1. Investor Relations - São Paulo, August 2nd, 2011 0

2. Agenda
Q
Q2’11: Main Achievements
Q2’11: Financial Results
Conclusions & Outlook
1

3. Q2 main achievements (continuous improvement)
1 Growth Acceleration Customer Base +25% EBITDA +12.7% (Normalized +23%)
(2Q’11 vs. 2Q’10) Net Revenues +19.5% EBIT +122%
Services Revenues +11 8%
S i R +11.8% Net I
N t Income +178%
2 Brand attractiveness # 1 in Brand Preference MOU at 127’ (+15%)
# 1 in incremental market share: at 39% 12.4
12 4 Mln internet unique users
in 2Q11 (+2.7 Mln lines) Smartphone penetration at 15%
3 S
Strengthening the
h i h R$ 14 bn CAPEX in 5 years (2009-13) 100% Anatel network quality score
foundations R$ 8.5 bn CAPEX in 3 years (2011-13) +2,000 km of fiber in Amazonia
AES Atimus acquisition signed in July +5,500 km of fiber in RJ/SP (AES Atimus)
4 Ultra-broadband in Sao Benefits of AES Atimus: Unique fiber based infrastructure
- R$ 1 bn saving in 3 years Largest capillarity in SP and RJ
Paulo and Rio de Janeiro
- Attack untapped market (R$ 30 billion)
Integration as of 4Q11
5 The best corporate
governance Migration to NOVO MERCADO accomplished
2

4. Acceleration of Growth (1/3)
R$ Mln, IFRS
Customer +24.7% YoY 2Q11 Q1 Q2 QoQ H1 YoY
Base +23.0%
23.0% YoY 1Q11 Customer
52.8 55.5 +5.1% 55.5 +25%
Base (Mln)
+19.5%
Revenues
+13.8%
Revenues 3,752 4,252 +13.3% 8,004 +16.8%
Service +11.8%
Revenues +9.0% Service
Revenues 3,463 3,744 +8.1% 7,207 +10.4%
+12.7%¹
+12 7%¹
Ebitda*
+9.0%²
Ebitda 1,033 1,138 +10.2% 2,171 +10.9%
Ebit +121.8%
+108.9%
+108 9% Ebit 350 529 +51.4%
+51 4% 879 +117%
+177.8%
Net Income Net Income 213 350 +64.0% 563 +212%
+291.0%
Ebitda - Capex 736 420 -42.9% 1,156 +55%
Net Debt 1,671
1 671 1,998
1 998 +19.5%
95 1,998
1 998 -20,7%
0,
* ¹ +23.2% normalized ² +22.9% normalized
3

5. Acceleration of growth (2/3)
Customer Base & Net Adds MoU & Outgoing Service Revenues Data Revenues
Mln users Min, R$ Bln %, R$ Mln
2.7 127 15
+30% YoY +15% Y Y
YoY
2.1 +2pp YoY
110 13
1.7 MoU % Data/ 12
Net Adds
55.5 73 Service
3,3 734
44.4 2,7
37.8 2,4
24 550
483
Customer +25% YoY Revenues +20.5% YoY Data +33% YoY
Base (Voice Out) Revenues
Q2'09 Q2'10 Q2'11 Q2’09 Q2’10 Q2’11 Q2’09 Q2’10 Q2’11
Generating More Revenues
+% YoY
R$ Mln 4,252
3,512 +19.5% YoY
Total 3,559
Revenues
3,744
3,144 3,350
3 350
Customer +11.8% YoY
MoU Data
Base Service
Revenues
+25% +15% +33%
Community FMS Internet for Q2’09 Q2’10 Q2’11
Expansion (Voice) everybody
4

6. Acceleration of Growth (3/3): Internet users expansion
driven by smartphone penetration
Infinity Web / Smartphones Unique users monthly
Mln clients
Infinity Web users (Pre Paid)
(Pre-Paid)
Daily Unique users, Mln clients 12.4
2x
1.8 Post Paid
6x
6.1
61
Pre Paid
0.3
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Aug’10 Jun’11
2010 2011
Handsets sold - volume
Smartphone penetration
% Webphone+smartphone penetration on Customer Base
Webphone smartphone 000 units, handset sales
>15% +83%
3,507
+64%
12%
10% 2,262
1,915
1 915
8% 1,383
54%
Smartphone 48%
19% 28%
2010 September 2010 Year End 2011 March 2011 June
Q1’10 Q1’11 Q2’10 Q2’11
5

7. 2
Brand attractiveness:
#1 in preference and incremental market share
TIM Player 2
Preference Player 1 Player 3
Net adds 39%
%, Mln lines TIM #1 in 1H’11 Market Share Recovery incremental
preference 32
31 market
30 4.7
47 % share
28 30.4%
29.5%
26
3.7
25.4% 25.5% 25.5%
21 21
3.9 24.9% 23.6% 25.5%
2 %
19
18 19.1%
19.0%
2.2
sep/oct apr/may sep/oct apr/may sep/oct apr/may sep/oct apr/may jun ’08 dec ’08 jun ’09 dec ’09 jun ’10 dec ’10 Jun’11
’07
07 ’08
08 ’08
08 ’09
09 ’09
09 ’10
10 ’10
10 ’11
11
With strong association to key attributes
Rejection % TIM Best Positioned Competitor
%
Δ YoY
15
13 Convenience 48
13 +13pp
23
12 11 12
Best 44
11 Promotions +10pp
10
30
8
9 8
Network 40
+5pp
Coverage 41
sep/oct apr/may sep/oct apr/may sep/oct apr/may sep/oct apr/may
’07 ’08 ’08 ’09 ’09 ’10 ’10 ’11 44
Innovation 23 +12pp
6

8. 3 Strengthening the foundations (1/3)
Player 1
Player 2
Player 3
Overall Quality Drop calls Set-up
Set up calls
% achieved Anatel network target Drop calls rate, SMP 7
Originated calls completed, SMP 5
100 TIM 1.3 84
1.2 Target:
95 <2.0 TIM
1.1 80
90 1.0
0.9 76
85
TIM #1 0.8 Target:
TIM >67.0
0.7 72
80
0.6
75 0.5 68
Jun/10 Aug/10 Oct/10 Dec/10 Feb/11 Apr/11 Jun/11 Jun/10 Aug/10 Oct/10 Dec/10 Feb/11 Apr/11 Jun/11 Jun/10 Aug/10 Oct/10 Dec/10 Feb/11 Apr/11 Jun/11
TIM solid Network Reliability, achieving 100% of all Anatel
target indicators (10 out of last 12 months )
7

9. 3
Strengthening the foundations (2/3):
Committed to a fast Network Expansion
TIM Brasil Capex – Organic growth* Development area
R$ Bln
14Bln E
D
A A
C
8.5Bln B
Backbone Backhauling Access
'09 '10 '11 '12 '13
Swaps Microwaves 2G capacity
Annual Consorthia FTTS 3G coverage
2.7 2.8 2.9
Capex Fiber in Amazonia New AES Atimus
New
*Excludes spectrum licenses and acquisitions
Backbone Backhauling (MW/FTTS) 2G Network Capacity (voice) Access 3G
000 km 28,0 % of sites connected with # ‘000 TRX installed % of urban population covered
own backhauling 202 >80%
>80%
20,7
20 7 +2,500bps
142
16,0 55%
115
80
7,0 2x
20%
'09 '10 '11 ’09 ’10 ’11 ’12 ’13 ’08 ’09 ’10 ’13 ’10 ’13
> 80% of Brazilian major cities
8
connected via fiber by 2013

10. 3
Strengthening the foundations (3/3):
Continuous Backbone expansion
One of the best backbone in the country Intelig/TIM
Backbone:
16,000 Km
16 000 K
+
Macapá
Boa Vista
Belém Fiber SWAP in
Fortaleza
2010:
Manaus
M
~6,500 Km
M
Porto Velho + Partnership TIM
Aracajú
A jú
Salvador
and T l b
d Telebras
Conjoint Building
Cuiabá Brasília M
Network 2012:
‘unlimited to all’
M
Goiania
Uberlândia Belo
~3,800 Km
Campo
p
Grande
Horizonte Vitória
Active in capacity
Rio de Janeiro
+ SWAP
São Paulo
Curitiba
Partnership with
M
M Backbone LD Belém Telebrás for
Florianópolis – Macapá - Manaus: PNBL expansion
Porto Alegre
~2,000 km
National Backbone (16k Km)
New swap network (6.5k Km)
New Conjoint Building NtWk (3.8k Km)
M
Metro Swap Agreements(375 Km)
TIM + Intelig:
~28,000 Km
New Network Manaus (~2k Km)
9

11. 4
Ultra-broadband in Sao Paulo and Rio de Janeiro:
Acquisition of AES Atimus on track (Fiber Network)
SP and RJ: Macroeconomics Widespread fiber network in SP and RJ
‘000 Km
GDP SP/RJ metro – telecom market size
RJ+SP R$1 3Tln
R$1.3Tln R$Bln ~3.0
30
Argentina R$0.85 Tln ~2.5
•R$ 30 Bln
Current TIM
TLC Market Revenue
Population •27% of Twice as
RJ+SP = 57Mln Brazilian GDP 3 Mobile much fixed
Italy =60Mln SP RJ incumbent
i b t
RJ+SP
Fixed
9 backhauling
Peers Infrastructure in SP and RJ
18
TLC Market Untapped MAP
SP/RJ States: R$50Bln (45% of Brazil)
Metro Areas: R$30Bln (26% of Brazil)
SP and RJ: Addressable market 4 steps Integration
Network sinergies
N t k i gi
Mobile PC ~30 Mln people Step 1 (link swap; FTTS) OPEX/CAPEX
Mobile Data Mobile
Step 2 Acceleration revenues
8 Mln households Co po ate ata
Corporate Data
@ Home Step
St 3 Solutions Fixed
@ Hot spot
4.5 Mln households revenues
Step 4 Ultra-broadband
class A and B
• Closing: Q4’11
550,000 companies • Start-up: Q1’12
10

12. 5 Novo Mercado: the icing in the cake
Corporate Governance Level
Maximum level
Ma im m le el of 1)One single class of
Corporate share, with equal
Minority Governance rights:
shareholders - Vote
protection - Dividend
requirements
Transparency and
- Tag along
disclosure requirements
2)Higher liquidity
Legal
Requirements
3)Larger number of
Other Telco independent
members on TIM’s
Brazilian Laws Level 1 Level 2
Board
“Lei das S.A”
4)Higher disclosure
level
Maximum level of Brazilian Corporate Governance Full Alignment:
Stock option
Uniqueness: TIM distinctiveness in Latam telco plan to Top
l t T
Management
11

13. Agenda
Q
Q2’11: Main Achievements
Q2’11: Financial Results
Conclusions & Outlook
12

14. Profitability
R$ Mln, %
Subsidy capitalized Ebitda margin
+10.2% QoQ 30.2% 30.4%
1,010
1 010 1,138
, Reported on
864 85 service revenues
27.5%
105 28.4%
Ebitda +12.7% YoY 24.6%
26.8% Reported on
925 total revenues
759
+23% A/A
normalized
normali ed Q2’09 Q2’10 Q2’11
Q2’09 Q2’10 Q2’11
Ebit margin 12.5%
+51.4% QoQ
529
6.7%
Ebit 239 +122% YoY
3.0%
104
Q2’09 Q2’10 Q2’11
Q2’09 Q2’10 Q2’11
Net income as % of revenues
350 +64.0% QoQ
*332
8.2%
Net 126 +178% YoY
3.5%
Income
*-11 *0%
Q2’09 Q2’10 Q2’11 Q2’09 Q2’10 Q2’11
* Reported Q2’09 R$332 benefitted by R$343 Mln from FX variation on Intelig’s result; Organig R$-11
13

15. Continuous improvement of efficiency drivers
IFRS
Bad Debt SAC*
R$ Mln R$/gross add
$/g 3.1
31
2.0%
2 0%
1.8% 2.6
Bad Debt %
Gross Revenues
-0.7pp
SAC/ARPU -38%
1.1% 83 1.6
96 90 63
66
35
-27%
Bad Debt SAC -45%
Q2'09 Q2'10 Q2'11 Q2'09 Q2'10 Q2'11
ARPU Subsidy
R$/month, mobile
R$/ th bil R$ Ml
Mln
Zero Subsidy
Strategy
-11% 115 732
+3.7% QoQ
26.9 85
24.2 64
21.6
21 6 468
Gross
Handset
Revenues 424 433
380 26
286 8 0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11
Q2'09 Q2'10 Q2'11
*SAC = Advertising, +Subsidy + Commission 14

16. Net Debt Evolution
R$ Mln
Ebitda - Capex EBITDA – CAPEX YTD:
R$ 1.156 +55% YoY
14% over Revenues
2,171
1,033
EBITDA 1,015 Debt Profile
297 Gross Debt: R$ 3.30 bln (of which 80% in the long term)
CAPEX
~22% of debt is denominated in foreign currency (100% hedged)
Q1’11 1H’11 Average Annual Cost: 11.0% or 90.2% of CDI in the 2Q’11 vs. 10.0% or
107.5% of CDI in the 2Q’10 (~90% of debt in soft loan)
Ebitda - Capex
YoY +478 +408 30% 100%
Net Debt 2Q 2011 996
1,300
15%
Of Which: 486 mln in 35% 474
dividends
3,298
1,162
(327) 1,998
20%
1,998 666
1,671
<12M 12<36M 36<60M +60M Total C ash NF P
March 2011 2Q11 NET CASH June 2011 D ebt
ending FLOW ending
2Q10 NET CASH
Q
NFP 1Q10 FLOW NFP 2Q10
2.558 +37 2.520
15

17. Agenda
Q
Q2’11: Main Achievements
Q2’11: Financial Results
Conclusions & Outlook
16

18. Conclusion Outlook
R$ Mln, IFRS
CB Expansion Consistency in Results
Mln lines
Voice out Revenues YoY VAS Revenues YoY
S
55,5 >60
44,4 Q2’11 Q2’11
+20.5% + 33.5%
Q1 11
Q1’11 +17 3%
17.3% Q1 11
Q1’11 + 32 3%
32.3%
Q4’10 +11.0% Q4’10 + 31.4%
jun/10 Jun/11 Dec/11
MOU increase Reducing exposure to MTR
Min/month Voice in Revenues YoY EBITDA exposed to MTR*
>140
127 30%
115 Q2’11 + 5%
-2% Q1’11 23%
-6% Q4’10
Q2'10 Q2'11
jun/10 Q2'11 Q4'11 New PGMC
Smartphone penetration AES Atimus draft by
Smartphone, % CB Anatel
>15% >18% Closing by Year End
8%
4 steps integration
jun/10 Jun/11 Dec/11
17
* Net of incoming revenues less interconnection costs

19. Challenging 3 main markets
Mobile Corporate Residential
Attack to fixed
Business Convergency:
Partnerships broadband market
p
Expansion
(SP/RJ)
Community FMS
1 2 3 Data
Expansion Voice
Supporting heavy Supporting 1Gbps
Network 100Mbps @home
data approach (3G, connectivity and
Evolution WiFi, LTE) Clouding solutions
(digital home)
Cost saving OPEX/CAPEX saving R$1Bln
18