Corporate Presentation Corporate Presentation November, 2004

Corporate Presentation / November Telemar Presentation - Contents 3. Operating Results Growth of Customer Base 3 1. Highlights 1 4. Debt Position and Financial Ratios 21

Corporate Presentation / November Highlights Region I = Concession area for Wireline services = Mobile license for Wireless services Nationwide = Authorization area for Long-Distance and Data services 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 billion (Oct/04) Most heavily traded shares at Bovespa (TNLP4): US$ 41 million/day (Oct/04); Strong liquidity at the NYSE (TNE): US$ 15 million/day (Oct/04)

Corporate Presentation / November % Contact Center 100% (TNL) Fixed line Tele Norte Leste Participações S.A. (TNL) Data Transmission Mobile 100% 80.9% Telemar Participações S.A. 18.9% BNDESPar - 25% Fiago – 19.9% AG Telecom – 10.28% ASSECA Participações – 10.27% L.F. Tel % BrasilCap - 5% Brasil Veículos - 5% Lexpart Part. – 10.28% Fundação SISTEL - 4% Shareholder Structure – TNE Total Shares: million Free Float 79.5% / Treasury 1.6% Total Shares: million Free Float 18.7% / Treasury 0.4%

Corporate Presentation / November Main growth 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 growth 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. million customers *Company’s acquisition Expansion of Customer Base Fixed Line Mobile ADSL CAGR (98-03) 19.7% ~

Corporate Presentation / November Main investments for expansion of fixed line network already completed; Fully digital platform in service; Fixed line penetration still ~50% of households in Region I; With an 88% utilization rate, Telemar has some 2 million lines spare capacity; Challenge: Increase in fixed line penetration subject to Brazilian GDP sustained growth and regulatory changes. Main investments for expansion of fixed line network already completed; Fully digital platform in service; Fixed line penetration still ~50% of households in Region I; With an 88% utilization rate, Telemar has some 2 million lines spare capacity; Challenge: Increase in fixed line penetration subject to Brazilian GDP sustained growth and regulatory changes. million lines Fixed Lines in Service growth maintenance CAGR (98/01) 23.8%

Corporate Presentation / November Fixed Line Sector in Brazil – Sep/2004 Brasil Telecom 9.6 M 20.3% Telemar 32.7% Telefonica 12.4 M 30.4% Embratel (LD Carrier) 15.2 M Fixed Lines in Service % of Total Gross Revenue: T= R$ 43.6 bn / 9M04 * Includes smaller incumbents and mirror companies (CTBC, Vesper, GVT and Sercomtel) LIS (million)* Sep/ % Region I Region IV Region III Region II

Corporate Presentation / November Broadband Market in Brazil Market Share Brazil PC Penetration (% of households) * *Pyramid Research 2003 Broadband clients in Brazil are 1.9 million (Sep/04); ADSL accounts for 85% of total broadband access in Brazil; Broadband penetration is expected to grow to 30% of total internet access in Brazil by 2008*; Challenge: Growth in broadband services in the medium/long term relies on increasing PC penetration in Brazil. Broadband clients in Brazil are 1.9 million (Sep/04); ADSL accounts for 85% of total broadband access in Brazil; Broadband penetration is expected to grow to 30% of total internet access in Brazil by 2008*; Challenge: Growth in broadband services in the medium/long term relies on increasing PC penetration in Brazil. Brazil *Source: Estimates Teleco e Telemar Dec/03 Sep/04

Corporate Presentation / November Velox is already available in 140 cities of Region I (more than 10x the coverage of alternative technologies); Subscribers reached 429K in Sep/04, with a penetration of 2.8% of total fixed lines in service; In 9M04, revenues from Velox grew by by 254% compared to the same period of 2003; Target: Increase Velox´s penetration within Region I to consolidate customer´s loyalty and enhance the fixed line ARPU. Velox is already available in 140 cities of Region I (more than 10x the coverage of alternative technologies); Subscribers reached 429K in Sep/04, with a penetration of 2.8% of total fixed lines in service; In 9M04, revenues from Velox grew by by 254% compared to the same period of 2003; Target: Increase Velox´s penetration within Region I to consolidate customer´s loyalty and enhance the fixed line ARPU. ADSL – Telemar (Velox) ADSL - thousand lines Gross Revenue (R$ million)

Corporate Presentation / November Mobile Market in Brazil *Includes other operators: Nextel, CTBC, SERCOMTEL, Telemig and Tele Norte Celular ** Oct/04 Market Share (Brazil v. Region I) – Sep/04 Mobile Penetration (%) – Oct/04 * *Source: Pyramid Research Annual growth rate in mobile subscribers is currently over 40% in Brazil; 33% mobile penetration in Brazil and especially in Region I (27%) still offer significant growth potential; Oi´s market share in its region reached 23% Oct/04; Challenge: Increase Oi´s subscriber base to 6.7 million (+72%) in 2004, with positive EBITDA margin. Annual growth rate in mobile subscribers is currently over 40% in Brazil; 33% mobile penetration in Brazil and especially in Region I (27%) still offer significant growth potential; Oi´s market share in its region reached 23% Oct/04; Challenge: Increase Oi´s subscriber base to 6.7 million (+72%) in 2004, with positive EBITDA margin. Brazil Region I**

Corporate Presentation / November In spite of the increased competition, Oi has been able to maintain its leadership in net additions in its region (market share of ~35% in 3Q04); Oi´s annual growth as of Sep/04 around 2.9 million subscribers (+101% on Sep/03); Total revenue in 3Q04 increased by 60% over 3Q03, while revenue from services (ex-handset sales) improved by 82%. In spite of the increased competition, Oi has been able to maintain its leadership in net additions in its region (market share of ~35% in 3Q04); Oi´s annual growth as of Sep/04 around 2.9 million subscribers (+101% on Sep/03); Total revenue in 3Q04 increased by 60% over 3Q03, while revenue from services (ex-handset sales) improved by 82%. Mobile Platform - Oi Prepaid Post-paid Subscriber base (thousand) Gross Revenue (R$ million) 2,849 3,893 ~6,700 4,408 5,093 5,740 80% 20% 83% 17% 15% 85% 85%85% 15%15% 15%

Corporate Presentation / November Focus on profitability: EBITDA positive since inception; 61% CAGR (01/03) in attendant positions, in line with increase in customer base and revenues (70% CAGR) - Contax has conquered important customers, including major banks, utilities, insurance, media and retail. Focus on profitability: EBITDA positive since inception; 61% CAGR (01/03) in attendant positions, in line with increase in customer base and revenues (70% CAGR) - Contax has conquered important customers, including major banks, utilities, insurance, media and retail. Call Center Services Attendant Positions 7,337 4,947 12,907 Gross Revenues (R$ million) ,

Corporate Presentation / November Consolidated Gross Revenue Breakdown – 9M04 The Company’s four main lines of business combine strong cash generation and new growth opportunities. Local 58% Inter- Connection Data Long Distance (includes VC2/3) Fixed to Mobile (VC1) Wireline Moderate Growth Long Distance High Growth Wireless High Growth Data & Corporate High Growth Others(*) (*) Includes advanced voice, public telephones, additional services and Contact Center. Mobile

Corporate Presentation / November Telemar holds leadership in LD services in Region I. Growth in Long Distance Services LD Gross Revenue - R$ million LD as a % of Total Revenues* +26.8% * Includes F2M (VC2/3)

Corporate Presentation / November Key corporate and government contracts achieved during 2003; The annual growth in revenues from data services has been consistently above 30%; ADSL services accounted for 23% of total data revenue in 9M04 (+8% in 9M03); Target: Expand Telemar´s offer of data services and market share in Brazil. Key corporate and government contracts achieved during 2003; The annual growth in revenues from data services has been consistently above 30%; ADSL services accounted for 23% of total data revenue in 9M04 (+8% in 9M03); Target: Expand Telemar´s offer of data services and market share in Brazil. Data Transmission Services Major Clients Data Revenues (gross) - R$ million +32%

Corporate Presentation / November Accumulated annual growth of 66% (9M04), driven by the increase in revenues from mobile services - subscriptions, outgoing calls & SMS - up 85% yoy; Recurring positive EBITDA since 1Q04; Target: Maintain the expansion of service revenues while increasing EBITDA margin. Accumulated annual growth of 66% (9M04), driven by the increase in revenues from mobile services - subscriptions, outgoing calls & SMS - up 85% yoy; Recurring positive EBITDA since 1Q04; Target: Maintain the expansion of service revenues while increasing EBITDA margin. Consolidated Gross Revenue from Mobile Telephony Services Handsets R$ million 875 1,454 9M03 9M04

Corporate Presentation / November Delivering consistent revenue and EBITDA growth in spite of strong expansion in the customer base; High EBITDA margins, despite the faster growth of mobile services (where margins are still below company´s average); Target 2004: reach a consolidated EBITDA margin of ~43% for the year. Delivering consistent revenue and EBITDA growth in spite of strong expansion in the customer base; High EBITDA margins, despite the faster growth of mobile services (where margins are still below company´s average); Target 2004: reach a consolidated EBITDA margin of ~43% for the year. R$ million Consolidated Net Revenues and EBITDA Net Revenues EBITDA EBITDA Margin 45% 43%

Corporate Presentation / November Consolidated Net Income M04 R$ million 9M03 Increase in EBITDA and reduction in net debt, with lower financial expenses, had a positive effect on year to date results (9M04).

Corporate Presentation / November CAPEX 2003: ~12% of net revenues, compared to 17% in 2002; Consolidated CAPEX since 1998: R$ 22 billion; Target: Stabilize CAPEX below 15% of net revenues over the next years. CAPEX 2003: ~12% of net revenues, compared to 17% in 2002; Consolidated CAPEX since 1998: R$ 22 billion; Target: Stabilize CAPEX below 15% of net revenues over the next years Wireline Consolidated CAPEX Wireless R$ billion Anatel Targets and Mobile License (R$1.1 bn) % 40%

Corporate Presentation / November 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

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

Corporate Presentation / November Net Debt Position and Repayment Schedule R$ million % of total Net Debt – Sep/04 Gross Debt Repayment Schedule – Sep/04 Given our strong cash generation, we expect to reduce net debt to less than 1x EBITDA by year end 2004 R$ 7,000 million R$ 11,863 million * To this figure should be added the amount disbursed by the Company on its stock buyback program.

Corporate Presentation / November Key Financial Ratios Net Debt* / EBITDA Amortization*/ EBITDA (%) Net Debt /Enterprise Value* CAPEX / EBITDA (%) * Principal and interest *EOP ** 12 - Month EBITDA *EOP

Corporate Presentation / November Key Financial and Valuation Ratios Enterprise Value* / EBITDA Market Cap* / EBITDA EBITDA / Net Interest Expense Dividends / EBITDA *EOP ** 12 - Month EBITDA *EOP ** 12 - Month EBITDA

Corporate Presentation / November 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 “Safe Harbor” Statement