VIVO Participacoes S.A. Announces Third Quarter Results of 2006

SAO PAULO, Brazil, Oct. 27  /PRNewswire-FirstCall/ -- VIVO Participacoes S.A. (VIVO) (Bovespa: VIVO3 [ON = Common Shares] / VIVO4 [PN = Preferred Shares]; NYSE: VIV), announced its consolidated results for the third quarter of 2006 (3Q06).

  R$ million                           3Q06            2Q06          3Q05

  Net Revenue                         2,824.9         2,598.3       2,810.4
  Total Operating Costs              (2,109.3)       (2,292.0)     (2,013.8)
  EBITDA                                715.6           306.3         796.6
  EBITDA Margin (%)                      25.3%           11.8%         28.3%
  Net Result                           (196.9)         (493.1)       (120.1)

  Number of customers (thousand)       28,726          28,525        28,840
  Market share                           39.3%           40.4%         45.7%
  Net Additions (thousand)                201          (1,613)          394



Total net revenue grew 13.0% in relation to the previous quarter. Termination of the partial Bill&Keep system in July contributed to such increase. By eliminating the effects mainly of the termination of the partial Bill&Keep system, the net revenue from services even though recorded 1.0% growth in the same period.

Operating costs recorded 8.0% reduction over 2Q06, due to drop in personnel cost, third party services, general and administrative expenses, cost of goods sold and provisions for bad debt. After elimination of the effects of the termination of the partial Bill&Keep system, the operating costs would record a 20% reduction.

EBITDA of R$715.6 million, with EBITDA margin of 25.3% in the quarter, represented a significant growth in relation to R$306.3 million and 11.8% Ebitda margin recorded in 2Q06. By eliminating the effects mainly of the termination of the partial Bill&Keep system, the Ebitda margin in 3Q06 would be 28.4%.

Positive reversal of the operating cash flow in 3Q06 over the previous quarter represented a consequence of improvement in the EBITDA. The amount of R$270.8 million recorded in the quarter increases the year-to-date operating cash flow to R$675.0 million.

The net indebtedness in the amount of R$4,147.6 millions presents a 4.3% reduction in the quarter due to higher net cash flow and reduction in short- term term. This is already a benefit of the first stage of the corporate restructuring effected in February 2006.

The provision for bad debt of R$147.8 million in the quarter, representing 3.7% of the gross revenue, shows a significant reduction by 56.4% in relation to 2Q06, which recorded R$338.7 million.

More than 90.0% of our customers are already inserted in the new IT/IS platform, which attests that the unification projects, now entering in their final stage, have been successful;

Sustainable combat against cloning and fraud, with certification of network and prepaid and post-paid customer base, provided approximately 84% reduction in the number of cloning occurrences in comparison to the same period the last year;

Second stage of the Corporate Reorganization about to be concluded and which will cause 14 operators to be merged into one sole company, with consequent simplification of structures and processes and allowing operating and control efficiency.

To download the complete version of the Company's earnings release, please visit our website: http://www.vivo.com.br/ir

VIVO provides mobile telephone services in the states of: Sao Paulo, Parana, Santa Catarina, Rio de Janeiro, Espirito Santo, Bahia, Sergipe, Rio Grande do Sul, Acre, Amazonas, Amapa, Goias, Maranhao, Mato Grosso, Mato Grosso do Sul, Para, Rondonia, Roraima and Tocantins and in the Federal District.

  Contact:
  Mr. Charles Allen
  55-11-5105-1172
  

DATASOURCE: VIVO Participacoes S.A



CONTACT: Mr. Charles Allen, [phone], 



Web site:  http://www.vivo.com.br/ir 

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