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Glossary

2G - In mobile telephony, second-generation protocols use digital encoding, a switch from their analog predecessor.

3G - In mobile telephony, third-generation protocols, which succeeded 2G protocols, were established according to International Telecommunication Union standards and permit mobile broadband internet access among other features.

4G - In mobile telephony, fourth-generation protocols. 4G will be based entirely on IP and may reach access speeds of between 100Mbps for mobile reception and 5Gbps for stationary reception, assuring a high-quality, secure service.

ACB - Answered call billing.

ACCESS - Set of physical or logical means whereby a user is connected to a telecommunications network.

ACCOUNTING POLICIES ADOPTED IN BRAZIL - Accounting policies established by Corporate Law, by the regulations issued by CVM and by the rules and pronouncements of IBRACON. With the enactment of Law No. 11,638/2007, new regulations and accounting technical pronouncements have been issued in line with international accounting standards by the Accounting Pronouncements Committee (CPC).

ACD - Automated Call Distribution - a means of assigning telephone calls to an answering position, used frequently in call centers.

ACR - Answered call rate.

ACTIVATION - Procedure followed by the telephone company that liberates operation of the mobile station.

ADDED VALUE - This is the difference in value that is added to a product by means of a new stage of production.

ADJUSTED EBITDA - The Company calculates the Adjusted EBITDA as the net income or loss before the net financial result, income tax and social contribution, depreciation and amortization, minority interest, and equity pick-up. Adjusted EBITDA is not a measure recognized neither the accounting practices adopted in Brazil, by IFRS, nor by USGAAP, and it does not represent cash flow for the periods indicated and should not be considered as an operating performance indicator nor as a substitute for cash flow as a way to measure liquidity. Adjusted EBITDA does not have a standard meaning and the Company‘s calculation of Adjusted EBITDA may not be comparable to the EBITDA or Adjusted EBITDA of other companies. The Company‘s management believes that Adjusted EBITDA is an important indicator to analyze a Company‘s operational economic performance since it is not affected (i) by fluctuations in interest rates, (ii) by changes in the tax burden from income tax and social contribution, and (iii) by the levels of depreciation and amortization, and is commonly used by investors and market analysts.

ADR Acronym for American Depositary Receipts, a negotiable certificate traded on the New York stock exchange.

ADSL - Asymmetric Digital Subscriber Line - digital technology developed to allow for data to be relayed over broadband at higher speeds than those permitted by conventional dial-up access, with the primary feature being the significantly higher speed at which data is sent and received when compared to the speed at which the same data is sent and received over the user‘s regular telephone line.

ADSL2 - Data-transmission technology that allows connections via telephone lines at speeds greater than ADSL speeds, with a maximum theoretical download speed of 24 Mbps and upload speed of 1 Mbps, making it superior to its predecessor ADSL technology.

AFTER MARKET - Name given to electronic trading that occurs at night, after the close of regular stock market trading. Only spot transactions can take place in this market.

AGM - Acronym for Annual General Meeting. This is the stockholders meeting where the corporation‘s board is obliged to convene periodically. At this meeting the company‘s results for the year are presented, the reports from the directors are voted on, and the board of directors is elected. It is mandatory that a general meeting be held up to four months after the closing of the fiscal year.

AICE - Special Class Individual Access [Acesso Individual de Classe Especial].

AMORTIZATION - Gradual reduction of a liability through regular payments, agreed previously between the creditor and debtor.

ANALOG - A means of data transmission whereby data is represented through a continuous, time-varying electric signal transferred over standard telephone lines. Word usually used to describe electronic devices that work with continuous variables of electronic signals. These variables are generally proportional (analogous) to other phenomena, for example, air-pressure variables caused by sound, as is the case with musical instruments.

ANATEL - The Brazilian Telecommunications Agency [Agência Nacional de Telecomunicações] - agency under the auspices of the Brazilian Telecommunications Department that is authorized to regulate the telecommunications market and services in Brazil.

ANTENNA - The element used to broadcast cellular-telephone radio waves. This device is included in all portable and transportable telephones as well as automobiles.

ARPU - Average revenue per user.

ARREARS - Delay in fulfillment of an obligation.

ATM - Asynchronous Transfer Mode - a set of broadband data-transmission protocols that permit various types of information to be transmitted over a network (for example, voice, data and video).

AUCTION OF SHARES - When a stock has a volume or value above normal, the stock exchange puts the shares up for auction, seeking to adjust its price.

AUDIT - Analytical review of the accounting records of a company or fund carried out independently by an auditor with no permanent link with the company. The more independent the study, the more credibility it will have in the market.

AVERAGE CALL DURATION - Average time a call lasts. A call‘s average durations is calculated by dividing the total number of minutes on the line by the number of calls held.

AVERAGE PRICE - Medium price of a security calculated for a trading session.

AVERAGE RESPONSE TIME - Statistic of ACD systems that gauges how much time, on average, a caller remains on hold until his/her call is answered by a live operator. This is an important reference statistic that is used in many call centers to measure the quality of the service provided at a given moment.

BAND - Radiofrequency range assigned to a given type of communication. Composed of two frequency limits. The bandwidth is the difference between these two frequencies, independent of where they fall on the spectrum.

A Band: Frequency ranges allotted to cellular telephony that will be utilized by public enterprises, such as the 27 companies within the Telebrás System. For cellular RBS, A band comprehends:

869 MHz to 870 MHz (A");
870 MHz to 880 MHz (A"); and
890 MHz to 891.5 MHz (A").

For cellular RBS, A band is thus:

824 MHz to 825 MHz (A");
825 MHz to 835 MHz (A"); and
845 MHz to 846.5 MHz (A").

B Band: Frequency ranges allotted to cellular telephony that will be utilized by private enterprises that compete with the operators operating within band A. For cellular RBS, B band comprehends:

880 MHz to 890 MHz (B"); and
891 MHz to 894 MHz (B").

For cellular RBS, B band is thus:

835 MHz to 845 MHz (B); and
846.5 MHz to 849 MHz (B").

BACEN - Another abbreviation for "Banco Central do Brasil" (Central Bank of Brazil).

BACKBONE - Set-up of central connections in a larger system, typically for better/higher performance. In terms of the internet, various backbones area hierarchically divided on a worldwide scale: intercontinental connections, which branch into international backbones that, in turn, branch into national backbones.

BACKHAUL - Data transfer among distant users to a central network.

BALANCE - Accounting statement with the values of the assets, liabilities, and stockholders equity of a legal entity for a fiscal year.

BALANCE OF PAYMENTS - The record of transactions between individuals and companies, businesses and official agencies, residents of a country and their partners abroad.

BALANCE OF SERVICES - It is the sum of services with transaction in the areas of transportation, insurance, tourism, and profits from investments.

BALANCE SHEET ANALYSIS - The study of a company‘s financial statements in order to assess its economic and financial status. The analyst compares the assets and liabilities, using the data from the company‘s balance sheets for making a qualitative and quantitative assessment.

BANDWIDTH - The frequency band available for sending information; the difference between the highest and lowest band frequency is measured in Hertz.

BASIC SUBSCRIPTION RATE - This is not a communications service per se. It is characterized as retribution paid to an operator so that the communication service remains available.

BC - Abbreviation for "Banco Central", the Central Bank of Brazil, also referred to as Bacen.

BENCHMARK - A reference point. A way of making a comparison among products, services, securities, or fees.

BENEFITS - Dividends, interest on equity, dividends and/or subscription rights distributed by a company to its stockholders.

BILL AND KEEP - A pricing agreement whereby the operators only pay the connection fee to the other cellular phone company when the ratio of incoming to outgoing traffic falls outside the range of 45% - 55%. This model continues to be used for local fixed-line telephone service.

BILL OF EXCHANGE - Type of commercial paper in the market issued by credit, finance, and investment companies and used as a source of funds for consumer credit.

BILLING - Process of registering attributes that characterize a telephone call, such as callers’ and receivers’ access code, date, time and duration of call.

BITSTREAM - The flow of bits, a time series of bits.

BLACK SPOTS - Areas within a service area where obstacles, walls, buildings, overpasses or mountains block radio signals.

BLUETOOTH - Open wireless technology standard for exchanging data over short distances, using short-length radio waves, from computers, cellular phones, handheld computers and other voice and data-transmission devices.

BM&FBOVESPA - A nationally-owned company created in 2008 from the merger of the operations of the São Paulo Stock Exchange (BOVESPA) and the Commodities and Futures Exchange (BM&F). It is responsible for intermediating capital market operations, including the trading of shares, share derivatives, fixed-income securities, government bonds, financial derivatives, currencies and agribusiness commodities.

BNDES - Acronym for "Banco Nacional de Desenvolvimento Econômico e Social" (National Economic and Social Development Bank). It is a federal financial institution established in 1952 to foster the development of basic sectors of the economy and develop policies of long-term business investments.

BONUS - Price negotiation, per underlying stock, of a call or put option.

BOOK ENTRY SHARE - Nominative share without the issuance of certificates, registered in the deposit account of its holder in the depository institution designated.

BOOK VALUE OF STOCK - Result of the division between net equity and the number of the company‘s shares.

BRADIES - Or Brady Bonds, are securities that were issued beginning in 1994 by developing countries in the renegotiation of their external debts. The name comes from Nicholas Brady, US Treasury secretary who promoted their use.

BROADBAND - Concept related to services or connections that allow faster transmission speeds for considerable amounts of information, for example television images. Applied to bandwidths greater than 2 Mbit/s although sometimes used for slightly lower speeds. Very high-speed internet access.

BROADBAND SERVICES - Services characterized by transmission speeds of 2 Mbps or more. Pursuant to international standards, these services are divided into two categories: (i) interactive services, including videophone/videoconferencing (both point-to-point and multipoint); local network interconnection; file transfer; CAD; high-speed fax; e-mail for the transmission of moving images and multimedia documents; broadband videotext; video on demand; programs for retrieving audio or static and moving images; and (ii) transmission services like, for examples, audio programs, television programs (including HDTV and pay TV) and the select acquisition of documents.

BROADCAST - A system for sending a message where the message is sent to all computers connected to a network.

BROKER - Intermediary in buying and selling securities.

BROKERAGE FEE - Amount charged by the financial intermediary for the purchase or sale of securities.

BROKERAGE HOUSES - These are institutions authorized to operate by the Central Bank and the Securities and Exchange Commission of Brazil (CVM). Only brokerage firms are authorized to execute buying and selling operations of stock or derivatives on BM&FBOVESPA.

BUSINESS TO BUSINESS - Expression used to define the relationships between companies. This term is often used to qualify certain marketing actions, generally direct marketing with other companies identified as the target public.

BUSINESS TO CONSUMER - Expression used to define the relationships between companies and their customers, notably due to retail sales.

BYLAWS - Refers to our Company‘s official rules, whose consolidation was approved at the extraordinary general meeting on December 17, 2004 and subsequently amended by an Extraordinary General Meeting held on March 30, 2006; September 29, 2006; January 4, 2008; and consolidated on December 17, 2009.

CADE - Acronym for "Conselho Administrativo de Defesa Econômica" (Administrative Council for Economic Defense).

CAIXA ECONÔMICA - Institutions of primarily a social nature that provide loans and financing for programs and projects in the areas of welfare, health, education, labor, urban transport, and sports. Under it are the Federal Government‘s Housing Finance System and also has the authority to sell lottery tickets as well as the responsibility to centralize the collection and investment of all financial resources from FGTS.

CALL CENTER - Customer-service center designed to receive telephone calls, automatically assigning the calls to representatives and thus allowing for the provision of customer services to end users, the implementation of telephone-based market research, sales, withholdings and other services.

CALL FOR CAPITAL - Subscription of new shares with or without a premium in order to increase the company‘s capital.

CALL LOG - Call information (extension or location, time of day and number dialed), registered by a PABX or ACD system. These logs serve as the bases for management software for a call center or for telecommunications.

CALL OPTION - The right granted to the holder of an option to purchase from the writer, if he so desires, a standard lot of shares for a price previously stated within the term of the option.

CALL TRANSFERRING - A service available to the user that automatically transfers calls to another programmed number.

CALL VOLUME - The number of calls that can be processed by an ACD system within a given period. The number of calls that reach a call center in a given time interval.

CALL WAITING - A service that allows a person in a call to place the current call on hold in order to answer another call.

CALLER ID - Permits caller identification prior to operator’s (or individual’s) answering a call. It is also known as automatic number identification (ANI).

CAPITAL - Amount of a corporation‘s money that stockholders tie-in with their worth as their own resources in order to reach their own objectives.

CAPITAL - Sum of resources, assets, and funds that make up an estate. Resources invested in assets, securities, or those invested in economic activities with intent to profit.

CAPITAL INCREASE - Adding reserves and/or new funds to the company‘s capital. Usually done through stock dividend, raising the nominal value of the stock and/or increasing subscription rights by stockholders, or also by merging with other companies.

CAPITAL MARKET - Includes the entire network of stock exchanges and financial institutions where the buying and selling of stocks, bonds, and securities takes place between companies and investors with the mandatory intermediation of financial institutions on the securities distribution system.

CAPITALIZATION - Increase of equity via reinvestment of income or raising of funds by issuing shares.

CAPU - Acronym for Cost Acquisition Per User. Its calculation may take into account costs relating to subsidy, logistics, commission on sales and Fistel.

CBLC - Acronym for "Câmara Brasileira de Liquidação e Custódia" the Brazilian Clearing and Depository Corporation. It is a corporation that provides services of custody and financial settlement of transactions made on Bovespa and other markets. CBLC was created from a restructuring that took place with São Paulo Stock Exchange in 1997.

CDB - A Bank Deposit Certificate issued by banks. It is a form of investment that yields a pre-fixed or variable interest rate depending on how it was negotiated. Who buys CDBs lends money to a bank in exchange for a negotiated return within a minimum of 30 days.

CDMA - Code Division Multiple Access - digital standard for cellular phones whereby all mobile telephones and RBSs transmit their signals simultaneously over the same frequencies. Each of the system’s elements (RBSs and subscribers) posses a long, exclusive binary code to differentiate one element from another on the receiver end. The code is applied to each of the bits generated by the customer, for example. CDMA is the commercial name for the spread-spectrum technology applied to cellular telephony.

CELLULAR TELEPHONE SERVICE - Mobile telephone service provide through a network of interconnected low-frequency base stations, each covering a small geographic cell within the cellular phone system’s total area.

CERTIFICATE OF DEPOSIT - Security representing the shares deposited in a financial institution.

CETIP - CETIP S.A. - It is an Over-the-Counter Clearing House of Assets and Derivatives for the settlement of trades involving certain fixed income securities, being a member of the Brazilian Payment System.

CGF - The acronym for Credit Guarantee Fund (Fundo Garantior de Crédito), an entity of a private nature of the Brazilian banking system, not of the government, whose function is to guarantee deposits.

CHAMBER OF ARBITRATION - This is a forum prepared to resolve conflicts within the financial system, being an important step in making the market regulation more transparent and increasing confidence within the financial system.

CHINESE WALL - The segregation (separation) of resources between two operators in order to avoid situations of conflicts of interests or competing interests. In Brazil the Central Bank through Resolution No. 2486 of April 30, 1998 established the segregation of the administration of third party resources from other activities of the institution.

CHURN - Term used to describe a company’s client turnover for a given service. In the case of internet service providers and telecommunications and pay-TV operators, this indicator measures the number of users that opt out of subscribing to the company’s services and migrate to services offered by the competition.

CIRCUIT-SWITCHED LAND-LINE TELEPHONE SERVICE - Telecommunications service that, through the transmission of voice and other signals, is dedicated to communication between set fixed points, using telephone system processes. Circuit-switched land-line telephone services are offered to the general public as local service, national long-distance service and international long-distance service under the terms contained in the General Concession Plan.

CLEARING HOUSE - An organization that brings together several commercial banks from one location in order to settle debits among them, settling all checks issued by the clients of each one for that day.

CLOSED CAPITAL - Characteristic of a corporation, or private company, in which the capital is divided in the form of shares among stockholders, but they are not permitted to be traded on the securities market. A closed capital company cannot have its shares traded on the stock market.

CLOSING PRICE - The last price of a given security in a trading session.

CNB - Acronym for "Comissão Nacional de Bolsas". It is a nonprofit civil association that represents the interests of stock exchanges in Brazil before the monetary authorities and market regulators.

CNPJ - "Cadastro Nacional de Pessoa Jurídica", or National Register of Legal Entities.

CODE OF CONDUCT - A manual prepared by the administrative bodies of a corporation in accordance with the principles and policies set by the board of directors in order to guide managers and employees in their way of conducting everyday business. The code of conduct should also set social and environmental responsibilities.

COFINS - A tax in Brazil that can be translated as Contribution for Social Security Financing.

COMMERCIAL DOLLAR - Exchange rate used for business operations in the country such as the payment of foreign debt and remittances of dividends from companies headquartered abroad.

COMMODITY - Goods or products, usually agricultural or mineral, negotiated between importers and exporters. There are specific stock exchanges for trading commodities. Coffee, cotton, soybeans, and oil are examples of commodities.

COMMON STOCK - Type of stock that gives its holder essential rights of a stockholder, specifically a share in the company‘s net income and voting rights at the company‘s meetings. Each common share corresponds to one vote in the General Meeting. According to Brazilian corporate law, it gives minority shareholders of common stock the right to receive at least 80% of the amount paid by the controlling group in the case of its control being sold (tag along).

COMPULSORY DEPOSITS - The obligation that a financial institution has to deposit with the Central Bank a set percentage of the amount of their demand and term deposits.

COMPULSORY DEPOSITS ON INVESTMENT FUNDS - The Central Bank determines that investment funds must also pay compulsory deposits on the amounts invested in the fund. Currently short-term funds pay 50% as compulsory deposit, 30-day funds pay 5%, and funds of 60 days or more do not require compulsory deposits.

CONCESSION AGREEMENT - An agreement or set of agreements, as the case may be, signed on June 2, 1998 by the company, each of the former subsidiaries and ANATEL that regulates the provision of circuit-switched fixed-line telephone services in the respective geographic region.

CONCESSION OR CONCESSIONS - A concession to provide circuit-switched fixed-line telephone services through ANATEL.

CONVERGENCE - The concept to define the set of technologies intended to unify voice and data networks.

CONVERSION - Changing the characteristics of a security. In the case of stock, it may be converting it from common stock into preferred stock or vice versa depending on the determination of the extraordinary general meeting and the provisions of the a corporation‘s bylaws.

CORPORATION - A company that has its capital divided into shares. The rights and responsibilities of its stockholders are limited to the face value of the shares subscribed or acquired.

COURT-SUPERVISED AGREEMENT WITH CREDITORS - Legal action that allows a company to continue operating even when it admits insolvency as a means of avoiding bankruptcy. In this case, the company admits it is unable to pay its debts within the time limits, but becomes obligated to pay off its debts according to what is specified in the sentence granting the benefit.

CPMF - A tax in Brazil that can be translated as Temporary Contribution on Financial Transactions. It is a federal contribution that is charged on money leaving a checking account. The value of the CPMF tax is 0.38% on the value of the transaction.

CR (VC) - Call rates, by minute.

CR1 (VC1) - Call rates applicable to local calls made from mobile phones and from fixed-lines to cellular phones.

CR2 (VC2) - Call rate applicable to calls where the caller and receiver are in different billing areas but in the same primary number area.

CR3 (VC3) - Call rate applicable to calls where the caller and receiver are in different primary number areas.

CRASH - The term used to denote a sharp drop in stock market prices. The word became known after the fall of the Stock Exchange in New York on October 24, 1929.

CREDIT ANALYSIS - The study done by a credit institution to establish whether the loan applicant has capacity to pay. This analysis is crucial for defining the maximum amount that can be loaned.

CROSS-SELLING - The sale of products/services from one line to a client who already subscribes to or has the products/services of another line (example: using a pay-TV subscriber’s information and relationships as a basis to sell broadband internet services to the same user).

CSP - Operator selection code [Código de Seleção de Prestadora] consisting of two numbers that the user presses before placing a long-distance call in order to indicate which telecommunications operator the user chooses to complete the call. This came into use in Brazil after the privatization of Telebrás as a means of promoting competition among long-distance operators. Examples of CSPs include: 14 and 31.

CSSL - A tax in Brazil that can be translated as Social Contribution on Net Income.

CUSTODY - The act of taking legal responsibility over securities. It is when equities and stock are registered in the name of who bought them, ensuring their ownership.

CVM - Acronym for "Comissão de Valores Mobiliários", which is the Securities and Exchange Commission of Brazil.

CYBER DATA - Information-technology structures and systems.

DATA COMMUNICATION - The transfer of information between equipment over local and long-distance networks through the telephone network, packet-switching networks or satellite.

DDD - LONG-DISTANCE DIALING (+ LONG-DISTANCE AREA CODE) - Brazil’s DDD refers to the long-distance calling service offered by telephone operators without the aid of live phone operators.

DDI - INTERNATIONAL DIALING (+ INTERNATIONAL COUNTRY CODE) - Brazil’s DDI refers to the international calling service offered by telephone operators without the aid of live phone operators.

DEALER - Institutions accredited by the Central Bank to participate in the auctions. Dealers are chosen among the most active banks in the market.

DEBENTURES - Debt securities issued by a corporation to raise funds to be invested or to finance working capital.

DEBENTURES CONVERTIBLE INTO SHARES - Debentures that allow the holder to convert them into shares according to predetermined conditions and at certain times.

DEDICATED ACCESS - Connection through a dedicated line between a telephone or telephone system (like ACD) and a long-distance operator or value-added telecommunication services operator. All calls on this line are automatically routed to a specific line that runs directly to the operator‘s existing equipment such that different calls among different offices can be placed by dialing from the same extension, as if they were internal calls.

DEDICATED LINE - Telephone line that is permanently linked between two locations. Dedicated lines are frequently found in moderately-sized connections to an access provider.

DEDICATED SERVICE LINE (DSL) - Service provided by an circuit-switched fixed-line telephone service operator to use dedicated lines to meet the needs of a single user or restricted group of users.

DEFAULT - When contractual obligations are not kept. When a debtor admits that he cannot pay the debt under the conditions and on the date established or that he cannot comply with certain clauses in the contract.

DEFICIT - This is the negative balance between revenue and expenditure.

DEFLATION - Fall of prices in general. Negative inflation rate.

DERIVATIVES - Contracts on financial assets or securities whose value and characteristics of negotiation are derived (hence the name derivative) from other assets that serve as a reference. It is an operation of the financial markets where the transaction value is derived from the future behavior of other markets such as stocks, foreign exchange, or interest.

DIAL-UP - A type of internet data connection over a modem connected to a fixed-line telephone.

DIAL-UP ACCESS - Connection via traditional telephone line.

DIFFERENTIAL - Combination of potential purchases and sales of options on the same underlying stock but in different series.

DIGITAL - This is the means of representing a physical variable, such as voice, using only zeros and ones. The digits are transmitted in binary form as series of pulses. Digital networks allow for greater capacity and flexibility through the use of computerized technology to transmit and manipulate phone calls. Digital systems offer less noise interference and can incorporate cryptography to protect against outside interference.

DIRECT INWARD DIALING - DID - a telephone service that allows callers to directly contact a given extension within a telephone system, without talking to a live operator. Direct dial-in eliminates the need to have an automated operator to route calls made to the central switchboard.

DISCLOSURE - The release of information. A measure imposed by capital and financial market regulating bodies that requires companies to make all relevant information known, whether good or bad, that might influence a decision to invest in that company.

DIVERSIFICATION - This is a risk management strategy by distributing financial resources to different financial assets in order to reduce risks inherent when resources are concentrated. In the case of a concentration of investments in a few modalities such as stocks, diversification means having stock of different companies where risks and risk premiums counterbalance each other.

DIVIDEND - Dividends correspond to the portion of net profit distributed to stockholders in proportion to the number of shares owned at the end of each fiscal year. A company must distribute at least 25% of its adjusted net profit. Preferred stock receives a 10% higher dividend than common stock if the company‘s bylaws do not establish a minimum dividend.

DOLLAR OR USD OR US$ - The currency of the United States of America.

DOW JONES INDEX - Index used to measure the performance of trades on the New York Stock Exchange. The Dow Jones is composed of a probable portfolio with the most actively traded stocks on the NYSE (New York Stock Exchange).

DOWNSTREAM - Speed at which data transmission is received.

DR - Acronym for Depository Receipts. Type of investment in fixed income whose earnings are a prearranged interest rate and they can be traded directly with the bank. DRs neither allow early withdrawal of funds invested nor trading on the secondary market.

DSL - Digital subscriber line - technology that transfers digital information through existent twisted copper wire. Transfer rates depend on the type of system used (examples: ADSL, HDSL, VDSL, SDSL).

DTH - Direct-to-home technology allows the company responsible for the programming schedule to transmit, via satellite, TV signals directly to the viewer’s home.

EBIT - Acronym for Earnings Before Interest and Taxes of a company.

EDGE - Enhanced data rates for GSM evolution - digital mobile telephone technology that allows for the transfer of data using GSM and GPRS standards at speeds of up to 500kbps.

EGM - Acronym for Extraordinary General Meeting. Name given to the stockholders meeting convened to deliberate on any matter of interest to stakeholders. Its summons depends on the company‘s specific needs.

EILD - Brazil‘s acronym for dedicated lines for industrial application.

ELECTRONIC TRADING - Electronic trading system by terminals that makes it possible for certified operators and brokers to conduct of business in markets of spot, forward, and options with instruments and fees defined by BOVESPA.

ENDORSEMENT - Transfer of ownership of a security by means of a written declaration, usually made on the back side of a document.

ESCROW - A deposit of securities made to the creditor in order to ensure the fulfillment of an obligation.

ETHERNET - Architecture used in the local area networks. It generally uses coaxial cables, although other methods can be used, such as telephone lines and radio waves that connect different computers. Each of these computers competes with the others to access the network, and certain rules exist determine which computers can transmit information at a given moment. Information can be sent by only one computer at a time or as a broadcast to all computers on the network.

EXCHANGE - Financial operation of selling, exchanging, or buying amounts in currencies of other countries.

EXCHANGE RATE - Amount paid in the conversion between two currencies.

EXCHANGE VARIATION - Percentage disclosed that indicates the variation of the exchange rate in a given period.

EXCLUSION OF THE RIGHT OF FIRST REFUSAL - The bylaws of publicly traded companies that contain authorization to increase capital may stipulate the issuance, without right of first refusal for the former holders of stock, debentures, or beneficiary parts convertible into stock.

EXERCISE DATE OF OPTION - Due date for exercising the right to purchase or sell in cash the assets that are the object of the option.

EXERCISE OF OPTIONS - Operation in which the holder of an operation exercises his/her right to buy or sell the lot of stock, object of issuing options, at the exercise price.

EX-RIGHTS - Name given to stock that already has exercised the rights granted by a company.

EX-RIGHTS DATE - Date after which former rights on the stock exchange (dividends, interest on capital subscription, and rebate) are no longer applicable.

FARE - Amount established previously and unilaterally by the government corresponding to the amount to be paid by optional users of goods or the services provided thereto by the government, directly or indirectly through authorized entities, operators or permit holders, in a manner that is exclusive or of limited competition.

FAX - Device that produces facsimile copies of a document over distances. The term is also used for a message sent or received through this device.

FED - Abbreviation for Federal Reserve Bank. It is the central bank of the United States. Created by Congress in 1913, it operates the national payment system, distributes the national currency, supervises and regulates the banking system, and serves as the bank for the US Treasury.

FIBER OPTICS - Any fiber filament composed of dielectric materials used to transmit laser-generated or LED-generated signals.

FINANCIAL INSTITUTIONS - Organizations authorized to operate by the Central Bank that make up the financial market. Commercial banks, investment banks, brokerage firms, and credit unions are examples of financial institutions.

FINANCIAL STATEMENTS - Accounting statements and other information submitted by companies reporting the economic and financial situation of a company. These financial statements are presented in nominal values and present, for comparison, results from the previous year.

FIREWALL - The point of the network defined as the boundary between one network and another, used for security purposes. A firewall is used to separate the internet from a company‘s network.

FIXED-LINE TELEPHONY - Conventional telephone system consisting of fixed-line telephones linked to a telephone exchange through copper wires or radio raves, as the case with WLL phones.

FIXED-RATE SECURITY - A security whose profitability is known in advance at the moment the investment is made.

FLOATING DOLLAR - Exchange rate used in major financial transactions and in the conversion of dollars from residents. It is the same as tourism dollar exchange rate.

FLOATING EXCHANGE - An exchange policy where the currency varies according to the supply and demand for a convertible currency (usually US dollars).

FOOTPRINT - Territorial range reached by the signals of a radio-base station. Corresponds to the area of a cell site.

FOREIGN CURRENCY RESERVES - International reserves of a country in currencies of other countries.

FRAME - Data packet transmitted through a serial line. The term is derived from a byte-oriented protocol that adds special bytes to the beginning and end of frames when transmitting data packets.

FRAME RELAY - Data-transfer service over digital networks with a speed of up to 2 Mbps that connects local networks, enables multimedia applications (like videoconferencing), integrates voice and data, and/or integrates multiprotocol networks or other data applications that require connectivity.

FREE EXCHANGE - System of exchange operations that does not maintain the interference of the country‘s monetary authorities. Therefore, the values of foreign currencies fluctuate according the interest they arouse in the market.

FREQUENCY - The rate at which telecommunication signals and electric currents cycle. Normally measures in Hertz (cycles per second).

FULL BILLING OR FULL BILL - Connection billing procedure for all mobile-to-mobile phone calls within the same local area (regulation established by ANATEL in Resolution 438). It substituted the "bill and keep" system for mobile telephones.

FUNGIBLE CUSTODY - This is when the custodial service allows that the securities received may not be the same as those deposited. They must, however, be of the same kind, quality, and quantity.

FUNTTEL - Technological Telecommunications Development Fund [Fundo para o Desenvolvimento Tecnológico das Telecomunicações], established under Law 10,052 on November 28, 2000.

FUST - Universalized Telecommunications Fund [Fundo de Universalização dos Serviços de Telecomunicações].

FUTURE DOLLAR - Price quote expected by financial markets for the value of the dollar in the futures market.

FUTURE MARKET - Segment of the market that includes buying/selling during trading sessions of contracts authorized by the futures exchange for settlement on a prefixed future date. The deal includes a buyer who agrees to pay a certain amount on the date set for the goods offered by the seller. The object traded may be a commodity, a security, a currency, or a benchmark index such as the Bovespa Index. The contracts traded are standardized by BM&F, which allows the trades to be streamlined.

FUTURE VALUE - Value of capital including its interest from one or more periods.

GATEWAY - Device used to link different networks and equipment from separate manufacturers.

GDP - Acronym for Gross Domestic Product. It is the set of all goods and services produced in a country or region during a given period.

GENERAL CONCESSION PLAN or PGO - General Concession Plan [Plano Geral de Outorgas] approved by Decree 2,534, dated April 2, 1998, which divides Brazil into regions and areas for concession purposes to render circuit-switched fixed-line telephone services throughout the country.

GENERAL CONNECTION REGULATION - General Connection Regulation approved by ANATEL Resolution 410 on July 11, 2005.

GENERAL QUALITY PLAN or PGMC - General Quality Plan [Plano Geral de Metas de Qualidade] for circuit-switched fixed-line telephone services approved by ANATEL Resolution 516 dated October 30, 2008.

GENERAL UNIVERSAL ACCESS PLAN or PGMU - General Universal Access Plan [Plano Geral de Metas para a Universalização] for circuit-switched fixed-line telephone services rendered under the Public System approved by Decree 4,769 dated June 26, 2003.

GLOBALIZATION - A term that denotes the process of accelerated integration of international markets with the possibility of moving billions of dollars by computer in a few seconds.

GOING PRIVATE - Situation in which the securities issued by a company will no longer be traded on the market.

GOVERNMENT SECURITIES - These securities are issued by federal, state, or municipal governments.

GPI-DS - Acronym for General Price Index - Domestic Supply. It measures the price variance on the wholesale, consumer, and construction market. It consists of the sum of three other indexes: WPI (Wholesale Price Index) with a weight of 60%, CPI (Consumer Price Index) with a weight of 30%, and NCCI (National Construction Cost Index) with a weight of 10%. The GPI-DS excludes imported goods, considering only what is produced internally. It is calculated based on prices calculated from the first day to the last of each month.

GPI-M - Acronym for General Price Index of Market. It measures the price variance on the wholesale, consumer, and construction market. It consists of the weighted sum of three other indexes: WPI (Wholesale Price Index) with a weight of 60%, CPI (Consumer Price Index) with a weight of 30%, and NCCI (National Construction Cost Index) with a weight of 10%. The GPI-M considers all available products on the market, including what is imported, and is calculated based on prices collected between day 21 of the previous month to the 20th of the current month.

GPRS - General packaged radio service - digital mobile telephone technology that allows data transmission using the GPS standard at speeds of up to 170kbps.

GPS - Global positioning system - extremely precise technology for geographic localization that provides the latitude and longitude coordinates of the location of the device equipped with this technology. Signals are sent via the constellation of 24 Navstar satellites that are linked to the U.S. Department of Defense.

GREENFIELD - A project that lacks any constraints imposed by prior networks.

GROSS INCOME - In financial investments, it is the set of gains obtained from a transaction before the payment of income tax.

GSM - Global system for mobile communications - the most widely used 2G mobile telephone standard in the world. The difference is that it uses the subscriber identity module (SIM) card or chip to identify users.

HDTV - High-definition television - TV transmission standard with digital technology that offers images with a quality similar to 35mm films and CD-quality sound.

HEADSET - A headphone combined with a microphone. The headset consists either of headphones connected to a telephone or an actual dialing phone that fully substitutes the telephone. It is a telephone device that substitutes the device per se (or receiver). All headsets consist of a listening apparatus and microphone, but nevertheless may be designed in a variety of ways.

HEDGE - This is a mechanism used to protect against a probable price fluctuation.

HEDGE FUND - A term used in the securities market to describe certain investment funds that use hedging techniques (strategy used to offset investment risk).

HERTZ - Abbreviated as Hz. This an SI unit of frequency defined as the number of cycles per second of a periodic phenomenon, with one Hertz equivalent to one cycle per second. The name comes from the German physicist Heinrich Rudolf Hertz who died in 1894.

HOLDING - Ratio between the capital stock of a particular stockholder or group of stockholders, and the company‘s total capital stock.

HOLDING COMPANY - A company that controls other companies by owning a majority of its stock. In general, the holding company has as its main activity, these stakes in one or more companies.

HOME BROKER - This is a modern relationship channel between investors and brokers, making it even faster and simpler to trade on the stock market, allowing the sending of orders to buy and sell shares by Internet and providing access to price quotes, the tracking of stock portfolios, among other tools.

HOUSING BOND - Credit instrument issued by real estate companies aimed at raising funds for financing contractors and buyers of property and that earns interest.

HUB - A central station that receives/sends signals from/to a satellite via a direct link. It is a concentrator that receives data from various ground (information transmission) stations and directs the data to the satellite.

HYPERINFLATION - Special case of extremely high inflation. Situation where the currency loses its reference value and its function as a unit of exchange.

IBGE - Acronym for "Instituto Brasileiro de Geografia e Estatística" (Brazilian Institute of Geography and Statistics).

IBOVESPA - The index of the São Paulo Stock Exchange measures the behavior of the most actively traded stocks and indicates the average performance of prices of a theoretical portfolio of stocks traded on the floor. This portfolio has shares from 55 companies selected among those that accounted for 80% of volume traded on the market over the past 12 months. The securities included on the Bovespa index must have a minimum presence of 80% of the trading sessions analyzed and a participation greater than 0.1% of the total financial volume. This theoretical portfolio is revised every four months.

IBOVESPA FUTURE - A derivative contract based on the Bovespa Index and traded on BM&F. It expresses the score of the Bovespa Index on the cash market at a future date.

IBRACON - Brazilian Institute of Independent Auditors.

IBX - This is the acronym for Brazil Index, which measures the return on a theoretical portfolio with 100 stocks selected from those most actively traded on Bovespa classified in descending order by liquidity and marketability, meaning the number of trades and financial volume measured in the last 12 months. The stocks that make up the portfolio undergo a weighting according to the number of shares available on the market. This theoretical portfolio is revised every four months.

ICMS - A tax in Brazil that can be translated as Tax on Sales and Services.

IDC - Acronym for Interbank Deposit Certificate. It is not only an indicator, but also a type of investment that can yield an interest rate, but is only traded between banks and usually for one day. An ordinary investor cannot buy IDCs. The average daily rate of the IDC is used as a reference for the cost of money (i.e. interest) and serves to assess the profitability of investment funds.

IEE - Acronym for the Electric Energy Index. This index is made up of only stock from companies in the electric energy sector.

IFRS - International Financial Reporting Standards.

IMF - Short for International Monetary Fund. This international financial organization was established in 1944 and brings together 184 countries. Its purpose is to provide temporary financial aid to countries in order to assist them in adjustments to their balance of payments, promote international monetary cooperation, bring exchange stability and orderly exchange agreements, stimulate economic growth, and improve employment levels.

INDEPENDENT AUDIT - A body external to the organization and free from any conflict of interest that has the responsibility to determine whether the financial statements adequately reflect the organization‘s reality.

INDEX - The rate chosen to adjust the values of contracts and financial assets.

INFLATION - The persistent increase in prices across the board resulting in a currency‘s loss of purchasing power.

INPC - Acronym for "Índice Nacional de Preços ao Consumidor" (National consumer price index). Weighted average of indexes prepared by IBGE for the metropolitan regions of Brazil (Belém, Fortaleza, Recife, Salvador, Belo Horizonte, Rio de Janeiro, Sao Paulo, Curitiba, Porto Alegre, Brasília, and Goiânia).

INPI - Acronym for "Instituto Nacional de Propriedade Industrial" (National Institute of Industrial Property).

INSIDER - Investor or person from the market who has access to privileged information before it becomes public.

INSIDER TRADING - Investors that, by themselves or by third parties, make use of privileged access to information not yet disclosed by the company.

INSOLVENCY - Situation in which a person or company admits to being unable to pay its financial commitments.

INSS - A tax in Brazil that can be translated as Social Security.

INSTITUTIONAL INVESTOR - An institution that has large amounts of resources kept at a certain level of stability to be used as a reserve for risks or for income from equities and that invests part of them in the capital market.

INTERCONNECTION - Connection between operationally compatible telecommunication networks such that users of services from one of network can communicate with users of services in another network or can access services available in another network.

INTEREST - Money that the borrower must pay to the owner of the money loaned. It can be simple (when calculated on the amount of capital) or compound (when the interest is added to the capital borrowed, which becomes part of the amount on which the next interest is calculated).

INTEREST ON ARREARS - Interest due to late payment.

INTEREST ON OWN CAPITAL - When companies distribute profits to their stockholders, they can opt to pay them through the payment of interest on their own capital rather than distribute dividends, provided that certain conditions are met as established in special regulations.

INTER-STATE SERVICES - Local circuit-switched land-line telephone services provided within states within a company’s given service region. International long-distance and data-transmission circuit-switched land-line telephone services for communication between a fixed point in national territory and another fixed point abroad.

INTRA-REGIONAL SERVICES - National long-distance circuit-switched land-line telephone services for communication between fixed points in different local areas within national territory, originating and connecting within the same region or General Concession Plan (covers intra-sectoral services and inter-sectoral services).

INTRA-STATE SERVICES - National long-distance circuit-switched land-line telephone services provided between locations within a state in a given service region for the company.

INVESTMENT - Employment of savings in a productive activity, targeting gains in the medium or long term. It is also used to describe financial resources were used in some kind of financial asset.

INVESTMENT CLUB - Group of individuals (maximum 150) that invest in a diversified portfolio of stock and that is administrated by an authorized financial institution.

INVESTMENT POLICY - In asset management, the investment policy is the definition of the rules and how the management of an investment portfolio will be carried out.

INVESTMENT PORTFOLIO - Set of fixed and variable income securities owned by individuals or companies.

IOF - A tax in Brazil that can be translated as Tax on Financial Operations. For investment funds, it is only charged on withdrawals made within less than 30 days.

IP - Internet protocol - an interconnection protocol for sub-networks, specifically those with different physical characteristics, used to connect to the internet.

IPC/Fipe - Acronym for "Índice de Preço ao Consumidor" (Consumer price index). It calculates the change in prices of a basket of average consumption and likely for the population in the city of São Paulo, calculated by the Foundation for Economic Research at USP.

IPCA - Acronym for "Índice Nacional de Preços ao Consumidor Amplo", which is Brazil‘s price index calculated by IBGE.

IPI - A tax in Brazil that can be translated as Excise Tax.

IPO - Short for Initial Public Offering. Refers to the first placement of securities through a public offering on the market by a company.

IR - Brazilian acronym for Income Tax. This tax is levied directly on the income earned by individuals and businesses. For individuals, the higher the income the higher the rate of tax levied. For companies, the percentage of the income tax depends on the type of business and taxation system in which it fits.

IRPJ - A tax in Brazil that can be translated as Corporate Income Tax.

ISDN - Integrated services digital network - the digitalization of the telephone network for simultaneous voice, data, image, application and multimedia-service traffic. The ISDN was designed to substitute the conventional (analog) telephone network with a digital network. There are two different types of ISDN interface. The ISDN/BRI interface is used at a user‘s residence and consists of two channels that can be used at a speed of 64 Kbps and a control channel, all operating within a pair of common telephone cables. This allows the user to have an internet access speed of 64 Kbps. The version of ISDN for companies and internet service providers is ISDN/PRI, which consists of 30 channels at speeds of 64 Kbps plus one control channel.

ISP - Internet service provider - internet connection service.

ISS - A tax in Brazil that can be translated as Service Tax.

ISSUANCE - Operation of placing cash, bonds, or securities in circulation.

IST - Telecommunications Sector Index - consists of an index that measures the costs associated with the telecommunications sector published by ANATEL. This index is used to adjust rates and was included in the 2006 Concession Agreements.

IT - Information technology.

JUCERJA - Board of Trade of the State of Rio de Janeiro.

JUNK BOND - These are securities that promise high yields and are classified as high risk.

KBPS - Unit to measure the transmission speed of digital information, which corresponds to 1,024 bits per second.

LAPTOP - Portable microcomputer complete with a flat monitor and keyboard, contained in a small computer box and designed to be used in transit.

LAW No. 11638/07 - Law of December 28, 2007, applicable from January 1, 2008, amending the Corporate Law in relation to the preparation and disclosure of financial statements in order to update the Brazilian corporate law to enable the convergence of Brazilian Accounting Practices with those set out in IFRS.

LDI - INTERNATIONAL LONG-DISTANCE SERVICE - Brazil’s acronym for international long-distance service.

LDN - NATIONAL LONG-DISTANCE SERVICE - Brazil’s acronym for national long-distance service.

LEGAL PERSON - Expression adopted to indicate any legal entity such as institutions, businesses, associations, and companies in general.

LEVERAGE - Level of using money from third parties instead of one‘s own resources or cash flow in order to increase the company‘s possibilities of making profit but with this increasing the level of an operation‘s risk.

LIABILITIES - The total debts and obligations of a company or a person.

LINE SHARING - Local line sharing, in other words application of asymmetrical digital subscriber line (ADSL) technology of a pair of metal wires for providing, exclusively, telecommunications support service for internet access.

LIQUIDITY - The ability to convert a security or asset into cash.

LISTING - Registration required for a company to have its stock admitted for trading on a stock exchange. The registration depends on the fulfillment of a series of standards set by the exchange, including being an open capital company registered with CVM and previous authorization to sell the securities.

LOCAL AREA - Continuous geographic area, as defined by ANATEL according to technical and economic criteria, where circuit-switched fixed-line telephone service is provided locally.

LOCAL LINK - A radiofrequency link refers to a line comprised of one or more line segments of different pitches resulting from possible obstacles that would ensue from the imaginary connection of the points where the transmitter antenna and receiver antenna are located.

LOCAL SERVICES - Local circuit-switched land-line telephone services. For communication between fixed points within the same local area.

LONG-DISTANCE SERVICES - Any intra-regional (inter-sectoral and intra-sectoral), inter-regional and/or international service.

LOUDSPEAKER - Also known as hands-free, this option allows the speaker to use the phone without holding it.

LOWEST PRICE - Lowest price reached for a security during a trading session.

MAILBOX - Area where received electronic messages are stored.

MAINFRAME - Large-scale computer normally used to process large volumes of data and electronic transactions like bank and airline-company transactions. Over time, manufacturers updated many of the mainframe’s basic characteristics, reducing its size and installation requirements (previously, they needed entire rooms with special conditions); with the rise of the concept of decentralized processing, or client/server, its operating systems were updated to be able to function as large servers for corporate networks, primarily in situations where security is a serious concern and needs to be readily available.

MAJORITY STOCKHOLDERS - The name given to the stockholders who own a quantity of shares with voting rights that gives them the share control of a company.

MANAGEMENT FEE - Amount paid by the shareholders of a fund to the manager as compensation for the services rendered.

MARKET AGENT - In the case of an individual: one that operates in the financial and capital markets providing services to investors (broker, analyst, portfolio manager, autonomous agent, among others). In the case of a firm: Institutions that directly or indirectly have dealings with the financial and capital markets (banks, brokers, trade associations, stock exchanges, regulators, among others).

MARKET OF SWAPS - Swap contracts can include exchanging currencies, interest rates, or commodities. An interest rate swap can be used to transform a floating rate into a fixed rate, and vice versa. A currency swap can be used to transform a loan in foreign currency into one of another currency. It is a sophisticated operation and because of this it is the treasury departments of banks and investment fund managers who are the ones that most use the swap market. The idea is that two investors make investments that are "married" so that on the expiration date they will serve as protection of the money or even as speculation to increase capital.

MARKET VALUE - The value that a holder would receive for an asset if that asset were to be sold at today‘s date on the market.

MATURITY DATE OF OPTION - The day that the right of an option ceases.

MBI - Minimum billing increments.

MCS - Multimedia communication service.

MEDIA - Means whereby information is perceived, expressed, transmitted or stored. This term alone should be avoided, and the context in which it is intended should always be identified. Humans perceive basically six types of media: text, print, image or figure (static, unmoving), sound, video (moving image) and animation (moving design.

MEGA - Measurement unit of the transmission speed of digital information that corresponds to 1,024 Kb per second.

MERGER - The process by which two or more companies join to form a new company, which will succeed the original companies in their rights and obligations.

METRO ETHERNET - Use of ethernet networks for geographically spread-out metropolitan areas.

MINORITY STOCKHOLDERS - Those who holds a non-significant amount of stock in a company.

MMDS - Multichannel multipoint distribution service. System for signal distribution and communication used by pay-TV operators. MMDS uses higher frequencies, greater than 2 GHz, to send programming to subscribers’ homes through small land antennas for signal diffusion, which is different from the DBS or DTH systems that transmit directly from earth-orbiting satellites.

MMS - Multimedia message service - a service that combines text, image and sound, used in GPRS and 3G networks.

MODEM - Equipment used to send data between two points by way of telephone line. The modem receives data through a serial port, modulates it (converts it from digital to analog) and then recovers it.

MONETARY BASE - Name given to the sum of currency in circulation in the country plus demand deposits with the monetary authorities.

MORATORIUM - Term given for extending the deadline for paying a debt granted by the creditor to his debtor. It can also be a unilateral declaration by the government that it will not honor its debts at maturity of the contracts.

MORTGAGE NOTE - A credit instrument issued by authorized institutions backed by a lien on mortgage loans and providing direct credit for its nominal value, adjusted for inflation, and determined interest.

MP 449 - Provisional Measure No. 449 of December 3, 2008 in Brazil that by force of law established the Transitory Tax Regime for calculating taxable income, which addresses tax adjustments resulting from new accounting methods and criteria introduced by Law No. 11,638 and introduce certain changes to the Corporate Law. Provisional Measure No. 449 was converted into Law No. 11,941 on May 27, 2009.

MPC - Acronym for Monetary Policy Committee (COPOM in Portuguese). In Brazil this committee was set up on June 20, 1996 with the aim of establishing monetary policy guidelines and setting the basic interest rate. The Monetary Policy Committee decides on the Selic rate target that should apply in the period between its meetings.

MTR - Mobile termination rate for use of the operator’s cellular network that the fixed-line phone operator pays for a call from a fixed-line to a mobile phone (connection rate).

MULTIPLE ACCESS - Multiple calls sharing the same equipment.

MUTUAL INVESTMENT FUND IN EMERGING COMPANIES - Set up in the form of closed-end fund, it is a pooling of resources to be invested in a diversified portfolio of securities issued by emerging companies.

MUTUAL STOCK FUND - OPEN PORTFOLIO - Set up in the form of an opened or closed-end fund, it is a pooling of resources to be invested in a diversified portfolio of securities. It should maintain on a daily basis at least 51% of its equity invested in shares issued by open capital companies, stock options, stock indexes, and options on stock indexes.

MUTUAL STOCK FUND - Set of resources managed by a distributor of securities, broker, investment bank, or multiple service bank with an investment portfolio that invests in a diversified portfolio of stocks, distributing the results to the stockholders in proportion to the number of shares held.

NASDAQ - An electronic stock exchange with a computerized system for trading and controlling stock quotes for more than 5,000 companies with headquarters in New York. Has been active since 1970 and concentrates its operations on stocks from high technology companies.

NET INCOME - In financial investments, it is the set of gains obtained from a transaction after the payment of income tax.

NET PROFIT PER SHARE - Earnings per share obtained during a given period of time calculated by dividing a company‘s net profit by the number of existing shares.

NETWORK - Set of operator switchboards, equipment and transmission media used to support circuit-switched fixed-line telephone service provision. The transmission equipment can be based on fiber-optic cable, metal cables or point-to-point radio connections.

NEW CONTROLLING COMPANIES - Companies that, as a result of Telebrás spin-off in May 1998, assumed the rights and obligations beholden to Telebrás as well as control of its subsidiaries.

NFS - Acronym for National Financial System. Set of institutions and financial instruments that enables the transfer of resources and creates conditions whereby securities have liquidity on the financial market.

NMC - Acronym for the National Monetary Council, which is the highest deliberative body in the National Financial System. NMC has the responsibility to establish the general guidelines of the monetary, foreign exchange, and credit policies; regulate the conditions for the establishment, operation, and inspection of financial institutions; and regulate the instruments of monetary policy and exchange.

NOMINAL DEFICIT - This is the amount spent by the government above the amount collected, considering the interest payments on public debt.

NOMINAL INCOME - Set of gains obtained in an operation without discounting the losses from inflation.

NOMINAL INTEREST - This is the amount by which the interest is contracted.

NOMINAL VALUE OF STOCK - Value established in the bylaws of a company and assigned to a share representative of its capital.

NT - Network - term used for ISDN networks to identify access from the point of view of the network where the platform or devices are connected.

ODD LOT - Number of shares less than the standard lot.

OI FIXO - Oi’s fixed-line telephone service.

OI MÓVEL - Oi’s mobile telephone service.

OI TV - Cable TV services offered by Oi using DTH technology.

OI VELOX - Broadband internet access offered by Oi.

ON - Acronym in Portuguese for nominative common stock. Type of stock that gives its holder essential rights of a stockholder, specifically a share in the company‘s net income and voting rights at the company‘s meetings. Each common share corresponds to one vote in the General Meeting. According to Brazilian corporate law, it gives minority shareholders of common stock the right to receive at least 80% of the amount paid by the controlling group in the case of its control being sold (tag along).

OPEN CAPITAL - Characteristic of a corporation, or public company, in which the capital is divided in the form of shares among different stockholders, beyond those representing the control group. Only open capital companies registered with CVM may trade its shares on the stock exchange.

OPEN MARKET - In the broadest sense, it is the market without any particular physical location and with free access to trading. In Brazil, however, this designation applies to set of transactions carried out with fixed income securities issued by public or private companies.

OPEN POSITION - Balance of positions held by investors in future and option markets.

OPENING PRICE - The first price of a given security in a trading session.

OPERATION SUPPORT SYSTEM - A system that supports operations.

OPERATOR - Legal entity that holds the concession, permission or authorization for a telecommunications service and authorization for radiofrequency use.

OPTION EXERCISE PRICE - Price per share at which a holder shall be entitled to buy or sell all shares, object of the option.

OPTIONS MARKET - A market in which rights to buy (call) or sell (put) stock, stock indexes, currencies, future contracts, or securities are traded at pre-established exercise prices. On the Options Market, buyers have the right to buy or sell a certain amount of assets at a prefixed price up to a certain date, while sellers are left with the obligation to sell them or buy them as agreed. The buyer who buys a call option hopes that the future price rises. When buying a put option, he expects the future price to fall. The expectation of the seller, however, is the opposite. If he sells a call option it is because he expects the future price to fall. If he thinks that the future price will rise, he sells the put option. The difference of the amount paid and the amount received is called a premium.

OTC MARKET - The over-the-counter market is where trades take place outside of stock exchanges.

OUTSTANDING STOCK - The shares of a corporation‘s stock available for trading on the free capital market, which means all shares issued by the company except for the following: those owned by the controlling stockholder, his/her spouse, partner, and dependents included on the annual income tax statement; in treasury; ones held by the company‘s subsidiaries and affiliates as well as other companies that in fact are part of the same group or by right; those owned by the subsidiaries and affiliates of the controlling stockholder as well as other companies that make up the same group de facto or by right.

OVERFLOW - Traffic that exceeds the capacity of a given group of telephone lines or agents, telephone system or call center. Overflows can be diverted to other lines or agents and, in an emergency, to other telephone systems.

OVERNIGHT - Operations carried out in the open market for a minimum period of one day, and are restricted to financial institutions.

PABX - Private automatic branch exchange. The term originally used for telephone exchanges in companies was PBX, or private branch exchange, referring to the equipment that required the manual intervention of a human operator to complete calls. Over time, PBXs were updated, and this procedure was automated. Nowadays, the terms PBX and PABX are used interchangeably.

PABX EXTENSION - Internal terminal connected to a PABX, composing the PABX phone line extension set-up.

PADOs - Processes for calculating the cost of breaching an obligation [Processos de Apuração de Descumprimento de Obrigação].

PAPER MONEY - The legal tender of a country, not convertible into coins of precious metal (gold or silver).

PASOO - Alternative service plan for obligatory offers [Plano Alternativo de Serviço de Oferta Obrigatória].

PBM - Basic monthly plan.

PBX - Private branch exchange, or private operator, consists of a switchboard for private use that is connected to the national telephone network.

PCS or SMP - Personal communications system or SMP [Serviço Móvel Pessoal] in Brazil.

PEAK PRICE - Highest price reached for a security during a trading session.

PENSION FUND - Set of resources raised by contributions from employees and the company itself, managed by an entity linked to it, whose destination is the investment in a diversified portfolio of stocks, other securities, and property.

PERFORMANCE FEE - Amount charged by the manager on the portion of the investment fund‘s profitability that has a variation that is above the rate set as a reference. It can also be charged in addition to the management fee.

PGBL - Acronym for "Plano Gerador de Benefícios Livres" translated as Free Benefit Generator Plan. Is a Private Pension Fund created in 1997 whose main characteristic is the collection of income tax at the time of redemption.

PIN - Personal identification number - numerical code used to restrict access to a given service only to authorized persons.

PN - Acronym in Portuguese that identifies the preferred stock. Preferred stock gives the holder priorities in both the distribution of dividend, fixed or minimum, as well as the redemption of capital. Preferred stock, however, does not give the stockholder voting rights in the company‘s General Meeting, or restricts the exercise of this right. If the company changes control, the treatment is different for the holders of preferred capital stock.

POOL - A set of financial instruments combined for resale.

PORTABILITY BILLING - Document standardized by the Portability Implementation Group [Grupo de Implementação da Portabilidade] (GIP) - a temporary entity set up by ANATEL to implement portability) that registers the request submitted by a user and enables the entity to follow up on each stage of the portability process; this request must be kept for a minimum of five (5) years, and may be requested by ANATEL and any time during this five-year period.

PORTFOLIO - Set of securities and contracts of an investor or investment fund.

POSTPAID - One form of payment for telephone services. Postpaid contracts require the user to accept a service subscription price and to receive a bill after a set period of telephone use.

PREDECESSOR COMPANIES - The operators created in January 1998 as result of the dismantling of the land-line operations controlled by one of the operators controlled by Telebrás.

PREFERRED STOCK - Also known as preferred shares (PN), give the holder priority at the time of distributing dividends, whether fixed or minimum, and in the case of redemption of capital. Preferred stock, however, does not give the stockholder voting rights in the company‘s General Meeting, or restricts the exercise of this right. If the company changes control, the treatment is different for the holders of preferred capital stock.

PREMIUM - Positive difference between the amount paid and the equity‘s nominal value.

PREMIUM OFFER - Reimbursement paid to third parties as a premium for capturing clients who have high consumption levels of telephone services from other operators.

PREPAID - One form of payment for telephone services. Prepaid systems require the client to pay for credits ahead of time prior to using the phone. Credits are purchased as cards, which can be bought in retail POS or directly through prepaid phone credit terminals at ATMs or operators‘ stores.

PRESENT VALUE - Current value discounted at an interest rate of a flow of future payments or receipts.

PRE-TAX INCOME - Earnings Before Income Tax of a company.

PREVI - The Pension Fund for the Employees of Banco do Brasil.

PRICE PROTECTION - Reimbursement paid to third parties for the purpose of guaranteeing a profit margin in the sale of devices included in promotional offers.

PRICE/EARNINGS RATIO - P/E - Quotient of dividing the price of a stock on the market at an instant by its annual net earnings. Thus, the P/E is the number of years it would take to recover the capital invested in buying a share by receiving the profits generated by a company. This interpretation, however, assumes that the earnings per share will remain constant and will be distributed each year.

PRICING - Use of certain criteria to establish purchase price or sell price of a stock, security, etc.

PRIMARY DEFICIT - Refers to the amount the government spends more than it collects, excluding interest payments on public debt.

PRIMARY MARKET - Where stocks, bonds, and securities from new issuances are traded for the first time. Companies turn to the primary market to complement the resources they need in order to finance their expansion projects or their involvement in other activities.

PRIMARY SURPLUS - Refers to the amount the government spends below what it collects, excluding interest payments on public debt.

PRIVATE SYSTEM - Form of telecommunications service provided under authorization granted by ANATEL.

PRIVATIZATION - Process for transferring share control from the government to private institutions or individuals through auction.

PROFITABILITY - Rate of return on an investment.

PROFITABILITY - Relationship between the current value and the amount paid for an investment. The current value is represented by the price of investment plus the income already distributed by the issuer or company responsible (dividends, bonuses, premiums, interest, subscription rights, etc.).

PROFITABILITY INDEX - Relationship between the current and the initial capital of an investment made in shares of a company.

PROSPECTUS - The prospectus of an investment fund includes the information that investors need to know about the fund‘s operation. It is a document prepared by the managers of investment funds and public offerings of securities, which allows the investor to know the characteristics of the investment.

PROVIDER - Legal entity that provides value-added services through the public telecommunications network and is responsible to public phone subscribers for the service.

PUBLIC DEBT - Amount determined without duplication of the financial obligations of the public sector undertaken by virtue of laws, contracts, agreements, or treaties, and by conducting credit transactions for a amortization period exceeding 12 months.

PUBLIC OFFER TO PURCHASE - Proposal to purchase a specific lot of shares at a given price in a transaction subject to interference.

PUBLIC OFFER TO SALE - Proposal of a placement to the public of a certain number of shares of a company.

PUBLIC SYSTEM - Form of telecommunications service provided under concession or permission, obligating the provider to provide services that ensure universality, quality and continuity.

PULSE - A rapid change in the amplitude or characteristic of a wave or flow of energy.

PUT OPTION - The right granted to the holder of an option to sell to the writer, if he so desires, a standard lot of shares for a price previously stated on the expiration date of the option.

QUOTA - Same as share. The fraction of a fund. All equity of a fund is actually the sum of quotas or shares that were purchased by different investors.

QUOTA ASSIGNMENT - The act of transferring ownership of shares from a fund to another person.

QUOTE - The value of any asset on offer to buy or sell on the market.

RADIO COMMUNICATION - Telecommunication via radio waves.

RATING - There are agencies engaged in classifying the risk of a bank, a country, or an asset.

RBS - Radio Base station - equipment that uses radio to connect the telephone exchange and the cellular telephone.

REAL EARNINGS - Set of gains obtained in an operation after discounting the losses with inflation.

REAL ESTATE FUND - An investment fund set up in the form of a closed-end fund whose capital is intended for investments in real estate ventures. The shares of these funds, which cannot be redeemed, are registered with CVM and may be traded on the stock exchange or on the over-the-counter market.

REAL INTEREST - This is the amount of the nominal interest minus the inflation rate for the period.

REAL OR R$ - Brazil‘s currency.

RECEIPT OF SUBSCRIPTION - Document that proves the exercise of subscription rights, which can be traded on stock exchanges.

REDEMPTION - Act of paying for a security (trade bill, promissory note, etc.) or receipt of an investment.

REGION I - The geographic area that corresponds to the states of Rio de Janeiro, Minas Gerais, Espírito Santo, Bahia, Sergipe, Alagoas, Pernambuco, Paraíba, Rio Grande do Norte, Ceará, Piauí, Maranhão, Pará, Amazonas, Roraima and Amapá (save to 57 cities in the Triângulo Mineiro and the Alto Paranaíba in the state of Minas Gerais).

REGION II - Geographic area corresponding to the Federal District and the states of Rio Grande do Sul, Santa Catarina, Paraná, Mato Grosso do Sul, Mato Grosso, Goiás, Tocantins, Rondônia and Acre (save for small areas in the states of Goiás, Mato Grosso do Sul and Paraná).

REGION III - Geographic area corresponding to the territory of the state of São Paulo.

REGION IV - Geographic area corresponding to all of Brazil.

REGION OR REGIONS - Area within Brazilian territory delimited by the PGO for the purposes of the circuit-switched fixed-line telephone services concession.

REGULATION - A set of rules or provisions established so that the laws are carried out, making effective the legislative determinations.

RELEVANT FACT - A fact that could influence the decisions of investors in the purchase or sale of securities issued by a company.

REMITTANCE OF PROFITS - Payment made for profits reached in one country to send abroad to a multinational company installed in another country.

REMOTE ACCESS - The ability to connect to a network remotely.

RETAINED EARNINGS - This is part of the company‘s profit that is not divided among its stockholders and serves as a reserve for the company.

REVENUE GENERATING UNIT or RGU - Client that generates revenue in any of the services offered by Oi Fixo and/or Oi Móvele and/or Oi Velox and/or Oi TV. A single client who uses the four services creates four RGUs.

RFB - Acronym for "Receita Federal do Brasil", the internal revenue service of Brazil.

RIGHTS OFFERING - When a company gives its stockholders the opportunity to buy new shares or debentures for a fixed price, usually below the current market price and within a relatively short time.

RISK - The possibility that things do not turn out as planned. Level of uncertainty of profitability (return) on an investment.

ROAMING - Having mobile phone connectivity through networks outside a given user’s registered local area. The network being accessed may or may not pertain to the mobile phone service provider with which the user is registered.

SATELLITE-BASED SERVICES - Telecommunications services provided via satellite for, among other purposes, calls to countries that cannot be reached by cable or providing cable alternatives and setting up closed user networks.

SAVINGS - Share of income not used for consumption.

SAVINGS ACCOUNT - One of the most traditional financial investments models. The investor can make investments that yield a profit at intervals of 30 days.

SDT - Brazil‘s securities distribution system managed and operated by CETIP.

SEC - Acronym for Securities and Exchange Commission. It is the regulating organization for capital markets in the US, equivalent to CVM in Brazil.

SECONDARY MARKET - Where the trading takes place of securities already acquired from the primary market. Bovespa is the largest secondary market of stocks in Brazil.

SECURITIES - Investment in money or goods susceptible to monetary valuation, carried out by the investor because of a need to raise funds from the general public, which provides venture capital to an enterprise, in which he, the investor, has no direct management but expects to get profit or future benefit. In the case of an investment fund, the performance of the investment will depend on the manager‘s effort.

SECURITIES DEALER - A company that operates in the open market according to rules set by Central Bank, intermediating the placement and issuance of capital on the market through the subscription, alone or as part of a consortium, of the issuance of securities for resale.

SECURITY HOLDER - Person (or entity) that owns one or more stocks.

SELF-REGULATION - A set of monitoring standards and procedures created by private entities to ensure fair market practices and maintain ethical standards in the operations of their associates.

SELIC - Acronym for "Sistema Especial de Liquidação e Custódia", which is Brazil‘s special system for settlement and custody. It is the system used by the Central Bank to which only the accredited institutions in the financial market have access. The function of Selic is to register the trades with federal government securities, receive the security from the seller, transfer it to the buyer, and make a financial settlement.

SERVICE AREA - The area in which mobile stations can access mobile service and receive calls, including from the public telephone network.

SERVICE LEVEL - Quality parameter normally defined by comparing predefined goals with the results of statistics generated by ACD systems.

SERVICE QUALITY - Term normally used for high-speed networks like ATM networks and frame relay; also used for telecommunications operators to gauge performance components, like ease of access to a line’s signal, sound quality, etc.

SHARE - The fraction of a fund. All equity of an investment fund is actually the sum of quotas or shares that were purchased by different investors. Everyone that invests in funds purchases quotas. The buyer is called a shareholder in the market.

SHARE CONTROL - Ownership of the largest part of voting right stocks in a company by one stockholder or group of stockholders, thus giving them the power of decision over it.

SHAREHOLDERS‘ EQUITY - Represents the difference between the value of assets and liabilities. It can also be called net worth and is the book value given to stockholders or partners. In the case of investment funds, net worth is the sum of all assets and operations of the funds minus costs and fees.

SHARPE INDEX - Index that allows you to relate the risk and return involved in a certain investment. For professionals in the financial market, the Sharpe ratio for an investment will be better the higher the return and the lower the risk.

SISBACEN - Brazilian Central Bank Information System. Computerized communications tool that connects the Central Bank with the financial institutions.

SMART PHONE - Mobile telephone apparatus that uses the GSM standard, designed to facilitate e-mailing, faxing and visualizing intranet screens on the view screen. It contains a small keyboard and software that links the telephone directly with specific applications.

SMP - In Brazil, personal mobile phone services.

SMS - Short message service - allows short messages to be sent or transmitted through cellular telephone. Like e-mail, SMS messages are stored and remitted to SMS servers, which means that messages can be retrieved even when the subscriber is not available to receive them.

SND - Brazil‘s Debenture Module managed and operated by CETIP.

SPECIAL AUCTION - A trading session held on days and hours determined by the stock exchange. In the case of the sale of shares in companies owned by the government, for example, special auctions were held known as privatization auctions.

SPIN-OFF - This is a process of transfer by a company of portions of its equity to one or more companies that already exist or were established for this purpose, and extinguishing the original company if all of its equity was transferred.

SPREAD - The difference between the purchase price and the selling price of a security or a currency. In the case of interest rate, it is the difference between the loan rate charged by banks from the borrowers and the funding rate paid to customers.

SRTT - In Brazil, the transport telecommunications network service.

STAKEHOLDERS (Interested parties) - individuals or entities who take some risks, directly or indirectly, in the company. In addition to the stockholders, they are the employees, customers, suppliers, creditors, governments, among others.

STAND-ALONE SIM CARD - The SIM (subscriber identity module) card, or chip as it is commonly referred to among Brazilian operators, is a small circuit card that stores the user’s data, such as the user’s personal agenda, application and authentication code. The stand-alone SIM card refers to the sale of only the chip, without a cellular phone or telephone device.

STANDARD LOT - Amount of securities of identical characteristics and in quantities prefixed by the stock exchanges.

STF - Acronym for "Supremo Tribunal Federal", the Brazilian Federal Supreme Court.

STJ - Acronym for "Superior Tribunal de Justiça", the Brazilian Superior Court of Justice.

STOCK - A marketable security that represents the smallest unit by which the capital of a company is divided.

STOCK DIVIDEND - Stock bonuses granted to the stockholders when there is a capital increase of a company.

STOCK EXCHANGE - An entity whose basic objectives are to maintain a trading location or system capable of closing trades between its transactions agents of buying and selling securities, uphold high ethical standards in trading and disclosing the transactions made with speed, scope and detail.

STOCK MARKET - Part of the capital market that includes primary placement of new shares issued by companies and the secondary trading (on stock exchanges and on the over-the-counter market) of the shares already put into circulation.

STOCK PORTFOLIO - A set of stocks from different companies.

STOCK WITH NOMINAL VALUE - A share that has its value established by the company‘s bylaws.

STOCK WITHOUT NOMINAL VALUE - A share for which there is no face value and the price is that set by the market when it is issued.

STOCKBROKER - It is an institution in the financial system that acts as an intermediary in transactions between investors and stock exchanges. Establishment of the financial system that operates on the capital market, with securities, and particularly on the stock market.

STOCKHOLDER - One who owns shares of stocks in a corporation.

SUBSCRIBED AND PAID-IN CAPITAL - Amount of capital plus the portion of subscription paid by the stockholder.

SUBSCRIBED CAPITAL TO BE PAID - Portion of subscription that the stockholder must pay according to determination of the body that authorized the capital increase of a company.

SUBSCRIBER - Individual or legal entity that signs a contract with an operator to utilize telecommunication services.

SUBSCRIPTION - Acquisition of securities issued by a company, in cash or assets, for the formation or increase of capital.

SUBSCRIPTION RIGHT - Right of a stockholder to subscribe preferably new shares of a corporation when there is an increase in its capital.

SUBSCRIPTION TERM - Deadline set by a corporation for stockholders to exercise their stock rights that it has issued.

SWING - Variation (positive or negative) observed in the price of the same stock at a given time period.

SWITCH - Hardware device whose function is to switch calls and/or messages of varied types within a telephone exchange or computer network.

SWITCHED LINE - Communications link whereby the physical path may vary each time, such as occurs in the public telephone network.

SWITCHES - Devices that filter and direct data packets between local networks, operating within the link layer (layer 2) of the open systems interconnection (OSI) model.

SWITCHING - Communication method whereby data is directed between hosts (any machine or computer connected to a network).

TAKEOVER - Process of acquiring control of a corporation by another group by it purchasing that company‘s stock on the stock exchange. This process is referred to as friendly when there is prior agreement between the parties.

TDMA - Time-division multiple access - digital cellular telephone standard based on TDM. Every U.S. TDMA channel has the same bandwidth as the AMPS channels, 30 KHz, and is used by three subscribers; Each subscriber’s digital signal of 64 Kbps is compressed to 8 Kbps through vocoders (IS-54 standard). Subsequently, the three subscribers’ compressed signal is transmitted over the same channel, one at a time. IS-54 and IS-136 TDMA standards, however, increase the AMPS standard threefold. The IS-136 standard differs from the IS-54 standard by introducing a digital control channel.

TED - Acronym for "Transferência Eletrônica Disponível", a real-time money transfer to other banks. It is a new fund transfer system whereby the electronic medium makes it possible to transfer money directly into a checking account in real time.

TELEBRÁS - Telecomunicações Brasileiras S.A.

TELEBRÁS SPIN-OFF - The Telebrás spin-off took place on May 22, 1998 and led to the creation of Tele Norte Leste Participações S.A. and the former incorporated subsidiaries.

TELEBRÁS SYSTEM - Set of land-line and cellular telephone companies controlled by Telebrás that were sold during the privatization process, in addition to the Research and Development Center, that rendered all the telecommunications services currently provided by the companies that resulted from the Telebrás Spin-Off and its subsidiary operators.

TELECOMMUNICATION - The transmission, emission or reception of symbols, characters, signals, writings, images, sounds or any manner of information through wires, radioelectricity, optics or any other electromagnetic process.

TELECONFERENCE - Facilitation to enable the connection of various extensions and outside telephones for a simultaneous conversation.

TELEPHONE EXCHANGE - Set of electronic components that automatically route or connect telephone calls through a telephone switchboard. A telephone switchboard, in turn, is a machine capable of electronically connecting two points (in the case of telephones, two subscribers).

THIRD PARTY RESOURCES - Expression commonly used by financial market professionals to refer to amounts coming from other companies or individuals.

TJLP - Brazilian acronym for Long-Term Interest Rate. In Brazil it is the official index for financial operations calculated for the average profitability of the Debt Conversion Bonds issued by government and, when issued on the primary market, any government securities. It is the rate used to adjust loans made by the BNDES.

TOB - Takeover Bid(s) according to CVM Instruction No. 361.

TOPOLOGY - Topology or architecture. This is method whereby the various parties of a system are online and connected to each other. For example: topology can be in the form of a ring, or it can be centralized. While topology may be arbitrary, in general, it reflects the technological advances of the time in which the system was designed.

TR - Acronym for "Taxa Referencial de Juros", an interest rate created in 1991 during the Collor II Plan. To calculate the TR, the Central Bank uses a sample of the 30 largest financial institutions in the country, the volume of funding of the deposits with maturities for each one of them The value of the TR is calculated based on the average monthly remuneration of the CDBs and RDBs issued by banks in the sample.

TRADE BALANCE - The relationship between imports and exports of a country. If exports exceed imports, a trade surplus occurs. Otherwise, there is a trade deficit.

TRADE DEFICIT - Situation in which the value of exports is below the value of imports of a country.

TRADE SURPLUS - Situation in which the value of exports is higher than the value of imports of a country.

TRADING - A session for buying and selling certificates on a stock exchange, which may take place directly on a trading floor or by an electronic system.

TRADING FLOOR - Location adequate for the representatives of brokerage firms to meet and trade among themselves stock and options in a free and open market. The open outcry trading session was closed at BOVESPA in 2005.

TRAFFIC - Quantity of information/packets that circulate in a network.

TRT - Acronym for "Tribunal Regional do Trabalho", which is Brazil‘s Regional Labor Court of Appeals.

TRUNK - Multichannel communications link used to connect two switch points, the first in a network or telephone exchange and the second in a private exchange. Also called line, switched line or switched-circuit line.

TRUNKING - Service closed to public correspondence that uses radio communications basically to engage in dispatch operations. The same as mobile service or a trunked system.

TST - Acronym for "Tribunal Superior do Trabalho", which is Brazil‘s Labor Supreme Court.

UNBUNDLING - Desegregation of elements from the network of operators of circuit-switched fixed-line telephone services through which all telecommunications service providers of collective interest are guaranteed use of the operators‘ network elements for access to the telecommunication-service user’s or subscriber’s terminal.

UNDERWRITERS - Financial institutions that specialize in stock issuance operations on the primary market. In Brazil, these institutions are, in general, multiple service banks or investment banks, securities distributors, and brokers that keep teams of analysts and technicians with the skills to guide entrepreneurs, showing them the conditions and the best opportunity for a company to open its capital to the investing public through issuance operations.

UNDERWRITING - Similar to the term "subscription" and refers to the process of issuing stock or debentures for public subscription. The placement of these securities is done by financial institutions authorized to intermediate operations to issue stock on the primary market.

UNIT VALUE OF STOCK - The quotient between a company‘s paid-in capital and the number of shares issued.

UNIVERSAL ACCESS - Obligation beholden to telecommunications operators under the public system that seeks to make access to telecommunications services available to any person or institution of the public interest regardless of location or socio-economic status and to allow for the use of essential telecommunication services that are of public interest.

UPSELLING - Selling more sophisticated products/services to a client who already has the products/services of the same line (example: selling higher connection speeds to a client who already has a broadband connection).

UPSTREAM - Speed at which data is transmitted.

US GAAP - Generally Accepted Accounting Principles in the United States of America.

USER - Any person who uses telecommunications services, independent of a service agreement or paid subscription with the provider.

VALUE-ADDED SERVICES - Type of service with more functionality that other transmission services offered by a telecommunications network.

VARIABLE-RATE SECURITY - A security whose profitability is not known in advance and are usually determined based on an index.

VELOX OR OI VELOX - Broadband service provided by the Company to provide high-speed internet access.

VENTURE CAPITAL - This is the name given to the capital that is invested in risk models, which means that there is the possibility of losses and also for high yields.

VGBL - Acronym for "Vida Gerador de Benefício Livre", translated as Life Free Benefit Generator. It is a private pension plan without the monthly charge of Income Tax. The tax is charged when you start receiving retirement benefits or upon withdrawing the money invested before the time established for yourself to begin making withdrawals.

VIDEOCONFERENCE - Video communication session between two or more geographically distant parties. The equipment allows for a series of applications once computer networks have been connected. The user can combine video tools and information applications. For transmission, there are more broadband options that are more widely available than ISDN lines. High-definition sound and images and the absence of delays (when voice and motion are out of synch) has convinced many to sign-up for this service.

VIRTUAL PRIVATE NETWORK - a private network (corporate network, for example) built over the infrastructure of a public network (public resource, where there is no control over information access), normally the internet. In other words, instead of using dedicated links or packet networks (like, X.25 and frame relay) to connect to remote networks.

VOICEMAIL - A messaging service where messages for users are recorded for later recovery.

VOIP - Voice-over IP - technology to transmit voice over networks (including the internet) based on an IP protocol.

VOLATILITY - The average degree of fluctuation in the value of shares of a fund when pricing an asset or security over a given period. High volatility means a tendency to strong variations and more liquidity. Measure of risk that a fund has in relation to daily quotas.

VOTE - Right that the owner of common stock (or preferred not devoid of this faculty) to participate in the discussions at general meetings.

WAITING PERIOD - Length of time established in the contract that investors cannot redeem their funds, or during which this is subject to penalties.

WALL STREET - The term refers to the financial community in New York. It is also the name of the street in Manhattan where the New York Stock Exchange is located along with several stock exchanges and the headquarters of major banks.

WAP - Wireless application protocol. An international standard for applications that use wireless digital data communication.

WARRANT - A certificate that gives the holder the option to buy stocks that guarantees this certificate at a predetermined price (exercise price) until a predetermined date (expiration date). This is a non-standard option, usually long term, issued by institutions holding significant positions in securities such as debentures, commercial paper, etc.

WIMAX - Worldwide interoperability for microwave access - technology for data transmission through wireless networks that offers broadband connectivity for domestic or corporate use.

WIRELESS - Generic expression that describes telecommunications systems in which signals are transported over electromagnetic waves, and not cables.

WITHDRAWAL RIGHT - Right of stockholders to withdraw from a company through reimbursement of the value of their shares when they disagree with a decision made in a meeting to approve certain matters defined in the relevant legislation.

WLL - Wireless local loop. Communications standard without a land line. Wireless connection to a land line.

xDSL - Digital subscriber line. Technology that transfers digital information through existent twisted copper wire. Transfer rates depend on the variant of the system used (examples: ADSL, HDSL, VDSL, SDSL).

(¹) This translation is still subject to the auditors review

(¹) This translation is still subject to the auditors review

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