TIM Day in London November, 12,2014

A SOLID HISTORY OF GROWTH

2

TIM’s Position

Long Distance

Leader

2nd in Market Share Overall

Smartphone

Sales Leader

1998 2003 2009 2014

Prepaid

Leader

Gross Revenues (R$ bln)

Customer Base EoP (mln customers)

19 20

25

28 30

2009 2010 2011 2012 2013

3.5

4.2 4.7

5.0 5.2

2009 2010 2011 2012 2013

41 51

64 70 73

2009 2010 2011 2012 2013

EBITDA (R$ bln)

CAGR+12%

CAGR+10% CAGR

+16%

1 2 1 1

4%

12% 11%

52%

2011 20142014

53% 64% 79%

90%

2006 2007 2008 2009

Tablet

Smartphone

56% 48% 42%

34% 27% 27% 23%

• Incoming calls only device

Mobile Penetration (% over population)

DATA THE NEW GROWTH WAVE

Data Penetration (% of data over total revenues in 3Q13)

248 212

166 162 140 139 91

MOU in 2008 (minutes)

• Still a lot of phones without data access • Wi-Fi only devices

PCs, Notebooks, Feature Phones

...was similar to the challenge in data growth now

Challenge in voice growth in 2009…

Goal: increase voice usage Challenge: deliver the best

experience in mobile internet

Source: Anatel and IBGE Source: IDC

Source: Global Matrix

High Growth

“Fear” to use

Low Usage

Handset Sales Share

2006 2007 2008 2009

2011

3

39

81

2013

1Q14

2Q14

3Q14

900 Mhz rollout according to plan (above 600 sites using the new frequency)

Expanding backhauling

INFRASTRUCTURE (R)EVOLUTION

4

Mobile Broadband Update

Cities Covered with MBB project

% of urban population covered

Improving Quality and 4G Services (e.g.: SP)

Reduction in dropped call rates and better overall performance

Higher average throughput rates

Improvement in indoor coverage

Increase in data and voice traffics

30%

31%

32%

Source: ANATEL app

36%

99.0%

97.95%

97.53%

98.36%

Voice Access # Antennas

Investing Efficiently

Big Data analysis for capex allocation

Antenna level return analyses (IRR and payback)

50%

88%

50%

12%

9M13 9M14

Infrastructure Investment Mix (as % of capex)

2G

3G + 4G +38 p.p.

∆ YoY Technology

Small cells in gas stations: agreement with a tower company to install more than 150 small cells inside Totem

BioSite: sustainable coverage, bringing harmony between environment and technology

Innovative Coverage Expansion

After

Before

DRIVEN BY INNOVATION

5

PREPAID MOBILE ACCOUNT/ MONEY

o Partnership: TIM, Mastercard and Caixa Econômica Federal

o Focus on unbanked population ( >50% of prepaid base)

NEW MUSIC PLATFORM

o Partnership TIM and Deezer (top global streaming platform)

o More than 35 million music available for download

o Maintaining leadership position in the mobile music industry in Brazil

INTERNET SHARING PLANS

o Up to 4 devices

o No additional charges

WEEKLY SERVICE PACKAGE o Voice + Data + SMS o R$ 7 per week

NEW M2M PLANS o New data packages

launched for M2M services

Adding Value Through Innovation

NEW APP FOR LANGUAGE COURSES o Games and quizzes help

students developing English skills

blah COMMUNICATION APP

o Integrated communication (VOIP, IM, SMS) App

o First ad campaign

Data Adoption

67% 77%

3Q13 3Q14

24

32

3Q13 3Q14

Smartphone Penetration Over Customer Base (%; ∆ YoY)

Smartphones Share over New Sales (%; ∆ YoY)

Data Users (mln users; % YoY)

+32%

+10 p.p.

25%

44%

3Q13 3Q14

+20 p.p.

Mix of Data Gross Revenues (R$ mln; %YoY)

1Q14 2Q14 3Q14

25% 27% 29% % over total gross

mobile service revenues

SMS

Web

1,500

+29% +39%

+45% +80%

∆ %YoY growth

1,578

Content & Others

1,677

+33%

+72%

+23% +20% +22%

New Data World

43% of data users over total base

TIM Protect

SECURITY SERVICES o Ensures safety of

customer’s devices and information

24.6% 27.4%

3Q13 3Q14

1,252

1,332

3Q13 3Q14

EBITDA (R$ mln; %YoY)

BUSINESS FUNDAMENTALS

6

Core Business Evolution

Mobile Service Net Revenues (% YoY)

EBITDA Margin (% YoY)

(Local + LD + VAS

+ Others)

Business Received

3Q13 3Q14

Business Generated

(Incoming Voice + SMS)

+6.4%

+2.8 p.p.

+5%

-34%

Operating margin

improvement

~0.7% ~0.8%

3Q13 3Q14

Efficient Cost Control

Interconnection Cost (Δ% YoY)

Leased Lines Cost (Δ% YoY)

Bad Debt/Sales (% over gross revenues)

stable

3Q13 3Q14

-36.2%

3Q13 3Q14

-1.8%

306 372

386 366

315 348

9M13 9M14

2Q

1Q

+10.6%

% YoY

3Q

1,007 1,086

+21.6%

-5.2%

+7.9%

2013 2014

Net Income Evolution (R$ mln; % YoY)

Total cost (Δ% YoY) 8.8%

2.3%

-2.9% -7.2% -8.1%

3Q13 4Q13 1Q14 2Q14 3Q14

36.7

38.2

3Q13 3Q1421

13

3Q13 3Q14

Accelerating Operational Performance…

LIVE TIM: EXECUTING ON OPPORTUNITY

7

43

120

3Q13 3Q14

Customer Base (000 users)

Source: Anatel

881

1,366

3Q13 3Q14

Netflix Broadband Ranking (average streaming speed representation)

3Q13 3Q14

ARPU (R$; YoY%)

… with Support of Quality Experience

Addressable Households (000 HH)

Source: Company

+2.8x +55%

+32%

New Line Payback (months)

-38%

Gross Adds (000 users)

18

31

3Q13 3Q14

+74%

Live TIM Net Adds Share (% of SP and RJ market additions)

Average Speed of New Sales (mbps)

+4.1%

16%

31%

Aug/13 Aug/14

Source: Company

CONCLUSION

8

Q3 Conclusions: A good balance between objectives

Perspectives: Moving the plan forward

Strategic… Financial… Operational…

EBITDA

Net Income

+6.4% YoY

+5% YoY

+11% YoY

MBB in 81 cities

OPEX Control

Prepaid leadership

Infrastructure growth

Evolving revenue profile Renewed Mission/ Purpose/Values

New 3-year plan

“To connect and take care

of every customer, so

everyone can do more”

o Industry leadership

o Long term commitment

o 4G license 700MHz

o Tower sale supporting investment plan

Quality

Business Generated

TIM Protagonist

• VOICE

• SMS

• MTR

• DATA

• DIGITAL SERVICES

o Data and digital services leadership

o Infrastructure

o Customer base value

o Customer experience

o One TIM initiative

Data Users (mln users)

Data + VAS (ex-SMS)

Smartphones (over total base)

32 mln 32% YoY

44% +19 p.p. YoY

R$1.3 billion +49% YoY