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3Q17 Results

Year-on-year improvement in EBITDA and cash generation based on operational efficiency, coupled with better quality indicators

Oi records net income from Brazilian operations and year-on-year improvement in EBITDA and EBITDA margin.

  • Our Brazilian operations recorded net income for the first time since 3Q15, totaling R$ 217.5 million in 3Q17.
  • Consolidated net income, which includes international operations, totaled R$ 8 million in the quarter.
  • Routine EBITDA totaled R$ 1,597 million in 3Q17, 4.1% up on 3Q16.
  • Routine EBITDA margin reached 27.0%, 2.2 p.p. more than in 3Q16.

Net service revenues resume sequential growth trajectory.

  • Net service revenues moved up 2.3% over 2Q17, driven by increased penetration of convergent products, recharge volume growth in the prepaid segment and increased postpaid revenues due to higher sales of new unlimited plans.

The Company reduced costs by R$ 337 million in 3Q17 and R$ 1.5 billion in the first nine months of 2017.

  • Operational efficiency promotes sustainable cost reduction, supported by continuous improvement in quality indicators.

Oi continues increasing infrastructure investments, reinforcing its commitment to business sustainability and the future of the Company.

  • Oi increased investments by 36.3% over 3Q16, reaching R$ 1.3 billion in 3Q17. CAPEX/ Net Revenues totaled 22.6%, compared with 15.9% in 3Q16.
  • In 9M17, total investments reached R$ 3.8 billion, 11.6% higher than in 9M16.

Since the beginning of the Judicial Reorganization, Oi’s operations have generated R$ 2.6 billion in cash.

  • In 3Q17, our cash moved up by R$ 287 million, supporting the increase in the Company’s investments in these three months.

Initiatives designed to increase operational efficiency and improve customer experience result in consistently better operating indicators.

  • Active management based on infrastructure modernization and expansion of network capacity, preventive actions to increase productivity, better customer service and digitalization lead to operational efficiency gains and better customer experience.
  • As a result, Oi has been recording substantial improvements in the customer experience, with continuous reductions in ANATEL (-13.9% y.o.y.) and Small Claims Court (JEC - Juizado Especial Cível) (-33.7% y.o.y.) complaint indicators.

Oi’s Judicial Reorganization process continues to advance and the Company continues to negotiate with creditors seeking the best proposal for a Judicial Reorganization Plan, to be submitted for approval at the General Meeting of Creditors on December 7.

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