TIM Brasil Investor Relations

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2 A Tough Scenario in 2015 Market Deterioration GDP Growth Estimates for 2015 (%YoY) 0.6% -1.0% -1.5% -3.7% -2.8% Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 Conventional Course of Action Cut investment program TIM s Approach Maintenance of appropriate infrastructure investment Inflation Estimates for 2015 (%) 6.5% 8.1% 9.0% 9.5% 10.7% Stick to existing offers A completely new portfolio for all segments Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 FX Rate Estimates for 2015 (R$/US$ at year end) Defend value of community business model First mover on SIM Card consolidation with disruptive offnet offers Mobile Market Users -23 mln Jan/15 Dec/ Cut costs across the board Structural yet selective efficiency program Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 2 Source: BCB Focus Report; Anatel

3 2015 Highlights Despite a challenging year... sustaining a long term strategy and repositioning marketing approach with focus on value Total Net Service Revenues (R$bln; %YoY) % mln Capex (R$bln; %YoY; ex-license) % 4.7 New strategic positioning 3 EBITDA (R$bln; %YoY; ex-towers sale) % 5.40 OPEX ex-cogs: -7% YoY Efficient approach defended EBITDA performance Defending EBITDA -0.1 mln Traditional Innovative 4G Coverage Leadership +40% Capex intensity bearing fruits SIM card consolidation Quality & Image Focus on 1 st SIM Focusing on the evolving Big Middle Classes B + C Class A 2% 71% 27% Source: IPC of 2015 Eliminating dependency from community effect

4 Customer Base Analysis TIM s Customer Base (Million users) Prepaid Disconnection Analysis (Million users) Cleanup Organic Churn Prepaid 84% Net adds Post % Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Postpaid 17% 21% 2014 Prepaid Net Adds P1 TIM P3 P5 P4 Postpaid Net Adds 2015 A better representation of Customer Base Prepaid Net Adds TIM -10.6mln (Market -28.4mln) Focus on efficiency and profitability Maintained leadership on prepaid share and regained #2 on postpaid human* New View of Voice Customer Base (average users per period) Defending position on 1 st SIM users (user base of 1 st SIMs, estimated by usage profile) -15% pay as you go +19% Recurring payment 4 Old Portfolio Jan-Oct/15 New Portfolio Nov-Dec/15 May-15 Jul-15 Sep-15 Nov-15 *Ex-M2M/Modems New Offer

5 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 First Take on New Offers R$ days R$50.00 month R$99.00 month +2% Prepaid Recharges (mln users) ARPU Outgoing +43% Control Gross Additions (mln users) ARPU Outgoing +46% Postpaid Gross Additions (mln users) ARPU Outgoing +% Double Digit +% Double Digit +% Single Digit Base New Offer Base New Offer Base New Offer Mobile Number Portability (thousand users) Total Postpaid (net port-in/out) New Portfolio launch Traffic Indicators (total base) 340 Bytes of Use (MB) 475 Voice traffic mix: cost impact within expected range* (mix of minutes for prepaid users) Off-net Fixed Minutes of Use On-net 9% %Port-in/Gross Additions 20% 1Q15 2Q15 3Q15 4Q15 Estimated Actual 5 *Illustrative

6 Data: Building the Path for Long Term Growth Others (2G, M2M etc) 3G & 4G Users (mln users) 4G 3G x3.5 YoY Mkt Share: 28% Flat YoY Mkt Share: 25% Postpaid Control Prepaid Data Penetration on Base (% of customer base) 73% 70% 36% 78% 76% 45% 3G+4G % over Base Dec/14 Dec/15 52% 67% Jun/15 Jul/15 Aug/15 Sep/15 Oct/15 Nov/15 Dec/15 VAS Gross Revenues (R$ mln) Innovative Revenues (% of VAS Gross Revenues) % 7.74 SMS Innovative 27% 73% +35% (YoY) 15% 85% +39% Data connectivity (YoY) 6 % Mobile Serv Revenues 28% 35%

7 A Year of Infrastructure: TIM 4G Leadership Urban Population Covered (4G) (% of urban population) 27% +32pp 36% 59% 2013 Total Pop. Covered 2 : TIM: 52% P1: 47% P3: 48% P4: 46% Number of Sites (4G) (in thousand) k G Refarming 1,800 Mhz ~65% connected with fiber (1) Cities Covered (4G) 2 (# of cities) +387 cities 411 P1: 193 P3: 164 P4: 83 CAPEX per Technology (R$ mln) 2G -22% YoY G 4G +6% YoY +133% YoY (+22% YoY) Fiber Backhaul (+32% YoY) Fiber Backbone >70,000 km Total Optical Fiber Network >70% of Data traffic Carried by high capacity backhaul Despite the FX headwinds, TIM managed to expand infrastructure above target with the same Capex plan 7 (1) Fiber and other high capacity backhaul (2) Source: Teleco / ANATEL

8 Quality Improvements SpeedTest in 2G/3G Network (By Ookla)¹ Throughput Downlink (Kbps) 3,586 Throughput Uplink (Kbps) 1,014 Latency (ms) 206 1, Q14 4Q15 4Q14 4Q15 4Q14 4Q15 Number of states within Anatel s performance Targets (%)² Drop Voice and Accessibility Data Accessibility 3G/4G Data Drop 3G/4G 2015 Consumer Complaints (Demands at Consumer s Protection Agency - Procon per 1,000 customers)³ 100% 100% 96% 85% 100% 3G 4G 100% 100% 3G 4G Dec-14 Oct-15 Dec-14 Oct-15 Dec-14 Oct-15 P4 P3 P1 TIM 8 (1) Quarterly average; generated from TIM s analysis over Ookla Speedtest results. 4Q15 until November, last data available (2) Last data available; Source: Anatel. (3) Total per economic group. Source: SENACON/MJ and Anatel. Broadband customer base as of Nov/15 (last data available).

9 Fixed Business Performance Fixed Net Revenues Performance (R$ mln; %YoY) 579 x2 +5% +14.1% 660 Fixed Revenues 2014 Residential Services Corporate Services Fixed Revenues 2015 Live TIM Base (mln of clients) Corporate Sales (%YoY) +78% % % ARPU YoY 4Q14 1Q15 2Q15 3Q15 4Q15 Live TIM - Market Share of Net Adds (SP and RJ >34Mbps) 48.0% 43.9% 50.2% 34.1% Live TIM P3 TIM Fixo: Fixed Voice Service (w/ wireless technology) Share of Net Adds 1% 34% % 6.8% 0.5% 0.5% 4Q14 4Q15 P1 P4 Mkt Share 0.9% 1.4%

10 Thousands Financials: Changing Revenue Pattern Continues Mobile Service Net Rev. (R$ bln; %YoY) incoming ~R$1Bln Total Net Revenues Breakdown (R$ mln; %YoY) 0% -40% -45% Market Share of Smartphones (among operators in 2015) P1 P3 14.5% 8% P2 30.2% TIM 46.9% +14% outgoing Flat: 0% , % 17,139 76% Data Transformation (% over net service revenues) 70% 62% ARPU and data users growth Data 2014 Mobile Incoming Handsets Fixed 2015 Business Generated Resilient Business Generated amid a tough year in spite of a difficult macro and competitive environment; Reducing MTR Impact (R$ mln) % of revenues ~ % 24% 30% Voice change in handset business strategy led to a sizable reduction of product sales without negatively impacting on margin. ~300 1Q12 4Q15 >20% <8%

11 Financials: Structural Efficiency Program Opex Performance (ex-cogs and towers sale) (% YoY) Efficiency Across the Board (% YoY; Δ R$mln YoY) Annual View Quarter View 2% 4Q13 4Q14 4Q % COGS -44% ITX & Network G&A 2014FY: R$13,960-11% -9% -7% -7% -8% Opex Evolution (ex-cogs and towers sale) (R$bln; % YoY) -4% Bad Debt Selling & Marketing Personnel Expenses Others -7% -6% 1% 8% -16% -7% Ex- COGS 2015FY: R$11,744 Recurring 3 year Efficiency Plan Update % 9.9 ~ 35% R$ 1 bln 11 Opex 2014 Growth Inflation Regulatory (ITX) Efficiency Plan Opex 2015 Jan/15 Dec/15 Dec/17

12 Financials: Margin Expansion EBITDA & Margin (R$ mln; % YoY) First Margin Gain due to Business Reshape (%) Reducing MTR Impact (R$ mln) Margin ex-towers sale 28% 31% 1,211 Towers Sale 80% 84% ~300 % of EBITDA 5, % 5,395 ~150 1Q12 4Q15 Service Margin 35% 36% >25% <10% Business anchored by a solid balance sheet Net Debt (R$ bln) Net Income (R$ mln; %YoY) 1, % 2,071 R$839 mln of Towers Sale Recurring: -20% YoY Dividends Proposal R$468.6mln 12 Net Debt/ EBITDA 0.23x 0.32x EPS

13 Conclusion & Perspectives Perfect storm scenario in 2015 Economy deterioration MTR cut impact Voice to Data migration 2016 Maintaining the focus on business development Strong fundamentals and focus on the long term helped to reduce impacts 48% (+2.6 pp YoY) Data Users (% over base) #1 On prepaid base 68% (+18 pp YoY) Smartphones (% over base) #2 On human* postpaid base Continuous adaptation to new market conditions 31.5% (+3 pp YoY) EBITDA Margin (in FY2015) #1 4G Coverage +35% YoY Innovative Rev (in FY2015) >70,000 Fiber Network(Km) Infrastructure evolution 13 New Portfolio Efficiency plan on track From Pay as you go Voice centric Market share Community...to: Recurring Data centric Revenue Share CB management Industrial plan update to be presented on February 16, 2016 *Total postpaid ex of M2M / modems