1. Spin Off Contax Participações S/A November 2004

2. www.telemar.com.br/ir 1 Main Objetive Uncover Contax’s hidden value to the benefit of all TNL shareholders Secondary Objective  Definitively align TNL and TMAR interests Contax as a stand alone business  Revenue mix is increasingly better balanced between Telemar and other clients  Total revenues should continue to grow with (a) the addition of new clients and (b) the organic growth of existing contracts Main Objetive Uncover Contax’s hidden value to the benefit of all TNL shareholders Secondary Objective  Definitively align TNL and TMAR interests Contax as a stand alone business  Revenue mix is increasingly better balanced between Telemar and other clients  Total revenues should continue to grow with (a) the addition of new clients and (b) the organic growth of existing contracts Executive Summary

3. www.telemar.com.br/ir 2 Current Status First Phase Final Phase Caroaci S.A. Shareholders Tele Norte Leste Part. S.A. Shareholders Tele Norte Leste Part. S.A. Contax Part. S.A. (ex-Caroaci) Shareholders Contax Part. S.A. Tele Norte Leste Part. S.A. Spin Off Phases Approved by TNL’s Board of Directors to be implemented by 11/30 Subject to approval by TNL and TMAR Extraordinary Shareholders’ Meetings, in addition to TNL’s Debenture Holders’ Meeting and TNL’s Fiscal Committee

4. www.telemar.com.br/ir 3 Focus on profitability EBITDA positive since the beginning of its operations in 2000 Average annual increase in attendants positions of 49%, in line with the increase in net revenues (58%) and customer base Contax has more than 30 clients, including major banks, utilities, insurance, cable TV and retail companies Target: Consolidate #1 position in Brazil’s call center market Focus on profitability EBITDA positive since the beginning of its operations in 2000 Average annual increase in attendants positions of 49%, in line with the increase in net revenues (58%) and customer base Contax has more than 30 clients, including major banks, utilities, insurance, cable TV and retail companies Target: Consolidate #1 position in Brazil’s call center market Call Center Services Work Stations 7,337 4,947 12,907 Net Revenue (R$ million) 223 421 146 16,500 15,954 413

5. www.telemar.com.br/ir 4 Contax Participações book value will be of R$273.7 million considering:  Book value of R$126 million of TNL Contax S/A in 10/31  Capitalization of loans held by TNL against TNL Contax S/A in the amount of R$57.7 million in Contax Participações  Additional capital increase of R$90 million in cash Contax’s valuation should be equivalent to other companies with the same size and growth perspectives  Contax’s growth should be equivalent or greater than historical/projected growth in the Brazilian call center market Contax Participações book value will be of R$273.7 million considering:  Book value of R$126 million of TNL Contax S/A in 10/31  Capitalization of loans held by TNL against TNL Contax S/A in the amount of R$57.7 million in Contax Participações  Additional capital increase of R$90 million in cash Contax’s valuation should be equivalent to other companies with the same size and growth perspectives  Contax’s growth should be equivalent or greater than historical/projected growth in the Brazilian call center market “Hidden Value” Source: IDC Brasil,www.callcenter.inf.br and Telemar’s Estimateswww.callcenter.inf.br Call Center Outsourcing Market in Brazil

6. www.telemar.com.br/ir 5 Spin Off Schedule Tuesday 11/30  Implementation of “First Phase”  Intercompany contracts will be signed subject to ratification by TNL’s and Telemar’s Extraordinary Shareholders’ Meetings Thursday 12/02  Public invitation for TNL’s and Telemar’s Extraordinary Shareholders’ Meeting, TNL’s Fiscal Committee, and TNL’s Debenture Holders’ Meeting  Additional information available for TNL’s shareholders in the investors relation web site www.telemar.com.br/irwww.telemar.com.br/ir  Opening of “Data Room” at TNL’s office (scheduled visits only) Friday 12/17  TNL’s and Telemar’s Extraordinary Shareholders’ Meeting, and TNL’s Debenture Holders’ Meeting  TNL’s Shareholders’ Meeting: potential new date in case of failure to meet minimum quorum on 12/17 2005  02/18 – Contax Participações S/A audited financials will be made available  From 02/21’til 03/10 – Contax’s shares are expected to begin trading on BOVESPA Tuesday 11/30  Implementation of “First Phase”  Intercompany contracts will be signed subject to ratification by TNL’s and Telemar’s Extraordinary Shareholders’ Meetings Thursday 12/02  Public invitation for TNL’s and Telemar’s Extraordinary Shareholders’ Meeting, TNL’s Fiscal Committee, and TNL’s Debenture Holders’ Meeting  Additional information available for TNL’s shareholders in the investors relation web site www.telemar.com.br/irwww.telemar.com.br/ir  Opening of “Data Room” at TNL’s office (scheduled visits only) Friday 12/17  TNL’s and Telemar’s Extraordinary Shareholders’ Meeting, and TNL’s Debenture Holders’ Meeting  TNL’s Shareholders’ Meeting: potential new date in case of failure to meet minimum quorum on 12/17 2005  02/18 – Contax Participações S/A audited financials will be made available  From 02/21’til 03/10 – Contax’s shares are expected to begin trading on BOVESPA

7. www.telemar.com.br/ir 6 Investor Relations Rua Humberto de Campos, 425 / 8º andar Leblon - Rio de Janeiro -RJ Phone: ( 55 21) 3131-1314/1313/1315/1316/1317 Fax: (55 21) 3131-1155 E-mail: invest@telemar.com.br Visit our website: http://www.telemar.com.br/irhttp://www.telemar.com.br/ir This presentation contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward- looking statements and involve inherent risks and uncertainties. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward- looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events “Safe Harbor” Statement