january/03 1 tele norte leste participaÇÕes s.a

January/031

TELE NORTE LESTE PARTICIPAÇÕES S.A.TELE NORTE LESTE PARTICIPAÇÕES S.A.

January/032

One of the largest Integrated Telecom Companies in Brazil

15.1 million fixed lines in service (Sep/02)

1.4 million mobile subscribers (Dec/02)

Concession Area:

65% of Brazilian Territory / 93 million people

40% of Country’s GDP

Over 21 Million Households

Leadership in Local Services (98% market share)

Domestic and International Long Distance Services

Regional Mobile Services (GSM)

Data, Corporate & Value Added Services

TNLP4: Most Liquid Stock in Brazilian Market (BOVESPA)

Free Float: 79% of Total Shares

Level 2 ADR (NYSE:TNE): 28% of Total Shares

Market Value: US$ 2.8 billion (Dec/02)

Overview – December / 2002

January/033

TELE NORTE LESTE

PARTICIPAÇÕES S.A

(TNE)

79.0% 18.7%

CONTAX

TELEMAR

PARTICIPAÇÕES S.A. *

TELEMAR

PARTICIPAÇÕES S.A. *

TELEMARNorte Leste

(TMAR)

Treasury Stock

Free FloatFree Float

18.9%

Treasury Stock

FREE FLOATFREE FLOAT

Pegasus

Telemar – Shareholders´ Structure

* Controlling Shareholder (53% of voting shares)

2.3%

1.6%

January/034

TNE - Capital Structure

Tele Norte Leste

Participações S.A.

(TNE)

Free Float

79.0%18.7%TELEMAR

PARTICIPAÇÕES S.A.

Capital

R$ 4,477 Million

Total Shares: 383,846 million

Preferred: 255,897 million

Common: 127,949 million

Treasury Stock = 2.3%

TOTAL CAPITAL*BNDESPar

Fiago

AG Telecom

ASSECA Participações

Lexpart Part.

L. F. Tel

BrasilCap

BrasilVeículos

25.0%

19.9%

11.3%

11.3%

11.3%

11.3%

5.0%

5.0%

* 53% of TNE common shares

January/035

• General Shareholders´ Meeting

• Board of Directors

• 11 board members 10 shareholders representatives plus the CEO

• Board Committees

• Fiscal Committee

• 5 members, appointed by:

• Controlling Shareholder ( Telemar Participações) –3;

• Minority Shareholders (voting shares) – 1;

• Minority Shareholders (preferred shares) –1;

• Objectives: Review and approve the Company´s accounting issues and procedures.

•Executive Committee

• 3 members: TNE, TMAR and Oi´s CEO’s

•Independent Accountants

• PricewaterhouseCoopers

Corporate Structure

January/036

Managing Structure

Fiscal Committee

Board of

Directors

TNE

Executive Committee

Controlling

Procurement

Treasury/ Investor Relations

CFOStrategy and

Regulation

Legal Counsel

Financial Planning

Asset Management

Public Relations

Billing ManagementInternal Audit

Oi CEOTMARCEO

TNE CEO

January/037

Main Achievements

- Optimization of Resources;- Process Standardization;- Management Centralization;- Merge of wireline companies;

Restructuring 16 1

Processes

Services

Market Approach

16 Companies 16 IT Systems 15 Network Platforms23 Network Management Centers116 Call Centers

Local Voice and regional LD;Regional Data Communic.

Geographic

1998

Local & Advanced VoiceDomestic & International

LD Nationwide Data

Transmission Wireless

Call CenterNetwork Management /

Internet

Management/Processes

Services

Market Vision

Customer Segmentation

All Unified

International

RIII

RIRII

2002

January/038

Anatel Targets: Reaping the Benefits

• Oi’s Operational Launching

• Domestic Long Distance Service

• International Long Distance Service

• Nationwide Data Services (Pegasus´Acquisition)

January/039

7.28.1 7.8

8.89.7

10.511.8

12.8

14.8

18.1

15.6

17.6

Jul_98* 1998 1999 2000 2001 Sep_02

Lines in Service (LIS) Lines Installed (LI)

Universal Service

Targets

Wireline Platform Growth and Utilization Rate - TMAR

*Acquisition of the Company

CAGR (LIS) = 23.8%106%

Utilization Rate (%)

89%92% 86%82%

93%89%

15.1

Wireless

Wireline

January/0310

Revenue Growth - TNE(R$ Mn)

CAGR = 25.1%

6,946

5,158

8,433

6,222

10,851

8,122

13,660

10,103

11,739

8,648

1998 1999 2000 2001 9M02

Gross Revenue Net Revenue

+17%

yoy

96%

January/0311

Operating Expenses - TNE* (R$ Mn)

* Ex depreciation and amortization

9M01

37%22%

16% 25%

9M02

19%

39%

8%34%

3,470 3,4884,095

6,663

4,811 4,618

1998 1999 2000 2001 9M01 9M02

Cost of Services

Interconnection

Selling Expenses

G&A and Other

Operating Expenses

January/0312

Bad Debt Provisions – TNE(% of Gross Revenue)

4.2%

2.5%

1.6%2.0%

5.7%

1998 1999 2000 2001 9M02

January/0313

Net Revenue EBITDA

EBITDA Growth - TNE(R$ Mn)

5,158

8,127

6,222

8,648

10,103

4,0303,440

4,032

2,735

1,689

34%

47%

50%

44%

33%

1998 1999 2000 2001 9M02

EBITDA Margin (%)

January/0314

Recent Financial Results(R$ Mn)

3Q01 2Q02 3Q02 9M01 9M02

Financial Revenue 156 136 163 297 427

Financial Expenses 510 636 1,021 869 1,979

Interest on Loans/ Dividends 70 187 236 162 575

Monetary & Exchange Variations 220 333 556 397 976

107 230

Premium Amortizations, PIS, Confins 48 41 94 67 186

Others 113 7 3 135 12

Net Financial Result (354) (500) (859) (572) (1,552)

Banking Fees & Monetary Atualizationof Provision for Contingencies 58 68 133

January/0315

15.4%

99.6%

34.5%

36.1%48.5%

1998 1999 2000 2001 9M02

Consolidated Capex - TNE(R$ Mn)

2,500 2,244 2,804

7,888

2,172

632

702

1998 1999 2000 2001 9M02

Wireline Wireless

10,060

1,334

CAPEX / Net Revenue

January/0316

Net Debt – Quarterly Evolution - TNE(R$ Mn)

R$ Mn Sep_01 Dec_01 Mar_02 Jun_02 Sep_02Total Debt 8,906 8,937 9,361 9,700 10,389

Short Term 1,160 1,388 1,424 1,220 1,328 Long Term 7,746 7,549 7,937 8,481 9,062

(-) Cash (1,870) (1,235) (1,044) (573) (1,229) (-) Long Term Financ Invest. - - - - (154) (=) Net Debt 7,036 7,702 8,317 9,128 9,006

January/0317

Debt Profile – Currency & Cost (Sep/02)

Currency Interest Index

Currency Cost (% p.a.)

US$ Libor + 5

Yen 1.7

Basket 12.3

Real 16.0

Cost of Debt

46%

11%

10%

33%

Local

US$

Yen (Swap to US$)

CY Basquet

52%

15%

20%

13% CDI

TJLP

Floating Rate (Foreign Currency)

Fixed Rate (Foreign Currency)

January/0318

Debt Profile – Repayment Schedule (Sep/02)

4%

11%

18%

21%

29%

18%

2002 2003 2004 2005 2006 2007

onwards

Total Debt: R$ 10,389 Mn

January/0319

Dividends and Dividend Yield – TNE (1998/2002)

*9M2002 Annualized

224 224248

500

300

4.3%

3.6%

4.3%*

3.0%3.1%

1998 1999 2000 2001 2002E

Dividends (R$ Mn) Dividend Yield (%)

January/0320

Oi´s Project: Pre-Launching Rollout

Coverage

• 200 cities covered; 30 million people

• GPRS coverage in 6 main capitals

• Record of site installation per month

• CAPEX optimization (co-sitting)

• International Roaming

• Main Suppliers: Nokia, Siemens, Alcatel, Ericsson

Coverage focused on profitable areas

Distribution

• 1,600 points of sales (breaking exclusivity of A & B band agreements)

• Diversified channels with high capillarity:

Retail, specialized agents/dealers, stores, telesales

• Corporate sales effort combined with Telemar.

Consumer and corporate focus through high capillarity and diversity of channels

Resource Optimization

• Tight headcount structure: ~660 employees

• Infrastructure Sharing

• Outsourcing (including “call centers”)

• Synergies with Telemar

• Strong brand

Focus on profitable growth, minimizing OPEX and CAPEX

January/0321

Post-Launching Results

• Innovative Campaign: 31 Years

• Differentiated Service Plans

• Diversified Handsets Offer.

Initial Targets(July/2002)

• 500,000 clients in 12 months

• ARPU of R$ 26

• MIX Pre / Post: 90% / 10%

• Market share and gross adds bellow fair market share

First Achievements

• 1,400,000 clients in just six months

• ARPU over R$ 30 (first 6 months)

• MIX Pre / Post: 80% / 20% (6 months)

• Market share and gross adds well above fair market share

January/0322

Oi´s Subscriber Base – Monthly Evolution(in thousands)

Jul_02 Aug_02 Sep_02 Oct_02 Nov_02 Dec_02

Pre paid Post-paid

79%

21% 81%

80%78%

78% 80%19%

20%

22%

22%

20%

178

386502

978

677

1,400

January/0323

OUTLOOK 2002 (Review)

Lines in Service: +300/400 K

New Revenues: DLD/ILD and Mobile Services (Oi)

Capex: Around R$ 2 Bn

Bad Debt: Up to 5% of Gross Revenue

Net Debt: Around R$ 9 Bn (2002 YE)

Oi: 1 Mn subscribers (2002 YE)

January/0324

Revenue Growth Strategy- TNE

Local Data & Corporate

Long Distance Mobility

Profitability

Competition

January/0325

Maintain Leadership in Home Market

Advanced Voice Services (Corporate /

Middle Market)

Best Carrier´s Carrier – Network leverage

(Home Market)

Increase ARPU

Value Added Services

Increase ADSL sales

Reduce Interconnection Costs (TNE level)

Local Service

Revenue Growth Strategy- TNE

January/0326

Leadership in Home Market

Conquer new markets (Inter-

regional / International / SMP – Dial

Code)

Protect existing market:

• Retail: Loyalty / Retention

Programs + Promotions

• Corporate: Best Quality (Call

Completion / Billing) +

Aggressive Service Plans

Long Distance Service

Revenue Growth Strategy- TNE

January/0327

Increase offer to SME (Home

Market)

ADSL (High end / SOHO / Small

Businesses)

Nationwide Services (Corporate

Level)

Leverage on National Backbone

(Telemar + Pegasus)

Competitive Service Level

Agreements

Data & Corporate Services

Revenue Growth Strategy- TNE

January/0328

MobileServices

Deepen Market Segmentation

Stimulate DATA + SMS

Focus on Corporate

Leverage on Competitive Advantages:

• Synergies with wireline

• Regional coverage

• GSM technology (speed & features)

Low Handset Subsidies / Aggressive

Service Plans

Increase National & International Roaming

Revenue Growth Strategy- TNE

January/0329

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” STATEMENTSAFE HARBOR” STATEMENT

Investor Relations

Rua Humberto de Campos, 425 / 8º andar

Leblon

Rio de Janeiro -RJ

Phone: ( 55 21) 3131-1314/1313/1315/1316/1317

Fax: (55 21) 3131-1155

E-mail: invest@telemar.com.br

Visit our website: http://www.telemar.com.br/ri