• Christmas campaign focused on highest value market segments.

• TCO´s customer base rose 17.1% in relation to 4Q04, recording 6,815 thousand customers, with post-paid customers growth of 2.6%.

• Market leadership with 45.5% market share, in a market with 4 operators in all its regions.

• SAC of R$ 101.0 in the quarter, representing a reduction of 17.6% in relation to the previous quarter. In the year-to-year comparison, it recorded a reduction of 18.9%, which reflects the Company’s selling efforts.

• Post-paid ARPU recorded 5.3% increase in the comparison between 4Q05 and 4Q04.

• Post-paid MOU increased by 5.6% in 4Q05 over 4Q04, with addition of 12 minutes, reflected in the increase of the postpaid ARPU.

• Net service revenues increased by 5.0% in the comparison of the accumulated totals for 2005 and 2004.

• Increase in data revenues by 39.5% in 2005, accounting for 5.6% of the net services revenue, showing the successful launching of new services.

• Launching of new corporate solutions focused on high speed in data transmission, such as Smart Mail 3G and VIVO ZAP 3G.

• Accumulated EBITDA in 2005 of R$ 649.3 million, representing a margin of 28.6%. Excluding the PDD effects, the EBITDA would record a 33.7% margin.

• Increase in the net financial result in 2005 over the accumulated total for 2004 by 88.3%, recording R$ 117.1 million.

• Operating Cash Flow of R$ 292.3 million in the accumulated total for 2005,  showing the efficiency of its operation.

VIVO

Vivo launched a campaign in October 2005, called “Vivo e Você na Copa” (Vivo and You in the World Soccer Cup), which is focused on the current customer base (post and prepaid), aiming at increasing profitability. Such campaign will take 75 customers with companion to watch Brazil’s games in the 2006 World Soccer Cup, being valid until March 31, 2006. To end the year, Vivo granted an unprecedented and quite attractive benefit, easily understood by the customers, which was intended to exploit freedom in using wireless phones with the “Natal Bônus Livre” (Free Bonus Christmas), a bonus of R$ 40/month (during 6 months) for local calls to any direction (wireless or fixed telephone), conditioned upon monthly recharge and punctual payment of postpaid bills, in addition to a data package (SMS and MMS).

On December 31, 2005, TCO had more than 70 own purchase points, in addition to an efficient network of accredited dealers, whether exclusive or not, totaling more than 1,900 points of purchase, which are able to market services and cellular handsets, thus making the Company also a leader in number of distribution channels.

On December 2, 2005 the Supreme Federal Court judged favorably an injunction based on the unconstitutionality of the base for the calculus of the PIS and of the COFINS. The said injunction was filed by TCO and consequent to the decision, the Company promoted the reversal of the outstanding provision in the amount of R$ 9.5 million. The other Companies, TC, TCP and GT carry similar injunctions, which altogether add up to R$ 140.3 million as of December 31, 2005 and, relative to these injunctions, the referred Companies will wait for the respective decisions by the Supreme Federal Courts to proceeds the reversal of the relative provisions.

The Norte Brasil Telecom (PA, AM, AP, RR and MA), the Telemat Celular S/A (MT), the Teleacre Celular S/A (AC) and the Teleron Celular S/A (RO) obtained the approval by the ADA (Agência de Desenvolvimento da Amazônia) and the Receita Federal for the fiscal incentives to the reduction of the IRPJ (Income Tax)   through the income from exploration.  The said benefit is retroactive to 2004 and will be used up till 2013.  The Companies will have the respective rights granted in the amounts of R$ 20.4 millions and R$11.6 millions related to the years 2004 and 2005, respectively.

The accumulated totals for 2005 and 2004 correspond to the values recorded in the twelve-month period ended on December 31 of the above mentioned years.

Some information disclosed for 4Q04, 3Q05 and accumulated 2004 were re-classified, as applicable, for comparison purposes. Figures disclosed are subject to differences, due to rounding-up procedures.

• Continued market leadership as a result of the increase in the customer base by 17.1% in the last 12 months, with 2.6% growth of the prepaid customer base, despite strong competition.

• SAC decreased by 18.9% and 17.6% in the comparison between 4Q04 and 3Q05, respectively, as a result of the reduction in the total subsidy, however continuing with the customer retention efforts, specially the medium and high end ones.

• The postpaid ARPU of R$ 86.8 increased by 5.3% in relation to 4Q04, due to the increase in the outgoing ARPU, despite the change in the customer mix. In the year-to-date total, the 0.6% reduction was mainly due to a drop in the inbound ARPU. The blended ARPU of R$ 25.9 recorded a 19.0% increase over 2004, reflecting a decrease in the prepaid ARPU, due, among other factors, to the outgoing traffic and the MOU of this segment. 

• The post-paid MOU increased by 6.2% and 5.6% in relation to the accumulated total for 2005 and 2004 and in the comparison between 4Q05 and 4Q04, respectively, due to the increase in the post-paid outgoing MOU. On the other hand, the total MOU was impacted by the changes in the customer mix, once the prepaid MOU is impacted by the reduction in the fixed-mobile inbound traffic.

• In 4Q05, customers growth in area 7 was 12.9% over 4Q04, recording 5,070 thousand customers in the end of the quarter, in a strongly competitive market.

• Absolute leadership, with 50.0% market share, being the highest market share among the Brazilian operators, with 4 competitors on the market.

• Increase of Market share of net additions of 19.8 p.p. over the previous quarter.

• Market penetration increase of 13.3 p.p. in relation to the last year.

• In 4Q05, customers base growth in area 8 was 31.3% and 6.9% in relation to 4Q04 and 3Q05, respectively, recording 1,745 thousand customers in the end of the quarter.

• Market share increased by 0.6 p.p. in relation to 4Q04, despite the strong competition.

• Market share of Net additions was 38.3% in the accumulated total for 2005, with emphasis on the growth of the post-paid customer base.

Net Services Revenue

The net services revenue grew 5.0% in the accumulated total for 2005 in comparison to 2004, recording R$ 1,972.7 million. Such growth was caused, mainly, by the increase in the customer base and by the increased use of data services, despite the effects of the customer profile adequacy, such as Vivo Ideal and customer loyalty campaigns.

It must be highlighted that “subscription and usage revenue” recorded a 14.5% increase in the accumulated total for 2005 over 2004, due to the increase in the total outgoing traffic. In the service revenue mix, this increase was partially offset by a reduction in the inbound traffic revenue, as a result of the transition from fixed-mobile traffic to mobile-mobile traffic, with consequent drop in interconnection revenue and the partial Bill & Keep effect.

Data revenues grew 39.5% in the comparison between the accumulated total for 2005 and for 2004, representing 5.6% of the net service revenues in 2005 (4.2% in 2004). This increase has continued to occur due to a more widespread access and use of such services, in addition to the several services launched on the market and the increase in the customer base. The SMS accounted for 71.6% of data revenues in 2005. Average number of SMS messages sent per month in the accumulated total for 2005 was some 38.8 million.

The increase in personnel cost in the comparison between the accumulated total for 2005 and 2004 is due to salary adjustments arising out of the November/2004, the investments in training and the incentive campaigns for the selling team.

The positive variation between 4Q05 and 3Q05 is a result of the collective agreement signed in November/2005 and the reflexes in provisions and benefits.

The 110.8% increase in the cost of services rendered by TCO, in 4Q05, when compared to 4Q04, and of 67.6% in the accumulated total for 2005, in relation to 2004, is due to an increase in the number of links and negotiations of connection means as well as the increase in the customer base. The variation recorded in “Fistel and other fees and contributions” in the periods under examination arises out of equalization of TCO’s accounting criteria to the other Group Companies, as well as of the increase in expenses with third-party services, especially plant maintenance and electric power. 

Cost of goods sold decreased by 35.7% in relation to 4Q04 and by 10.3% in the comparison between the accumulated total for 2005 and 2004, mostly due to the increase in the number of customer additions, reduced costs and improved mix of handsets, as a result of market conditions.

In 4Q05, selling expenses increased by 83.7% in relation to 4Q04 and by 58.6% in the comparison between the accumulated totals for 2005 and 2004, caused by an increase in expenses with third-party services, especially publicity, commissions, and post-sale “client care”, resulting from the increase in the total traffic recorded in 2005.
 
The Provision for Bad Debt – PBD recorded the amount of R$ 113.0 million in 4Q05 and R$ 224.6 million in the year 2005.
In addition to the effect from adjustments in the recognition of the acquisition of customers, it must be mentioned that the company provisioned revenue from receivables of calls made through the networks of other operators. Such values, according to the present regulation are obligatorily paid to the cited operators, independently of recognition of such calls from our clients. It must be said that structural measures and process actions have been adopted, including substitution of systems and certification of analog networks and TDMA of other operators to substantially reduce said expenses.
Disregarding the above mentioned effects, we estimate that the PDD would have recorded R$ 44.4 million for 4Q05 and R$ 107.8 million for year 2005, in line with the business evolution.
By the same criterion, we estimate that the EBITDA in 4Q05 would have been  R$ 184.7 million with an EBITDA Margin of 32.4%. For the year 2005 the EBITDA would have been R$ 766.1 million with a 33.7% margin.      

General and Administrative Expenses

The 20.9% reduction in general and administrative expenses in 4Q05, as compared to 3Q05, is due to the recognition on 3Q05 of a provision for value–added tax. In the accumulated total for 2005, the 28.7% increase over 2004 is due to the increase in the costs of third-party services, especially labor and systems maintenance.

Increase of R$ 41.7 million in the revenue in 4Q05 in relation to the same period of the previous year and increase of R$ 19.4 million in the accumulated total of 2005 over 2004, caused by an extraordinary effect referring to recovery of expenses with taxes and reversal of contingencies provision.

In the year-to-date figure, the EBITDA (earnings before interests, taxes, depreciation and amortization) was R$ 649.3 million, with 28.6% margin. The variation recorded in the EBITDA in the period reviewed was caused, among other factors, by the drop in the revenue from sale of handsets, partially offset by the reduction in the cost of goods, as well as by the increase in selling costs (PDD and third party), and by the cost of services rendered (Fistel and other fees and contributions and third-party services).

Depreciation and amortization expenses recorded R$ 70.3 million in 4Q05 and R$ 262.8 million in the accumulated total for 2005, representing 3.5% increase in 4Q05 in relation to the previous quarter and 25.1% in the comparison between the accumulated total for 2005 and 2004, due to the investments effected, especially in function of the overlay to the CDMA network and incoming operational assets, as a result of the conclusion of works.

Net financial revenues in 4Q05 recorded a reduction of R$ 15.7 million when compared to 3Q05. Such result was due to the positive effect in 3Q05 of the discount of R$ 7.3 million obtained in the advanced payment of the tax incentive with the State of Goiás Treasury Department (Teleproduzir) and the decrease in the interest rate for the period earned from the company’s financial investments (4.74% in 3Q05 and 4.31% in 4Q05). Other effects which caused such reduction were the increase of R$ 2.4 million, in relation to 3Q05, in the expenses with Pis/Cofins taxes on Interest on Own Capital referring to fiscal year 2005, and the increase in the monetary adjustment occurred in 4Q05, which is assessed on Contingencies (Telebrás spin-off).

The increase in the interest rate of 2005 over 2004 (16.17% in 2004 and 19.0% in 2005), together with the increase in the net cash position of the Company, caused an increase in the net financial revenue over 2004 of R$ 54.9 million.

The net profit in the quarter was R$ 63.2 million, and in the accumulated total for the year was R$ 339.1 million.

On December 31, 2005, TCO’s debt related to loans and financings amounted to R$ 108.9 million (R$ 140.7 million on September 30, 2005), 28% of which is nominated in foreign currency. The Company has signed exchange rate hedging contracts thus protecting 100% of its financial debt against foreign exchange volatility, so that the final cost (debt and swap) is reais-referenced. This debt was offset by cash and financial investments (R$ 894.5 million) and by derivative assets and liabilities (R$ 15.2 million payable) resulting in a net cash position of R$ 770.4 million, a 14.2% reduction in relation to September 2005.

The payments effected in December 2005 of Interest on Own Capital referring to fiscal year 2004 (R$ 51.1 million) and to Interim Dividends for fiscal year 2005 (R$ 46.4 million), besides the postponement of the maturity dates of some postpaid cycles were the key factors which caused the reduction in TCO’s net cash position in the comparison between 4Q05 and 3Q05.

Capital expenditures of R$ 357.0 million in 2005 are due to the migration from TDMA to CDMA technology (overlay), which started in 2004. In addition, the capital expenditures in 4Q05 were basically due to the following factors: (i) improvement in the consolidation rationalization of the information systems; (ii) maintenance of quality and expansion of the coverage in order to meet the growth of the customer base; and (iii) terminals and technology for meeting the corporate segment.

The positive operating cash flow of R$ 292.3 million in the accumulated total for 2005 shows TCO has generated funds from its operations to implement its capital expenditures program.

In 4Q05, the value of TCO’s common shares (ON) and preferred shares (PN) increased by 24.5% and 28.7%, respectively. The Bovespa Index (São Paulo Stock Exchange Index) rose 5.9%. From September to December 2005, the Company’s PN shares were traded in 100% of the floor trading sessions, with an average daily trading volume of R$ 3.9 million. By the end of 4Q05, ON and PN shares were traded at R$ 24.88 and R$ 26.70, respectively.

The price of TCO’s level II ADRs increased by 23.8% in the quarter, against an increase of 1.4% in the Dow Jones index. The daily average volume of shares traded in the NYSE during 4Q05 was US$ 1.9 million. The closing price of TCO’s ADRs for the quarter was US$ 11.22.

The managements of Telesp Celular Participações S.A. (“TCP”) and Tele Centro Oeste Celular Participações S.A. (“TCO”), in the form and for the purposes of CVM Instructions no. 319/99 and 358/02, informed to the public that their respective Boards of Directors, on December 04, 2005, approved the proposal to be submitted to the shareholders of the Companies, of a corporate restructuring for merger of TCO into TCP.

The managements of TCP and TCO consider that the Corporate Restructuring, with the consequent concentration of the shareholders of both Companies in one sole publicly-held company and the transfer of TCO’s shares to TCP, will simplify the present organizational structure, by reducing costs and increasing the equity value for the shareholders, allow their shareholders to hold interest in a company with higher liquidity in the Brazilian and foreign stock exchanges, and make easier the unification, standardization and rationalization of the general management of TCP’s and TCO’s businesses, allowing enhanced synergies between the referred Companies, which, either directly or through the respective operators controlled by them, already use “VIVO brand”.

In the Shareholders Meeting of TCP and TCO, held on February 22, 2006, the Corporate Restructure was duly approved and Telesp Celular Participações will be named VIVO PARTICIPAÇÕES S.A. The full contents of the above mentioned terms and conditions may be obtained from our website www.vivo.com.br/ir.

• At the end of 2005, the Vivo Institute had already benefited more than 500 thousand persons in its sphere of influence through concentrated actions in education and environment, by means of partnerships with big institutions both in the private and in the public domains thus consolidating its performance.

• The Programa Vivo Voluntário (Vivo Volunteer Program) that operates in projects directed to help persons with visual deficiency, in its year and a half of existence, has more than 600 collaborators. In the last quarter 2005, inaugurated in Rio de Janeiro a tape recording studio and an audio library, two special places for the volunteers to tape read books and produce CDs that will be given to institutions that help people with visual deficiencies.

• By means of an initiative undertaken in the 2005 Christmas, the volunteers collected more than 6,000 gift packages throughout the Country. The packages contained toys and clothes for children that were distributed to kids sponsored by entities that have signed partnership agreements with the VIVO Institute.

• Vivo and Vivo Institute were awarded several prizes in the last quarter of 2005, among which the following are worthy of mention: the Environment Case Prize, to Vivo’s Waste Management project, awarded by Valor Econômico newspaper; Abrafort Prize to Vivo Volunteer Program; Darcy Ribeiro Education Prize awarded by the Brazilian House of Representatives to “Escola Solidária” project, which is supported by the Institute; APCA Prize to ESPN’s Sports Caravan television project, supported by Vivo Institute, and one of the finalists of the Esso Journalism Prize; in addition to a mention to Vivo in the 2005 Good Corporate Citizenship for the support given to education projects, such as Young Excelling, carried out in partnership with Ayrton Senna Institute.

• Vivo was awarded, in October, the Superbrand Awards 2005 trophy, delivered by Superbrands Brasil, an affiliate of Superbrands Global – an independent international organization engaged in world evaluation and projection of brands. This is the first national edition of this world project, which has been carried out for ten years in 50 countries. 

• Vivo was further awarded, in November, with two trophies in the 2005 edition of the B2B Quality Standard prize, sponsored by Padrão Editorial. 94 companies participate in this ranking. Vivo has been also outstanding in the Info 2005 Prize, sponsored by Revista Info, of Abril publishing company. The prized case was the Vivo Localiza service. Such prizes evidence the market’s recognition of our efforts, besides attesting to the quality of Vivo’s professional staff.     

• Vivo Open Air, the largest open-air cinema in the world, was awarded a prize in December by Cool Magazine, being considered the best event by Cool Magazine for the second consecutive year.

• Vivo was awarded the title of Year’s Advertiser in Caboré 2005 Prize. Vivo is the Caboré’s year advertiser, which prize is awarded by Meio & Mensagem newspaper.

Subsequent
Events

Vivo has launched the digital roaming service in Minas Gerais and in 6 Northeast states. As from 01/30, Vivo postpaid customers who buy a Motorola A840 – GLOBALMOTO handset will have available an automatic digital roaming service in all Brazilian states, in addition to the international roaming in more than 170 countries in the five continents, using the same handset and same Vivo telephone number.

This press release contains forecasts of future events. Such statements are not statements of historical fact, and merely reflect the expectations of the company's management. The terms "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects", "aims" and similar terms are intended to identify these statements, which obviously involve risks or uncertainties which may or may not be foreseen by the company. Accordingly, the future results of operations of the Company may differ from its current expectations, and the reader should not rely exclusively on the positions taken herein. These forecasts speak only of the date they are made, and the company does not undertake any obligation to update them in light of new information or future developments.