1 2 Important Notice

Portugal Telecom has issued an information statement describing the spin-off to holders of American Depositary Shares (“ADSs”) representing ordinary shares of Portugal Telecom and to U.S. resident holders of Portugal Telecom’s ordinary shares. The information statement includes, among other things, information regarding: (i) the spin-off; (ii) risks relating to the spin-off; (iii) the business, financial condition and results of operations of PT Multimédia; (iv) certain tax considerations for holders of Portugal Telecom ADSs and U.S. holders of Portugal Telecom ordinary shares; (v) certain relationships between Portugal Telecom and PT Multimédia; (vi) the management of PT Multimédia; and (vii) a description of the ordinary shares of PT Multimédia. Portugal Telecom urges you to review the information statement carefully.

This communication is not an offer to sell or the solicitation of an offer to buy any securities, nor is it intended to substitute the information statement and other sources of information about Portugal Telecom, PT Multimédia and the spin-off.

The presentation contains statements which constitute forward looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of our management and on information available to management at the time such statements were made. Forward-looking statements include (a) information concerning possible or assumed future results of our operations, earnings, industry conditions, demand and pricing for our products, the potential effects of the announced spin-off of shares of PT Multimedia by Portugal Telecom and other aspects of our business and (b) statements that are preceded by, followed by or include the words “believes,” “expects,” “anticipates,” “intends,” “is confident,” “plans,” “estimates,” “may,” “might,” “could,” “would,” and the negatives of such terms or similar expressions.

These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Further, certain forward looking statements are based upon assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from the plans, objectives, expectations, estimates and intentions expressed or implied in such forward-looking statements.

Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to provide reasons why actual results may differ. You are cautioned not to place undue reliance on any forward-looking statements. 3 Experienced and Focused Management Team

Rodrigo Costa, CEO • Joined Portugal Telecom Board in 2005 and became Vice President of the Executive Committee in 2006. Chairman of PT Comunicações from 2006 to 2007 • Experience prior to joining Portugal Telecom: Microsoft (Portugal General Manager 1990-2001, Brazil General Manager 2001-2002, Corporate Vice President of OEM division 2002-2005) • Other positions: Advisor to the Government Technology Plan (since 2005)

José Pedro Pereira da Costa, CFO • Joined Portugal Telecom in 2000. CFO of PT Comunicações, PTM.com and PT Prime from 2002 to 2007. Held various other Board and management positions with the group • Experience prior to joining Portugal Telecom: Jazztel (CFO), de Negocios Portugal (Executive Board Member), McKinsey & Co. (Engagement Manager), BPI

Luís Gonçalves Lopes, Board member, Marketing and Sales • Joined Portugal Telecom in 2004. Board Member of PT Comunicações, PTM.com and Paginas Amarelas until September 2007. Held various other board and management positions with the group • Experience prior to joining Portugal Telecom: McKinsey & Co. (Engagement Manager), Procter & Gamble

Duarte Calheiros, Board member • Joined PT Multimedia in 2004. President of Lusomundo, Board Member of PT Conteudos and TV Cabo since 2004 • Experience prior to joining PT Multimédia: President of the Board Hertz Portugal 4 Spin-Off Timetable

30 Oct First day of ex-div trading for Portugal Telecom shares and ADSs • Portugal Telecom shareholders to receive 0.176067 PT Multimédia shares for every Portugal Telecom share held on the record date • Less shares withheld by Portugal Telecom for WHT purposes • Cash in lieu of fractional entitlements • Spin-off of 58% of PT Multimédia (approx. gross €1.8 billion value)

1 Nov Record date

7 Nov PT Multimédia ordinary shares credited to Portugal Telecom shareholders’ accounts through the Central Securities Depository

13 Nov PT Multimédia ADSs (unlisted) delivered to holders of Portugal Telecom ADSs 5 PT Multimédia Today – A Strong Growth Platform

Highlights Subscriber base

• No.1 Pay-TV operator in Portugal: Cable + DTH Pay-TV Cable: 1,081k DTH: 440k 1,521k – 100% coverage – Leading content 387k • No.2 broadband operator in Portugal—leader in footprint Voice 54k • Nascent voice service launched in January 2007 • No.1 in Audiovisuals and Cinema Exhibition RGU per sub (including DTH) — 1.29 RGU per sub (excluding DTH) — 1.41

Key financials 2006 revenues Audiovisuals € million Cinemas 5% 2006 y-o-y 9M 07 y-o-y 7% Revenue 666.5 6.1% 527.6 7.9%

1 EBITDA 211.1 8.1% 171.0 8.9% Pay-TV and Broadband 88% Margin 31.7% 32.4%

Leading media and communications company with multiple growth opportunities

Note: 1. PT Multimédia defines "EBITDA" as Income before financials and income taxes + Workforce reduction programme costs + Impairment losses +/- Losses (gains) on disposals of fixed assets +/- Other costs (income) + Depreciation and amortization. EBITDA is not an IFRS measure, is not a substitute for income or other IFRS measures of performance and may be calculated differently from similarly titled measures used by other companies 6 Growth Business with Further Opportunities

RGUs Blended ARPU ‘000s €

RGU per cable sub 1.29 1.32 1.34 1.41 7.1% CAGR AGR 4.2% C 29.1 30.9 1,962 25.4 27.6 1,754 1,827 1,842

1,449 1,479 1,480 1,521

2004 2005 2006 9M 2007 2004 2005 2006 9M 2007 Pay-TV subscribers RGUs

Revenue EBITDA 1

€ million 5.5% CAGR € million % CAGR 666.5 8.7 598.8 628.5 195.3 211.1 178.8

2004 2005 2006 2004 2005 2006

Note: 1. PT Multimédia defines "EBITDA" as Income before financials and income taxes + Workforce reduction programme costs + Impairment losses +/- Losses (gains) on disposals of fixed assets +/- Other costs (income) + Depreciation and amortization. EBITDA is not an IFRS measure, is not a substitute for net income or other IFRS measures of performance and may be calculated differently from similarly titled measures used by other companies 7 Agenda

Investment highlights

Brief market and company description • Pay-TV • Broadband • Voice

Strong financial track record 8 Investment Highlights

• Leading Portuguese media and communications player

• Well defined growth opportunities across all services

• Benefiting from the spin-off from Portugal Telecom

• Advanced network offers product and cost advantages vs. incumbent

• Growing revenues but stable costs allowing for margin improvement in the coming years

• Appropriate capital structure providing operational, financial and strategic flexibility PTM Market Positioning Offers Significant Growth 9 Opportunities

Fixed Broad- Telephony Pay- band TV

Market volume (2005) €470m €670m €1,400m

PTM clients 1,521 387 54 (‘000, Septemebr’07)

PTM market share 80% 25% ~1%

PTM network coverage 100% 63% 61%

GROWTH POTENTIAL

Source: ANACOM Statistics 2005 10 Well Defined Growth Opportunities

• Penetration at 41% vs. 60% European average 1 Further develop • Add further local and exclusive content to attract subscribers and up-sell Pay-TV market • Develop on-demand platform

Under- 1 penetrated • Broadband penetration below European average broadband • Coverage strength and DOCSIS 3.0 potential of cable network market

Exploit • €1.4 billion Portuguese fixed telephony market: 3x size of Pay-TV market telephony • Voice launched in January 2007: 54,000 subscribers by 3Q-07 without number portability opportunity • Lynchpin service: cut off incumbent from customer

• Cross-sell between Pay-TV, broadband and voice – underexploited to date Reap benefits • Differentiates PT Multimédia in the market of bundling • Reduces churn and drives Pay-TV and broadband penetration • Enables multi-play economies

Implement off • Expand addressable broadband and voice market cable network strategy • Bundling with DTH Pay-TV services

Note: 1. Source: Economist Intelligence Unit 11 Benefits of Spin-Off from Portugal Telecom

Operational autonomy and independent management

• Independent, dedicated and fully focused management • Effective competition with Portugal Telecom across all services • Ability to implement off-network strategy • Review of telecom and programming costs

Greater regulatory flexibility Increased competitiveness • Ability to price services independent of regulation directed at Portugal Telecom and agility • Increased flexibility of broadband offering • Number portability to be introduced in 2007 expected to boost growth further

Strategic flexibility

• PT Multimedia strategy sole focus • Greater strategic flexibility for management, including targeted acquisitions • Increased flexibility in shareholder remuneration 12 Advanced and Scalable Network in Place

Cable network

2.7 million homes passed mainly in the most densely populated and Mirandela highest income regions of Portugal (60% of total TV households, Porto estimated around 80% of GDP) • 100% digitally enabled • 98% bi-directional, enabling broadband services • 96% VoIP compliant

Coimbra • 45% estimated overlap with Cabovisão’s network Network enabled for the roll-out of new services and broadband speed increases with low capex requirements Leiria • Docsis 1.1 in place and upgrade to Docsis 3.0 / wideband is being analysed Azambuja Lisboa • Superior long term broadband capability

Évora Additional fibre deployment in 2006 / 2007 is enabling an improvement in quality of service and delivery of higher speeds Cruz de Pau DTH platform

Nationwide coverage of TV services through satellite network • 7 transponders from Hispasat Faro • Conditional access system by Nagra 13 Growing Revenues, Stable Costs

Operating leverage Trends

€ million 666 • Significant incremental revenues without ramp up 628 in SG&A 599 553 − Revenue up 31% 2002 to 2006

507 − Costs up just 5.8% over the same period 456 433 431 423 420 • Opportunity to further leverage network and customer base assets • Further cost and investment reduction opportunities

− Programming costs (strong leverage from flat fees)

− Potential acquisition of network assets from PTC

2002 2003 2004 2005 2006

Revenues Operating Costs

Note: 1. 2002 and 2003 data as reported under Portuguese GAAP. All data excludes contribution of Media Business (Lusomundo Media) sold in 2005 14 Agenda

Investment highlights

Brief market and company description • Pay-TV • Broadband • Voice

Strong financial track record 15 Pay-TV: Outright Market Leadership

• 80% market share: strong customer franchise and brand No. 1 Pay-TV operator • Complementary DTH and cable Pay-TV platform: 100% coverage • Highly fragmented remaining market

• Leading local content offering • Access to key sports contracts through Sport TV − Domestic football Leading content − European Champions League offering • Contracts with key major Hollywood studios − Use leverage through Audiovisuals relationship • Large subscriber base an advantage when competing for content

• Penetration lagging other European markets Pay-TV market • Further differentiation through additional local content still developing • Opportunity to grow cable advertising market (currently around 8% of TV advertising versus 15% of TV audience)

Alternative distribution • IPTV only recently launched by Portugal Telecom and Clix platforms in infancy • DTT launch expected in 2008/2009 undermined by limited FTA channels 16 Portuguese Pay-TV Market Opportunity

41% (1.9 million) of TV households currently PTM Cable: 2.7 million subscribe to Pay-TV TV PTM DTH: 4.5 million • Significantly below European average of 60% market Addressable market: 4.5 million TV households Remaining households have access to only four FTA channels via analogue terrestrial TV Pay-TV Pay-TV households • 2 public broadcasters 1.9 million Room for further growth market 41% penetration • 2 commercial broadcasters

Several areas of expansion for PT Multimédia Cabovisao 15% Other 5% PTM PTM customers • Up-sell existing analogue and digital 1.5 million subscribers position 80% market share • Grow penetration in cable footprint Source: ANACOM, INE • Grow DTH penetration 17 Robust Pay-TV Performance

Pay-TV subscribers Pay-TV blended ARPU

‘000s € per month % CAGR: +7.1 % (Blended) CAGR: +1.8 25.0 23.8 1,521 1,479 1,480 1,449 22.5 21.6

440 383 389 421

1,066 1,090 1,059 1,081

356 108 270

2004 2005 2006 3Q07 2004 2005 2006 3Q 07 Cable DTH Digital 18 Comprehensive Pay-TV Offering

Basic packages Add-on premium channels

SportTV Channels €22.30 SuperSportTV €33.99 1

ExtraSportTV €27.99 €29.99 2 €15.55 €22.99 Lusomundo Channels Other

€15.50 €5.60 4 €7.20

Basic 70 Minibasic channels Recently added channels 40 13 radio stations, 16 channels VoD, EPG channels And other digital features Ethnic Analogue or Channels Analogue Digital only 3 digital 3

Notes: 1. Only available for cable subscribers 2. Only available for satellite subscribers. In this package basic channels are only 12 (and not 18) 3. Digital offers, both in cable and satellite, require a set-top-box. All satellite packages/channels are in digital format 4. Disney channels costs €2.85 for Lusomundo channel subscribers 19 Pay-TV Next Generation: On-Demand

Video-on-Demand PVR and P.PVR HD EPG evolution

Next generation offers several up-selling opportunities…

… and is expected to reduce churn and compete with rollout of new IPTV/DTT distribution platforms 20 Broadband: Independence to Drive Growth

No. 1 Broadband • 45% footprint market share (25% of total Portuguese market) operator within • Strong brand and elected number 1 broadband service by users footprint • Leverage strong market position in under-penetrated Portuguese market

• Further penetration upside in Portugal − Low PC penetration relative to other European markets Strong market growth − Government objective to increase broadband penetration in Portugal • SoHo market still underdeveloped − Voice offer expected to increase broadband penetration in this segment

• Voice service introduced in January 2007 Additional PTM growth • 84% of voice subscribers are triple play through bundling • Full triple play offer key differentiator vs. competitors

Enhanced regulatory • Ability to price services independent of regulation directed at flexibility post spin-off Portugal Telecom

• DSL unbundling outside cable footprint ( model) • Offer triple play services together with Pay-TV service Off-network strategy • Cooperation with real estate construction firms to extend network into new developments Broadband — Significant Market and Market Share 21 Growth Potential

Broadband penetration Potential for market share gains

Broadband subscriber lines (per 100 people) Broadband penetration of subscriber base 32 127% 28 23 19 15 12 55% 55% 48% 8 36% 3 5 0 1

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1 1 Ono Cabovisão Euskatel -Cabo TVCabo Pay-TV Source: Economist Intelligence Unit subs 922 295 261 199 1,081 (‘000) Sources Screen Digest, Merrill Lynch Broadband Matrix, Company Data Note: 1. Includes off-network clients

• Government commitment to develop broadband • Increasing up-selling and product bundling targeted at PT Multimédia Pay-TV subscribers • Decreasing hardware and service prices stimulating broadband demand • Attractive price offerings and leverage on our TV offering to gain broadband share from other cable operators

• Targeting non-cable subscribers with intensive marketing and sales effort and 3Play product promotions 22 Broadband Growth

Broadband subscribers Broadband ARPU evolution

‘000s € per month

387 24.7 362 23.8 348 22.0 21.9

34.2% 35.8% 305 31.9%

28.6%

2004 2005 2006 9M 07 2004 2005 2006 9M 07

Broadband subscribers Penetration cable subs 23 Voice: Significant Opportunity and 3Play Driver

• €1.4 billion (revenue) Portuguese fixed voice market • 54,000 voice customers since January 2007 (even without number portability) Nascent voice − Number portability expected in the short term telephony opportunity • Aggressive pricing strategy − Ability to price services independent of regulation directed at Portugal Telecom

• Killer application: cuts off DSL competitors from customers Lynch-pin service • Helps reduce churn • Significant cross-selling potential, particularly of broadband

Voice subscribers Voice customers with triple play

‘000s

54

24 84% 6

1Q 2007 2Q 2007 3Q 2007 24 Lusomundo Overview

Audiovisuals Cinemas • Movie rights acquisition in international markets • Leading movie exhibitor platform in Portugal (28 theatres with 191 screens, 11 screens with digital or 3D capabilities) • Marketing of movie rights owned in Portugal and African Portuguese-speaking countries • Strong brand recognition • Strong presence in the market and long-term relationship • First player to introduce digital features in cinema exhibition in with all major producers and distributors Portugal; first European player to introduce digital 3D • Privileged relationship to access key content through Lusomundo Audiovisuals Theatrical rights No. of screens

178 195 191 148

USA Europe 2004 2005 2006 3Q 07 • Summit • Europa Corp (France) Market shares 1 • ICom • Canal+ (France) Other 11% • New Line • Wild Bunch (France) Medeia Filmes 7% • Hyde Park • Filmax () • Weinstein Own catalogues (acquired in UCI PTM 2005 with Portuguese 15% 49% movies)

Castello Lopes 18%

Source: ICAM, June 2007 25 Agenda

Investment highlights

Brief market and company description • Pay-TV • Broadband • Voice

Strong financial track record 26 Financial Highlights

Revenue Growth Drivers • Pay-TV and broadband market growth • Increased RGUs and ARPU driven by bundling and up-selling • Lower churn achieved through triple play

Growing revenues, stable costs

• Significant portion of revenue growth falls straight to EBITDA due to high Profit Growth operating leverage and Strong Cashflow Cost Saving Potential Conversion

• Management reviewing all areas to identify potential cost reduction opportunities

Capex

• Capacity to roll-out new products and services without substantial capex growth 27 Strong Financial Track Record

€ million 2004 2005 2006 9M 2006 9M 2007 Revenues 598.8 628.5 666.5 489.1 527.6 % growth 8.4% 5.0% 6.1% 3.9% 7.9% EBITDA 1 178.8 195.3 211.1 158.4 171.0 % margin 29.9% 31.1% 31.7% 32.4% 32.4% Capital lease amortisation 8.0 10.0 36.2 26.4 27.5 Other D&A 43.4 51.9 66.3 49.8 54.0 EBIT 127.4 133.4 108.6 82.2 89.5 % margin 21.3% 21.2% 16.3% 16.8% 17.0% Net Income 122.9 111.7 71.1 60.4 51.9 Capex 73.2 185.5 132.8 96.0 64.2 % revenues 12.2% 29.5% 19.9% 19.6% 12.2% of which capital leases 19.4 99.1 23.5 19.0 0.0 EBITDA-Capex 2 117.0 98.8 65.6 55.0 79.3

Notes: 1. PT Multimédia defines "EBITDA" as Income before financials and income taxes + Workforce reduction programme costs + Impairment losses +/- Losses (gains) on disposals of fixed assets +/- Other costs (income) + Depreciation and amortization. EBITDA is not an IFRS measure, is not a substitute for net income or other IFRS measures of performance and may be calculated differently from similarly titled measures used by other companies 2. Excluding non-cash capitalised lease payments 28 Capex and Cash Flow

Capex EBITDA—Capex 1

€ million € million

185

117

66 99 133 5 19 79

33 66

73 63 64 19 55 20 22

46 45 32 31

2004 2005 2006 9M 07 2004 2005 2006 9M 07

Network Infrastructure Other Transponders Telecom Costs

Note 1. Excluding non-cash capitalised lease payments 29 Financial Flexibility

Net debt/ EBITDA LTM • Low debt levels also allows for financial flexibility in order to pursue: x 5.0 4.6 – Incremental network expansion and new service development 3.4 3.2 3.0 – Potential consolidation opportunities (if value enhancing)

– Shareholder remuneration 1.7 1.7

1.0 1.0 PT PTM¹ BSkyB Premiere Sogecable Liberty Multimedia Polska Source : Company Data, Datastream, Equity Research Reports Notes 1. Excludes impact of acquisition of Bragatel, Pluricanal Leiria, and Pluricanal Santarém EBITDA LTM = EBITDA 9M 07 + EBITDA 2006 – EBITDA 9M 06. 30 Next Steps

30 Oct to 7 Nov Spin-off Effective

Late Nov Strategic Review Completed and New Initiatives Announced as Appropriate

End 2007 Deadline for Corporate Name Change

Jan 2008 Investor Day

Feb 2008 PT Multimédia 2007 Full Year Results