1. March 2005 “Creating value for the Future”

2. [2] | Portugal Telecom | March 2005 Summary >Why betting in the corporate sustainability? >Sustainability goals >Basis of the corporate sustainability for the PT Group >Strategic guidelines >Action methodology >Work done so far >The future >Achievements

3. [3] | Portugal Telecom | March 2005 Why betting in the corporate sustainability? “To keep creating value within the next 100 years” > create value for the “stakeholders” in the long-term > involve the “stakeholders” confidence in the PT Group

4. [4] | Portugal Telecom | March 2005 Sustainability goals General  To make Sustainability a core issue in the PT Group strategy, transversal to all its companies  To reinforce PT’s action whilst a sustainable company  To make it known. Specific > To create Added Value to the Shareholders > To support and promote the economic development in countries where PT is present, namely in the context of IS > To act effectively in the triple bottom line: economic, environmental and social dimensions

5. [5] | Portugal Telecom | March 2005 >The Sustainability Strategy is supported in the “triple bottom line” approach Basis of the corporate sustainability for the PT Group Social Corporate Citizenship Digital inclusion/ IS Human Resources Management Environmental Energy Efficiency Environmental Certification Environment Report Resource Management Policy Environmental impact reduction Economic Governance model Ethic Code Stakeholders relationships

6. [6] | Portugal Telecom | March 2005 Strategic Guidelines >The Corporate Sustainability as a part of the business strategy and consistent with the core business >Creation, divulgation and implementation of Transversal Policies on the “Triple Bottom Line” dimensions >Transversal Strategy for Quality >Centralization of the Corporate Sustainability management >Monitoring and evaluation of the Sustainability strategy implementation >Sustainability commitments should be assumed towards stakeholders

7. [7] | Portugal Telecom | March 2005 Action methodology Assumed the commitments, a plan of actions was defined for each target, according to 4 vectors: Commitments Communication Information Training Financial Community Clients Society Media Employees Partners Dialogue

8. [8] | Portugal Telecom | March 2005 Work done so far

9. [9] | Portugal Telecom | March 2005 Ethic Code >Set of principles, values and code of conduct applicable to all employees and social bodies >Available in the intranet & internet >Environmental Chart, October 1996 >Sustainability Chart, March 2004 >PT joined, January 2004 Signatory of ETNO Charts Signatory of The Global Compact

10. [10] | Portugal Telecom | March 2005 Relation with stakeholders (feedback) Financial Community Clients Employees Media >Investors Relations Direction >Annual Market and Perception studies >Investor Day and other events >Quality analyses and Client satisfaction Direction >Inquiries of satisfaction and perception >Inquiries of satisfaction >Events, general meetings >Feedback meetings >Employee Portal Press cabinet

11. [11] | Portugal Telecom | March 2005 Relation with stakeholders (feedback) II Regulator Bodies ONG’s Community >Regulatory Affairs Dept. >Competition Policy Dept. >Conferences - Participation and Support >PT Foundation >Image studies (Perception)

12. [12] | Portugal Telecom | March 2005 Sustainability Report >Goals: Communication and Transparency >To be published soon (2Q 2005) >Based in the GRI (Global Reporting Initiative) guidelines >Target: All stakeholders

13. [13] | Portugal Telecom | March 2005 Environmental Responsibility

14. [14] | Portugal Telecom | March 2005 >PT promotes a culture of respect and pro-activity towards environment Energy Efficiency Use of more efficient technologies Pollution prevention and reduction CO2 emission reduction Reduction of consumption: electricity, water and fuel Other good practices Use of recycled paper Reduction of color prints Promotion of formation and communication Environmental management system International norm ISO 14001 Building up of the environmental responsibility Antennas impact Electromagnetic radiations below the established limits Control of the produced impacts Efficient management of the residues Selective collecting – “Ecopontos” Mobile and cordless phones’ batteries handled in the shops Certification of the Environmental management system Our Environmental Commitment

15. We communicate smiles! Social responsibility A better quality of life for everyone

16. [16] | Portugal Telecom | March 2005 Commitments with the community >Strong intervention in the following areas: - Social - Cultural - Information Society >Creation of the PT Foundation, with the aim to coordinate and foster the social intervention and support to development

17. [17] | Portugal Telecom | March 2005 Social involvement >Products & Services: –Technological solutions for clients with special needs >Donations: –Support to social institutions >Social volunteer initiatives: – Aurora Project, Mão na Mão…

18. [18] | Portugal Telecom | March 2005 Cultural involvement >PT has a continued Maecenas policy –Portugal Telecom prize “Brazilian Literature” –Exclusive maecenas, Teatro Nacional D. Maria II –Involved in all big national projects: Expo 98, Porto2001 and Euro 2004

19. [19] | Portugal Telecom | March 2005 Information Society Adult training on use of info-communication technologies.

20. [20] | Portugal Telecom | March 2005 Our employees

21. [21] | Portugal Telecom | March 2005 PT values Merit To retain and develop the existing talent High quality talent selectively caption Talent caption and retention as a lever to increase performance!

22. [22] | Portugal Telecom | March 2005 Market-oriented and best practices PT promotes competences personal and professional development communication, impact and influence strategic view Innovation & creativity analysis capability organizational knowledge client-oriented team and group spirit ethic and values [integrity] leadership and development of teams results-oriented leading change courage, acerbity and credibility

23. [23] | Portugal Telecom | March 2005 PT’s HR management strategic model recruit fit identify evaluate training move reward fidelize communicate Social participation Best company to work Top students recruitment (best universities) Cherry picking (talent) Responsibility | know-how Population segmentation 1 x year | Feed-back 2 x year Annual follow up, Executive Board [holding] World class training E-learning | Technical training | Universities International MOVE | SWAP | International consulting Fixed + variable JEP program [Youth with High Potential] Internal communication Volunteer actions

24. [24] | Portugal Telecom | March 2005 The Future >To keep working in the triple bottom line >To swiftly adapt the strategies and management models Competitive advantage Shareholders value creation

25. [25] | Portugal Telecom | March 2005 Achievements Some examples: >PT Group’s Governance model considered one of the best in Europe - Heidrick & Struggles >Quality certification ISO 9001 >Environmental certification ISO 14001 > IR Magazine & IR Awards (Diário Económico/ Semanário Económico Grand Prix for Best Overall Investor Relations Best Use of the Internet for Investor Relations > PricewaterhouseCoopers/ Financial Times The most respected company in Portugal

26. [26] | Portugal Telecom | March 2005 Thank you!