TIM Participacoes SA: Material Fact

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TIM Participacoes SA: Material Fact
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Source: Anatel - PGMQ - SMP

RIO DE JANEIRO, BRAZIL--(Marketwire -07/19/12)- TIM Participações SA ("Company") (TIMP3.SA) (TSU), informs its more than 68 million customers, its almost 11,000 employees, its shareholders and the public in general that it has received with great surprise the very extreme measure adopted by Anatel, which in a disproportional way, blocked the sale of new lines in 19 states.

Extreme and Anti-Competitive Measure

The decision was apparently based on data and indicators different from those usually established by Anatel it self to track the performance of the network. The presented measure took into account, for example, the percentage difference in each state between the worst operator and the others' average in complaints to the Anatel's call center, a measure until now unknown and does not necessarily reflect the quality of the network.

In 2011, TIM became the second largest mobile operator in the country, as result of innovation and widespread acceptance of its services by users. Today, TIM is the only operator in the market that sells its phones unlocked and without loyalty penalty. Therefore, today the only element that keeps the customer with TIM is the satisfaction with the company. Such a disproportionate measure by Anatel will certainly affect competition in the telecommunications industry in the country.

Anatel's Indicators

Monthly, Anatel monitors the network's quality of the mobile operators, using KPIs of quality, including network indicators. The accompanying charts show the SMP indicators of network quality measured by Anatel and show that TIM has demonstrated an outstanding position.

In relation to Anatel's Performance in Customer Service Index (Portuguese abbreviation "IDA" index), which measures volume and the deadline of complaints' care at Anatel, TIM has been showing good results. The Company took the second place in IDA during the first quarter of 2012, getting closer to the first position, as a reflex of the large reduction in the rate of complaints (-36%). Comparing the 1Q12 with the same period in 2011, TIM was the only operator to present a reduction in the rate of complaints and growth in the IDA indicator score.

Commitment TIM

TIM reaffirms that it is developing a set of infrastructure projects to continue to provide innovative services to customers, supporting the growth and capturing the opportunities that market offers.

The great effort of the first half of 2012 was done towards the investments in network infrastructure and the integration of TIM's mobile network with the fiber optic network of TIM Fiber. In 2013, the forecast is to have 80% of Brazil's major cities connected via fiber optics. This investment will improve the quality of voice and data transmission significantly.

The Company is also working on upgrading equipment, doubling the speed of the infrastructure of mobile Internet access to 42 Mbps (HSPA +, an intermediate step between 3G and 4G). Today, in São Paulo, for example, more than 50% of the sites have been upgraded to work under this technology, which will be taken to other major cities.

Over the past four years, the Company invested approximately R$ 3 billion yearly on improving its capacity and network expansion, with emphasis in backhaul, backbone, coverage and Wi-Fi. Considering the aforementioned, TIM will take all necessary measures to restore normality of its activities as soon as possible.

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Contact:
TIM Participacoes S.A.
Avenida das Americas, 3,434, 7th floor
22640-102 - Rio de Janeiro - RJ, Brazil
Phone: +55 (21) 4109-4167
Fax: +55 (21) 4109-3990
Rogerio Tostes
Investor Relations Officer
of TIM Participacoes S.A.

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