2003 Year End Results

March 2003 11Page

Tele Nordeste Celular

Tele Nordeste Celular

Webcast – 2003 Results

2TND – 2003 Results PageTele Nordeste Celular

Agenda

• 2003 Main strategies• Market performance

High quality client baseGross additions and churnRetention and net additions

• GSM launch• 4Q03 Financial overview

Net revenuesARPU performanceMOUSACEBITDANet income

3TND – 2003 Results PageTele Nordeste Celular

2003 Main strategies

• GSM launch

• Development of new services

– Focusing on the corporate segment

• Qualitative acquisition based on customer value

– Outgoing traffic boost

• Loyalty and retention

– Churn reduction

• Optimization of cost and expenses

• Strict control of bad debt

4TND – 2003 Results PageTele Nordeste Celular

High quality client base

694

1,232

705

1,467

2002 2003

∆ %12.8%

64.0%

36.0%

67.5%

32.5%

1,9262,172

Total lines(in thousands)

Postpaid

Prepaid

ConsistentConsistent growth due to the offers of growth due to the offers of new servicesnew services

5TND – 2003 Results PageTele Nordeste Celular

Gross additions and Churn

Driving growth through: - Service and brand recognition- Better quality acquisition YoY

Driving growth through: Driving growth through: -- Service and brand recognitionService and brand recognition-- Better quality acquisition YoYBetter quality acquisition YoY

Gross Additions(in thousands)

30.7 114.5

30.9

145.5 118.3

479.8

146.6

473.4

4Q02 4Q03 2002 2003

∆ %21.5

145.2176.4

PostpaidPrepaid

6.4 4.9

23.218.3

4Q02 4Q03 2002 2003

Churn (%)

∆- 1.5 p.p

598.1 620.0

∆ %3.7

∆- 4.9 p.p

6TND – 2003 Results PageTele Nordeste Celular

Boost of the Net additions

(42.3) 63.4 72.0

(91.3)

259.4

11.1

235.6

4Q02 4Q03 2002 2003

∆ %241.2

Net additions (in thousands)

168.1

PostpaidPrepaid

User profiling as key for acquisition and retentionUser profiling as key for User profiling as key for acquisition and retentionacquisition and retention

246.7

∆ %46.8

21.1 72.0

7TND – 2003 Results PageTele Nordeste Celular

Technology OptionMobility Profile

Local(ex: only capital) TDMA and GSM

Regional(ex: capital and inner cities) TDMA

National(ex: only capital) TDMA and GSM

National and Regional TDMA

All operating companies using GSM

Ensure the right option according to client mobility profileExpanding GSM coverageClient options ⇒ novelty, handset, data, MMS, SMS

Ensure the right option according to client mobility profileExpanding GSM coverageClient options ⇒ novelty, handset, data, MMS, SMS

More than 41% of the population covered

8TND – 2003 Results PageTele Nordeste Celular

Net revenues performance

Consistently increasing service revenueConsistently increasing service revenueConsistently increasing service revenue

14.3

237.0

18.7

244.4 50.4

871.1

94.5

904.9

4Q02 4Q03 2002 2003

251.3

921.5

Net revenues(in millions R$)

HandsetServices

∆ %4.7

263.1

999.5∆ %8.5

9TND – 2003 Results PageTele Nordeste Celular

ARPU Performance

ARPU(in R$)

ARPU(in R$)

Stable when compared to client base growth

(Growth with profitability)

Stable when compared to Stable when compared to client base growthclient base growth

(Growth with profitability)(Growth with profitability)

40.0 37.5

2002 2003

37.0 37.2 37.238.8

1Q03 2Q03 3Q03 4Q03

10TND – 2003 Results PageTele Nordeste Celular

MOU (in Minutes)

• Outgoing traffic growth thanks to the high value customer acquisition policy

• Income usage suffered due to fixed lines blocking calls to our network

•• Outgoing traffic growth thanks to the high value Outgoing traffic growth thanks to the high value customer acquisition policycustomer acquisition policy

•• Income usage suffered due to fixed lines Income usage suffered due to fixed lines blocking calls to our networkblocking calls to our network

4Q02 1Q03 2Q03 3Q03 4Q032002 2003

113104 105 108 108 113 107

IncomingOutgoing

11TND – 2003 Results PageTele Nordeste Celular

Qualitative acquisition based on customer value

84 82

11091

4Q02 4Q03 2002 2003

SAC(in R$)

SAC decreased due to the gross adds increase, but also due to our distribution

channel's strategy

SAC decreased due to the gross adds SAC decreased due to the gross adds increase, but also due to our distribution increase, but also due to our distribution

channel's strategychannel's strategy

12TND – 2003 Results PageTele Nordeste Celular

4Q02 4Q03 2002 2003

EBITDA performance

48.5%

121.8

408.9

37.2% 35.8%

Affected by the OPEX due to the implementation of the GSM networkAffected by the OPEX Affected by the OPEX due to the due to the

implementation of the GSM networkimplementation of the GSM networkEBITDA (Millions R$)

124.1

427.7

47.2%

46.4%40.9%

1Q03 2Q03 3Q03 4Q03

47,2%

35.8%37.2%43.3%

124.1

90.392.8101.5

13TND – 2003 Results PageTele Nordeste Celular

118,6

207,5

2002 2003

Growth in Net Income

∆%

75.0

Net income increased 75% compared to 2002 due to our policy to growth with profitability

Net income increased 75% compared to 2002 Net income increased 75% compared to 2002 due to our policy to growth with profitabilitydue to our policy to growth with profitability

Net Income(Millions R$)

14TND – 2003 Results PageTele Nordeste Celular

For further information, please contact:http//www.timnordeste.com.brInvestor Relations:

Leonardo Wanderleyphone: 55 81 3302-2594 – 9987-8882leonardo.wanderley@timnordeste.com.br

Fabíola Almeidaphone: 55 81 3302-2813 – 9996-4353fabiola.almeida@timnordeste.com.br

Polyana Macielphone: 55 81 3302-2593 – 9949-7999polyana.maciel@timnordeste.com.br