Results Presentation 1Q16

2
Results Presentation
Investor Relations
Tough 1Q16 still reflects challenging macro scenario, but points to a beginning of
turnaround in operational metrics
Operational
Results
1Q16
Net Postpaid Portability
(# of lines)
Customer Base per Technology
(% of users over total base)
1 Normalization is related to transformation costs/expenses in HR and G&A
Service Net Revenues
(YoY%) (R$ million)
Normalized¹ EBITDA
MOU – Minutes of Use
(Minutes per user per month)
1Q15 2Q15 3Q15 4Q15 1Q16
MTR Impact
-R$142 mln
Industry Reshaping
- Traditional revenues: -20% YoY
- Innovative revenues +26% YoY
- Prepaid base reduction
LTM effect of 2015 inflation
GDP decline
Lower consumer confidence
• Restructuring’s costs
• Short term impact of
new offer
• Tax impacts
-4%
-5%
-7%
-8% -8%
1Q15 2Q15 3Q15 4Q15 1Q16
Trend
stopped
1,344 1,287 1,296
1,475
1,162
1Q15 2Q15 3Q15 4Q15 1Q16
-13.5%
BOU – Bytes of Use
(MB per data user per month)
120 119
1Q15 1Q16
340
502
1Q15 1Q16
+48%
stable
31%
55%
14%
1Q15 2Q15 3Q15 4Q15 1Q16
2G & Other 3G 4G

3
Investor Relations
Fast reaction in multiple fronts, positioned for recovery path
Keep investment
focus
+394 new cities
with 4G vs. 1Q15
4G
leadership position
Increasing customer
base value
Off-net to all plans
& focus on
mobile bundle
Defending results
from tax impact
Actions
to offset
ICMS increase
Workforce
Restructuring program
Adapting
to market reality
Company
repositioning
New brand launch:
quality,
innovation,
customer experience
~10% of customer
base in the new
portfolio
Price
repositioning to
compensate tax
Rightsizing
workforce
On track with
Efficiency Plan
> R$ 1 bln in
efficiency
(2015-17)
~40% of program
achieved in 1Q16
New phase
launched in 2Q16
Infrastructure Offer Portfolio Efficiency Actions Positioning

4
Investor Relations
63
439
1,414
1,860
1Q15 1Q16
Infrastructure deployment towards data continues unabated
Coverage
Capacity
Quality
82% of urban
population with 3G
and 60% with 4G
#1 in 4G coverage
89% of total sites
within our own
infrastructure
Continuously
improving network
quality
Sites
Connected
with Fiber
Cities Sites (000)
194
Cities with MBB Project
94%
97%
95%
Feb-15 May-15 Aug-15 Nov-15 Feb-16
90%
97%
80%
Feb-15 May-15 Aug-15 Nov-15 Feb-16
Mobile
Broadband
Instant
Speed1
Mobile
Broadband
Average
Speed2
1 SMP10: Measures connection speed at any given time
above Anatel’s target. Minimum required of 95% of
measurements above target.
2 SMP11: Average connection speed registered within
the month. Required to provide at least 80% of the
contracted speed.
Anatel’s target
+32%
~3,800
~4,800
1Q15 1Q16
+26%
10.7
12.5
1Q15 1Q16
4G
3G
+17%
4G
3G
7x 4.0
8.0
2x

5
Investor Relations
28% market
share
Data reaccelerating, driven by 4G
Fast growing on 4G
Changing
revenue profile
Data penetration increase Traffic acceleration
(BOU: bytes of use per data customers)(million users)
4G penetration
3G penetration
Innovative Revenues
(R$ bln; YoY growth)(R$; YoY growth)
Source: Anatel
340
502
1Q15 2Q15 3Q15 4Q15 1Q16
26% 48%YoY Growth
(3G & 4G user over customer base)
Source: Anatel
Data ARPU
1.0
1.3
1Q15 1Q16
5.7
7.4
1Q15 1Q16
68%
+13pp YoY
Smartphone
penetration
+29% +26%
3.0
9.2
1Q15 2Q15 3Q15 4Q15 1Q16
~55%
~14%
1Q15 1Q16

6
Investor Relations
Base New OfferBase New Offer
New portfolio presenting positive results
Mobile number portability update
Improving Quality of Revenues…
ARPU improvement
in all segments 10% of total
base in the new offer
% of new offers over gross adds
Prepaid ARPU Postpaid ARPU
(postpaid users)
(R$) (R$)
17%
20%
1Q15 1Q16
Postpaid mix
63%
65%
nov/dec-15 1Q16
(postpaid and control users)

7
Investor Relations
POSTPAIDPREPAID
Portfolio evolution: a better experience leading to higher ARPU
TIM PRÉ 150
R$7/week recurring
150MB + 100min off-
net + SMS
TIM PRÉ 500
R$10/week
recurring
500MB + 100min off
+ Deezer
TIM PRÉ Classic
R$8/week
recurring
250MB + unlimited
on-net + SMS
TIM PRÉ 1GB
R$35/month
recurring
1GB + 400 min off-
net + SMS
CONTROLE
TIM CONTROLE
R$50/month
1.5GB + 500min off-
net + WhatsApp
TIM PÓS
R$139/month
5GB + 1,000min off-
net + WhatsApp
Recurrence as base of all
propositions
VALUE BASE
Offer segmentation to
improve convenience
Better customer experience
for higher ARPU
New
Portfolio
Evolution
TIM PRÉ 300
R$10/week recurring
300MB + 100min off-
net + SMS
TIM PRÉ 150
R$7/week
recurring
150MB + 100min off-
net + SMS
TIM CONTROLE
R$50/month
1GB + 500min off-
net + WhatsApp
TIM PÓS
R$99/month
2GB + 1,000min off-
net + WhatsApp
New
Portfolio
at
launch
Upselling to improve
profitability

8
Investor Relations
1Q15 1Q16
Revenue transformation continues
Business Generated Revs MixData Revenues MixData Growth Reacceleration
MTR Cut - Last year of material impact
Total Net Revenues (R$ bln; % YoY)
4.55
3.85
+26.3 %
-20.3% -34.8% +14.3%
-61.2%
1Q15 Innovative
Services
Traditional
Services
Incoming Fixed
Business
Handsets 1Q16
21% 21%
17%
9%
14%
1Q15 2Q15 3Q15 4Q15 1Q16
(% YoY)
SMS
Innovative
Services +26 %
-37 %
Mobile Net Service Revenues (R$ bln; % YoY)
-5.4%
ex-MTR
Revenue
Exposure
39%
47%
61%
53%
1Q15 2Q15 3Q15 4Q15 1Q16
Data
MTR
Impact
Voice
3.79
3.58
3.44
(% of business generated net revenues)
1Q15 1Q16
-9.2%
(VAS net revenues mix; % YoY)
~7%~10%

9
Investor Relations
26.2%
20.1%
1.6%
-2.8%
-9.0%
-22.1%
-61.3%
7.1%
-4.3%Personnel
Efficiency plan on track and to be further accelerated
Normalized1 Opex Performance Ex-COGS (R$ mln)
2,550
2,438
41
1Q15 Growth Inflation ITX Efficiency Plan 1Q16
Efficiency Plan Status (2015-2017)
Jan/15 Dec/17
> R$1 bln
Mar/16
~ 40%
Recurring
% YoY
-4.4%
Reported
%YoY
-2.8%
Transformation
Impact
Normalized for
HR additional
costs (R$33 mln)
Opex in
details
(% YoY)
Selling & MarketingITX & Network
G&A
COGS
Bad Debt
Commissions –9.6%
Fistel (Condecine
and Net Adds) +8%
Leased Lines -16%
Mobile ITX -21%
Power & Rental: +27%
Normalized for
Headquarters
relocation costs
(R$8 mln)
Products
Margin +63%
Bad debt / Gross
Revenues 1.2%
Normalized1
-
> R$90 mln
Annual
Run rate savings
~R$7 mln
Leased Lines and
other net. exp.
> R$200 mln
+
Others Costs

10
Investor Relations
Process
Improvement
Digging deeper into cost reduction – Efficiency Program 2.0
Optimization /
Control
Strategic
Sourcing
Organization/
Rightsizing
and Efficiency
Process
Improvement
Business
Model
Changes
> R$1 bln in savings
Jan/15 Dec/17
Business
Model
Changes
• 3 years program
• Between R$ 300-350 mln per year
Mar/16
Corporate Efficiency Plan
Additional Efficiency & Cost Restructuring
• Enhancement of corporate efficiency program;
• Additional efforts in Sales & Marketing (commissioning
model and advertising);
• Full cash cost approach;
+Sales & MKT
New
Approach
Optimization /
Control
+
Strategic
Sourcing
+
Organization/
Rightsizing
and Efficiency
+
~ 40%

11
Investor Relations
1.34
1.12 1.16
-8% -1% +63%
+41 mln
1Q15 ∆ Other
OPEX
Products
Margin
1Q16 Reported Transformation
Costs / Expenses
1Q16 Normalized
1Q15 1Q16
317
128
1Q15 1Q16
Defending margin despite tough environment
Net DebtNet Profit
MTR Cut - Last year of material impact
EBITDA Evolution (R$ bln; % YoY)
EBITDA
Margin
29.1%29.5%
Normalized1 EBITDA (R$ bln; % YoY)
Normalized¹ EBITDA Exposure
-9.1%
ex-MTR
-60%
7.9
3.5
4.4
Debt Cash Net Debt
(R$ bln)
Net Debt / 12M EBITDA: 0.54x
MTR
Impact
1.34 1.16
1.22
(R$ mln)
Voice & Data
Contribution Margin
Impact of off-net offers, investment
for repositioning & future growth
-13.5%
30.2%
-16.6%
-13.5%
1
~14% ~8%

12
Investor Relations
Conclusion & Outlook
Less impact from
MTR
-8.7% -9.2%
4Q15 1Q16 2Q16 3Q16 4Q16
-5.3%
-13.5%
4Q15 1Q16 2Q16 3Q16 4Q16
Mobile Service Net Revenues
(%YoY)
Normalized¹ EBITDA
(%YoY)
Headwinds should gradually reduce…
Traditional business
stabilization
Data services
resuming growth
Better customer
base mix
Continuous cost
efficiency program
intensified
Keeping focus on
Infrastructure

Results Presentation 1Q16

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Results Presentation 1Q16