Corporate presentation - MZ€¦ · Wireline Brazilian Market (Mar/12) Access (million) CAGR...

Investor Relations

Corporate

presentation

June 2012

Brazilian Telecommunications Market

1

Oi: Profile, Footprint and Strategy

Operational and Financial Results

Attachments

BRAZIL SNAPSHOT

Strong expansion in GDP per capita combined with record low unemployment rate have resulted in a significant shift in income classes

2

• 8.5 Mn Km2 (80% of the size of Europe)

Land Area

• 191 Mn inhabitants (5th largest)

• 57 Mn households (84% urban)

Population

• GDP: US$ 2.5 Trillion (2011)

• Currency – US$ 1.00 = R$ 1.88 (Dec/11)

6th largest economy in the world

A/B

C

D/E

Income Classes

15%

2011 2005

34%

51%

22%

54%

24%

Income*

R$ 2,907

R$ 1,450

R$ 792

* Average income per household

Source: PNAD, O Observador – OPSOS2011, IBGE

BRAZIL’S IMPORTANCE IN THE WORLD ECONOMY GROWS AND

TELECOM IS KEY TO FURTHER DEVELOPMENT OF THE COUNTRY

3

Where we were

GDP, current prices, trillions of US$, 2007

14

4.4

3.5

3.3

2.8

2.6

2.1

1.4

1.4

1.4

USA

Japan

China

Germany

England

France

Italy

Spain

Canada

Brazil

USA

China

Japan

Germany

France

Brazil

England

Italy

Russia

India

15.1

7

5.9

3.6

2.8

2.5

2.5

2.2

1.9

1.8

Where we are

GDP, current prices, trillions of US$, 2011

THERE IS POTENTIAL TO INCREASE PENETRATION AND

INTEGRATION OF TELECOM SERVICES IN BRAZIL

4

Fixed voice penetration

Lines/homes

77%

70%

121%

100%

Broadband penetration

Accesses/ homes

30%

42%

75%

82%

Mobile penetration

Lines/ population

125%

88%

106%

137%

Pay TV penetration

Subscribers/ homes

23%

48%

87%

61%

Source: Anatel, Pyramid

BRAZILIAN TELECOM SECTOR EVOLUTION

5

• State – owned monopoly

• Lack of Investments

• Low quality of services

• Huge pent-up demand

• Incipient Internet

1998

• Multiple players

• Focus on universal competition and quality of services

• Expansion of fixed and mobile services

• GSM Launch

• Broadband start-up

2003

• Consolidation

• Mature fixed; mobile and broadband as growth drivers

• Convergence in early stages

• Launch of 3G (2008)

• Expansion of Pay-TV (Cable TV and DTH)

2008

• Tough competition

• Mature Mobile services: multiple chip is a market trend (on net-calls)

• Pay-TV and broadband as growth drivers

• 3G services is a reality

• Convergent Players

2012

PRE- PRIVATIZATION

POST- PRIVATIZATION

FOCUS ON COMPETITION

CURRENT SCENARIO

BRAZILIAN TELECOM INDUSTRY

6

• Accesses losses (FMS in accesses)

• Lower traffic per terminal (FMS in traffic)

• More competitive market in high-end and SME (new entrants)

MATURE LOCAL FIXED VOICE

• Market evolution, mainly in the pre-paid (naked sim-card) market based in the multiple chip trend

• ARPU for the industry has been reduced

• Different business models

CONTINUED EXPANSIONS IN THE MOBILE DATA MARKET

WITH STRONG COMPETITION

• Fierce competition in areas that concentrate high-end clients

• Continuous expansion and falling ARPU

• Penetration:

• Fixed Broadband: 30% of households

• Pay TV: 24% of households

BROADBAND AND PAY TV WITH STRONG GROWTH

251

43

14 17

Fixed

Broadband

Mobile

Pay TV

Wireline

Brazilian Market (Mar/12) Access (million)

CAGR (03-11):

Broadband: 39%

Mobile: 23%

Wireline: 1%

Pay-TV: 17%

Source: ANATEL, Teleco and Team analysis; FMS - Fixed to Mobile Substitution; SME - Small & Medium Enterprises

122.7 143.6

167.1 198.2 205.2

27.9

30.4

35.8

44.1 45.6

2008 2009 2010 2011 Mar/12

Pre-paid Post-paid

150.6

174.0

202.9 • Naked sim-cards continues as a national

trend

• Penetration rate reached 128% in Mar.12

• Multiple chip is a market trend (on net-calls)

• Pre-Paid: represents 82% of the total access

MOBILE MARKET* (MILLION)

BRAZILIAN TELECOM INDUSTRY: MOBILE MARKET

7

242.2 250.8

Includes 3G (mini-modem and data package) Source: Teleco, Anatel and Team analysis

7.0 7.7 9.0 10.5 10.9

3.0 3.7

4.8

6.0 6.4

0.9

2.7

4.3

6.8 7.4

2008 2009 2010 2011 Mar/12

ADSL Cable and Others 3G (mini-modem)

10.9

14.1

18.1

• Broadband: Strong growth in accesses

• Fixed broadband penetration: 30% of households (17.3MM access)

• ADSL corresponds to 63% of total fixed broadband accesses and 44% of the total (fixed + 3G mini modem)

Fixed Broadband BROADBAND MARKET (MILLION)

BRAZILIAN TELECOM INDUSTRY: BROADBAND

MARKET

8

23.3 24.7

• 3G becomes an alternative for broadband access

• 56% growth in the last 12 months (2,661,000 access)

Mobile Broadband

Source: Teleco, Anatel and Team analysis

3.8 4.3 5.0 5.5 5.7

2.1 2.8

4.5

7.0 7.7

0.4 0.4

0.3

0.2 0.2

2008 2009 2010 2011 Mar/12

Cable DTH Others*

6.3 7.5

9.8 • Pay-TV: Strong growth in accesses

• Penetration: 24%

• DTH represents for 81% of net additions in the 1Q12

• Pay-TV: More growth opportunities in classes C and D due to lower households penetration

Pay TV

PAY-TV MARKET (MILLION)

BRAZILIAN TELECOM INDUSTRY: PAY-TV

9

12.7 13.6

*Others: MMDS and UHF Source: Teleco, Anatel and Team analysis

COMPETITION: MAIN TELECOM GROUPS IN BRAZIL

10

Economic Group Vehicle Service Clients mkt share Revenue mkt share

Fully Integrated

Fixed 44%

21% Mobile 19%

Fixed Broadband 30%

Pay TV 3%

Telefônica Integrated

Fixed 25%

26% Mobile 30%

Fixed Broadband 21%

Pay TV 4%

Telmex / AMX

Embratel Fixed 20%

24% Claro Mobile 25%

Net/Embratel Fixed Broadband 28%

Net/Embratel Pay TV 54%

Tim ~Pure Mobile Mobile 27% 14%

Nextel Pure Mobile Mobile - 5%

Sky Pure Pay TV Pay TV 30% 4%

GVT ~Pure Fixed Fixed 7%

3% Fixed Broadband 10%

Others

Fixed 4%

2% Mobile -

Fixed Broadband 11%

Pay TV 8%

Mar/12


11



Attachments

• 3 listed companies

• 7 share classes

• Complex capital structure

CORPORATE SIMPLIFICATION

12

• 1 listed company

• 2 share classes

• Capital structure improvement

TNL

TMAR

BRT

• TNLP3 • TNLP4

• TMAR3 • TMAR5 • TMAR6

• BRTO3 • BRTO4 OI S.A.

COMMON

TmarPart 56.6%

Direct controllers

12.0%

Free-float 31.4%

PREFERRED

TmarPart -

Direct controllers

39.1%

Free-float 60.9%

• OIBR3 • OIBR4

CURRENT OWNERSHIP STRUCTURE

13

Shares** Capital Mn

shares

TmarPart

%

Other

Controlling*

%

FreeFloat

%

ON 513,809,697 56.6 12.0 31.4

PN 1,123,988,051 0.0 39.1 60.9

Total 1,637,797,748 17.7 30.6 51.7

Telemar Participações

(TmarPart)

Oi S.A. (OIBR)

Telemar Norte Leste

PT

12.1%

Funcef

7.5%

Petros

7.5%

LF Tel

19.3%

FATL

11.5%

BNDES

13.1%

Previ

9.7%

AG Tel

19.3%

100%

100%

17.7%

*Includes minorities stakes of,PT, AG, LF, FATL, BNDES and Pension Funds ** ex-treasury

OI S.A. (Bovespa: OIBR4/OIBR3 & NYSE:OIBR / OIBR.C)

Listed companie

Competitive differentials

Leading Telecommunication provider and the only integrated player offering quadruple play services in Brazil

14

• 4,505 municipalities covered by fixed network

• 168 thousand of Km of Optic Fibers

• Oi has 6 thousand cellular towers connected to its Fiber

• Oi covers ~80% of Brazilian households

Broad Infrastructure

• 10 years of experience in convergence: in Brazil, Oi pioneered convergent Telecom offers that changed the market

Lidership in covergence

• Anticipation of universalization targets in 2001

• Launch of Oi Mobile in region 1, being the fourth entrant, reaching leadership in market share after 3 years

• Reaches 20% market share in the city of SP in 2 years

• Integration with BrT done in around 1 year, capturing more than R$1 billion in synergies

Proven Execution Capacity

BROAD INFRASTRUCTURE

15

22,000 Km Globenet submarine

cables interconnecting the

Americas

GLOBAL

115,000 Km National backbone Largest coverage

area in Brazil

NATIONAL

• Present in all Brazilian states

and +4,800 municipalities

• 30,000 km of

metropolitan rings

REGIONAL

Largest public WiFi network in Brazil

Over 4,500 sites covered by satellite

LOCAL

One of the largest and most diversified Telecom networks in the world

Source: Oi, Anatel, Atlas Brasileiro de Telecomunicações 2011; Teleco; press

UNIQUE POSITION HARD TO BE REPLICATED

16

Only company able to offer bundles across the entire country*

* Except SP B2C

NATIONWIDE PRESENCE + FULL BUNDLE

• Unique last mile capillarity to meet growing demand in Brazilian social mobility

• Company in the best position to take advantage on governmental digital inclusion programs

• North and Northeast regions grew 14% and 15% in past 3 years (Brazil grew 10%): Oi has a lidership position in the regions that grow the most

CHANGE IN APPROACH FROM PRODUCT TO SEGMENT

17

PRODUCT

Fixed Voice

Mobile

Broad band

Pay TV

Leverage largest residential customer

base in Brazil

SEGMENTS

Increase competitiveness to attend fair share of

the market

Maintain leadership position in the

segment and enter new markets (SP &

IT)

RESIDENTIAL

PERSONAL MOBILITY

CORPORATE AND BUSINESS

CHANGE IN APPROACH FROM PRODUCT TO SEGMENT

18

SEGMENTS

RESIDENTIAL

PERSONAL MOBILITY


14.2 13.0 12.8

3.8 4.4 4.6

0.4 0.4 0.4

2010 2011 Mar/12

Pay TV Fixed broadband Fixed line

18.4 17.8 17.9

Residential RGU’s (Million)

32.6 38.0 38.5

4.9

5.3 5.6

2010 2011 Mar/12

Pre-Paid Post-paid + Oi Controle

37.5

43.3 44.1

Personal Mobility RGU’s (Million)

5.0 5.1 5.2

0.5 0.5 0.5

1.8 2.4 2.4

2010 2011 Mar/12

Pay TV Fixed broadband Fixed line

Business / Corporate RGU’s (Million)

7.4 7.8 8.1

WE HAVE A STRATEGY FOCUSED IN SEVEN KEY

INICIATIVES

19

RESIDENTIAL

• Leverage the largest residential base in Brazil

• Consolidate leadership position in fixed broadband

• Complete Residential Bundle with TV offer

1

1a

1b

• Grow presence in prepaid and leverage differentials

• Capture fair share of high-end post-paid customers

• Capture measure data growth

2

3

4

PERSONAL MOBILITY

• Regain historical presence in SME

• Make Oi relevant player in SP corporate

• Position Oi as important ICT provider

5


6

6

Structural Enablers • Reinforce the organization

• Improve network capacity and coverage

• Aggressively expand channel expansion

• Improve service quality in customer service and field service operations

• Maintain leadership in convergence 1c

Source: Pyramid, IDC

Aggressive Commercial activity

• Convergent offering of unlimited fixed and mobile pre-paid services (unlimited calls from ‘Oi Fixo’ and ‘Oi Cartão’ for just R$ 29.90 per month)

• ‘Oi Internet Total’: access anywhere via fixed and 3G network and wi-fi. Already represents 10% of high speed broadband sales;

• ‘Oi TV Mais Package’, with 44 paid channels for R$ 29.90/month. Most appealing entry-level package of the market

• ‘Oi Smartphone’ plans: Integrated and unlimited voice, internet, SMS and Oi WiFi services, and aggressive discounts for smartphones

• Subsidized mini-modem for new ‘Oi Velox 3G’ clients

• Unlimited calls to any Oi and local ‘Oi Fixo’ for 30 days for just R$14.90

New offerings and plans for residential and mobility clients leverage quarterly sales

Residential Mobility

20

The reduction of TRADITIONAL TELECOM FRONTIERS,

BRINGS OPPORTUNITIES AND Oi is ALREADY CAPTURING THEM

21

Telecom

(2012)

FIBRA

FEMTOCELL

LTE

(2012)

(2011)

Internet

Over the top

(2011)

(2012)

Media

IPTV (2012) (2009)

IT

(2012)

Financial services

(2011)


22



Attachments

18,404 17,810 18,266 17,810 17,850

37,496 43,263 39,294 43,263 44,106

7,355

7,848 7,690

7,848 8,112 827

771 824

771 757

2010 2011 Mar/11 Dec/11 Mar/12

Residential Personal Mobility Business / Corporate Others

The wireline client base decreased at a slower pace while broadband and pay TV accelerated, resulting in the stability of the base and reverting the downward trend.

Residential

TOTAL REVENUE GENERATING UNITS – RGUS (THOUSAND)

REVENUE GENERATING UNITS (RGUS)

23

Acceleration of post-paid growth and focus on greater profitability of the pre-paid base

Personal Mobility

64,083 69.693

66,074 70,826

1Q12 x 4Q11

69,693

Maintenance of growth pace within the segment

Business / Corporate

14,161 13,046 13,925 13,046 12,841

3,841 4,412

3,999 4,412 4,614

402 351 341 351 396

2010 2011 Mar/11 Dec/11 Mar/12

Fixed Line Fixed broadband Pay TV

Through bundled solutions, the Company remains focused on increasing the residential base with more than one product. The total residences with more than one Oi product/service grew 1.3pp, totaling 6,238 thousand.

Convergence

RESIDENTIAL - RGUs (THOUSAND)

Residential CLIENT BASE

24

In line with the strategy of strengthening the channels, growth of Oi-owned stores and franchises, as well as the change in the commission system for partners, contributed to the result.

Sales Channels and Portfolio

18,404 17,810 18,266 17,850

1Q12 x 4Q11

17,810

32,605 37,978

34,634 37,978 38,536

4,891

5,285

4,660

5,285 5,570

2010 2011 Mar/11 Dec/11 Mar/12

Pre-paid Post-paid + Oi Controle

The sales performance of post-paid plans stems from the addition of more benefits to the offers and the strengthening of sales channels, which started in 4Q11 and advanced in 1Q12. These are already bearing fruits. We highlight that in March 2012 Oi became the market leader in terms of post-paid net additions in Brazil.

Pre-paid

PERSONAL MOBILITY - RGUs (THOUSAND)

Personal mobile CLIENT BASE

25

The new plan structure brings a clearer communication for the consumer and is part of a more aggressive position in the prepaid market to leverage sales and revenue.

Post-paid

37,496

43,263 39,294

44,106

1Q12 x 4Q11

43,263

5,037 5,083 4,998 5,083 5,192

512 523 514 523 535

1,806 2,242 2,178 2,242 2,385

2010 2011 Mar/11 Dec/11 Mar/12

Fixed line Broadband Mobile

• Investment in training the teams and new regional offices

• Increasing door-to-door sales team to 4,000 employees

Business

BUSINESS / CORPORATE - RGUs (THOUSAND)

Business / corporate CLIENT BASE

26

• Data grows 12% vs. 1Q11 and 5% vs. 4Q11

• Mobility grows 45% vs. 1Q11 and 9% vs. 4Q11

• Modernization of network and resumption of sale of internet access boosted results

• Strengthening of sellers headcount

Corporate

7,355 7,848 7,690

8,112

1Q12 x 4Q11

7,848

11,949 10,501

2,746 2,536 2,429

8,021 8,190

1,867 2,150 2,106

8,620 8,470

2,127 2,112 2,111

890 746

193 159 155

2010 2011 1Q11 4Q11 1Q12

Residential Personal Mobility Business / Corporate Other Services

The rise in revenue from the expansion of the Oi Velox and Oi TV base, whose offers are increasingly attractive, has partially compensated for the decrease in wireline revenue in the residential segment

Residential

CONSOLIDATED NET REVEUES* (R$ MILLION)

CONSOLIDATED NET REVENUE

27

The performance is influenced by the seasonal effect, provided that historically the fourth quarter has a stronger usage due to the December holidays.

Personal Mobility

29,479 27,907

6,933 6,802

1Q12 x 4Q11

6,958

* The pro-forma results amount to the old TNL data as if the takeovers had occurred on January 1, 2012

10,295

8,766

1,985 1,838 2,012

2010 2011 1Q11 4Q11 1Q12

CONSOLIDATED EBITDA* (R$ MILLION)

CONSOLIDATED EBITDA

28

1Q12 x 4Q11

* The pro-forma results amount to the old TNL data as if the takeovers had occurred on January 1, 2012

34.9% 31.4% 28.6% 26.4% 29.6%

EBITDA Margin

The performance basically results from the combination of three factors:

• growth in Revenue Generating Units (RGU)

• aggressive commercial policy

• reduction in operating costs and expenses

These results are in line with Oi’s long-term strategy, announced at Oi Investor Day.

NET INCOME (R$ MILLION)

Net income as the basis for payment of dividends. Oi S.A. now includes all of

shareholders of the group

93

141

346

1Q11 4Q11 1Q12

Following the approval of the ownership

restructuring on 02/27/2012, TNL, Coari and the

shareholders of TMAR were incorporated by Oi S.A.,

TNL and Coari became extinct and TMAR became a

wholly-owned subsidiary of Oi S.A.. As a result, the

figures in this report represent Oi S.A. (the remaining

company, and the new name of Brasil Telecom S.A.)

at the end of March 2012, when it had taken over

only one month of TMAR, Coari and TNL (from

02/28/2012 to 03/31/2012). However, for a better

understanding of the business, we present the

consolidated pro-forma results equivalent to the old

TNL figures, with the exception of Net Income, as if

the takeover had taken place on January 1st, 2012.

Net Income

29

Capex

30

2,248

3,890

611

1,626

809

226

286

50

136

99

616

783

168

370

183

2010 2011 1Q11 4Q11 1Q12

Network IT Services Others

829

2,132

1,091

4,959

3,090

The company maintained investments in implementing and expanding the 2G/3G mobile network, in addition to increasing coverage and speed of broadband and adapting the infrastructure of telecommunication services.

Network

Optimization of systems, mostly directed to the improvement of servers and the unification of internal systems.

IT Services

CAPEX (R$ MILLION)

1Q12 x 4Q11

indebtedness

31

22,253 25,140 22,531 25,140 28,866

7,667 4,579 5,872

4,579 3,979

2010 2011 Mar/11 Dec/11 Mar/12

Long Term Short Term

28,404 29,719 32,845

29,719 29,920

18,711 16,326

14,390 16,326 17,472

2010 2011 Mar/11 Dec/11 Mar/12

Net Debt / EBITDA

1.9x 2.0x 1.5x 1.9x 1.8x

GROSS DEBT (R$ MILLION)

NET DEBT (R$ MILLION)

Debt Pro forma

Balanced debt profile, with average term

and cost of 5 years and 101.5% of CDI,

respectively, and post-hedge foreign

exchange exposure of 0.7%

32

CDI, 43%

TJLP, 17%

Others, 40%

TOTAL DEBT PROFILE (After hedge)

Interest

BRL, 99.3%

Foreign, 0.7%

Currency 32,845 2,999

3,506 3,634

2,257 4,090 16,359

GrossDebt

2012 2013 2014 2015 2016 2017onwards

GROSS DEBT AMORTIZATION (R$ billion)

FUNDING SOURCES (R$ billion)

32,845 576 9,334

8,988

1,514 2,158 6,475

4,952

Gross Debt

Bonds Asia Deben- tures

Commer- Cial Banks

Europe/ Asia

Borrowing Costs and

Hedge

National Develop-

ment Bank

2

1

2 2 1

2012E 2013E 2014E 2015E

2012-2015: TOTAL AMOUNT OF R$ 8 BI

R$2 Bn already paid in May/12

Guidance & Dividend Policies

PARAMETERS 2012 2015

Revenue Generating Units (RGU) - million

74.9 106.8

Residential 19.8 25.7

Personal Mobility 45.8 67.8

Business/Corporate 9.3 13.3

Net Revenue - R$ billion 28.9 38.6

EBITDA – R$ billion 8.8 12.8

Capex – R$ billion 6.0 6.0

Net Debt – R$ billion 24.9 28.4

Guidance Dividend Policy (R$ billion)

• Net Debt /EBITDA: 3.0x

• Net debt includes payment of dividends of the fiscal year

• EBITDA registered in the year prior to the year of dividend payment

Covenants

Thanks to these results, the company reaffirms its confidence and reiterates the guidance

and dividend policies announced at the Investors Day

33


34



Attachments

BROAD INFRASTRUCTURE SIGNIFICANTLY SUPERIOR

TO THE COMPETITION

35

4,505

644

134 118

Telefônica AméricaMóvil

GVT

Municipalities Covered by Fixed Network by Operator

Oi has 6 thousand cellular

towers connected to its Fiber

Oi covers ~80% of

Brazilian households

168

124

51

34

Telefônica AméricaMóvil

GVT

Thousands of Km of Optic Fibers by Operator

7x

3x

5x

Cash flow

36

2,012

781

358 -86

1,231

539 962

231 175 38

EBITDA Capex EBITDA - Capex non-cashitems

workingcapital

operationalcash flow

Interest IncomeTax

Authorizationsand

concessions

Free CashFlow

1Q12

Cash flow

37

8,766

3,656 4,783

1,353

5,110

2,512 1,385 2,516

562 351


workingcapital


Interest IncomeTax

Authorizationsand

concessions

Free CashFlow

2011

10,296

6,724 9,071

4,750

3,572 3,021 674 3,789

382 150


workingcapital


Interest IncomeTax

Authorizationsand

concessions

Free CashFlow

2010

FIXED INCOME: BONDS AND RATINGS

38

Issue Feb/12 Sep/11 Sep/10 Apr/09 Dec/10

Maturity Feb/22 Sep/16 Oct/20 Apr/19 Dec/17

Amount (R$ Mn) US$1,500 BRL 1,100 US$ 1,787 US$142 EUR 750

Coupon (% annual) 5.75% 9.75% 5.50% 9.50% 5.12%

Yield (% annual) - issued 5.75% 9.875% 5.50% 9.625% 5.33%

Yield (% annual) - current 5.52% 8.62% 5.25% 5.73% 4.53%

Agency

Global Scale Domestic

Scale Local

Currency Foreign

Currency

Fitch BBB BBB AAA(bra)

Moody’s Baa2 Baa2 Aaabr

S&P BBB- BBB- brAAA

~R$ 9.8 billion in the international capital market

BONDS

RATINGS

Oi´s soundness is reflected in the ratings awarded by the world’s leading risk assessment agencies

MAIN HIGHLIGHTS

39

Oi S.A. Pro-Forma 1Q12 4Q11 1Q11 2011 2010

Op

era

tio

nal

Revenue Generating Unit (‘000) 70,826 69,693 66,074 69,680 63,956

Residential (‘000) 17,850 17,810 18,266 17,796 18,277

Personal Mobility(‘000) 44,106 43,263 39,294 43,264 37,757

Business / Corporate(‘000) 8,112 7,848 7,690 7,848 7,094

Others (‘000) 757 771 824 771 827

Fin

anci

als

Net Revenue (R$ million) 6,802 6,958 6,933 27,907 29,479

EBITDA (R$ million) 2,012 1,838 1,985 8.766 10,295

EBITDA margin (%) 29.6% 26.4% 28.6% 31.4% 34.9%

Net Debt (R$ million) 17,472 16,326 14,390 16,326 18,711

Available Cash (R$ million) 15,373 13,393 14,014 13,393 11,209

Capex (R$ million) 1,091 2,132 829 4,959 3,090

Net Debt / EBITDA 2.0 1.9 1.5 1.9 1.8

Oi’s shareholders

40

Oi S.A. ON % ex-

treasury PN

% ex-treasury

TOTAL % ex-

treasury

Telemar Participações 290,549,788 56.6% - - 290,549,788 17.7%

Portugal Telecom 36,367,992 7.1% 218,668,046 19.5% 255,036,038 15.6%

Andrade Gutierrez - - 76,090,214 6.8% 76,090,214 4.7%

La Fonte - - 76,090,366 6.8% 76,090,366 4.7%

Previ 20,060,877 3.9% 38,533,108 3.4% 58,593,985 3.6%

Petros 204,547 0.04% 2,096,861 0.2% 2,301,408 0.1%

Funcef 471,434 0.1% 3,880,336 0.4% 4,351,770 0.3%

BNDES 4,634,853 0.9% 23,749,003 2.1% 28,383,856 1.7%

Outros 161,520,206 31.4% 684,880,117 60.9% 846,400,323 51.7%

TOTAL (ex-treasury) 513,809,697 100% 1,123,988,051 100% 1,637,797,748 100%

Treasury 85,198,932 74,089,724 159,288,656

TOTAL 599,008,629 1,198,077,775 1,797,086,404

Portugal telecom ownership structure in OI

41

Portugal Telecom

12.1%

BNDES / Pension Funds

37.8%

AG 19.3%

LF 19.3%

Fundação Atlântico

11.5%

Oi S.A.

35% 35%


100%

17.7%

15.6%

PT economic interest in Oi

Through AG 2.8%

Through LF 2.8%

Through TmarPart 2.1%

Direct in Oi 15.6%

Total 23.3%

AG ownership structure in OI

42

Portugal Telecom

12.1%


37.8%

AG 19.3%

LF 19.3%


11.5%

Oi S.A.


100%

17.7%

4.7%

AG economic interest in Oi


Direct in Oi 4.7%

Total 8.1%

LF ownership structure in OI

43

Portugal Telecom

12.1%


37.8%

AG 19.3%

LF 19.3%


11.5%

Oi S.A.


100%

17.7% LF economic interest in Oi


Direct in Oi 4.7%

Total 8.1%

4.7%

BNDES ownership structure in OI

44

Portugal Telecom

12.1%

BNDES 13.1%

AG 19.3%

LF 19.3%


11.5%

Oi S.A.


100%

17.7%

1.7%

BNDES economic interest in Oi


Direct in Oi 1.7%

Total 4.0%

Previ 9.7%

Petros 7.5%

Funcef 7.5%

Previ ownership structure in OI

45

Portugal Telecom

12.1%

BNDES 13.1%

AG 19.3%

LF 19.3%


11.5%

Oi S.A.


100%

17.7%

3.6%

Previ economic interest in Oi


Direct in Oi 3.6%

Total 5.3%

Previ 9.7%

Petros 7.5%

Funcef 7.5%

Petros ownership structure in OI

46

Portugal Telecom

12.1%

BNDES 13.1%

AG 19.3%

LF 19.3%


11.5%

Oi S.A.


100%

17.7%

0.1%

Petros economic interest in Oi


Direct in Oi 0.1%

Total 1.4%

Previ 9.7%

Petros 7.5%

Funcef 7.5%

Petros ownership structure in OI

47

Portugal Telecom

12.1%

BNDES 13.1%

AG 19.3%

LF 19.3%


11.5%

Oi S.A.


100%

17.7%

0.3%

Funcef economic interest in Oi


Direct in Oi 0.3%

Total 1.6%

Previ 9.7%

Petros 7.5%

Funcef 7.5%

CORPORATE STRUCTURE – shareholders rights

48

• All shares and ADR OIBR.C: right to receive a minimum 25% of adjusted annual net income

• Preferred Shares and ADR OIBR: minimum of 6% of Capital divided by the total number of shares or 3% of Shareholders’ Equity divided by the total number of shares, whichever higher

DIVIDENDS

• Common shares have a tag along right of 80% of the value paid upon acquisition of control under existing Corporate Law

• The Preferred shares do not have tag along rights

TAG ALONG

• Minority shareholders (15% or more of the voting shares) have the right to appoint one board member (out of 17)

• Preferred shareholders (10% or more of the total capital) have the right to appoint one board member (out of 17)

BOARD MEMBERS

• 3 to 5 members, appointed by:

• Controlling Shareholder (Telemar Participações) – 3 members

• Minority Shareholders (10% or more of the voting shares) – 1 members

• Preferred Shareholders – 1 member

FISCAL COMMITTEE MEMBERS

• Common shares have full rights to vote at shareholder meetings

• Preferred shares have right to vote only under specific circumstances (a)

VOTING RIGHTS

• Shareholders have the right to redeem under certain special circumstances (b)

REDEMPTION RIGHTS

(a) Approval of management service agreements with foreign entities related to the controlling shareholders; issuance of a new class or increase of an existing class of preferred shares and/or change in the advantages and benefits of preferred shares or in the conditions for their redemption; full right to vote if the Company does not pay dividends for three consecutive years. (b) Issuance by the Company of a new class or increase of an existing class of preferred shares; change in preference right of shares or in the conditions for their redemption; reduction on statutory dividend; merger or spin-off of the company; participation of the Company in a group of companies; change in corporate purpose

INVESTOR RELATIONS

IR Contacts

Bayard Gontijo

55 21 3131-2972 [email protected]

Marcelo Ferreira


Patricia Frajhof


Matheus Guimarães


Michelle Costa


Leonardo Mantuano


Address: R. Humberto de Campos, 425 – 7º andar Leblon Rio de Janeiro - RJ

Visit our website: www.oi.com.br/ir

Twitter: www.twitter.com/oi_investors

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.

49

mailto:[email protected]






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

http://www.twitter.com/oi_investors

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