Agenda

15 years Anniversary - Rodrigo Abreu

Q2 Discussions:

Q2 in Few - Rodrigo Abreu

Operations - Lorenzo Lindner

Marketing - Roger Solé

Live TIM - Rogério Takayanagi

Financials - Claudio Zezza

Conclusions - Rodrigo Abreu

2

27.8

2010 20132004 2009

15 years anniversary: Building up a solid organization

3

→ Start up (privatization process);

→ Launched national coverage;

→ Pioneer on GSM technology;

→ First operator to launch data

services: SMS and MMS.

→ Acquired fixed license;

→ 3G launch;

→ ISE adherence;

→ Intelig acquisition (~R$0.8mln)

→ Long distance leadership;

→ Novo Mercado migration;

→ Public offering R$1.7 bi;

→ Atimus acquisition (~R$1.6bln).

1998 2003

1998

Gross Revenues

(R$ Bln)

Customer base

EoP (Million)

15,000 km fiber

optical backbone

5,500 km fiber

optical backhauling

Accessing Capital Market

→ Leadership on prepaid and advancing on

postpaid.

→ Consolidated 2nd player in value and volume.

→ Building a robust fixed infrastructure.

→ Leadership in market net adds.

→ >400,000 points of sale.

→ >11,500 employees.

→ >23,000 indirect jobs.

→ Recognized as the market

innovator.

Organic

Growth

Growth via

Acquisitions

2012 1998

70.3

2012

0.9%1.1%

0.7%1.0% 0.9%

Quarter in Few: Improvements Across the Board

7.0% 5.4%9.7%

2Q132Q12

Organic1 Net Revenue Growth(YoY)

Organic1 Net Services Revenue Growth(YoY)

Organic1 EBITDA Growth(YoY)

-15.3%-11.0% -9.5%

-3.6% -0.7%

1Q132Q12

10.0 10.3 10.7 10.9

11.4

2Q132Q12

3Q12 4Q12 2Q13

Ex one-off

eventARPU Performance (YoY)

Postpaid Base (mln customers)

%Bad Debt/Gross Revs.

+20% (YoY)

Ex-M2M

Financial Operational

+14%

1Q133Q12 4Q12

1Q13

6.4% 5.5%

1.4% 1.8%3.1%

2Q132Q12 1Q133Q12 4Q12

+8.7% (YoY)

Reported

5.6%4.1% 4.4%

2Q132Q12 1Q13

2Q132Q12 1Q133Q12 4Q12

+2.0% (YoY)

Reported

+1.8% (YoY)

Reported

4

Efficient Approach

1: Organic revenues growth adjusted by R$44mln, EBITDA growth adjusted by R$31mln and Net

Income growth adjusted by R$20 mln due to one-off impact related to interconnection disputes.

+0.4%

Organic1 Net Income Growth(YoY)

-1.6%

13.9% 17.9%

2Q132Q12 1Q13

+12% (YoY)

Reported

18.7% 19.6% 20.5% 21.4% 22.1%

%VAS / Mobile Service Gross Revenues

2Q132Q12 1Q133Q12 4Q12

Operations

Customer Base Evolution - Market Share

(Source: Anatel)

Growth Backed by Business Resilience

19.6% 19.6%

24.0% 25.0%

28.0% 26.3%

28.1% 28.8%

2Q12

+67 bps

-168 bps

+96 bps

-1 bps

2Q13

15.3% 16.5%

23.9% 20.3%

38.2% 39.1%

22.0% 23.4%

2Q12

+140 bps

+90 bps

-353 bps

+124 bps

2Q13

29.6% 29.7% 29.1% 28.8% 28.7%

26.9% 26.8% 26.9% 27.0% 27.2%

24.6% 24.5% 24.9% 25.1% 25.0%

18.7% 18.7% 18.8% 18.7% 18.7%

Oi

Claro

Vivo

2Q12 3Q12 4Q12

+28 Bps

-89 Bps

+43 Bps

+5 Bps

YoY

1Q13 2Q13

Prepaid Voice Postpaid*

3526 27

1.6

1.41.5

2Q11 2Q12 2Q13 2Q132Q11 2Q12

1.1%0.9% 0.9%

Total

TIM

SAC & SAC/ARPU

(R$; months)

Efficient Market Approach

(Source: TIM, Anatel)Bad Debt & Postpaid CB

(000 customers; %postpaid mix)

Leading net additions.

Consolidating Prepaid #1.

Accelerating on Postpaid.

Maintaining an efficient go-

to-market.

SAC/

ARPU

SAC

% Gross

Revs

Postpaid

*Excluding modems and M2M.

+25%+14%

14.4% 14.5% 15.8%Mix

6

Caring Improvements to Increase Customer Satisfaction

Claims at Consumer’s Protection Agency (Procon)

(Avg # Claims - the lower the better; Source: SINDEC database)

Imp

rovin

g c

ari

ng

Red

uc

ing

co

mp

lain

ts

P3

P4

P1

TIM

TIM PRE POS CORP

Customer Care Satisfaction Survey

(Points; Source: TIM)

IDA – Index of Caring Performance (last reported)

(Points - the higher the better; Source Anatel)

99.9

93.998.0

92.1

92.8

80.4

84.9

65.9

Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13

P3

P4

P1

TIM

Anatel Ranking of Complains (last reported)

(Index of Complains under 1,000 access - the lower the better;

Source: Anatel)

0.20

0.320.24

0.360.34

0.470.50

0.65

Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13

P3

P4

P1

TIM

2,564

4,147

2,262

3,179

6,187

6,990

3,503

6,870

2Q12 3Q12 4Q12 1Q13 2Q13

7

8.0

7.5

7.0

6.5

6.0

Marketing

ARPU Performance

(%YoY; R$)

Reverting ARPU Trend

Voice Usage

(000 lines; minutes)

Data Performance

(monthly unique users; average days of use)

7,638 8,184

8,703 8,956 9,367

2Q12 4Q123Q12 1Q13

127

150

139

145

2Q12 4Q123Q12 1Q13

18.3 19.918.9 18.5

VAS

Voice

-15.3%

-11.0%

9.5%-3.6% -0.7%

2Q12 4Q123Q12 1Q13

After several quarters, ARPU has reversed

its trend thanks to a continuous

management of the customer base.

Voice Postpaid* Total MOU

2Q13

18.1

2Q13

148

2Q12 4Q123Q12 1Q13

Data Users SMS Usage

2Q13

2Q13

2Q12 4Q123Q12 1Q13 2Q13

+21% +13%

*Excluding modems and M2M.

+23% +16%

9

Organic

18.3

Organic

0.4%

35%39%

43%46%

50%

2Q12 3Q12 4Q12 1Q13 2Q13

Data Services Update: Keeping the Good Pace

Data users

(% over total customer base)

VAS

(% of Mobile Services Gross Revenues; R$ Million)

Handset Sales Market Share Apr-Jun/13

(% of handset revenues; Source: TIM)

19% 22%

Smart/Web phone Penetration

(% over total base of lines)

VAS

Gross

Revs

VAS/Revs

7%

21%

34%

38%

54%

46%

P4

P3

P1

TIM

Players

Open Mkt

TOP SELLERS @ ~R$300

27.7%28.7%

30.3%31.0%

31.9%

2Q12 3Q12 4Q12 1Q13 2Q13

+25%

23 mln

users78 %

on sales

10

1,031

1,291

2Q12 2Q13

Live TIM Update

Live TIM: Delivering on Plan

257

522

609

804

3Q12 4Q12 1Q13 2Q13

Network Evolution

(000 Addressable Households ; Source: TIM)

Sales per Quarter

(000 Clients; Source: TIM)

9.7

17.1

1Q13 2Q13

Customer Base

(000 Clients; Source: Anatel)

9.7

16.3

26.4

4Q12 1Q13 2Q13

82%

Net Share Live TIM SP+RJ

(UBB >34MB ; Source: Anatel)

Market Share SP+RJ

(UBB >34MB ; Source: Anatel)

38%

19%

13%

11%

10%

9%

Live TIM Oper. I Oper. II

Oper. III Oper. IV Outras

26%

69%73%

3Q12 4Q12 1Q13

ITAQUERA

CASA VERDE

BUTANTÃ

JABAQUARA

PINHEIROS

MORUMBI

MOOCA

São Paulo

Totaling

26 Districts

in São Paulo

12

Financials

Financial Evolution Analysis

1,210

EBITDA

2Q12

Organic

EBITDA

2Q13

-15

ΔMkt

and Sales

ΔPers./G&A

and others

-53

ΔHandset

Margin

-39

ΔNetwork

and ITX

+35

ΔServ.

Revs

26.6% 25.3%

32.1%31.5%

+125

+5.8% +8.3%-51.2% +1.1%+3.1%ΔYoY

1,263

+4.4%

563 879 879

3,9844,109

4,065

Thousands

Revenue

2Q12

Δ HandsetΔ Fixed

Services

Organic

Revenue

2Q13

Δ Mobile

Services

+316-86+211

Service

Handset

4,547

-33%+5.7%ΔYoY

4,988 -44

One-off

Event

Reported

Revenue

2Q13

4,944-31

Reported

EBITDA

2Q13

1,232

+1.8%

24.9%

31.1%

One-off

Event

14

+56%

+3.1%

+2.0%EBITDA Margin

Service EBITDA Margin

Organic

EBIT

Net Financial

Result

Organic

Net Income

2Q13

Organic

Taxes and

Others

Depreciation/

Amortization

Organic

EBITDA

2Q13

From EBITDA to Net Income

(R$ Million)

ΔYoY

One-off

Event

Reported

Net Income

2Q13

+0.9% +8.5% -36% +5.6% +18% +12%

1,263 -671

592 -41 -145406 -20 386

Net Revenue Evolution

(R$ Million, % YoY)

From EBITDA to EBITDA

(R$ Million)

+8.7%+10%

Strong Cash Position

Net Debt

(R$ Mln)

Capex

(R$ Mln, % YoY)

1,998

2,278

1,984

2Q11 2Q12 2Q13

+14%-13%

725

1,057

2Q11 2Q12 2Q13

+46%

+6%

→ 37% of debt in foreign currency (100%

hedged to R$).

→ Average debt maturity: ~ 3 years.

→ 0.39x net debt to Reported EBITDA (LTM).

→ Capex catch up during Q2.

→ 94% of Capex related to

infrastructure (ex-licenses).

→ No subsidy capitalization.

1,123

0.45x 0.47x 0.39xNet debt/

EBITDA

(LTM)

15

Conclusions

Strategic Priorities Check Point

• Improvements on all customer care indicators;

• FTTS Plan on track (569 new sites in Q2);

• 4G launch anticipated in SP and Curitiba,

good traction on 4G market share.;

• Final steps of LT Amazonas Fiber Line;

• Started rollout of small cells for JMJ in Rio.

• Strength of “Controle” strategy – hybrid pre/post;

• VAS over Mobile service: 22%;

• 3G adoption: WCDMA base grew by 21%;

• TIM Music launch: OTT music platform, more than

6mln songs downloaded already;

• Several actions for monetizing customer base with

new micro-packages.

• Launched company wide initiative on “Best Company

to Work For”;

• Total employee population grew to over 11,500, an

additional 574 new employees compared to 2Q12;

• Reached the number of 134 own stores, adding

several new TIM employees;

• Initiated a movement to reinforce and add new talent

on all teams, in particular on Network and Regional

structures.

• “Portas Abertas” campaign, web-site and mobile

app reinforcing commitment with quality and

transparency;

• Closure of the Dropped Calls accusation with

final report from Anatel releasing the company

from any misconduct;

• Proactive position in the sector in conversations

with Congress, Anatel, Ministry and State

Governments – position of collaboration and

transparency.

1Q13 2Q13

TIM Call Center

1Q13 2Q13

Anatel

2Q12 2Q13

+23%

2Q11 2Q12 2Q13

14%39%

57%40%

40%21%

46%21% 22%

% Only Smartphone over Total Sales

Smartphone

Webphone

Essential

Network Complaints

-15%

-8%

Postpaid Voice Base

17

Conclusion & Outlook

Perspectives

18

Business has shown good resilience,

even with slower economic growth;

TIM led industry growth both in value

and volume;

Recent polls showed good recovery in

net customer preference;

Quality and Infrastructure KPIs already

showing improvements in many

fronts.

Continuous offer innovation to help TIM

leadership in a lower growth / more

rational competitive environment;

Data/VAS to continue leading growth; TIM

well positioned in handsets and micro

browsing;

Fixed-to-mobile substitution still a trend;

Focus on leveraging huge customer base;

Postpaid mix and ARPU are important

improvements to business case.

Achievements

Solid fundamentals.

Track record built over 15 years.

Clear momentum for a continuation of growth path.

15th

Anniversary