teleco.com.br

04/11/2012

portugaltelecom.pt	Portugal Telecom	Brazil
	Annual	Annual
	Quarter	Oi Mobile
		Oi Fixed

Portugal Telecom (PT) is a Telecommunication Operator from Portugal privatized in 1996. In Brazil, PT controls Vivo, market leader.

Portugal Telecom operates in many areas, the main areas are multimedia, fixed and mobile telephony.

Portugal Telecom also has presence in countries as: Morocco, Guiné Bissau, Cape Verde, Mozambique, Timor, Angola, Kenya, China and Sao Tomé and Principe.

In Jan/08 Deutsche Bank acquired, through shareholding partnerships, 2.35% of the outstanding share of Portugal Telecom.

In Mar/08, Portugal Telecom acquired 8.11% of the company's capital in the market estimated in contracts such as banks Barclays, Plc and with Credit Suisse International, reducing its capital.

The main shareholders of Portugal Telecom since Jun/2011 are:

PT shareholders	%
Grupo Banco Espirito Santo	10.45%
RS Holding	10.05%
Telemar Norte Leste S.A.	7.20%
Grupo Caixa Geral de Depósitos	6.23%
Brandes Investments Partners	5.24%
Norges Bank	4.96%
Capital Research and Management	4.79%
UBS AG	4.69%
Grupo Visabeira	2.64%
Europacific Growth Fund	2.57%
BarclaysPlc	2.54%
BlackRock Inc.	2.35%
Controlinveste International Finance	2.28%
Identified Total	65.99%

www.portugaltelecom.pt

Portugal Telecom leaves Vivo and enters in Oi

in July 2010, Portugal Telecom sold its participation in Vivo to Telefonica for €7.5 billion and signed a deal to enter in Oi, acquiring 10% of the shareholder participation in Telemar Participações and 35% of AG Telefom and L.F. Tel's capital, both are Telemar Participações's controllers.

The deal foressen a capital increase of R$ 12 billion in TNL and other of R$ 12 billion in Tmar, for those PT committed itself to invest R$ 2 billion and R$ 1.7 billion respectively. The contracts about this operation were signed on 01/25/2011.

The acquisition was carred out on March 28 2011, that was when PT started to have participation of 25.3% in Oi and participation of 14.1% in Contax.

PT's total investment in Telemar Norte Leste, S.A. ("Oi") and in Contax, S.A. ("Contax") hit R$8,437 million (€3,728 million).

Annual Results

Portugal Telecom Group

Financial Economic Performance (excluding Vivo)

Millions Euros (IFRS)	2009	2010	2011
Net Revenue	3,733	3,742	6,147
EBITDA	1,557	1,492	2,188
EBITDA margin	41.7%	39.9%	35.60%
Net Profit	685	5,672	339
Investments	848	798	1,224
Net Debt	4,829	2,100	4067.9*

*excluding Oi and Contax (total = € 6,387 million)

Note: Resulting from the acquisition (on March 28th 2011) of 25.3% partticipation at Oi and 14.1% participation at Contax, PT's financial results include the proportional consolidation of respective assets and liabilities from the results since April 1st. 2011.

Revenue (Million Euros)	2010	2011
Portugal	3,125	2,892
Residential	647	628
Personal	865	768
Companies	1,080	982
Services to providers, others and eliminations	533	459
Brazil - Oi	-	2,412
Others and eliminations	618	843
Total Revenue	3,742	6,147

Operational Performance

Millions Euros	2006	2007	2008	2009	2010	2011
Fixed Telephony	3,317	3,010	2,843	2,746	2,695	2648
Mobile Portugal (TMN)	5,704	6,241	6,944	7,252	7,419	7,444
Cable TV	-	-	-	-	830	1,042
Broadband**	-	652	710	862	1,001	1,105

Sonae's offer was rejected

In February 2006, Sonae offered to acquire the control of Portugal Telecom (PT), Sonae declared that would be for sale the participation of Portugal Telecom in Vivo, in case of operation, Telefonica and Telmex have minority participations in Portugal Telecom.

In 01/12/07 Sonae was authorized by Comissão do Mercado de Valores Mobiliarios (CMVM) the acquisition of Portugal Telecom.

The offer of Sonaecom was directed to PT shareholders to appove a change in its estatute that has 10% limit of vote to each shareholder. This proposal was rejected in 03/02/2007 finishing with the offer of Sonaecom.