Draft presentation for the Brazil roadshop of Greenwich Consulting in Brazil 2012

1. Confidential

2. GWC roadshow Brazil
March, 1st 2012
Contacts :
Robert Heukamp +351-9139-24842
Confidential – Do not copy

3. Agenda
Topics and targets
Presentation key slides
• 4G license
• MVNO enabling
• Distribution
Greenwich Consulting © 2011 3

4. The Greenwich story in a nutshell
Towards MNOs xxx
• Greenwich Consulting comes to Brazil and • xx
brings hot topics from Europe and the US (e.g.
4G, MVNO wholesale, triple play, sports
marketing, …)
• Greenwich would like to understand whom of
the operators plans to gain competitive edge in
these areas
• The aim of a first meeting is to understand the
context of the operator and to explain what
Greenwich can bring to the table
Greenwich Consulting © 2011 4

5. Main telco topics
MNO messages Fit with Brazil Target C
• The demand is obvious but the business case
4G licence remains tricky
• 4G license award in April 2012 • All MNOs
• Leverage your fixed assets, consider launching • All MNOs,
MVNO • MVNO regulation in place since recently
your own no-frills MVNO MVNOs
IPTV •x • Formally allowed since very recently • All MNOs
• You need to start now to plan WM and
Sports • World champion ship RJ 2014, Summer • All consumer
Olympics. GWC has experience from Germany
Marketing Olympics in 2016 companies
and South Africa
MFS II •x • ??…. • All MNOs
FTTx • xx • ??…. • All MNOs
• Exploiting M2M requires dedicated investment,
M2M but is one of the last untapped value pockets
• Traditionally strong fleet management, … • All MNOs
• New capabilities open opportunities to gain
BIG Data competitive edge
• ??…. • All MNOs
Network • Smart network sharing gives access to relevant • Market saturating • All MNOs
sharing cost and CEX upsides • High investments in 4G. Lack of cash with oi • American Tower
• Rethink the business case of your own shops • The country side and poor areas don’t justify
Mini Shops channel full blown shops (-> Angola)
• All MNOs
Greenwich Consulting © 2011 5

6. Targets
MNOs Banks
oi vivo
claro Nextel Media
TIM
Net (Cable) Bosch Print
MVNOs Other
Porto Seguro Correios American Tower
Churches Virgin
Greenwich Consulting © 2011 6

7. Contacts with oi, RJ
CxO
• Francisco Valim, CEO
• Maxim Medvedovsky, CMO, Robert
• Paulo Altmeyer Goncalves, CTO, Robert
• James Meaney, COO, Robert
Directors and Managers
• Yen Wang, Corporate Strategy Director, Robert
Main challenges/topics
• Maurício Gonzalez Director Patrimônio e Logística,
Robert
• Pedro Ripper, President IG/Strategy and New • Negative cash flow since 2 years
Businesses (ex-Cluster) (acc. 5 Bn)
• Luis Mauro Jabour, Marketing Manager, JML • 4G licence auction in April
• Eduardo Neubern, SM- Mobile Payment, JML (probably worth 2-3 Bn USD)
• MVNO launches
Other • IPTV regulation
• Shakhaf Wine, PT responsible for Brazil, Didier
• Luis Falco, Former CEO, Robert
• Flavia Maria Bittencourt , Former CMO, Robert
• Rodrigo Dienstmann, former resp. FTTX+IPTV, ex-GVT
Greenwich Consulting © 2011 7

8. Contacts with TIM, RJ
CxO
• Luca Luciani, CEO
• Roger Solé, CMO, Robert, Didier
• Claudio Zezza, CFO
• Lorenzo Frederico Zanotti Lindner, CCO
Directors and Managers
Main challenges/topics
• Alexandre Trindade, Marketing Director Business
• Bernardo Bittencourt, Strategy and Business
Development, through Guilherme • xxx
• Felipe Figueiredo Head of Consumer CRM Marketing • 4G licence auction in April
• Rogerio Takayanagi, CEO, TIM Fiber, (probably worth 2-3 Bn USD)
• MVNO launches
• IPTV regulation
Greenwich Consulting © 2011 8

9. Contacts with vivo, SP
CxO
• Dr. Daniel Cardoso, CMO, Robert, Didier
Directors and Managers
Main challenges/topics
• Surya Mendonca, Marketing Director, via Bruno Moreira
• Roberto Piazza, Diretor Executivo - Fibra & TV. Via Raul,
Gilberto, Bruno
• Nuno Cadima, Director Best Practices and Cross- • xxx
Divisional Product Development (ex CFO Meditel) • 4G licence auction in April
• Luis Henriques, Head of ARPU growth for Broadband (probably worth 2-3 Bn USD)
Internet, Pay-TV and Prepaid Landlines • MVNO launches
• IPTV regulation
• World championship & Olympics
Greenwich Consulting © 2011 9

10. Contacts with Claro, SP
Rua Flórida, 1970
CxO São Paulo, SP
04565-907
• xxx
www.claro.com.br
Directors and Managers
Main challenges/topics
• xxx
• xxx
• 4G licence auction in April
(probably worth 2-3 Bn USD)
• MVNO launches
Other • IPTV regulation
• World championship & Olympics
• xx
Greenwich Consulting © 2011 10

11. Contacts with Nextel, SP
CxO
• Alfredo Ferrari, VP Strategy, Regulation and Business
development => The big guy, Pierre
• Gustavo Diament, VP Marketing, Pierre
Directors and Managers
Main challenges/topics
• Carlos Rust, 3G program Manager, Pierre’s initial
contact.
• 3G build-out delayed
• 4G licence auction in April
• MVNO launches
• IPTV regulation
Other • World championship & Olympics
• xx
Greenwich Consulting © 2011 11

12. Contacts on targets
MVNOs Other
• Tiago Galli, Porto Seguro Telecom, DG, Robert, • Luis Eduardo Falco, Olympics 2016, Robert
Didier • Gilberto Mayor, Director, Net, Robert
• Raul Aguirre Zegarra, CEO Brazil, Virgin Mobile, • Samuel Artman, Business Development, Robert
Robert. Has decided to work with Datora, • Bruno Moreira, Inventta, Robert
http://www.prepaidmvno.com/2012/02/08/virgin- • Carlos Antunes, Alberto Blanco, Gruda Em Mim,
mobile-latin-america-taps-datora-for-mvno- Robert
launch-in-brazil/ • André Bianchi, Mobi9, Robert
• Sisteer MVNE
• Correios do Brazil
• Datora Telecom MVNA, M2M
ATC
• News:
http://www.prepaidmvno.com/2011/11/16/reality-
check-regulatory-challenges-for-brazilian- • Christopher Street, Sales and Marketing
mvnos-rcr-wireless/ Director, American Towers, Robert
• Alexandre Braga, VP & Managing Director of
Brazil at American Tower, Robert
Greenwich Consulting © 2011 12

13. Porto Seguro
MVNOs
• Tiago Galli, Porto Seguro Telecom, DG, Robert,
Didier
• On TIM network
• Ericsson platform
• Launch planned for xmas 2011
• 10 M R investment in 1st year
• 1 M subscribers in first 3-5 years
• Target: 3.5 Porto Seguro customers
• Advantage: reach Porto Seguro services from
the phone
Greenwich Consulting © 2011 13

14. Roadshop time plan
29.2.2012
Su, 11.3. Mo, 12.3. Tu, 13.3. We, 14.3. Th, 15.3. Fr, 16.3.
SP RJ
Maxim
Carlos Andre Luis Falco
AM Nextel Medvedovsky
Antunes Bianchi (Olympics)
(oi)
Julio Bezerra,
Alexandre Bruno Rogerio Francisco Roger Solé
L Principal,
Braga (AT) Moreira Dienes Valim (oi) (TIM)
BCG
Daniel
Raul Aguirre Samuel Yen Wang Maurício
Cardoso
PM (Virgin)
(vivo)
Artmann (oi) Gonzalez
Thomas
Tiago Galli, Gilberto Emeric
Mackenbrock Flight Flight
D (Seguros) Major (NET) Chevalier
(Bertelsmann
Pedro Ripper (oi)
Time and venue agreed
Guilherme Lapagesse
Meeting agreed, time and venue open
Contacted Marcos Colagrossi
To be contacted Emanuel Demaria
Empty
Greenwich Consulting © 2011 14

15. Voice market shares Brazil
Brazilian voice market share (% of LIS)
51.0% 49.9% 49.2%
50 47.7% 47.6%
45.7%
40
30 27.0% 27.0% 27.1% 26.9% 26.6% 26.2%
20 18.2%
15.6% 15.8% 16.7% 16.7%
15.0%
10 5.9%
4.7% 5.4% 5.8%
3.8% 4.2%
1,5%
1,3% 1,5%
1,4% 1,5%
1,4% 1.5% 1.5% 1.7%
0,4% 0.4% 0.4% 0.4% 0.4% 0.4% Others
0
1T10 2T10 3T10 4T10 1T11 2T11
Source: Teleco Greenwich Consulting © 2011 15

16. However, GVT underperforms its market share on local traffic
Local traffic market share – volume (min)
3% 3% 3% 4% 4%
2% 2% 3% 3% 4% Others
GVT
Telefonica
31% 30% 28% 27% 27% Embratel
Oi
6% 9% 12% 14% 15%
59% 57% 54% 52% 50%
2006 2007 2008 2009 S1 2010
Source: Anatel, Oi = Br + Telemar Greenwich Consulting © 2011 16

17. TIM has captured 42% of the long distance market thanks to its Liberty and
Infinity offers at the expense of the fixed competitors; GVT below 3% share
Long distance national traffic market share – volume (min)
3% 6% 7% 5% 5% Outros
4% 6%
7% TIM
Telefonica
28% Embratel
25%
26% 42%
27% Oi
17%
25%
23%
24% 14%
25%
18%
41% 39% 35%
25% 21%
2006 2007 2008 2009 S1 2010
Source: Anatel, Oi = Br + Telemar Greenwich Consulting © 2011 17

18. Embratel maintains its domination on International traffic with 64% of market
share; GVT below 3% market share
Long distance international traffic market share – volume (min)
7% 6% 7% 5% 5%
Others
4% 5% 4% 7% 9% TIM
Telefonica
16% 20% 13% 14%
22% Embratel
Oi
56%
57%
55% 54% 64%
15% 18%
14% 13%
9%
2006 2007 2008 2009 S1 2010
Source: Anatel Greenwich Consulting © 2011 18

19. NET melhorou a sua penetração nas casas passadas nos últimos anos
NET – Base de clientes vs. Casas passadas (000s)
Casas passadas
Subscritores
14,000 % penetração de casas passadas 50%
12,300
12,000 11,800
10,777 40%
9,784 36%
10,000 34%
9,042 31%
8,408
7,800 27% 30%
8,000 25%
24%
6,000 20%
4,212 4,422
4,000 3,618
3,071
2,140 2,475 10%
1,834
2,000
0 0%
200 200 200 200 200 201 Q2 2011
5
Source: Teleco, NET
6 7 8 9 0 (est.) 19
Back
Greenwich Consulting © 2011 19

20. Cobertura Cabo em 2010
% de domicilios com Cabo
0%
59,3%
57,4%
29,1% 18,1% 34,2%
33,7%
17,1%
4,1%
45,2% 35%
21,2% 35,8%
26,4%
29,5% 26,2%
34,6%
29,7%
38,5%
> 50% 41,9% 59,1%
66,9%
40-49%
60,5%
30-39% 48,5%
20-29%
44,4%
<20%
45,5%
20
Source: Anatel

21. Na maioria dos países, o DTH manteve uma quota de mercado de mais de 30%
Quota de mercado de TV por assinatura por tipo de recepção (%) - 2010
100 100 100 100 100 100 100 100 0%
0% 0% 4% 0% 0% 0% 0% 0% 0% 0% 0% 100%
0% 3% 1% 4% 8% 0% 4% 6%
0% 16% DTT
29% 19% MMDS
IPTV
51% 48%
53% Cable
62%
47% DTH
35%
88%
18%
71%
46% 43% 39% 37%
34%
29%
6%
Brazil Mexico USA UK Spain Japan France Germany
21
Fonte: Dataxis

22. Estas alterações refletem um forte crescimento observado durante o primeiro Semestre
de 2011 devido ao desempenho do DTH
Base de clientes de TV por assinatura(000s) Adições liquidas por Semestre (000s)
11.109
276 1 1.200 1.143
TVA (UHF) DTH
9.770 1.100
MMDS
313 1 1.000
DTH
TV a Cabo 900 848
7.474 5.619
800
355 24 4.476
6.321 700
397 22 600
5.348 2.780
4.583 346 12 500
4.176 2.091
258 4 400 345
227 0 1.762
292
333
1.479 300 252 233
1.438 193
166 165 TV a Cabo
4.980 5.213 200 142
4.315
3.811 100 44
2.842 3.228 21
16 26
2.511 -21 -21
0 -37
MMDS
-100
2005 2006 2007 2008 2009 2010 Q2 2011 S1 2006 S1 2007 S1 2008 S1 2009 S1 2010 S1 2011
22

23. Confidential – Do not copy
Greenwich Consulting © 2011 23