15th Years After…

27.8

2010 20132004 2009

Building 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$0.8bln)

→ 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.

→ >11,800 employees.

→ >23,000 indirect jobs.

→ Recognized as the market

innovator.

Organic

Growth

Growth via

Acquisitions

2012 1998

70.3

2012

Backed by High Level of Investments

4

Capex

(R$ Bln)

2,67 2,84 3,03 3,39 2,65

0,87

1,60 0,38

0,12

-

0,50

1,00

1,50

2,00

2,50

3,00

3,50

4,00

4,50

5,00

2009 2010 2011 2012 9M13

Focus on Infrastructure

(% of Organic Capex)

67% 81% 89% 93% 93%

33%19%

11%

7% 7%

2009 2010 2011 2012 9M13

Acquisitions/

Licenses

Organic

Organic as %

Net Rev.

Commercial

and Others

Infrastructure

19,4% 19,6%

17,7% 18,0%

17,1%

FIBER INFRASTRUCTURE

FROM 0 TO 45.000 KM

OF WHICH ~10k KM BACKHAUL

CELL SITES

MORE THAN 13.6K

4.63

3.54 3.76

2.77

FIBER TO THE SITE

MORE THAN 2.800 sites

+

+

Resulting in Outstanding Market Position

5

Customer Base

(Millions of line; Source: Anatel)

34,643,5

54,859,6 60,3 60,8 61,0

10,3

10,7

10,911,4 11,9 11,4 11,9

2009 2010 2011 2012 1Q13 2Q13 3Q13

Pre

Paid

Post

Paid

70.3

69.4

71.2 72.2 72.9

51.0

Data Services

(% of data users over CB; Mln of users; Source: TIM)

1,6 2,5

17,521,3 22,1 23,1 24,5

2009 2010 2011 2012 1Q13 2Q13 3Q13 2016e

4% 5%

27% 29% 31% 32% 34%

>50%

XX%

83

116129

136145 148 150

>170

2009 2010 2011 2012 1Q13 2Q13 3Q13 2016e

Voices Services

(Minutes; Source: TIM)

Mobile is more convenient than Fixed…

(R$/minute)

2006 2007 2008 2009 2010 2011 2012

50%

discount5,9% 6,8%

26,8%48,3% 46,5% 50,1%

94,1% 93,2%73,2%

51,8% 53,5% 49,9%

dez/07 dez/08 dez/09 dez/10 dez/11 dez/12

Fixed OperatorsTIMFixedMobile

Exploring an untapped market

(Market Share of LD minutes)

Serving an unsatisfied demand

(% of users using service in last 3 months)

518 24

4957

64

2010 2011 2012

SMSInternet

Sources: Company estimates, Anatel, CETIC 13

41.1

Pure Mobile Paying Off: Strategic Check

6

Users’ Preference for Mobile

(%Households w/ mobile phones only)

Net Revenues

(% YoY)

EBITDA

(% YoY; Not including assets sales; Mobile as TIM)

Low Fixed Broadband Quality

( Brazil’s Average Speed; Source: Akamai)

Entering in Data World Via Mobile

(Mln users; Source: Anatel)

Fixed

Incumbents

Mobile

48,9%56,3%

2009 2012

2Q13 2.4 Mbps

ANATEL: >50% of fixed broadband

connections are below 2Mbps

Mobile

Fixed 4,1

14,6

33,2

52,5

77,9

11,4

13,8

16,3 19 20,2

2009 2010 2011 2012 Aug/13

+18x

+77%

-7,0% -6,1%

-2,6%

3Q11 3Q12 3Q13

-6,2%-4,3%

-14,1%

3Q11 3Q12 3Q13

11,6%

7,1% 6,9%

3Q11 3Q12 3Q13

11,7%

3,9% 4,2%

3Q11 3Q12 3Q13

Fixed

Incumbents

Mobile

Looking Ahead

71%

65%

59%

48%

39%

24%

18%

12%

5%

2%

1%

1%

R$ 10

R$ 20

R$ 30

R$ 40

R$ 50

R$ 70

R$ 80

R$ 100

R$ 150

R$ 200

R$ 250

> R$ 250

Source: CETIC 13

Data Wave Opportunities

60%36.8 mln

40%24.5 mln

44%16.2 mln

24%8.8 mln

32%11.8 mln

(40%)

(60%)

61.3 Mln

Possess

Internet

connection

Does NOT

Possess

Internet

connection

Other

Lack of

coverage

Too

Expensive

53% of active connections

are below 2Mbps

Willingness to pay (% of Households)

Total Households Households which does

NOT possess

CA

BL

E

FT

TH

AD

SL

VD

SL

MB

B

8

2Q13 2.4 Mbps

Brazil`s Internet average

speed according to Akamai

94%80%

47%

14%

A B C DE

% of population who used the Internet in the last 3 months per social class

68 million people

don’t use the Internet

in class C, D, E.

Low usage not only in

households

Market Transformation

(Total Revenues - R$ Bln)

(55%) (50%) (44%) (43%)

(45%)(50%) (56%) (57%)

2009 2011 2013 2016

104

CAGR ’13-’16

Mobile: +3%

Fixed: -2%

120

112118

Data

Mobile

...Concentrating in the Mobile Segment

Data: +18%

Data: +6%

9

Data Services Revenues Growth 2016 vs. 2013

>R$10 bln in Mobile (+62%)

>R$4 bln in Fixed (+18%)

Keeping Innovative Approach

Chip Torcedor

TIM SIM blister for each

team.

Increase Stickiness

14 Teams alread

sponsored

10

Liberty Controle Express

Pushing on Postpaid migration

Payment via credit card

jan/13 sep/13

~7x

+56%

sep/12 sep/13

Young

Young segment positioning

Member get member through

social network since 2010.

Nonstop

Innovation

VOICE DATA

Recarga Troco International LD Infinity Web + SMS TIM Music

Talk unlimited on-net for

R$2 for 2 days.

Capture extra “charge”.

Leveraging on micro

recharge on physical

PoS.

Up selling approach,

targeting only customer

base.

US:R$0,20/min.

+ 8 countries: R$0,50/min

FMS initiative.

Capturing the unexplored

mobile international calls

market.

Market attended Today

through fixed carries.

Internet + unlimited SMS

on/off-net.

Pay per day.

Combining Web and

SMS offers.

Cross selling WEB and

SMS .

Unlimited download.

Pay R$0.50/day.

Over the top service.

Increase customer

stickiness.

Network friendly.

13 million songs already

downloaded.

And Resulting in Solid Growth

43%

52%

>75%

2012 Jul 13 2016e

Smart/Web phone Penetration

(% over total base of lines)

136150

>170

2012 3Q13 2016e

Voice MOU

(Minutes)

2012 2013e 2016e

Data Users

(% of Data Users in CB; million users)

VAS Revenue Growth

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

21%23%

>40%

VAS

Gross

Revs.

VAS/Revs.

+XX%21.3

24.5

2012 3Q13 2016e

29% 34% >50%

+15%XX%

+XX%

Innovative

Offers Driving

Growth and

Differentiation

11

2014 - 2016 Guidance

12

Total Net Revenues

EBITDA

CAPEX

18,8

2012 2013e 2014e 2015e 2016e

5,0

2012 2013e 2014e 2015e 2016e

R$ billion

R$ billion

0,5

3,2

2012 2013e 2014e 2015e 2016e

R$ billion

Infrastructure

Others/Licenses

3.8

Guidance

2013-2016 CAGR:

Mid Single Digit Growth

2013-2016 CAGR:

Mid Single Digit Growth

Total CAPEX 2014-2016:

~R$11 billion*

*Does not consider 4G licenses (700Mhz).

Appendix

Infrastructure Needed in the Data Arena

14

2016MASSIVE LD

BACKBONE

65,000 KM OF FIBER

2013FIBER TO THE

AMAZON

46,000 KM OF FIBER

BY YE13

Fiber to the site / Mobile Broadband

Project Key to Data Growth

Targeting 38 cities in 2013,+100 cities till 2016.

From 2-8 to +100 Mbps.

LTE Ready.

Macro coverage fine tuning.

Focus on IP infrastructure, caching, peering.

Backhauling

Evolution

Fiber base

Infrastructure

INTELIG 15,000KM

2009INTELIG

ACQUISITION

New backbone routes- Increasing resilience.

Increased Coverage and Access Capacity

# new elements

82% urban

population

2013 2014 2015 2016

95% urban

population

#NodeB / eNodeB

(3G + 4G)

# BTS

(2G)

2012 2013e 2014e 2015e 2016e

Small Cell Approach

# new elements

New Sites.

Including

Small Cell.

POP MW

POP MW POP MW

POP MW

BSC-RNC Site

POP MW

Capex Evolution Towards Data

% of total Capex

2013 2014 2015 2016

LTE* 3G 2G

*Includes 2.5GHz RAN Sharing.

Where We Are: TIM 2013 Year-to-Date Results

15

Operational

Total Revenues

− Service

− VAS*

− Handset

EBITDA

CAPEX

9M13 YoY

14,738 7.3%

12,359 2.1%

2,379 45.2%

3,708 3.4%

R$ Million

9M13 YoY

Postpaid (mln users)

MOU (min)

ARPU

11.9 16.4%

147 12.7%

R$ 18.4 -2.0%

Financial

2,769 +16.8%

3,899 23.7%

• Consistent financial and operational

results even amidst a different macro

scenario

• Continuous growth/acceleration on

postpaid, improving customer base

mix, ARPU evolution.

• Maintaining data services at double

digit growth, underscored by

smartphone sales and innovative

offers.

• Solid improvement on Network and

Quality indicators.

• Executing Fiber-to-the-Site (FTTS)

project and 3G/4G roll-out,

guaranteeing mobile broadband

acceleration.

• Strong efficiency: Industry benchmark

for SAC and bad debt.

• Strong savings on leased lines costs,

even with traffic double digit growth.

Reported figures for TIM Part.

*Gross Mobile Service Revenues