VIVO - Apresentation of 1st Quarter 2007 Results

1

Vivo Participações S/A 1Q07 Results

May 9, 2007

Vivo Participações 1Q07 Results

2

Vivo

Operating Performance

Financial Performance

Table of contents


público copyright©vivo20073

Executive Summary

EBITDA

5.6% increase over 1Q06

Outgoing Traffic

22% up from 1Q06

Prepaid Recharges


Distribution Channels

National retail store share leadership with 40%

MOU


ARPU

18.1% up from 1Q06

Net Results

89% decrease in losses over 1Q06

Operating Cash Flow + change in working capital

R$ 296.7 million

Net Debt

26% decrease over 1Q06

Data Revenue + VAS

Historical record in the quarter; 28% up from 1Q06

GSM/EDGE

16% of total additions in 1Q07 and 33% in March

Highlights

Unified Systems

100% of customer base within one common platform

* Including replacements



Brand repositioning



R$ 1,000 promotion

Up to R$ 1,000 in recharges paid by Vivo. The higher the recharge amount, the higher the bonus to talk to any other Vivo subscriber for 6 months in local calls.

Vivo and TelefonicaPartnership 2,500 Minutes

Bonus for free calls to any Vivo cell phone for 6 months, in local calls.

Main marketing actions

Postpaid customers using Speedy can place free local calls from their Vivo cell phones to any fixed phone, and from their fixed phones to any Vivo cell phone, during every weekend through 2007



4.847 4.348 3.831

2.625

2.036

2.984

Vivo C1 C2

Retail Third Party

7,831

6,973

5,867

99

111

303

C2

C1

Vivo

Own Store

Distribution

• 40% national retail share leadership, 19% above the second placed;

• More than 338 thousand recharge points;

• New recharge partnerships with Santander and Bradesco correspondent bank services

19%4%

77%

Post-paid additions

26%38%

36%

Prepaid additions

Third PartyVivo's Own Stores Retail

• 40% of sales to individuals at the company's own stores, of which postpaid clients accounted for 77%

Sales channels share in the total additions

8,134 Points of Sale

Distribution and coverage leader in its operational area

Network Coverage

• 100% of the municipalities in Sao Paulo, Rio de Janeiro and Espirito Santo in both CDMA and GSM technologies;

• 2,295 municipalities covered against 1,782 of the second competitor in our operational area

• GSM national digital coverage


7

Vivo





30.13829.03029.053

1Q06 1Q07 4Q06

- 0.1% - 3.7%

• Best in class solutions in GSM and CDMA.

• Vivo Escolha: 33% of the post-paid individual clients;

• GSM/EDGE Adoption: 16% of the additions in the quarter*;

• Market share leader in its operational area with 30.7% share of total additions;

• Focus on customer service and satisfaction

• Constant improvement in the services provided

* Including replacements

Customer Base

9%25%

37%

44% 38%

47%

1Q06 1Q07

High Medium Low

Additions per range

• Focus continues on the acquisition of value customers, keeping rationality;

• Additions in the high-end were 16p.p higher than 1Q06



1Q06 4Q06 1Q07

recharge financial volume

- 6.1%

+ 20.5%

Actions

866922719

• In the first quarter 2007, Vivo continued its customer loyalty and retention efforts focusing on high- and medium-value customers, prepaid and postpaid.

• Use of rewards program for the replacement of handsets;

• Recharge and traffic incentive through bonuses;

• Right Planning

• Even with the maintenance of the competitive pressure in the value segment, the churn remained stable.

• 20.5% growth in the financial recharge volume in 1Q07 versus 1Q06.

• Vivo has been investing in the expansion of virtual credit resellers accounting for 40% of the total recharge;

• Vivo's prepaid customers have more than 338 thousand recharge points;

• Recharge incentive campaigns such as a "Bonus up to R$ 1,000 every month paid by Vivo".

R$ million

Recharges

Loyalty and RetentionResults



125115

100

1Q06 4Q06 1Q07

*SAC Blended

- 13%

- 20% • 13% SAC reduction due to seasonality and lower expenses with GSM subsidies;

• Reduction of advertising and commissions expenses.

1Q07 vs 4Q06

• 20% SAC reduction as a result of lower expenses with subsidies, publicity and advertising;

• Launch of the GSM technology;

• Better commercial agreements with suppliers;

• Exchange rate valuation.

1Q07 vs 1Q06

SAC reduction as a result of greater commercial and operating efficiency.

SAC*



3144 39

37

3836

1Q06 4Q06 1Q07Outgoing Inbound

15,0 16,4 16,3

10,413,7

14.2

1Q06 4Q06 1Q07

Outgoing Inbound B&K Effect

7582

68

+ 10.3%- 8.5%

30.030.6

25.4

+ 18.1%- 2.0%

ARPU MOU

4.2 3.9

• ARPU maintenance in comparison with the 4Q06 and growth over 1Q06

• Adjusted 1Q07 ARPU 2.9% up from 1Q06

• Aggressive recharge campaigns

ARPU and MOU Evolution


12

Vivo





143 158 193

1.189 1.232

9301.226 1.185

1,263

1Q06 4Q06 1Q07

Other services Monthly Subscriptions and usage

Network B&K Effect

R$ million

2,262

2,6092,647

+ 15.4%

- 1.4%

359 337

29,920 28,790 28,997∆%- 3.1

∆%+ 0.7

Average Customer

base

Net Service Revenue

• 28% growth in the Data Revenue + VAS in comparison with 1Q06;

• 20.5% increase in the financial volume of recharges in 1Q07 x 1Q06 and cost reduction.



1Q06 4Q06 1Q07

+ 21.9%

• The 1Q07 showed a historical record in Vivo's data revenue;

• More than 120,000 full songs sold monthly;

• Vivo is one of the country's largest digital music stores;

• Vivo is the only operator that charges the download

contents, without charging for the traffic;

• Reverse Auction Voice Portal;

• Vivo Location base service to families: more than 10,000

customers.

% of Net Revenue

7.5% 6.6% 8.2%

* Data Income including VASs

Net Data Revenue*

Average Customer

base29,920 28,790 28,997∆%

- 3.1 ∆%

+ 0.7

+ 28.0%



156

512

107

352

174

716

160

603

73

407

185

733

129

550

161

433

156

434

General andAdministrative

Expenses

SellingExpenses

Provision forBad Debt

Cost of GoodsSold

H.R.

Cost ofServicesRendered

1Q07 4Q06 1Q06

*Does not include depreciation

Bill & Keep Effect

• Cost of Services Rendered Increase in the interconnection cost with the end of the partialB&K. Adjusting for this effect, the 1Q07 amount would have shown a R$ 43 million reduction in comparison with 1Q06.

• H.R.Increase over 1Q06 as a result of restructuring expenses.

• Cost of Goods SoldBetter agreements with suppliers, impact of the exchange rate and GSM.

• Provision for Bad Debt2.7% of Gross Revenue.

• Selling ExpensesDecrease over 1Q06 due to lower third party expenses, especially commissions and marketing.

• General and Administrative Expenses21,2% increase over 1Q06 due to higher third party expenses

Operating Expenses*

R$ million



717858

757

27,8%26,6%

29,2%

1Q06 4Q06 1Q07

EBITDA Margin

* EBITDA – CAPEX + Change in Working Capital

EBITDA and Margin Operating Cash Flow *

32.8%29.7%

Adjusted EBITDA for B&K

• Adjusted EBITDA for B&K would have been R$745.8 million in 1Q07and R$ 844 million in 4Q06.

297

- 114

760

1Q06 1Q074Q06

EBITDA and Free Cash Flow

R$ million

13.4

11.2

Bill&Keep Effects



1Q06 1Q074Q06

• 9 times improvement year over year

• Extraordinary non recurring items in 4Q06 amounted R$876 million

• Better financial results

Net Results

R$ million

PIS and COFINS Reversal

Credit Activation

Net Income

-19

886

-179

740

136

10

+ 89%



- 186

- 147

- 119

1Q06 4Q06 1Q07 1Q06 4Q06 1Q07

Short Term Long Term

4,5005,483

60%

40%

68%

32%

3,305

4,464

65%

35%

4,057

3,553

Financial Result

Net Debt Gross Debt- 26%

- 7%

- 26%

- 10%

1Q06

4Q06

1Q07 *

- 36%

- 19%• S&P confirmed Vivo’s rating and change its outlook from "negative" to "stable“

• Better financial result as a consequence of improved interest rates during the period

• Improvement in the short-term / long-term profile

* Without the effect of Fistel payment

Financial Result, Gross Debt and Net Debt

R$ million



8%

36%

11%

92

805

9886

134

44

103

120

94

1Q06 4Q06 1Q07

Network Technology Others

281 235

1,059

Total Capex & % Capex / Net Revenue

• Quality improvement

• GSM/EDGE

• Systems Integration

CapexR$ million



Final Remarks

"To be the biggest telecommunications operator in Braziland one of the biggest in the world is important, but to be the best in what really matters to the customer is still more important. Likewise, to be a reference in the development of high-end technology will make no difference if that technology does not provide useful services to the customer.

We wish to transform Vivo in an unforgettable customer experience for both existing and potential new fans."

Roberto Lima



•Some information shows our vision of future and perspectives or objectives, such as the growth of our subscriber base, the distribution of the various services to be offered and the results to be achieved. This information is being made available for the sole purpose of elucidating how we intend to expand our business. Thus, it is not intended to provide projections for accomplishing such objectives.

•Many factors may distort our actual results in comparison with the objectives that have been presented, including Brazilian political and economic factors, the development of competitive technologies, the access to the capital required for achieving our objectives and the appearance of strong competition in our market areas.

Safe Harbor Clause Forward Looking Statements

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VIVO - Apresentation of 1st Quarter 2007 Results

Investor Relations