Spin Off

Contax Participações S/A

November 2004

2www.telemar.com.br/ir

Main Objetive Uncover Contax’s hidden value to the benefit of all TNL shareholders

Secondary Objective

Definitively align TNL and TMAR interests

Contax as a stand alone business

Revenue mix is increasingly better balanced between Telemar and other clients

Total revenues should continue to grow with (a) the addition of new clients and (b) the organic growth of existing contracts

Main Objetive Uncover Contax’s hidden value to the benefit of all TNL shareholders

Secondary Objective

Definitively align TNL and TMAR interests

Contax as a stand alone business

Revenue mix is increasingly better balanced between Telemar and other clients

Total revenues should continue to grow with (a) the addition of new clients and (b) the organic growth of existing contracts

Executive Summary

3www.telemar.com.br/ir

Current Status First Phase Final Phase

Caroaci S.A.

Shareholders

Tele Norte Leste Part. S.A.

Shareholders

Tele Norte Leste Part. S.A.

Contax Part. S.A.(ex-Caroaci)

Shareholders

Contax Part.S.A.

Tele Norte Leste Part. S.A.

Spin Off Phases

Approved by TNL’s Board of Directors

to be implemented by 11/30

Subject to approval by TNL and TMAR Extraordinary

Shareholders’ Meetings, in addition to TNL’s Debenture Holders’

Meeting and TNL’s Fiscal Committee

4www.telemar.com.br/ir

Focus on profitability EBITDA positive since the beginning of its operations in 2000

Average annual increase in attendants positions of 49%, in line with the increase in net revenues (58%) and customer baseContax has more than 30 clients, including major banks, utilities, insurance, cable TV and retail companies

Target: Consolidate #1 position in Brazil’s call center market

Focus on profitability EBITDA positive since the beginning of its operations in 2000

Average annual increase in attendants positions of 49%, in line with the increase in net revenues (58%) and customer baseContax has more than 30 clients, including major banks, utilities, insurance, cable TV and retail companies

Target: Consolidate #1 position in Brazil’s call center market

Call Center Services

Work Stations

7,3374,947

12,907

Net Revenue

(R$ million)

223

421

146

16,50015,954

413

5www.telemar.com.br/ir

Contax Participações book value will be of R$273.7 million considering: Book value of R$126 million of TNL Contax S/A in 10/31 Capitalization of loans held by TNL against TNL Contax S/A in the amount of

R$57.7 million in Contax Participações Additional capital increase of R$90 million in cash

Contax’s valuation should be equivalent to other companies with the same size and growth perspectives

Contax’s growth should be equivalent or greater than historical/projected growth in the Brazilian call center market

Contax Participações book value will be of R$273.7 million considering: Book value of R$126 million of TNL Contax S/A in 10/31 Capitalization of loans held by TNL against TNL Contax S/A in the amount of

R$57.7 million in Contax Participações Additional capital increase of R$90 million in cash

Contax’s valuation should be equivalent to other companies with the same size and growth perspectives

Contax’s growth should be equivalent or greater than historical/projected growth in the Brazilian call center market

“Hidden Value”

Source: IDC Brasil,www.callcenter.inf.br and Telemar’s Estimates

Call Center Outsourcing Market in Brazil

R$ Million

2,0092,451

2,843 3,0983,595 3,798

51.7PAs (x 1,000) 58.6 64.8 70.1 74.6 78.3

2002 2003 2004 20072005 2006

R$ Million

2,0092,451

2,843 3,0983,595 3,798

51.7PAs (x 1,000) 58.6 64.8 70.1 74.6 78.3

2002 2003 2004 20072005 2006

6www.telemar.com.br/ir

Spin Off Schedule

Tuesday 11/30 Implementation of “First Phase” Intercompany contracts will be signed subject to ratification by TNL’s and Telemar’s

Extraordinary Shareholders’ Meetings

Thursday 12/02 Public invitation for TNL’s and Telemar’s Extraordinary Shareholders’ Meeting,

TNL’s Fiscal Committee, and TNL’s Debenture Holders’ Meeting Additional information available for TNL’s shareholders in the investors relation web

site www.telemar.com.br/ir Opening of “Data Room” at TNL’s office (scheduled visits only)

Friday 12/17 TNL’s and Telemar’s Extraordinary Shareholders’ Meeting, and TNL’s Debenture

Holders’ Meeting TNL’s Shareholders’ Meeting: potential new date in case of failure to meet

minimum quorum on 12/17

2005 02/18 – Contax Participações S/A audited financials will be made available From 02/21’til 03/10 – Contax’s shares are expected to begin trading on BOVESPA

Tuesday 11/30 Implementation of “First Phase” Intercompany contracts will be signed subject to ratification by TNL’s and Telemar’s

Extraordinary Shareholders’ Meetings

Thursday 12/02 Public invitation for TNL’s and Telemar’s Extraordinary Shareholders’ Meeting,

TNL’s Fiscal Committee, and TNL’s Debenture Holders’ Meeting Additional information available for TNL’s shareholders in the investors relation web

site www.telemar.com.br/ir Opening of “Data Room” at TNL’s office (scheduled visits only)

Friday 12/17 TNL’s and Telemar’s Extraordinary Shareholders’ Meeting, and TNL’s Debenture

Holders’ Meeting TNL’s Shareholders’ Meeting: potential new date in case of failure to meet

minimum quorum on 12/17

2005 02/18 – Contax Participações S/A audited financials will be made available From 02/21’til 03/10 – Contax’s shares are expected to begin trading on BOVESPA

7www.telemar.com.br/ir

Investor RelationsRua Humberto de Campos, 425 / 8º andar

Leblon - Rio de Janeiro -RJ

Phone: ( 55 21) 3131-1314/1313/1315/1316/1317

Fax: (55 21) 3131-1155

E-mail: invest@telemar.com.br

Visit our website: http://www.telemar.com.br/ir

This presentation contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements and involve inherent risks and uncertainties. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events

“Safe Harbor” Statement