UPDATE 1-Brazil's TIM misses Q1 profit estimates as stagnant revenue offsets lower costs

(Adds share performance this year, details)

SAO PAULO, May 5 (Reuters) - Brazilian telecoms firm TIM Participações SA reported on Tuesday an 8.3% year-on-year rise in first-quarter net income, missing market expectations, as a drop in its mobile customer base driven mostly by pre-paid plans kept revenues stagnant, offsetting cost-cutting efforts.

The subsidiary of Telecom Italia SpA said its quarterly net profit adjusted for non-recurring items hit 164 million reais ($29.4 million), compared with a consensus estimate of 420 million reais ($75.29 million), according to Refinitiv data.

Earnings before interest, taxes, depreciation and amortization, a gauge of operating performance known as EBITDA, came in line with expectations at 1.926 billion reais, 8% up year-on-year.

TIM’s EBITDA margin rose to 45.7% from 42.6% in the first-quarter of 2019.

Brazil’s third-largest wireless carrier reported a net revenue of 4.215 billion reais in the quarter ended March 31, only 0.6% up from a year ago. Operational expenses fell by 4.9% to 2.289 billion reais.

TIM’s mobile customer base shrank 4.1% year-on-year, to 52.8 million, as a result of a 9.7% fall in pre-paid plans. The post-paid segment grew, however, by 5.3% to 21.67 million users, representing 41% of the total from 37.4% at the end of March 2019.

The carrier’s broadband service, TIM Live, had 584,000 users, 20.2% more than a year before, while the number of 4G users rose to 38.6 million.

TIM’s shares have fallen over 10% this year, while rival Telefonica Brasil SA’s stock has declined more than 13% in the same period. ($1 = 5.5783 reais) (Reporting by Gabriela Mello; Editing by Himani Sarkar and Peter Cooney)

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