1

Results PresentationTIM Participações S.A.

2

Agenda

Q1 in Few

Community Expansion

Keeping the Innovation Path

Infrastructure & TIM Fiber Update

Financials Highlights

Outlook and Priorities

3

Consistent Growth: Keeping the Pace

Revenues

Services

Ebitda

Revenues

Ebitda

* Includes Revenues and EBITDA of AES Q1 2011

Reported

Pro-forma*

1Q12 1Q11

4,468 3,752

∆%

+19.1

4,015 3,463 +15.9

1,169 1,033 +13.2

4,468 3,792 +17.8

1,169 1,067 +9.5

Growth driven by mobile business:

Consistency in customer base and revenues expansion

Data acceleration

Increased pressure on Voice services (FMS)

MTR cut started on March – impact of -R$43 mln/

month revenues; -R$22 mln/month Ebitda

Ebit 512 350 +46.4

Speed-up of Network Roll-out:

Capex +83% YoY in Q1 (2G capacity, 3G roll-out)

3G upgraded to 42 Mbps starting from SP

TIM Fiber/TIM integration:

~1,000 antennas connected with fiber n SP/Rio (FTTS)

>1,000 Household connected (TIM Fiber)

Soft launch confirmed for Q2

4

4,468

3,752

4,0153,463

1Q11 1Q12

Post Web

Post Voice

Pre

Tot.

1.8 3.1

8.5 9.9

1Q11 1Q12

Drivers of Revenue Growth: Community Expansion and “Internet for All”

Post Web

Post Voice

Pre

Tot.

Mln R$, Fixed+Mobile

Total Net

Revenues

Revenues

+15.9%Net Service

Revenues

Mln clients, Base EoP

Customer Base

Gross Adds

52.867.2

Net Adds

+17%

+72%

Pre-paid

Post-paid

+28%

+27%

Δ% YoY

45.1 57.6

7.79.6 +25%

Gross Adds Net Adds

1Q YoY1Q

YoY

-2%

+21%

+16%

+14%

+32%

Q1 2011 YoY

Voice Out(local)

Long Distance

VAS

TOTAL

Voice In

+16%

+14%

+19%

+8%

+56%

Q1 2012 YoY

+17%

+17%

+72%

+74%

Gross Rev.

Mobile only

-6% +33%

+125%+64%

+19.1%

5

Smartphone/webphone penetration

% smartphones/total CB (lines), % smarphones/handsets sales

Mobile Internet: the New Wave

∆ YoY

Total

DATA

LD

+13.7%

+32.3%

+21.0%

+18.4%

+33.5%

+38.7%

+20.0%

+47.6%

+41.5%

+20.7%

+49.2%

+34.4%

+18.9%

+56.1%

+16.3%

Mobile Serv. Gross Rev, R$ Mln

Revenues Reshape

# cities

% urban

population

coverage

512488

331273258

2Q 111Q 11 4Q 113Q 11 1Q 12

66.6% 67.1%57.5%56.9%55.8%

3G - Coverage

Voice OUT&Other

-2.4% +4.7% +5.6% +10.5% +8.0%Incoming

+14.6% +14.9% +13.7% +13.9% +13.8%

944897 968974

2,4172,656 2,751

640

958834

734

4,644

1Q11

820829

2,532

5,031

2Q11

690

5,521

VoiceOut&Others

4Q11

1,000

1,034

803

1Q12

LD

2,889

Incoming

Data

5,722

841

3Q11

5,294

Data reached R$1 billion revenues

Data exceeding Long Distance Revenues 2011 2012

<14%

>18%

VAS +400bps

in 1 year12.6%

15.4%

19.5%

26.6%

31.1%

Mar'11 Jun'11 Sep'11 Dec'11 Mar'12

% sold 46% 52% 69% 68% 77%

6

Pressure on Voice (FMS) and Acceleration of Mobile Internet (Business Transformation)

Received Business ErosionGross Revenue Mix

Price Competition (eg. Local and LD)

Billion Minutes Received TIM Approach to Competitive Arena

TIM

Claro

Vivo

25 cents/call

(equal to ~5cent/minute)

16-21 cents/call

5 cents/min

-15/35%

Price aligned

14%

52%

15%

19%

18%

50%

14%

18%

1Q11

LD

In

Local

1Q12

VAS

68%66%

Mobile-

Mobile

Fixed-

Mobile

MTR impact asimmetric for mobile

only operators

–R$43 mln/month revenues

–R$22 mln/month margin (itx costs

66% regulated vs 34% not –SMS,

M-F, itx)

Incoming voice MOU in fast erosion

Organic (-18% YoY) as of FMS

Forcing FMS Mobile Internet

Volumes

Out

Price

Out

monthly unique users22.621.8

20.118.4

17.5

1Q11 2Q11 3Q11 4Q11 1Q12

-8%-7%-14%

-23%-32%

1Q121Q11

10.3

17.5

1 22.22.2 flat

1Q11 1Q12

7

Agenda

Q1 in Few

Community Expansion

Keeping the Innovation Path

Infrastructure & TIM Fiber Update

Financials

Outlook and Priorities

8

34.6 35.8 37.5 39.7 43.5 45.1 47.5 50.6 54.8 57.6

6.5 6.6 7.0 7.27.5 7.7 8.0

8.79.3

9.7

41.1 42.4 44.4 46.951.0 52.8

55.559.2

64.167.2

4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

Customer Base Evolution

Δ YoYMarch

∆%Mln lines

Net Adds

Post-paid

(000)

149 150 341 280 243 223 632317 655 348 125 +56%

+2.1+2.5

+4.1+1.8

+2.7 +3.7+4.9

+1.3

+3.1+14.4

+2.0

+12.4

Δ YoYMarch

+27%

+25%

+28%

YoY %

Pos

Pre

Net Adds

Pre-paid

(000)

1,354 1,103 1,716 2,242 3,838 1,598 3,0532,359 4,219 2,786 1,188 +74%

• Consistent CB expansion on Post-paid and Pre-paid

• Continuous Efficiency Improvements in Go2Market (in a more subsidized context)

SAC

(R$)81 75 63 55 36 36 35 36 28 32

9

23.7% 24.0%24.5%

25.1% 25.1% 25.5%

26.0% 26.5% 26.8%

30.1% 30.2% 30.1% 29.7% 29.5% 29.5% 29.5% 29.5% 29.8%

25.4% 25.3% 25.5% 25.4% 25.4% 25.6%

25.3% 24.9% 24.6%

20.4% 20.1%19.5% 19.4% 19.7%

19.1% 18.8% 18.8% 18.5%

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

18% 20% 18% 17% 15% 14% 16% 19% 20%

17% 17% 19% 24% 25% 25% 26% 26% 27%

15% 16% 15% 16% 17% 18% 18% 17% 15%

15% 10% 7% 9% 13% 12% 15% 16% 12%

Market Share Growth

Customer Base ΔYoY

Vivo

TIM

Claro

Oi

1st in YoY CB

growth for 7

Quarters

Oi

Claro

Vivo

„000

4,669

7,603

8,917

1,103

1,598

2,786

1Q10 1Q11 1Q12

Net

Gross

+45%

+74%

+63%

+17%

Peers copying TIM‟s offers

Prepaid CB Mobile Market Share

10

Postpaid growth: a sustainable business model

Bad Debt

Handset Revenues and Capitalized Subsidy

% Gross Revenues

SAC/

ARPU

Bad Debt/

Gross Rev.

2.00% 1.83%1.34%

1.04%0.77%

1.08% 0.95% 0.92% 0.86%

3.12.6

2.3

1.5 1.8 1.6 1.71.3

1.7

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

R$ Mln

286

380424

468 433

732 712664 673

11585 64

26 8 0 0 0 0

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

Capitalized

Subsidy

Handset

Gross

Revenues

6.62 6.96 7.24 7.48 7.70 8.02 8.65

9.31 9.65

1T10 2T10 3T10 4T10 1T11 2T11 3T11 4T11 1T12

Postpaid Customer Base

ANATEL‟s SMP 11 KPI

CB

Mln lines

+25.3%

YoY

Complaints over 1,000 Bills

1.551.69

1.17

0.760.56

11

Agenda

Q1 in Few

Community Expansion

Keeping the Innovation Path

Infrastructure & TIM Fiber Update

Financials

Outlook and Priorities

12

Infinity – The Largest Mobile Community in Brazil

1Q 09 1Q 10 1Q 11 1Q 12

Infinity Web Modem

Unlimited navigation for

R$1.99/day

― speed reduction after 80Mb

Pay when you use

Speed up to 1Mbps

Infinity Voice

56 mln users

Leveraging on

community

Voice out

SMS

Internet for all

Local

LD

M-F

1Q11 1Q12

+27%

25

cents

25

cents

50

cents

local LD M-F

50 cents

per day

On-net/off-net

On-net

1Q11 1Q12

Off-net

2x Revenues

1Q11 1Q12

50 cents

per day

Unique users/day

0

21.7

40.8

56.1Mln lines

Per call

#SMS, Bln

Daily unique users, Mln

1.2

2.8

2.5x Revenues

13.1

16.7

Bln minutes

10x

Infinity at 97%

of prepaid base

13

Liberty – Continuous Offering Innovation

Post-Paid Subs

Data

Voice

9.6

7.7+39%

+21%

Voice: unlimited incoming and 50 minutes outgoing to TIM

numbers and local calls

Data: unlimited data per day (speed reduction after 3Mb)

Promotional Pricing (per day, per service):

Mln lines

1Q 11 1Q 12

Américas

R$ 19.90

Europa/África

R$ 19.90

Ásia/Oceania

R$ 69.90

Voice – More off-net calls bundled

Liberty Liberty + 50R$ 49

SMS – Unlimited messages

Unlimited on/offnet

Pay when you use

R$ 9.90/

month

Handset browsing

Unlimited browsing

Pay when you use

R$ 29.90/

month

1

2

3

4

+25%

14

Liberty Controle benefitsConvenient as Post Paid

(unlimited TIM–TIM calls, local/LD)

Flexible as Pre Paid

(R$10 credit to use on SMS/Web/Fixed)

Liberty Controle – Entering in a New Market Segment

+Infinity benefits

Budget Control

Pay per Day

(e.g R$0.50 SMS/Internet)

Liberty benefitsConvenience of unlimited

usage

Fixed monthly bill

Brazilian Demographics Population, Mln

DE

C

AB

2011

191

45

103

42

2005

182

93

63

26Liberty

LibertyControle

Infinity

R$ 27/

month

15

50%21%

13%

31%

1Q11 1Q12

Best Smartphone Portfolio Drives Internet Browsing

Smartphone PenetrationUnique Users Per Month

Device Portfolio Q1 SalesBest Device Portfolio

Revenues VAS

Liberty Web Tablet (49/month)

Best Tariff Plans

+70%

Mln clients

2,368

50%

1Q12

2,354

79%

1Q11

Basic

Support

Internet*

Gross Prod. Revenues

(Mln reais)

Units

433 673+55%

0.64

1.00

1Q11 1Q12

+56%

10.3

17.5

1Q11 1Q12

% of CB

R$ Bln

Liberty Web (29.90/month)

Infinity Web (0.50 /day)

Liberty Web Modem (69.90/month)

Infinity Web Modem (1.99/day)

Tablets

Smart-

phones

Modem

Performance Price

iPadSamsung

Galaxy Tab 7”

iPhone 4S

Galaxy SII

iPhone 3GS

Galaxy Y

14 Mbps 7.2 Mbps

% of Internet enabler

devices /gross prod. Rev 77% 94%

*Includes modem, tablets and web/smartphones

16

Agenda

Q1 in Few

Community Expansion

Keeping the Innovation Path

Infrastructure & TIM Fiber Update

Financials

Outlook and Priorities

17

Network Integration

# Sites

YE20121Q12

1,0301,477

2Q12

1,777

% of

existing66% 95% 115%

FTTS Roll-out SP/RJa

# access

Intelig Cust. Connectedb

688

977

3,045

x3

Intelig

TIM

TIM Fiber

1Q12

1,030

1,038

1Q11

First Evidencesc

Tim Mobile

Network

Intelig/

AES Fiber

Network

Tim Fiber

Residential

Ultra BB

1Q12 2Q12

More than 1,000 antennas

connected with fiber (FTTS)

Capacity upgraded from

8Mbps (leased copper based)

to 100Mbps (owned fiber)

Advance in FTTS Plan: 12

main cities (complete

SP/Rio and 10 capitals)

Starting Leased Lines

switch-off (Opex saving)

Fiber based last meter

Fiber to the office for Top

customers (last meters)

Improving network reliability

Back to commercial

push for Intelig

corporate business

Pre-start Activities Start-up of TIM Fiber

3,600 Building authorized

1,100 Building connected

IT dedicated platform

development

First customers

connected (testers)

Soft launch on May

Commercial launch on Q3

80Mbpsmeasured in field

on pre-launch

18

Network

Topology2

1

Optical

network

MSANs

Backbone

Ultra broadband: construction and tests underway

As is

Status

~3,600

~1,100

1 2

• Technical lab tests concluded successfully

• Field tests underway, with first Friendly User Testers

connected on the network:

- Download speeds reaching 80 Mbps

- Minimal signal attenuation verified on the network

Network Roll Out: Execution at full speed Technical Tests: Architecture works as designed

MSANs CPEs

Speed test : 80Mbps

19

TIM Fiber: On track for the Q3 Commercial Launch

Customer base

Geographic Coverage

(SP/RJ)

Product

Employees +

Friendly User Testers

n/a BTL ATL

Key objective

1 neighborhood 5 neighborhoods 25+ neighborhoods

UBB Naked

Pre-Launch Test Soft Launch Commercial Launch

Launch Phases

Technical Trial of the

solution

Start of the Commercial

Operations

Check of the Business

Readiness

Beta TestersCustomers

Base Build-up

Communications

Channelsn/a D2D + Telesales

TIM Fiber Day

timetable confirmed

Q2 Q3

Telesales

20

Agenda

Q1 in Few

Community Expansion

Keeping the Innovation Path

Infrastructure & TIM Fiber Update

Financials

Outlook and Priorities

21

EBITDA Evolution

EBIT Net

Financial

Result

Net

Income

1Q12

Taxes

and

Others

512

1,169

Depreciation/

Amortization

276

EBITDA

1Q12

-42

ΔYoY +13.2% -3.8% +46.4% +29.3% +86.5% +29.5%

R$ Mln

From EBITDA to Net Income

Consistent EBITDA and Net Income Growth

-657

-193

350512

1Q11 1Q12

EBIT Net Income

213276

1Q11 1Q12

+46%+30%

R$ Mln R$ Mln

1,033

EBITDA

1Q11

EBITDA

1Q12

-192

Var.

Marketing

and Sales

1,169

Var.

Personnel

G&A and

others

expenses

-119

Var.

Handset

Margin

-68

Var.

Network

and ITX

-37

Var.

Services

Revenues

27.5% 26.2%Ebitda Margin

Service Ebitda Margin31.1% 31.1%

R$ Mln

+552

Handsets Rev.:

COGS:

+164

-201 Includes R$34 mln

one off tax liability

22

Cash Position

D Working Capital

R$ Mln

CAPEX

R$ Mln

R$ Mln

OFCF

R$ Mln

543

297

689

1Q121Q10 1Q11

+83%

-972

-1,285

1Q10 1Q12

-1,903

1Q11

D WC -617 YoY

-30 => Inventories

-142 => Receivables

-466 => Payable

+21 => Others

-549-714

1Q12

-1,277

1Q111Q10

DOFCF -727 YoY

-110 => EBITDA-CAPEX

-617 => D WC

1Q12

1,899

1Q11

1,671

1Q10

2,558

+14%

Including TIM Fiber

net debt – R$75 Mln

Net DEBT/

EBITDA

(trailing 12m)0.73x 0.39x 0.40x

1Q11 1Q12 Var

Network 60% 77% 17 p.p

IT 24% 14% -10 p.p

Others 16% 8% -7 p.p

Net Income

23

Agenda

Q1 in Few

Community Expansion

Keeping the Innovation Path

Infrastructure & TIM Fiber Update

Financials

Outlook and Priorities

24

1Q Takeaways

Consistency of TIM´s Growth

Accelerating Revenue Reshape

Regulation

MTR cut asymmetric

impact for pure mobile

vs. integrated

EILD price-cut expected

soon

4G auction scheduled

March

2011

March

20122011 Q1 2012 Q1

+27% +19%

March

2011

March

2012

2011 Q1 2012 Q1

15%14%

>18%

<14%

Smartphone

penetration

Competition

“Me too” approach from

main competitors

Increased subsidy and

commissioning

Price-down

Continuous Innovation

Tariff plans (Passport; Controle;

Infinity modem)

Smartphones/tablets ultimate

portfolio

Seamless 3G/Wi-Fi solution (ex:

Airports; Rocinha)

TIM Fiber launch on scheduling

1,100 buildings connected

3,600 building authorized

Early field test: 80 Mbps scored

TIM Network Acceleration

1,030 antennas connected (FTTS)

with capacity increased from 8 to

100 Mbps (transmission)

3G+ roll-out at 42Mbps (access)

52.8

67.23,752

4,468

31.1%

12.6%

Crossing

1 Bln barrier

Data

LD

CB Net

Revenues

25

Business Priorities for Q2

Business Developments

• Forcing FMS even more

- Infinity‟s community expansion

- Liberty accelerating (Passport,

Controle)

• Data enter in FMS mode

- Best smartphone portfolio (Apple)

- Most attractive plans (Pre; Post)

- FTTS completed in SP/RJ

- 3G+ upgraded to 42 Mbps (access)

• Benefitting from network sinergies

- Switch-off leased line (SP/RJ)

- Intelig/AES/TIM network fully

integrated by Q2

Competitive Arena

- MTR (asymmetric phase) impact

- Long distance commoditization

Regulation

- 4G auction confirmed

- EILD new price expected

New Business

- Ultra BB residential: confirmed

- Intelig (corporate): back to

commercial push in Q2