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EXECUTIVE SUMMARY

This market research report on Brazilian wireless industry provides an overview of the competitive environment in Brazil’s mobile operator space. The report covers key metrics such as the numbers of subscribers, YoY growth, net additions and market shares for all of the major Brazilian operators – Vivo Participações SA (Vivo), TIM Brazil, Claro Brazil (a unit of Mexico's América Móvil (AMX)), and Tele Norte Leste Participações SA (TNE). Two takeaways from the data are: 1) Strong subscriber growth continues as SIM card sales rise, TNE enters São Paulo, and Vivo expands operations in the Northeast; and 2) The wireless operators’ shares of net additions are different from their market shares by subscribers. With 26% share of net additions in 2008 YTD, AMX’s Claro is about to become Brazil’s second largest wireless carrier.

TABLE OF CONTENTS

Anatel releases August 2008 wireless subscriber data: Major operators’ shares of net additions not consistent with their shares of subscribers

·          Strong subscriber growth continues as SIM card sales rise, TNE enters São Paulo, and Vivo expands operations in the Northeast

·          With 26% share of net additions in 2008 YTD, AMX’s Claro is about to become Brazil’s second largest wireless carrier

Tables:

Table 1: Wireless Subscribers, Market Share of Net Additions, and Overall Market Share, August 2008

Table 2: Brazil Monthly Wireless Subscriber Data, Sept 2006 – Aug 2008

Charts:

Chart 1: Overall Market Shares, June 2008 – August 2008

Chart 2: Market Share of Net Additions, March 2007 – August 2008

Chart 3: Market Shares of Vivo, TIM, Claro (AMX) and TNE, August 2007 vs. August 2008, 2008 YTD

Chart 4: Vivo + TMB remains #1 player with 30% market share

Chart 5: Wireless Penetration by State - Brazil reaches 72% wireless penetration in August 2008 (up from 59% in August 2007)