May, 2003

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Overview – March/2003

• Integrated Telecom Service Provider-15.0 million wirelines in service - 1.7 million wireless clients

• Concession Area (Region I) - Local Service and SMP– 65% of Brazilian territory/94 million people– 40% of country’s GDP– Over 21 million households

• Leadership in local services in Region I (98% market share)

• National and international long distance services

• Regional mobile services (GSM)

• National Data, Corporate & Value Added Services

• TNLP4: most liquid stock in Brazilian market• TNE: among the most liquid L.A. ADR at the NYSE /2002

• Free Float: 80% of total shares

• Level 2 ADR (NYSE: TNE): 30% of total shares

• Market value: US$ 4.2 billion (Apr/03)

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* Controlling Shareholder (53% of voting shares)

TNE – Shareholders´Structure

TelemarParticipações S.A.*

Free float

Tele Norte Leste Participações S.A. (TNE)

Free float = 18.9%

Treasury stock = 1.6%

100.0%

Treasury

79.5%

Norte Leste (TMAR)

100.0% 100.0%

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TNE – Capital Structure

*53% of TNE common shares

Capital

R$ 4,644 million

Tele Norte Leste Participações S.A.

(TNE)

Telemar Participações S.A.

Free float

17.9% 79.9%

BNDESPar

Fiago

AG Telecom

ASSECA Participações

L.F. Tel

BrasilCap

Brasil Veículos

Lexpart Part.

130,186 Mn

390,557 Mn

260,371 Mn

Common

Preferred

Total

Shares

1/3

2/3

Total outstanding shares (ex-treasury)

381,8 Mn

Treasury Stock

2.2%

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Managing Structure

Audit

Committee

Fiscal Committee

Board of

Directors

Executive Committee

Controlling

Procurement

Treasury

CFOStrategy and

Regulation

Legal Counsel Financial PlanningAsset Management

Public Relations

Internal Audit

TMAR

Investor Relations

Billing CycleHuman Resource

OiCEOTMAR CEO

TNE

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Wireline Network – Lines Installed & in Service(million lines)

Lines in service (LIS)

Lines installed (LI)

July 1998* 1998 1999 2000 2001 2002 1Q03

*Company´s acquisition.

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Wireline Network – Broadband Accesses(in thousands)

Mar/02 Jun/02 Sep/02 Dec/02 Mar/03

15%

85%

19%

81%

23%

77%

53%58%

47%42%

90 92 93

120125

Velox (ADSL)

DVI (ISDN)

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Wireline Network – Long Distance Backbone

Natal

Recife

Maceió

RR

AMPA

MA

AC

RO

MT

MS

RS

PR

SP

MGGO

TO

BA

PI

CE

PBPE

Porto Alegre

Florianópolis

Curitiba

Goiânia

Brasília

SE

São Luís

Rio de Janeiro

Vitória

Salvador

Aracajú

Terezina

Fortaleza

Paracatu

Patrocínio

ES

Belém

RN

AL

Uberlândia

SC

Belo Horizonte

São Paulo

Campinas RJ

AP

Montes Claros

• Cover over 80% of Brazilian Industrial GDP

• Interstate transport network

• 18,000 km fiber optical cable

• 20 integrated metropolitan rings in 18 states

• 350 remote satellite stations

• 8 Hub satellites

• DWDM, SDH and IP

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Nov/02 Dec/02

Prepaid

Post-paid

Wireless Platform - Oi’s subscriber base(in thousands)

Mar/03

80%

20%

78%

22%

78%

22%

80%

20%

79%

21%

78%

22%

502

978

1,4011,504

1,624

78%

22%

1,722

677

Oct/02Sep/02 Jan/03 Feb/03

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Financial Results 1Q03 – Net Revenues(R$ Mn)

Oi

244

291

4Q02 1Q03

TMAR

2,980 3,041

4Q02 1Q03

TNL

2,785

3,2183,226

4Q02 1Q03 1Q02

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Gross Revenue - R$ Mn 1Q03 % 4Q02 % 1Q02 %

QoQ YoY

Wireline 4,234 100% 4,034 100% 3,759 100% 5% 13%

Local (ex - VC1) 1,881 44% 1,863 46% 1,644 44% 1% 14%

Local Fixed-to-Mobile (VC1) 711 17% 665 16% 702 19% 7% 1%

Long Distance (ex - VC2/3) 514 12% 470 12% 342 9% 9% 50%

LD Fixed-to-Mobile (VC2/3) 152 4% 125 3% 121 3% 22% 26%

Network Usage 330 8% 347 9% 426 11% -5% -22%

Data 271 6% 221 5% 230 6% 23% 18%

Public Phones 196 5% 182 5% 148 4% 8% 32%

Other 180 4% 161 4% 147 4% 12% 22%

Wireless 219 100% 318 100% - - -31% - Services 137 63% 76 24% - - 81% -

Subscription 32 15% 17 5% - - 91% - Outgoing Calls 52 24% 27 8% - - 93% - Domestic/Inter. Roaming 12 6% 7 2% - - 73% - Network Usage 35 16% 21 7% - - 68% - Other SMP Services 6 3% 4 1% - - 44% - Handset Sales 82 37% 242 76% - - -66% -

Total Gross Revenue 4,453 100% 4,352 100% 3,759 100% 2% 18%

Wireline 4,234 95% 4,034 93% 3,759 100% 5% 13%

Wireless 219 5% 318 7% - 0% -31% 0%

Consolidated Net Revenue 3,218 3,226 2,785 16%

% Change

Financial Results 1Q03 – Gross Revenue Breakdown

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25

- 4

46

-3

0

64Total

Installation

Other

Fixed to Mobile

Pulses

Montly Subscription

Consolidated Revenues – Local Services

Decrease in average lines in service and traffic

Fixed to mobile tariff adjustment in February

1

246

-19

9

96

160

Total

Installation

Other

Fixed to Mobile

Pulses

Montly Subscription

1Q03/1Q02

1Q03/4Q02

Tariff increase in June/02 and traffic growth (5% yoy)

Decrease in fixed to mobile traffic (campaigns incentivating fixed-fixed calls)

Drivers

+ R$ 67 Mn

(+2.5%)

+ R$ 246 Mn

(+10.5%)

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Consolidated Revenues – Long Distance Services

Intra-RegionaI: increase in average revenue per minute (lower promotions/ discounts)

Inter-regional & International: Increase in traffic and market share

Fixed-Mobile: Traffic increase (CSP 31) and tariff adjustment in February

27

71

12

11

10

11

Total

Fixed to Mobile (VC2/3)

International

Inter-Regional

Inter-State

Intra-State

1Q03/1Q02

1Q03/4Q02

32

204

24

53

40

56

Total

Fixed to Mobile (VC2/3)

International

Inter-Regional

Inter-State

Intra-State

Market share gains in all segments (new services contributed with R$ 77 million) and tariff increases

Drivers

+ R$ 71 Mn

(+11.9%)

+ R$ 204 Mn

(+44.1%)

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14

24

- 4

8

50

8

Total

Other

Packet/Frame Relay

EILD

SLDD/SLDA

IP

Consolidated Revenues – Data Services

1Q03/1Q02

1Q03/4Q02

20

12

-12

7

41

14

Total

Other

Packet/Frame Relay

EILD

SLDD/SLDA

IP

The Brazilian Data Market is growing by 10% a year. Telemar´s revenue increased by 17.5% yoy and 22.4% qoq, mainly due to market share gains (also helped by Pegasus´ acquisition).

Pricing pressure on leased lines (mainly to other providers - EILD)

Drivers

+ R$ 50 Mn

(+22.7%)

+ R$ 41 Mn

(+17.8%)

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Growth in services (+89%) partly compensating the decrease in handsets sales (-66%)

Consolidated Revenues – Wireless Services

1Q03/4Q02

7

100

15

14

25

-161

Total

Other

Subscription

Netw ork Usage

Outgoing Calls

Handset SalesDrivers

- R$ 100 Mn

(-31.2%)

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Oi´s Operating & Financial Performance – 1Q03

21%34%

74%

79%66%

26%

3Q02 4Q02 1Q03

Handsets

Services

Gross Revenue (R$ Mn) Net Additions (in Thousands)

366

Market Share/Net Additions 1Q03 *

Band A+B

44%Oi56%

Wireless Market-Share Region I (Mar03)

* Region I (Band B net adds estimated)

314184

10.6%

88.4% Band A+B

900 321500

Oi

31%20%20%

69%80%80%

3Q02 4Q02 1Q03

Pre Paid

Post Paid

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Costs & Operating Expenses* - 1Q03(R$ Mn)

*Ex depreciation and amortization

1Q02 4Q02

1,351

1,966

1,743

1Q03

1Q03

4Q02

29%

18%

40%13%

Cost of services

Interconnection

Selling

G&A / Other

39%

18% 35%

8%

Cost of services

Interconnection

Selling

G&A and Other

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(R$ Mn)Costs & Operating Expenses – Main Changes - 1Q03/4Q02

Analysis

Costs and Operating Expenses - R$ Mn 1Q03 4Q02 R$ %

Interconnection 654 587 67 11.4%Average increase in mobile interconnection rates in February/03 (22%)

Personnel 204 229 (25) -10.9% A 6.8% reduction in average headcount at TMAR/TNL and higher severance costs in 4Q02

Third Party Services 475 544 (69) -12.7%Decrease in maintenance expenses/dealer commissions (Oi)/consulting expenses (Corporate + Legal +IT)

Materials 126 290 (164) -56.6% Decrease in handset sales

Rent / Insurance 145 170 (25) -14.7% Decrease in rental expenses at TMAR

Marketing 16 63 (47) -74.6% Lower marketing campaigns in 1Q03 (Oi and 31Global)

Provision for Doubtful Accounts 141 122 19 15.6% Subscription frauds at Oi

Other Op. Expenses (Income) (18) (39) 21 -53.8% Non recurring revenues in 4Q02

Total 1,743 1,966 (223) -11.3%

* TNE Consolidated - accounts for elimination of intercompany transactions.

ChangeTNE*

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Personnel – 1Q03(full–time employees)

1998 1999 2000 2002 Mar/03

24,206 24,511

21,090

28,73629,987

Contax

TMAR+Oi

2001

27,471

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Bad Debt Provisions – 1Q03(% of gross revenue)

1Q02 2Q02 3Q02 4Q02 1Q03

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Consolidated EBITDA – 1Q03(R$ Mn)

2,7803,083 3,226 3,218

2,785

1,2601,4761,434 1,311 1,285

45.9%

39.1%41.7%

47.2%

51.5%

1Q02 2Q02 3Q02 4Q02 1Q03

Net Revenue Ebitda Ebitda Margin

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Financial Results – 1Q03(R$ Mn)

* Net of currency swap results.

Increase in interest rates (CDI) and in total debt during 1Q03

1Q03 4Q02

Financial Revenue 123 75

Financial Expenses (575) (484)

Interest on Loans/ Debentures (265) (248)

Monetary & Exchange Variations* (149) 23

Banking Fees & Contingencies (108) (115)

Premium Amortization, PIS & Cofins (34) (127)

Other (19) (17)

Net Financial Result (452) (409)

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Consolidated Income Statement – 1Q03(R$ Mn)

Reversal of Income Tax/ Interest on Capital Statement

1Q03 4Q02

Net Operating Revenue 3,218.3 3,226.1

Operating Expenses 1,088.9 1,379.2

Interconection Costs 653.7 586.8

EBITDA 1,475.7 1,260.0

Depreciation and Amortization 985.1 980.7

EBIT 531.6 260.0

Financial Result 452.1 409.1

Income Before Taxes 60.9 (114.2)

Income Tax and Social Contribution 113.5 (207.8)

Employee Profit Sharing 11.2 98.2

Minoritary Interest 48.4 96.1

Net Income (112.3) (100.7)

EPADR (R$) (0.30) (0.27)

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Consolidated CAPEX – 1Q03(R$ Mn)

88

453

255

135244

97

243255196 251

5.8%

21.6%

16.5%

13.9%15.8%

1Q02 2Q02 3Q02 4Q02 1Q03

Wireline/Contax Wireless Capex/ Net Revenue

440386

509

697

185

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Debt Position (Mar/03)(R$ Mn)

Mar-03 Dec-02 Mar-02Total Debt 11,616 10,774 9,361

Short Term 2,053 1,769 1,424 Long Term 9,563 9,006 7,937

(-) Cash (1,479) (1,513) (1,044) (-) Long Term Financial Investments (132) (141) - (=) Net Debt 10,005 9,121 8,317

(+) Suppliers 1,188 1,635 1,648 (+) Other Accounts Payable 271 381 165 (=)Total 11,464 11,136 10,131

Gráfico 17 - Custo da Dívida no 3T01

1

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Debt Profile – Currency & Cost (Mar/03) – After swap effect

81%

16%

3%

CDI

TJLP

Floating Rate (FC)Libor +5%

Currency3%

97%

Local

US$

Interest Rates

Currency Cost

US$ Libor + 5%

Basket 12.3%

Real 25.0%*

Cost of Debt

* Based on CDI at 26.5% p.a.

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Debt Profile – Repayment Schedule (Mar/03)

Total Debt:

11,616

323

955

2,306 2,407

3,196

1,041

495

893

2Q2003 2S2003 2004 2005 2006 2007 2008 2009onw ards

(R$ Mn)

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Growth Focus

Wireline Services

Wireless Services

Data & Corporate

Long Distance

Integrated Strategy

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Local Service

Data & Corporate

Long Distance

• Maintain leadership in home market

• Advanced voice services

(corporate/middle market)

• Value added services

• Increase ARPU

• Reduce interconnection costs

•Lower Platform Growth (in line with GDP)

•Increase in Value Added Services

Wireless Services

Growth Focus - Local Wireline Services

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Local Service

Wireless Services

Data & Corporate

Long Distance

• Increase penetration in SME (home

market)

• ADSL (high end residential/SOHO/small

businesses)

• Nationwide services (corporate level)

• Leverage on national backbone

(Telemar + Pegasus)

• Competitive Service Level Agreements

•Growth above the market

Growth Focus - Data & Corporate Services

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Local Service

Data & Corporate

Long Distance

• Leadership in home market

• Protect existing market

– Retail: loyalty/retention programs

+ promotions

– Corporate: best quality (call

completion/billing) + competitive

service plans (discounts/volume)

• Conquer new markets

(inter-regional/international/SMP

• Leverage on relationship & brand

• Leverage on efficiency (lower cost

service provider)

• Best quality service provider

•Offer of New Services (Increase Market Share)

•Growth above the market

Wireless Services

Growth Focus - Long Distance Services

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GROWTH FOCUS - Wireless Services

Local Service

Data & Corporate

Long Distance

• Market segmentation /Innovative Plans (MTV & Celebrities/Oi Family)

• Stimulate data / SMS growth• Increase Focus on Corporate Market• Leverage on competitive advantages

– Synergies with wireline company– Regional coverage– GSM technology (speed & features)

• Low handset subsidies/aggressive service plans

• Increase national & international roaming

•High Growth + Synergies with Wireline

Wireless Services

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Outlook 2003

• Platform Growth: Wireline: stable

Wireless: 1.3 million net adds

• Revenue Drivers: (1) DLD, Data and Mobile growth

(2) Local tariff increase (June)

• Cost: strict control

• Net Debt: flat to small reduction YE03/YE02

• Bad Debt : ~3.8% of gross revenues

• EBITDA TNE: ~ 42% - 45%

• CAPEX: R$ 1.8 b (55% TMAR/40% Oi/ 5% Contax)

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“Safe 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

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