FIRST QUARTER HIGHLIGHTS

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2 Strategic Operational Financial 2 FIRST QUARTER HIGHLIGHTS Data Revenues performance +46% YoY Web+Content (% YoY) 46% 33% 16% 1Q13 Accelerating growth on innovative services Total VAS revenues already account for 32% of mobile service revenues 4G Performance 4.5x YoY user base Fast growth in 4G adoption and market share Largest 4G network on state capitals according to Anatel Postpaid performance +6.4% YoY user base Control Plan Users +23% YoY Good performance in postpaid segment, in particular Control Plans Resuming market share growth and share of net adds based on quality and offer Efficient Operation -5.3% YoY opex Strong focus on efficiency continues, with opex savings in multiple areas: leased lines, S&M and G&A in particular EBITDA Margin 29.5% EBITDA +1.7% YoY Resilient performance amid short term headwinds Margin on services grew to 35%

3 CORE BUSINESS PERFORMANCE Customer Base Evolution (mln customers; % YoY) Mobile Serv. Net Rev. (% YoY) EBITDA & EBITDA Margin (R$ bln; % YoY) Postpaid Prepaid % % % 62.7 Business Generated (Voice, Data, SMS & Others) +3.5% % % Postpaid net adds (in thousand) % Business Received (MTR + SMS) 26.0% 1Q Q14 3Q14 4Q14 3 Data as a catalyst to business generated growth Macroeconomic scenario impacting consumer spending Stringent disconnection policy on prepaid New round of MTR cuts Sharp reduction of SMS business Data revenues compensating decline on traditional revenues Strong and disciplined efficiency approach Reshape of the business driving profitability

4 4 INFRASTRUCTURE: PROJECT TURBO ROLL-OUT New Capex Plan (R$ bln; % YoY) ~ % >14.0 Coverage Number of 4G Sites (% YoY) +88% Number of 3G Sites (% YoY) +16% 2014 Plan (3 yrs) 2015 Plan (3 yrs) Availability Quarterly Capex Evolution (R$ mln; % YoY) % 924 2G 3G/4G Capacity Small Cells & Wi-fi (% YoY) +79% BackBone (000 Km; YoY) Q13

5 EFFICIENT CAPEX ALLOCATION PLAN IN EXECUTION Tower Sale: Largely supporting capex increase 1 st Closing (April, 29) Asset optimization From Estimated value of the deal Towers to be transferred to American Tower Cash in from tower sale Towers sold Remaining towers to be sold in the coming months to Refarming 1,800MHz Efficient use of spectrum portfolio % of urban population covered with 4G Band 850 MHz 900 MHz 1800 MHz 2100 MHz 2500 MHz 700 MHz 4G with p.p. Possible Technologies 2G 3G 2G 3G 2G 4G 3G 4G 4G +6 p.p. 4G with 2.5 only Indoor coverage increase in cities already covered with LTE a 2014a 2015e 2016e 2017e Refarming to be applied in other cities

6 IMPROVING QUALITY PERCEPTION Ranking for Preference TIM Postpaid Rejection Customer Satisfaction: (Provokers Research) 29% 28% 22% 16% 17% 14% TIM P1 P3 P4 Nov/12 Nov/14 Speed Test: (Ookla)¹ Throughput (Kbps) (downlink in 2G/3G Network) Latency (ms) (in 2G/3G Network) Market Average TIM 2Q14 3Q14 4Q14 2Q14 3Q14 4Q14 (1) The report was generated and created from TIM's analysis over the NetMetrics Reports provided by Speedtest.net Consumer Complaints² Demands at Consumer s Protection Agency (Procon) in Public commitment for improvement of communication and education on mobile internet TIM P3 P1 P4 6 (2) Total per economic group, in thousands. Source: SENACON/MJ

7 ANATEL QUALITY METRICS Anatel s Quality Plan Results (End of Quality Plan ) % of Metrics within Anatel s Target # of States within Target (%) Data Accessibility 3G 93% 89% Player Jul/14 Feb/15 Change P3 93.1% 93.7% 0.6% Feb-14 Feb-15 P1 P4 86.1% 83.5% 78.1% 90.1% 83.8% 86.1% 4.0% 0.3% 8.0% Data Drop 3G 89% 100% Anatel s Opinion on TIM (End of Quality Plan ) " (...) há clara percepção de melhora nos resultados ao longo do tempo É de se ressaltar, também, a redução de clear reclamações signs de rede of alcançada quality pela operadora no período e a investment... disponibilidade do Continuous corpo técnico da operadora para as discussões improvements de qualidade com in a the Agência. Observa-se que a operadora, que teve um aumento expressivo de usuários em decorrência results da sua and agressividade in the comercial, dá sinais claros de reduction investimento of complaints em qualidade, com a realização de investimentos em patamar muito superior ao previsto inicialmente, com a melhoria contínua nos resultados e na redução de reclamações". TIM Market Avg. Feb-14 Voice Accessibility* 3G Data Accessibility* 99.4% #1 99.7% #1 97.7% 98.9% Feb-15 Improvement case: São Paulo Source: Anatel 7 * As of Feb/15. Market Average weighted by number of users for top 4 players (ex-tim)

8 8 *Feb Source: Anatel & GfK Report DATA GROWTH CONTINUES, FUELED BY 4G VAS Gross Revenues Growth (R$ bln; % YoY) % % 1.8 Data Users (mln; % YoY) +27% Data (Web & Content) +33% +46% * * SMS +1% -28% % of total base 37% 44% 1Q13 % of gross revenues 21% 25% 32% Data ARPU (R$; % YoY) Data Traffic (Bytes of Use) market share in 4G +29% +14% millions 4G users vs. * * market share of smartphones sales

9 RELEVANT INNOVATION GENERATING RESULTS 9 Liberty Controle Gross Adds and Migration (# of postpaid customers) Mitigating community effect Other Innovative Services (# of active users) TIM Protect *Feb +23% YoY 1.0 mln users TIM Protect Backup 5.0 mln users Controle WhatsApp Liberty Controle Voice Adding new sources of revenues TIM Multibank Mobile money in partnership with Mastercard and Caixa Econômica bank Infinity Day (% of infinity day users in the prepaid base) Mitigating voice MOU reduction 4% Aug/14 R$0.75 daily offer 2% 14% Feb/14 * Feb/15 * 38% % of prepaid users on 30/100 MB plans Increasing data adoption and ARPU

10 10 LIVE TIM: MAINTAINING PERFORMANCE TRACK RECORD MSAN e Homes Passed (thousands; millions homes) MSAN s Homes Passed Q13 Customer Base (thousands subscribers) Customer Base Net Adds % % ARPU (R$; % YoY) 1Q13 +20%

11 CORPORATE SEGMENT: MORE FOCUS, IMPROVING RESULTS Fixed Solutions Sales (R$; % YoY) +124% Activations (R$; % YoY) +144% Margin of Projects Sold (R$; % YoY) +106% Mobile Solutions Gross Adds (% YoY) +16% Data only (% YoY) +13% Smartphones Lines (% YoY) Churn (% YoY) -2% +26% 11

12 Thousands 2Q14 3Q14 4Q14 REVENUES HIGHLIGHT: SOLID CORE BUSINESS Business Generated (Serv. Rev. ex incoming) (R$ mln; % YoY) +3.5% 3,213 3,324 Net Revenues Profile (R$ mln; % YoY) -3.3% +0.1% Ex-MTR cut 4, ,547 Δ % YoY +3.5% +12.4% +0.8% -38.7% 4, Reported Revenues Δ Business Generated Δ Fixed Services Δ Products Revenues Δ Business Received (MTR+SMS) Reported Revenues Ex-MTR Revenues Fixed Business Repositioned Net Revenues (% YoY) 1Q % MTR incidence over Service Revenues (as % of net service revenues) 1Q10 ~27% % ~10%

13 13 1Q13 EFFICIENCY APPROACH ON COSTS CONTINUES Opex Evolution (% YoY) +5.9% 1Q13 Leased Lines costs (% YoY) % -9.8% -10.1% Efficiency in the transport network G&A costs (R$ mln) % YoY 143 1Q13-2.9% -5.3% SAC/Gross Adds (R$) Subscriber Acquisition Cost under control Bad Debt as % of Gross Revenues Lowest industry level % 1.1% 0.8% Strong cost efficiency despite solid growth on data users and traffic 1Q13 Stable SAC/ARPU 1Q13

14 Thousands Thousands FOCUS ON PROFITABILITY EBITDA Profile (R$ mln; % YoY) 1, ,340 Δ % YoY +1.7% +8.9% +1.7% +1.8% Ex-MTR cut 1, MTR incidence over EBITDA (as % of EBITDA) 1Q10 ~44% 28.0% 33.2% EBITDA Margin Service EBITDA Margin 29.5% 35.3% ~14% Reported EBITDA Traffic/Data Δ Contribution Margin Δ Opex/ Others Reported EBITDA Ex-MTR EBITDA Net Income (R$ mln; % YoY) Cash Flow (R$ mln; % YoY) Net Debt (R$ mln) 6,669 3,550 4G payment: ~ -R$1.7 bi % 313 Ex-4G payment: ~R$1.4 bi 14-1, % -1,577 3,119 Debt Cash Net debt

15 15 CONCLUSIONS & PERSPECTIVES 1 Q1 with headwinds but 2 Solid progress on 3 positive performance infrastructure plan Demonstrating innovative DNA in data + Growing EBITDA and EBITDA margin + Growing outgoing revenues + Accelerating on data - Macro / inflation / consumer spending - MTR reduction - SMS / voice trends + Project turbo roll-out + Quality metrics + 4G take up / growth + WhatsApp availability in all plans bringing differentiation + Recovering performance in postpaid + Increasing data plans on prepaid All key strategic metrics checked + Data revenues growth + Data users growth + % of base as data users + Data ARPU growth + Outgoing revenues growth + EBITDA margin increase