1

BRASIL TELECOM S.A. First Field Trip

Strategic positioning in a deregulated market

April 2002

2

This presentation contains forward-looking statements. Such statements are not statements of historical fact, and reflect the beliefs and expectations of the Company's management. The words "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "predicts," "projects" and "targets" and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties. Accordingly, the actual results of operations of the Company may be different from the Company's current expectations, and the reader should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update them in light of new information or future developments.

3

Regulatory Issues

Luiz Otávio Calvo MarcondesRegulatory Affairs Director

4

Entrepreneur

– Fiercer competition through new local and long distance licenses

– 1962 – CBT – 1965 – Creation of

Embratel– 1972 – Creation of

Telebrás– 1995 –

Constitutional amendment

– 1996 – Minimum Law

– 1997 – Preliminary phase of LGT

– 1998: Privatization ofTelebrás

– 1999: Mirror licenses of Telesp, Telemar, Brasil Telecom andEmbratel

State Monopoly (1962-1997)

Free Competition - 2002

Regulator

PrivatizationLimited Competition

1998 - 2001

Context

Role of State

Historical Background

5

Planning and implementation

of the PRIVATIZATION process.

++

++

Universalization

Competition

Privatization

Creation of ANATEL

E. Maximize the sale value of telecommunications assets without jeopardizing the other objectives.

D. Create conditions for an harmonic growth of the sector in line with the social role of the

Gov’t.

C. In a competitive environment, create attractive investment opportunities as well as

encourage technological and industrial development.

B. Broad and improve the range of telecommunications services.

A. Strength the regulatory role of the Gov’t and and forego its role as entrepreneur.

ORIGINAL OBJECTIVES OF THE REFORMORIGINAL OBJECTIVES OF THE REFORM BASIC GUIDELINESBASIC GUIDELINES

The Brazilian Model

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Fixed Telephony

Region II: Mid-SouthConcession: Brasil Telecom Mirror: Global Village Telecom

Region I: North-EastConcession: Tele Norte LesteMirror: Vésper S.A.

Region III: São PauloConcession: TelefônicaMirror: Vésper SP

Nationwide (Long Distance)Concession: EmbratelMirror: Intelig

7

Mobile Telephony

Area 5: South

Area 7: Mid-West

Area 8: North

Areas 1/2: São Paulo

Band A: Tele Centro Oeste CelularBand B: AmericelBand D: TIM

Band A: Telesp CelularBand B: BCP and TESSBand D: TIM

Band A: Amazônia CelularBand B: Norte Brasil TelecomBand D: TNL - PCSBand E: TIM

Band A: TIM Sul, Sercomtel CelularBand B: Global Telecom

Area 10: NortheastBand A: TIM NordesteBand B: BCPBand D: TNL-PCS

Area 6: Rio Grande do Sul

Area 4: Minas Gerais

Area 9: East

Area 3: Southeast

Band A: Telefônica CelularBand B: Maxitel (TIM)Band D: TNL-PCS

Band A: Telemig CelularBand B: Maxitel (TIM)Band D: TNL-PCS

Band A: Telefônica CelularBand B: ATLBand D: TNL-PCSBand E: TIM

Band A: Celular CRT Band B: TeletBand D: TIM

8

In million

Source: Up to 2001: Actual numbers

2005: PASTE 2000

The Brazilian Telecom Market

0.2 0.8 1.20.4 0.8

28.7

13.3

48.0

16.5

5.6

58.0 58.0

1994 2001 2005

Paging Pay TV Mobile Fixed

9

Fixed Plant� Fixed telephony subscribers in Brazil (in million)

14.818.3

38.3

48.0

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

1998 1999 2000 2001

10

Mobile Plant� Mobile subscribers in Brazil (in million)

2.7

7.2

23.2

28.7

-

5.0

10.0

15.0

20.0

25.0

30.0

1998 1999 2000 2001

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Public Telephony� Public telephones in service (in thousand)

548597

803

1,271 1,259

-

200

400

600

800

1,000

1,200

1,400

1998 1999 2000 2001 2002 Paste

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Operational investments in the sector*

2000199819971996

15.8

12.1

7.67.44.3

2.2

20011999

17.6

24.7

0.4 1.20.70.7 1.61.5

* R$ billion

Investments in the privatization auction and mobile bands*

1995

0,22,9

26,5

3,8

200019981997 20011999

0

Privatization: Jul/1998

Share in GDP %

Investments

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� New authorizations

� Companies that have anticipated Anatel targets

� PCS

� Relevant issues

� Bad debt

� Cross subsidies

� Interconnection tariffs

� Tariffs

� Tax burden

Current Scenario

14

� Revision of Concession Contracts

� Public Hearing until Dec. 31, 2002

� Express interest in postponement to Anatel

until Jun. 30, 2003.

� Rules for mergers and acquisitions

� Anatel and the market

Outlook

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Brasil Telecom’s NetworkCurrent Scenario and Outlook

Francisco Aurélio SantiagoGoal Compliance Director

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Scenario

� Greater speed and information volume demand (broadband).

� Quality/cost/term as key factors in choosing service

provider.

� Increasing competition.

� Acquisition/mergers.

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Guidelines

� Focus on meeting the needs of corporate and business

clients.

� Define a strategy in terms of technological evolution,

with the objective of optimizing investment and

anticipating the offering of new services.

� Gear investments towards data communication and

intelligent network, always focusing on client loyalty and

increase service quality.

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Current Scenario

� Circuit switching networks focused on supplying voice

and some low-speed data transmission.

� Accesses mostly of metal cables, which support voice

and medium-speed (xDSL) data services; radio access

(2%); fiber access (5%).

� Data communication networks to support dedicated

accesses and IP services.

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Telecom Data

2001 2002 Var.

2002/2001

Population (Million) 40.2 41.1 2.0%

Lines Installed (Thosuand) 10,015 10,340 3.2%

Teledesidade (Term/100 Habts.) 21.5 25.2 3.7 p.p.

Lines in Service (Thosuand) 8,638 9,198 6.5%

Utilization Rate (%) 86% 89% 2.7 p.p.

Digitization Rate (%) 97% 98% 1.2%

Public Telephones (Thousand) 285.7 312.2 9.3%

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Teledensity vs GDP (2001)

1

10

100

100 1000 10000 100000

DF

GO

SC

RS

PR

AC

MS

TO

RO

BRASIL

DEU

JPN

ITAURY

LUX

FRA

PRT

CHL

ARG

MEX

PAK

IND

PER

TELEDENSIDADExPIB 2001 OPERADORAS BRASIL TELECOM

TELEDENSIDADE

PIB PERCAPITA US$

USA

IDN

PHL

MAR

SYR

VEN

SAU

TUN

EGY

SWEDNK

AUT

NOR

ESP

CAN

MT

Source: IBGE and Brasil Telecom

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Access

2001 2002 Var.

Thous. Thous. 2002/2001

Lines Installed 10,015 10,340 3.2%

Data Communication1 176.4 270.5 53.4%

Value-Added Network2 1,402.4 1,986.6 41.7%1 ADSL, Dialnet, DT Network, Frame Relay, ATM and IP2 SPM, UMS, CNG, ICW, CPP, TFPP, Personal number

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Outlook

� Priority: expand data communication.

� NGN: voice convergence, data and image into a single

network.

� Expand network for value-added services, such as

intelligent network and messaging services.

� Increase opticalization of network access, targeting

broadband services.

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Brasil Telecom’s Backbone

Porto Alegre RS

Florianópolis

Goiânia

CriciúmaTubarão

Campo Grande

Rondonópolis

Rio Branco

SC

GO

MS

MTAC

Porto

Velh

o

RO

Palmas TO

ANEL 109Interconexão

do RS com SC

ANEL 105Paraná

ANEL 400Curitiba e

interior do Paraná

ANEL 104Noroeste do Paraná

ANEL 103Mato Grosso do Sul

ANEL 102Goiânia

ANEL 101Goiás BRASÍLIA

Cabo de Fibra Óptica

Cuiabá

MT

Curitiba PR

Morrinhos GO

DF

Lages SCSC

LondrinaPR

Cross ConnectsADM-4

ADM-16

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Qu

ality

Ind

icato

rs (Ou

t of 3

5)

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32

32

34

34

34

34

35

34

34

35

35

33

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-

5

10

15

20

25

30

35

jan/01

feb/01

mar/01

apr/01

may/01

jun/01

jul/01

aug/01

sep/01

oct/01

nov/01

dec/01

jan/02

feb/02

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Universalization Targets - 2001UNIVERSALIZATION INDICATORS

MONITORED BY ANATELGOAL/ YEAR

CRT CTMR TELESC TELEPAR TELEMS TELEMAT TELERON TELEACRE TELEGOIAS TELEBRASILIA BRT

Localities that have less than 50% of publicphones able to make and receive local andLD calls, installed in locals with 24-houraccess

0 begin. Dec/31/9

90 0 0 0 0 0 0 0 0 0 0

Localities that have less than 25% of publicphones able to make and receive local andLD and ILD calls, installed in locals with 24-hour access

0 begin. Dec/31/9

90 0 0 0 0 0 0 0 0 0 0

Municipality served by STFC, withindividual access, with public telephones atno further than 800 meters

0 begin. Dec/31/9

90 0 0 0 0 0 0 0 0 0 0

Localities with less than 3 public telephones per 1,000 inhabitants distributed evenly

0 begin. Dec/31/9

90 0 0 0 0 0 0 0 0 0 0

Localities with over 1,000 inhabitants,without STFC, with at least um publictelephone accessible 24-hours capable ofmaking and receiving local, LD ILD calls

0 begin. Dec/31/9

90 0 0 0 0 0 0 0 0 0 0

Requests for a public telephone in schoolsand hospitals met in more than 4 weeks

0 begin. Dec/31/0

00 0 0 0 0 0 0 0 0 0 0

Requests for a public telephone made bythe hearing impaired and in wheelchair met in more than 4 weeks

0 begin. Dec/31/0

00 0 0 0 0 0 0 0 0 0 0

Requests for a line met in more than weekin schools and hospitals

0 begin. Dec/31/9

90 0 0 0 0 0 0 0 0 0 0

Requests for a line made by the hearingand speaking impairred met in more tha 6weeks

0 begin. Dec/31/0

00 0 0 0 0 0 0 0 0 0 0

Localities served only with public access,without at least 1 public telephoneaccessible 24 hours capable of making andreceiving DLD and ILD calls

0 begin. Dec/31/9

90 0 0 0 0 0 0 0 0 0 0

Localities that have no 2% of all publictelephones adapted to the hearing andspeaking impaired as well as in wheelchair

0 begin. Dec/31/9

90 0 0 0 0 0 0 0 0 0 0

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Corporate Market and Data Products

Yon Moreira da SilvaCorporate Business Director

Manuel Ribeiro FilhoSuperintendent Director

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Vant Acquisition - I

* Authorization to offer Corporate Network Service (CNS) throughout the country

* Specialized in data transmission and corporate, retail and Internet solutions

* IP backbone and over 2,100 ports in service in Region II

* 17 points of presence in São Paulo, Rio de Janeiro, BeloHorizonte, Vitória, Salvador, Recife and Fortaleza

* http://www.vant.com.br

� 19.9% of Vant Telecomunicações S.A.’s total capital

� Company Characteristics:

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Vant Acquisition - II

� Benefits for Brasil Telecom:

* To consolidate participation in data communication market

* To strengthen and to increase position in Region II

* Presence in Regions I and III through operating agreements

* Expertise in IP – highly qualified team

* Operational learning as CLEC (Competitive Local Exchange Carrier)

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BrT Serviços de Internet S.A.

� BrTurbo.com gained, in 3 months, 35% of market share in BrasilTelecom’s concession area

� Partnership with Microsoft that targets the corporate market by offering Office XP software on-line

� Fully-owned subsidiary

� Launch of BrTurbo.com portal

� Partnership with Ibest, with call option

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Product Launches - I

� BrTurbo.com portal launched October 2001

� Targets Internet broadband users

� Multiplayer on-line games,videos, sports and social events, live and recorded

� Offers personal backup of 1 Gigabyte per user and 3D chat

� 24/7 exclusive live transmission of reality show Big Brother Brasil

� Approximately 25,000 subscribers

� Second largest provider of Internet turbo adsl

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Product Launches - II

� Free Mail Boxes

* As of January 2002, Brasil Telecom’s clients have access to 32 million free mail boxes on the Internet

* Allows to send and to receive messages from Internet-accessed computers

* Offers 10Mb of free space to allow the exchange of large files

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Product Launches - III

� Launched in March 2001

� Available in 18 cities

� 24-hour broadband access, 30x faster than regular modem connection

� Promotional installation fee of R$ 60

� Promotional leasing modem fee of R$ 14.90/month

Package Downstream Upstream Monthly fee

Fast Up to 256 Kbps Up to 128 Kbps R$ 59.00

Super-Fast Up to 512 Kbps Up to 128 Kbps R$ 175.00

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Product Launches - IV

� By 1Q02, over 54 thousand adsl connections had been installed

54,812

34,378

21,735

6,799

14,84617,207

25,756

40,640

65,067

8,326

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1Q01 2Q01 3Q01 4Q01 1Q02

Installed Sold

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Product Launches - V

* Launched November 2001

* Promotional installation fee of R$250

* Promotional leasing modem fee of R$30/month

Package Downstream Upstream Monthly fee

Rápido Up to 256 Kbps Up to 128 Kbps R$ 199.00

Super Rápido Up to 768 Kbps Up to 128 Kbps R$ 409.00

Profissional Up to 1.5 Mbps Up to 256 Kbps R$ 890.00

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Product Launches - VI

� Launched in December 2001

� Curitiba, Porto Alegre and Brasília

� Operates uninterruptedly 365 days per year

� Hosting services, collocation, data storage and connectivity

� Infrastructure with physical and logical security, no-break, generator groups, acclimatization, access control and backup

� Redundant systems integrated with Brasil Telecom’s backbone

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Product Launches - VII

� Based on ADSL technology.

� VPN Simples was launched nationwide. Outside Region II, clients should contract a connection through their local operator (this connection should have at least 1 valid IP).

� Major characteristics of this architecture:

� Connection speed and safety in exchanging files

� One terminal per point (internal network required)

� Use of a regular modem bridge

� Presence of a shared VPN server

� Include integrated redundant systems to Brasil Telecom’s backbone

� http://www.vpnsimples.com.br

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BRASIL TELECOM S.A. First Field Trip

Strategic positioning in a deregulated market

April 2002