Oi S.A.

Bayard de Paoli Gontijo - Chief Executive Officer Flavio Guimaraes - Chief Financial Officer and IR Director Pedro Falcao - Engineering Director

Jonathan Dann - Royal Bank of Canada Susana Salaru - Itau BBA Mathieu Robilliard - Barclays Daniel Federle - Credit Suisse Andre Baggio - JPMorgan Soomit Datta - Newstreet Research Walter Piecyk - BTIG Simon Cooke - Insight Investment Alex Hooper-Greenhill - Societe Generale Michel Morin - Morgan Stanley Eriko Ross - Barclays Sonny Kushwaha - Claren Road

Good morning everyone. I have here with me Bernardo Winik, B2C Director; Mauricio Vergani B2B Director; Pedro Falcao, CTO; Jose Claudio Goncalves, Network Operations Director; Jason Inacio, Transformation Officer Director, Carlos Aragão, Regulatory Director and our financial team, with Flavio Guimaraes, CFO and Investors Relations Director, Marco Schroder, Administrative and Financial Director and Marcelo Ferreira in the IR team.

Thanks for joining this conference call. A little over a year ago, Oi’s Board of Directors expressed its trust in me to assume the leadership of the company and embrace the important challenge that lay ahead.

At the time, our results did not seem very promising and the market hardly knew what to expect in the future. Despite the unfavorable retrospect, I accept the challenge since I have always believed in Oi’s potential and the capacity and ability of our employees.

At that time, we established our four strategic priorities that will lead to renewed sustainable growth and reposition Oi in the Brazil in Telecom market. One year later, here we are, quarter-after-quarter, presenting to our stakeholders the progress made in relation to our strategic priorities in this last 12 months.

I would start then with slide 2 of our earnings presentation. We continue to focus on the operational turnaround through transforming our business and improving our infrastructure.

We will see further ahead that we have maintained our strict control on cost and optimized a location of our investments associated with an improvement in our revenues. Looking at our results from the first nine months of the year, EBITDA and operational cash flow in Brazil remain on track to achieve our 2015 guidance.

We are delivering exactly what we have promised to the market and we are more and more confident in the success of our plan to transform the business. In this context, we launched in the beginning of this month, the Oi Livre offer, which is a very disruptive model of offer in Brazil.

This offers them to change the way mobile customers communicate, challenging the current mindset where consumers purchase sim-cards from different operators or even restrict their communication by using data in order to avoid paying very high rates for off-net calls. With Oi Livre, Oi takes a strategic step forward and follows a global trend by adopting a model widely used in markets such as United States and Europe.

Furthermore, increasing the data limit with no restrictions meets the growing demand of customers for limited access to millions of apps available for their smartphones. Another important step was preparing for the launch of our multi-product service.

With this new model of offer, known as Oi Total which combines fixed line, broadband, TV and mobile services, customers will have an integrated customer service and the installation of different services in only one visit in addition to being charged in one single bill. As a result we expend expertise of our technicians, leverage their productivity, generate savings and provide a better customer experience.

Also, as part of our transformation plan, we have been focusing on the efficient allocation of our investments with resulting improvements in our infrastructure. With the lower CapEx, we have been able to deliver more with more quality which you see later on when we talk about network efficiency and improvement initiatives.

One of our biggest challenges is to improve the profile of our balance sheet. As a result of the sale of PT Portugal in June this year we proved substantially our liquidity position.

And with that we’re able to focus on refinancing and debt payment in order to improve our debt profile. From the regulatory standpoint, we have had many discussions with the government and Anatel about developing and building a more positive environment.

We are optimistic about the progress on TAC and the discussions regarding the concession. Regarding the TAC, as everyone knows, in April, we filed the list of projects of corrective measures and system Anatel following its formal procedures has been evaluating and discussing adjustments in our proposal aiming to reach a more efficient agreement for both parties and the market in general.

The negotiating process is in its final stage and we hope to conclude the agreement in the coming months. As far as the concession we understand that the current telecom concession model is worn out and needs to be modernized.

This model is outdated and carries a regulatory symmetry which harms competition and creates structural disadvantages for incumbents. Just to give you an idea, for the countries such as Spain and Portugal for instance, use concessions as a temporary stage, unlike Brazil which has been under this stage model for over 16 years.

According to a study by the International Telecommunications Union, broadband services developed more quickly in countries with fixed voice service authorization model rather than a concession model. I’d like to point out that Oi is the natural player to lead the expansion of this service throughout Brazil.

Therefore, we have an unprecedented window of opportunity. We must seize this moment in which we are revisiting the concession terms to make a profound reform of the sector in order to meet the growing demand of the society as other countries have already done.

At the end of September, the government structure are working group composed of members from the Ministry of Communications and Anatel, in order to reevaluate and propose alternatives to improve the current regulatory model. We are confident in the evolution of this process.

With respect to our governance about a month ago, we completed the last stage of the operation to migrate to the highest corporate governing standards in Brazil. Two thirds of our preferred shares were converted into common shares.

And we concluded the corporate simplification, thus creating a company with no controlling shareholders with a new independent board of directors and new bylaws that reflect the governance standards of Novo Mercado. Lastly, we have signed an exclusivity agreement with the firm LetterOne for a period of seven months in order to structure our proposal for the consolidation of the Brazilian Telecommunications industry.

We are currently working on alternatives to structure with BTG and the firm LetterOne. Therefore, as you can see, we have made consistent progress on all of our strategic priorities.

Moving on to slide 4. For one more quarter, we show improvement in our operational turnaround.

As you can see, the continued focus on cost efficiency associated with the profitability of our existing customer base has brought significant results over the year. The third quarter presented an annual reduction of 7.5% in routing costs, which represents a real gain of 16% due to inflation of 9.5% in the period.

The routine EBITDA from Brazil grew 10.6% year-over-year in the third quarter with 26.7% of margin. For the year-to-date, Brazilian routine EBTIDA reached BRL5.5 billion with an 11.4% annual growth and 27.5% of margins and an improvement of 3.6 percentage points compared to the same period last year.

As with costs, we maintained our focus on optimizing the allocation of our investments. Structural investments have improved our main network quality indicators.

As we shall see later on, the engineering initiatives and projects have resulted in a higher level of delivery with lower investments in verified improvement of customer experience. We have already addressed the modernization of the network core, now we are working to improve the access.

We have no doubts that with the work that we have done modernizing the transmission and transport infrastructure Oi is very well positioned to take advantage of the market migration from voice to data. The operational cash flow in Brazil jumped to BRL719 million in the quarter, an increase of over 450% year-over-year.

On the year-to-date we already reached 177% of annual growth in the operational cash flow. In other words, there has been an improvement so far of BRL1.6 billion which gives us confidence to deliver our 2015 guidance.

Total net service revenues in Brazil, which excludes handset revenues totaled BRL6.5 billion this quarter, only 1% lower than in the same quarter last year despite a more challenging macroeconomic environment. We will discuss the revenue performance later on.

I would like to stress once again that we are not only cutting costs and investments but actually transforming Oi to make it a more efficient and sustainable company. The operational turnaround continues to be on the right track.

And we are reiterating our guidance for this year. As slide 5 shows our customer based trends with 4.3% year-on-year decline.

As we have been saying this year, the strategy for 2015 is directed towards quality and profitability of our existing customer base, with respective improvement of the users’ experience. We have continued to focus our efforts on retention and profitability as a way to reduce churn and improve the quality of the active base.

At the same time, we have resized the mix of channels, optimizing our sales cost, which combined with a more restricted credit policy improved quality of our sales. In addition, we have kept our restricted basis connection policy in the mobility in order to maintain a profitability base to avoid paying unnecessary fees on inactive customers.

Moving on to slide 6, we will show you our revenues’ breakdown. Total customer revenues grew 0.9% as opposed to the 1.1% decline in the last quarter.

Despite the poor macroeconomic environment, Oi has improved its revenue strength in every segment. As I mentioned earlier, total net service revenues only fell 1% this quarter compared to 3.3% annual drop in the last quarter.

I’d like to highlight here the annual growth of almost 1% in the personal mobility service revenues. In this case, the 33% cut in the mobile interconnection tariffs was offset by the 8.1% growth in customer revenues of this segment underpinned mainly by data as we will show later in more detail.

Another important highlight is the consistent improvement in the revenue trends of the residential segment as a result of the profitability of the existing base and the sales quality improvement as you will also see in the coming lives. It’s important to remember however that the country is experiencing a macroeconomic environment of recession and yet Oi has consistently improved its performance since the last quarter of 2014.

Therefore it’s natural that the challenge of maintaining the strength in revenues increases going forward. Moving on to slide 7, the demand for data continues to drive recharges and ARPU in the personal mobility segment.

The growth in mobile customer revenues is due to the continuous and solid growth in the revenues reached for yet another quarter posted over 50% increase year-on-year reporting BRL764 million this quarter and accounting for 43% of the total customer revenues. This increase in data has been driven by the penetration of 3G and 4G handsets in our base at 56% this quarter, and the migration of 2G users to our 3G network, which has more capacity to meet the growing demand for data and provide our customers with a better experience.

We also continue to maximize the profitability of our base through this strategy to obtain higher value added customers combined with increased data use. All of this led to substantial increase of 23% in ARPU of the gross in the postpaid segment excluding MTR and a growth of the prepaid recharges even in a more challenging macroeconomic environment.

It’s very clear to us that the customer wants data and total freedom to use the service the way they see fit. In this context, I would like to move to slide 8 to present our new offer.

I have already been saying for some time that the fall of MTR would create an opportunity for structural change in the dynamics of the Brazilian market. Taking advantage of this movement, we led the market by launching offers that put an end to the community effect and give more freedom to customers.

From an extensive research program, which interacted with over 5,000 customers we’ve developed throughout 2015 new mobile offers in order to meet customer needs for more independent total and serve freely. Our mobile value proposition is to offer this freedom to customers to talk to whoever they want, whatever they want eliminated the community barrier combined with a better data usage experience through higher allowances of usage and no user solution by simple offers and no tricks.

This innovative positioning covers the entire mobile portfolio from prepaid to postpaid and controlling. And from the first quarter 2016, it will also include the convergent products.

This transformation began on October 30, with the launch of the media campaign of Oi delivery. Oi’s new prepaid which offers calls to all customers of all operators and more data with no user restrictions, an offer that mobilize all the company and our retail partners.

We will be launching this offer for postpaid and controlling plans at the end of this month. The expectations with the new position is to concentrate the prepaid customer spending with Oi reducing the need for multi sim-card use and to increase our postpaid mix.

Going on to slide 9, about the residential segment, we continue to improve the profitability of our residential customer base in all products. Residential ARPU increased 8.3% year-on-year, reporting nearly BRL80 in the quarter, owing to deposit ARPU performance of the three products.

Improvement in the sales mix, with a focus on higher value-added offerings together with the selling and cross selling initiatives has been supporting the profitability strategy of the segment. I’d like to highlight that this quarter we reversed the trend of increased net disconnections as a result of high gross combined with stable churn rates reflecting better sales quality and the resumption of our commercial activity.

Sustained by the positive effects of profitability and gross revenues in the segment have been demonstrating a resilient recovery trend as already shown in slide 6. I would like to point out the growing average speed trend for broadband customer base which exceeds 5 mega this quarter representing a growth of 25% year-on-year and 7% sequentially.

This quarter, 53% of our broadband has speeds equal or higher than 10 mega. As a result of this consistent progress, our broadband base with speeds equal or higher than 10 mega grew 40% year-on-year reaching approximately 30% of the total base.

We recently launched higher speed via the sales broadband with offers ranging from 15 mega to 35 mega and we expect this product to make even further progress. As you can see on slide 10, during the third quarter of 2015, two releases strengthened Oi’s performance in the residential segment.

The Oi Play platform and the new broadband speeds via VDSL. These releases boost the resumption of our commercial activity meeting growing demand for data and TV consumption in nonlinear format and multi devices.

These movements also reaffirm our position with focus on simplified products and offers. On slide 11, the B2B segment is being primarily affected by the macroeconomic slowdown.

But we are carrying on with our strategy of improving base profitability and sales quality. In the corporate segment we have reduced our dependence on voice services by increasing the offer of data services, IT and VAS such as managed services, security solutions, cloud services, ICT, datacenter and machine-to-machine.

As a result, we have grown our corporate data revenues higher than the market average. In these more immediate price segments, in order to reduce cost optimize processes and improve margins, we have worked on structuring measures such as: high share of channels with lower cost in the sales mix; portfolio simplification for greater efficiency and quality in the product chain; review of the post sales structure to better manage deliveries, repairs and views of handset subsidies.

Now moving to slide 12, we continue to control cost consistently even in an environment of rising inflation, exchange rate pressure and high electricity tariffs. As I mentioned in the last quarter, we are sparing no efforts to reduce cost and to reform the way we do business.

This is a mantra here at Oi nowadays. We have worked relentlessly to pursue operational efficiency and business sustainability and we are definitely not going to stop now.

Excluding the effects of MTR cuts lease-back from assets sold and handset cost, our cost and operating expenses were 4.1% lower year-on-year totaling BRL4.8 billion. In the same period inflation climbed to almost 10%, energy tariffs increased substantially and the dollar position put pressure on certain expenses.

This serves to prove the resilience of our efforts to control the company’s cost, particularly if you consider the 13% real decrease in the year. As you can see reductions are occurring in practically every area of our business.

Year-to-date we delivered a 5.5% reduction in OpEx excluding MTR cuts, lease-backs from assets sold and handset costs which represents a real drop of around 14% in the first nine months of 2015. And we will continue to work since we still see tremendous opportunities in our business mainly in structuring projects that ensure Oi’s process’ efficiency.

Moving on to slide 13, the focus of the transformation office during the second half of this year has been seek cost savings through end-to-end initiatives focusing on process optimization, operational productivity and improving customer experience. We already have examples of the impact from these projects to the company.

In order to enhance the M2M end experience for the customers, we launched the photo of quality. This coordinates the efforts of the company’s critical areas to improve our customer experience and it has managed to reduce by 7% number of cost to the call center and by 13% the average time of repair.

We also work in processes that can generate revenue loss. We have launched a project that ensures that all customer downgrade requests are treated by a specialized call center unit, thus minimizing the ARPU reduction.

In addition, we have deeply reviewed the procedure and adherence of customer complaint processes in order to ensure that we assign the correct and fair value to the customer when the due is contacted. These are just some examples.

But this work is ongoing and we are convinced that there are still several opportunities to enhance the company’s operational efficiency. Going now to slide 14, the focus on quality and profitability of the customer base, cost control and efficiency and CapEx optimization have provided continuous evolution of Oi’s operational cash flow.

Brazil routine EBITDA grew 10.6% year-over-year and routine EBITDA minus CapEx increased by 455% in the same period. Year-to-date the routine EBITDA from Brazilian operations reached BRL5.5 billion, with annual growth of over 11%.

And routine EBITDA minus CapEx reached BRL2.5 billion, an increase of 177% versus the same period last year. So we remain firmly on track to deliver our guidance.

As I have also been saying for some time we are not sacrificing the future of this company for the turnaround process. We clearly have limited resources but as we shall see next we have managed to do more with less through several efficiency initiatives in the allocation of CapEx and the results in terms of improved network and quality of customer experience are visible.

We have prioritized infrastructure projects and have been able to deliver them very efficiently. Below we discuss more detail this progress.

On slide 15, for the mobile network, we continue our strategy of constant improvement of all network layers from core to access and in particular to the 3G access network, making it possible to further stimulate the migration of 2G customers to the 3G network. At this point almost all of our customers who have a 3G handset are already able to use 3G network and yet with a better data usage experience.

Also we have recently completed a renegotiation on the mobile network based on the Single-RAN strategy and it will allow us to have at the end of the comfort of total of approximately 75% of our sides with a single supplier. In addition, we continue our network sharing strategy, these actions combined with the contract on renegotiations scaled out between 2014 and ‘15 have enabled the optimization of our investments while improving our network quality indicators.

Moving to slide 16, on the fixed and broadband network combined with the contractual gains from fast negotiations and the fiber swap initiatives we maintain the strategy of restructuring our transport backbone with execution of the project 100 giga OTN and Single-Edge. Thus we continue with the growing progress of our customers’ quality experience while maintaining an annual growth of around 43% in IP traffic and 45% in customer average bandwidth.

In addition to that we have a 40% annual growth in our customer base above 10 megabits per second and reduced by 17% year-on-year the volume of our customers potentially effective by network congestion. This strategy has also allowed us to launch the VDSL technology with speeds up to 35 mega and the GPON corporate for B2B customers.

I will now let Flavio take the floor to present our balance sheet and liquidity figures.

Thank you, Bayard and good morning everyone. Moving on to slide 18, as Bayard mentioned at the beginning of this presentation, we maintained our focus on debt payment and refinancing, aiming to improve the company’s debt profile.

This quarter, we paid nearly BRL5 billion between amortization and prepayments. In October, we signed an MOU with China Development Bank for a credit line of $1.2 billion in order to refinance short-term debt and finance purchase of equipment and services from quality.

We expect to sign the definitive agreement in December. The gross debt at the end of September is to that BRL53.7 billion and was heavily impacted in the quarter by the foreign exchange rate fluctuation and the accounting effect of the mark-to-market of derivatives.

First of all, I’d like to point out that the company maintains a conservative approach to foreign exchange risk and our debt denominated in foreign currency is fully added through swaps NDFs and offshore cash. The impact of the exchange variation mainly refers to the portion of debt hedged with cash as we kept the proceeds from the sale of BT Portugal in euros in order to hedge Portugal Telecom’s legacy debt.

Therefore, this impact was offset by the gains from the exchange variation of the cash in foreign currency. Regarding the accounts effect of the derivatives, it is important to remember that for accounting purpose, the borrowing and financing of foreign currency are recorded at the concept of approval and the derivatives are recorded at market value.

Especially this quarter, we observed an unusual volatility on the interest rate in dollars traded at BM&F Bovespa, which increased around 284 basis points in the period. This rate is used as a discount factor for mark-to-market calculation of the derivatives, resulting in a negative impact of BRL1.5 billion.

As we can see in the slide, this effect is registered every quarter, although not producing significant impact on the debt. In October, for instance, much of this effect has already reverted.

This effect is accounting and temporary with no cash impact and it is a result from the mismatch between the market value and the accrual of the derivatives. I emphasize that the difference between the market value and the approval of the derivatives tends to converge in the end of the contract, therefore offsetting this effect.

It is important to mention that as the company adopts the hedge accounting, this accounting effect is recorded directly in the shareholder’s equity with no impact on the P&L. On slide 19, we continue to have a solid liquidity position with the ability to meet our short-term needs.

At the end of September, our cash position was BRL16.4 billion. Our total liquidity position which considers cash and available credit lines came to BRL20.1 billion enabling us to safely and comfortably keep focus on the transformation of our business.

Slide 20, shows the net debt variation in the quarter. As you can see, we presented a positive operating cash flow of around BRL686 million, after many quarters registering cash consumption.

This performance reflects our efforts from the company to improve operational efficiency. And it partially offsets the negative impact of the financial results and the effect of mark-to-market account of derivatives on the net debt which closed September at BRL37.2 billion.

Going to slide 22, after two long years, we have managed the complete the operation of migrating to the highest standards of corporate governance in the country. We recently approved in the shareholders meeting, the incorporation of Telemont Participacoes, the election of the new Board of Directors composed of independent members and the new bylaws with the requisites of Novo Mercado.

Last month, we also finished the conversion of two thirds of preferred shares into common shares. Thus we have delivered to the market of what we promised, a company with no controlling shareholders and independent board and the highest standards of corporate governance.

Now, I will let Bayard take over again.

Thanks Flavio. Lastly, in slide 23, in summary, we continue moving forward on all fronts of our strategy priorities and quarter-by-quarter delivering everything that we have proposed to the market one year ago.

The business transformation is happening and there is no turning back. In this respect, I take this opportunity to thank all our employees for their relentless efforts to transform Oi.

There are still many challenges that lie ahead of us. But I’m proud to say that much has been accomplished.

I am convinced that we are on the right path to resume sustainable growth and create value for all of our stakeholders. Now I would like to open for questions.

Thank you very much.

Hi there, I’ve got a couple of questions. The first was can you just tell us when do the derivatives mature?

And then secondly, on slide 16 you walked through some of the prices per unit for various cost items. Could you just give us an idea given that units I assume are growing very rapidly, well, how much you’re saving in millions of reais, or if the millions of reais cost is still growing because of the volume growth?

And then a final very easy one hopefully, I see you’ve changed the Oi Livre tariff, have you done anything on any of the sort of per month type tariffs in mobile?

Hi Jonathan, good morning. Let me start by the last question, then I will turn to Flavio to talk about derivatives and maturity of it.

And I will ask you to do the second question again because I couldn’t get it. But starting by the last question, the Oi Livre for us is disruptive offer in our view.

It will definitely change the way the market and the consumers they communicate in Brazil. We are doing very well in our view at the beginning of this offer, especially in the prepaid.

We have all the models available to our customers; we have per-minute offers; we have per-day offers; we have weekly offers and monthly offers. So, we have all the portfolio of able for our customers.

And by the end of this month we’re going to launch the Oi Controle in the same structure as well as full speed. Our offer is extremely I would say interesting when we talk about data.

I think the main I would say desire of the market today not voice, it’s more towards data and in that sense we are very confident about the ability of our offers in the upcoming months. So, this is pretty much I think that the last question, I will now turn to Flavio here, who will explain about derivatives.

Hi Jonathan, most of the derivatives are perfectly matched with the loans and the bonds. So, you can expect that the duration of the portfolio will be close to the duration of our debt, there is a small mismatch but I’ll say, the duration of the portfolio it’s around a little bit above three years.

Excellent. And then my third question was you have some slides on the cost per unit?

And I guess if your cost per unit is falling, call it 30% to 40% based on the charts, I guess the volumes are also growing at 30% to 40%. So have you been able to actually reduce the monetary value of the contracts and the costs?

Yes, that’s exactly what we’re doing, we’re going after the flyers and discussing the terms and conditions to drive. And what we see here is a substantial saving in terms of CapEx.

So I think that the main point here Jonathan is that yes, we’re doing less CapEx than the market expected. We received CapEx from the previous year.

But the most important metric for us is the quality of the network it’s our ability to render data and to improve quality of the service we provide to our customers. And this is clearly what is going, it’s happening.

I was just before the call here talking to Pedro Falcao, who is here with me about the Netflix quality, Netflix measures, the quality of the networks from the telecom providers for their clients, right. And we’ve been able to improve our metric consistently month after month, so this is what matters to us, not the absolute number, it is how this CapEx is impacting the quality of our services.

Excellent, thanks a lot.

Hi, good morning. Thank you for taking our questions.

And we have two questions here, first on the comparative dynamic we saw that there was a start in the flexi plans in the market, if we expect the other companies to follow through and if you believe that there will be some rationality or if we may start to see some price war going forward, that will be the first question. And the second question is related to the RGU world, the performance going forward.

When should we expect the performance to stabilize or to start growing maybe next year? Thank you.

Thank you, Susana, good morning. Well, let’s see, I think we have already been followed.

I think we launched the very disruptive offer here. On the 30th we had our advertisement on TV, on the newspapers, on the magazine.

Third, we had full film available with price and everything else to our customers. And now we’re seeing already some followers on the TV as well.

So, some other company is doing the same. What I would like to highlight here is that again, our offer defers from our competitors because it gives forward data.

And again, that’s what from what we could see from the research we did in the past, then I don’t know, 10 months where we were discussing the new offer, it is the desire of the market. And we are offering more than our competitors.

Besides that, this is not a war price for us we are the smaller player in the mobile. It’s a natural move for us.

It will only improve our market share and our profitability. I cannot say if that’s the same case for our competitors.

For Oi, it’s not a war price, it is a natural movement. So, this is pretty much about the offer.

And as I mentioned we will by the end of this month launch as well the Controle and postpaid. And we are very confident about the quality of the offer and the impact in the market.

Regarding RGUs, I think this is very important because this new offer shows that our mission in terms of commercial approach is changing, I mean, until now we were, we can say organizing things, improving efficiency, productivity. And now we believe we’re able to go back to the market with more aggressive offers such as Livre and the pipeline continues.

I mean, we’re going to have other campaigns to launch in the upcoming months. And with that we believe we’re going to be able to stabilize and then start growing RGUs for next year.

Perfect. Thank you.

Yes, good morning, good afternoon. Thank you for taking the questions.

First with regards to the TAC and the concession in terms of potential change, any sense of a timing for both of these events and should we still assume that they’re unrelated or they’re not being put together? Second with regards to the agreement you signed with LetterOne, could you clarify that the commitment is for up to $4 billion or for full $4 billion if you guys signed an agreement on the other parts of the deal?

And then finally on mobile, service revenues for the residential segment, clearly a very good performance in Q3 compared to peers. There is to some extent either, albeit of an easy comp element and I was wondering how that plays out in Q4?

I mean, do you still think you can grow in Q4 in mobile service revenue growth, or you think that the comps make it a bit tougher? Thank you very much.

Thank you, Mathieu for your questions. Let’s talk by the TAC question.

Those are not related subject, I mean, two different discussions and one is the TAC the term of adjustment, and another one which is relating to the regulations in the special concession. And in that sense, in terms of the TAC, Anatel publicly said they want to have some of the TACs approved until the end of this year.

So, that’s going to happen in the next couple of months. But of course it depends on Anatel, they’re doing their work, they would be working doing this, here with only three, Board of Directors five now they have and two, Board of Directors here.

So, we believe it will fit by the end of this year according to what they have said publicly. And we are confident that our TAC will be approved as filed.

In regards to the concession agreements, well, last month I was in Futurecom which is the most important telecom event in Latin America. And my speech was basically about the concession terms.

Concession terms in Brazil are old fashioned, I mean, normally a concession less in average four years. In Brazil it has been here for six years or more.

And it’s time to change that. Last I think 15 days ago it was established a group with representatives of Anatel and the Ministry of Telecommunications, and they are working on this new model to be presented to the market within the next I don’t know now probably 75 days, right.

So, we are very confident giving all the, I mean, benchmarks and all the information we’ve been seeing, are important for them to analyze and to present something to the market to see how it goes. But I think it’s evolving and hope that it moves in this next 75 days for something that it’s much more aligned with the tendency and with fanatics of the current market.

This was for the TAC and the concession. Regarding the LetterOne, the proposal, the activity limit we have with the LetterOne is an exclusivity agreement where their investment would be up to $4 billion.

But this is how it has to be because if we do a capital increase, we have to give preferential rights to the current shareholders of the company. It is up to because we need to know from the current shareholders of Oi, who would be willing to participate or not.

So that’s the simple answer to that question. In terms of the mobile, I mean, we are facing a very, I would say challenging macroeconomic environment in Brazil.

So it’s a bit hard to predict the future and how this is going to impact the performance of the company. What I can tell you is that we are confident that we are going to deliver on the guidance as we gave to the markets.

Therefore, the route in EBITDA from BRL7.1 billion to BRL7.4 billion in Brazil, we are confident we’re going to deliver on this. And the routes maybe minus CapEx improvement of BRL1.2 billion to BRL1.8 billion will be achieved as well.

So, again, it’s hard to predict physically in service how it will be the impact, how it would the evolution. But we are using all the tools we have in order to deliver on the guidance we gave to the market.

Thank you very much.

Good morning everyone. My first question is related to the fixed line concession.

What would be the best format for Oi for this new fixed line concession route? And if Anatel and the minister are in talks with the companies, they are allowing the companies to contribute to the new format of the fixed line concession, this is the first part.

The second part is, if you believe it’s possible to present a proposal for Tim, for a merger before a final rule in terms of the concession? And my second question is related to the new plans.

I’d like to understand if you believe the new plans, they are financially positive as of now or in the first moment you go capture market share, and probably in 2016/’17, when emit charge will be much lower, then you’ll become profitable? Thank you.

Thank you, Daniel. Let’s start by the fixed line concession.

I mean, what we are doing here and we don’t have to be invited to, to contribute about that. We - since I started as CEO of the company last - October last year, we have been talking to Anatel to the Telecommunications Ministry about what we believe is the correct format for the concession in Brazil.

So, we have regular discussions about what we think is the right way. In the last month, we were not only Oi’s when there to say what Oi thinks about it but all the concessionaires in Brazil are working together to present to the government.

But we believe it is the right thing to be done for the country, for the society, for the company. So, now we have a group Telefonica, Algar, ourselves may represent what we think is the adequate regulatory framework for the future of this sector in Brazil.

So the format we believe is the format where concession terminates and we enter into an authorization where the companies will be able to come freely. There is enough competition in Brazil and the universalization has been done in Brazil.

So we don’t need any more obligations to fulfill or anything reversible assets. What we do need is freedom delivered to the customers and society what they want.

And clearly we have benchmarks about that. In markets with concession for instance, broadband develops in a loop, in a low pace than markets with authorization because of course resources are limited.

And if we do have obligations we cannot direct those resources where demand is. What we want here is the freedom to compete, freedom to deliver to the markets what the market wants.

So, this is about the fixed line concession. On the proposal for Telecom Italia regarding consolidation in Brazil, we’re working, and two things, I mean, one is lending a proposal that is visible that it’s good for all the parties involved together with LetterOne.

And we hope to be able to deliver proposals sooner rather than later. On the other hand, we have continued to work very hard on the concession curves.

As I have mentioned in the previous question, this group that is working on this has established a deadline of 90 days, now 75 days to present something concrete about concession. So things are evolving together in our view, we tend to give a proposal.

And of course it can be accepted or not depending on regulations. Certain things are evolving in our view together.

Finally, about the financial sustainability or the profitability of the new offer, we are the smaller player in the mobile business. We are the player that doesn’t have community, therefore, we, in that sense as I mentioned this is not a war price for us, it’s a natural move.

What we’re going to have out of this in our view is market share and profitability. Therefore I cannot talk about our competitors they will be cannibalized about something like this.

But in our case, no, in our case, what we believe is that we’re going to have positive results in terms of market share and profitability.

Okay. Thank you very much Bayard.

Good morning Bayard. So Bayard, you have been doing a very good job of improving revenue trends and also cost trends.

But how can we view the evolution of net debt which is a concern that I have and we saw this impact from derivatives that’s, you said it’s a one-off. Can we see next quarter or in fact, a reduction in the net debt levels?

Baggio, thank you for the question, and I think - we have to separately clearly the operational results from the capital structure of the company. We do know that we do have to fit the capital structure of the company.

This is something we will approach by selling assets as we have mentioned and by consolidation. With that we believe the capital structure will be addressed.

Therefore, the net debt evolution depends a lot on those things. In terms of assets, we still have assets to sell, we still have the African assets, we still have mobile towers to sell we still have some companies that are not in the core business of telecom that can monetize as well.

Therefore, I mean, that’s how we’re going to approach the net debt. Regarding operations as we have mentioned, I mean, we are confident we’re going to deliver on the guidance.

We have improved revenue results. We have been able to maintain the focus and the results in terms of cost control.

Working capital has improved this quarter. So we are happy about the operational results.

And dealing with the leverage with those two I told you. So, the agreement with LetterOne to pursue consolidation in Brazil can address that issue together with disposal of some assets that we still have to do in the upcoming quarters.

Regarding derivatives, I’ll let Flavio answer. I just take the easy questions.

Hi, Baggio, the portfolio of derivatives covering 100% of our FX denominated debt. So, the impact we saw last quarter was due do a volatility that usually happens once again couple of years.

So I do not expect to see that volatility. Again, but market conditions are kind of difficult so, again this is something that we cannot manage it.

But what I can tell is that in October we observed the rates going down and a portion of BRL1 billion from that impact being reverted. So again, life is going back to normal.

So, we do not expect to see a huge impact like that.

Okay. Thank you.

And then just a follow on question, sorry another question. Bayard, there’s a mention that there is an exclusive agreement with LetterOne for seven months, but I also understand that any agreements to LetterOne depends on our consolidation with the theme that also depends on a change in concession terms.

In the seven months any reasonable timeframe for us to expect any changes in Brazil, because I understand that change in concession depends on the approval of the Minister, of the Anatel, of the Congress and many other people also saw. So, is seven months a bit realistic for a change in regulation?

Baggio, I cannot answer that. It does not depend only on Oi.

I mean, what we’ll see during those seven months is that, first, there is work that is now being done by this new group to, rules for the sector are they accepted or not. If they are, I mean, check, one last thing to deal with the new rules will affect and our group for the sector and our group for the impairment.

If that happens, we’ll see, maybe, I don’t know a couple of month is, enough to go to Congress and to have this approved, maybe not. But I mean, this is something we’re going to monitor and we’re going to see the evolution poured into the what comes from this first, it is a turning point this work that is being now done by this group.

And let’s see how this turns out in the next steps.

Okay. Thanks a lot Bayard.

Yes. Hi, couple of questions please.

One on liability management, I think you mentioned you have paid around BRL5.5 billion in amortization and prepayments. Do you have any more detail on the prepayments and more generally what have you got out of that process in terms of covenant easing?

And can you any give any thoughts on that process in the next two or three months would be helpful, please. And then secondly, just on the Controle plans, you started to disconnect some of the Controle subs which I was slightly surprised by.

I generally was under the impression they were slightly higher quality subs. So what kind of ARPU were those subscribers on, and what was the rationale exactly for disconnecting those subscribers?

Thank you.

Okay, Soomit, I’ll start by the second question then I’ll turn it over to Flavio to talk about the debt liability. Well, I mean, we’ve been maintaining strict policies of disconnections and the Controle was exactly this situation.

I mean what we see here is that this is going to become less and less important since we now have this new Oi Livre plan. It’s natural that chips will go away and probably we’ll see in the next month reductions in terms of chips and RGU for the mobile market in Brazil, that’s what we expect.

So, I think the most important matter here is profitability of the current base increasing ARPU. And in terms of growth for the postpaid, the ARPU increased year-over-year 23%.

So, this pretty much what we expect from the base. This is an addition of clean-up of the base, we’ve done in the Controle.

And we’ll continue to do that because it only makes sense to us to have clients in our base, if they are active because I mean, we want to avoid any possible taxes that are not being funded by the clients. I’ll now turn to Flavio here.

Hi Soomit. Actually since we received the proceeds from the sale of BT we have prepaid or amortized roughly BRL8 billion, so there was a combination of different transactions, bonds, debentures, some development banks bilateral.

We tried to combine FX plus short-term maturity and then a combination of pretty much all of the lines available were paid, some more, some less. But again we have paid BRL8 billion so far.

And now we’re going to wait and see what would make sense for the company to get back to size and look in that, we have some maturities in the beginning of next year on the new rules in the second half of the year bonds in reais and euros. So I believe that those would be the targets for the company to keep reducing the growth debt.

Okay, thanks.

Hi thanks, Bayard, what’s the plan to return the company to wireless service revenue growth and how long do you think that will take?

Thank you, Walter. In terms of the clients’ service revenue, we have 8.1% increase year-over-year.

And also quarter-over-quarter increase as well. So in terms of, if we exclude the MTR impact and handsets, we’re growing fast and strong, and I think this is extremely important that was our goal.

We, in terms of the total revenue of the mobile, yes, we are still being impacted by MTR. Since MTRs will go down next year again, and thereafter we expect it to be at rest over the next season.

So again, I think the most important metric for us clients’ revenue because that’s one we have to manage currently.

Why do you think the most important metric is being able to generate free cash flow at which point you actually revenue even with the MTR cuts to actually go up. I mean there’s only so much you can cut.

So, I’m just curious with the MTR outlook which you know, when will wireless service revenue return to growth?

Let me tell you something, routine EBITDA minus CapEx this month reached BRL700 million that’s 5% increase over last year. That’s our goal, that’s what we’re doing.

So you have no outlook for return to revenue growth for the company?

Yes, we do have.

Okay. When is it?

Yes, we do have, no, no and we’re not disclosing this. There is no guidance.

All right. One last question, can you, would you consider selling the wireless business away from the company as opposed to selling the entire company or buying all of Tim?

You’re talking about selling assets as a way to stop the reduction in net debt, at some point you just sell the wireless business and the fixed business remains for shareholders?

No.

Okay, thank you.

Thanks. I’ve three questions, if I can, all on the balance sheet side of things.

In terms of covenant waivers based on numbers even if they have mark-to-market reverses, you’re still going to be over five and half times gross levered for your covenant calculation and obviously the covenant resets four times next year. Have you had any progress discussing covenant waivers with your lenders?

Secondly, in terms of China Development Bank line, is that replacing existing facilities or is it a wholly new facility? And lastly, I guess, lots of Street research over the last couple of months has said, you should consider doing a debt restructuring.

Could you just talk through your thoughts on that and whether that is something you would consider absent M&A in Brazil? Thanks.

Thanks for the questions. Regarding covenants, not yet, I mean, what we’ve been doing here is a consistent I’d say operational work, the ability to sit with the banks and discuss this before March as we’ve done this year.

And but we have not yet started the discussions. Regarding CDB and the other question, I will ask Flavio here.

So, regarding the CDB, that’s probably new facility. The way we are structuring with them, 50% of the facility will be used for debt refinancing and 50% of the facility will be used for funding the purchase of equipment services from Huawei.

The terms are really good for a company fitting our ratings. We are long-term facility.

So I prefer not to disclose the cost but it’ll say it’s really, really competitive cost. And we expect that to get the signage by the beginning of December.

And then once we get that signed, we are free to draw the refinancing facility and as long as we are purchasing equipment and services from Huawei, one of our main suppliers, then we can draw under the purchase equipment range. Regarding the other question, as Bayard mentioned, we have exclusive agreements [indiscernible].

In Brazil we are working to deliver the turnaround in March, we’ve been able to deliver it. So there is no discussion or plan for that restriction in the future.

Thank you.

Hi, thank you for taking my call. Just another couple of questions on your balance sheet.

Are there any repayments you need to make for the rest of the year that where your debt doesn’t have the covenant waivers I think in particularly of your revolver? And then also, there have been some rumors that you are perhaps buying back bonds.

Can you confirm those if you are or say about having any intention to buyback bonds? And then lastly, just on your own working group can you just confirm that the bad line isn’t quite here, whether Anatel is involved in your working group or you have the working group and then you take the proposal to Anatel and then on to the government?

Thank you very much Alex for the questions. I’ll go to the second one and then Flavio will answer about the leverage.

It’s not our working group just to make it clear it’s a working group that was created by Ministry of Telecommunications. And Anatel has three representatives there as well, so it’s a group of six, three from Anatel, three from the Telecommunications Ministry.

Now, Flavio, please.

Thank you for the question. We have BRL500 million through the end of 2015.

And regarding the bond buybacks, the company has had market opportunities and we need to reduce our debt. Actually we have been doing that.

As I mentioned in the previous question, we paid so far since the sale of BT BRL8 billion in debt that was a combination of amortization and debt prepayment. The focus of the company retires short-term debt.

So, again, actually we bought some of the bonds, certain bonds and we’re in the process of cancelling some of them. And the focus would be always in the short term.

At this point we believe that would be the strategy, so to minimize annual refinance risk for the company and therefore looking forward to buyback debt, short-term debt in general.

Okay, great. Thank you very much.

Hi, good morning, it’s actually Michel Morin at Morgan Stanley. First of all Bayard, congratulations on hitting the guidance, you know we were skeptical about how you’re going to pull it through.

So congratulations to you and your team on that. I have two questions the first is on the balance sheet.

You have some assets for sale for about I think BRL10 billion; that’s up from the second quarter. So I was wondering if you can explain why it’s up about BRL1.5 billion so what’s behind that.

And then secondly regarding the LetterOne discussions; how are you thinking and I’m sure you can’t share any specifics but just philosophically how do you think about potential transactions and potential agreements also involving the creditors at large in terms of them taking on additional risk as part of a broader debt restructuring. Thank you.

Thank you, Diego. The impact on the assets are mainly FX, it’s mainly the impact of the currency.

And then regarding how that would play a role in the consolidation I mean, we do not expect to use that as a tool for the consolidation. We have an agreement with Livre One this agreement is an agreement where they are willing to invest up to $4 billion within Oi to combine Oi with a competitor in Brazil.

And that would put us in a sustainable and very I would say comfortable position in terms of leverage. It’s how we see it.

Okay. And I also, just on the first question so you’re saying the assets I’m assuming it’s the Africa assets, you’re valuing those in euros or dollars as opposed to in local African currencies, because those have also devaluated significantly in many countries.

We value them in their local currency. And then we have the impact of the volatility of that currency, when we translate this to reais.

So that’s pretty much the impact we have there, in every single country, local currency and then translating this to reais.

Right. And there was no impact on the income statement given the total held for sale?

The income statement it’s an average. So I mean, it’s only the average.

All right, thank you.

Hi there, good morning. Thanks for taking the questions and congratulations on the operational results.

I had a couple of questions more on the financing side. So you’ve obviously disclosed some information around the Chinese Development Bank’s financing lines.

Can you tell us whether those are secured and what kind of quantum of debt we’re talking about there? And then I wanted to also gauge a sense of what your ability is to roll some of the short term debt with your existing banks and whether you think that’s something that you might be able do?

You obviously mentioned on the covenant side that you haven’t started renegotiations, but I was wondering whether you managed to secure a waiver yet for the BNDES facility which I believe you’re on breach of covenant of at the moment? And then perhaps also you can give us a quick update on disposals since you mentioned that was one way to address some of the maturities.

Well, first, we are not in reach of the covenants with BNDES. We already got the waiver actually we got a couple of months ago.

Regarding the waiver for March, actually as Bayard mentioned so far we’re not discussing with the banks. But if we believe that’s important for the company and of course strategy of the company, we don’t foresee any problem in discussing with the banks, an extension of the waiver granted this year, the beginning of this year.

So, to be honest, I don’t see that as a problem.

Okay, great.

Regarding the CDB, actually the facilities to support the purchase of equipment and then that network 3G and 4G electronics and then plus services.

And there is no guarantee.

Yes, there is no guarantee at all, it’s fully unsecured long-term in a very competitive terms, I can assure you.

And what’s the size of that facility?

$1.2 billion at first, $600 million to fund the acquisition of electronic equipments and services and $600 million to refinance debt.

Okay, got it. And then what do you think your ability is to perhaps roll some of the short term debt that you have with your existing banks?

First, the company today has a huge liquidity position without considering the cash in hand plus the committed facility, we have roughly BRL20 billion which is more than enough to walk through to 2015/16 and so we are in a very good position from that liquidity. Of course, if you manage to access the market or have conversation with our bankers to refinance part of the maturity in 2016.

If the conditions are good, the same way we are doing with CDB then why not, then I think we should pursue that definitely. If not then we use the cash to prepay the debt.

Yes, I guess the concern for investors is whilst obviously you do have a pretty healthy cash balance as it currently stands, obviously you are facing material maturities coming in June 2016 and then also in 2017. So I guess the question is what ability do you have to really push those out particularly given the free cash flow is likely to be negative?

I would say, in June we issued €600 million bonds so again now we are just about to sign agreement with CDB at $1.2 million agreement. So I think that shows the market that yes, we can find ways to refinance our debt.

And once you see the levels that we’re discussing with CDB you’ll see that it’s good terms. So, if there is a good condition for the company, the terms are good then we would definitely refinance a portion of the debt, especially the BRL ones.

If not, then we can use the cash in hand to walk through this volatility times and once the market is back, it’s open in very good terms, then we can access in refinance. But again, I think the CDB facility it’s a strong demonstration for the market that the company has ways to refinance the short-term debt.

And we’ll keep pursuing transactions like that.

Okay, that’s helpful. And perhaps I can ask one final question in that case on the potential renegotiation of these concessions.

You mentioned that you’re hoping the LetterOne group is going to come to some conclusion of appraisal within the next 75 days. I guess can you perhaps outline potential timeframe beyond that.

So after the 75 days and they come to some sort of conclusion about what the potential changes should be for that concession? How long does it then take perhaps for them to then formalize that and go to I guess Congress with something?

Is that something that we should expect at the beginning of next year or could you see something getting tabled at the end of this year?

No, I don’t think we’re going to have something concrete in terms of changes through the end of this year. We do expect to have concrete news on next year, hopefully in the first half of the year.

Okay, that’s very helpful. Thank you very much for taking the questions.

Hi there, thanks for taking the questions. I’ve got few questions, one just on your OpEx.

If can you tell us how much of that is linked to FX, I think you commented that your rent insurance was up primarily in terms of exchange rate, so I was just curious of on overall OpEx how much was linked to the FX? And then looking at OpEx customer broadly, I’m wondering do you see much more potential, because I think quarter-over-quarter your routine OpEx hasn’t really changed much.

So I’m wondering has most of the work made or do you think there’s still more to go? And then on your derivatives, I know you’ve already answered some questions on this so sorry if you’ve already answered this, but so you attribute the mark-to-market loss to I think, you call it atypical volatility in the curve.

I’m wondering if you can tell us what exactly caused that volatility and if it was just linked to the kind of steep increase in the depreciation with currency or if it was something else that caused that volatility? And then just finally, you said that a good chunk of your cash is in FX.

I assume that’s on euros I think you said that as well but just to confirm that’s primarily in euros and not in USD? Thank you.

Thank you, Sonny for your questions. We’ll start by the OpEx in U.S.

Dollars. I mean, the OpEx is not significant it’s still a small portion of it, mainly TV content, some infrastructure capacity in terms of the submarine cable that we sold last year.

And that’s just - and satellites, there were a reasonable satellites sold. So that’s pretty much what we have in terms of OpEx linked to U.S.

Dollars and that’s not significant. In terms of the trend in OpEx, I mean, we would be able to maintain the OpEx in very low levels.

We continue to work in the transformation of office to improve processes, to improve productivity, to improve efficiency of the business. Of course, with the macroeconomic environment in Brazil, with inflation going up, inflation in Brazil is running at around 9% to 10%.

First the challenging increases but we’ve been able to maintain that OpEx controlled. And we have here initiatives on the deployment to address that issue and to continue to capture savings on that.

Then I’ll turn here to Flavio to talk about the dollar volatility and the cash and currency.

Thank you, Sonny. First the cash actually it is currently in Euro.

So it’s matching our debt denominated in euros. In regards to the volatility M2M, so what we saw in September was a huge volatility in the market, the dollar-real went from 3.80 to 4.20, I think that was high.

So of course when you have such volatility that will impact all of the curves and the combined which is the interest rates in dollar negotiated in the BM&F Bovespa but there was impact and why they need almost 300 basis points so there was the effect of that caused this BRL1.5 billion, so we usually do not see such a spike in just a couple of weeks. And that’s what happened.

That’s why now that things are come here at this point and life is going back to normal than we saw the reversal of BRL1 billion out of the BRL1.5 billion that was pretty much this market condition.

Okay. Okay great thank you.

Well, thank you very much for being in the conference call with us. I would like to take the opportunity again to thank the employees of Oi for the terrific job done in this quarter.

And we hope to see you again in the next quarter results conference call. Thank you very much.