INVESTOR DAY

David MelconChief Financial Officer

São PauloMarch 15th 2016

R$ 35 billion of Capex, representing 20% of revenues,

with focus on providing outstanding connectivity

GVT acquisition creating unique positioning

Acquiring unrivaled spectrum holdings in 4G (largest band in

2.5GHz + 700 MHz in key metropolitan areas) to support

data traffic growth

Leadership expansion in key customer segments (mobile

postpaid and ultra broadband)

Disciplined financial managementwith high dividend payout ratio (more than R$ 21 Bn, >30% of

market cap) and limited leverage

Well proven and experienced management

For the last 5 years (2011-2015)

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WE HAVE BEEN BUILDING SOLID FOUNDATIONS TO IMPROVE DIFFERENTIATION, GENERATE STRONG RESULTS AND ENHANCE INVESTOR CONFIDENCE

MAIN ECONOMIC HEADWINDS WERE ADDRESSED IN 2015

• 50% of Opex

Exchange Rate2

Inflation2

• Full renegotiation with suppliers with readjustment below inflation for 2016

• Collective agreement with 7% wage readjustment

6.410.7 6.7

2014 2015 2016

IPCA %

Energy costs

• Passing through the increase in cost of handsets

• Negotiation with main providers neutralizing FX impact in 2016

• Debt fully hedged

• Replacement of equipment with short term payback

• Quick wins on efficiency activities

• 8% of Opex

• 32% of Capex

• 16.5% of net debt

ACTIONS TAKENEXPOSURE1 BEFORE

ACTIONS TAKEN

• 3% of Opex

2.7 3.4 4.2

2014 2015 2016

Average R$/US$

2014 2015

Energy Tariff in R$

+40%

1- % on 2015 base. 2- Source: Focus bulletin as of March, 04th 2016.

Bad Debt Rate

• Credit and collecting actions already driving bad debt to the previous year level

• 4% of Opex

263 341 272

2.6% 3.3% 2.5%

2014 9M15 4Q15

R$

Bad Debt Bad debt / net revenue

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Telecom services are perceived as more essential to consumers than energy and water

Large potential in new customers1

What will be less consumed by Brazilians?5

Lunch/Dinner/Snacks out of home 47.7%

Cinema 43.1%

Supermarket 35.4%

Bars and Restaurants 33.7%

Clothes, shoes, accessories 31.6%

Energy, water 20.4%

Beauty Salon 13.5%

Travels 13.4%

Cellphone 13.2%

STILL WE SEE THE SECTOR AS RESILIENT TO SECULAR TRENDS AND SOME ECONOMIC IMPACTS

47 Millionpeople (23% of the

Brazilian population) with less than 14 years old²

51% of population with

mobile data coverage but no usage

1 – GSMA and IBGE. 2- IPC_Maps 2015. 3- Telco sector includes telecommunications, IT, audiovisual, press agencies and News services. 4- AT Kearney Analysis. 5- SPC Brasil (Service of Credit Protection) resource.

Telco sector3 GDP shows resiliency even in recession periods

1Q15 2Q15 3Q15 4Q15

Brazilian GDP GDP-Telco sector/ICT

Brazilians demand more connectivity than in any other country4

51%

13%24% 25% 28%

Brazil Japan UK US Global

% of users that demand permanent connectivity

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VIVO ACHIEVED SOLID REVENUE GROWTH, EBITDA EXPANSION AND STRONG CASH FLOW GENERATION IN 2015

R$ million 2015¹ %YoY

Net Operating Revenue² 42,133.7 4.8

Net Mobile Revenue² 25,136.2 6.2

Net Fixed Revenue 16,997.5 2.7

EBITDA 12,714.2 3.4

EBITDA Margin (%) 30.2% (0.4) p.p.

Capex³ 8,318.8 (0.9)

EBITDA – CAPEX³ 4,395.4 12.6

Key Financial Highlights

Solid EBITDA expansion in the year even with macro effects

Growing OpCF while sustaining solid Capex level

Outperforming the market in Revenue growth

Total revenues• Excluding regulatory effects 2015 revenue grew 5.6%

Mobile• Mobile data representing 51% of MSR in 4Q15

• Capturing 100% of incremental MSR of the sector in 2015

Fixed• Outstanding growth in key revenue lines (FTTX and Pay TV)

• Resuming growth in SP area (ex. GVT)

1 – Considers TEF Brasil + GVT figures as of January, 2014. 2- Includes net handset revenue. 3- Capex excluding licenses. | 5 |

IN REVENUES, GROWING BUSINESSES MORE THAN COMPENSATE FOR THE REDUCTION IN TRADITIONAL ONES

23.7 21.8

16.6 20.4

2014 2015

Revenue per product

(R$ billion)

Products with growth

-8.0%Products with

no growth

23.0%

5.6%

Excluding regulatory effects

+4.8%

Mobile data & VAS

TV UBB

2014

2015

34.1%

27.6% 16.6%

Fixed voice Mobile voice

2014

2015-2.6%

-8.6%

• Continuous delivery of data centric strategy

• Mobile data revenues surpassing mobile voice revenues since 2Q15

• Improved trends in fixed voice due to smart pricing actions and 3P growth

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UPCOMING TERMINATION RATE CUT WILL REDUCE REVENUES WITH LIMITED IMPACT ON EBITDA

Expected Tariffs reduction

YEAR MTR FTR (TU-RL / TU-RIU)

Tariff

R$ centsVar. %

Tariff

R$ centsVar. %

2014 25 -25%

2015 17 -33%

2016 11 -37% 1.1/5 -60% /-37%

2017 7 -47% 0.6/2 -50% /-59%

2018 4 -47% 0.3/0.9 -50% /-59%

2019 2 -50%

TU-RL and TU-RIU new tariffs became effective on February 24, 2016

785500

275

2016 2017 2018

Incremental Impact

190110

20

2016 2017 2018

Incremental Impact

Reduced exposure in EBITDA

Reducing impact on revenues

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Estimated direct Revenue impact

Estimated direct EBITDA impact

R$ million

R$ million

Share of total net revenue1 Share of EBITDA1

IN A HIGHLY COMPETITIVE MARKET VIVO OUTPERFORMS PEERS WITH THE HIGHEST GROWTH IN REVENUE AND LARGEST EBITDA

Vivo records the largest Market growth capturing the largest share of incremental value of the industry

14% 22%30% 34%

Positioned among the companies with highest market value in Brazil, the highest in the telecom sector

17%23% 26%

34%

1- Based on 2015 public information for two main operators. For a 3rd one, based on the rolling 12 months

ended in Sep/15. Does not exclude non recurrent effects. 2 – Includes nominal amounts of net debt

according to the last numbers published by the operators;

293181

66

Itaú UnibancoAmbev

Enterprise value2: Telecom (R$Bn)Mkt cap as of March 10th 2016

Market Cap Ibovespa (R$Bn)March 10th 2016

66

19 1

5

2 37

Tim Oi

Mkt value Net debt

TimVivo Oi

-12.1%

-2.3%

+1.8%+4.8%

2038

693rd position when excluding

financial sector

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Total net revenue

evolution y-o-y

6th

position in Brazil

Vivo

Player 3 Player 1Player 2 Vivo

WE WILL IMPROVE FURTHER OUR PROFITABILITY THROUGH FOUR MAIN LEVERS

Synergies

Capex allocation

Simplification and efficiency

Digitalization

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OPERATIONAL SYNERGIES

Real 2015 2016 2017 2018 2019 2020

EBITDA increase Capex savings and avoidance

Already executed actions in 2015 to secure 30% of total NPV of best case scenario, with increasing EBITDA impact beginning in 2016

Leveraging of combined networks

• Migration of last mile circuits

• Sharing of Backbone Routes

• Fibering of mobile sites

• Avoiding investments in GVT’s fiber footprint in SP

Unification of advertising agencies and advertising budget

• Concluded in 2015

Rightsizing of the organization

• Anticipated from Jan/16 to Sep/15

R$636Millionin 2015

70% ofRun Rate

Full Run Rate

1- Does not include NPV of taxes in the amount of R$4.5 billion in the base case and 5.9 billion in the best case. 2- Includes opex avoidance in the capex | 10 |

Total NPV from R$ 9.6 billion to R$ 16.1 billion1

Revenue

R$ 2.7 bn

R$ 5.5 bn

Opex

R$ 3.9 bn

R$ 6.6 bn

Capex avoidance2

R$ 3.4 bn

Capex savings

R$ 0.7 bn

R$ 1.6 bn

Base Case

Already secured

Best Case

R$ 0.2 bnR$ 2.9 bnR$ 0.2 bn

R$ 3.0 bn

Initiatives accross the board to improve profitability

Consolidation of IT platforms and applications

Portfolio simplification reducing customer care costs

Optimization of network infrastructure / field services

SIMPLIFICATION AND EFFICIENCY

1800

6

Old portfolio Current sales portfolio

B2C Mobile

B2B

4300

8

Old portfolio Current salesportfolio

40% reduction in the number of applications simplifying IT operations

2015 2018

-40%• Insourcing of field services in SP

leading to reduction in non-qualitycosts

• Fixed network simplification with VoIP in FTTH areas

• Unified installation process for 3P additions

• Avoiding copper expenditures

• Network sharing agreement for rural areas

Prepaid offers with simpler structure

Zero waste approach

• Program to achieve efficiency and operational excellence by implementing initiatives to reduce waste and attack performance gaps

• Best in class efficiency rate

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COMMERCIAL BACKOFFICE

DIGITALIZATION AND ANALYTICSCreating the tools and the incentives to transform customer experience and save costs

• Target online bills across

mobile postpaid base

• Vivo Easy (first postpaid plan

as an app in the market)

E-COMMERCE

E-CARE

BIG DATA

• Incentivizing self care through

use of Meu Vivo application

• Improving customer satisfaction

and call center costs

Leveraging on analytics and

big data to transform business

model and cost structure

and maximize revenues

• Accelerating use of virtual

recharges

• Increasing B2B, 3P and mobile

sales through online stores

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Superior capex ratio focused on improving growthCAPEX ALLOCATION

Solid Capex evolution strengthenedby Capex avoidance

8.4 8.39.0

20.9% 19.7%22.0%

8

8

8

8

8

9

9

2014 2015 2015 including Capex

avoidance

Capex % Capex / Net Revenues

R$ Billion

• Synchronize business outcomes with investment requirements

• Critical trade-offs: where we play to win (e.g. larger coverage x quality where it matters)

• Reprioritizing 30% of mobile capex based on big data information (geo localization of higher value customers)

Improving returns with a new methodology to stablish capex trade-offs

To be sustained in 2016 with focus on improving growth

MAIN PROJECTS

• 3G capacity

• 4G coverage

• Backbone and

Backhaul

• FTTX footprint

• FTTC2016 Capex

Commercial

Maintenance/Obligatory

70% of Capex allocated to improve commercial growth and assure quality

• Assessing potential sales of mobile towers to improve efficiency and value generation

Continuous analysis of opportunities in sales of mobile towers

R$ Billion

Max. 8.71

1- Excluding licenses| 13 |

OpCF 2015 Free cash flow 2015

Growth in OpCF driven by EBITDA increase and stable investment level

Solidly converting EBITDA – Capex into free cash flow

DISCIPLINED FINANCIAL MANAGEMENT DRIVING OpCFGROWTH AND STRONG CONVERSION IN FREE CASH FLOW

3.9 4.4

2014 2015

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77%

R$ Billion R$ Billion

1- Free Cash Flow after working capital variation, financial interest and taxes.

4.43.4

Monetizationof OpCF after working capital variation, financial interest and taxes

OpCF (EBITDA-Capex)

1

A SOLID CAPITAL STRUCTURE PROVIDING OPTIONALITY AND FLEXIBILITY FOR THE COMPANY

Net Debt/EBITDAR$ billion

10.2

5.6

4.6

Gross Debt Cash Net Debt

2015

• Low leverage and strong liquidity position with average investment yield (103% of CDI) higher than average cost of debt (93% of CDI)

• Vivo’s solid balance sheet reflected in credit ratings, which persist above Brazil’s rating

2014 2015

0.58 0.36

-22.6%

YOY

-35.9%

YOY

-6.8%

YOY

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AN UNIQUE COMBINATION OF GROWTH AND VALUE DISTRIBUTION

Dividends declared in the amount of more than R$21 billion (>30% of market cap) from 2011-2015

Synergies driving EBITDA growth superior to peers with dividend yield higher than more mature companies

Source: Bloomberg. 1- Europe Average includes Telefónica, Deustche Telekom, Orange, Telecom Italia,

Vodafone, British Telecom, Telenor, KPN, Swisscom, Telia-Sonera, Tele2, Telekom Austria and TDC.

Hig

hLow

HighLow EBITDA CAGR 2015-18

Europe AVG.1

Div

idend

Yie

ld 2

016

Between 0-2% Above 6%

Betw

een 0

-2%

Above 6

%

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REVENUE

PERSPECTIVES2016 - 2018

EBITDA CAPEX

Continued strong growth in key revenue lines (mobile data, UBB and TV) due to our value driven data centric strategy, outperforming the industry

Recurrent margin improvement supported by synergies and efficiency

Capex / revenues of up to 20% to be reassessed in 2017 depending on economic activity and potential optimization due to smart allocation initiative. Capex to descend in 2018

Continued growth in Operating Cash Flow

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FINANCIAL TAKEAWAYS

Vivo stands out in the market with an unique combination of EBITDA

growth, shareholder remuneration and solid capital structure

Unique

Strategy

Unique Capital

Structure

Unique

Positioning

Through sustained investment, M&A and a value driven commercial approach, we

have built a matchless platform, including the right infrastructure, spectrum

portfolio and customer mix to capture market value and evolve to service

convergence

We have a robust plan to transform the company benefitting top line. Efficiency

and simplification initiatives, digitalization and an improved capital allocation

oriented for growth should enhance further our returns

Strong cash flow generation and solid debt position gives the company optionality

and flexibility to chase growth while remunerating shareholders

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DISCLAIMER

These presentations 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

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.

For a better understanding, we are presenting pro forma numbers combining Telefônica

Brasil and GVT results for all financial and operational indicators for every period as of

January, 2014.