Investor Relations - Rio de Janeiro, 2nd August 2010

1

Agenda

TIM repositioning path

Economics Q2 2010

Development in 2H 2010

2

…with higher Profitability

“More People”

Generating more Revenues…

“Talking More”

The Q2 in Few

Customer Base, Mln lines

37.8 44.4

June '09 June '10

+19%

+12%

+17%

YoY growth%

Post

Pre

6.2

31.6

6.9

37.5

110

73

0

20

40

60

80

100

120

2Q09 2Q10

+81%

In

Out

-23%

+51%

52

21

93

17

QoQ growth %

Total +4.9%

Pos +5.2%

Pre +4.8%

QoQ growth %

Total +10%

Out +14%

In -7%

* 2009: Intelig includes +14.2 mln of non recurring gain

Net Service Revenues, Mln R$

3,317

3,118

2Q09 2Q10

TIM only

Intelig

2,967

165

3,138

208

+5.8%

+25.9%

+6,4%TIM

Consolidated

QoQ growth %

Total +5.5%

TIM only +4.7%

Intelig +20.5% 764

887

2Q09 2Q10

Mln R$, %

TIM only

Intelig

736

28*

859

27

+16.7%

-1.5%

QoQ growth %

Total +9.5%

TIM only +6.6%

Intelig +186%

21.9%25.1%

EBITDA Margin

EBITDA +16.1%

+3.2pp

*

1

3

MoU

2

3

“More People” (1/2)Increase in Customer Base, Pre and Post

Customer Base

Net Adds Post-paid

Net Adds Total

Net Adds Pre-paid

29% 34%

Incremental Market Share

2.11.7

0

1

1

2

2

3

2Q09 2Q10

MM lines

vs. 1.3 Mln in 1Q’10: +64% QoQ

1,7221,687

0

500

1000

1500

2000

2500

2Q09 2Q10

‘000 lines

Vs 1,103 in 1Q’10: +55% QoQ

+19%

+2%

‘000 lines

8x

Vs 150k in 1Q’10: +127% QoQ

Speeding up Customer Base growth

More sales and less churn in Post-paid Voice

Reached 1 mlnLiberty customers, restoring TIM presence in Post-paid voice market

YoY Growth

Mln lines

37.8 44.4

June '09 June '10

23.7% 24.0%

Market Share (% EoP)

QoQ growth %

Total +4.9%

Pos +5.2%

Pre +4.8%

+19%

+12%

+17% +4.9%

Pos

Pre

6.2

31.6

6.9

37.5

1

341

42

-9

41

91

141

191

241

291

341

2Q09 2Q10

Infinity pre-paid up to 27 Mln lines: the largest mobile Community

4

“Talking More”Reshaping Traffic Profile

Incoming volume0

10

20

30

40

50

60

70

80

90

2Q'09 2Q'10

MoU Outgoing On-net

in

out

Off-net

On-net+81%

-23%

Lower MTR risk exposure

F-M substitution on incoming

On-net traffic steering:

Longer calls for local and long distance:

Outgoing volume

-7%

LD

Local

- Reduced ITX costs - F-M substitution on

outgoing- “Community based”

concepts

Bln Minutes

Minutes Minutes Minutes

- “Azul” (local equal to long distance)

- Pay per call (Infinity)- All you can eat on-net

post paid (Liberty)

15x

+125%

-25%

+50%

+125%

Total

On-Net

Fixed Mobile Substitution

Off-Net

-20%

-4%M-TIM

F-TIM

2

Bln Minutes

M-F: - 15% (FMS effect) M-M: - 6% (on-net steering)

>2x

>2.7X

12.2

5.7

2Q'09 2Q'10

- 9%

2.42.1

2Q'09 2Q'10

73

110

2Q'09 2Q'10 2Q'09 2Q'10

+81%+51%

5

(12%)(11%)

(31%) (27%)

(61%)(58%)

0

0

0

0

0

1

1

1

1

1

1

2Q'09 2Q'10

“Generating more Revenues”…lowering MTR exposure, increasing profitability

Improved Revenues Mix

Outgoing

Incoming

VAS

Lower MTR Exposure

+123

+188

-65

+55

+198

0 50 100 150 200 250 300 350

EBITDA

Contribution

Incoming

VAS

Out

2Q10, Incoming Revenues – Interconnection, R$ Mln

2Q Revenues, R$ Mln.

EBITDA

Net Service Revenues

Incoming

Service Revenues Contribution

Voice Out(net of ITX) +18.0%

+16.6%

-7.1%

+8.0%

+16.1%

Δ% YoY

Incoming Revenues

ITX Costs Margin exposed to MTR

2009

% YoY

0.9 (0.6) 0.3

-7.1% -2.7% -16.3%

0 0 0 0

VAS

Incoming

Outgoing +10.5%

-7.1%

+16.6%

YoY Growth

Generated Business driving Profitability

VAS

YoY Growth

0

0

0

0

0

1

1

1

1

1

1

Better Revenues contribution

2Q’09 2Q’10

Gross margin (services revenues net of ITX costs)

-7.1%

+17.7%

+8.0%

Service Revenues

ITX Costs

+5.8%

-2.7%

Business received(Incoming)

Business Generated(Outgoing + VAS – ITX)

TIM only; R$ MM

+5.8%

#1 in outgoing voice

R$ Mln, BRGAAP

MTR exposure reduced to ~28% of total EBITDA (vs. 40% in 2Q09)

3

0.80.6

0.2

0

100

200

300

400

500

600

700

800

900

6

…and strengthening long-term Competitiveness

June’09 June’10

Preference

Rejection

21

15

25

11

#2

#1

#3

#4

1

1

1

1

1

1

1

1

Drop calls

7.207.72

7

7

7

7

8

8

2Q09 2Q10

% dropped calls

2Q09 2Q10

85 91

50

60

70

80

90

100

110

120

CSIIDA

Network

Caring

Customer SatisfactionIndex

Caring Performance Index (Anatel)

Quality

2Q09 2Q10

2Q09 2Q10

Ranking ANATEL

99,5%100%

1.06

0.71

Widening the gap

Innovative

Convenient (price)

Closer

Benefits for current customers

Leader

#1

#1

#1

#1

Quality and Reliability

•TIM is the only operator scoring 100% in network quality from March until June

Research of 12th wave

Innovation and Offering

14 12 12 11

0

2

4

6

8

10

12

14

16

Δ pp YoY -4-2+20

20 2025

30

0

5

10

15

20

25

30

35

Δ pp YoY -3+4-7+2

#2

3431

2020

5 10 15 20 25 30 35 40

P-1TIM

P-3P-2

• Continuous improvement in most segments, only LA Premium dropping slightly (2Q09 2Q10): - Pre: 7.41 8.11- Post Co: 6.66 6.83- Business: 5.37 6.29

Rejection: Preference:June ‘10 June ‘10

Player2 Player3 Player1 Player2 Player3 Player1

3229

2622

15 20 25 30 35 40

TIM

P-3

P-1

P-2

352424

215 10 15 20 25 30 35 40

TIM

P-1

P-3

P-2

3333

2824

5 10 15 20 25 30 35 40

TIM

P-1

P-2

P-3

3634

2828

5 10 15 20 25 30 35 40

TIM

P-1

P-3

P-2

7

Agenda

TIM repositioning path

Economics Q2 2010

Development in 2H 2010

8

Revenues and Margin: KPIs trends

BRGAAP – TIM (excluding Intelig)

ARPU/MARPU Post PaidR$, Net of visitors

Customer Base and MixMln Customers EoP

Pre Paid: ARPU Out/InR$, Net of visitors

OUT

IN

2Q102Q09

37.8 44.4

June '09 June '10

+19%

+12%

+17%

Pos

Pre

6.2

31.6

6.9

37.5

Mix Post 2Q10 % 16.4% 15.6%

• Incoming reduction due to F-M substitution

• Positive ARPU trend

* Net Service Rev.–Interconnection – Commissioning- Bad Debt-Anatel Taxes

• Price Reduction of Liberty (- 30%)…

• …offset by lower handset subsidy and bad debt reduction (handset driven)

Revenues and Contribution Margin

0

500

1000

1500

2000

2500

3000

3500

2Q09 2Q10

Net Revenues 3,335 3,352

ARPU / MARPU Total

ARPU

MARPU

Net Service Revenues

Mln R$

Contribution Margin*

R$ / Month

+0.5%

+5.8%

+11.5%

-10%

-5%

• Total ARPU reduction affected by mix dilution

Overall improvement of Service Revenues, Contribution Margin and Profitability

Δ% YoY

26.8 24.1

2Q09 2Q102Q102Q09

ARPU

MARPU+6%

9

EBITDA and Net Income

EBITDAMargin

2Q09 includes Intelig pro-forma

763.9

222.3

-58.9

5.2-56.3

10.5

886.7

EBITDA2Q09

Δ Business Generated **

Δ Business Received

(incoming)

Δ Bad Debt

Δ Commercial + Handset

Contribution

EBITDA2Q10

25.1%+3.2 pp

21.9%

EBITDA evolution (in R$ Mln)

101.4

886.7

214.2

-672.5

-62.1

-50.7

EBITDA2Q10

Depreciation and

Amortization

EBIT Net Financial Expenses

Taxes and Others

Net Income

2Q09 (678.4) 85.5 265.4 (38.0)763.9 313.0

122.8 5.9 (327.5) (12.7) (211.6)YoY 128.7

From EBITDA to Net Income (in R$ Mln)

+16%

R$ 343.3 was the positive impact from FX variation on

Intelig’s 2Q09 results

IFRS: 28.4%

IFRS*:R$ 1,012 Mln(+15% YoY)

* IFRS figure according to controlling shr..report** Outgoing + VAS – Interconnection/Network Costs

Δ Other expenses

Service Contribution

+163.4

TIM only: --R$15.2

TIM only: R$106.7

10

Free Cash Flow and Net Financial Position

2.520

2Q09* 2Q10

Net Financial Position – Jun10R$ Mln

R$ 4.2 Bln (of which 62% on long term)

~27% of debt is denominated in foreign currency (100% hedged)

10.0% no 2Q10 vs. 10.9% no 2Q09 e 9.9% no 1Q10

Gross Debt

Average Annual Cost

2.5572.900

887 -436

-221

229

EBITDA Δ Working capital

CAPEX Oper.FCL

R$ Mln

Operational Free Cash Flow in 2Q10

2.520

-229

1Q10

Oper. FCF

192

-13%

Non-operFCF**

773 1,521 1,703

Cash

* TIM excluding Intelig** Payment of R$ 204 Mln in dividends in June

11

Agenda

TIM repositioning path

Economics Q2 2010

Development in 2H 2010

12

172

208

150

170

190

210

230

250

270

290

1Q 2Q 3Q 4Q

Multiple Play via Intelig

Force FMS (Voice)

TIM Growth Strategy: opportunities in the TLC market

A pure mobile attacker with a solid property backbone 1

3

Monthly fee (R$)

•200 min F-F Local

•Unlimited on-net (Local + LD)

Fixed incumbents

Liberty

40 39

MM people

Internet experience via Mobile2

MOU LD

X 10

1Q 09 1Q 10

14

14

14

15

15

15

15

15

16

16

16

1Q09 1Q10

MOU LD

X 15

2Q 09 2Q 10

Fixed IncumbentsRevenues

~ -3%

15k Km Fibers

Metropolitan rings

Selective last miles

Partnerships

-AES-Copel-Sky

15,000 Km FibersMobileConvergent

Def

ende

rAt

tack

erPo

sitio

ning

Fix

ed

Positioning Mobile

14% 26%

Revenues, Delta % YoY

162

69.6 43.7

25.9

92.4

Population

>10yr

Don't Use Used in Last

3 Months

Used BUT

Don't Possess

Use AND

Possess

LAN House substitutionSmartphone penetrationInternet key penetration

BRGAAP

13

Forcing Fixed-Mobile Substitution

MOU Total Market share long distance

=Pre Infinity:

Long calls for class C customers

Long distance via mobile (untapped market)

Liberty Post:

All you can eat on net: R$ 39

Off-net plug-in:

•50 min – R$ 49

•100 min – R$ 69/89

Convenience and simplicity

Save the wireline monthly feeFree to call LD/TIM communityPlug-in for off-netPhase-out of subsidized model

Chip-only Handsets Free

No penalty / Unlocked handsets Paid in 12x

TIM 41 National LDN traffic market share

6.9%26.8%

Minutes

0

10

20

30

MOU Pre

MOU Post

Other Pre Infinity

0

10

20

30

Other Post(consumer)

Liberty

Boost mobile usage

Attractive to customers

Profitable for TIM

0

28 Mln

2Q09 2Q10

0

1 Mln

YE09 2Q10

CB Infinity CB Liberty

Combo

5.0%

26.8%

6.9%

27.0%

24.0% 24.9%

17.1%

27.5%

24.3%

YE08 Jun/09 YE09

x6

x40

New

Price-up

TIM #1

1

73

110

0

20

40

60

80

100

120

140

160

2Q09 2Q10 YE2010

Player-1

Player-2

Out

In

~140

14

59

85

0

20

40

60

80

100

120

140

160

Experiencing Internet via Mobile

Internet Penetration

SmartphonePenetration

Internet for class C –Pre-paid

(LAN House substitution)

Smartphones + unlimited internet post-paid

Enablers

~3,500

>15,000

>4,000

2010

3G Coverage (# antennas)

2G Capacity (# TRX)

Radio back-hauling

2009 2010MW replacing leased lines

Buy

Make

65%

35% 65%

35%vs.

Buy

Makevs.

Backbone

MAN

3G / 2G antenna

Efficiency & reliability in Back-Hauling

Fast roll-outHigh qualityHSDPA SP, RJ and main capitals

Low cost devices and

customer experienceSimple and accessible

monthly fees and plans

Solid communication

support and sales force

training

1H09 1H10

x4

3G towers activated# of Node-B

3G Coverage

EoY09 Jun 10

2,4x

# of cities

Liberty + 100

199

820

50

100

150

200

R$, monthly fee

Smartphone(Class A)

“Internetphone”

(Class B)

Apple iPhone

Samsung Corby

New

New

Father’s Day

As of 20 July

New

6 months of free internet

TIM Web: per time pricing

2

Internet pre-paid - via celular

144

15

Intelig: a new turnaround started

14.4%

19.7%

11.3%

44.8%

25.9%

15.7%

19.4%

15.8%

65.7%

% Growth YoY

Total

Wholesale

Corporate

SME

Residential

-1,8%

Q2

Q1

* Benefit from non-organic bad debt recovery (dispute with Vivo)

Key Revenues Drivers

ServiceRevenues

EBITDAand

Profitability

QoQ Growth YoY Growth

1Q10 2Q10

172.3207.5

+20%

BRGAAP, R$ MM

2Q09 2Q10

164.9207.5

+26%

0

5

10

15

20

25

30

2Q09 2Q10

Organic

Non-organic

13.7

14.2

27.9*

EBITDA margin

16.8%*

8.2%

13.2%

27.4

Organic

+5.0pp

0

5

10

15

20

25

30

1Q10 2Q10

5.6%

13.2%

EBITDA margin

EBITDA

27.4

9.6

+7.7pp

3

16

Moving Towards IFRS Standards

BR-GAAP

IFRS asReported by

Telecom Italia

R$ MM

Net Serv. Rev.

Net Handset Rev.

Total Net Rev.

EBITDA

EBITDA Margin

R$ MM

6.463 6.103 5,9%

337 557 -39,5%

6.800 6.660 2,1%

1.697 1.379 23,1%

24,9% 20,7% 4,2pp

Net Serv. Revenue

Net Handset Rev.

Net Revenue

EBITDA

EBITDA Margin

1H10 1H09 %YoY

6.526 6.167 5,9%

329 544 -39,6%

6.855 6.711 2,2%

1.961 1.649 18,9%

28,6% 24,6% 4,0pp

2Q10 %YoY %QoQIFRS

(re-stated)IFRS

(re-stated)

3.350 3.152 3.176 6,3% 5,4%

209 361 120 -42,2% 74,2%

3.559 3.513 3.296 1,3% 7,9%

1.012 879 949 15,1% 6,6%

28,4% 25,0% 28,8% 3,4pp -0,3pp

2Q09 1Q10

3.531 3.486 3.269 1,3% 8,0%

3.317 3.118 3.146 6,4% 5,5%

213 368 124 -42,1% 72,7%

887 764 810 16,1% 9,5%

25,1% 21,9% 24,8% 3,2pp 0,3pp

2Q10 %YoY %QoQ2Q09 1Q10 1H10 1H09 %YoY

Results On Track to Guidance

• Net Serv. Rev. > 5%

•Ebitda Margin > 25%

17

Statements in this presentation, as well as oral statements made by the management of TIM Participações S.A. (the “Company”, or “TIM”), that are not historical fact constitute “forward looking statements” that involve factors that could cause the actual results of the Company to differ materially from historical results or from any results expressed or implied by such forward looking statements. The Company cautions users of this presentation not to place undue reliance on forward looking statements, which may be based on assumptions and anticipated events that do not materialize.

Statements in this presentation, as well as oral statements made by the management of TIM Participações S.A. (the “Company”, or “TIM”), that are not historical fact constitute “forward looking statements” that involve factors that could cause the actual results of the Company to differ materially from historical results or from any results expressed or implied by such forward looking statements. The Company cautions users of this presentation not to place undue reliance on forward looking statements, which may be based on assumptions and anticipated events that do not materialize.

Investor Relations

Avenida das Américas, 3434 - Bloco 016° andar – Barra da Tijuca22640-102 Rio de Janeiro, RJPhone: +55 21 4009-3742 / 4009-3446 / 4009-3751Fax: +55 21 4009-3990

Investor Relations

Avenida das Américas, 3434 - Bloco 016° andar – Barra da Tijuca22640-102 Rio de Janeiro, RJPhone: +55 21 4009-3742 / 4009-3446 / 4009-3751Fax: +55 21 4009-3990

Visit our Website

http://www.tim.com.br/ir

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