REGISTERED IN CATEGORY “B”

ALGAR TELECOM S/A Publicly-Held Company CNPJ (Corporate Tax) No.: 71.208.516/0001-74 NIRE (Company Register Identification Number): 313.000.117-98

MANAGEMENT PROPOSAL

Ordinary and Extraordinary General Meeting to be held on April 20, 2018.

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REGISTERED IN CATEGORY “B”

TABLE OF CONTENTS

Item Subject Page

1. Ordinary General Meeting 3

1.1. Acknowledge the accounts of the Administrators, examine, discuss and vote on the Management Report, Financial Statements, accompanied by Reports issued by Independent Auditors and the Fiscal Council for the 3 fiscal year ended December 31, 2017.

1.2. Resolve on the proposed destination of net income for the 2017 fiscal 3 year.

1.3. Resolve on the number of members that will be part of the Board of 4 Directors.

1.4. Elect the members of the Board of Directors. 4

1.5. Resolve on the proposed remuneration for Directors. 6

1.6. Resolve on the non-installation of the Fiscal Council. 7

1.7. Resolve on the Company’s proposed capital budget for the fiscal year 7 ending on December 31, 2018.

2. Extraordinary General Meeting 8

2.1. Resolve on the proposed distribution of part of the profit reserve account 8 as dividends.

3. General Instructions 8

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REGISTERED IN CATEGORY “B”

Dear Shareholders,

This Management Proposal was prepared by the Board of Directors of ALGAR TELECOM S/A (the “Board” and “Company”, respectively), pursuant to Law 6.404, dated December 15, 1976 (“Law 6.404/76”), and CVM Instruction 480, dated December 7, 2009 (“CVM Instruction 480”), to inform and guide the Company's shareholders on the deliberations to be taken at the Ordinary and Extraordinary General Meeting to be held on first call on April 20, 2018, at 09:00 a.m. (“Meetings”), at the Company’s headquarters located at Rua José Alves Garcia, nº 415, Bairro Brasil, in the city of Uberlândia, State of Minas Gerais.

1. Ordinary General Meeting.

1.1. Acknowledge the accounts of the Administrators, examine, discuss and vote on the Management Report, Financial Statements, accompanied by Reports issued by Independent Auditors and the Finance Committee for the fiscal year ended December 31, 2017.

Considering the Company's Financial Statements for the fiscal year ended December 31, 2017, which have already been duly published and includes an opinion from the external auditors and the Fiscal Council, as well as the Standardized Financial Statements which have been presented to the Brazilian Securities and Exchange Commission and to the Company's Board of Directors and Fiscal Council, we submit for shareholder resolution at the Ordinary General Meeting the financial statements for the fiscal year ended 12/31/2017.

All the aforementioned documents are available for consultation at the Company's headquarters, and may also be consulted on the websites of the Brazilian Securities and Exchange Commission - CVM (www.cvm.gov.br) and the Company’s website (http://ri.algartelecom.com.br/).

1.2. Resolve on the proposed destination of net income for the 2017 fiscal year

Considering the Company's Financial Statements for the year ended December 31, 2017, we disclose below the proposal for the allocation of the Company's net income, to be decided at its Ordinary General Meeting, pursuant to Law 6.404/76.

In the fiscal year ended December 31, 2017, in addition to the mandatory minimum dividends in the amount of R$54.7411, corresponding to 25% of the net profit after deducting the legal reserve, as provided for in the Bylaws, the Company proposed additional dividends of 10% of net profit, in the amount of R$21.8962.

The dividends proposed by the Company for the fiscal year ended December 31, 2017 and to be resolved at the Ordinary General Meeting are shown as follows:

Company 12/31/2017 12/31/2016 Net income for the year 230,488 182,496 Legal reserve - 5% (11,524) (9,125) Income used for payment of dividends 218,964 173,371 Mandatory minimum dividends (25%) 54,741 43,343 Dividend per common share (R$) 0.21 125,64 Dividend per preferred share – A class (R$) - 125,64 Dividend per preferred share – B class, with additional 10% (R$) - 138,21 Additional 10% for preferred share – B class - 54

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Total mandatory minimum dividends 54,741 43,397

Proposed additional dividends 21,896 19,403 Dividend per common share (R$) 0.08 56,25 Dividend per preferred share – A class (R$) - 56,25 Dividend per preferred share – B class, with additional 10% (R$) - 61,87 Additional 10% for preferred shares – B class - 25 Total dividends additional to the mandatory minimum dividends 21,896 19,428

Total proposed dividends: Mandatory minimum dividends 54,741 43,397 Additional dividends 21,896 19,428 76,637 62,825 Dividends per share class:

Number of shares: Common shares 267,468,800 282,820 Preferred shares – A class - 57,792 Preferred shares – B class - 4,349 Total shares 267,468,800 344,961

Dividend unit price (R$): Common share unit price 0.29 181,89 Unit price of preferred share – A class - 181,89 Unit price of preferred share – B class - 200,08

Total dividends per share class: Total dividends – common shares 76,637 51,443 Total dividends – preferred shares – A class - 10,512 Total dividends – preferred shares – B class - 870 76,637 62,825

1.3. Resolve on the number of members that will be part of the Board of Directors.

Pursuant to Article 13 of the Company's Bylaws, resolve on the number of members that will be part of the Company's Board of Directors, being the requirement of at least five (05) and a maximum of seven (07) effective members, without alternates, all elected and at the Ordinary General Meeting, with a mandate of two (2) years, being eligible for (re)election.

1.4. Elec the members of the Board of Directors.

To facilitate the conviction and consequent approval of the candidates that will be part of the Board of Directors, the Company’s Management states that the CVs of the respective candidates are available to the Shareholders at the Company's headquarters, and provides summary information on the candidates, as follows:

Indicated by the Controlling Shareholder for (re)election, as members of the Board of Directors:

Mr. Luiz Alexandre Garcia. Professional experience in the past 5 years: (i) 2011 to 2017: CEO of Algar S/A, member of the Board of Directors of Grupo Algar (Agroindustry) and member of the Board of Directors of Algar Telecom (Telecommunications); (ii) Member of the Corporate Governance Committee of Grupo Algar. He holds the following management positions in other companies or third sector organizations: (i) Member of the Strategic Council of FIEMG - Federation of Industries of Minas Gerais; (ii) Member of the Curator Council of CPqD – Center for Research and Development in Telecommunications and IT; (iii) Chairman of ACEL - National Association of Mobile Phone Operators; (iv) Chairman of FEBRATEL – Brazilian Telecommunications Federation; (v) Statutory Officer of Telebrasil – Brazilian

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REGISTERED IN CATEGORY “B”

Telecommunications Association; (vi) Chairman of the Board of Directors of ABRAFIX – Brazilian Association of Concessionaires of Fixed Switched Telephone Service; (vii) Chairman of SindiTelebrasil – National Union of Telephony Companies and Cell and Personal Service.

Mrs. Eliane Garcia Melgaço. Professional experience in the past 5 years: (i) Vice-President of Governance and Brands of Grupo Algar; (ii) 2011 to 2015: Vice-President of Marketing and Sustainability of the Group; (iii) Member of the Human Talent and Corporate Governance Committee of Grupo Algar. She holds the following management positions in other companies or third sector organizations: (i) Member of the Board of Directors of FBNI - Family Business Network International.

Mr. Luiz Alberto Garcia. Professional experience in the past 5 years: (i) 2011 to 2016: Chairman of the Board of Directors of Grupo Algar, Chairman of the Board of Directors of Algar Agro (Agroindustry) and member of the Board of Directors of Algar Telecom (Telecommunications); (ii) Member of the Human Talent and Corporate Governance Committee of Grupo Algar. He holds the following management positions in other companies or third sector organizations: (i) Member of the Board of FIEMG – Federation of Industries of Minas Gerais; (ii) Member of Fundap – Research Foundation of the Federal University of Uberlândia; (iii)Member of IEDI – - Institute for Studies for Industrial Development; (iv) Member of ACIUB Industrial/Commercial Association of Uberlândia.

Mr. Divino Sebastião de Souza. Professional experience in the past 5 years: (i) 2015 to 2016: Vice-President of Operations of Algar S/A and Chairman of the Board of Directors of Algar Telecom S/A; (ii) 2011 to 2015: CEO of Algar Telecom S/A.

Mr. Luiz Eduardo Falco Pires Correa. Professional experience in the past 5 years: Since March 2013: CEO of CVC Brasil Operadora e Agência de Viagens S.A., where he has also been member of the Board of Director since October 2016. 2001 to 2011: CEO of Oi S.A, a telecommunications service provider. Prior to Oi, he held relevant positions during his 20 years at TAM Linhas Aéreas, where he worked in the Operations, Sales, Marketing and Strategic areas.

Sr. Thilo Helmut Georg Mannhrdt. Born in Germany, he developed his professional career in the European aerospace industry and primarily at McKinsey & Company, where he retired as a Senior Partner based in Latin America. He was responsible for the launch and management of McKinsey in Brazil in the 1980s and 1990s, and also directed the company's operations in South Africa and North America (Mexico, Colombia, Peru and Venezuela) from 2001 to 2009. He also worked intensively on strategic and operational projects at Ultrapar S.A. for more than 15 years. He was a member of the Board of Directors of Ultrapar from 2011 to 2012 and from 2013 to 2017 he was the company’s CEO. He holds a degree in aeronautical and aerospace engineering and business administration, having a master's and PhD degree, among others, from the Technische Universität Berlin, Germany.

Negative Declaration of Harmful Events:

All the aforementioned candidates nominated for election to the Board of Directors declare that, for all legal purposes, in the past five years, they have not been convicted of crimes, sentenced or penalized in administrative proceedings by the Brazilian Securities and Exchange Commission or subject to a decree absolute in the judicial or administrative sphere that warranted suspension or disqualification for the practice of any professional or commercial activity.

1.5. Resolve on the proposed remuneration for Directors.

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REGISTERED IN CATEGORY “B”

We present the proposal for the annual and global budget for remuneration of the members of the Company's Board of Directors.

For the 2018 fiscal year, we propose the amount of up to thirteen million, six hundred and forty-one thousand, eighty-two reais and ninety-two centavos (R$13,641,082.92) for the remuneration of the Company’s Directors, including fees and any gratuities. Not included in this calculation are the amounts related to social charges due, whereby the Company’s Board of Directors is responsible for determining the individual amount and, if appropriate, granting representation funds and/or benefits of any nature, according to article 152 of Law 6.404/76.

Said amount was determined based on the vast experience of the current Directors and their high degree of knowledge of the Company's activities and operations, its solid market reputation and the need to maintain and enhance the Company's individual talents, inserted in an increasingly competitive market.

In order to support the decision and vote of the respective shareholders, we hereby present a proposal for the remuneration of the Board of Directors and Statutory Board, according to the information required in the Reference Form as per CVM Instruction 480:

Total remuneration forecast for the current fiscal year 12/31/2018 - Annual Values Board of Directors Statutory Board Fiscal Council Total Total No. of members 6 6 0 12 No. of paid members 6 6 0 12 Fixed annual

remuneration Salary or fees 5,040,000.00 3,977,400.00 0.00 9,017,400.00 Direct and indirect 0.00 348,562.92 0.00 348,562.92 benefits Participation in 0.00 0.00 0.00 0.00 committees

Others 0.00 1,920,000.00 0.00 1,920,000.00

Employer's Social Security, Guarantee Description of other Fund, Thirteenth fixed remunerations Salary, Vacations and Vacation Bonus. Variable

remuneration Bonus 0.00 1,218,720.00 0.00 1,218,720.00

Profit sharing 0.00 1,136,400.00 0.00 1,136,400.00

Participation in 0.00 0.00 0.00 0.00 meetings Committees 0.00 0.00 0.00 0.00 Others 0.00 0.00 0.00 0.00 Description of other

variable remunerations Post-employment 0.00 0.00 0.00 0.00 Termination of office 0.00 0.00 0.00 0.00 Share-based 0.00 0.00 0.00 0.00 (including options)

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The total number of The total number of members of each body members of each was calculated to two body was calculated decimal places, on a to two decimal places monthly basis, in on a monthly basis in Comment accordance with each accordance with each - - body’s annual average body’s annual average number of members, number of members, pursuant to Official pursuant to Official Notice Circular Notice Circular CVM/SEP/No. 02/2018. CVM/SEP/No. 02/2018

Total remuneration 5,040,000.00 8,601,082.92 0.00 13,641,082.92

1.6. Resolve on the non-installation of the Fiscal Council.

Pursuant to Article 25 of the Company's Bylaws, resolve on the non-installation of the Fiscal Council for the 2018 fiscal year.

1.7. Resolve on the Company’s proposed capital budget for the fiscal year ending on December 31, 2018.

Pursuant to article 196 of the Brazilian Corporation Act, we present the proposed Capital Budget for 2018, in the amount of R$230,488,000 (two hundred and thirty million four hundred and eighty- eight thousand reais), according to the origin and application of resources described below.

Capital Budget Proposal for 2018 R$ million

Net income for the period R$230.488

Use of Resources Dividends R$76.637 Legal reserve R$11.524 Investments in Network, Technology and Information Systems, R$142.327 Products and Services, Channels, Administrative, Licenses and others

Total Use of Resources R$230.488

The investments described above are aimed at expanding the Company’s network capacity to meet demand and guarantee the quality of the services it provides.

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REGISTERED IN CATEGORY “B”

2. Extraordinary General Meeting

2.1. Resolve on the proposed distribution of part of the profit reserve account as dividends.

Resolve on the proposed distribution of part of the profit reserve balance (retention reserve of profits), according to the balance sheet as of December 31, 2017, in the amount of three hundred and fifty-two million (R$352,000,000.00) ("Distribution"). The distribution shall have as a suspensive condition the implementation of the Company's capital increase, within the limit of its authorized capital, through the issuance of new Company shares and the effective subscription and payment of such new shares of, at least, the amount corresponding to the Distribution, pursuant to the material fact released by the Company on January 2, 2018.

3. General Instructions:

Shareholders of the Company may participate and vote at the General Meeting held at the headquarters or be represented by a proxy.

i. Attending Shareholders:

Shareholders wishing to participate in the General Meeting, in person, should arrive before the time indicated in the Call Notice, accompanied by an identification document or professional license, officially recognized.

ii. Shareholders Represented by a Proxy:

If Shareholders wish to attend the General Meeting but are unable to be present at the Company's headquarters, they may appoint a proxy with special representation and voting powers to represent them, pursuant to Law 6.404/76, paragraph 1 of Art. 126.

The power-of-attorney letter and documents proving the shareholder’s identity must be sent to Rua José Alves Garcia, nº 415, Bairro Brasil, in the city of Uberlândia/MG, CEP 38400-668. Phone: (34) 3256-2978.

Foreign shareholders must present the same documentation as Brazilian shareholders, except that the corporate documents of the legal entity and the power-of-attorney letter must be notarized, consularized, translated into Portuguese and their translations registered in the Registry of Deeds and Documents.

In order to assist shareholders, the power-of-attorney example letter is available at the Company's headquarters and may be used. Shareholders may use the power-of-attorney in accordance with Law 6.404/76 and the Brazilian Civil Code.

All documentation related to the Agenda will be available at the Company’s headquarters.

Uberlândia, March 20, 2018.

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BOARD OF DIRECTORS

Algar Telecom S/A Rua José Alves Garcia, nº 415, Bairro Brasil, Uberlândia/MG Telephone: +55 11 3512-7564 or +55 34 3256-2978 [email protected] | http://ri.algartelecom.com.br/

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