Tim Presentation Deutsche Conference Set09 Eng

0

Deutsche Bank Global Emerging Markets One-on-One Conference

September 9-10th, 2009

TIM Participações S.A

1

TIM PARTICIPAÇÕES S.A. | Investor Relations

Agenda

Market Facts and Historical Data

Build a Solid Platform for the Long Term

2nd Quarter Results

Re-launch Plan: Key Actions and Results

2


Re-launch Plan: Key Actions

Build a Solid Growth Platform for 2010

React to 2008’s inertia on revenues:

- minimizing impact on 2009…

- …and preserving profitability

Caring

Brand

Offering

Sales Force

Network

Efficiency

Selectivity and Multi-channelingServices improvement: better flow over demand Caring model evolution: service level vs. client value

Actions in Course

RepositioningShare of voice increaseNew format to increase recall and brand linkageCoherence and brand recognition

Distinctiveness and InnovationInfinity pre and post“Azul” (DDD = local)

“Back to Sales”Grow again on post-paid and on pre-paidSales Force development (rationalization / productivity) Value-based Commissioning

Focus on 2G Service Quality :2G: excellence on voice quality3G: “right on spot”

Structural RethinkingRevision of go-to-market models and processes Renegotiation with suppliersGrowth financing and sustain profitability

Shock offering: “Recarga Imperdível”“TIM Único”

1

4

5

3

2

6

7

3


Brand: Share of Voice Increase; Growth of Recall, Appreciation and Brand Linkage

... with Good Campaign Results

2006 2007 2008

3º 3º 4ºRanking

TIM

-6 -13 -14

Greater Efforts in Communication...

TIMPlayer 1

Δ p.p.

20

Target% share of investment

7075

Manifesto Da Marca(Mar)

TIM TerraAzul (May)

Recall Appreciation Brand LinkageΔpp

vs. leader

Player 2Player 3

Source: Ibope Monitor/GRP, Data Folha, Synovate’s Image Research

Brand

30%32%

15% 16%

30%

24% 19%

17%

29%

31%

26%28% 28%

21%

16%

18%

5%

10%

15%

20%

25%

30%

35%

40%

0

1H‘09

1º

46

76 78

18

87

32

1

4


Network: Improvement of Service and Network Quality2008 FY – Overall Service Quality Jan-Jun 2009 – Overall Service Quality

# 6 # 24Q ‘08: 90.2%

98.7% in June

Network Service Quality

% target achieved in overall service quality, TIM vs. competitors

Jan/09 Jun/09 Delta (p.p.)

TIM 84.1% 100.0% +15.9

Player 1 100.0% 100.0% 0.0

Player 2 95.7% 98.6% +2.9

Player 3 53.8% 50.0% -3.8

Main mobile operators

Source: Anatel

Network

% target achieved in overall service quality, TIM vs. competitors

% target achieved in network quality , TIM vs. competitors % target achieved in TIM network quality

99.5% 98.0% 97.7% 95.1% 93.4% 91.6%83.9%

Player 1 Player 2 Player 4 Player 5 Player 6 TIM Player 3

99.9% 97.3% 97.0% 96.0% 93.4% 90.7%

76.9%

Player 1 TIM Player 5 Player 6 Player 4 Player 2 Player 3

96.7%99.5% 99.5% 98.9% 100.0%

84.6% 84.1%84.1%

80,00%

82,00%

84,00%

86,00%

88,00%

90,00%

92,00%

94,00%

96,00%

98,00%

100,00%

nov/08 dec/08 jan/09 feb/09 mar/09 apr/09 may/09 jun/09

2

5


Caring: Improvement in Customer Satisfaction

7,6

7,8

8

8,2

8,4

8,6

mai/06 ju l/06 set/06 nov /0 jan/07 mar/07 mai/07 jul/07 set/07 nov /0 jan/08 mar/08 mai/08 ju l/08 set/08 nov /0 jan/09 mar/09 mai/09

Customer Satisfaction Evolution

May06

Oct06

May07

Oct07

May08

Oct08

May09

8.4

8.18.1

8.0

8.6

7.87.8

8.0

Evidences: . Reduction of # Lines / frequency of problems . Strong recovery in historically critical areas: SP, RJ and Mid-West

Offering: . Improving on competitiveness in handset. Increase media presence. Launch of Infinity pre-paid plan

CRM: . Pro-active replacement of handset based on value. Expansion of Premium cell

Coverage: . Focus on areas with high concentration of high-value clients

TIMPlayer 1

Player 2Player 3

Source: Customer Satisfaction Monitoring (Bridge Research)

Caring

TIM: recovery of client satisfaction after a negative 2008

3

Costumer Care Index - Anatel

Jan09 Feb09 Mar09 Apr09 May09 Jul09

Player 1

TIM

Player 2

Player 3

Player 4

Jun09

6


Offering: Inversion of Market Share Erosion TrendOffering

TIM Net Adds and Net Share TIM Market Share

000’s lines, %

Clean-up:

~1Mln lines

2008 2009

2008 2009

Mln lines

28.4 29.8 29.9Pre

Post 6.8 6.6 6.2

TIM Customer Base

2300%

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

31.6

6.2

Jun

% of market share

Rankingin net share

2Q 2Q

2008 2009

1,282

1,729

0

500

1.000

1.500

2.000

29.1%

NetAdds

% NetShare

17.4%

2300%

2350%

2400%

Apr09

May09

Jun09

Net share%

#1 #2 #1

37.7% 24.1% 32.2%

0

0

0

0

0

0

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May JunQoQ Speed up:

•Net addtion: 1.7mi 2Q vs. 0.7*mi in 1Q09

•ARPU: R$26.6 2Q vs. R$26.0 in 1Q09

*excluding clean-up base

4

25,3 25,1 25,024,7

24,524,2 24,1

23,5 23,5 23,6 23,6 23,7 23,8

Jul

34,2 34,7 35,2 35,8 36,1 36,4 36,635,7 36,1 36,5 37,2 37,8 38,5

Jul

7


Infinity

Other plans

Offering: Infinity Offer ResultsOffering

2009 Infinity pre-paid base (000’s lines)

Pre

Post

Infinity

100%

34%

66%

~0%

May Jun

% Infinity in gross post voice consumer

5

~2.500

~1.600

~650

Mar Apr May Jun

4

8


000’s lines, 2009

Apr May

Gross adds

Churn

Net AddsReported

- + ++

NetAdds

- - - +Net Adds

+ + ++

Gross Adds

Churn

2009

2009

Jun

++

+

++

5

Churn

Gross Adds

1Q*

1Q*

1Q*

Sales Force: Stop-loss of Value Customers Base (Post-paid)

Excluding ~1Mln lines clean-up

Total Base

“Back to Sales”

Post-paidPost-paid Sales

Re-launch

Pre-paid

Pre-paid Growth Speed

up

Excluding ~0,3Mln lines clean-up

Excluding ~0,7Mln lines clean-up

* monthly average in 1Q

Sales Force

Apr May Jun

Apr May Jun

1Q Apr Mag Giu

Q1 Apr Mag Giu previa fechamento

Q1 Apr Mag Giu

9


46%

62%44%

69%

107%

24%

25%14%

113%

145%

56%

22%

120%

78%

55%

26%

23%

40%

5%

25%

45%

65%

85%

105%

125%

145%

Sales Force: Positive Balance on Post-Paid MNP and Speed up in Acquisition Dynamics

Gap MNP Post-paid

Jan Feb Mar Apr Jun

% MNP Port In/ Port Out

Business

Post-paid

Consumer

Positive Balance on Consumer and Businesssegments

“Zero balance”

+

May

Note: Mobile NP

SalesForce5

Gross Adds Post-paid (voice)

-46%-34% +2% +13%

+42%

’08 vs. ’09“The Turnaround”

+29%

Jan Feb Mar Apr JunMay

10


Efficiency: Self-financing Brand Repositioning Plan and Commercial Re-launch

Total Cost

1Q

2Q

YTD

Advertising &Promotions

Commercial*

Bad Debt

1Q

2Q

YTD

Leased Lines

Intercon-nection

1Q

2Q

YTD

Personnel

G&A

Δ% 09 vs. 08, BRGAAP

Breakdown Costs

+14%

+

+

+

-

+

Com-mercial

Indus-trial

HR, ITand G&A

Bad Debt Evolution % Net Services Revenue, BR GAAP

Improvement in acquisition quality

Efficiency

1Q

YTD

Note: Excludes non organic effects: Embratel dispute agreement: - R$64 Mln (Mar/09); São Paulo inventories stolen : -R$21Mln (2Q09)*Includes COGS, Selling, CRM and Marketing Expenses

-10%

-14%

-6%

-20%

-48%

26%

41%

-5%

-2%

2Q~0

-18%

-6%

8%

15%

1%

-5,00% 0,00% 5,00% 10,00% 15,00% 20,00%

-10%

-10%

-9%

-100,00% -50,00% 0,00%

6.8%

4.1% 4.8%3.6%

4.7%

9.6%

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09

6

11


237

228

243

Net Services Revenues

15%

16%

14%

1Q

2Q

1H

Net Total Revenues

EBITDA Growth EBITDA and EBITDA Margin

1Q

2Q

1H

1Q

2Q

1H

Δ% 09 vs. 08, BR GAAP

Δ% 09 vs. 08, BR GAAP Δ basis points 09 vs. 08, BR GAAP

1Q

2Q

1H

Δ% 09 vs. 08, BR GAAP

+

+

+

+

+

+

Financials: Flat Revenues with Structural Increase of Profitability

22.3%20.0%

2008 2009

Economics

-0.8%

-1.2%

-0.5%

-5,00%

Issue: neutralize 2008 negative

waves (post and pre-paid)

+ 230 Basis points YoY

0.6%

3.7%

2.2%

0,00%

7

12


25.3

8Mln

6Mln

4MlnJun-08 Jun-09

6.86.2

30%

25%

15%

27%

21%2008

Post-paidRevenues

- 800K

25%

20%

15%

20%

16%

29.0Total market

Loss of active voice post-paid lines:

R$100ARPU/

post-paid active voice lines:

~ R$ 1 Bln

Delta base

2009 Inertial

Post-paidRevenues

Impact on Total Post-paid Revenues(FY 2009)

Economics

x

-6pp

-4pp

1st Wave 2008: Loss of Post-paid Voice Base

TIM Post-paid Base

(lines)

TIM Post-paid Mix(%)

TIM Post-paid MarketShare

Jun-08 Jun-09

Jun-08 Jun-09

∆ Jan 09 vs. Jan 08

-R$0.5 bn in 1H

7

13


Promo Non-Promo

ARPU

ARPU Promo base vs. Non-Promo base

2008’sAverage

2008’s Average

- +

Bln R$

Economics

Mar2009

Mar2009

2nd Wave 2008: Reduction in Pre-paid Base with Promos

Promo Active BaseNon-PromoActive Base

Mln lines Mln lines

Promo Δ Base

2008Pre-paid Revenue

Non-PromoΔ Base

2009Inertial

Pre-paid Revenue

Impact on Total Pre-paid Revenues (FY 2009)

- +- +

Mainly in 2Q

7

14


Agenda


Build a Solid Platform for the Future

2nd Quarter Results


15


Subscribers base: +4.8% QoQ

Net Revenue growth: +3.7% YoY to R$ 3,304 Mln

Net Service Revenue:

• +4.0% QoQ (and +9.7% QoQ in Total Net Revenue)

• VAS: +12.5% QoQ e +21.7% YoY

• Stop ARPU and MOU erosion on a quarterly basis

Structural efficient growth:

• Bad Debt at -47.9% YoY (and 3.6% of Net Services Revenue)

• Interconnection & Network: -14.1% YoY

• Personnel and G&A: -9.0% YoY and Commercial: +24.6% YoY

Improving Profitability: EBITDA at R$ 736 Mln (+15.5% YoY) to a Margin of 22.3% (+230 bps YoY)

Net Loss reduction: -R$ 15 Mln vs. -R$144 Mln in 1Q09 and -R$66 Mln in 2Q08

Positive Operating Free Cash Flow: R$ 407 Mln, +10% YoY…

… with an improvement in the Net Financial Position: R$ 2,900 Mln, -R$117 Mln vs. 1Q09

2Q09’s Main Results

16


% Penetration per total population

MobileMn lines

133.2 140.8 150.6 153.7 159.669%

73%78% 81%

83%

2Q08 3Q08 4Q08 1Q09 2Q09

Mobile lines

73% 73%76%

38.8 39.441.1

2007 2008 2Q09

% Penetration pertotal households Fixed Access

10%14%

19% 20%

2006 2007 2008 2Q09

Fixed Fixed Broadband

Industry Overview

5.6

7.7

10.0

10.8

2006

78%

41.8

FIXED

New players has brought competition

FIXED BROADBAND

ADSL/Fixed Lines ~25%

~42% of total access with speeds up to 500kps

MOBILE

Market growth continues to be fueled by intense commercial

activity from major players and SIM-card only sales

MOBILE BROADBAND

Mobile broadband base ~3 million (Jun09)

2009 YTD mobile net addition surpassing fixed broadband

17


Net Adds(000’s)

Stop Market Share Erosion…

2Q08 1Q09 2Q09

Customer Base

CB YoY Growth (%)

Million lines

Pre-paid

23.1% 11.0%

Post-paid

11.9%

… through Revamp in Net Additions

2Q08 1Q09 2Q09

6.8 6.2 6.2

27.0 29.9 31.6

25.4%

23.5% 23.7%

1,282

1,729

(306)

17.4% 17.2*%

29.1%

~700*

Net Share (%)

6.2

* Excluding the impact of ~1MM clean-up

∆ Net Adds YoY: +35%QoQ: +149%*

Market Share (%)

+17.1%

-8.9%

+5.6%

+0,7%

ΔY/Y ΔQ/Q33.8

36.1 37.8

18


Revenues & KPI’s

2Q08 1Q09 2Q09

Net Revenues

R$ Mln

215 189 368

2,9362,971 2,823

3,186 3,0123,304 +3.7%

-1.2%

+70.8%

Service Revenue KPI’s

ARPU

2Q08 1Q09 2Q09

29.8 26.0 26.6

R$

-13.8% -11.7% -11.0%YoY %

+1.2% -13.1% +2.1%QoQ %

∆ YoY ∆ QoQ

-27.1% +4.4%

ARPM

2Q08 1Q09 2Q09

10070 73

0.300.360.37

0,15

0,20

0,25

0,30

0,35

0,40

R$

MOU

∆ YoY

22.2%

∆ QoQ

-2.2%

Min.

397 430 483Gross VAS Rev.

9.8% 11.2% 12.3%% VAS/ Service Rev.

+9.7%

+4.0%

+95.0%

+21.7% +12.5%

+2.5pp +1.1pp

ΔY/Y ΔQ/Q

ΔY/Y ΔQ/Q

Increased penetration of micro-browsing over total

customers base

Net Service Revenue

Net Handset Revenue

19


Commercial Efforts Maintained…

R$ Mln

COGS

R$ Mln

Selling Expenses

2Q08 1Q09 2Q09

325 324

467

+43.7%+43.9%

Margin %

R$ Mln

20.2%

1Q09

609

20.0%

2Q08

637

22.3%

2Q09

EBITDA

.. delivering EBITDA Growth…While Efficiency Plan Gets Traction...

2Q08 1Q09 2Q09

2Q08 1Q09 2Q09

2Q08

134

1Q09

106

2Q09

277 261 252

1,073 985 921

143

60*

Bad Debt

Personnel and G&A Costs

-47.9%-21.2%

-9.0%-3.7%

-6.5%

6.8%* 4.8% 3.6%

% ofNet Serv.Revenues

Interconnection & Network Costs

736R$ Mln

R$ Mln

R$ Mln

99

-14.1%

+20.8%+15.5%

2Q08 1Q09 2Q09

666 709829

+16.9%+24.6%

Advertising =1.4 x84 115 119

∆ YoY

Gross AddsYoY: +20%QoQ: +27%

* Telesales Impact

20


R$ Million

EBITDA and Bottom Line performance

* Other Expenses include: G&A, Personnel and Net Other Operating Expenses/Revenues

Margin %

Δ YoY -1.2% +70.8%

+24.6%

-14.1

%

-47.9

%

-13.1

%

EBITDA2Q08

ServiceRevenues

HandsetsRevenues

Advertising & Sales

NetworkExpenses

+43.7%

COGS Bad DebtOther

Expenses*EBITDA2Q09

22.3%20.0%

637.2

(34.4)

152.6

(163.4)

(141.9)

151.7

97.436.9

736.0

+15.5%

Investments on Growth

Savings

~300 (~10% Serv. Rev.)

~290(~10% Serv. Rev.)

+R$99 Mln

EBITDA to Bottom Line performanceEBITDA Structurally Improve – Financing the Growth

and the Repositioning

EBITDA 2Q09

Depreciation & Amortization

EBIT Net FinancialExpenses

Taxes and Others

Net Result

736.0

88.6 (65.9)(15.2)(38.0)

(647.5)

+15.5% +8.6% +116.9% -27.9% +141.1% -77.0%YOY %

2Q08 637.2 (596.3) 40.8 (91.4) (15.7) (66.3)

1.2x 2.2x 0.2x2Q09 vs. 2Q08

R$ Million

21


Gross DebtR$ 3.67 billion (of which 68% long term)

~33% of total debt is denominated in foreign currency (fully hedged)

Average annual cost 10.95% in 2Q09 vs.11.64% in 2Q08 (and 12.47% in 1Q09)

Net Financial Position and Operating Free Cash Flow – 2Q09

R$ Million

Net Debt

R$ Million

Operating Free Cash Flow

* Excluding 3G license

Operating FCFR$ Million

EBITDA ΔWork. Cap.

CAPEX Operating FCF

2Q091Q09Non

Op. FCF

73693 (422)

407

(3,017) (289)407 (2,900)

~R$ 168 Mlnof dividends

-117

2Q08

371 *

+10%

% total revenues

12.3% 11.6%

22


Agenda



2nd Quarter Results


23


2008 2009

Posiziona-mento mark

Market Share

Economics

R$ Bln R$ Bln

Keep growing in revenue and profitability

Source: TIM internal data

Reshaping TIM Brasil: Build a Solid Growth Platform

Brand Positioning

Loss of Preference (-7 pp) and Top of Mind (-1 pp)

Ranking #6 in Quality (Anatel)

Customer Satisfaction Index decrease (ranking #3)

Recovery in - Preference- Top of Mind - Quality of Services (ranking Anatel)- Customer Satisfaction

MS Total

Net adds pre

Net adds post voice

Net TotalRevenues

EBITDA Margin

- 6 pp only at post24.2%25.0%25.4%25.9%

1Q08 2Q08 3Q08 4Q08

-20,00%

-10,00%

0,00%

10,00%

20,00%

30,00%

18% 20%24%

26%

1Q08 2Q08 3Q08 4Q08

20%22%

1Q09 2Q09 3Q09 E 4Q09 E

23.5% 23.7%

1Q09 2Q09 3Q09 E 4Q09 E

-20,00%

0,00%

20,00%

30,00%

Reversal post-paid base erosion trend (value base)

10,00%

+6% +5% +6% +10%

24


The Path for 20091Q09 2Q09 3Q09 4Q09

+ ++

--

Target: restructure the company, recovering strong positioning, sustaining profitability and cash flow

Network and Brand recover Back to Sale Back to Talk Back to Growth

Net ServicesRevenue Δ YoY

Strategy: Pure Mobile

Organization: new

management Team

Advertising: new format

and greater presence in

media

Network Quality

New portfolio Offers:

- April (Infinity Pre, Da Vinci)

- June (Infinity Post, “Único”)

Sales channels Push :- Back-to Post-paid- MNP Focus

Recovery of Customer Satisfaction

Usage stimulus, MOU growth. Ex:- “Recarga Imperdível”- LD Infinity

Market share Increase :- Post-paid Voice (BU/CO)- Infinity Pre-paid Push

New Offers (July)- 4 in 1- New “Imperdível”

Commercial Push on New

Offer

Closing Intelig and

capturing early synergies

Recovery of Top of Mind

and Preference

25


* 2009 Estimate

Improving Structural Efficiency of the Company2009, BRGAAP

Commercial

HR, IT and G&A

Industrial (Network)

08 vs 07 09* vs 08

08 vs 07 09* vs 08

Δ YoY

% Net Service Revenue

Δ YoY

Δ YoY ITX Leased Lines

08 vs 07

09* vs 08

Δ YoY+

+

++

-

+

+

+ +

-

-

Strict Rigor in Bad Debt

Industrial Costs Variation

2008

2009

We do not sacrifice growth to increase profitabilityWe do not “buy" growth by destroying value

08 vs 07 09* vs 08

Intelig

4%5%

10%

7%

3.6%

4.8%

1Q 2Q 3Q* 4Q*

26


Repositioning on track:

• Brand

• Quality

• Satisfaction

Growth of net additions with ARPU increase

Profitability preserve through efficiency

QoQ improvement in all metrics

2Q Achievements

Main Takeaways

•Stimulate Usage (MOU)

3Q Priorities

• Positioning

•Profitability and cash generation

•Post-paid

Build a Solid Growth Platform for 2010

27




2nd Quarter Results


28


Market Facts

TIM Part. Total Control Free float

Common 799,924,805 650,537,118 149,387,687

Preferred 1,548,522,231 990,098,811 558,423,420

Total 2,348,447,036 1,640,635,929 707,811,107

34%

66%

40%

60%

21%

79%

100% 100%

(%) (%) (%)

100%

*in Aug 31, 2009

*All Market Panel data refer to Aug 31th, 2009*All Market Panel data refer to Aug 31th, 2009

Shareholders StructureStock Performance

TIM ParticipaçõesTIM Participações

TIM CelularTIM Celular

TIM NordesteTIM Nordeste

100%

TIM Brasil

100%

ON: 81%PN: 64%Total: 70%

100%

Telecom Italia

Stock Exchange: BOVESPA

Ticker Symbol: TCSL4 (Preferred)Price: R$ 3.96

52 Week Price Range:High – R$ 4.50

Low – R$ 2.42


Ticker Symbol: TCSL4 (Preferred)Price: R$ 3.96


Low – R$ 2.42


Ticker Symbol: TCSL3 (Common)Price: R$ 5.45


Low – R$ 4.49


Ticker Symbol: TCSL3 (Common)Price: R$ 5.45


Low – R$ 4.49

Market Panel*Market Panel*Market Panel*

Stock Exchange: NYSE

Ticker Symbol: TSU (ADR)Price: US$ 21.26

52 Week Price Range:High – US$ 23.68

Low – US$ 11.44

Stock Exchange: NYSE

Ticker Symbol: TSU (ADR)Price: US$ 21.26

52 Week Price Range:High – US$ 23.68

Low – US$ 11.44

Market Capitalization: R$ 10.49 BillionMarket Capitalization: R$ 10.49 Billion Market Capitalization: US$ 5.80 BillionMarket Capitalization: US$ 5.80 Billion

TCLS4 TCSL3 IBOV

Aug08 Sep08 Oct08 Nov08 Dec08 Jan09 Feb09 Mar09 Apr09 May09 Jun09 Jul09 Aug09

29


Numbers may differ from the previous publishing due to rounding

Historical indicators: operational results

Brazilian Wireless Subscriber Base (million) 159,6 153,7 133,2 3,9% 19,9%Estimated Total Penetration 83,5% 80,6% 69,5% 2,9 p.p. 14,0 p.p.Municipalities Served - TIM GSM 2.944 2.772 2.733 6,2% 7,7%Market Share 23,7% 23,5% 25,4% 0,2 p.p. -1,7 p.p.Total Lines ('000) 37.826 36.096 33.815 4,8% 11,9% Prepaid 31.610 29.923 26.993 5,6% 17,1% Postpaid 6.216 6.174 6.821 0,7% -8,9%Gross Additions ('000) 4.855 3.836 4.046 26,6% 20,0%Net Additions ('000) 1.729 -306 1.282 n.m. 34,9%Churn 8,6% 11,4% 8,4% -2,8 p.p 0,2 p.pARPU (R$) 26,6 26,0 29,8 2,1% -11,0%MOU 73 70 100 4,4% -27,1%ARPM (R$) 0,36 0,37 0,30 -2,2% 22,2%SAC (R$) 120 135 119 -10,7% 0,9%Investment (R$ million) 422,5 194,4 1.706,3 117,3% -75,2%Employees 10.174 10.212 10.253 -0,4% -0,8%

QoQ YoY% %2Q09 1Q09 2Q08

30


Numbers may differ from the previous publishing due to rounding

Historical indicators: financial results

R$ (Thousands) 2007 1Q08 2Q08 3Q08 4Q08 2008 1Q09 2Q09 QoQ % YoY %

Net Revenues 12,441,643 2,992,957 3,186,075 3,357,794 3,544,138 13,080,965 3,011,668 3,304,252 9.7% 3.7%

Services 11,421,037 2,837,663 2,970,664 3,065,744 3,222,737 12,096,808 2,822,979 2,936,240 4.0% -1.2%

Handset Revenue 1,020,606 155,294 215,411 292,051 321,401 984,157 188,689 368,012 95.0% 70.8%

Operating Expenses (9,601,330) (2,460,169) (2,548,906) (2,559,338) (2,613,134) (10,181,547) (2,402,216) (2,568,235) 6.9% 0.8%

Personal Expenses (625,398) (162,625) (168,697) (152,654) (164,186) (648,162) (157,959) (138,181) -12.5% -18.1%

Selling and Marketing Expenses (2,512,078) (598,141) (665,621) (715,019) (708,347) (2,687,128) (709,130) (829,036) 16.9% 24.6%

Network & Interconnection (3,865,089) (1,044,547) (1,072,570) (1,077,171) (1,048,241) (4,242,530) (984,633) (920,902) -6.5% -14.1%

General & Administrative (429,699) (123,779) (107,984) (101,496) (118,883) (452,143) (103,488) (113,542) 9.7% 5.1%

Cost of Goods Sold (1,434,431) (263,235) (324,831) (378,072) (439,650) (1,405,788) (324,451) (466,727) 43.9% 43.7%

Bad Debt (714,571) (271,701) (203,327) (143,250) (130,554) (748,833) (134,453) (105,949) -21.2% -47.9%

Other operational revenues (expenses) (20,065) 3,859 (5,876) 8,325 (3,272) 3,036 11,897 6,102 -48.7% -203.8%

EBITDA 2,840,313 532,788 637,169 798,456 931,004 2,899,418 609,451 736,016 20.8% 15.5%

EBITDA - Margin over total net revenues 22.8% 17.8% 20.0% 23.8% 26.3% 22.2% 20.2% 22.3% 2.1 p.p. 2.3 p.p.

Depreciation & Amortization (2,323,674) (572,033) (596,338) (617,988) (622,185) (2,408,545) (641,222) (647,451) 1.0% 8.6%

EBIT 516,639 (39,245) 40,831 180,468 308,818 490,872 (31,771) 88,565 -378.8% 116.9%

Net Financial Results (281,500) (73,609) (91,382) (152,943) (57,041) (374,974) (69,314) (65,857) -5.0% -27.9%

Income (loss) before taxes and Minorities 235,139 (112,854) (50,552) 27,526 251,778 115,898 (101,085) 22,708 -122.5% -144.9%

Income tax and social contribution (166,837) (12,613) (15,743) (39,579) 132,188 64,254 (42,929) (37,956) -11.6% 141.1%

Net Income (Loss) 68,302 (125,466) (66,295) (12,053) 383,966 180,152 (144,014) (15,247) -89.4% -77.0%

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Statements in this presentation, as well as oral statements made by the management of TIM Participações S.A. (the “Company”, or “TIM”), that are not historical fact constitute “forward looking statements” that involve factors that could cause the actual results of the Company to differ materially from historical results or from any results expressed or implied by such forward looking statements. The Company cautions users of this presentation not to place undue reliance on forward looking statements, which may be based on assumptions and anticipated events that do not materialize.

Statements in this presentation, as well as oral statements made by the management of TIM Participações S.A. (the “Company”, or “TIM”), that are not historical fact constitute “forward looking statements” that involve factors that could cause the actual results of the Company to differ materially from historical results or from any results expressed or implied by such forward looking statements. The Company cautions users of this presentation not to place undue reliance on forward looking statements, which may be based on assumptions and anticipated events that do not materialize.

Investor Relations

Avenida das Américas, 3434 - Bloco 016° andar – Barra da Tijuca22640-102 Rio de Janeiro, RJPhone: +55 21 4009-3742 / 4009-3446 / 4009-4017Fax: +55 21 4009-3990

Investor Relations

Avenida das Américas, 3434 - Bloco 016° andar – Barra da Tijuca22640-102 Rio de Janeiro, RJPhone: +55 21 4009-3742 / 4009-3446 / 4009-4017Fax: +55 21 4009-3990

Visit our Website

http://www.tim.com.br/ri

“Safe Harbor” statements

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Documents

Tim Presentation Deutsche Conference Set09 Eng