teleco.com.br

04/04/2012

oi.com.br	Oi Group	Oi Fixed	Oi Mobile	BrT	Portugal Telecom
	Annual	Annual	Annual	Annual	Annual
	Quarter	Quarter	Quarter	Quarter	Quarter
		Month	Month	Month

In this page: Annual operational and economic results gotten by Oi Group.

Oi Group was formed from Telemar, fixed telephony incumbent in Region I privatized in 1998.

1998	Telemar was privatized
2001	Cellular authorization to operate inside Region I through TNL PCS
2006	Purchased Way TV, cable TV operators in the state of Minas Gerais.
2007	Cellular authorizarion to operate inside Region III (São Paulo) and purchased Amazônia Celular.
2008	Purchased Brasil Telecom, fixed telephony incumbent inside Region II ( more details )
2009	Authorization to operate DTH
2011	Portugal Telecom enters in the Group that controls Oi.
2012	Shareholder restructure, in which TNL, Coari and TMAR's shareholders were incorporated by Oi S.A. (Brasil Telecom S.A.'s new denomination).

Commentary

Oi Group has focused profitability, chosing smmaler growth and reduction of bad debt. In 2011, the group went through transition due to the change of president and the entrance of Portugal Telecom into the controller group.

About the reasult gotten in 2011, the operator changed the way of it reports its revenue break, which was first presented as gross revenue and by service, now is net revenue in the following segments:

Residential, which includes fixed telephony, fixed broadband and pay TV offered to residential clients. in 2011, in this segment, the number of accesses fell -4.0% and revenue -12.1%.
Personal mobility, which includes retail cellulars (without corporative), growth of 14.6% in accessea and 2.1% in revenue (2011).
Corporative, which includes fixed and mobile accesses for corporative segment, hrowth of 10.6% in accessea and -1.7% in revenue (2011).
Pay phones dropped -6.8% in accesses and -16.2% in revenue (2011).

The operator ended 2011 counting 69.7 billion accesses (+8.9%) and R$ 27.9 billion in net revenue (-5.3%). EBITDA margin reached 28.2% in the year and 26.4% in 4Q11, affected by the implementation of Oi's new plan in 4Q11 having growth in expenditures “costs with advertising anf publicity, hiring 700 people for its own stores, outsource services and CMV, all related to intensification of sales ans focus in services quality”.

The operator reported profit of R$ 1.0 billion in 2011 (Oi S.A.'s profit) and may distribute dividends of R$ 2.0 billion.

Operational Performance

Thousands	2009	2010	2011	∆Year
Mobile Accesses	36,054	39,302	45,506	15.8%
Fixed Telephones	21,344	20,019	18,946	(5.4%)
Fixed Broadband	4,211	4,354	4,906	12.7%
Pay TV	248	402	351	(12.7%)
Total Accesses	61,857	64,076	69,709	8.8%
"Oi Conta Total" (plan)	1,449	1,439	-	-

Source: Oi (cellulars), Anatel (Fixed telephones and pay TV) and Teleco (Fixed Broadband)

Thousands	2010	2011	∆Year
Residential	18,277	17,796	(2.6%)
Mobile	37,757	43,264	14.6%
Corporative	7,094	7,848	10.6%
Others (pay phone)	827	771	(6.8%)
Total Accesses	63,956	69,680	8.9%

Source: Oi

Economic Financial Performance

Net Revenue

R$ Millions	2010	2011	∆Year
Residential	11,949	10,501	(12.1%)
Mobile	8,021	8,190	2.1%
Corporative	8,620	8,470	(1.7%)
Others (pay phone)	890	746	(16.2%)
Total Net Revenue	29,480	27,907	(5.3%)

Net Revenue Break

R$ Millions	2010	2011	∆Year
Net Revenue	29,479	27,907	(5.3%)
Residential	11,949	10,501	(12.1%)
Personal Mobility	8,021	8,190	2.1%
Services	7,917	8,154	3.0%
Voice	4,958	5,137	3.6%
Network Use	2,305	2,398	4.0%
Data / Value Added	654	620	(5.3%)
Retail Material	104	36	(65.0%)
Corporative	8,620	8,470	(1.7%)
Other services	890	746	(16.2%)

Indicators

Million R$	2009	2010	2011	∆Year
Total Gross Revenue	45,863	45,929	43,868	(4.5%)
Net Revenue	29,997	29,479	27,907	(5.3%)
EBITDA	9,768	10,295	8,766	(14.9%)
EBITDA Margin	32.56%	34.92%	31.41%	-
EBIT	7,808	4,097	-	-
Net Profit	5,092	1,750	1,006*	-
Bad Debt	2.80%	2.10%	-	-
Investment	5,126	3,090	4,959	-
Net Debt	22,428	18,711	16,326	(12.7%)

* Oi S.A.

Million R$	2009	2010	2011	∆Year
Fixed Telephony	27,018	25,029	-	-
Mobile Telephony	9,935	11,206	-	-
Broadband	8,668	9,312	-	-
Pay TV	242	383	-	-
Total Gross Revenu	45,863	45,929	43,868	(4.5%)

Check Brazilian Telecom Groups to see Oi's position inside Brazilian market.

To access Telemar's historical data, click here.

Oi's Shareholder Structure in 2011

Former Oi's Shareholder Structure

Shareholder Composition of Telemar Participações

	Participation at Telemar Participações
Company	Until 2010	By PT's entrance in 2011*
AG	19.34%	19.35%
La Fonte Tel.	19.34%	19.35%
BNDESPar	16.86%	13.08%
Portugal Telecom	-	12.07%
Fundação Atlântico	11.5%	11.5%
Previ	12.96%	9.69%
Petros	10.0%	7.48%
Funcel	10.0%	7.48%
Total	100%	100%

Portugal Telecom:

Got direct participation of 12.07% at TmarPart, after acquiring Previ, Petros and Funcel stocks and took part of the capital increase of about R$ 761.2 million.
Acquired participation of 35% of AG PASA and LF's social capital with the right to vote.
Got participation (direct and indirect) of 25.6% at TmarPart.
Got committed on buying stocks in order to have the minimum direct and indirect participation of 22.38% at TMAR through outlay of R$ 8.321 billion (“Total Investment”).

The agreements with TmarPart, AG PASA and LF's shareholders were revised to include Portugal Telecom.

The entrance of Portugal Telecom at Oi

On July 27st 2010, Portugal Telecom (PT) and Oi signed for the entrance od PT at Oi, acquiring 10% stake at Telemar Participações and 35% of AG Telecom and L.F.'s capital, both controlled by Telemar Participações.

TNL's capital will be increased in R$ 12 billion and also Tmar's in R$ 12 billion. PT is likely to invest R$ 2 billion in TNL and R$ 1.7 billion in Tmar.