-22.5%

1Q13 1Q14

1ST QUARTER HIGHLIGHTS Financial Results

Mobile Net Services Revenues (Δ% YoY)

Business Generated

Business Received

(MTR mpact)

Consolidated EBITDA (Δ% YoY) Consolidated Net Income (Δ% YoY)

1Q13 1Q14

1,317 372

Incoming

Outgoing (Long Distance

+ Usage)

VAS

60.3 61.7

10.9 12.2 Postpaid

1Q13 1Q14

%YoY

+11.9%

+2.3% Prepaid

Customer Base (mln; Δ% YoY)

Mobile Data Users Growth (mln; Δ% YoY)

1Q13 1Q14

Mobile Payback Ratio (SAC/ARPU in months)

1.6x 1.6x

306 1,224

Operational Results

2

+7.6% +21.6%

+1.4%

+8.9%

26.0% 28.0% EBITDA Margin

71.2 73.9 +3.8%

22 27

1Q13 1Q14

+20.1%

0.13 0.15 EPS (R$)

714

1,764

2013 2014e

1Q13 1Q14

~11,000

~14,000

2013 2014e

2G

3G

4G

NETWORK EVOLUTION Investments

Fiber Infrastructure

~19,700 Km ~37,600 Km

Backbone Metro-Areas

3

R$3.8 Billion in FY14e

R$613 mln in 1Q14

>94% in infrastructure

This image cannot currently be displayed.

57,300 Km in Fiber + =

1Q13 1Q14

2G

3G

4G

R$613 mln

R$470 mln

Average throughput analysis where MBB is completed *

From To ~ 800 Kbps ~ 2.1 Mbps

Number of sites with fiber optic

Cities with mobile BB project

Number of 3G & 4G Sites Number of Wi-Fi & Small Cell

Network Additions in the 1Q14

3G sites: + 111 in Q1 (total 9,185)

4G sites: + 208 in Q1 (total 2,133)

WiFi hotspots: +190 in Q1 (total 904)

MBB cities: + 14 in Q1

+ 30% YoY

39

100

2013 2014e

+16x

*According to TIM independent analysis of the NetMetrics Reports provided by Speedtest.net

0.37 0.31

0.42 0.42

1Q13 1Q14

0.05 0.03 15.0

10.3 12.1

26.8

25.5

44.4 45.5

1Q13 1Q14

QUALITY IMPROVEMENTS

320 cities under the company’s quality

plan project in 1Q14

53% of 2014 target achieved in the first

quarter

Claims at Consumer’s Protection Agency (Procon) (in thds)

TIM: Claims at Anatel over 1,000 lines

Source: ANATEL Source: SINDEC-Procon

TIM other

TIM’s Quality Plan (#cities)

Note: Per economic group

25.9

The least claimed within telcos

Consistent performance in PROCON

Reducing Anatel complaints in all fronts

Network showing remarkable

improvements

320

213

1Q14 Targetfor 1Q14

Source: Company

4

Total Complaints Network Complaints

Avg. Market Complaints

2014e

(Target for 2014) 599 cities

53%

4Q13

1Q13 1Q14

74.8 76.0 78.5

67.2 71.2 73.9

61.6 66.3 68.7

46.5 49.5

50.6

5

CUSTOMER BASE EVOLUTION Customer Base (mln)

Leading market growth

#1 player in prepaid

#2 player in voice postpaid

Austere disconnection policy

Prepaid Recharge (R$; YoY)

1Q12 1Q13

TIM

+3.3%

+3.8%

+3.7%

+2.2%

Source: ANATEL

Source: Company

1Q14

1Q14 x 1Q13

+10%

1Q13 1Q14

15.3%

16.5%

Mix of Postpaid over total base

Distribution Channel (YoY)

1Q13 1Q14

+22%

Source: Company

1Q13 1Q14

+28% # Points of Sales: Mass Channel (retail)

# of Own Stores

Vivo

Claro

Oi

Source: Company

+121bps

% of Customer Base

1Q12 1Q13 1Q14

+20.1%

1Q12 1Q13 1Q14

5.5

5.8 5.9

Mobile Data users

6

DATA SERVICES AT A SOLID PACE Revenues (R$ bln)

18%

21%

25%

% of Gross Services Revenues 26%

31% 36%

Users (# mln users)

+25.4% +20.4% +24.6% 1.0 1.2 1.5 18 22 27 Data Gross

Revenues

67.2 71.2

73.9

4G Market Share (%; thd users)

3G Market Share (%; mln users)

23% 24%

23% 25%

42%

37%

10% 13%

1Q13 2Q13 3Q13 4Q13 1Q14

25.4

26.6

38.7

13.5

Source: ANATEL

TIM

47% 41%

20%

33%

21% 15%

12% 11%

2Q13 3Q13 4Q13

TIM

858

676

321

223

Source: ANATEL

1Q14

Source: Company Source: Company

+ 39% YoY Other VAS

services

105 mln 2.1 mln

LEVERAGING ON THE LARGEST COMMUNITY Access via Mobile

Notebook sales FY2014e: 8.5 mln

Tablet sales FY2014e: 11.1 mln

Smartphone sales FY2014e: 46.7 mln

Device sales profile

Broadband Willingness to Pay (% of Households)

7

Source: CETIC 2012

5% of HH: Up to R$150/month

24% of HH: Up to R$70/month

59% of HH: Up to R$30/month

Huge data opportunity in-house

27 mln data users

Handset market share (Mar/14)

TIM’s Customer Base Snapshot

Source: IDC

Source: GFK Group Source: Company

The newest communication app by TIM

Provides a new user interface far all

communication

TIM Protect

TIM Chip for soccer fans: free content of soccer

teams

Ensures safety of customer’s devices and

information

Simple and reliable platform

Brazil’s largest digital music provider

>32 mln songs downloaded

TIM

P1

P2

P3 10%

25%

29%

36%

53% Open

Market

Operators

Innovative Services

Prepaid Postpaid

Data Offers

73.9 million users

+31 mln untapped market

46mln potential data users

+15 mln with data handset 36%

21%

42%

FIXED BROADBAND: LIVE TIM

8

Accelerating Deployment Addressable HH (000 HH)

609

1,138

1Q13 2Q13 3Q13 4Q13 1Q14

sep/12 mar/14

Customer Base (000 users) 75

4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

Customer Base ARPU (R$; CAGR %)

+15% General Satisfaction

Offer

Billing

Call Center

6.0 7.0 8.0 9.0 10.0

TIM P2 P1

Market Performance

Customer Satisfaction Survey* (Source: TNS Institute Research)

1.5

100 neighborhoods:

41 neighborhoods in SP

59 neighborhoods in RJ

* From Dec/13 to Jan/14

8.7

9.0

8.9

9.0

8.3

7.1

8.8

7.6

7.5

5.3

7.5

7.4

8.1

8.0

7.4

TIM Fiber

39.9% Others 61.1%

UBB Market Share (SP + RJ) (connections >34Mbps)

Source: Anatel

Gross Adds (000 users)

7.6

18.3

1Q13 1Q14

+141%

Conection Quality

Source: TNS Institute Research) Feb/14

INTELIG, NOW POSITIONED AS “TIM SOLUÇÕES CORPORATIVAS”

9

The Opportunity Ahead

Market re-positioning

2013 2012

-

2014

Geographic expansion

Source: IDC Brazil ICT Business Service Database

TIM’s Addressable market (Net service revenues of total addressable market*; R$ bln)

Better financial performance

M 2014

Expansion:

2014: 7 new cities

2015: 12 new cities

Intelig now positioned as “TIM

Soluções Corporativas”

Re-structuring of sales force: multi

channel approach

Re-designed service portfolio

CAGR 11-14

8.8 9.2 9.8 10.9

7.7 7.6 7.7 7.8

2011 2012 2013e

VAS

Voice

22.7

2014e

4.3

24.4

5.2 4.7 5.7

Data

20.8 21.5 Total 5.7%

0.4%

7.4%

9.9%

…with considerable room to increase revenue share (% of fixed corporate market)

1 2 3

Business Remodeling Path

*Companies with more than 100 employees

2%

P2 14%

P3 25% P1

3%

P4 21%

P5 35%

TIM

+

M

M

M

M

M

M

M

Segment EBITDA-CAPEX

Source: Company A Actual

A A

Net Revenues (with intercompany)

2013 2014

1.22 1.32

1.39

1Q13 1Q141Q13 1Q14

MTR IMPACT ANALYSIS

MTR Impact

MTR Cut Path

-33%

-25%

-11%

-10%

Avg. MTR Price (R$)

Mobile Service Net Revenues EBITDA

MTR Exposure

Net Services Revenues EBITDA

0.32

0.24

0.16

0.36

+5.0%

2012

2013

2014

2015e

10

~ 27%

~ 14%

1Q10 1Q11 1Q12 1Q13 1Q14

~ 40%

~ 20%

1Q10 1Q11 1Q12 1Q13 1Q14

Source: Company

+1.4%

+13.4%

+7.6%

MTR cut impact should be reduced

following lower exposure

Business generated (outgoing &

data) should offset MTR impact

Impact of ~ R$ 140 mln

FINANCIAL RESULTS ANALYSIS Net Revenues (R$ mln; % YoY)

EBITDA (R$ mln; % YoY)

Net Income (R$ mln; % YoY)

624 603

4,087 4,100

Revenue 1Q13

Δ Handset Δ Fixed Services

Revenue 1Q14

Δ Mobile Services

-21 -42 +55

Service

Handset

4,711

ΔYoY

4,702

+1.4% -22.9% -3.4%

+0.3%

0%

-3.4%

269 306

372

1Q12 1Q13 1Q14

+13.9%

+21.6%

11

1,224

EBITDA 1Q13

EBITDA 1Q14

ΔHandsets

+223 -117

ΔOpex

-12

Traffic/Data ΔContribution Margin

26.0%

30.7%

1,317

28.0%

33.2%

EBITDA Margin

Service EBITDA Margin

+8%

ΔYoY +7.0% +37.0% +6.1%

Business Generated: +8.9% YoY Business Received: -22.5% YoY

(+)Mobile: Efficiency (-)Fixed: Repositioning/new brand

Cash Flow & NFP (R$ mln)

-1,193 -1,374 -1,571

-265 -332

1Q12 1Q13 1Q14

OFCF

Non OFCF

Net Cash Flow -164

-1,458 -1,706 -1,735 NFP BoP

NFP EoP

-441

-1,899 -1,555 -1,314

(+)

(=)

+151 +421

-230 Δ Fistel

CONCLUSIONS AND PERSPECTIVES

12

Offer Innovation

Slower macroeconomic growth requires evolution of industry approach

Competitive landscape remains intense

Regulatory environment:

o Upcoming 4G Auction

o New consumer regulation framework

World Cup games: airports and stadiums coverage

o Wi-fi off loading at Maracanã: in recent test 25% of data traffic were off-loaded

Financial Services:

o Initial commercial launch of a “prepaid mobile account” / “mobile money”

o A partnership between TIM, “Caixa Econômica Federal” (federal bank) and Mastercard

o Focus on “unbanked” population (50% of prepaid base.)

New data offers: more options of data cap for prepaid (10 & 30Mb)

Infinity Turbo 7 launch: services package of R$7 per 7 days all in:

o Voice + Web + SMS

4G included in all data package

TIMmusic included in postpaid packages

Live TIM Extreme: new 1Gbps offer

“TIM Soluções Corporativas” / “TIM Empresas” as renewed

positioning of fixed and mobile corporate solutions

Business Generated: +8.9% YoY

EBITDA: +7.6% YoY

EBITDA Margin: +200 bps YoY

Net income: +21.6% YoY

Solid results in 1Q14

Macro environment highlights

Continued infrastructure focus

Coverage densification: macro and micro coverage enlargement

Resilience and network availability

Network control (NOC) internalization completed:

o Monitored elements - more than: 12,000 sites, 70,000 km of fiber, 900 IP network elements, 6,700 transmission equipment and 1,300 MSANs

Towers: analyzing opportunities to unlock hidden value