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03/10/2011

Vivo and TIM were the leaders in 4Q10

Vivo conquered the leadership in five indicators in 4Q10 and TIM led in two.

Indicator		Leader in
Indicator		2009	1Q10	2Q10	3Q10	4Q10	2010
Mobile Accesses	Market Share	Vivo	Vivo	Vivo	Vivo	Vivo	Vivo
Growth	Net Adds	Vivo	Vivo	TIM	TIM	TIM	TIM
Revenue	Net Revenue	Vivo	Vivo	Vivo	Vivo	Vivo	Vivo
Revenue per Client	ARPU	TIM	Vivo	Vivo	Vivo	Vivo	Vivo
Profitability	EBITDA Margin	Vivo	Oi	Oi	Oi	Vivo	Oi
Quality	Anatel's Targets	Vivo	Vivo	Vivo	TIM	TIM	Vivo
Coverage	Covered Population	Vivo	Vivo	Vivo	Vivo	Vivo	Vivo

Note: The order doesn't show the importance of the indicators. CTBC and Sercomtel weren't included. Oi includes BrT.

Vivo, which in 2009 led in 6 from the 7 indicators, lost the leadership in growth and profitability in 2010, but conquered the leadership in ARPU. In 4Q10, particularly, Vivo was overtaken by TIM in quality.

Since 2007 Teleco keeps track of mobile operators' performance in Brazil which is measured through these 7 indicators. The following presents the results for each one of these indicators.

Market Share: Vivo leads and Tim is the only company to gain market share

Vivo, the biggest mobile operators in Brazil, ended 2010 with 60.8 million mobile accesses and market share of 29.7%. The loss of 0.43 percentage points (p.p.) in 4Q10 took the market share gains gotten in the first semester. Vivo ended the year with -0.04 percentage points less if compared with 2009.

Tim was the only operator to win market share in 2010 (and in 4Q10) decreasing the distance which separates the company from Claro to 0.3 p.p.. Oi got the biggest lost in market share.

-	Market Share					Market Share Variation (percentage points)
-	4Q09	1Q10	2Q10	3Q10	4Q10	p.p. (QUA)	p.p. (QUA)
Vivo	29.75%	30.12%	30.24%	30.14%	29.71%	-0.43%	-0.04%
Claro	25.52%	25.45%	25.33%	25.47%	25.44%	-0.03%	-0.08%
TIM	23.63%	23.65%	24.00%	24.52%	25.14%	0.62%	1.51
Oi	20.73%	20.41%	20.08%	19.51%	19.35%	-0.16%	-1.37%

Vivo leads market share in three regions, in 12 from the 26 states and in 31 from the 67 area codes (DDD). Tim reached the leadership in the state of Ceará overtaking Oi, which leads only in Paraíba and Maranhão.

-	Market Share Leader in 3Q10
	Region	State*	Are Code
	Region	State*	Are Code
Vivo	I, II e III	12	31
Claro	-	6	13
Tim	-	7	17
Oi	-	2	6

*Includes Brasília, the Brazilian capital

Vivo and Claro lead postpaid market share. In prepaid, Tim is winning market share, surpassing Claro in 3Q10 and reducing the difference that separates the carrier from Vivo to 2.4 p.p. in 4Q10.

Market Share	Postpaid			Prepaid
Market Share	2Q10	3Q10	4Q10	2Q10	3Q10	4Q10
Vivo	34.7%	35.3%	35.2%	29.3%	29.0%	28.5%
Claro	27.3%	27.4%	28.6%	24.9%	25.1%	24.8%
Tim	21.3%	21.2%	20.9%	24.6%	25.3%	26.1%
Oi	16.1%	15.5%	14.7%	20.9%	20.4%	20.4%

Growth: Tim leads in 2010

Tim led mobile growth in 2010 overtaking the other operators in net adds in 2Q10, 3Q10 and 4T10. Vivo, which led net adds in 1Q10, stayed in the second position.

Net Adds (thousands)
-	1Q10	2Q10	3Q10	4Q10	2010
TIM	1,254	2,057	2,522	4,081	9,913
Vivo	2,205	2,028	1,737	2,578	8,548
Claro	1,182	1,318	1,865	2,871	7,237
Oi	501	614	189	1,915	3,218

Net Revenue: Vivo increases its advantage over Tim

Vivo amplified its leadership in net revenue over Tim (second carrier in the ranking).

R$ Billions	1Q09	2Q09	3Q09	4Q09	1Q10	2Q10	3Q10	4Q10
Vivo	4.0	4.0	4.2	4.4	4.2	4.4	4.6	4.9
Tim	3.2	3.5	3.5	3.5	3.3	3.6	3.7	3.9
Claro	2.7	2.8	2.6	2.8	2.8	2.9	2.6	2.8
Oi	2.0	2.2	2.4	2.5	2.5	2.6	2.6	2.7

Note: Tim includes Intelig. Vivo and Claro adopted IFRS, Tim and Oi didn't. Claro's values for 3Q09 and 3Q10 were reported considered the integration with Embratel that eliminates common revenues.

Data net revenue was the responsible for the biggest part of the growth in Vivo's revenue. It reached R$ 948 million in 4Q10 with growth of 48.1% over 4Q09. Data revenue already represents 20.7% of Vivo's service net revenue. For Tim, voice is still the main responsible for revenue growth.

ARPU: Vivo keeps the leadership in 4Q10

The growth of data revenue, encouraged by investments in 3G, helped Vivo to keep the leadership in ARPU. Oi overtook TIM in ARPU in 4Q10.

ARPU (R$)	4Q09	1Q10	2Q10	3Q10	4Q10
Vivo	27.1	24.8	25.0	25.2	25.9
Oi	22.5	21.8	22.4	22.9	23.5
TIM	27.0	24.0	24.1	23.4	23.3
Claro	22.0	20.0	19.0	19.0	18.0
ARPU Brazil	24.8	22.8	22.7	22.7	22.7

Note: Vivo and Claro adopted IFRS, Tim and Oi didn't. Claro's values for 3Q09 and 3Q10 were reported considered the integration with Embratel that eliminates common revenues.

Tim, which is growing mainly in the prepaid segment, presented fall in ARPU, but is the leader in number of monthly minutes of use by client (MOU).

Minutes	4Q09	1Q10	2Q10	3Q10	4Q10
TIM	99	100	110	123	129
Vivo	119	116	114	115	118
Claro	93	92	93	100	96
MOU Brazil	105	103	106	113	114

Note: Oi doesn't release this indicator.

Profitability: Oi leads EBITDA margin

Vivo led profitability in 4Q10 with EBITDA margin of 34.5%, but Oi mobile still kept the leadership in the year.

EBITDA Margin	1Q10	2Q10	3Q10	4Q10	2010
Vivo	30.1%	30.5%	33.4%	34.5%	32.2%
Oi	32.4%	34.6%	35.4%	29.5%	33.8%
Claro	31.7%	26.3%	-	-	-
Tim	28.7%	28.4%	28.2%	30.6%	29.0%

Note: Tim includes Intelig. Since 3Q10, América Móvil started to publish Claro's results consolidated with Embratel.

Quality: Tim leads in 4Q10, but Vivo keeps the leadership in the year

In 4Q10, Tim led quality by achieving Anatel's targets with 100% of accomplished targets. However, Vivo kept the leadership in the year.

Accomplished Quality Targets
-	1Q10	2Q10	3Q10	4Q10	2010
Vivo	99.9%	99.9%	99.4%	99.1%	99.6%
TIM	98.5%	99.0%	99.9%	100%	99.4%
Claro	98.7%	98.5%	97.8%	96.1%	97.6%
Oi	82.8%	80.6%	79.1%	80.6%	84.1%

Among these four operators, Vivo presented the smallest index of complaints in 4 quarters of 2010 and the best performance in answering theses complaints (IDA) in 12 months of the year.

	Covered Cities				Covered Population
Operator	1Q10	2Q10	3Q10	4Q10	3Q10	4Q10
Vivo	3,499	3,610	3,636	3,646	90.0%	90.2%
Claro	3,346	3,346	3,464	3,478	89.8%	90.1%
Tim	2,922	3,202	3,205	3,205	89.4%	89.5%
Oi	2,516	2,912	2,912	2,913	83.0%	83.2%