3Q07 ResultsVivo Participações S/ANovember 5, 2007
1público copyright©vivo2007
,
Highlightsg g
Acquisition of Telemig and Amazônia Celularq g
Purchase of 1.9 GHz frequency
Elimination of structural problems
Implantation of the “Vivo para o Cliente” program
Net revenues up by 15% YoY and 7.5% QoQ
EBITDA climbs 31% QoQ and 16% YoY
Net Income of R$ 4 million
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Survey reveals: Vivo is the best consumer option!
The Brazilian Consumer Rights Association (PRO TESTE) undertakes an annual survey of currently available mobile plans. In the 2007 edition of the “Mobile Tariffs” report, Vivo was the leading highlight. The Brazilian Consumer
Rights Association – PRO
Source: Gazeta Mercantil – Oct 15
Rights Association – PRO TESTE - declares Vivo
to be the best choice for consumers!
“...Vivo offers to its users cheaper plans than other mobile operators.”
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AgendaVivo Participações 3Q07 Results
ge da
Operating PerformanceFinancial PerformanceFinal Remarks
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Customer base
Share of net additions: 26.4% - market leader in its operational area and nationwideMarket share: 36.8% in its operational areaGSM/EDGE: 77% of total activationsVivo Escolha: 63% of individual postpaid baseCh R t 2 2% i th t + 9 0%Churn Rate: 2.2% in the quarter + 9.0%
+ 3.6%
28,726 30,240 31,320
8,020 points of sale347,000 recharge points
Distribution Channels
, g pNew recharge partners:Redecard and Hypercard
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3Q06 2Q07 3Q07
Products and services
Residential Phones
• fixed-line phone using wireless network• fixed-line tariffs• simplicity and mobility
Vivo Flash
• wireless residential broadband internet access - desktopaccess des top
New Partnerships
• Yahoo!• SonyBMG• Terra - Sonora
• Dual-delivery: receiving music acquired through cell phone also in the
Bl kB C
acquired through cell-phone also in the computer
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BlackBerry Curve
SAC* GSM:GSM:more competitive prices
capture of higher value clients increase in postpaid additions
=
115
+ 9.5%+ 7.5%
= 87% growth in high and medium-value
postpaid additions in the 3Q07
105 107115
21%24%
19% 24% 24%
56% 51% 57%
21% 25%
3Q06 2Q07 3Q07Subsidy Commission AdvertisingSubsidy Commission Advertising
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*Blended SAC
ARPU and MOU trends
ARPU
+ 7.3%
+ 3.0%
MOU
- 1.3%
3.0%
77777830.829.928.7
+ 10.5% +7.7%
13.4 13.7 13.9 39 35 35
15.3 16.2 16.9
3Q06 2Q07 3Q07
39 42 42
3Q06 2Q07 3Q073Q06 2Q07 3Q07
Outgoing Inbound
3Q06 2Q07 3Q07
Outgoing Inbound
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Loyalty and retention
Actions Results
Reward Program
Customer recapture
Restructuring of plans
22% growth in sign-in rate
6,500 customers “recaptured”
More than 100 000 restructuringsRestructuring of plans
Recovery of suspended customers
Alteration of recharge mix
More than 100,000 restructurings
6,000 suspended customers “recovered”Recharge revenue: R$994 million, 25% g
Recharge incentives up YoY
Loyalty and retention effortsLoyalty and retention efforts focused on high- and medium-
value customers
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AgendaVivo Participações 3Q07 Results
ge da
Operating PerformanceFinancial PerformanceFinal Remarks
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Net service revenueR$ million
+ 15.3%
Data and VAS Revenue
8 3% of net service revenue2,468
2,8462,648
+ 7.5%
8.3% of net service revenue
34% YoY growth
1,1501,187
1,252
1 260 1,373
151 201 221
1,1671,260 ,
3Q06 2Q07 3Q07Network usageSubscriptions and usageOther services
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Operating costs*p gR$ million
Operating costs under strict control despite fiercelycontrol despite fiercely
competitive environment113
162
729
159
Selling
General andAdministrative
512
697
549
728
585Cost of Goods Sold
Expenses
512
165151
151H.R.
141140
659
144Fistel, Fust, Funtel
543640
659Cost of ServicesRendered
3Q06 2Q07 3Q07
12*Excluding depreciation
Q Q Q
Ebitda and Ebitda margingBalance between sales and
profitabilityprofitability=
Revenue 7.5% QoQCosts 1 2% QoQCosts 1.2% QoQEBITDA 31.4% QoQ
21 0%25.7%25.3%
R$ million21.0%
833.3715.6
634.2
3Q06 2Q07 3Q07
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EBITDA Margin
Cash flow and net resultR$ million
Cash Flow * Net Result961.8
112 8
4.4
527.5
-112.8
-196.9340.7
444.6
3Q06 3Q072Q073Q06 3Q072Q07
137.6
9M079M06
* EBITDA – CAPEX + change in working capital
3Q06 3Q072Q073Q06 3Q072Q07 9M079M06
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Financial result, gross debt and net debtR$ million
Gross Debt Net Debt
4,147.6
- 29%
- 11%
- 14%
- 9%
Gross Debt Net Debt
2,957.7
3,336.33,705.7
4,699.6
68% 55%67%
4,038.4
68%67%
55%
32% 45%33%
3Q06 2Q07 3Q07Short Term Long Term
3Q06 2Q07 3Q07
32% 33%45%
Financial Result
2Q07
3Q07
124.4
113.8
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3Q06 201.6
CAPEX16%
R$ million
11%11%444.8
369.2337.3
135.1
107.146.3 48.1
100.7114.4
202.6 190.3 206.7
3Q06 2Q07 3Q07
% Capex/Net Revenue
3Q06 2Q07 3Q07Network Technology Others
Main Investments
Adaptation to the Number Portability projectNew Customer Service System and Front Office
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Increasing GSM Network Capacity and QualityTotal GSM capex : 90% already utilized
AgendaVivo Participações 3Q07 Results
ge da
Operating PerformanceFinancial PerformanceFinal Remarks
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Final Remarks
Vivo wins the Reliable Brands prizeVivo wins the Reliable Brands prize .
Most valuable brand in cellular phone in Brazil :R$2.25 billion
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Disclaimer
• This presentation may contain forward looking statements concerning future
Disclaimer
• This presentation may contain forward-looking statements concerning future prospects and objectives regarding growth of the subscriber base, a breakdown of the various services to be offered and their respective results. The exclusive purpose of such statements is to indicate how we intend to expand our businesspurpose of such statements is to indicate how we intend to expand our business and they should therefore not be regarded as guarantees of future performance.
• Our actual results may differ materially from those contained in such forward-looking statements, due to a variety of factors, including Brazilian political and economic factors, the development of competitive technologies, access to the capital required to achieve those results, and the emergence of strong competition in the markets in which we operate.
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