TELE NORTE LESTE TELE NORTE LESTE PARTICIPAÇÕES S.A.PARTICIPAÇÕES S.A.

March, 2002March, 2002

2

OverviewOverview

Largest Telco in Latin America:

18.1 million lines installed

14.8 million lines in service Concession Area: Region I

65% of Brazilian Territory

16 states (Rio, Minas, Bahia, …)

93 Million pops (54% of Country´s total)

40% of Country’s GDP

Over 21 Million Households Tele Density: 16% ( vs. 22% National Average)

3

TNLP4: Heaviest Weighted Stock in IBOVESPA One of Leading LatAm ADRs’ in the NYSE (TNE) Market Value: US$ 5.1 billion (March/01) Free Float: 80% of Total Shares Investment grade rating: Fitch / BBB-

Moody´s / Baa3

S&P / brAA+

OverviewOverview

4

2001 Main Achievements2001 Main Achievements

Corporate Restructuring of wireline business;

Early Compliance with Anatel´s 2003 targets;

Wireline operating restructuring;

Acquisition of PCS license for Region I;

5

Consolidation (“16 operating co´s 1 – Telemar Norte Leste”);

Operational and administrative efficiency gains;

Better utilization of Tax Loss Carry-forwards (R$ 890 million);

Market recognition – Animec award. (Braz. Nat´l Investors Assoc.)

Corporate RestructuringCorporate Restructuring

6

TELE NORTE LESTE PARTICIPAÇÕES S.A

80.1%

17.6%

Corporate RestructuringCorporate Restructuring - Previous Shareholding Previous Shareholding StructureStructure

HICORPOUTSOURCING

TNL ACESSO CONTAX TNEXTTNL PCS

TELEMAR PARTICIPAÇÕES S.A

RIO DEJANEIRO

ESPÍRITOSANTO

MINASGERAIS

PIAUÍ

SERGIPE

MARANHÃO PARÁ

ALAGOAS RIO GRANDEDO NORTE

CEARÁ

BAHIA

AMAPÁ

PERNAMBUCO

RORAIMA AMAZONAS

PARAÍBA

69%79% 81% 61% 69%86% 76% 64%

83% 78% 73% 64% 55% 81% 60% 75%

Note: percentages reflect TNL holdings; balance is minoritary shareholders

Free Float

2.3% Treasury

7

TELE NORTE LESTE PARTICIPAÇÕES S.A

80.1% 17.6%

HICORPOUTSOURCING

TNL ACESSO CONTAX TNEXTTNL PCS

TELEMAR PARTICIPAÇÕES S.A Free Float

TELEMARNorte Leste

Branches

Bahia

Sergipe Rio Grandedo Norte

Alagoas Pará RoraimaEspíritoSanto

Paraíba

Pernambuco

AmapáCeará

Piauí

MaranhãoMinasGerais

Amazonas

Rio de Janeiro

2.3% Treasury

Corporate RestructuringCorporate Restructuring – Current Shareholders´ StructureCurrent Shareholders´ Structure

79.6%

8

Shareholders’ StructureShareholders’ Structure

Tele Norte Leste Participações S.A.

Free Float

Preferred Shares -----99.7% Brazil ------ 58.1% ADR ------- 41.9%Common Shares ------- 44.4%

80.1%17.6%

Common Shares = 52.3%

TELEMAR PARTICIPAÇÕES S.A.

Total Shares: 378,250 mnPreferred: 252,167 mnCommon: 126,083 mn

Shares in Treasury = 2.3%

TOTAL CAPITALBNDESParFiagoAG TelecomASSECA ParticipaçõesLexpart Part.L. F. Tel BrasilCapBrasilVeículos

25.0%19.9%11.3%11.3%11.3%11.3%5.0%5.0%

Market Cap = R$ 14.0 billionDec/01

9

5.3 million new lines installed;

296 thousand public phones installed;

16,420 localities covered;

77 million inhabitants benefited from the program;

Over 97% digitalization rate;

Over 17 thousand km of optic fiber network;

US$ 9.7 billion CAPEX since privatization.

Early Compliance with Anatel´s 2003 TargetsEarly Compliance with Anatel´s 2003 Targets and other achievementsand other achievements

10

7.2 8.1 7.8 8.89.7

10.5 11.8 12.8

14.8

18.1 18.1

0

5

10

15

20

jul/98 1998 1999 2000 2001 2002E

Early Compliance with Anatel´s 2003 targetsEarly Compliance with Anatel´s 2003 targetsPlatform GrowthPlatform Growth

15,0

Lines in ServiceLines Installed

(in millions)

20,01998

Utilization Rate (%)

1999 2000 2001 2002E

89%92% 92%

82%

+/-90%

LIS +106%

LI +123%

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Centralization of operational systems;

Centralization of operational and administrative activities;

Better control and cost management;

Improvement of internal processes;

Headcount reduction.

Wireline Operating RestructuringWireline Operating Restructuring

12

31,312

24,526 22,922 21,210

-

5.000

10.000

15.000

20.000

25.000

30.000

35.000

1998 1999 2000 2001 2002E

Wireline Operating RestructuringWireline Operating RestructuringTotal Employees (ex-Contax)Total Employees (ex-Contax)

Average Employees (ex-Contax)Average Employees (ex-Contax) Total Employees (ex-Contax)Total Employees (ex-Contax)

24,383 24,563 21,090

15,490

-

5.000

10.000

15.000

20.000

25.000

1998 1999 2000 2001 2002E

13

Acquisition of PCS license for Region I (March/2001);

USD 1.4 billion of suppliers and banks facilities;

R$ 2.2 billion CAPEX in 2001 (R$ 1.2 bn for license);

Launching brand name.

Acquisition of PCS license for Region IAcquisition of PCS license for Region IMobile Phone BusinessMobile Phone Business

14

Revenue growth;

2001- Financial and Operational Results2001- Financial and Operational Results

Improvement in gross revenue per employee ratio;

Operating expenses;

Bad debt provision;

EBITDA;

Income statement;

Balance Sheet.

15

6,946

5,158

8,433

6,222

10,851

8,122

13,660

10,103

-

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

1998 1999 2000 2001 2002E

Gross Revenue Net Revenue

2001- Financial and Operational Results2001- Financial and Operational ResultsRevenue Growth (R$ mm)Revenue Growth (R$ mm)

+97% (98/01)

CAGR (2001/98)

25.3%

16

Gross Revenue per Employee Gross Revenue per Employee (R$ Thousand /year)(R$ Thousand /year)

Total employees, but excluding PCS and Contax

287,51345,86

514,49

907,25

-

200

400

600

800

1.000

1.200

1.400

1.600

1998 1999 2000 2001 2002E

Average Annual

Growth

(2001/1998) 46.7%

17

-300

200

700

1200

1700

22002700

3200

3700

4200

4700

1998 1999 2000 2001Cost of Services Selling Expenses G&A Others

Operating Expenses BreakdownOperating Expenses Breakdown(R$ Million)(R$ Million)

40

17

33

10

33

21

27

19

38

30

32

-10

51

34

25

2,977 2,774 2,460

4,328

%

18

Bad Debt Provision (R$ Million)Bad Debt Provision (R$ Million)

812

114

212219

5.9%

2.5%

1.6%2.0%

0

100

200

300

400

500

1998 1999 2000 2001 2002E0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

Bad Debt Bad Debt/Gross Revenue

2.8%

4.6%

10.6%

5.2%

1Q01 2Q01 3Q01 4Q01

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End of Period

Total Partial

% of Total Lines in Service

Line Blocked & DisconnectedLine Blocked & DisconnectedBlocked Lines (in thousands)*

1,1871,152 1,185

945

6.4%8.1%

9.5%8.5%

Mar-01 Jun-01 Sep-01 Dec-01

Disconnected Lines (in thousands)

413472

636

767

1Q01 2Q01 3Q01 4Q01

= 2,288

Partial Blocking´-outgoing calls: 30 days past due

Total Blocking – all calls: 60 days past due

Disconnected: 90 days past due

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EBITDA (R$ Million)EBITDA (R$ Million)

0%1998 1999 2000 2001

1,689

2,735

4,032 3,440

-500

1.0001.5002.0002.5003.0003.5004.0004.500

1998 1999 2000 2001

Margin (%)

34,1%49,6%48,8%

54,3%

20%

40%

60%

1998 1999 2000 2001

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Consolidated Income StatementConsolidated Income Statement

Plant growth

F-M Traffic growth

Debt increase

Var.R$ Millions 1999 2000 2001 01/00

Net Operating Revenue 6,222.3 8,126.9 10,103.1 24.3%

Operating Expenses 2,573.6 2,460.6 4,328.3 75.9%

Interconection Costs 916.4 1,634.8 2,334.6 42.8%

EBITDA 2,732.3 4,031.6 3,440.2 -14.7%

Depreciation and Amortization 2,757.4 2,802.0 2,926.4 4.4%

EBIT 97.9 1,229.6 531.4 -56.8%

Financial Result 42.3 39.5 325.5

Income before Tax and Social Cont. 12.1 1,206.0 203.8 -83.1%

Net Income 95.7 709.4 140.4 -80.2%

EPADR (R$) 0.29 1.90 0.37

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Consolidated Balance SheetConsolidated Balance Sheet

12/31/00 12/31/01 12/31/00 12/31/01

TOTAL ASSETS 19,472 26,766 TOTAL LIABILITIES 19,472 26,766

Current Assets 6,054 4,951 Current Liabilities 3,566 5,609 Cash and ST Investments 2,093 1,234 Suppliers 1,358 2,199

Accounts Receivables - Services 2,502 2,146 Loans and Financing 786 1,371

Recoverable Taxes 1,144 1,293 Salaries Benefits and Social Securities 186 182

Other Current Assets 315 277 Taxes 548 524

Dividends Payable 458 538

Other Accounts Payable 230 796

Long Term Assets 1,176 1,949 Recoverable Taxes 953 1,561 Long Term Liabilities 3,023 9,072 Other 223 388 Loans and Financing 2,045 7,549

Taxes 882 1,491

Other Accounts Payable 96 31

Permanent Assets 12,241 19,867 Deferred Income 179 2 Investments 42 160 Participação Minoritária 2,368 2,057 Property Plant and Equipment 12,200 19,227 Shareholder´s Equity 10,331 10,023 Deferred - 479 Funds for Capitalization 4 3

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Total Debt – 2000/2001Total Debt – 2000/2001

30%

R$ Million 2000 2001

Suppliers 1,358 2,199 Other Accounts Payable 230 796 Total 1,589 2,995

Loans and Financing 2,831 8,920 Cash (2,093) (1,234) Total Net Debt 738 7,686

Total Geral 2,327 10,681

CAPEX 2,804 10,061

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Cost Drivers:- Increase of operating efficiencies;- Headcount reduction;- Plant Maintenance

- Bad debt control

2002 OUTLOOK2002 OUTLOOK

Revenue Drivers: - Plant Expansion - New Services – LD

- New Markets – Corporate Regions 2 and 3- ARPU Improvement

CAPEX reduction;

Net Debt forecast;

PCS roll out.

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2002 OUTLOOK -Revenue Drivers 2002 OUTLOOK -Revenue Drivers

Platform Expansion (mm)

7.89.7

11.8

14.8

1998 1999 2000 2001 2002

Lines in Service by year end

7.28.6

10.6

13.6 15.5/15.6

1998 1999 2000 2001 2002

Average Lines in Service

26

• Internet Access • National & International Long Distance Calls • Data Business

New Businesses New Businesses Adding Value Adding Value

Region I

Region IIIRegion II

27

Headcount Reduction - 40% in average

3rd Party services

Bad debt control - less than 5% of Gross Revenue

Marketing expenses • wireline (30% reduction) • wireless (as partially deferred)

2002 OUTLOOK2002 OUTLOOK Cost Drivers

28

2002 OUTLOOK2002 OUTLOOKCAPEX Reduction (R$ Bi)

Capex

1998 1999 2000 2001 2002

2.5 2.2 2.8

10.1

2.52001

R$ 10.1 bi 2002

R$ 2.5 bi

Wireline BusinessWireless Business

-75%

29

Debt Structure – December 2001 (R$ mn)Debt Structure – December 2001 (R$ mn)

TOTAL = 8,920

Maturity Profile

17%

14%

16%

17%

OF R$ 8,938 million total debt•R$ 5,382 million in foreign currency (60%)* at average interest rate of LIBOR +7% p.a.•R$ 3,538 million in Brazilian currency (40%):at average interest rate of + 17% p.a.

36%2006 and beyond

20022003

2004

2005

* Fully Hedged

ST 1,371

Long Term 7,549

Net Debt7,686

Cash 1,234

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PCS – Roll OutPCS – Roll OutTNL PCS - ´´Oi´´

Apr/02 - Ready to Launch

10 States - 160 cities

Main suppliers: Nokia, Alcatel, Siemens

Technology GSM/GPRS

Operating AgreementsInfrastructure Co-sitingInterconnectionRoaming

Operating SynergiesBilling & CreditInfrastructure & BackOfficeData Base

12 months target 500,000 Subs

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This presentation contains forward-looking statements. Statements that are

not historical facts, including statements about our beliefs and expectations,

are forward-looking statements and involve inherent risks and uncertainties.

These statements are based on current plans, estimates and projections, and

therefore you should not place undue reliance on them. Forward-looking

statements speak only as of the date they are made, and we undertake no

obligation to update publicly any of them in light of new information or

future events.

““SAFE HARBOR” STATEMENTSAFE HARBOR” STATEMENT

32

Investor RelationsNew Address

Rua Humberto de Campos, 425 / 8º andar Leblon

Rio de Janeiro -RJPhone: ( 55 21) 3131-1314/1315/1313Fax: (55 21) 3131-1325/ 3131-1326

E-mail: invest@telemar.com.brVisit our new website:

http://www.telemar.com.br/ri