EBIT: Earnings before interest and taxes

EBITDA: Earnings before interest, taxes, depreciation and amortization

Hedge: transaction designed to offset an existing or potential risk of macroeconomic variables such as interest rates or exchange rates

Swap: Derivative that allows the exchange of streams of payments over time according to specified terms

Foreign Exchange Rate Swap: Derivative that allows an exchange of currencies and interest rates over time according to specified terms

Interest Rate Swap: Derivative that allows an exchange of interest payments on a specific principal amount, according to specified terms

Options: The right, but not the obligation, to buy (for a call option) or sell (for a put option) a specific amount of a given stock, commodity, currency, index, or debt, at a specified price (the strike price) during a specified period of time

Forward: Derivative on interest rates, commodities, foreign exchange, to be settled at a particular price and at some specified future date, according to specified terms

Shareholder's Equity: An accounting principle which means the total assets minus total liabilities of a company

Capex: Capital expenditures - money spent to acquire or upgrade physical assets such as property, plant and equipment

Debt / EBITDA: A ratio used to evaluate the company’s capacity to pay its debts using its operational cash flow generation

Debt / (Debt + P/L): Measures the company financial leverage. ROL: Operating Net Income

PDD: Provision for Doubtful Accounts, measures the provision that is made for doubtful service accounts based on past-due accounts receivable over 90 days

Churn rate: For a given period of time, the number of clients who discontinue their service divided by the average number of active clients at the same period

Total Churn: Total number of disconnections

MOU: Minutes of Use measure in minutes, of the clients average traffic. MOU = (total originated minutes + minutes received) / average number of clients in the period)

SAC: Subscriber Acquisition cost measured in Reais as follows: SAC: (70% of total advertising costs + cost of distribution network + other expenses + handsets subsidies)/gross additions

ARPU: Average Revenue Per User. ARPU = Net Revenue from Service / Average number of clients

ARPU Prepaid: ARPU of prepaid service users

ARPU Post paid: ARPU of postpaid service users

Blended ARPU: Total ARPU (postpaid and prepaid)

CCPU: Cash Cost per User is a measure, in Reais, of the cash costs to operate the business per user consisting of handsets subsidies, direct costs, marketing costs and structure costs. CCPU = (Operational costs – Provisions – Handset sales)/Average number of clients

AD: Additional tariff-applied on incoming or outcoming calls while the subscriber is outside the contractual home registration area. DSL: An additional tariff charged on incoming calls while the subscriber is out the contractual home registration area.

CDMA: Code Division Multiple Access, an air interface technology based on a spread spectrum of the radio signal and the division of the channels in the codes dominion. It offers a great voice quality, communication privacy and reduction of the interference level

CDMA2000 1xRTT: (1x Radio Transmission Technology) or only CDMA2000 1x. An 2.5G technology that is one of the steps for the evolution to 3G technology. Its data communication reaches 144kbps

ZAAAP: Service that allows faster wireless internet access (144 Kbps) through computer, notebook or PDA using the 2.5G technology CDMA 2000 1XRTT

WAAAP Turbo: Service similar to WAP developed to provide permanent high-speed internet access, through 2.5G mobile handsets. The service is charged by TCP in a data transfer method

2G Technology: Second generation cellular technology, digital and capable to transmit data in speeds up to 14.4 Kbps in CDMA standard. CDMA one is the CDMA technology adopted by Telesp Celular, also called CDMA IS-95

2.5G Technology: Superior technology, capable to reach data communication on higher speeds (144kbps) and to offer a broader range of services. The 2.5G technology adopted by Telesp Celular is the CDMA 1XRTT

CDMA2000: A standard, managed by CDG (CDMA Development Group), for the implementation of air interfaces of third generation, based on CDMA technology and specified by the IMT-2000 of ITU (International Telecommunication Union) for all 3G network. CMDA2000 is the evolution of the CDMA One or IS-95, whose main characteristics are the increase of voice channels capacity, and data transmission up to 2Mbps

CDMA2000 1x EV-DO (Evolution Data Optimized): Third Generation technology, which is the evolution of CDMA 1XRTT, it can reach data communications speeds up to 2.4 Mbps. Also known as HDR (High Data Rate)

WAP: Wireless Application Protocol, it is a open standard protocol, initiated in 1997 by the WAP forum, that allows access to internet providers trough specific equipment: WAP Gateway at the operator and WAP browser at user’s terminals. Supports specific language (WML) and telephone applications (WML script)

WAAAP: Internet access service through mobile phones using CDMA 2G technology provided by Telesp Celular. To use WAP services, that the handset must have a browser, that translates the internet information to the mobile phone screen

SMS: Short Message Service for mobile phones. The technology enables mobile hansets to send and receive alphanumeric messages

BREW™: (Binary Runtime Environment for Wireless). A technology that allows the users to download and to execute softwares in the cell phone, transforming it into a computer enabled to perform local processes (mobile execution environment), and connected to high speed internet (CDMA 2000 1X network)

1XRTT: (1x Radio Transmission Technology) - It is the CDMA 2000 1X technology which, pursuant to the ITU (International Telecommunication Union), and in accordance with the IMT-2000 rules, is the 3G (third generation) Technology.