Results2Q102Q10

AgendaAgenda

Operating Performance

Financial PerformanceFinancial Performance

A quarter highlighted by the accelerated th f d EBITDAgrowth of revenues and EBITDA.

Attractiveness of Vivoresults in customer base growth and improves

t i

Increase in Market Share for four consecutive quarters

customer mix ...

...a more stable and active customer base

ARPU improvementd SAC d Ch active customer base,

with increasing consumption...

and SAC and Churn stabilization

...driven by growth in data services...

Data Revenue accounted for 19.4% of the net service revenue

...resulting in accelerated growth of service revenue and

Annual growth of 10.7% in the net service revenue and service revenue and

EBITDA.service revenue and 10.6% in the EBITDA

3

The attractiveness of Vivo results in the customer b th d i t i

Brand Channels Offers Quality and Coverage

base growth and improves customer mix...

The major own stores chain in the market

H ill it

Best cost-benefit ratio in the market

Complete offers with d t d i

Most valuable brand in telecom sector*

Leader in 3G coverage

Consistent l d hi i A t l’ Huge capillarity

of recharge pointsdata and voice leadership in Anatel’s

quality indicators

+19.6

8.0% 25.5%

QoQ YoY

2.7% 18.1%

46.853.9 56.0

+3.8

Post paid BlendedPre paid Post paid

* According to the Brand Finance Consultancy.

4

...a more active customer base that uses the bil h

Customers VOICE TRAFFICMOU

mobile phone even more...

rechargingVOICE TRAFFICMOU

+ 42.5% +70.1%

Million of minutes % of pre paid customer base

Minutes

-4.0% -11.1%

QoQ YoY

25 24

116 114

- 1.7%

4.4% 0.4%

QoQ YoY 18,398 18,744

+1.9%

+ 5.9 p.p.

-1.1% 69.8%91 90

27

25 24 80

2.3% 114.5%

11,022

53

2Q09 1Q10 2Q10

Outgoing Incoming Outgoing Incoming

5

...increasingly more stable, demanding less ff t t tt t d t i t

Churn of 2 6% in the quarter

efforts to attract and retain customers...

SAC Blended*- 15.5%

Churn of 2.6% in the quarter, with small variations for more than 10 quarters

QoQ YoY 8

84

7169

+2.9%

Number Portability

16 19

20 16 19

13

8 9 9 9

69

23.9% -3.4%

12.6% -26.9%

-5.1% 7.6%

-25.4% -52.3%

27 17 13

19 21

2Q09 1Q10 2Q10

11.6% 30.5%

Subsidy

Comissions

Advertising

Lending

Fistel

Mar/09 Jun/09 Sep/09 Dec/09 Mar/10

* (70% of marketing expenses + costs of distribution channels + handset subsidy + corporate lending + Fistel)/gross additions.

6

...increasing the monthly service expenditure...

ARPU – R$

- 7 4%

QoQ YoY 27.0

24.8 25.0

+ 0.8%7.4%

-5.1% -13.8%

Q Q24.8 25.0

4.7% -3.1%

Outgoig Incoming

7

...driven by growing data service d tiadoption...

o Mobile Internet market share of 40%o 4 6 million devices with access

In this context Vivo has absolute leadership

o 4.6 million devices with access to the 3G networko Increase of 44% in Data ARPU

Mobile Internet Market Share*

40%50%

Player 1

Player 2

40%

20%

30%

40%

yPlayer 3

0%

10%

*Only consider modems and data card. Data updated until Feb/10.

Fonte: Anatel e análises internas da Vivo. 8

...resulting in growth acceleration in service d EBITDA t ith t di th revenue and EBITDA, notwithstanding the

consistent cash generation.

2Q10 2Q09* Δ %

Net Service Revenue 4,129.8 3,729.4 10.7%

EBITDA 1,342.7 1,213.7 10.6%

EBITDA Margin 30.5% 30.3% 0.2 p.p.

Net Result 236.0 181.7 29.9%

Cash Flow after Investments 960.9 836.0 14.9%

* The 2009 numbers were reclassified, when applicable, according to the adoption of new accounting practices in Brazil (CPCs).

9

Thus, Vivo consolidates its leadership and build the path to sustain this positionthe path to sustain this position.

Growing and more active customer base...

...generating the expected return for the investments

in 3G and...

...resulting in an EBITDA Margin over 30% for the last

5 quarters...in 3G and... 5 quarters...

+6 p.p

...and sustainable cash generation.

...supported by a quality coverage and high capacity in

2G and 3G...

R$417 MM in dividends payment in April 2010.

10

AgendaAgenda

Operating Performance

Financial PerformanceFinancial Performance

Net Service RevenueYoY Growth

%

R$ million

+ 10 7% 71 8%+ 10.7%

+ 5.1%

3 929 4,130

64.8%51.8%

71.8%

1 490

467 687 802

3,9293,729 3.4% 5.8% 10.7%

4Q 09/08 1Q 10/09 2Q 10/09Net Service Revenue Data + VAS

2Q 10/09 GrowthR$ million

1 760

1,463 1,505 1,490

1,760 1,703 1,806

2Q09 1Q10 2Q10

+71.8%

Outgoing Voice

Interconnection

Data + VAS

In order to simplify the analysis the chart does not include ‘Others”

+1.9%+2.6%

In order to simplify the analysis the chart does not include Others .

12

Data Revenue + VASR$ million

Others

QoQ YoY

Others19%

SMS+MMS40%

Vivo Internet

+ 71.8%

802

+16.8%

16 0% 121 4%

-4.8% 8.5%

Vivo Internet

41%

687

802

467

Others

16.0% 121.4%

SMS MMS

Vivo Internet

Others12%

28.1% 50.8%SMS + MMS

% Net Service Revenue

SMS+MMS35%

Vivo Internet

53%% Net Service Revenue

Data Revenue over Service Revenue reach stage comparable to more

...with internet services being th l t t f thi

13reach stage comparable to more

mature markets...the largest part of this

revenues.

13

Operating Expenses*R$ million

9001,046 1,038

+ 15%- 1%

449 433 394

- 12%- 9%

897 846954

+ 6%+ 13%

394

133154 167

+ 26%+ 9%

214244 266

+ 24%+ 9%

213267 269

+ 26%+ 1%

133

* Excluding Depreciation.

14

EBITDA EvolutionR$ million

+71.8% +1.7% +24.2% +17.4% -12.2% +14.8%+6.4%

+10.6%

2Q09 Data + VAS

Voice + others

H. R. Service Rendered

Goods Sold

Selling Expenses

Others 2Q10

Revenues Costs

15

EBITDA and MargingR$ million

QoQ YoY

5.4% 10.6%

Financial discipline maintain expenses growth under control.

EBITDA EBITDA Margin

16

EBIT and Financial Result

EBIT

R$ million

FINANCIAL RESULT

2Q09 1Q10 2Q10

EBIT FINANCIAL RESULT

+ 24.9%

(58)

(101)

Q Q Q

403 402 503

(122)(101)

2Q09 1Q10 2Q10

17

Net Result and Cash FlowR$ million

+ 29.9%

+ 23.0%

2Q102Q09

1Q10

Net Margin

18

Gross and Net DebtR$ million

Gross Debt Net Debt

- 28.5%- 29.5%

4,692.6

-14.8%

6,511.1

- 4.5%

,3,937.6

3,355.3

6,511.1

4,803.2 4,588.4

Net Debt/EBITDA of 0.62x;

C dit R ti ‘b AAA’Credit Rating: ‘brAAA’

19

CAPEXR$ million

14.9%

7.8%11.1%

595.1

489.2

328.7

% Capex/Net Revenue

20

A Successful Journey

Launching of HSUPA network

Cloning elimination

Launching of GSM network

HSUPA network

Telemig Focus on Customer Base

Beggining of operations in the Northeast region

gAcquisition

Strategic focus

Corporate Restructuring

YoY accelerated growth in Revenues

and EBITDAStrategic focus on quality

and EBITDA

Market Share increase for the 4th consecutive

tquarter

2003 2004 2005 2006 2007 2008 2009 1H10

21

Results2Q102Q10