Apresentao do PowerPoint

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TELE NORTE LESTE PARTICIPAÇÕES S.A.
III Foro Europeo de Empresas Latino
Americanas Bolsa de Madrid -
LATIBEX Nov 2001
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Brazilian Telecommunications Market
Source Anatel/Telemar End of Period
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Brazilian Telecommunications Market
Source Anatel/Telemar End of Period
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Brazilian Telecommunications Market
Cellular Subscribers (thousands)
1994
1992
1999
2005E
1998
2000
1996
2001E
2003E
Source Anatel End of Period
5
Summary
? Concession 65 of Brazilian Territory ?
Population 92 Million ? 40 of Countrys GDP ?
Over 21 Million Households ? Penetration TNE
Region 16 ( Brazil 23)
? Largest Telco in Latin America 14.6 million
LIS ? Heaviest Weighted Company in IBOVESPA ?
One of Leading Latam ADRs in the NYSE ? Market
Capitalization US 4.8 billion (Nov/01) ? Free
Float 80 of Total Shares
Lines in Service Sep 2001
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Company Evolution
Efficiency (Harvesting)
Value

Construction (Sowing)
Integration
Privatization/ New Values

• Transformation Plan

• Organizational
• Outline

Time
2000
2001
2002
1998-1999
Fonte
Análise da Equipe
7
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Transformation Plan
Post Privatization Telemar
Pre PrivatizationTelebrás

• 16 companies with individual strategic plans
• Focused on government
• policies
• Investments constrained by Federal Budget

• One integrated strategy
• Maximizing value for shareholders
• Investments determined by business strategy and
  operators efficiency

New Environment

• Privatization
• Competition
• Regulatory Agency
• Technology

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Organizational Outline

• Head Office
• Strategic Investment Decisions
• Regulatory Matters
• Marketing
• Regulatory Institutional Relations
• Procurement, IT Finance

• Outsourcing
• Call Center
• Line Installation
• Network Upgrade Maintenance

TELE NORTE LESTE
RJ
PE
BA
CE
MG
Operating Subsidiaries
1
5
14
4
10
3
15
16
12
7
13
11
9
6
2
8

• Sales Customer Service
• Billing Collection
• Concession Requirements
• Operations Management
• Data Processing Network Management Centers

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Company Evolution
Efficiency (Harvesting)
Value

Construction (Sowing)
Integration
Privatization/ New Values

• People, Systems
• Processes

• DLD Backbone

• Transformation Plan

• Organization
• Outline

Time
2000
2001
2002
1998-1999
Fonte
Análise da Equipe
7
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People Reallocation Rejuvenation of Workforce

• ? Headcount Reduction - 32,000 to 24,000
• ? Reduction of Employees Average Age
• ? Revitalization of the Company
• ? Reallocation of Positions From Administrative
  to Marketing Sales
• ? Improvement of Labor Skills (21,000 People
  trained - UNITE)
• ? Wages Based on Performance and Stock Option
  Plan (EVA)

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Process Systems Integration

• ? Call Center Consolidation (116 5
  Contax)
• ? Data Processing Centers (14 1)
• ? Technological Uniformity (18 Different Major
  Technologies 4)
• ? Network Management Centers 23 3
• Back Offices 16 1 (Shared Service Center)
• ? Brands 16 One (Telemar)

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DLD Backbone
BOA VISTA
MACAPÁ
MANAUS
SÃO LUIS
BELÉM
FORTALEZA
TERESINA
NATAL
JOÃO PESSOA
RECIFE
MACEIÓ
ARACAJU

• Interconnection of 16 local networks
• Long Distance Service (Intra-Region)
• Data Service (IP/ATM Network)
• Network Services (Other Telecom Providers)

SALVADOR
BELO HORIZONTE
VITÓRIA
RIO DE JANEIRO
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Company Evolution
Efficiency (Harvesting)
Value

Construction (Sowing)

• First Results

Integration

• Anatel Targets

• PCS License

Privatization/ New Values

• People, Systems
• Processes

• Capex

• 16 1

• DLD Backbone

• Transformation Plan

• Organization
• Outline

Time
2000
2001
2002
1998-1999
Fonte
Análise da Equipe
7
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First Results Net Revenue Growth (R million)
9 Months
7,370
5,894
4,522
CQGR 24 ()
3,843
8,122
7,370
6,222
99
98
00
01
5,158
1998
2000
2001 (9 M)
1999
() 1H01/1H98
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Revenue per Quarter (RMM)
Stake on Revenue 1 sem 2 sem 98 48,5 51,5 99 4
6,8 53,2 00 46,5 53,5
?
8,127.9
6,222.3
5,158.4
2,625
4T
3T
2,438
2,306
2T
1T
1998
1999
2000
2001
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First Results EBITDA (R million)
9 Months
9 Months
3,198
2,943
4,032
2,134
1,842
3,198
2,747
99
98
00
01
99
98
00
01
1,717
2,943
2000
1999
1998
2001 (9 M)
() (Adjusted EBITDA, excluding one-time charges
of 3Q01)
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First Results Lines Installed (millions)
Digitalization
98
90
18.0
81
12.8
73
10.5
8.8
1999
1998
2000
2001E
Digitalization Rate () Lines Installed
(million)
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First Results Market Perception Economic
Results
Closing Price (PN) (R)
Year Summary ____ _________________ 19
98 Ugly Duckling 1999 Attractive Stock 2000 Top
Pick - Strong Buy 2001 Buy -
Outperform Rating - Standard Poors - BB-
(Foreign Currency) BB (Domestic Currency) ()
Bovespa plus NYSE (ADR) () Sep/01 ()
Adjusted for one-time charges taken in Sep/01
EBITDA Margin
Average Daily Volume (USM)

12.74
19.80
32.7
42.22
43.9
17.50
41.05
48.80
49.6
24.20
41.3 ()
35.10
Fonte
Análise da Equipe
7
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Anatel Targets
Pay Phones 7.5/1000 Pop
100 Localities Covered
Achieve the 2003 Targets in 2001
Two Weeks maximum waiting time for new line
installation
Service available to communities larger than
600 inhabitants
Ability to Compete Nationally in 2002
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CAPEX
DECEMBER 2000 TNE had 12.8 million Lines
Installed
5.2 MM Lines
DECEMBER 2001 TNE will have 18 million Lines
Installed
2001 CAPEX R 8.4 Billion (PCS Included)
Universalization Plan 46
FUNDING 50 Cash Generation 15 BNDES 15
Debentures 20 Vendor Financing
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PCS License
Telemar PCS

• ? License Acquired in TNE Region (March/01)
• ? Synergies with Wireline Operations
• ? Defensive Strategy
• ? Joint Fixed/Mobile Services
• ? Capex - US 1.7 Billion Fully Funded

Telemar PCS is on track for commercial launch in
2Q/2002
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Merger of Subsidiaries (161)
Main Benefits

• ? Efficiency Gains
• ? Cost Reduction
• ? Tax-Loss Carryforwards
• ? Lower Cost of Debt
• ? Flexibility for Future Capital Markets Fund
  Raising
• ? Higher Liquidity and Corporate Transparency

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Company Evolution
Efficiency (Harvesting)
Value

Construction (Sowing)

• Core Business

• New Businesses

• First Results

Integration

• Anatel Targets

• PCS License

Privatization/ New Values

• People, Systems
• Processes

• Capex

• 16 1

• DLD Backbone

• Transformation Plan

• Organization
• Outline

Time
2000
2001
2002
1998-1999
Fonte
Análise da Equipe
7
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Efficiency
Product Portfolio (Complementarity)
Geographic
Core Business
Value Chain
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New Businesses ? Adding Value

• Data Corporate

• ? Data Products
• ? Contact Center
• ? Internet Data Center
• ? Network Outsourcing
• ? Internet Access

A division of TNE
Telemar-Acesso

• PCS

• National International Long Distance Calls

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Core Business Cost Reduction
Utilization Rate ()
Platform Growth (In millions)
18.5
18.0
12.8
1999
2000
2001E
2002E
1998
10.5
8.8
1999
2000
2001E
2002E
1998
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TELEMAR PCS
Coverage
Quick decision
Competitive Advantages
Opportunities

• Operating synergies
• Commercial Synergies and fixed-to-mobile
  complement
• Opportunity to buy license at low price

• Need for capillarity
• Network quality linked to number of cell sites
• R 1.7 billion CAPEX in 3 years, vendor financing

• Fast growing market
• High Value Consumers
• New applications due to rapid technological
  development GPRS

• Aggressive competitors already established
• Aggressive Targets
• Subscribers
• Revenue
• Largest roll-out in the world

Cellular telephony operations represent an
excellent opportunity for Telemar, and the
company is prepared for the challenges involved.
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Company Evolution
Efficiency (Harvesting)
Value

Construction (Sowing)

• Core Business

• New Businesses

• First Results

Integration

• Anatel Targets

• PCS License

Privatization/ New Values

• People, Systems
• Processes

• Capex

• 16 1

• DLD Backbone

• Transformation Plan

• Organization
• Outline

Time
2000
2001
2002
1998-1999
Fonte
Análise da Equipe
7
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SAFE HARBOR STATEMENT
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.
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Thank you very much