YOU ARE AT:AmericasTIM’s new CEO faces many challenges

TIM’s new CEO faces many challenges

As RCR Wireless News reported earlier, the Brazilian unit of Telecom Italia, TIM Brasil, recently named Rodrigo Abreu, its new CEO replacing Andrea Mangoni, who has led TIM for less than a year. Abreu has been the country manager at Cisco Brazil for the last four years.

Scheduled to begin his new role on March 4, Abreu will take on many challenges at TIM including improving the carrier’s image. Although last year’s financial results were good, TIM faced several issues related to the quality of its services, which damaged its brand.

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The regulatory agency Anatel banned TIM’s sales in July because of customer complaints. The carrier was prohibited from selling new services in 19 states, including Rio de Janeiro. Competitor Oi was also banned in five states and Claro in three states, including the most populous state, Sao Paulo. In addition, TIM was accused of deliberately dropping calls, which also hurt its image, and in November, Anatel forced TIM to suspend sales of its “Infinity Day” plan  due to network and service quality concerns.

“TIM needs to show society that it is a better operator than the image it has now,” Eduardo Tude, CEO of the consulting and analyst firm Teleco. When asked what issue the carrier should tackle first, Tude said TIM should start talking with the government and the public to change its image.

Certainly, this will not be an easy task. However, Abreu faces a better situation than Mangoni, who took over the CEO post after Luca Luciani resigned in the wake of allegations that parent company Telecom Italia exaggerated its customer base through irregular SIM card use in Italy.

In his favor, Abreu is known as an executive who has a good relationship with government agencies and who has spent several years improving networks in the public sector. On the other hand, while Abreu has spent the majority of his career working in the ICT industry, his experience is in the vendor side of the industry.

For the past seven years, Abreu worked at Cisco; before that, he was president of Nortel from July 2004 to April 2006, and previously, he worked as the CEO for Promon Tecnologia. He has also worked as consultant at McKinsey in the past.

“I think Rodrigo can bring together a lot for TIM given his relevant experience in industry networks and equipment,” said Renato Pasquini, telecom industry manager at Frost & Sullivan. “One of the most important challenges for operators, especially TIM, is to increase the capacity and availability of the data network. And this relates to the core network, such as increasing the capacity of routers, IP backbones, backhaul fiber connecting the base stations and expanding the number of antennas.”

In addition, Abreu will join TIM just as the carrier is about to deploy LTE networks—a potential opportunity for TIM to bolster its postpaid segment. “TIM has focused its activity on the prepaid segment, reducing the cost of customer acquisition coupled with encouraging greater use of services. This has proved a successful strategy from a financial standpoint in recent years,” said Pasquini. “But there is the challenge to better position itself in the postpaid segment, and LTE could be an opportunity for the operator, particularly in the two largest markets in Brazil: the metropolitan regions of São Paulo and Rio de Janeiro.”

Instead of choosing an Italian to take the CEO position, as the carrier did with Luciani in 2009 and Mangoni in 2012, TIM tapped a Brazilian, which in Tude’s opinion, shows that the carrier recognized the need for an interlocutor from the country to interact with the Brazilian government and the public.

Before Luciani and Mangoni, the Brazilian Mário César Pereira de Araújo led TIM from 2003 to 2009.

Rodrigo Dienstmann will serve as the interim country manager at Cisco.

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