Rodrigo DienstmannChief Resources Officer

São PauloMarch 15th 2016

INVESTOR DAY

VIVO RESOURCES STRATEGY

• Best mobile network experience: Value driven, high quality and data centric mobile coverage and capacity

• Superior customer experience in FTTx Ultra broadband Monetization of legacy copper with FTTC

• Provide the best TV and VoD experience in the market

• IT as strategic platform: enable digital and cloud transformation with agile, converged, simplified business systems

• Obsessive pursuit of efficiency and capital optimization

• CRM quality excellence. Digital transformation

Key LeversOperations Approach

Provide the Platforms for

Excellent Customer

Experience based on

sustainable and smart

investment choices

| 2 |

Connected Everything

Cloud Integrated

5G4G / 4.5G

3G / 3G+2G

Latency

Speeds

Density

1st Data Access MBB Revolution LTE / LTE-Advanced

Ultra speeds, low

latency, low energy –

IoT ready

300-1000ms

100Kbps

Low

100-500ms

5Mbps

Mid to High site density required

10-100ms / 10ms

10-20Mbps / 30-100Mbps

High density, small cells and indoor coverage

~1ms

1-10Gbps

Very High density

SpeedsUp to 56Kbps < 5Mbps 10-100Mbps 100Mbps - 1Gbps

2000 2005 2011 2018~

Mobile

Fixed

Dial Up xDSL FTTx / Cable FTTH

Personal ContextVideo and eGoodsPersonal Content

ROAD TO GIGABIT ECONOMY NETWORKS

VideoExperience

SD HD + PVR 4K + VoD

8K/10K

+ Multiscreen + cPVR

+ Virtual RealityTV

| 3 |

CapEx 2016 (R$, Excludes spectrum capex)

B2C B2B Network TI Others

%YoY 4% 4% -0.2% 10% 10% 4%

2016

Competitive

exposure

Market

potential Line of

business

ROI by local market product offer

ROICapital intensity

70% OF CAPEX WILL BE ALLOCATED TO IMPROVE GROWTH AND CUSTOMER EXPERIENCE

up to

8.7 Bi

Capex Strategy

• Maintain quality leadership

• Enable Selective Growth• Customer value Big data

• Structural IT Transformation (BSS, OSS, ERP)

• Network optimization and consolidation

| 4 |

MOBILE NETWORK

Before 2015

+ Geolocation

2016+

+ Customer Value

+ Big Data

Traffic

Growth

Network

Estimates

Trends

Occupancy

BIG DATA AND CUSTOMER VALUE DRIVING MOBILE INVESTMENT

São Paulo example

| 6 |

2016 MOBILE ROLLOUT

2015 2016 2017

Technology Breakdown

4G

3G 2G

0.5%

2013 2014 2015 2016

Fiber to the Site

• Focus on High ROI cities

and Population Coverage

• 4G investment growing

41% YoY, versus -25% YoY

on 3G

• Acceleration in Fiber to

the Site deployment

FTTS Penetration

26%

3,137 3,289 3,524 3,945

3,543

2013 2014 2015 2016

3G cities

86.7% 87.5% 88.7% 88.8%Pop %

73140

183

352

185

2013 2014 2015 2016

4G cities

30.0% 40.6% 46.6% 60.0%Pop %

| 7 |

1.2 1.3

0.9 0.9

1.6

0.6 0.70.6

0.3 0.4

TOTAL >500k 500k>>200k 200k>>100k <100k

Spectrum per population - 4G (MHz/1000 inhab.)

VIVO

411

3895 50

228183

3894

28 23

TOTAL >500k 500k>>200k 200k>>100k <100k

Cities coverage - 4G (by City population Size)

VIVO

6

8

10

12

14

16

51% 52% 53% 54% 55%

Speed (

Mbps)

Coverage*

*Based on users

average time spent

in the 4G network.

VIVO

Player 2

VIVO 4G COMPARED WITH COVERAGE LEADER

The State of LTE Report

(Feb/16) OpenSignal

| 8 |

ASSETS COMPARED

Technology SPECTRUM VIVO CLARO TIM OI

2G

800 25MHz 25MHz - -

900 5Mhz 5MHz 5MHz 5MHz

1800 20MHz 20MHz 40MHz 40-50MHz

3G 2100 30MHz 20-30MHz 20-30MHz 20-30MHz

4G700 20MHz 20MHz 20MHz -

2500 40MHz 40MHz 20Mhz 20MHz

VIVO SPECTRUM

*Total band of operations in each spectrum calculated by

the average holding in the metropolitan areas of SP and RJ.

| 9 |

VIVO SPECTRUM ASSESTS AVAILABILITYThe reduction of GSM traffic will enable the use of 850 MHz for 3G

The reduction of GSM it will enable the use of 1800 MHz for 4G

In order to deploy 4G network in 700 MHz, spectrum cleaningis needed. This will happen gradually between 2016 and 2019.

3G Band 2016 2017 2018 2019

Brasil

(except Norte

and Nordeste)

2,100 MHz 15 + 15 15 + 15 15 + 15 15 + 15

850 MHz 5 + 5 10 + 10 10 + 10 10 + 10

Total MHz 20 + 20 25 + 25 25 + 25 25 + 25

Norte

2,100 MHz 10 + 10 10 + 10 10 + 10 10 + 10

850 MHz 5 + 5 5 + 5 10 + 10 10 + 10

Total MHz 15 + 15 15 + 15 20 + 20 20 + 20

Nordeste

2,100 MHz 10 + 10 15 + 15 15 + 15 15 + 15

850 MHz - - - -

Total MHz 10 + 10 15 + 15 15 + 15 15 + 15

2G Band 2016 2017 2018 2019

Brasil

(except Norte

and Nordeste)

850 MHz 7,5 + 7,5 2,5 + 2,5 2,5 + 2,5 2,5 + 2,5

1,800 MHz 10 + 10 5 + 5 5 + 5 5 + 5

Total MHz 17,5 + 17,5 7,5 + 7,5 7,5 + 7,5 7,5 + 7,5

Norte

850 MHz 7,5 + 7,5 7,5 + 7,5 2,5 + 2,5 2,5 + 2,5

1,800 MHz 12,5 + 12,5 7,5 + 7,5 7,5 + 7,5 7,5 + 7,5

Total MHz 19,5 + 19,5 15 + 15 10 + 10 10 + 10

Nordeste

850 MHz - - - -

1,800 MHz 15 + 15 15 + 15 15 + 15 5 + 5

Total MHz 15 + 15 15 + 15 15 + 15 5 + 5

4G Band 2016 2017 2018 2019

Brasil

(except

Nordeste

and

Cluster P)

2,600 MHz 20 + 20 20 + 20 20 + 20 20 + 20

1,800 MHz - 5 + 5 5 + 5 5 + 5

700 MHz - (*) (*) 10 + 10

Total MHz 20 + 20 25 + 25 25 + 25 35 + 35

Cluster P

(**)

2,600 MHz 20 + 20 30 + 30 30 + 30 30 + 30

1,800 MHz - 5 + 5 5 + 5 5 + 5

700 MHz - - - 10 + 10

Total MHz 20 + 20 35 + 35 35 + 35 45 + 45

Nordeste

2,600 MHz 20 + 20 20 + 20 20 + 20 20 + 20

1,800 MHz 10 + 10 10 + 10 10 + 10 20 + 20

700 MHz - (*) (*) 10 + 10

Total MHz 30 + 30 30 + 30 30 + 30 50 + 50

| 10 |

(*) 10 + 10 MHz available in some cities.

(**) DDD 11, 21, 48, 51, 54, 63 e 67

BROADBAND AND VIDEO

Speed versus % of Same Copper Pairs (measured)

Until 1M 3M 8M 12M 25M 50M

0.7%

40.2%

4.6%10.3%

30.9%

13.2%

FTTCShortening of xDSL distance in legacy copper increases UBB availability

Before FTTC

After FTTC

4.4%

9.3%

27.3%29.9%

16.8%

Until 1M 3M 8M 12M 25M 50M

From 82%

Between 1M e 2M

To 96%

Between 10M to 50M

12.3%

• Average Capex per Home

Connected ~60% lower than FTTH

• Potential Delta ARPU +35%

• 2.7M Households upgradeable

Plan to build 1.5M in the next 3

years

| 12 |

CONTENT CACHINGSince February, Netflix caching improved dramatically

customer experience while saving Opex

W52 W01 W02 W03 04 W05 W06 W07 W08 W09 (01/03)

116G118G

127G

101G

66G

46G 46G42G 43G

36G

Download

-71%

Outbound Netflix Traffic

153

20 248 4 3

Jan 2016Before Cache

Feb 2016 AfterCache

GVTBenchmark

Netflix Performance

Secs to HD Quality Secs to Start Streaming

Videos start 2X Faster

HD quality 8X Faster

• Started Feb 2016 for Vivo Fiber and xDSL

• Next Steps

- Google/YouTube, Facebook

| 13 |

Customer congratulates Vivo, saying that quality is now excellent

“Vivo/GVT will win many new customers”

POSITIVE CUSTOMERFEEDBACK AFTER NETFLIX CACHE ROLLOUT

Jan 24th Customer awaiting cache activation

Jan 26th

Same customer publishes his satisfaction after cache activation

| 14 |

Initial Results in São Paulo Reference Area

SELECTIVE FIELD INSOURCING BRINGING QUALITY AND PRODUCTIVITY GAINS

5.7%6.6%

8.1%

6.0%5.3% 5.5%

NOV DEZ JAN

4.3 4.5 5.8

Nov Dec Jan

1.5 1.7 1.8

Nov Dec Jan

13.1%14.7%

16.6%15.2%

11.2%9.6%

NOV DEC JAN

2014 2015

Quality – Technical repair rate(defects/active line)

Individual Productivity (Activites/technician/day)

Copper Fiber

Repeated repair rate (New defect before 7 days)

| 15 |

DEC

NEW TV PLATFORM MOVING TO A CONVERGENT VIDEO SERVICE

Fiber IPTV MultiScreen2 DTH

Platforms

STBs HybridSTBs IPTV

IPTV HYBRID DTH

BACKEND TV

FIBRA

IPTV Linear

Distribution

PC, Tablet,

cTV, Mobile

BACKEND TV

OTT

Video Over

Demand (VoD)

OTT Linear

Distribution

Video Over

Demand (VoD)

BACKEND TV

DTH

DTH Linear

Distribution

Video Over

Demand (VoD)

MULTISCREEN

Converged Video Platform

Single user interface

Advanced features

(start-over, catch-up) DTH consolidation

Open Platform

IPTV HYBRID DTHMULTISCREEN

APPsAPIs

VODcDVR

| 16 |

IT TRANSFORMATION

Customer Base Migration

1% 16% 36%71% 91% 100%

2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

CONSOLIDATED IT SYSTEMS Transformation of São Paulo Fixed Business

GVT Systems and PortfolioSales, Customer Care, Billing,

Tech Support

Network Network

Automated provisioning, Single installation visit

Integrated customer care tools

Single Bill

Harmonized 3P Portfolio

| 18 |

ONGOING SIMPLIFICATION OF LEGACY SYSTEMS ARCHITECTURE

TV Fiber Copper

OTT DTH IPTV Data Voice Data

Sales and CRMNsi@

Vivo 360°

ATISNYX

CIPEX

CSOCSO

CadCli

Network Provisioning

NSI@

GIFT Agendador

SGOS

SIGRES

OSP

SIGRES Terus

SCAIOSP GVOX

SGOS FOC

Billing and Collections

NSI@ NIS@

ATIS

CAR

FAT

SIU

SGS

INA

Field Force Automation

MobilePeople

Mobile PeopleGift

SCAI

ATIS

CSO

Before

ATIS

CSO

Converged 3-Play

Siebel 8

GPS

Savvion

COL

NEC/ SAGRE/ TBS/ SIGRIS/ OSP/ TERUS

Kenan

TOA ETA Direct

2016

• Converged 3P portfolio

• Simplified SW stack

• Faster Time-to-Market

• Higher efficiency and

productivity

| 19 |

ENABLING DIGITALNew n-Play Full stack System

ONLINE AND OMNICHANNEL

Automated and streamlined

business processes

(ZERO BACKOFFICE)

360 CUSTOMER VIEW – n-P

Business Process Transformation

1

2

E-CARE /

E-COMMERCE

SALES

CUSTOMER CARE

BILLING/COLLECTIONS

N-Play BUNDLES

4P

MOBILE |IPTV

VOIP | FIBER UBB

MOBILE PREPAID

FWT

nP

FIBER

DTH

ADSL

COPPERMOBILE &

CONTROL

Phase 1

3Q16

Phase 2

4Q16

Phase 3

1Q17

Phase 4

2Q17

Phase 5

3Q18

E-CARE APP CALL CENTERE-COMMERCE RETAIL

| 20 |

EFFICIENCY

869

637 568 483635

546464 392

2012 2013 2014 2015 2016 2017 2018

87

5 5

8

65

2012 2013 2014 2015 2016 2017

-3% 3%

45.0%

57.6%

71.6% 76.6%

75.1%

76.0% 77.0% 78.0%

2012 2013 2014 2015 2016 2017 2018

CONSOLIDATIONAND EFFICIENCY IN IT

Data center consolidationData Center Quantity

Vivo 1 Vivo 1 + GVT

6 DCs decomissioned until 2017

Application shutdown

Applications Quantity

-44% -38%

629 Applications shut down until 2018

Virtualization Index

% Virtualized Servers

| 22 |

90 181 273378

484591

699925

11511378

16061784

180

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Additional FTTS 2016Accumulated

Leveraging combined network capillarity to bring traffic on net

Better quality

Increase data capacity and customer

experience using existing GVT fiber

Lower cost

194553

1,349

2,1802,395 2,544 2,600

223438

1,3151,903

2,9653,177 3,340

Jun Jul Aug Sep Oct Nov Dec

BP Realized

Better quality

Lower cost

Leased Lines 2015

SYNERGIESLeased line migration and fiber to the site

| 23 |

QUALITY

7.066.98

7.06

7.22

7.39

Dec/14 Mar/15 Jun/15 Sep/15 Dec/15

Note: Brazil CSI 2015 includes only Vivo, the result of GVT is 7.47 (Dec/15)

VIVO BRASIL CSIGrowing Customer SatisfactionVivo breaking away from closest competitor

GAP +0.07 +0.08 +0.15 +0.20 +0.34

GVT7.47

| 25 |

QUALITY PLANA process of transformation towards a culture focused on customer satisfaction

• Orientation for choosing the appropriate service

• Product easy to understand• Deliver what was promised

Sales and Activation

• Use the service whenever you want• Be satisfied with the offered serviceOperation

• Quick service in the channel of your choice• Understanding and solving the problem

CustomerCare

• Meet the agreed deadline• Efficiency in defect resolution

Technical Support

• Bills that are easy to understand• Receive the bill with the correct

value and on the time• Ethics and respect in debt collection

Billing the Collection

CONTACT RATEReduce customer contact rate

CONSUMER PROTECTION AGENCIESReduction in complaints and litigation

We established a commitment with the entire organization through a Quality Plan,with goals and plans, anda Endomarketing and Training Program, to mobilize the company about the responsibility for customer satisfaction

REGULATORYBetter compliance with quality goals

CSIIncrease customer satisfaction

| 26 |

Note: Comparison Mar/15 vs Dec/15 - total of 74 measured processes of all segments

118 ACTION PLANS, 30 ALREADY IMPLEMENTEDEVOLUTION OF SATISFACTION IN 85% OF PROCESSES

-3%8%

3%7% 8%

5%20% 10%

3%

-2%0% -5%

2%2% 3%11%

17%

11%

17%

6%

Post Paid

8%

8%

3%

-1%

2%

Pre Paid

18%

6%

13%

7%

6%

Small Medium Business

Voice Network

Internet Network

Customer Care

Commercial Offer

Billing/ Recharge

Mobile

General Operation

Technical Support

Customer Care

Commercial Offer

Billing

Fixed Residential

Small Medium Business

EnterprisesFixed & Mobile

| 27 |

PF: Individuals, PJ: Small/Medium Business

CUSTOMER CARE OPERATION KPIS EVOLUTION

Contact Rate PF (Gross)

IVR Quality Score PF (Top box)

Mar

15Sep

15

Dec

15

Apr

15Sep

15

Dec

15

Mobile Fixed (Vivo + GVT)

Dec

14Mar

15

Sep

15

Dec

15

Dec

14Mar

15

Sep

15

Dec

15

Repeated Calls PF (%)

Dec

14

Mar

15

Sep

15

Dec

15

Dec

14

Mar

15

Sep

15

Dec

15

IVR Retention PF + PJ (%)

Dec

14

Mar

15

Sep

15

Dec

15

Dec

14

Mar

15

Sep

15

Dec

15

Transferred Calls PF (%)

Dec

14

Mar

15

Sep

15

Dec

15

Dec

14

Mar

15

Sep

15

Dec

15

| 28 |

Dial 9 rate*(talk to representative)

Usability Mean Time*

*MG Standard IVR Humanized

HUMANIZED IVR RESULTS IN CUSTOMER CARE

Friendly communication

CustomizedIVR Menus

Persona• Dynamic

• Smart

• Fun

• Trendy

• Agile

• Friendly

• Empathic

| 29 |

% IVR Retention (Regional)Target +4.5 PP (in 6 months)

Results

MG SP/RJStandard Humanized

4Q14 1Q15 2Q15 3Q15 4Q15 4Q14 4Q15

Meu Vivo App + Web SMS

DIGITAL CRM CHANNELS

(Access in millions) (Access in millions)

95% 91% Retention in 24h Retention in 24h

Low rate of Follow-up calls

| 30 |

Customer Value SegmentationInsource of Customer Care to the 5% most valuable customers

Customers (%)

5%

95%

Segmented Care

0% 87%

Timeline

Top High Value

Massive

2015 2016 2017

100%

| 31 |

MAIN INITIATIVES 2016

FTTC SP

FTTH OSP

NEW VIDEO PLATFORM

BACKBONE CONSOLIDATION

MOBILE DEPLOYMENT

SINGLE FIXED BSSSOPHIA

INTEGRATED 3P

SELECTIVE INSOURCINGFIELD FORCE AND CUSTOMER CARE

REBRANDING

WORKFORCE MANAGEMENTSYSTEM CONSOLIDATION

| 32 |

MAIN INITIATIVES 2016

DIGITAL FIRST ENABLER

ZERO WASTE

NEW n-P BSS PLATFORM

BIG DATA

DW CONVERGENCELEGAL ENTITY CONSOLIDATION

(SAP)

CAPEX EFFICIENCY

HUMANIZED CUSTOMER CARE

| 33 |

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.