Vivendi

We noted with much satisfaction the advent of the French media and telecom
conglomerate, Vivendi to Brazilian business, but more specifically telecommunications
with their announcement, on November 13th of the acquisition of 37.9% of GVT
(Holding) S.A voting capital, with options to buy a further 19.6%. At first blush this
appeared to be the arrival of new and powerful blood to a sector that is crying out for new
approaches, new ideas and the need to provide excellence of service at affordable prices.

We remember the birth of the “mirror” companies a decade ago, and have been pleased to
note the success of GVT, the one mirror company that had its market vision firmly based
on the reality of innovation and cost controls. Vésper, the mirror operator for Sao Paulo
and the North/ Northeast Regions was bought by Embratel many years ago, after
significant management and operational difficulties, and essentially disappeared.

GVT

3rd Quarter, 2009 results demonstrate (R$ ooo`s):

Net Revenues Adj. EBITDA Net Income Capex

(yoy growth) (margin) Before taxes
442,353 (27.3%) 172,783 (39,1%) 84,737 170,885

The results show a company growing consistently over its range of services (average
27.3%), with Broadband being the highlight, growing in 2009 at a 57.6% rate.

Vivendi

Vivendi has businesses in video games via Activision Blizzard (AB); music recording
and publication via Universal Music Group (UMG); European Mobile telephony via
SFR; North African and Malawian Mobile Telecom via Maroc Telecom (MT), and Pay-
TV via the Canal+ Group (Canal+).

Results for the first nine months of 2009 are:

(€ millions) Total AB UMG SFR MT Canal+ Other

Revenues 19,525 1,986 2,978 9,230 1,999 3,368 (36)
EBITDA 4,245 406 269 1,986 905 754 (75)
(margin) (21.7%) (20.4%) (9.0%) (21.5%) (45.3%) (22.4%)
Growth 10% 116% (5%) 10% 4% (1%)

Vivendi`s mix of businesses show a conglomerate with substantial revenues € 19.5

billion1, but with an EBITDA margin of 21.7%, (21.6%, same period 2008) and an
anemic growth rate of 10%.
1
The revenues reflect the revenues of the businesses in which Vivendi has an investment which may not be
100%. For instance, Vivendi owns only 57% of Activision Blizzard, and 56% of SFR.
One of their businesses has a questionable future. The UMG music business` future in
this world of digital downloads is full of business risks. The business is showing negative
growth, and its EBITDA margin is down from 13% (9 mos, 2008) to 9%. Maroc Telecom
returns an excellent EBITDA, but has almost no growth. The new license for Mali is thus,
of great importance to the group. Canal+ also delivers less than zero growth, but
maintains an EBITDA of over 20%.

Vivendi has 75% of its revenues in telecom markets that are mature, and its pay TV
operations have a similar profile. The viability of the music business as a growing and
profitable contributor to Vivendi`s portfolio is in doubt, which leaves Activision
Blizzard, the video games company with 116% growth in 2009, as its main highlight.

Vivendi`s telecom experience primarily in mobile telecom, but does have substantial
experience with the products that GVT either is developing, or wishes to develop, such as
IPTV, MVNO mobile. Vivendi`s participation would also help with GVT`s expansion
into new geographic regions, including parts of the State of Sao Paulo.

Vivendi has paid a premium above its initial offer, and above what was the market price
for GVT at the end of the 3rd quarter of 2009. The premium was paid to obtain a foot hold
in what is currently perceived as one of the world`s most dynamic economies. Further,
Vivendi has some experience of emerging markets which will no doubt be relevant for
Brazil. It will continue with the same management team that has developed GVT into a
successful operation. Their participation will be a logical extension of existing strategies.
However, GVT has surely benefited from being below Telefonica`s and Oi`s radar
screen. GVT`s net revenues are less than 5% those of each of Oi and Telefonica and less
than 10% of those of Brasil Telecom. We can be sure that with Vivendi as the majority
shareholder, the incumbent operators will have GVT in their sights.

Below we provide 9 month 2009 numbers relating to the three regions, and three
operators (BrT is now owned by Oi) created for fixed telephony in Brazil. We foresee
significant challenges for Vivendi, as GVT, notwithstanding its success, is a relatively
small operator in comparison with their competitors.

R$ billions Oi (fixo) BrT (fixo) Telefonica (fixo)

Net Revenues 10.0 5.6 11.9
EBITDA 5.6 0.7 4.8