. We believe we continue to be used on Instagram, Twitter and Facebook packages, and has a valued leaderhigher average ticket. Furthermore, in the prepaid plan segment, andwe continued with our strategy to increase value added benefits for our customers. For example, by including an “Amazon Prime Mobile Only” subscription with no additional fee to TIM PRÉ TOP customers, we maintain our strong position in the prepaid market, being the only carrier in the global market to offer video and music subscriptions without an additional fee (Amazon Prime Mobile Only and Deezer Go – launched in 2021). Through this product strategy, we believe that our pioneering and innovative spirit (which we consider characteristics of our DNA) will sustain our relevance in the domestic market and complete packages, aimingallow our customers to increase loyalty among our customer base.take full advantage of growing network capabilities as we enter the 5G era.

OnIn July, 23, 2019, the Companywe and Telefônica BrasilVivo also entered into a memorandum of understanding or the Vivo MoU,(the “Vivo MoU”), to start negotiations regarding: (i) sharing of a single-grid 2G network; (ii) establishment of new infrastructure sharing agreements for the 4G network in 700Mhz, directed to cities with fewer than 30,000 inhabitants, which in the future may be expanded to larger cities; (iii) other network sharing opportunities in other frequencies and technologies; and (iv) other opportunities in efficiency and cost reduction in operations and network maintenance. We believe that implementing the concepts set forth in the Vivo MoU will result in synergies and efficiencies that could help support us in continuing to provide innovative and standard-setting offerings and services, as well as synergies and efficiencies in the allocation of investments and operating costs.

On March 26, 2020, the Company and C6 Bank concluded negotiations regarding a strategic partnership with the objective of developing combined offers with special benefits for their customer bases, combining in an innovative manner digital banking and telecommunications services. The agreement also provides for the possibility of exploring sales and payment channel synergies, expanding the distribution of offers and optimizing costs. This agreement does not create a joint venture, but we have been granted, on February 1, 2021, the right to acquire an indirect equity interest of approximately 1.4% in C6 Bank through the exercise of subscription bonuses, subject to certain agreed upon thresholds.

TIM seeks to follow the desire of its consumers, considering them at the center of the Company’s decision making, based on: (i) innovation, which is in the DNA of the Company and will continue as a priority, with new plans, offers, partnerships and technologies; (ii) quality, which is the basis for acquiring the customer’s loyalty and for the expansion of its life cycle; and in the (iii) user experience, which is the strategic pillar of convergence of all others, establishing a new relationship with customers and acting in a way that everyone receives the best experience, great services and a transparent relationship with the Company.

Competitive Strengths

We believe that our robust network infrastructure, our innovative approach, our brand recognition, and our widespread sales network, position us well to capitalize on opportunities in the telecommunications industry in Brazil and meet the constantly changing demands of the mobile telecommunications market. We believe that our main strengths include:

High quality services

Since national coverage and quality had improved quite substantially over the last few years, Anatel also has shifted its focus. The prior focus was service quality from a broader, state-oriented perspective and now, Anatel is taking a local perspective, concentrating its efforts on smaller geographic areas like cities, especially those where service is still considered poor. In the final quarter of 2017, Anatel proposed the Quality of Telecommunications Services Regulation (Regulamento de Qualidade dos Serviços de Telecomunicações) (“RQUAL”), or RQUAL, which following public consultation No. 29/2017, was approvedcame into force in December 2019 (Resolution No. 717/2019)March 2022. Based on performance against certain quality and performance indicators, operators will each be classified with a grade between A-E. This grading is expected to enter into forcetake place in 2022.2023. RQUAL is based on responsive regulation and will apply to all telecommunication services (mobile, fixed, fixed broadband and payTV) on a municipal level and sets forth new obligations for service providers, such as a user compensation model and a mandatory ombudsman, and grants customers additional rights including the customer’s possibility of terminating their service agreement without penalty in case of poor service quality. For more information on the new quality regulation, see “—Regulation of the Brazilian Telecommunications Industry—Quality Management Regulation.”

Accordingly, TIM haswe have also started tracking itsour quality and performance indicators, andin particular focusing on service quality at the city level, in order to assure an even more rigorous review of theour customer experience. Following the contribution period, TIM continueswe continue to monitor municipalities outside the Anatel threshold (“critical”) and hashave already started simulating the new performance indicators set forth in Resolution No. 717/2019.

The results of this local focus are demonstrated in the solid improvements of Anatel’s quality metrics over the lastrecent years. As a highlight, the Company haswe have been able to maintain positive results in 3G/4G data-related indicators due to the rapid expansion of our coverage, in particular in 4G, where we are the leading telecommunications company by number of cities covered, according to the Anatel website (www.anatel.gov.br). Anatel’s latest release, which includes data up to the third quarter of 2019, indicates that TIM was the company with the lowest number of critical municipalities.

TIMOur LTE technology also demonstrated a strong performance and the inclusion of its LTE technologythe NR network in data usage, wide coverage and availability. The TIM 4G network received higher measurements, when viewed against other test of 4G networks, in the Brazilian market on the SpeedTest platform. These results are important givendue to the strong demand by TIMour customers for this technology in 2020.technology. At the end of 2020,2022, approximately 90%94.18% of TIM’sour data traffic was carried out byover the 4G and 5G network, up by 5 p.p. whenwith an increase of 1.83% compared to the previous year.

It is also worth mentioning that theThe results of our digital transformation initiatives continue to expand and, during 2020, presented2022, demonstrated solid results. Given the impacts of the COVID-19 pandemic, societyour customers demanded even more network capacity and digital solutions. This demand meets the strategy TIM haswe have adopted for several years to seek digital evolution and the constant network development, aiming to ensure innovative solutions, quality and availability of services, offering a superior customer experience and strengthening the Company’sour positioning in the market. We believe that the digital transformation of our services must take place on several fronts, from the sale and activation of the line to post-sale and the so-called “self-caring”, meaning the digital service portals that allow customers to manage profiles and subscriptions, billing, collection, and payment.

Even in a challenging year, our digital channels’ positive results and the excellence of services offered to our customers confirm that we had made the right business decisions, made during such period were appropriate, provedemonstrated our capacity to adapt to adverse situations and reinforce our purpose of “evolving together, with courage, transforming technology into freedom”.

Customer service is one particular area in which digitalization – in particular our Mobile App and interactive voice response, or IVR, technology – has proven fundamental to improving the customer experience. In 2020, we increased by 9.8% the number of digital customer interactions (an increment of 14% in Mobile App and Website interactions partially set off by a decrease of 36% in IVR interactions). Additionally, the number of individual users of the “Meu TIM” application in 2020 grew 12%, while IVR retention increased by 2.5 percentage points. Also, digital sales in the postpaid segment increased by 32% in the year ended December 31, 2020 as compared to the year ended December 31, 2019, and more than 2% in the prepaid segment, while recharging by digital means continues to become a more relevant sales channel, with a 30% increase in the year ended December 31, 2020 as compared to the year ended December 31, 2019.

We believe our ultra-broadband service is also viewed generally as a reference of quality in the sector, driven by our commitment to theensuring a positive customer experience. ThisThe service quality of our TIM LiveUltraFibra offering has demonstrated itself to be excellent, asproduced positive results, being recognized for 57 consecutive years in a row (2015 - 2020) by the fifth time2022) by the widely circulated newspaper, called “O Estado de São Paulo.”

We also seek a strong position in the high-value customer market as a content HUB by offering a variety of plans for individual and family usage, bundling voice and data packages, streaming and other content subscriptions, as well digital Value-Added Services (music, e-reading, video streaming, games), in order to provide a custom customer experience.

We are also better able to provide high quality services due to our strong relationship with our suppliers. We operate a system for information technology vendor management in order to improve the commitment of our suppliers. As a result of this approach, we benefit from enhancements like (i) better accountability of end-to-end vendors on our business processes; (ii) better contractual conditions and savings due to the increase of volumes per

vendor; (iii) vendor consolidation and specialization in specific platforms/processes, creating the opportunity for long-term investments in such areas; and (iv) active contribution to transformation and simplificationsimplification; and (v) raising the best practices of Request for Quotation instead of Direct negotiating in order to gain more savings, also increasing the so called Global Deal among the Companyus and Telecom Italia with the scope to capture more synergies and quality of the furniture’sfurniture’s by global vendors.

These processes were organized and improved through detailed rules such as the Projects Review Board and Investments, and the Function Points Productivity Contractual Auditing. This allowed us to achieve an excellent level of information technology governance, exemplified by better business contribution of each investment due to shared objectives and goals. As a result, we improved our efficacy and efficiency.

Finally, we also continue to seek new internal data sources in order to better understand our users’ perspective and needs, including collecting and analyzing information from applications and investing in the modernization of traditional quality-assessment tools.

The Company understandsWe understand that the above statistics reflect itsour commitment to solidquality infrastructure and itsour focus on the customer experience. However, the Company recognizeswe recognize that there are some statistics and/or quality measures that use different methodologies that couldand which may present diversedifferent results from those that are mentioned above.

Open Innovation Program

TIM’sOur Open Innovation Program has the objective to establishof establishing a network to exchange knowledge, best practices and business models within a collaborative group of enterprises, startups and academia in order to leverage the development of innovative products and services. The program focuses on learning and exploring new technologies in partnership with complementary business partners, in order to create sustainable and responsible solutions. The collaboration network is based on the concept of partnerships with startup, innovation hubs, academy and/or society, and is designed to bring together entrepreneurs, vendors, technology companies, providers and content developers, innovation centers and universities so that they can recognize in TIM a potential partner in the development of new products, services or business models based on TIM’sour business strengths and technology.

AAs a supporter of the concept of open innovation concept for fourfive years, TIM haswe have been obtaining goodpositive results from such approachapplying this concept to our business. After a unique year in 2019 for TIM’sour Open Innovation program, when the company became a space for promoting and fostering a new technological wave in Brazil, TIMwe went further in 2020 and 2021, increasing itsour involvement with startups, establishing new partnerships with innovation hubs dedicated to healthtechs and agritechs. During 2019, TIMwe established 5G Living Labs with the aim to foster the development and use of 5G in a variety of contexts, to perform network testing and promote market readiness. The 5G Living Labs establish an environment for experimentation and co-creation in which end-users, researchers, companies and public institutions explore, design and jointly assess new and innovative products, services, solutions and business models, and provide important feedback for development and subsequent commercialization of products and services. In this occasion, four labs were launched with national and international partners across Brazil: one with the Federal University of Santa Catarina and CERTI Foundation, one with the National Telecommunication Institute (Inatel) in Santa Rita do Sapucai (State of Minas Gerais), one with the Federal University of Campina Grande and Virtus Institute and the last, one in São Paulo within CUBO, the most prestigious startup hub in Latin America. These TIM 5G Living Labs were focused on fostering 5G use in the following areas and business sectors: telemedicine, remote education, smartcity, security, intelligent home, game streaming, drones, industry 4.0, immersive technologies for education, health, industry and entertainment (actual reality and virtual reality) and smart agriculture using experimental 5G radiofrequencies.

In 2020, TIM,we together with the Telecom Infra Project (TIP) and the National Telecommunication Institute (Inatel) started the Open Field Program, which aims to develop innovative and sustainable solutions for the expansion of the radio access network (RAN) infrastructure, creating an adequate environment to run tests, like a living laboratory, validating and accelerating products and new functionalities of open and disaggregated technologies solutions, such as Open RAN. The program has taken place since 2021. Additionally, by the end of 2022, the execution of the Open RAN 5G SA TIP test plan for access network with the vendor was completed and the TIP internal process to obtain the Silver Badge began, which will take place duringhappen after the entire yearreview and approval of 2021.deliverables. This TIP Silver Badge demonstrate testing of a product, combination or solution for alignment with TIP-defined requirements, typically in a controlled environment. The specific tests required for a particular badge are established by TIP’s project groups and will comprise a significant subset of all tests required for deployment.

In 2021, as part of our client platform strategy for start-ups, we actively pursued a number of fintechs, edutechs, insurtechs and healthtechs, among other verticals in an effort to transform those startups into unicorns. This was based on our client platform strategy pursuant to which we seek partnerships with digital service companies where we believe we can accelerate their growth and create new business models, client journeys and marketing approaches. As part of this strategy, we started pilot projects to foster the development of an ecosystem of solutions and partners with the aim to approve devices and applications in partnership with academies, government agencies, communities and startups. In 2022, we were also working more closely with the Cubo Itaú innovation center to promote co-creation with startups. In October 2022, TIM established a new singular hub, dedicated to 5G “HUB 5G TIM ” that was launched at Cube's space, with 5G demos by partners (FWA, VR gaming, AR for Industry 4.0, 5G notebook, necklace and 360° camera). The hub, a collaboration ecosystem, is a place for experimentation where customers, studies, large case companies, entrepreneurs, investors and public institutions, services and valid cases are connected to solutions in general, with a focus on developing an innovative environment aimed at business connections with companies that can be leveraged with 5G technology. The launch of our new positioning at CUBO with the “HUB 5G TIM” brand space took place at CUBO headquarters in São Paulo, with the participation of technology partner companies, innovation hubs and startups.

We in alliance with Inatel – Brazil’s National Institute of Telecommunications, will develop solutions regarding internet-of-things (IoT) and smart cities based on IoT Mobile solutions with applications that could improve the quality of life of citizens, development of intelligent tools and enable new processes of public administration.

In alliance with PUC/Rio - Pontifical Catholic University of Rio de Janeiro, we will develop different use cases in relation to following verticals:

(i)       Health:

(ii)       Rural:

In 2021, with the goal of redefining smart cities in Brazil and exploring the full potential of 5G, we, Enel X Brazil and Leonardo Brazil joined forces to serve smart, safe and resilient cities. The companies agreed to offer and develop joint solutions for smart cities, combining experience in energy, telecommunications, technology, and cybersecurity tailored to Brazilian municipalities.

In 2021, we became a partner of Embrapa, the main agent of innovation and research in agribusiness in Brazil and the world, in the development of a new innovation agribusiness hub called Silo, located in Juiz de Fora (MG). The hub pursues innovative solutions through the combination of entrepreneurship, research and innovation. We will provide an important role in operating the hub, enabling mobility and 5G.

In 2021, in relation to 5G, in partnership with AgTech Garage innovation hub, we launched a call for startups that want to evolve or pivot their business plans in order to utilize 5G. The call was successful, having more than 45 startups registered, with eight finalists. Those startups had the opportunity to present their pitch to us, involving solutions for fire detection, irrigation, intelligent fertilization, robotics, image monitoring, pest control, among others. Among the finalists, four startups were selected to test and evolve their minimum viable product (MVP) together with Auros Robotics, Quickium and Umgrauemeio.

In 2021, driven by current market trends and the role of 5G enabling new business concepts, we established a partnership with Intel, which allows us to have first-hand access to Intel technology. The project focuses on offering 5G network services to benefit end consumers. The focus of the partnership is mainly on cloud gaming and the metaverse. This initiative is unprecedented in the Brazilian market, making us the first pioneer partner of Intel for cloud gaming over 5G.

In 2021, we again took part in the biggest hackathon in Latin America, Hacking.Rio. The challenges were based on the UN Sustainable Development Goals and we launched a challenge based on SDG 11 – “Sustainable Cities and Communities”, looking for products and services that can benefit mobility and help create, more modern and cleaner cities with green spaces.

In 2021, Stellantis, we and Accenture teamed up to launch the first standalone 5G pilot for the automotive industry in Brazil applied through a private network, which uses artificial intelligence and cloud computing.

In 2021, we were chosen as the telecommunications provider responsible for providing the 5G infrastructure and network, deploying the 5G SA (standalone) network core in the public cloud, constituting an integrated digital environment.

In 2022, after undertaking a proof of concept, we signed a private 5G network customer service partnership with a customer operating in the port segment. Pursuant to the joint initiative, we plan to implement the first 5G private mobile internet network tailored for port operators throughout Latin America. The network is expected to be commissioned in 2023, after releasing the 3.5 Ghz frequency for the city, under the oversight of Anatel, the national regulator.

The year 2022 was marked by several challenges, such as the reopening of face-to-face events, new opportunities in our partnerships, and bringing together startups that are in the scale up phase.

We participated in Scibiz, the largest conference bringing together the connection between science and business in Latin America, promoted by USP, at the International Diffusion Center (CDI) and at InovaUSP, in São Paulo. Together with several of our internal teams, such as human resources, IT/network and marketing, we held lectures on various topics and participated in panels on 5G technology, with the participation of a number of our directors, and a panel dedicated to our Cloud journey, which included participation by representatives from some of the largest tech companies.

We again took part in the biggest hackathon in Latin America, Hacking.Rio. Challenges were based on the UN Sustainable Development Goals and we launched a challenge based on SDG 12 – “sustainable production and consumption”, looking for products and services that can benefit the 4.0 industry, Big Data and 5G.

We made the first call for startups for our hub, called “HUB 5G TIM”, leveraging our new collaboration space. The first cycle was dedicated to our B2B - Corporate Solutions department, aimed at approaching startups dedicated to 5G applications for one of the most significant economic sectors of the Brazilian economy: Agribusiness. Eight startup proposals were selected, four of which were pure agritechs and four deeptechs/datatechs, with specialized solutions such as mapping the spatial variability of agricultural soils and creating high-precision management zones, in addition to computer vision, artificial intelligence and machine learning technologies. The selected startups will be able to test their solutions on one of our B2B agribusiness clients, in addition to having support from our technology department for better use of the 5G network.

Based on our open innovation model, in 2022 we contracted with 15 startups with solutions to increase revenue, improve experience and reduce cost or risk, supported by technologies such as artificial intelligence, cyber ​​security and process automation, to meet challenges in the areas of sales, purchasing, logistics, security, legal and customer relationship. As a result, we have already observed cost reductions with legal operational processes, based on the digitization of the demand handling flow stage, significant reduction of the SLA for carrying out tasks in the IT operations area and other improvement according to the perception of our employees, among other gains.

A Strong brand.

We believe that our brand, TIM, since the commencement of our operations, has been recognized for leading important developments in the Brazilian telecommunications market and, consistent with a new tagline.

During the 2020 COVID-19 pandemic, telecommunications services were very important, as connectivity allowed peopleour brand identity, we continue to find new waysposition ourselves at forefront of studying, working and finding entertainment, making the world even more digital. TIM translated this trend into its newsociety’s digital transformation. Our brand tagline “Imagine the possibilities”, which invites our customers to seeview the future in a positive waylight and shows that TIM will be nextdemonstrates our commitment to being along side them in theiras they face new challenges, opening up a world of opportunities. In addition, TIMwe presented a new spokesperson representing theour current brand values - freedom, respect and courage - and highlighting diversity, a relevantan important pillar in the company’sour strategy. To reinforce itsour brand strategy, TIM made a new reading of itswe revised our written purpose: “Evolve together with courage, transforming technology into freedom”, indicating that the companywe will continue to lead important market movements and act as a pioneer in customer services. Furthermore, to reinforce the positioning of our brand image,as a new campaign was launchedbrand that values our customers and brings advantages beyond just gigabytes of data, we have become the first operator to communicate TIM network quality, “TIM network. You can count on.”, that showsoffer consumers prepaid video streaming, further broadening and democratizing access to this type of service to a previously unserved customer base. Since 2015, we have been the evolution ofleader in 4G technologies, in which TIM has the largest coverage throughout Brazil, even connecting Brazil’s countryside to help facilitate technological innovation in the country since 2015,agribusiness sector. Furthermore, we pioneered the activation of 5G networks in addition to highlightingBrazil, with our first tests carried out in 2019, and we demonstrated our preparedness for the 4.5G and the newnext generation of mobile networks by launching 5G DSS. Finally, after 13 years, TIM again won the TOP OF MIND award from “Folha de SP”, onein all Brazilian state capitals while staying ahead of the main andcompetition in terms of coverage (including by focusing our 5G deployment in key regions in order to reap the benefits of our investment in 5G most respected and credible media companiesefficiently). Finally, in Brazil. In a customer survey,order to help reinforce our brand was electedassociation with music, in 2022 we resumed our music sponsorship. This included the most remembered in the telecom segment, demonstrating the consistencysponsorship of the brand2022 Brazilian edition of the Rock in Rio festival and communication work doneTIM Music Rio (free concerts on the beaches of Rio de Janeiro), TIM Music Noites Cariocas (the most iconic event in the last year.Rio) and TIM Music Mulheres Positivas (an all-female lineup).

Advanced Technology and Innovation Center

In 2017, we set up TIM Lab, a multifunctional test bed environment for evaluation of innovative technologies, products and services, assessing their functional efficiency and performance requirements, and development of new models and solutions. This endeavor brings engineers, researchers and technicians together to ensure effective assessment, and serves as an open space for new opportunities, leading innovation for the Brazilian telecommunications market and acting as a national reference for R&D activities.

TIM Lab performs a strategic role in supporting service assessment and innovation activities. These projects support TIM’sour network evolution and tackle certain important business and market needs, including the evaluation of new generation networks, future Internet applications, projects with positive social and environmental impacts and open innovation initiatives.

In this sense, TIM haswe also joined the Telecom Infra Project or TIP,(“TIP”), an initiative founded by Facebook and other companies to create a new approach for building and deploying telecommunication network infrastructure, with TIM Lab as the first TIP Community Lab in Latin America. In addition, since 2017 TIM Lab has also participated as one of the GSMA Mobile IoT Open Labs since 2017, a community where companies developing solutions over cellular low power wide area networks can work with experts on their projects.

Among the technologies assessed and approved at the TIM Lab environment are certain extremely important technologies to support the network evolution, including 700MHz LTE, IP multimedia networks (voice over LTE, video over LTE, WiFi calling services, completely laid out functional blocks, and enabled by an IP multimedia subsystem platform), network functions virtualization or NFV,(“NFV”), 4G RAN sharing, NB-IoT, Defense Wavelength Division Multiplexing, transport network and power saving features and solutions. In 2019, TIMwe launched itsour nationwide 4G NB-IoT network in 700MHz, covering over 3,200 cities. In 2020, TIMwe ran laboratory tests and live trials with 4G advanced features combined with 5G (multiple antennas plus carrier aggregation and dynamic spectrum sharing). The first 5G NSA compatible devices were homologated and commercialized in 2020, allowing the users to make use of the technology in the available live clusters. Open-RAN solutions were also evaluated in laboratory environment with the objective to assess the maturity of 4G and 5G disaggregated solutions for future field trials. Other advanced technologies, such as edge computing, disaggregated transponders and transport network optimization and automation solutions were also evaluated in TIM Lab in 2020.

We evaluated 5G standalone architecture and solutions in 2021 (known as 5G SA), for commercial deployment in 2022. Also in 2021, we developed proofs of concept (PoCs) making use of different technologies associated with 5G SA, such as artificial intelligence for the automated processing of images (using 5G as mean of connectivity), and cloud software for hosting 5G core network elements.

In 2022, we continued to undertake tests for our standalone 5G architecture at TIM Lab, aiming to ensure the evolution of the 5G architecture and the provision of quality services. Another focus of our work throughout 2022 at TIM Lab were the tests of broadband/fixed network expansion scenarios and Multi InfraCo's scenarios (together with VTAL), with a focus on the interoperability tests of TIM CPEs in the InfraCo's network, in addition to the various support and testing fronts with I-Systems.

In 2022, aspiring to broaden its project horizons and position itself as an innovative brand, TIM Lab undertook to migrate to a new location, with a fully renovated test environment that would also function as an innovate space for presenting projects to potential new business partners and clients while also generating cost efficiency, with the use of its own building and with new technical features. In October 2022, we started the plan to migrate TIM Lab to a new location in São Cristovão, in the state of Rio de Janeiro, with an area of approximately 850 m². With this new infrastructure, the TIM Lab will benefit from an increased usable area, better connectivity and greater capacity to absorb innovative projects, in addition to connections with cloud environments.

Strong commitment with ESG pillars and the only Brazilian telecommunications company listed on the Novo Mercado for over 10 years

Since TIM Participações’s listing on the Novo Mercado in July 2011, we arehave been part of the only company in the Brazilian telecommunications sector listed on thisNovo Mercado segment of the B3. As part of our listing on the Novo Mercado,B3 stock exchange, meaning that we are requiredsubject to complyB3's highest standard of corporate governance requirements, which includes compliance with heightened requirements relatingnot only related to corporate governance, andbut also to the disclosure of information to the market. As part of our strong commitment to these principles, we made our financial results meetings

available by teleconference, smartphones and tablets, in addition to computers. We believe that the listing on the Novo Mercado provides greater liquidity and value for our shares and allows us greater access to international markets, promotes the strengthening of our corporate image and increases confidence in us, in addition to reaffirming the long-term commitment of Telecom Italia and its subsidiaries or the Telecom(the “Telecom Italia Group,Group”), in Brazil. We believe listing on the Novo Mercado also aligns the interests among our controlling and minority shareholders with respect to voting rights, tag along rights and dividend policy.

In addition, we belong to a select group of companies comprising the portfolio of the Corporate Governance Index and the B3 Tag Along Stock Index, comprised of companies that have committed to adopt better co-sale protection to minority shareholders, have actively traded in 30% of the trading sessions and do not constitute a penny stock. In 2020,December 2022, we were listed for the thirteenthfifteenth consecutive year as part of the portfolio of the Corporate Sustainability Index of the B3, an index comprised of companies that have a strong commitment to sustainability and social responsibility, and was selected asresponsibility. In 2022, we also remained one of the “top 10” companies on the launchconstituents of the S&P B3 Brazil ESG Index in September.Index. In January 2021, TIM was2023, we were selected to joinremain in the portfolio of the Carbon Efficient Index, or ICO2, of the B3, with the commitment to measure, disclose and monitor itsour greenhouse gases, or GHG, emissions.emissions, and we were selected to be part of B3’s Great Place to Work Index, or IGPTW, once we became a GPTW certified company in 2022, recognizing us an employer that creates an outstanding employee experience. We increased, by 4%, our S&P ESG Score, which is based on our response to the Corporate Sustainability Assessment (CSA). The constant pursuit of best environmental, social and governance practices also ensures our presence in several international indexes and ratings, such as FTSE4GOOD Emerging Markets, FTSE4GOOD Latin America, MSCI AWCI ESG Leaders, MSCI Emerging Markets ESG Leaders, Refinitiv D&I Index, among others.

In 2021, we became the first Brazilian operator to integrate the Refinitiv Diversity & Inclusion Index, occupying the first position globally in the telecom sector. The index measures the performance of more than 11,000 companies - equivalent to 80% of the global market - based on diversity, inclusion and career development initiatives. In 2022, we were ranked 10th in the global ranking, maintaining our leadership in the telecom sector and in Brazil. At the beginning of 2022, we remained for the second consecutive year in Bloomberg's Gender Equality Index, which gathers 485 companies from 45 countries, with only 17 from Brazil.

As a signatory to the Global Compact since 2008 TIM participates in the Human Rights Working Group organized by the Brazilian Network of the Global Compactand UN Women since 2015 and promotes2021, we promote projects related to the Sustainable Development Goals (“SDG”). We and recognize the rights to data privacy, safe internet, access to information and freedom of expression as essential and unnegotiable.unnegotiable as part of our efforts to respect Human Rights.

As part of itsour commitment to society in addressing climate change, TIM conductswe conduct periodic mapping of the sources of emissions in itsour activities. The Company isWe are able to do so by preparing annually a GHG inventory in accordance with the guidelines of the GHG Protocol (which sets the global standard for how to measure, manage, and report greenhouse gas emissions). and also by working with TIM in Italy to establish goals aligned with the Science Based Targets Initiative (SBTi), since the companies controlled or related to the TIM Group in Italy (“TIM Group”) joined the initiative in July 2021 with the challenge of keeping global warming limited to 1.5°C, as established in the Paris Agreement. The SBTi aims to promote the best reduction and offsetting GHG emissions in line with climate science. Since 2010, TIM reports itswe have reported our greenhouse gases (GHG) emissions by means of the Carbon Disclosure Project (“CDP”) – the largest database of primary corporate climate change information in the world – and publishes its GHG emissions inventory in accordance with the Brazil GHG Protocol Program. In 2021, the CDP questionnaire was integrated by B3 as a crucial part of the methodology for the selection of the constituents of the Corporate Sustainability Index and our CDP Score improved from B- to B. In 2022, we remained in the ICDPR70, an index we have been part of since its creation in 2021, which focuses on including companies publicly committed to reducing their carbon footprint, based on the companies' scores in the CDP questionnaire and ranking those with the best level of awareness about climate change.

Since May 2022, we have publicly declared our support for the recommendations by the Task Force on Climate related Financial Disclosures (TCFD), demonstrating our commitment to better information as a basis for understanding climate risks in our transition to a low carbon economy. We have also aligned our approach to climate risks and opportunities with the TCFD recommendations and published these in an issue brief.

We also identify opportunities to improve our levels of excellence in our Environmental Management System (EMS), covering all our operations, based on our Environmental Policy. This includes basic commitments such as protecting the environment, customer service to the legal requirements and norms of the organization and the continuous improvement of performance in processes and controls, having obtained the ISO14001 environmental certification for Network Management and Operation in the states of Rio de Janeiro, São Paulo and Espírito Santo.

For 1215 years TIM haswe have published itsour Sustainability Report presenting the main financial and non-financial results, in accordance with the Global Reporting Initiative (“GRI”) Standards methodology. TheSince 2021, we refer to this publication as the ESG Report and reinforce our commitment to transparency and accountability to our stakeholders, organizing the report into three pillars: Environmental, Social and Governance. Since 2021, the ESG Report also reports the SASB - Sustainability Accounting Standards Board - indicators. Our ESG Report has an independent third-party limited assurance.assurance since 2009.

Our main policies - such as the Corporate Social Responsibility, Human Rights, Environmental, Climate Change, Supplier Relations, Risk Management, Anti-corruption and Safety & Occupational Health Policies - are publicly available to the consultation of our stakeholders.

The company also identifies opportunities of improvement to achieve levels of excellence in its Environmental Management System (EMS). It has been working on improving performance in processes and controls since 2010, having obtained ISO 14001 environmental certification for Network Management and Operation in the states of Rio de Janeiro, São Paulo and Espírito Santo.

Founded in 2013, Instituto TIM has a mission to democratize access to science, technology and innovation, in order to promote human development in Brazil. More than 700,000 people from all Brazilian states and the Federal District have been benefited by the education and inclusion projects of Instituto TIM, some of which were internationally awarded (i.e. Governarte Awards – BID 2015). More on Instituto TIM’s actions on the website https://institutotim.org.br/.

In 2020, TIM included2022, we updated our long-term ESG commitments in its 2020-2022our 2023-2025 Strategic Plan. The CompanyBased on the ambitions assumed in our last Industrial Plan (2023-2025), we included new objectives related to a portfolio of initiatives that are part of our business strategy, contributing to a coherent interrelated structure between ESG aspects, business operations and organizational accountability. For the TIM Group, the business role is increasingly tied to the responsible management of aspects that go beyond financial targets and aim to generate positive value for society in the long term.

Among the established goals, which are also part of MBO and LTI compensation programs, our environmental pillar is to become a carbon-neutral company by 2030 and net-zero carbon by 2040. In addition, we have undertaken to maintain a policy of using renewable sources for 100% of our energy consumption, to increase by 110% the energy efficiency in data traffic (against the base year of 2019) by 2025, to reduce by 47% scope 3 indirect emissions by 2030 and to recycle at least 95% of our solid waste by 2023. From a social perspective, the main commitments are for our workforce to be comprised of 40% of black people, our leadership positions to be comprised 35% of women, to take 4G connectivity to all Brazilian cities, and to keep our level of employee engagement of at least 80% until 2023. We have obtained the ISO 37001 (anti-bribery management systems) and, aims to obtain, untilin 2022, also obtained the ISO 27001 (information security management), both are important aspects of our Corporate Governance pillar, while reducing GHG emissionswhich also has as goals to recertificate them when needed, and improving eco-efficiency are relevant Environmental goals. Onby 2023, to keep TIM on the Social pillar, the trainingNovo Mercado, Pró-Ética and ISE-B3, and the engagement of employees are the main objectives.ISO 14001 and ISO 9001 certifications. Our ESG plan is annually updated together with strategic plan.

Highly qualified and experienced executives and controlling shareholder support.

We have a team of highly qualified executives, widely recognized in the industry and possessing extensive experience in telecommunications markets in Europe and emerging countries. Our executive compensation policy seeks to align the interests of our executives with those of our shareholders, through variable compensation plans and stock optionsshare based incentives that reward good performance and the accomplishment of certain goals, as well as provide for improved executive retention.

Our controlling shareholder’s support in our operations is further demonstrated through the sharing of know-how and best practices and development of new solutions for networking, marketing and finance, which are rapidly rolled out under a “plug & play” strategy, under which network innovations may be developed by our parent company first in other regions and then implemented with us.

Strong financial position

With consistent financial results in recent years, and solid earnings before financial revenues (expenses) (including foreign exchange variations), income tax and social contribution, depreciation and amortization or EBITDA,costs and expenses and share of loss of an associate (“Adjusted EBITDA”), according to our internal analysis, we believe that we have a strong cash flow generation, a solid financial position and a low relative debtNet Debt to Adjusted EBITDA ratio. In this scenario, we understand that we are in a strong position to take a significant role in potential future consolidations in the market and/or to have a competitive position in important frequency auctions in the years to come.

Our Strategy

Our Strategic Plan

We expect our updated strategic plan to allow us to consolidate the TIM brand through 2023,2025, in a consistent approach with our prior plan (2020-2022)(2022-2024). Our new plan is still focused on our main stakeholders and on providing building blocks for our future growth by combining evolution and transformation to developreach our aspirations, which combines our bold expectations for both value and growth. The improvement in overall business dynamics, driven by the combination of having a larger revenue base with a solid margin recovery trend and better capital expenditure efficiency provides us with opportunity and a clear path to optimizing our spending. This dynamic is expected to provide benefits to our cash flow and overall financial returns.

The means by which we achieve our aspirations pass through (a) being recognized as the best mobile operator in Brazil, (b) accelerating our growth by pursuing a new asset light model in broadband, (c) scaling-up our presence in the B2B/IoT tech arena and (d) expanding the portfolio of our strategic pillars.partnerships to accelerate our ability to capture value.

In order to be recognized as the best mobile operator in Brazil, we know we have to surpass our competitors by providing the market with (1) the best offer, using innovation as a core differentiator, (2) the best customer service, which involves a long journey towards developing a culture of customer experience excellence, and (3) the best connection, by taking the lead in the network quality race, all whilst evolving to provide our customers the best overall service and experience available in the market.

For the purposes of accelerating our growth through a new asset light model in broadband, we are focused on the massive FTTC to FTTH customer migration (to maximize customer experience and profitability), accelerating the expansion of our footprint through partnerships like I-Systems, and enhancing our value proposition, launching convergence play (mobile + broadband) with a better trade-off between volume and value.

In order to scale-up our presence in the B2B/IoT tech arena, we have been undertaking strategic movements, aiming to capture the expected growth of the market by increasing adoption across verticals and 5G opportunities, through (a) the select use cases verticals, (b) partnering with industry leaders, (c) developing solutions in specific ecosystems, whilst having in mind that the market for solutions and services related to connected applications will grow faster than the market for connectivity. We have already been partnering with many industry leaders and are evaluating a number of promising vertical opportunities that we wish to pursue. There are many sectors which present business opportunities for us to offer a full vertical solution.

We are strengthening our core business to generate cash-flow to sustain new avenues of growth and increase shareholder remuneration. We believe that duringthis unique combination of elements, with ESG agenda embedded in our business strategy, will result in the nextbest value proposition for the investor community.

In an effort to generate high value beyond our core business through partnerships with potential market disruptors and unicorn candidates, our plan is to leverage our base and key assets to target organizations that we believe can grow exponentially, boosting our unique assets through a symbiotic relationship. We have developed a clear plan of action to generate value for our customers, partners and shareholders, whilst retaining our customer base with an ever improving service quality and value proposition. In recent years, some relevant trends, such as mobile market consolidation, wavewe have built an unrivalled, efficient and scalable machine to convert millions of asset separation, acceleration incustomers to new digital consumption, 5G, such as the Internet of things, or IoT, and the machine-to-machine market, or M2M, technology, will have structural implications on the business model of telecommunication operators in Brazil, including the uncertain pace of the country’s economic recovery. Our aspirations for 2023 reflect these market opportunities and trends, as we will strive to:services. 

Our forward-looking strategy is focused on the four strategic fronts:

In our view, the COVID-19 pandemic increased demand for connectivity and the telecommunications sector has taken advantage of it. As a result, we believe we can be considered a more resilient company, not only due to data consumption growth, but because we have been honing our market vision and execution capacity to create long-term value.

Protecting the value of our prepaid customer base and aiming at the growing postpaid segment, shifting focus from absolute market share to revenue share, and strengthening our existing customer base.

TheUp until 2020, the Brazilian mobile telecommunications market iswas facing an overall reduction in the number of prepaid customers, as userscustomers. However, in 2021, the prepaid base increased, which previously held multiple SIM cards are consolidating to one single SIM card,may be a consequence of the reductionsocio-economic changes in population or particular incentives in our competitors’ offerings. In 2022 the market underwent a series of interconnection charges, which allow companies to offer plans with off-network calls at the same pricedisconnections of on-network calls. In connection with this trend,inactive lines that were inherited by leading carriers following their acquisition of Oi’s mobile business. We maintained our strategy is to be chosen as the single SIM provider for the prepaid consumer market by providing offers that are attractive and valuable to customers andwhile maintaining our reputation for quality and innovation. For the prepaid consumer market, our key priority is to offer simplification to improve customer experience with continued evolution of digital channels, while for the postpaid consumer market, our plan is to grow based on a “Mobile Challenger” approach pushing migration from prepaid, leveraging the benefits of 4G coverage leadership and establishing a customer long-term relationship driven by loyalty initiatives. To support this strategy, we also implemented new offers, new handset strategy and initiatives in our sales channel model because of the pandemic. We improved the digital channel and created a drive thru and delivery sales models experience while physical stores were closed to maintain sales.

The COVID-19 pandemic crisis led to a drop in prepaid recharge revenue in the first months of the pandemic, recovering in the second half of the year. In order to contain the negative impact of the crisis, numerous actions were taken, highlighting the encouragement to recharge by means of digital channels and the digitalization of Control customers who paid their bills in physical channels, reducing bad debt.

experience. In the business to business market, we intend to leverage consumer offers and channels in order to gain market share in the small and medium business, or SMB, segment, as well as to launch a new mobile offering focused on micro and small businesses. We are also pursuing the development of targeted markets such as the Internet of things, or IoT, and the machine-to-machine market, or M2M, beyond simple connectivity, and evaluating business opportunities for the application, using the 5G network, of mobile application and fixed wireless access. Moreover, we are repositioning our sales channel strategy in order to increase not only efficiency but also sales productivity. Our growth strategy is mainly focused on addressing the potential for mobile Internet in the Brazilian market, particularly increasing mobile Internet penetration and data traffic. We believe mobile operators are in a strong position to address the demand for broadband in Brazil, with the ability to provide flexible price plans affordable to the majority of the Brazilian population. The lack of fixed infrastructure is still an issue for accessibility to fixed broadband, especially in suburban areas, making mobile coverage more suitable for such customers without broadband access. In addition to providing affordability and coverage advantages, mobile operators appeal to the new cultural demand for Internet connectivity at all times and in all places.

In addition, our strategy also involves positioning TIM as a partner of our existing customer base, by increasing their loyalty by offering exclusive products to existing customers, focusing on Value-Added Services in our offers, and by differentiation in our productsproduct s and services. Value-Added Services represent an important part of the TIM strategy, as it is already a relevant market and has high growth rates with the potential to increase revenue streams. Such services are generally launched through a partnership with an established OTT player. We believe the foregoing strategies will allow us to strengthen customer loyalty without requiring us to incur higher costs, as

increased traffic within our own network does not significantly increase our operational costs. We are also investing in new channels, to bring new customers to the company and to enhance each customer’s experience. We are constantly seeking new customers through new marketing efforts and promotional initiatives. Another important growth factor is expected to come from our digital strategy evolution, with an increased role in the growing M2M and IoT ecosystem, exploring new revenues opportunities including being more than just a connectivity provider, offering a platform (analytics, big data, mobile advertising, etc.) and a content offer aggregation to support mobile and fixed service revenue growth. Capitalizing on fixed-mobile substitution in voice and traditional services.

We seek to capitalize on the existing opportunity of fixed-mobile substitution in voice and data traffic and encourage the use of mobile devices, rather than landlines, for long distance communication and Internet. We believe that the main advantage of our product offerings is that our customers are able to use our growing mobile network.

In the voice market, this strategyProviding affordable Internet access.

Mobile network technology has been successful in part duecreated a business opportunity for CSPs to the limited service offerings of other long distance carriers in Braziloffer more affordable connectivity services to individuals, which brings benefits for both customers and the acceleration of fixed-mobile substitution.mobile operator. We have become a market leader in long-distance telecommunications, based on our market share. Fixed-mobile substitution is still evident in Brazilian market, as fixed telephony operators have experienced declining revenues. Since we are primarily a mobile operator with robust network infrastructure, the impact of any reduction in the fixed telephony market does not have a material impact on our performance, and we therefore encourage the acceleration of fixed-mobile substitution, which in turn increases demand for our services.

As already mentioned, TIM is also targeting the residential broadband market through its 4G mobile broadband network, using fixed wireless access technology, connecting homes to the Internet by using a router that connects to our 4G mobile network. We believe such product can be suitable especially for areas with poor fixed broadband infrastructure as our 4G coverage is growing rapidly. We are also evaluating the use of the 5G network to provide fixed wireless access solutions.

Providing Internet access to everyone.

We intend to provide universal Internet access to an increasing number of individuals, offering our prepaid and postpaid customers competitive data usage plans through wireless handsets or other data devices (e.g., tablets, wearables, etc.). We believe that our telecommunications activities generate positive impact beyond our business. Access to mobile telephony and broadband internet services allows not only communication, but also creates countless opportunities for people and companies, functioning as a powerful tool for innovation. This transformation also enables digital inclusion through the provision of connectivity to regions otherwise without access to these resources, such as isolated communities, rural locations and low-income areas. Our focus on increased data usage among our customers is also influenced by our ability to effectively manage our handset and accessories sales, with a primary focus on entry level 5G smartphone models that providewill be ready for the deployment of our 5G network, providing quality Internet access at a low cost.access. This approach has allowedis allowing us to offer our services at a highly competitive price, offer convenient payment methods, meet market demand and allow for opportunities for innovation. The result of this strategy can be seen in the increase in our number of data users and in smartphone penetration, especially in 4G.5G. Leading mobile Internet growth in our sector is a key pillar of our strategy, since we see this as the most important market in terms of growth and size in the foreseeable future. Our marketing efforts have also been designed to stimulate Internet usage and leverage our 3G4G and 4G5G networks by providing for suitable and affordable postpaid and prepaid Internet plans.

Construction of a unique infrastructure network in the Brazilian market and improving our network

We are committed to developing a robust network infrastructure capable of serving our customer base and anticipating new trends and technologies in the industry. The development of this infrastructure requires both organic (planning and infrastructure development projects for the existing network) and inorganic (acquisitions) investments. As part of our strategy to focus our investments in infrastructure, TIM Participações acquired Intelig (now known as TIM S.A.) in December 2009, in order to establish TIM’s own fiber optic network and develop automation projects. TIM Participações also acquired the company formerly known as AES Atimus (later TIM Fiber, which was merged into TIM Celular in 2012, and TIM Celular was merged into the Company in 2018) in 2011 to strengthen and expand our fiber optic network.

With the acquisition of Oi’s mobile operations, TIM will improve itsOi Transaction, we have improved our market position, capturing higher gainsbetter economies of scale, synergies and optimizing investments. TIM should incorporateWith the acquisition, we have incorporated into our network approximately 7,200 mobile access sites, which corresponds tobeing approximately 49% of the former Oi’s total mobile assets. We intend to maintain 2,500 of these mobile access sites, of Oi’s mobile assets unit.improving coverage and user experience, while decommissioning the remaining sites as they are too close to our existing sites.

Besides improving our core infrastructure, TIM haswe have been rolling out an aggressive plan for 4G coverage, which we believe has placed TIMus as the undisputed leader infor 4G coverage in Brazil, achieving more than 3,477 cities withproviding 4G technology in 2020, considerably ahead100% of its competitors. This positions TIM as havingBrazilian cities at the best coverage and the best mobile broadband technology, creating the possibilityend of an improved market position, particularly for high-end customers. TIM has also reinforced its2022 – in line with our commitment to cover 100% of the country with itsour 4G network by 2023. Moreover,the end of 2023, considerably ahead of our competitors and we believe positioning our brand as the market leader in terms of coverage. We were elected the telco with the best “Core Consistent Quality” and with the higher network availability by OpenSignal, in partnership with Anatel.

Strengthening our expanding core and developing our recent new businesses.

We have continued our plan to strengthen and expand our core sectors. TIM has also been strategically investing in 3G technology, achieving more than 3,200 cities covered in 2020. In order to improve our network coverage in an efficient way, without raising investment levels, TIM has executed network sharing agreements during 2020 with other telecommunications providers.

Expansion into new businesses and continued strength in recently expanded sectors.

TIM LiveUltraFibra offers high quality ultra-broadband, with high-speed data connection, currentlyconnection. To navigate our way through new markets, we, through partnership with I-Systems and others, have accelerated our footprint expansion, FTTH (fiber to the home) network coverage and continued to grow, prioritizing the consolidation of already active clusters. We ended 2022 with growth of 30% YoY of total homes passed (HPs) with fiber, operating in 34 localities with FTTH (+47.8% YoY), being 2732 cities and plus 79 administrative regions of the Federal District. We ended 2020 surpassing 3.2 million homes-passed (HPs)District, and with FTTH (fiber to the home) technology – an expressive double-digit growth of almost 43%ARPU increasing by 1.7% when compared to the fourth quarter of 2019 to the fourth quarter of 2020 – and an ARPU increase by 7.8% when compared2021.

TIM UltraFibra ended 2022 with 2019.

In 2020, we had a base of 645 thousand clients,716,000 connections, adding about 80 thousand customers in the twelve past months (up 14.0% YoY). Net additions to FTTH reached 131 thousand new usersapproximately 31,000 lines in the past twelve months. .12 months, increasing by 4.5% YoY, maintaining its growth trajectory, with the FTTH base as the main lever. Higher value plans, with speed above 100 Mpbs, continue to gain more relevance, reaching a 77% share of the total base in the quarter ended December 31, 2022. We plan to continue expanding TIM Live'sUltrafibra's services with the right balance between Salescoverage rollout model transition from building to renting, with I-Systems acting as one of the infrastructure vehicles with the mission of deploying, operating and Capex, reinforcing clusters already launched and accelerating our deploymentmaintaining last-mile infrastructure for broadband access, in a strategy of fiber (backbone, backhaul and fiber-to-the-home)changing capital expenditure to operating expenditure with fiber-to-the-home offered in selected regions. Our success withpositive free cash flow impact.

Since 2020, TIM Live has been developing an innovative customer platform strategy that aims to monetize our customer base. Strategic partnerships, together with Mobile Advertising, yielded revenues of approximately R$185 million in 2022.

Following the same approach, in May 2022, we announced a new strategic partnership, this time focused on the digital security market and entertainment. This partnership was born between TIM and the FS group with the creation of EXA, a new brand dedicated to digital solutions for end consumers. EXA began to offer reading solutions to our customers directly in their plans through the Ayabook and Aya Minibooks applications (which provide access to digital books) and through Bancah (which provides access to several Brazilian newspapers and magazines). As a result, of the strategy of offering a differentiated autonomous broadband service, with an OTT friendly approach.more than 40 million TIM customers can benefit from these services.

Sales and Marketing Strategy

Our recent sales and marketing strategy has been characterized by:

Digitalization and innovation by means of a partnership with C6 Bank, a digital bank, that adds more value to postpaid customers, bringing exclusive benefits such as credit card with free annual fees, exclusive investment portfolio, no tax to open an account, subscription of a premium delivery app included “RappiPrime”, and also expanding our telecom benefits with internet bonuses, internet to use in international roaming, international long distance calls and the possibility to buy smartphones with better payment options with C6 Bank credit cards.

We are negotiating a new partnership with an educational group in Brazil to offer greater value and exclusive benefits to our customer base and expand access to digital education services.

Mobile Service Rates and Plans

In Brazil, as in most of Latin America, mobile telecommunications service is offered on a “calling party pays” basis, under which the customer generally pays only for outgoing calls. Additional charges apply when a customer receives or places calls while outside the customer’s “registration area,” which are the areas into which we divide our coverage areas.

Under our current authorizations, we are allowed to set prices for our service plans, provided that such amounts do not exceed a specified inflation adjusted cap. Anatel must ratify our basic and other service plans, but its focus is on compliance with the relevant regulatory rules rather than the prices charged. See “—Regulation of the Brazilian Telecommunications Industry—Wholesale Rates Regulation.” We charge different rates for our services, which vary according to the customer’s service plan. Per minute prices decrease as customers commit to purchasing more minutes per month. Prices can also vary depending on the type of call (for example, calls from other operators on fixed lines or calls outside the network for mobile calls) or the location of the parties on a call.

Anatel regulations require mobile telecommunications providers to offer service to all individuals regardless of income level. We recommend service plans that are suitable to each potential customer’s needs and credit history, such as our prepaid service plans described below. If a customer fails to make timely payment, services can be interrupted. See “—Billing and Collection.”

We offer mobile services under a variety of rate plans to meet the needs of different customer classification, including our corporate customers. The rate plans are either postpaid, where the customer is billed monthly for the previous month, or prepaid, where the customer pays in advance for a specified volume of use over a specified period.

Our postpaid plans include the following charges:

Certain plans include the cost of national roaming and long distance in the price per minute so that all calls within Brazil cost the same amount per minute. Some postpaid plans are designed for high- and moderate- usage subscribers, who are typically willing to pay higher monthly fees in exchange for minutes included in the monthly service charge while other plans are designed to satisfy the more limited needs of low-usage postpaid subscribers. We also offer customized services to our corporate clients, which may include local call rates between employees wherever located in Brazil.

We offer a single prepaid plan with promotional offerings, which does not include monthly charges. Prepaid customers can purchase a prepaid credits plan that may be used for calls, data and additional services, based on the specific customer’s needs. We have agreements with large national retail store chains, in addition to partnerships

with regional retail store chains, to offer recharging online and by WhatsApp.online. Customers can also recharge straight from their mobile handsets using credit cards.

Consumer Plans

In 2020,2022, we continued to improve our positioning towards high value consumers, offering a variety of plans bundling voice, data packages and free access to certain applications, as well digital Value-Added Services (music, e-reading, video streaming). The approach to this segment is driven by the strategy of adding value for the customer base and ensuring users a premium custom experience.

Within the consumer business, our main plans include:

Prepaid Plans

·        TIM Pré TOP: Offerings launched during 2020 were built for provide a full experience with simplicity, by adapting consumption according to balance and recharge; boosting benefits (unlimited network calls, unlimited calls for other carries using code 41, adaptable data packages and SMS). In addition, due to the more aggressive competition scenario, we have become more competitive, giving more benefits to customers with a high recharge value and expanding the monthly R$20,00 offer to more area codes.

·        TIM Beta: With an exclusive feel, this plan focused on young and digital customers that can only enter by invitation send by existing members or participating in a journey and accomplishing tasks to conquer their own invite. Until the end of 2020, the plan offered voice, SMS and data packages per day, week or month. However, in December, there were changes in the plan with the end of the commercialization of daily and weekly offers. New monthly offers were launched with more attractive service packages that include 8GB of internet franchise for Netflix, YouTube, Instagram and TikTok and unlimited calls.

Postpaid Plans

In the higher value postpaid segment, we have maintained our position in the market as an innovator and disruptor with our new TIM Black Família and TIM Black plans, discussed above, improving our portfolio by offering large shared data packages with monthly video streaming subscriptions, such as Netflix, HBO GO or YouTube Premium already included in the fee.

TIM Black Família plans start at R$199.99184.99 for an entry level plan with unlimited off-network calls, 30 GB shared data package (for one main line and one dependent), and unlimited data for OTT applications such as WhatsApp, Facebook, Instagram and others. The main offer is set at R$319.99284.99 (for one main line and three dependents) with unlimited off-network calls, 100 GB shared data package, Netflix, HBO GO or YouTube Premium monthly fee included, and unlimited data for OTT applications such as WhatsApp, Facebook, Instagram, data rollover, international roaming (including data package for use in the American continent, seven days of unlimited WhatsApp and 30 minutes of voice) and others.

TIM Black plans start at R$109.9999.99 for an entry level plan with unlimited off-network calls, 15 GB data package (for one main line), and unlimited data for OTT applications, such as WhatsApp, Facebook, Instagram and others. The main offer is set at R$149,99139.99 (for one main line) with unlimited off-network calls, 25 GB data package, data rollover and international roaming (data package for use in the American continent) and other benefits like unlimited data for OTT applications and Value-Added Services such as music, e-books and magazines.

Control Plans

Our Control plans are a hybrid between our prepaid and postpaid plans, with fixed price billed to the customer on a monthly basis, either via credit card or digital account. Once customers of Control plans have reached the limit of their data plan, the data transmission is no longer available and the user has two options: (i) to repurchase a data package or upgrade to higher tariff planplan; or (ii) to wait for the next data period to commence, which varies by plan, at which point his data availability and usage limit are renewed in full. Postpaid customers can also purchase a data package to navigate in full speed but the usage is not blocked when he reaches the limit of his data package.

TIM Controle plans start at R$44.9946.99 with unlimited on-network calls and 25 minutes of off-network local calls and 2.515 GB Internet. The main offer in the TIM Controle portfolio (which has a commercial focus) is set at R$64.9959.99 with unlimited calls, 4.0 GB19GB Internet and unlimited data for OTT applications.

Corporate Plans

We are seekingcommenced an ambitious endeavor in 2018 to increase customer base loyalty withinbridge the Controle segment by offering discounts forconnectivity gap in Brazilian rural areas in partnership with the agricultural industry. As a 12-month contract; this typeleader in 4G coverage, we already had agribusiness customers, but sought to enable the digitalization of the industry and to offer allows TIM to be more competitive while taking a selective and rational approach. We also offer an innovative unlimited data “plug in” at a price of R$20.00 for use of social networks, and give customers the opportunity to “try and buy” this social network plug in for three months. We launched a new higher tariff plan within TIM Controle set at R$79.99 with unlimited access to social networks, 5.0 GB Internet and unlimited callssolutions in order to encourage customersincrease our productivity with automation, control and new technologies. We joined major companies within the sector to upgrade aftercreate ConectarAGRO, a customer-focused initiative to expand connectivity to all rural areas of Brazil, increasing productivity and transforming the trylives of those who live in these regions. The initiative reached its 2019 goal of 5 million connected hectares and buy period.expects to progress further in 2023.

Corporate Plans

In 2020,2021, we continued to improve our positioning towards the large companies as potential clients, offering a variety of corporate solutions for mobile or fixed services (both voice and data), as well as Value-Added Services and mobile-to-mobile services. The approach for these top clients are driven by customized solutions and a premium customer service focus.

In the SMB segment, we have positioned our core offering targeting the “prosumer” market, or those individuals who both consume and produce a product. “TIM Black Empresas” has become the brand for the SMB portfolio, delivering unlimited voice calls and a variety of data packages, consistent with its strategy of providing “lots of minutes and lots of Internet, across all operators and anywhere in Brazil.” In addition to mobile connectivity, relevant Value-Added Services have been added to the main “TIM Black Empresas” offer in order to empower our business customers during their progress towards digital transformation, such as: cloud storage and backup, a website and online store builder, sales/field force automation and productivity apps. Those complimentary services were built based on revenue sharing agreements through strong partnerships with UOL, Fs, Datamob, Prouser and Deezer, that supports our aim to become our customers’ business partner rather than a pure connectivity provider.

Additionally, TIM commencedIn 2022, we started offering private networks combined with edge computing solutions in the B2B market, in order to address the needs of agricamps, and ports and other verticals to have access to high-throughput, low-latency and high resilience 5G networks, ensuring that companies always have access to the bandwidth and network resources they need, including low latency time. We intend to implement those networks in 2023.

We maintain a prominent position in the area of Internet of Things (known as IoT), especially in the AGRO segment, where since 2018 we have started an ambitious endeavor in 2018effort to bridgefill the connectivity gap in Brazilianthroughout rural areasBrazil in partnership with the agricultural industry. As a leadersector. In 2020, in 4G coverage, TIM already had agribusiness customers,addition to consolidating its leadership in AGRO, we managed to evolve with projects in other verticals with action and cooperation with the ecosystem. Our strategy that has connectivity as the central point, our strongest attribute, but sought to enable the digitalization of the industry and to offer innovativewith complete solutions together with our partners in order to give more value to our customers and, at the same time, generate more revenue and loyalty. In addition, we have been developing a new network product and service model by offering private networks using 4G and 5G mobile network technologies for corporate customers, mainly for industrial segments such as mining, transport and logistics, healthcare, public safety and industry 4.0.

Since 2018, in an ambitious effort to fill the connectivity gap in rural Brazil, we have increasingly advanced in enabling digitization of the sector and allowing the adoption of innovative solutions to increase its productivity and efficiency with automation, control and new technologies.

We joinedare a founding member of ConectarAGRO in partnership with the major companies withinplayers of the agricultural sector, to create ConectarAGRO, a customer-focused initiativefocusing on customer-farmers, to expand connectivity to all rural areas ofin Brazil, increasing productivity and transforming the lives of those who live in these regions.

In 2022 we reinforced our position of prominence in the area of Internet of Things (known as IoT), not only due to strong results in agribusiness, but with relevant projects in other verticals such as logistics, public safety and mining, acting and cooperating with the ecosystem. We also established ourselves in the 5G private network business segment and closed a number of deals in industrial sectors, the most significant of which was the first 5G port operation in Latin America, located in Port of Santos, State of São Paulo. The initiative has reached its 2019 goalcenter point of 5 million connected hectaresour strategy is connectivity, complemented by fulsome solutions together with our partners to deliver additional value to our customers while generating more revenue and expectscustomer loyalty.

In the ICT and Mobile market, our strategy is to progress furtherreinforce our portfolio of traditional solutions and our positioning as a significant player in 2020.large companies’ segment, offering various corporate solutions for mobile or fixed services (voice and data). In addition, we are working to evolve our value-added solutions, seeking to provide a more fulsome approach to meet the broader needs of our premium customers.

Value-Added Services

We are constantly seeking to increase value to our customers through innovative offers and products, and 20202022 was no exception. We offer, directly or through agreements entered into with third parties, Value-Added Services in varied categories, such as education, music, reading, games, videos and social networks. Our

In 2022, we launched what we consider to be the most relevant change regarding Value-Added Servicesinnovative offer in 2020 wasthe Brazilian pre-paid space, made possible by partnering with Amazon. Pursuant to our offer, all pre-paid customer are granted free access to Amazon Prime Video. This has generated a spending increase of 20% for our pre-paid base using the service.

We also continue the improvement of our portfolio through additional services provided by new strategic partners. For 2021, we intend to continue to implement this strategy in a wider array of products, to introduce new types of Value-Added Services into these bundles, and to launch a new strategy to sell stand-alone Value-Added Services offers which will focus on aligning clients with Value-Added Services offerings.

Financial and Other ServicesDigital Channels

In 2020,2022, we continued to develop this businessour digital channels as well as the insurance services we relaunched in 2018 with a new portfolio of services, which allow us to take a broader approach to this market, suchmarket. We launched new digital customer service channels, which aims to maximize convenience for our customers. We continue to use a new tool called DialMyApp that shows a visual interactive voice response (known as TIM Protect,IVR) on the customer's cell phone every time the customer calls the contact center from an Android device. This is intended to enable our customers to resolve their issues directly on their smartphone without needing to go through the traditional phone service. We achieved first place in customer engagement on this platform among all Brazilian telcos. We also continue to use customer service through RCS, a value added services insurance planGoogle platform that covers certain device damages, lossesallows easy interaction with our customers, with user-friendly visual elements, in addition to a more interesting cost composition. Once again, we were the first telco to launch this service in Brazil. We also started the process of internalizing pre- and theft. For 2021, we intendpost-paid migrations under the leadership of the board dedicated exclusively to develop new partnerships with Brazilian fintechsdigital and remote channels created in order to provide agility and innovation to our customers.

Digital Channels2021.

In 2020, we focused2023, our efforts infundamental pillars are to increase the share of proprietary channels, with the evolution of digital channels (including publicthe e-commerce internalization process and logged web sites, self-caring applications and e-commerce portals) in order to deliver new services, provide betterredevelop the MEU TIM app, as a strategy to improve customer experience,

increase the volume of users and operate with more efficiency. Digital channels usage volume has increased significantly in 2020, with more visits in the public website and increases in the total sales and users of the Meu TIM application as compared to 2019.

In addition, we are able to interact with our customers through WhatsApp, a channel that is already integrated intoimprove their digital life. We are the first Brazilian operator to close a commercial contract to use WhatsApp Business, which allows communication between companies and customers in a simple and easy way.journey.

Customer Service

In order to serve our customer base, almost 5563 million customers, we aligned the insourced/outsourced ratio of our internally managed customer service operations to our outsourced customer service operation to the best practices of Brazilian telecommunications business.

We operate through 18 customer care centers, two of our own and eight16 outsourced, comprising around 10,51113,511 customer service representatives and our home based service “Projeto Nova Era – 100% Remote service”, (of which 1,888 are the purpose of offering dedicated1,521 customer service representatives aim to provide the best options in terms of offers and services tooffer our multi-customer base)customers a differentiated journey). Our high value customer service, core processes and core or critical processes“Referral Channels” are maintained withinin our internal customer care centers.home based model.

As of December 31, 2020,2022, we had more than 11.8 thousand12,800 points of salessale through premium shops and dealers (exclusive or multi-brand) and consolidated partnerships with large retail chains. This figure includes 161158 of our own stores. In addition to these retail stores, our customers have access to prepaid phone services through supermarkets, newsstands, and other small retailers, totaling more than 220 thousand212,000 points of sale throughout Brazil.

After its launch in December 2021, we opened our first five concept stores, using a new format, launching the beginning of a new experience in our customer journey. For 2023, we plan to open four additional concept stores in this new format. The new format has several spaces where customers are able to try out smartphones and accessories that already have 5G technology, as well as equipment for connecting homes using TIM UltraFibra fixed ultra-broadband. Customers themselves will be able to carry out basic activities, such as consulting with our sales representatives, printing, paying invoices, purchasing plans and services, and even discussing with our tech experts tips for operating their devices, apps, and more. For the corporate market, TIM haswe have more than 536397 third-party business partners and 112101 employees focused on serving small-small and medium-size companies and a direct sales force team of 86 employees focused on large companies.

ThroughoutSince 2020, digital channels have been an important aspect of our customer service, was digital customer service such as ourthrough the MEU TIM mobile application Meu TIM and the Company’s website. The digitalMEU TIM web portal. Digital channels are also gaining relevance inuseful for self-service, prepaid customer self-caring, top up of prepaid customersrecharge and upselling of services.service upselling. In addition to being a better customer experience due to the quickspeed of response it provides, digital channels also allow TIMus to reduce costs such as customer service operations and sales commissions.

We continued to roll out new features across our digital channels, increasing our ability to promptly resolve challenging issues that arise for our customers.

We expanded our customer service offerings for our digital customers by adding the following channels for our customers to connect with us: CHAT MEU TIM (Web and App), WhatsApp, SMS, RCS, Telegram, Apple Message for Business and Google Business Message.

We also talk to our customers via Twitter, Facebook and Instagram. As of December 31, 2022, our principal Twitter account had more than 740,000 followers and our Facebook page had more than 2,753,000 likes.

In 2020,2012, we workedactivated an additional Twitter account, and in December 2022, this channel had over 273,000 followers and recorded more than 337,000 tweets. Our Instagram page has more than 445,000 followers. Meanwhile, in 2022, the MEU TIM app received the best rating among the service applications of Brazilian operators (grade 4.7 in the App Store).

Since 2021, we have been working to keep our “Customer Experience” foundational pillar as a focus (see “—Our Strategy”), creating initiatives that soughtseek to put the customer as the center of decision-making. The approach used to promote this cultural transformation was guided by the relationship between customercustomers and employee.employees.

We have evaluated and taken action to improve the experience and professional development of our employees, with educational projects to promote engagement and insight, focused not only on technical, functional or transversalsoft skills competences, but also on the new capabilities.capabilities required to reach industrial and business goals. These efforts strengthened the bonds between an employee’s business functions and the products and services they deliver to the customer. The impact was noticeable in our Organizational Climate Survey, a study performed by consulting company Mercer, considering several companies across the country, in which our employees’ performance in respect of “Quality and Customer Focus” improvedattained by 3pp (87%1pp (86%), from 20192020 to 2020.2021. Compared to the other telecom companies that also use this survey, TIM is 12pp (84)%10pp (84%) above average regarding this indicator. The business area responsible for supporting these initiatives was divided in three sections: Design, Execution and Monitoring.

The Design areaOur design team created a policy with “Customer Experience” guidelines. This document defined expected behaviors and patterns in communication and interactions with customers, outlined a monitoring model, as well as refactored the products and services development cycles, to better cover all elements of Customer Experience.

The Execution area sought to solve legacy issues, with many of them concluded, which represented the efforts in the Customer Experience governance plan. These actions were grouped on four strategic pillars:

In addition, we continued to use the so-called “Net Promoter Score” as a fundamental key performance indicator to measure customer experience with our call center. There is an ongoing project to expand this survey to other of our customer service channels.

We have also sought to maximize customer satisfaction through improvements in our processes and systems, including customer journey mapping, where employees are invited to assume the customer perspective using empathy maps and design thinking tools. The goal of using these methods is to reduce customer effort, increase customer success and to ensure positive emotions towards TIM.our brand. We also work in teams to resolve critical issues and implement improvements in processes and systems.

We also enhanced our interactive voice response channels to include more customer oriented services.

We completed the migration of prepaid and postpaid consumer back officeback-office services (front end was implemented in 2015) to the Siebel customer relationship management, or CRM, platform. The migration to the Siebel system from legacy systems for corporate clients is still ongoing.

Lines of Revenue

Our revenues from mobile and fixed services includes: (i) monthly subscription charges, (ii) network usage charges for local mobile calls, (iii) roaming fees, (iv) interconnection charges, (v) national and international long distance calls, (vi) Value-Added Services, and (vii) co-billing. Additionally, we have revenues from sales of products (mobile handsets and accessories). and other customer platforms revenues.

Monthly Subscription Charges

We receive a monthly subscription fee under our postpaid mobile plans, which varies based on the usage limits under the relevant plan.

Network Usage Charges

We divide our coverage areas into certain areas defined as “home registration areas.” Calls within the same home registration area are considered local calls. Each of our customers is registered as a user of one of our home registration areas.

As determined by Anatel (Act No. 987/2020), our usage rate categories for local mobile services on a prepaid or postpaid basis are as follows:

*General Authorization Plan (“GAP”) for Personal Mobile Service

Usage charges are for minutes in excess of those included as part of the monthly subscription charge under the relevant postpaid plan.

Roaming Fees

We receive revenue pursuant to roaming agreements we have entered into with other mobile telecommunications service providers. When a call is made from within our coverage area by a client of another mobile service provider, that service provider is charged a roaming fee for the service used, be it voice, text messaging or data, at our applicable rates. Similarly, when one of our clients makes a mobile call when that customer is outside our coverage area using the network of another service provider, we must pay the charges associated with that call to the mobile service provider in whose coverage area the call originates at the applicable rate of such mobile service provider.

Automatic national roaming permits our customers to use their mobile telephones on the networks of other mobile service providers while traveling or “roaming” in the limited areas of Brazil not covered by our network, complementing our current mobile coverage. Similarly, we provide mobile telecommunications service to customers of other mobile service providers when those customers place or receive calls while in our network. Mobile service providers which are party to roaming agreements must provide service to roaming customers on the same basis that such providers provide service to their own clients. All such providers carry out a monthly reconciliation of roaming charges. Our roaming agreements have a one-year term and automatically renew for additional one-year terms.terms, which are regulated and previously approved by Anatel.

Interconnection Charges

We receive interconnection revenues in connection withfor any callcalls originating from another service provider’s network, mobile or fixed line, which is received by any mobile customer, of ours or of another provider’s, while using our network. We charge the service provider from whose network the call originates an interconnection fee for every minute our network is used in connection with the call. On the other hand, we must pay the fees for other telecommunications companies, when our users place a call to phones connected to other network operators.

We have entered into interconnection agreements with most of the telecommunications service providers operating in Brazil, which include provisions specifying the number of interconnection points, the method by which signals must be received and transmitted, and the costs and fees for interconnection services. The interconnection among the networks of providers of telecommunications services of collective interest is mandatory and theSuch interconnection agreements must be submitted to Anatel for approval. Nevertheless, even in the absence of ratification by Anatel, the parties to these interconnection agreements are obligated to offer interconnection services to each other.

The interconnection fees we were permitted to charge other mobile telecommunications providers,companies, and which other mobile telecommunications providerscompanies charge us, have in the past been adjusted by inflation. In 2004, Anatel issued regulation establishing that the agency would determine rules for the calculation of reference rates for interconnection fees based on a cost model. Transition rules were defined and applied until in July 2014, by means ofas set forth in Resolution No. 639/2014,2014. Anatel effectively issued the rule for the definition of reference rates for entities with significant market power, based on a cost model, for VU-M, as well as maximum rates for the termination of calls on TU-RL. Since the issuance of Resolution No. 639/2014, interconnection fees have been decreasing based on a specific glide path.path, until 2019. Starting in 2020, Anatel has determined that VU-M values will rise slightly again. See “—Regulation of the Brazilian Telecommunications Industry—Interconnection Regulation.”

Long Distance

Telecommunications customers in Brazil are able to select long distance carriers on a per-call basis under the carrier code selection, program, or the CSP, introduced in July 2003, by punching in a two-digit code prior to dialing long distance. This regulation also increased the size of home registration areas, calls within which are local calls and, as a result, reduced the number of home registration areas.

For mobile customers, we offer long distance services throughout Brazil. This service allows our mobile customers the option of continuing to use our service for long distance calls, which we believe strengthens our respective relationship and loyalty, and enhances the perception of our brand as a comprehensive mobile telecommunications service. Mobile customers of other service providers can also choose to use our long distance service.

Under this structure, a customer is charged the VC1 rates directly by us only for calls made by and completed to a number registered within that customer’s home registration area. Long distance calls, however, are charged to a customer by the chosen long distance carrier. OtherWhen our customer chooses other long distance carriers, in turn, paythe other carrier pays us a VU-M fee for any use of our network for a long distance call.

As determinedVU-M is the fee another telecommunications service provider pays to us for the use of our network by Anatel, oursuch provider’s customers, in this case for long distance usage rate categories are as follows:calls. See “—Interconnection Charges.”