Results PresentationTIM Participações S.A.

Var. % YoY

Var. % YoY

+12.6%

+14.7%

+9.2%

+12.4%

+56.4%

+7.0%

+9.8%

+6.0%

+10.2%

+45.9%

2Q12 1H122Q11

4,2524,547

4,668

1,214

1,262

1,057

9,016

9,180

2,383

2,453

1,600

Q2 Financials Highlight

Total Revenue (reported)

Total Revenue (MTR adjusted)

EBITDA (reported)

EBITDA (MTR adjusted)

CAPEX

Guidance

>10% Confirmed

>10% Confirmed

~R$3 bln Confirmed

(+R$0.5 Mln licenses)

R$ mln

1,145

724

Anticipation focused on

Network

2

Main Achievements Quarter Impact

Leadership in Prepaid segment Fastest data growth (+40%YoY) and

smartphone at 35.2% of total base TIM Fiber started-up (Live TIM brand)

MTR cut (-R$121mln rev; -R$48 mln EBITDA)

Macro-economic and competitive environment

TIM Fiber start-up costs (~R$11 mln)

Macro economic scenario slowdown in 1H12 vs. 1H11 (i.e.: level of indebtedness; high commitment of income to debt payment; GDP lower growth)

Short term competition aggressiveness

-28%

Effects on Q2: MTR and Macro Environment

Total Net Revenues(R$ billion)

EBITDA(R$ billion)

MTR Macro Environment

4.5

2Q11 2Q12

0.1

4.3 +7%

+10%

1.1 1.2

2Q122Q11

0.1

+6%

+10%

-R$121 mln impact on net revenues and -R$48 mln on EBITDA

Still no elasticity coming on and traffic reshape to offset MTR impact

FMS will lead to lower dependency on MTR 143%

2Q122Q11

11%

83%

2Q11 2Q12

YoY

Net Revenues Volume

Drivers to softening these impacts Keeping the

Innovative approachEILD regulatory framework

Macro scenario improvement

Intelig/ TIM Fiber (leased lines swap)

3

4Q12

4.7

1.3

2Q12

Revenues Costs

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12e 3Q12e 4Q12e 1Q13e

Source: BCB, Bradesco Corretora and Company’s estimates

GDP Quarterly Growth (YoY)

Handset Sale

FMS Secular Trend Remains on Play

4

-23%

2Q121Q124Q113Q112Q111Q11

Fixed Tariff Premium over Mobile

ARPM (R$/min)

Leading Traffic to a Sharp Increase

(Bln Minutes)

Leadership in LD Market Share

(% Minutes)

Mobile Outgoing price (% YoY)

Lines in Service

(% yoy)

Fixed Revenue

(% yoy)

jun/11dec/10 dec/11jun/10 mar/12jun/09

Incumbents*TIM

* Telemar, Brasil Telecom, Telesp e Embratel.

Mobile

Fixed 3Q11

2Q11

1Q12

4Q11

23.8

-14%

22.621.820.118.417.5

Source: Companies results, Teleco and Bloomberg estimates; **Excluding one company.

40% mobile discount

Fixed to Mobile Substitution… …impacting Fixed Incumbents

2Q12

jun/10

Lines

(% yoy)

Mobile Revenue

(% yoy)

… benefiting Mobile Segment

3Q11

2Q11

1Q12

4Q11

2Q12

-4.1%

-8.0%

-7.0%

-7.6%

-4.9%

-4.7%

-4.0%

-4.5%

-3.4%

+18.0%

+16.7%

+18.6%

+18.6%

+17.6%

3Q11

2Q11

1Q12

4Q11

2Q12

3Q11

2Q11

1Q12

4Q11

2Q12

+11.5%

+11.3%

+14.5%

+12.4%

+7.1%**-11.7%**

5+

Operations

Operational Growth Remains Strong

6

Customer Base(million lines)

Total Market Share Growth(% of total lines)

9.7+2.7

+3.7 +4.9 +3.1 +1.7

68.9

10.0

PrePaid

PostPaid

2Q11

55.58.0

1Q11

52.87.7

3Q11 4Q11 1Q12 2Q12

59.2 64.1 67.2

8.79.3

Net Adds(000)

Post Paid

Pre Paid

223 632317 655 348

1,598 3,0532,359 4,219 2,786

348

1,308

YoY2Q

+2.0

+11.3

+25%

+24%

%

Oi

Claro

Vivo

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

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

15% 16% 15% 16% 17% 18% 18% 17% 15% 13%

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

Vivo

TIM

Claro

Oi

3Q112Q111Q11 2Q124Q11

25.5%25.4%

1Q10

25.4%

2Q10

25.3% 25.4%

4Q103Q10

29.5% 29.5%

24.0%

25.5%

29.5%29.5% 29.8%

26.0%

19.5%

25.1%

29.7%

26.8%26.5%

19.4% 19.7% 19.1% 18.8% 18.8% 18.5%

30.1% 30.2% 30.1%

24.6%25.3%

20.1%

25.5%24.9%

20.4%

29.6%

18.7%

24.6%

26.9%

1Q12

23.7%24.5%

25.1%57.6 58.9

47.545.1 50.6 54.8

3Q112Q111Q11 2Q124Q111Q10 2Q10 4Q103Q10 1Q12

SP City Market Share Growth(% of total lines)

Source: Anatel Source: Anatel

640bps

270bps

Largest Prepaid

Base

Oi

Claro

Vivo

3Q112Q111Q11 2Q124Q111Q10 2Q10 4Q103Q10 1Q12

Customer Base Growth(%YoY)

1st in yearly growth for 8 consecutive quarters

Growth Backed by Efficiency Approach

7

Customer Base Growth(% YoY)

SAC and SAC/ARPU(R$)

Handset Subsidy(R$ million)

Bad Debt Trend(as % of Gross Revenues)

2Q122Q10 2Q11

Prepaid

+830Bps -210Bps2.6

1.4

2Q112Q10 2Q12

1.6

2Q10 2Q11 2Q12 2Q12

0.92%

2Q11

1.08%

2Q10

1.83%

Continuous growth on pre-paid

and acceleration on postpaid

But with a rational approach:

o significant subscriber acquisition

cost drop

o continuous bad debt downward

trend

Sustainable business model

o Low bad debt

o No subsidies

o Freedom to customers

SAC/ARPU

SAC(R$)

-44% -26%

CapitalizedSubsidy

Postpaid+360Bps

+860Bps

Update on Anatel´s Sales Ban

8

Anatel SMP 5 – Orig. calls compl. Anatel SMP 7 - Call drop(Points)

Anatel Ranking of Complaints Procon Ranking of Complaints(SMP Compl./ Lines in Service * 1000) (Compl. of Integrated System of Procon )

=> Network KPI

=> Customer KPI

=> Commitment on Network Development

=> Commitment on Quality Improvement

157

# TRX Data Channel Elements KM of Fiber(‘000) (‘000) (‘000 Km)

+75% +84%

TIM Call Center Index of Complaints(Points)

271

139

741

29

53

76%

90% 92% 96% 100% 77%

SMP 5 - Call Complete SMP 7 - Drop Call SMP12 - % Call Center(% clusters) Responsiveness

2011 2014 2011 2014 2011 2014

1H 2012 2014E

4.3x

-30%

1H 2012 2014E 1H 2012 2014E

+1,600Bps+400Bps +1,300Bps

Current Situation: TIM is not the worst Outlook: Improvement Plan Presented

Anatel’s sales ban is expected to be removed in the next days

Source: Anatel, Procon and Company

9+

Marketing

Innovation Platform

10

Local=LD

Per Call

Unlimited

Per Day or Month

“All you can eat”

Unlimited

Per Day or Month

Unlimited

Budget Control

Innovation path

LibertyTorpedo

1Q11

40.157.553.3

2Q12

56.1

1Q124Q113Q11

47.8

2Q11

43.9

1Q11

4.1 7.56.6

2Q12

7.0

1Q124Q113Q11

5.8

2Q11

5.5

1Q11

1.2

3.62.7

2Q12

3.2

1Q124Q113Q11

2.3

2Q11

1.6

New Concept Unlimited Internet offer SMS Hybrid Plan

Unlimited

Per Day

International

Infinity Customer Base(million lines)

Liberty Customer Base(million lines)

Infinity Web Unique Users(daily users, million)

Liberty Web

Infinity Web

InfinityTorpedo

Liberty Controle

Liberty Passport

Liberty

Infinity

And Generating Value

11

Pre Paid – Customer Base(000 lines)

Post Paid – Customer Base(000 lines)

MOU and Post paid Churn(Minutes, % of lines)

58,873

47,506

2Q12

37,469

2Q112Q10

2Q112Q10 2Q12

2Q122Q11

10,001

2Q10

6,9568,019

Churn

MOU

+24%+3%

-80Bps -50Bps

+27%

+24% +15%+25%

Volume of Top Up growth(Mln recharges)

2Q112Q10 2Q12

+42%+18%

Combining volume and

value throughout a complete

and unlimited platform of

services (local and LD calls,

SMS and data)

Pre-paid consistent growth

Post-paid taking-up with

increasing traffic and lower

disconnections…

..even with no handset subsidy

policy and no loyalty

Internet Take-Up Supported by Best Handset and Offering

12

Smart/Web phone Penetration(% smartphones/total CB (lines))

31.1%

1Q121Q11 3Q11

26.6%

35.2%

15.4%

2Q124Q11

12.6%19.5%

2Q11

Data Revenues(% of Gross Mobile Service Revenues)

14.6%

16.7%

3Q111Q11

13.8%

2Q11

15.7%

18.7%

1Q12

18.1%

2Q124Q11

+490Bps

SMS unique users growth(daily unique users)

2Q121Q124Q113Q112Q111Q11

~3X

May 12

18,907

2Q11

12,391

Data users(monthly unique users)

57% 68%3G coverage(% of urban pop.) +1,100Bps

79%

% sold

77%70%71%54%48%

Value Added Services Revenues(R$ billion)

0.73

2Q11 2Q12

1.03+40%

+53%

13+

Financials

EBIT Net Financial

Result

Net Income 2Q12

Taxes and

Others

550

1,214

Depreciation/Amortization

347

EBITDA2Q12

-64

ΔYoY +6.0% +7.8% +3.9% +44.6% +3.2% -0.9%

-664

-140

1,145

EBITDA2Q11

EBITDA2Q12

-172

Marketingand Sales

1,214

PersonnelG&A and

others expenses

+27

Handset Margin

-38

Network and ITX

+12

Services Revenues

26.9% 26.7%EBITDA Margin

Service EBITDA Margin32.7% 32.2%

+240

Handsets Rev.:COGS:

+55-43

Consistent EBITDA and Net Income Growth

EBITDA EvolutionR$ Mln

From EBITDA to Net Income R$ Mln

R$54 mln one off event due to mark to market hedge position

-2.8% +8.7%-14.4% +15.1%+6.4%ΔYoY

Net Debt(R$ Mln)

OFCF(R$ Mln)

Working Capital(R$ Mln)

2Q122Q10 2Q11

-82

2Q10 2Q12

147

2Q11

2Q122Q112Q10

2Q12

2,278

2Q11

1,998

2Q10

2,520

Net DEBT/EBITDA

(trailing 12m)0.68x 0.45x 0.47x

  2Q11 2Q12 VarNetwork 61% 67% 600 BpsIT 22% 28% 600 BpsOthers 17% 5% -1,200 Bps

Cash Position Analysis

Capex(R$ Mln)

OFCF R$-34mln YoYEBITDA-CAPEX =-R$261mlnWC R$230mlnOther –R$3mln

Including TIM Fiber net debt = R$87 mln

WC: R$230 mln YoY

+46%

15

16+

TIM Fiber Update

Market Demand(Units)

Quality of Service(Mbps)

Buildings authorized

5,700

Building’s accessed

2,100

MSANs installed

214

Network Construction

Homes Passed Ready

to Sell

220k1

Optical network

MSANs

Backbone

Network and Marketing Highlights

2

3

Activation 1k

Website Registration 63k

Market Demand and Quality of Service

Download Speed

UploadSpeed

17

TIM Fiber Launch Plan: On Track

18

Geographic Coverage (SP/RJ) 1 neighborhood 5 neighborhoods 20+ neighborhoods

Launch Phases

Key objective Technical Trial of the solution

Start of the Commercial Operations

Check of the Business Readiness

Customer base ~50 Employees +

Friendly User Testers

~1 Thousand

Beta Testers

50-70 Thousand

Customers end-of-period

n/a Advertising outside of communication media (BTL)

Communications

Pre-Launch Test Soft Launch Commercial Launch

Commercial Launch Soon…

Product

Channelsn/a

Naked Ultra Broadband

Door to door + Tele sale Outbound

Door to door + Tele sale Outbound + Tele sale Inbound

Advertising in mass communication media (ATL)

Conclusions and 2H12 Outlook

19

• Focus on network development, quality improvement and communication to defend post-paid segment and reverse the bad perception from Anatel ban

• Insist on FMS trend with an innovative approach

• Support data revenues growth through smartphone penetration and network strengthening

• Launching TIM Fiber (Live TIM)

Out

look

• TIM managed to maintain its solid operational improvements amid tough 1H12 (macro-economic and competitive scenario)

• Data services continued at a solid pace

• Leadership in market share of net addition for 8th consecutive quarter is a clear signal how TIM’s offer is indeed the best value option

• Operational efficiency set the tone, with significant subscriber acquisition cost (SAC) and bad debt reduction

Con

clus

ions