TIM ‐ Acquisition of AES Atimus

Investor Relations - São Paulo. July 8th, 2011

Safe HarborSafe Harbor

Safe Harbor Statements

Statements in this presentation, as well as oral statements made by the managementof TIM Participações S.A. (the “Company”, or “TIM”), that are not historical factconstitute “forward looking statements” that involve factors that could cause theconstitute forward looking statements that involve factors that could cause theactual results of the Company to differ materially from historical results or from anyresults expressed or implied by such forward looking statements. The Companycautions users of this presentation not to place undue reliance on forward lookingcautions users of this presentation not to place undue reliance on forward lookingstatements, which may be based on assumptions and anticipated events that do notmaterialize.

TIM Strategy: 3 waves of growth

Q1 ‘10R$ Mln %YoYQ1 ‘11

Operating Results

growth

Total Revenues

Services

3.296

3.176

Ebitda 947

14%

9%

9%

3.752

3.463

1.033

1 2 3 DataFMS Voice

Community Expansion

Infinity Web / Smartphones3

Ebitda‐CapEx 258 185%736

Customer Base1 Revenue Voice Out / MoU2

Mln users

5x

Daily Unique users, Mln clients

1,7

Infinity Web users (Pre‐Paid)

R$ Bln Min

1.941.78

Mln users

Smartphone penetration

MarFebJanDecNovOctSepAug

0,3

MayApr2010 2011

Jun

42,452,8

R$ Bln, Min

Revenues(Voice  Out)

+46% +24%

1.561.78 p p

% Webphone+smartphone penetration on Customer Base36,1

MoU 8%10%

12%

>18%

70100 126

Q1 11Q1 09 Q1 10Q1 09 Q1 10 Q1 11

2010 September 2010 Year End 2010 March 2011 Year End 1

Supported by a consistent Network Expansion

TIM Brasil CapEx – Organic growth* Development area

R$ Bln

Network Expansion

C

D

E

AA

R$ Bln

14Bln

R$ 14 Bl i 5

Backbone Backhauling Access

B

'09 '10 '11 '12 '13

R$ 14 Bln in 5 yearsR$ 8.5 Bln 2011‐2013

SwapsConsorthia

MicrowavesFTTS

2G capacity3G coverage

*Excludes spectrum licenses and acquisitions

AnnualCapEx 2.7 2.8 2.9

2G Network Capacity (voice)

# ‘000 TRX installed

20 7

Backbone

000 km

Backhauling (MW/FTTS)

>80%

Access 3G

% of urban population covered% of sites connected with own backhauling

28,0202 >80%

7,0

16,0 20,7

20%

80

115142 55%

2x

25x

'09 '10 '11 ’13’12’11’09 ’10

> 80% of Brazilian major cities connected via fiber by 2013

’13’10’09’08 ’13’10

2

Acquisition of Intelig was key for TIM’s Evolution and Business Transformation

#1 carrier in long distance services (accelerating FMS)#1 in voice arena (size; ARPU, growth)

Market Mobile → Long Distance → Fixed

Evolution and Business Transformation

Fast growing presence in Government / Top CustomersSegment Consumer → Corporate

Infinity web now exceeds 8 million unique users/month (6% of Brazilian browsers) in just 6 months

Product Voice → Data (small screen)

Totaling 28,000km of backbone15 000 km from InteligNetwork

#1 in historical areasFast growing in São Paulo (#2 back) and Rio (close to Oi)

Geography

50/50% from own /rented To infrastructured

South; Northeast → São Paulo; Rio de Janeiro

.15,000 km from Intelig

. Active in swap capacity market / government PNBLNetwork 50/50% from own /rented → To infrastructured

Starting Business TransformationLD Market Share% of LDN minutes

48 3%

Backbone (Km of fiber)‘000 R$Bln

11,5%

48,3%

20,6%17,0%

27,7%

11 5%

33,8%

17,2%

Player 1Player 2

Player 30.6

>1.0

>2 .0

15 0

~6.5

~22.5 ~5.7

~28.2Network strenghtening Intelig

Revenues

11,5% 11,5%

2007 2008 2009 Jun/10 Dez/10 '10 '11 '13

1.015.0

YE 2009 Inteligcontribution

Swap ofcapacity

Today TotalUnderConstruction Powering up voice

mobile growth3

One of the best backbone in the country

Intelig/TIM 

Optic fiber network

backbone in the country

Backbone:  

16,000 Km

+

Boa Vista

Macapá

Belém

Fortaleza

Fiber SWAP  in 2010:  

~6,500 Km

Brazilian  Data Activation

Manaus

Porto Velho

ú

M

M

Conjoint Building Network 2012: 

+PNBLCuiabá

Brasília

Goiania

Aracajú

Salvador

M

M

~3,800 Km

Backbone LD Belém

+Active in capacity SWAPPartnership with Telebrás

CampoGrande

Rio de Janeiro

Vitória

BeloHorizonte

Uberlândia

São PauloNew swap network  

National Backbone 

Backbone LD Belém– Macapá ‐Manaus:

~2,000 km

with Telebrásfor PNBL expansion

Porto Alegre

Florianópolis

CuritibaMM

New Conjoint Building NtWk

New Network Manaus

M Metro Swap Agreements

TIM + Intelig: ~28.000 KmIntelig enables capacity to swap network

4

Rationales for AES acquisition

A Unique Network For the Best Choice

Backbone Backhauling Access

acquisition

B

C

D

E

AA

Mobile

Fixed(last mile)

TIM/Intelig

AES3G, WiFi, LTE, 100 Mbps, FTTH

~5.500 km of fiber in SP/RJ

T S t M i M bil D t E i A d Ch ll g th Fi d M k t

2

3

R$ Bln, Revenues

To Support Massive Mobile Data Expansion And Challenge the Fixed Market

Brazilian TLC Market

111

140

1

1

2

at Home

at Office

1140

Voice

Broadband

100100

InteligRevenues

0

'10 '11 '12 '132010 2020

5

A unique network

AES: widespread network in SP and RJ (urban area) Network Scale-up

A unique network

~3.0 Mission:

Build the strongest network in Km

~2.5Twice as

much fixed Build the strongest network in

Brazil

Rational:Infrastructure 

SP RJ

much fixed incumbent

backhauling in SP and RJ

1) Increase of capacity and

capillarity:

a. Additional 5.500 km in top

MAP

2 cities

b. Most valuable asset to

swap with other operators

ADSL

VDSL2) Network cost structure

transformation

a. Opex savings (leased lines)

b Capex avoidance (eg FTTS)100 Mbps

Cable

FTTHb. Capex avoidance (eg. FTTS)

1 GbFTTO

6

Best choice in Top 2 Towns (SP/RJ) – R$ 30 Bln market

GDPValue Proposition

R$ Bln, Revenues

(SP/RJ)  R$ 30 Bln marketSP and RJ: Macroeconomics

RJ+SP R$1.3TlnArgentina R$0.85 Tln

PopulationRJ+SP = 57Mln

Consumer/SoHo

Best‐of‐breed connectivity(3G 4G Wi Fi FTTH)

Other States

InnerArea

SP and

110

50

60

50 30

Urban

Mobile

30

20

18

12

RJ+SP

SP/RJ St t R$50Bl (45% f B il)

TLC Market

Italy =60Mln (3G, 4G, Wi‐Fi, FTTH)

Seamless experience

Bundling broadband

RJ States 50 Area Fixed30 18

30 Bln addressable market,

Brazil TLCMarket

TLC MarketSP/RJ States

SP and RJ Metro Area

Widespread AES in SP and RJ: Addressable market

SP/RJ States: R$50Bln (45% of Brazil)Metro Areas: R$30Bln (26% of Brazil)

Bundling broadband capability off‐the‐shelf

largely prospect

~30 Mln peopleCorporate / SME

Best corporate connectivity8 Mln households

Mobile PC

4,5 Mln households class A and B

@ Homeconnectivity

Clouding

Voice/data/services

8 Mln households

@ Hot spot

550.000 companies

/ /

7

AES Atimus – Acquisitiondetails

TimingPrice

1 6R$ Bln

details

0,5

1,6

1,1Signing Closing Start-upEV

TotalRJSP

Km of Fiber ~3.0 ~2.5 ~5.5 Approvals Integration

08/07 Q4’11 Q1’12

13x 7x 11xEV/2011E

pp g

St 1Network sinergies

OPEX/CAPEX

4 steps

Step 1

Step 2

g(link swap; FTTS)

Mobile Data Accelaration

OPEX/CAPEX

Mobile revenues

integrationStep 3

Step 4

Corporate Data Solutions

At home

Fixedrevenues

Step 4 At home

8

Benefits for TIM shareholders

Mobile AccelerationOPEX/CAPEX Saving

R$ 250 mln in 2012 TIM 2013

shareholders

D

E

R$ 250 mln in 2012R$ 1 bn in 3 years

13%

29%>34%

TIM 2013

DataFMS Voice

Community ExpansionBackbone Backhauling Access

B

C

AA

USAEUBrazil

Replicating Intelig Value CreationSP/RJ metro – telecom market size

Backbone Backhauling Access

0,2

2,9

0,8

3x

9Fixed

•R$ 30 Bln TLC Market

•27% of Brazilian GDP

R$Bln Current TIM Revenue

3 Mobile

0,9 1,0

Cost Market FixedMobile Total

189Fixed

Additional

PeersUntapped

Costsaving

Market value at dec’09

RevenueRevenueota

Value

Topping fixed broadband market9

Takeaways

Acquisition for R$ 1 6 bln of 5 500 km of best fiber in SP and RJ

Takeaways

Acquisition for R$ 1.6 bln of 5,500 km of best fiber in SP and RJ

Closing expected by Q4

Integration completed by Q1 2012

Shareholders value creation by

− OPEX/CAPEX saving (250 mln in 2012; 1 bln in 3 years)OPEX/CAPEX saving (250 mln in 2012; 1 bln in 3 years)

− Mobile revenues acceleration

− Fixed line business expansionFixed line business expansion

Replicating Intelig’s value creation exercise

10