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  • 1. Results4Q08February 27th, 2008

2. TIM PARTICIPAES S.A. | Investor RelationsMain phases of TIM Brasils Re-launch Plan 2008 1st half2008 2nd half 2009 1st quarter2009 2nd quarter 2009 2nd halfPhase 0: Current Phase 1:DifficultyRestructuringPosition Re-Launch Plan Volume drivenNew management Loss of Top of Brandstrategy team Mind/PreferencerepositioningFalling ARPM Strict financial Drop in volume New portfolio ofRising bad debtdiscipline share and valueofferingsOffering strategyLaunch of Fixed- Issue in post-paid Convergingis lacking Mobile substitutionsegmentapproach offer Loss ofLower ProfitabilityDefend % EBITDA Growth in Value Revenue Share 1 3. TIM PARTICIPAES S.A. | Investor Relations AgendaPhase 0: Current Difficulty Phase 1: Re-LaunchRestructuringPositionPlanClaudio ZezzaLuca Luciani 2 4. TIM PARTICIPAES S.A. | Investor Relations4Q08 / 2008 Achievements ..Lights..shadows..EBITDA margin 4Q08 at 26.2% and 22.2% FY 2008:Drop in market share (below guidance ~26%) meeting company's guidance24.2% of market share in 2008 vs. 25.8% in 2007 ARPM increase to R$0.35 (R$/min) in 4Q08 Net service revenue FY08 at 5.1% growth, below expectations (guidance >7%):Bad debt 4Q08 at 4.1% of net service revenues:Discipline and stricter credit control (meetingLower Postpaid customer base (-200K lines YoY) expected FY ~6%) Low incidence of post-paid on total gross adds in 4Q08 (13%)SAC reduction: selectivity and efficiency on High churn of post-paid (10% in 4Q08)acquisition Mix post-paid at 18.1% 4Q08 (vs. 21.7% in 4Q07) Slowdown of ARPU erosion in 4Q08: R$29.9 in 4Q08 vs. R$29.7 in 3QMOU reduction in 4Q08 (-19% YoY) as consequence of lower push on promotions VAS: +25.5% 4Q08 YoY, reaching 11% of gross service revenues 3 5. TIM PARTICIPAES S.A. | Investor RelationsRigorous Financial DisciplineEBITDA %: Meeting the company guidanceARPM IncreaseR$ Million R$ Cent.890 928 800 YoY YoY 4.2% 7.2% QoQ0.320.35 QoQ 0.2916.0% 18.0% 4Q07 3Q08 4Q08 4Q073Q084Q08 Margin26.4%23.8%26.2% SAC ControlBad Debt ControlR$ R$ Million YoY YoY143 131-12%9833.5%110 110 96 QoQ QoQ -13%-8.9% 4Q07 3Q084Q084Q073Q084Q08 FY 08SAC / % Serv. 3.2x3.7x3.2x3.2%4.7%4.1%6.2%ARPU revenues 4 6. TIM PARTICIPAES S.A. | Investor RelationsSolid KPIs Slowdown of ARPU erosionVAS (success in innovative services) % of gross service revenueR$R$ Million 10.8% 9.7%34.5 9.0% 29.729.9 YoY YoY -13.1%25.5% QoQ 471.3 QoQ 375.4402.9 +1.0% 17.0%4Q073Q084Q084Q073Q08 4Q08TIM FIXO* (fresh market)TIM WEB (boosting VAS) Million accessesMillion accesses+25%+70% ~0.20 ~0.5~0.16 ~0.3 ~0.01~0.2 2007 1H0820082007 1H082008 * Including TIM Casa Flex 5 7. TIM PARTICIPAES S.A. | Investor RelationsCustomer Base ProfileTIM: Market Share ErosionTIM: more pre-paid Customer BaseMillion lines Million lines140.8 150.6125.8 133.236.4121.0+24.5%33.8 35.2 Mobile31.3 32.5 Market YoY 31.332.533.835.236.4TIM+16.5% 27.0 28.429.8+22% 24.525.8 YoY YoY4Q071Q082Q083Q084Q086.86.8 6.8 6.86.6-3% 4Q07 1Q08 2Q08 3Q08 4Q08 YoY TIM Market share 25.825.925.425.024.2 Post-paidPre-paidTIM Incr. share 25.526.517.418.312.1% Pos / Total21.720.820.219.4 18.1 TIM erosion in market share: Market continues to grow at a very strong pace (+24.5% in lines) TIM reduce its market share to 24.2% Incremental market share down to 12.1% in 4Q08 Mix change towards pre-paid (volume): TIM Customer Base grew-up to 36.4 Mln lines mainly on pre-paid (+22%) Post-paid lines down to 6.6 Mln (-200K lines YoY), representing 18.1% of total Customer Base6 8. TIM PARTICIPAES S.A. | Investor Relations Revenue Performance Net Revenue TIM Service Revenue Share R$ Million3,544YoY % 3,3763,186 3,358 2,993 29.6% 27.5%27.3% 3,1003,066 3,223+4.0%2,838 2,971276 155 215292 321 +16.5% 4Q071Q08 2Q083Q084Q084Q073Q084Q08* YoY +5,3%+4,1% +6,1% +5,0% Net Service Revenue Net Handsets Revenue * Includes net service revenue from Vivo, Claro, TIM, Telemig, Amaznia, Oi and Brt Revenue Growth at 5.1% on a FY basis (below guidance >7%) due to: lower than expected post-paid growth (post-paid Gross Adds at only 13% of Total in 4Q08) high churn on post-paid (10% in 4Q08) MOU reduction in 4Q08 as consequence of lower push on promotions 7 9. TIM PARTICIPAES S.A. | Investor RelationsRevenues KPI evolution MOU95R$ 8626 Incoming25ARPU Outgoing62 70The 2008 objective was: R$4Q08 FY08 Price increase and to contain the YoY:Total -19% -1%ARPU dilution29.9 29.7 Incoming -18% -21% Greater discipline towards theOutgoing -19% +9%pre-paid promotions that4Q08 FY08resulted in pre-paid ARPU ARPM increase YoY -13% -13%R$Total ARPU performance mirrorsthe mix deteoration0.35 0.31 4Q08FY08 YoY +7% -13% 8 10. TIM PARTICIPAES S.A. | Investor RelationsEBITDA YoY performance45.6(61.4) R$ Million 11.8 (65.9) (32.7) 16.7 123.0 Increase due to Higher handset sale Largely impacted by higher commercial volume (+14% YoY)strong creditactivities, advertisingexp. andcollection effort in commissions 4Q07 890.4927.6EBITDA 4Q07 ServiceHandsetsSelling Network COGSBad Debt*OtherEBITDA 4Q08 Revenue RevenueExpensesExpensesExpenses Change+4.0%+16.5% +9.5%-1.1%+17.6% +33.5% -5.5% % YoYEBITDA Margin 26.4% 26.2% * Other Expenses include: G&A, Personnel and Net Other Operating Expenses/Revenues9 11. TIM PARTICIPAES S.A. | Investor RelationsFrom EBITDA to bottom line 4Q08 EBITDA Depreciation Net Financial Taxes andEBIT Net Income4Q08AmortizationExpensesOthers R$ Million (622.2)Growth fueled by highercost of debt and 3G NPVTax loss carry forward 927.6 R$160.2Mn(141.4) 135.6 305.4 299.6Change YoY +4.2%+3.3%+5.9% +153.0%n.m. +65.8%10 12. TIM PARTICIPAES S.A. | Investor Relations Net financial position and FCF 4Q08 Net Debt Operating Free Cash Flow R$ MillionR$ Million 3Q08OpFCFNon4Q081,084 (782)OpFCF Positive Net Cash Flow1,229 +1,072 928 (157) (1,670) (2,743)1,229 EBITDA WkC CapexOpFCF3Q07 and(1,788) 928(92)(952)4Q078901,044 (1,007) 928 4Q07 figuresfigures R$ 3.2 billion (of which 60% long term)Gross Debt~28% of total debt is denominated in foreign currency (fully hedged)Average annual cost12.1% in 2008 vs. 11.4% in 2007 (13.2% in 4Q08 vs. 10.9% in 4Q07)Debt ratio0.58x - Net debt over 2008 EBITDA11 13. TIM PARTICIPAES S.A. | Investor Relations Paving a sustainable growth TIM became part of Bovespa s Corporate Sustainability Index (ISE) On December 1st of 2008, TIM became part of the new portfolio of Bovespas Corporate Sustainability Index (ISE) ISE is composed by 30 companies out of 394 traded at Bovespa, comprising only the companies with a strong commitment to sustainability and social responsibility ISE is based on the international concept of the Triple Bottom Line (TBL), which makes an integrated assessment of companies social, environmental and financial elements Underlining TIMs commitment on a constant relationship improvement among all its stakeholders and strengthening its environmental indicators performance Recognized as one of the national companies more committed to management transparency and which contributes to the development of a fair social system, environmentally balanced and economically prosperous 12 14. TIM PARTICIPAES S.A. | Investor Relations AgendaPhase 0: Current Difficulty Phase 1: Re-launchRestructuringPositionPlanClaudio ZezzaLuca Luciani13 15. TIM PARTICIPAES S.A. | Investor RelationsA Large and Competitive MarketCustomer BaseService RevenueMillion linesBillion R$25%14%Double-digit 121 151 3844 market growth2007200820072008Penetration 64% 78%Gross Adds Churn Million lines Million lines 35% 32% 75 Churn market... 56 3546 2007 2008 20072008 Churn 32% 34%TIMPlayer 1Player 2 R$, R$/min R$, R$/minR$, R$/min ARPU suffering ARPM Competition increases with 0.39 Mobile Number Portability in strong0.360.31-13%0.34 -15%0.35 -23%2009: competitive 0.2717% of population covered in34.429.6 -3% 29.7 -13%30.327.3 25.5 -7% pressure Sep-08 100% by Mar-09 20072008 200720082007 200814 16. TIM PARTICIPAES S.A. | Investor RelationsLoss of TIM Brasils competitivenessTop of Mind PreferenceOct-08Oct-08 25% 26%27%22% 21%21%Top of Mind and 20%18%Preference Player 2 Player 3 Player 4Player 2 Player 3 Player 4Revenue Share Market share%* %Market Share 25.8% 29.4% 29.6%25.4% 24.2% 27.7%(value and volume)2006 2007 2008200620072008 % Post-paid/Base% Post-paid/BaseHigh-Value Base20.8% 20.2%(Post-paid)21.3% 21.7%18.1% 19.4% 18.1% Churn: 10% in 4Q08 Gross Adds: 13% post- paid/total in 4Q08200620072008 1Q082Q08 3Q08 4Q08MNP Mobile Number46% %, Sept-Dec 2008 Portability 11% Increasing competitive pressure in 2009 INOUTSource: Synovate Image Survey Sept-Oct 0815 * Includes net service revenue from Vivo, Claro, TIM, Telemig, Amaznia, Oi and Brt 17. TIM PARTICIPAES S.A. | Investor Relations TIM Brasils strong fundamentals1 Network: leadership in coverage and quality voice (coverage and quality) data (Edge/ 3G) 2 High-Value Customer Base (ARPU ~30R$) withOperating as a proven innovation attitude (VAS 10.8% Gross Service Pure Mobile Revenue in 4Q08) company, with solidfundamentals 3 Unique Pure Mobile convergence offering in line with our DNA TIM Web: strong growth (+2.5x of base YoY) TIM Fixo: high satisfaction among early adopters 16 18. TIM PARTICIPAES S.A. | Investor Relations Network: leadership in voice and data coverage VoiceData Population covered by GSM*Largest data network = Edge / UMTS93%Player 2 90%3G Data Only high quality Right on spot Player 388%Player 488%Native 3.5G (HSDPA)high performanceRecovery of Service Quality Congestion % cells with Grade of Service > 2%1059% of high-value customer base covered by 3G 8(Jan-09) 78% by Dec-09 6420Jan Feb March April May June July Aug Sept Oct Nov Dec Jan Jan W1 W2 * Urban population covered (Jan-09)17 19. TIM PARTICIPAES S.A. | Investor RelationsHigh-Value Customer Base with proven innovation attitudeARPU VAS/ Gross Service RevenueData Revenue Growth Monthly ARPU, R$% Gross Service Revenue4Q07 vs. 4Q08 10.8% 34.5SMS/29.5 29.8 29.7 29.9 9.8% 9.7%4% MMS 9.0%8


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