1) Market data revenues were expected to overcome voice revenues in 2017, though the transformation accelerated and the shift happened earlier than expected in 2016. 2) The company is repositioning its offers to address changing consumer behavior and the new market environment's focus on data and value. 3) The company aims to protect and increase the value of its customer base by focusing on segmentation, smart pricing, and simplifying offers.

2. Market data revenues wasexpected
to overcomevoicerevenues in2017…
Transformationis accelerating,
adjustmentsunderway
to resumegrowth
2
… market trend anticipatedfor
2016instead.
0%
25%
50%
75%
100%
2011 2012 2013 2014 2015e 2016e 2017e
Voice Revenues Data Revenues
2011 2012 2013 2014 2015e 2016e 2017e
Voice Revenues Data Revenues

3. Less relevance forcommunity effect
Caring service with bad track record
Commoditizationof offers
Market Reality....
Consumerbehaviorchanging fast to data
Offer Repositioning:
Addressing Opportunities
in the New Environment
3
Market
Stabilization
Marketsubscribers
growth (%QoQ)
Mln
subscribers
266 276 282
+0.6%
+0.8%
-0.3%
2Q13 2Q14 2Q15

4. ProtectingtheValueof Our CustomerBase
(prepaid) , whileincreasingour base of value
customers.
…TIM NEW APPROACH
Free up and simplify
offer and usage:
(best value for money)
• Voice, Data and VAS
• OTT offsetting community
• Essence of TIM positioning
• Still room forFMS
Improving customer
experience
• Process transformation
• Digital experience
• Betternetwork quality
Infrastructure as a
key enabler
• Competitive network
• Focus on 4G
• 3G evolution + migration
Offer Repositioning:
Addressing Opportunities
in the New Environment
4

5. From volumeto value
in Prepaid
StrictDisconnectionPolicy
 Greater segmentation with
Big-Data
 Improving ARPU
 Reducing OPEX
 Back to offer differentiation
 Revenue Share x Market Share
 Focus on preference
42 85
351
476
362
836
719
63.2 63.1 62.7 62.3 61.9
61.1
60.3
JAN FEB MAR APR MAY JUN JUL
FromMass Offer… …to Offerby Need
2009 - 2013 2014 – 1H15 2H15 – 2016
Source:Anatel
Disconnections
(inthd)
PrepaidCustomer
Base (inmln)
Percall
On netcalls
R$0.30
Permonth
R$12.00
WhatsApp
+50MB
Price per
call
5
Perday
300min
R$0.75
R$0.99
15MB
+ WhatsApp
+SMS
Perweek
R$7.00
300min/day
10MB/day
+SMS
+WhatsApp
Continuous
Evolution

6. Back to the Value Game:
First Resultson Postpaid
Postpaid Acquisition
Source:Company
AcquisitionMix(%)
100% 100%
HIGH
value
LOW
value
JAN-JUL AUGe
 Improving share
 YoY sales uplift
 Focus on pre-post
migration
 All in one: Voice + Data
w/o subsidy
 Different market, different
approach
 ARPU uplift expected
Post-PostMigrationto
LibertyTOP (%)
6
20%
80%
Downgrade
Upgrade
JUN'15 JUL'15 AUG'15
Postpaid Liberty Top
Gross + MigrationsPostpaid Share on
Net Adds:
2Q14
2Q15
JUL’15

7. Infrastructureas the key
enabler for offer repositioning
% Capexover sales(TIM) 1H15- CapexDistribution
(as % of total capex)
65%
Live TIM
Other &
LicensesTransmission2G3G + 4G
Access (+23% YoY)
Mix of
Capex (%)
CapexEvolution
(R$ mln; % YoY)
After working on TRANSMISSION,
additional focus to ACCESS network
7
16.5% 17.5%
23.7%
1H13 1H14 1H15
16% 19%
Innovative
Traditional
1H14 1H15
2,108
1,654

8. CapexDriving
Data growth
Data Traffic
(Bytes of Use)
2Q14 2Q15
+32%
Data ARPU*
(R$; %YoY)
2Q14 2Q15
+42%
4G Users
(mln users; %YoY)
1.0
3.8
2Q14 2Q15
4x
8
Infrastructureas the key
enabler for offer repositioning
CapexEvolution
(R$ mln; % YoY)
Innovative
Traditional
1H14 1H15
2,108
1,654

9. 9
+96%
3,009
3,091
3,098
3,206
P1
P4
P3
TIM
4G Sitesin statecapitals 4G Traffic*
jan/15 jul/15
~20%4G / total
traffic
~2.7x
*4Gtrafficin São Paulo,Rio deJaneiro,BeloHorizonte,BrasíliaandCuritiba.
4Q14 2Q15
3G Cities
2Q14 2Q15
3G Sites
(% YoY)
+19%
1,623
1,365
>80%
Urban
population
covered
2Q14 2Q15
SmallCells& Wi-Fi
(% YoY)
New approach to coverage
challenges

10. 10
New approach to coverage
challenges: BioSite

11. 2Q13 2Q14 2Q15
Quick Financial Recap:Assuring
businessprofitability level
SMS
Innovative
MobileVAS Gross RevenuesGrowth
(R$ bln; %YoY)
+42% +45%
-35%-8%
1.3
1.9
1.6
% of gross
service
revenues 22% 27% 35%
ImprovingMargin
35.4%
34.4%
EBITDA
Margin
Service
Margin
Contribution Margin
(Contribution* over eachR$ of revenue)
Voice
Contribution
Data
Contribution
100%
~80%
29.2%
27.9%
2Q15
2Q14
11

12. More than R$1 bln in 3 years
(sum of savingsin 2015, 2016 and 2017)
Quick Financial Recap:Assuring
businessprofitability level OpexBreakdown
(% YoY; R$mlnΔ YoY)
Selling & Marketing
BadDebt
G&A
ITX& Network
COGS
Personnel Expenses
-R$60
-R$73
-R$190
-R$50
-R$18
+R$34
-6%
-7%
-23%
+15%
-28%
-23%
Optimization/
Control
Strategic
Sourcing
Rightsizing
Process
Engineering
Business
Model
ImprovingMargin
EBITDA
Margin
Service
Margin
2Q15
2Q14
12
35.4%
34.4%
29.2%
27.9%

13. Challengesdo not Deviate the Vision
and Execution of our Long-Term
Strategy
13
Protecting& IncreasingValueof CustomerBase
 Back to essence of TIM positioning
 Knowing our customersbehaviors
 Segmented go to market while maintainingsimplicity
 Smart pricing: differentiateoffer in a rationaleenvironment
SustainingInvestmentson Data Infrastructure& Services
 Developing robust4G infrastructure,tostimulate adoption and
market share
 Customer experience on an end-to-end approach

14. UnderlyingAsset Transformation
Not Reflectedin Price
Source:Company and Bloomberg
(EOP2011) (EOP2Q15)
Numberof Sites (BTS)11,335 14,781
15,8333G & 4G Elements6,476
% Siteswith Fiber 27%0%
Km of Fiber 61,23228,891
14
22,677
21,499
1,458 2,582
Market Cap
Net debt
Dec/11 Dec/12 Dec/13 Dec/14 Aug/15
Voice World
Modest residual
value of cash flow
Data World
Higher residual
value of cash flow
R$ 24,132 R$ 24,081EV
4.2x5.2x
Consensus
EV/EBITDA