0 November 17, 2004 UBS Global Conference Presentation

1 AGENDA Brazilian Telecom Market Telemar Overview Financial Results 1

2 From State Monopoly to Privatization and Competition R III RIRI R II Up to 1998 (State Monopoly) One Holding Company 26 state companies (fixed/mobile) 1998 (Duopoly) Fixed line Mobile 4 incumbents 4 Mirror Co’s. Telemar Telefonica Brasil Telecom R IV Embratel (Long Distance) 10 incumbents 10 Mirror Co’s I & II III IX X IV VI V VII VIII Local Fixed line Long Distance Broadband Mobile Data (Corporate) : Low : Medium-High : Low-Medium : High 2004 (Competition) Degree of Competition (per service) Major Players Local LD Mobile Data Telemar Telefonica Brasil Telecom Telmex/AMX TIM Vivo

3 Major Telecom Players in Brazil – September/2004 Brasil Telecom 9.6 M 25% Telemar 39% 15.2 M Lines in Service (Brazil: 39 million*) National Market Share Region I Region II Oi 5.7 M 10% 4.0 M 7% Opportunity & BRT (GSM) (TDMA/GSM) TIM 11.7 M 20% (TDMA/GSM) Embratel (LD Carrier) TelefonicaVivo (CDMA) (TDMA/GSM) Claro 12.2 M 31% 24.6 M 42% Region IV 12.0 M 21% Region III Subscriber Base (Brazil: 58 million**) National Market Share Fixed line Mobile * Includes smaller incumbents and mirror companies. ** Includes other groups

4 Mobile Penetration (%) Growth of Customer Base * 01 * September 04 Fixed Line Penetration (%) Fixed Line & Mobile Customer Base – Brazil (millions) Privatization PCS Entrants  Growth depends on Brazilian economic uptake going forward  Mobile users already surpassed fixed lines in service, posting an annual growth rate in excess of 30% (1999 – 2003) Mobile subscribers Fixed Lines in Service

5 Penetration Figures and Forecasts  Mobile penetration still has a lot of room to grow;  Market estimates between 62.8 / 69.8 m subs by 2004YE;  Estimated mobile penetration for 2008YE ranges from 42% to 58% (80 to 100 m subs);  Fixed line penetration should be more or less stable, relying on GDP growth. 58% 42% Fixed Line** 23% * Estimates from: Citigroup, Goldman Sachs, JP Morgan, Merryll Lynch, Pyramid Research. ** Estimates from Yankee Group Mobile* Max. Min. 23% 33% Fixed: 39 M (Sep/04) Mobile: 58 M (Sep/04)

6 Broadband Market Broadband Market Brazil Source: Estimates Teleco e Telemar Broadband Access – ( thousands) 1, ,490 3,148 3,547 3,831 1,874 2,591 CAGR 46% Source: *Pyramid Research Estimates Broadband penetration still low in Brazil (1.9 m accesses by Sep/04) ADSL is the dominant technology (~85% market share); Cable has ~10% market share Broadband penetration is expected to grow to 30% of total internet accesses by 2008*; Telemar has a target to increase broadband penetration from 2% of fixed lines to 5% by * 2003 PC Penetration (% of households)

7 AGENDA Brazilian Telecom Market Telemar Overview Financial Results

8 100% Contact Center 100% (TNL) Fixed line Tele Norte Leste Participações S.A. (TNL) 100% 80.9% Telemar Participações S.A. 18.9% Free Float: 81.1% Shareholder Structure TNLP Data Transmission Mobile Free Float: 19.1% TMAR

9 Telemar – Overview Integrated Telecom Service Provider (Sep/04) –15.2 million fixed lines in service –5.7 million mobile subscribers –429 thousand ADSL subscribers Concession Area (Region I ) - Local Service and PCS –65% of Brazilian territory/94 million inhabitants –40% of country’s GDP –Over 20 million households Leadership in local and long distance services After only 2 years of launching, already #2 position in mobile subs (Region 1) Data, Corporate & Call Center Services (nationwide) High Free Float: 81.1% of total shares Market value of US$ 5.1 billion (Sep/04) Region I = Concession for fixed line services License for Wireless services (GSM) Nationwide Authorization for fixed line services, DLD, ILD and Data Most heavily traded shares at Bovespa (TNLP4): US$ 48 million/day (Sept/04); Strong liquidity at the NYSE (TNE): US$ 18 million/day (Sep/04)

10 Main Achievements Processes Services Market Approach - Optimization of Resources; - Process Standardization; - Management Centralization; - Merger of wireline companies; Restructuring 16  1 16 Companies / Brandies 16 IT Systems 60 Network Platforms 50 Network Management Centers 116 Call Centers Local Voice data and regional LD; Geographic Local & Advanced Voice Domestic & International LD Nationwide Data Transmission Wireless Call Center Network Management / Internet Management/Processes/IT Services Market Vision Customer Segmentation All Unified International R III RIRI R II Market Approach Product and Service

11 Largest Telco Player with Integrated Operations The Company’s six main business lines provide a healthy balance between stable cash flow and growth opportunities. Telemar is the leader or second major player in five out of its six main businesses The Company’s six main business lines provide a healthy balance between stable cash flow and growth opportunities. Telemar is the leader or second major player in five out of its six main businesses Fixed line Data, Internet & Corporate Wireless DLD / ILD Contact Center Broadband National Coverage Customer loyalty Cross-selling Convergent services Operating / Financial synergies Scale

12 Sources of Growth: New Customers and New Services Penetration Growth Wallet Share Growth New Services New Customers Existing Customers & Services Bundles One Stop Shop Cross Selling Video & VOD Fixed-mobile phone Convergence Synergy Innovation Full Telecom Service Provider CLM (Customer Lifetime Value Management) Up Selling Growth Strategy

13 Integrated and Convergent Services Velox Wi-Fi Velox + Oi Hotspots Wireline SMS Voice Net + (virtual PBX integrated with Mobile trunks) Prepaid Mobile recharge on Fixed Line Bill Oi + Public Phone (single card) “Oi Family” (reduced tariff from mobile to family’s fixed line) Wireless banking transactions Wireless payment authorizations Oi World (Video) +

14 Some Integrated and Convergent Services Buy a Velox (DSL) and get an Oi (Mobile) 100 minutes free from Oi (Mobile) to fixed Recharge Prepaid Mobile on Fixed line Bill Single Card for Mobile and Public Phone

15 Innovation: House of the future Existing Client Expenditure Breakdown New Content & Services + Up Selling + Cross Selling Broadband + Fixed line + Mobile Kitchen USB IP Telephony Fixed Mobile Handset Gaming Security System Integrated Entertainment Wireless Access Video Telephony VOD Living Room Kid’s Room Kitchen Home Office Telemar is piloting new revenue generating services in its “House of the Future”

16 Main drivers: Ability to anticipate the growth potential of mobile technology and keep on expanding customer base; Capacity to maintain and increase market share in a changing technological and market environment. Main drivers: Ability to anticipate the growth potential of mobile technology and keep on expanding customer base; Capacity to maintain and increase market share in a changing technological and market environment. In millions Growth of Customer Base Fixed Line Mobile ADSL ~ CAGR (98-03) 19.7%

17 AGENDA Brazilian Telecom Market Telemar Overview Financial Results

18 CONSOLIDATED NET REVENUE (R$ million) + 12% yoy

19 EBITDA – ANNUAL EVOLUTION (R$ million) EBITDA Margin + 6% yoy

20 CAPEX 2003: ~12% of net revenues, compared to 17% in 2002; CAPEX 9M04: R$ 1,134 million (9.8% of sales); CAPEX since 1998: R$ 22 billion; CAPEX should stay below 15% of net revenues in the medium term. CAPEX 2003: ~12% of net revenues, compared to 17% in 2002; CAPEX 9M04: R$ 1,134 million (9.8% of sales); CAPEX since 1998: R$ 22 billion; CAPEX should stay below 15% of net revenues in the medium term. Consolidated CAPEX R$ billion Wireline Wireless Anatel Targets and Mobile License (R$1.1 bn) % 40% M04 CAPEX / NET REV.

21 Consolidated Operating Cash Flow after CAPEX R$ million Having met our main fixed line universalization targets and mobile rollout, our cash generation is expected to remain strong CAGR (99-03) 69.1% 9M04 9M03 +25% yoy

22 Net Debt Evolution (R$ million)  Based on a strong cash generation, we expect to reduce our net debt level to below 1x EBITDA by 2004YE. Net Debt/ EBITDA Debt Position x * To this figure should be added the amount disbursed by the Company on its stock buyback program

23 TNE: Dividend Payments / Dividend yield* Dividend / Interest on Capital US$ million Our goal is to continue to provide high cash returns to investors * Based on stock prices at 10/29/04.

24 Closing remarks Ability to timely adjust to market changes, searching for new opportunities Re-shaping competition in the mobile market Continued increase in market share and revenues Sound financial position & increasing returns to shareholders

25 Investor Relations Rua Humberto de Campos, 425 / 8º andar Leblon Rio de Janeiro -RJ Phone: ( 55 21) /1313/1315/1316/1317 Fax: (55 21) Visit our website: 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 This Presentation is also available in our website at: