Provided by MZ Data Products
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 6-K
 
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
 
THROUGH October 15, 2008

(Commission File No. 1-15256)
 

 
BRASIL TELECOM S.A.
(Exact name of Registrant as specified in its Charter)
 
BRAZIL TELECOM COMPANY
(Translation of Registrant's name into English)
 


SIA Sul, Área de Serviços Públicos, Lote D, Bloco B
Brasília, D.F., 71.215-000
Federative Republic of Brazil
(Address of Regristrant's principal executive offices)



Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.

Form 20-F ___X___ Form 40-F ______

Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1)__.

Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7)__.

Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.

Yes ______ No ___X___

If "Yes" is marked, indicated below the file number assigned to the
registrant in connection with Rule 12g3-2(b):



NET REVENUE TOTALS R$2.8 BILLION IN THE 3Q08, 3.4% UP YoY

Brasil Telecom records EBITDA of R$952.5 million and Net Income of R$164.1 million in the 3Q08 

Brasília, October 15, 2008: Brasil Telecom Participações S.A. (BOVESPA: BRTP3/BRTP4; NYSE: BRP) and Brasil Telecom S.A.  (BOVESPA:  BRTO3/BRTO4;  NYSE:  BTM)  announce  their  consolidated  results  for  the  third quarter of  2008  (3Q08).  The  Companies’  financial  statements  are  prepared in  conformity  with  generally accepted accounting principles in Brazil and presented in consolidated form and in Brazilian real (R$). Except where stated otherwise, the tables and comments below refer to the consolidated figures of Brasil Telecom Participações S.A. 

HIGHLIGHTS


          
IR CONTACT    CONFERENCE CALLS     
 
 Paulo Narcélio (CFO and IRO)     Portuguese     English  
 Telephone: +55 (61) 3415-1140            
 e-mail: ri@brasiltelecom.com.br     Date: October 16, 2008 (Thursday)     Date: October 16, 2008 (Thursday)  
    Time: 10:00 a.m. (Brasília time)     Time: 11:00 a.m. (Brasília time)  
MEDIA CONTACT    Telephone: +55 (11) 2188-0188     Telephone: +1 412 858-4600  
 Telephone: +55 (61) 3415-9657     Code: Brasil Telecom     Code: Brasil Telecom  
 e-mail: diretoriadecomunicacao@brasiltelecom.com.br     Link: www.brasiltelecom.com.br/ri    Link: www.brasiltelecom.com.br/ir 

Brasil Telecom Participações S.A.    Page 1 of 24 

CONSOLIDATED INCOME STATEMENT – Brasil Telecom Participações S.A.

         
R$ Million    3Q07    2Q08    3Q08    DQuarter    D12 Months    9M07     9M08    D  Year 
         
GROSS REVENUES    3,997.3    4,179.1    4,326.0    3.5%    8.2%    11,867.2    12,541.2    5.7% 
         
   FIXED TELEPHONY    2,752.7    2,753.7    2,800.8    1.7%    1.7%    8,352.5    8,333.5    -0.2% 
         
     Local Service    5 1,624.5    1,613.6    1,654.9    2.6%    1.9%    4,907.0    4,857.3    -1.0% 
     Public Telephony    138.8    120.4    106.2    -11.8%    -23.5%    408.2    360.6    -11.7% 
     Long Distance Service    720.0    713.0    712.7    0.0%    -1.0%    2,203.9    2,189.2    -0.7% 
     Interconnection    82.5    92.2    101.4    9.9%    22.8%    249.9    275.0    10.0% 
     Lease of Means    86.6    105.0    112.4    7.1%    29.7%    262.4    321.0    22.3% 
     Supplementary and Value Added Services    92.4    101.6    106.0    4.3%    14.6%    294.6    307.1    4.2% 
     Other    7.8    8.0    7.4    -7.4%    -5.2%    26.4    23.3    -11.8% 
   MOBILE TELEPHONY    539.6    526.0    540.4    2.7%    0.1%    1,480.8    1,532.5    3.5% 
     Services    478.8    466.8    481.9    3.2%    0.6%    1,285.1    1,375.2    7.0% 
     Merchandise Sales (Handsets and Accessories)   60.8    59.2    58.5    -1.2%    -3.8%    195.7    157.3    -19.6% 
   DATA COMMUNICATIONS    704.9    899.4    984.8    9.5%    39.7%    2,033.9    2,675.2    31.5% 
         
Deductions    (1,249.0)   (1,355.8)   (1,484.4)   9.5%    18.8%    (3,684.7)   (4,114.3)   11.7% 
NET REVENUES    2,748.3    2,823.3    2,841.6    0.6%    3.4%    8,182.5    8,426.9    3.0% 
         
OPERATING COSTS AND EXPENSES    (1,778.2)   (1,691.4)   (1,889.1)   11.7%    6.2%    (5,287.8)   (5,431.7)   2.7% 
     Personnel    (159.4)   (219.0)   (218.0)   -0.5%    36.7%    (466.9)   (653.7)   40.0% 
     Materials    (92.9)   (98.7)   (88.9)   -10.0%    -4.3%    (271.9)   (263.0)   -3.3% 
     Subcontracted Services    (558.2)   (534.4)   (518.4)   -3.0%    -7.1%    (1,685.1)   (1,593.8)   -5.4% 
     Interconnection    (558.0)   (554.8)   (559.9)   0.9%    0.3%    (1,705.0)   (1,678.4)   -1.6% 
     Advertising and Marketing    (39.3)   (40.3)   (45.5)   13.0%    15.8%    (99.7)   (128.2)   28.6% 
     Provisions and Losses    (211.0)   (238.0)   (274.0)   15.1%    29.9%    (700.9)   (791.0)   12.9% 
     Other    (159.4)   (6.3)   (184.4)   N.A.    15.7%    (358.3)   (323.7)   -9.7% 
         
EBITDA    970.1    1,131.9    952.5    -15.8%    -1.8%    2,894.7    2,995.2    3.5% 
EBITDA Margin    35.3%    40.1%    33.5%    -0.2 p.p.    -0.1 p.p.    35.4%    35.5%    0.0 p.p. 
Depreciation and Amortization    (608.1)   (530.2)   (505.6)   -4.6%    -16.8%    (1,884.7)   (1,582.2)   -16.1% 
         
EARNINGS BEFORE FINANCIAL RESULT (EBIT)   362.0    601.7    446.9    -25.7%    23.5%    1,009.9    1,412.9    39.9% 
         
Financial Result    (18.5)   (19.6)   (59.9)   205.2%    223.5%    (368.5)   (322.4)   -12.5% 
     Financial Revenues    145.6    167.9    200.9    19.6%    38.0%    451.0    587.5    30.3% 
     Financial Expenses    (164.1)   (187.6)   (260.8)   39.0%    58.9%    (551.7)   (642.7)   16.5% 
     Interest on Equity          N.A.    N.A.    (267.8)   (267.2)   -0.2% 
         
EARNINGS AFTER FINANCIAL RESULT    343.5    582.0    387.0    -33.5%    12.7%    641.5    1,090.5    70.0% 
         
Non-Operating Revenues (Expenses)   2.7    (8.3)   1.9    N.A.    -27.3%    8.8    10.7    21.6% 
     Goodwill Amortization          N.A.    N.A.    (0.1)     N.A. 
     Other    2.7    (8.3)   1.9    N.A.    -27.3%    8.9    10.7    19.9% 
         
EARNINGS BEFORE INCOME AND SOCIAL    346.1    573.8    388.9    -32.2%    12.4%    650.3    1,101.3    69.3% 
CONTRIBUTION TAXES                                 
         
Income and Social Contribution Taxes    (131.9)   (214.1)   (159.7)   -25.4%    21.0%    (260.9)   (426.2)   63.4% 
         
EARNINGS BEFORE PROFIT SHARING    214.2    359.7    229.2    -36.3%    7.0%    389.4    675.1    73.4% 
         
Minority Interest    (63.9)   (105.2)   (65.1)   -38.1%    2.0%    (191.5)   (275.4)   43.8% 
         
EARNINGS BEFORE REVERSION OF INTEREST ON    150.3    254.4    164.1    -35.5%    9.2%    197.9    399.7    102.0% 
EQUITY                                 
         
Reversion of Interest on Equity          N.A.    N.A.    267.8    267.2    -0.2% 
         
NET INCOME    150.3    254.4    164.1    -35.5%    9.2%    465.6    666.9    43.2% 
         
 
         
Net Income/shares - R$    0.4147    0.7019    0.4527    -35.5%    9.2%    1.2846    1.8397    43.2% 
Net Income/ADR - US$    1.1275    2.2047    1.1825    -46.4%    4.9%    3.4928    4.8051    37.6% 
         

Brasil Telecom Participações S.A.    Page 2 of 24 


OPERATING PERFORMANCE

Client Base

     
    3Q07    2Q08    3Q08    D Quarter     D 12 Months 
     
FIXED TELEPHONE PLANT                     
     
Lines in Service - LIS (Thousand)   8,064.2    8,104.5    8,198.3    1.2%    1.7% 
           Residential    5,909.4    5,862.2    5,904.4    0.7%    -0.1% 
           Non-Residential    1,224.4    1,272.9    1,298.2    2.0%    6.0% 
           Public Telephones    282.0    279.7    278.0    -0.6%    -1.4% 
           Other (Including PBX)   648.4    689.8    717.6    4.0%    10.7% 
Average LIS (Thousand)   8,096.8    8,070.4    8,151.4    1.0%    0.7% 
Additional LIS (Thousand)   (65.2)   68.2    93.8    37.4%    N.A. 
     
Active Lines (LIS - Blocked Lines)   7,862.1    7,932.4    8,058.1    1.6%    2.5% 
     
 
BROADBAND                     
     
ADSL Users (Thousand)   1,523.2    1,709.8    1,761.9    3.0%    15.7% 
Net Additions (Thousand)   69.8    72.6    52.1    -28.3%    -25.4% 
     
 
MOBILE TELEPHONY                     
     
Clients (Thousand)   4,023.8    5,015.4    5,245.9    4.6%    30.4% 
   Post-Paid    856.8    832.5    894.9    7.5%    4.4% 
   Pre-Paid    3,167.0    4,182.9    4,351.0    4.0%    37.4% 
Net Additions (Thousand)   255.3    437.8    230.5    -47.3%    -9.7% 
   Post-Paid    (33.4)   3.1    62.4    1912.8%    N.A. 
   Pre-Paid    288.7    434.7    168.1    -61.3%    -41.8% 
     

Wireline 

The wireline LIS base had a net addition of 93,800 lines in the 3Q08, due mainly to the rise in number of clients in Total Control, the pre- paid wireline plan, and the increase in the non- residential client base.  

Total Control is a plan focused on the  low consumption segment and is offered in areas  where the service is technically viable. Seventy- two percent of the plan’s clients had never had access to a wireline before and the remaining had been out of the base for at least 5 months. 

For  micro,  small  and  medium  companies,  Brasil  Telecom  maintained its  strategy of  converging  operations  by strengthening  sales  channels  and  launching  targeted  products  and  services,  such as  the  convergence  offering Brasil Total Negócios. 

Mobile Telephony 

Brasil  Telecom’s  mobile  telephony  client  base  reached  5,245,900  users in  service in  the  3Q08,  1,222,100  net additions in  the  year, or  up  by  30.4%   on  the  3Q07. The  Company  recorded  883,400  gross  additions in  the quarter, 37.5% up on the 3Q07, the second highest in its history. 

By the end of the 3Q08, the client base comprised 894,900 post- paid subscribers, 4.4% more than in the 3Q07, chiefly due to (i) adhesions to Pluri packages, (ii) reduction of the migration from the hybrid to the pre- paid plan and (iii) adhesions to 3G offers. At the end of the 3Q08, Brasil Telecom had 43,600 3G clients and Banda Larga 3GMais no Computador (3G broadband in your computer).  

The  pre- paid  client  base  totaled  4,351,000 in  the  3Q08,  37.4%   higher  than in  the  3Q07,  chiefly  due to  the success of the Fathers’ Day campaign and the offers launched in 2007, such as Pula- Pula Mais (a pre- paid plan in  which calls received generate bonuses to clients), which encourage the migration from the hybrid to the prepaid plan. 

Brasil Telecom Participações S.A.    Page 3 of 24 


Broadband  


In  the  3Q08,  Brasil  Telecom  added  52,100  ADSL  users to its base, which totaled 1,761,900 at the close of the quarter,  up  by  15.7%   over  the  close of  the  3Q07.  ADSL penetration (ADSL/LIS) came to 21.5% in the 3Q08, versus 18.9% in the 3Q07.  

Moving forward with the expansion of its broadband network, Brasil Telecom reached 80.1%  of the municipalities with ADSL coverage  -the highest percentage among the major operators.  

Close to  70% of  Brasil  Telecom’s  network is  prepared to offer ADSL 2+broadband technology that gives access to speeds of up to 24 Mbps. 

Internet Service Providers 

Internet  Group is  Brazil’s  first  Internet  provider,  with  over 4  million  dial- up  clients  and 7.9   million  email accounts. Considering broadband and value- added services, the total number of paying subscribers exceeded 2 million. In  addition,  Internet  Group  disputes  second  place in  terms of  audience  among  national  portals  and internet  service  providers,  with  over  13.3   million  residential  visitors  each  month  (Source:  IBOPE/NetRatings, August 2008). 

In  the  quarter,  Internet  Group  held  its  first  on- line  debate  between  mayoral  candidates,  launched a  new individual  blog  and  columnist  platform  and  established  partnerships  with  the  humor  sites  Morra  de  Rir  and Heresmita, the ecological video site Canal Azul TV and the magazines Brasileiros and Wish Report

New Products

PLURI USO 

At the beginning of September, Brasil Telecom launched Pluri Uso, a single minute package that can be used in all the client’s wireline or mobile calls. This mechanism, in addition to allowing clients to maximize the use of individual  plans, is  intended to  promote  the  acquisition of  mobile  plans by  clients  who  already  have  wireline telephones.  Packages  vary  from  250 to  4,000  minutes,  which  can  be  used in  calls to  any  wireline  terminal (including other operators) or mobile (only Brasil Telecom). The package also allows the use of these minutes in long- distance  calls.  Additional  accesses  (fixed  and  mobile  numbers  or  broadband)  and  smart  services  (SMS messaging,  GPRS  and  data)  can  be  included in  the  client’s  plan at  special  prices.  Brasil  Telecom is  the  only operator offering this kind of package in Region II.   

Brasil Telecom Participações S.A.    Page 4 of 24 


Number Portability

Number portability for fixed switched telephone services (FSTS) and personal mobile service (PMS) began to be implemented in  Brazil  on  September 1,  2008.  According to  Anatel’s  schedule,  the  gradual  implementation of portability should be concluded by March 2009. Until now, number portability has been implemented in three national  codes  where  Brasil  Telecom  operates:  62  (Goiás),  67  (Mato  Grosso  do  Sul)  and  43  (Paraná).  From September 1, 2008 to October 7, 2008, the impact of number portability was a loss of 2,700 wireline clients and a gain of 360 mobile clients. 

Brasil Telecom Participações S.A.    Page 5 of 24 


ECONOMIC-FINANCIAL PERFORMANCE

REVENUE

Consolidated Operating Gross Revenue

           
R$ Million           3Q07     2Q08    3Q08    D Quarter    D 12 Months     9M07     9M08    D Year 
           
GROSS REVENUES           3,997.3    4,179.1    4,326.0    3.5%    8.2%    11,867.2    12,541.2    5.7% 
           
FIXED TELEPHONY           2,752.7    2,753.7    2,800.8    1.7%    1.7%    8,352.5    8,333.5    -0.2% 
           
 Local Service           1,624.5    1,613.6    1,654.9    2.6%    1.9%    4,907.0    4,857.3    -1.0% 
           
     Subscription    893.3    900.1    926.3    2.9%    3.7%    2,630.2    2,717.6    3.3% 
     Activation    2.9    3.2    2.8    -12.6%    -3.4%    13.2    8.3    -36.9% 
     Local Traffic    263.1    238.3    227.3    -4.6%    -13.6%    846.7    693.9    -18.0% 
     VC-1    459.0    467.3    494.0    5.7%    7.6%    1,390.7    1,424.3    2.4% 
     Lease of Facilities    0.3    0.3    0.3    0.3%    1.1%    0.9    0.9    -0.5% 
     Other    5.9    4.4    4.1    -6.7%    -30.4%    25.3    12.2    -51.8% 
           
 Public Telephony    138.8    120.4    106.2    -11.8%    -23.5%    408.2    360.6    -11.7% 
           
 Long Distance Service    720.0    713.0    712.7    0.0%    -1.0%    2,203.9    2,189.2    -0.7% 
           
     Intra-Sector    219.3    221.3    206.5    -6.7%    -5.8%    645.5    634.0    -1.8% 
     Intra-Region    66.0    67.0    60.9    -9.1%    -7.8%    200.6    186.2    -7.2% 
     Inter-Region    60.6    61.6    60.7    -1.6%    0.1%    182.4    177.4    -2.8% 
     International    9.9    11.7    12.7    7.9%    28.6%    32.9    34.4    4.6% 
     VC-2             196.0    185.7    193.0    3.9%    -1.5%    589.3    595.5    1.0% 
           Fixed Origin    72.1    72.8    77.9    7.0%    8.0%    216.6    225.4    4.0% 
           Mobile Origin    123.9    112.8    115.1    2.0%    -7.1%    372.8    370.1    -0.7% 
     VC-3             168.3    165.7    179.0    8.0%    6.4%    553.1    561.7    1.6% 
           Fixed Origin    77.1    81.7    91.4    11.8%    18.4%    270.0    272.4    0.9% 
           Mobile Origin    91.1    84.0    87.6    4.3%    -3.9%    283.1    289.3    2.2% 
     Interconnection    82.5    92.2    101.4    9.9%    22.8%    249.9    275.0    10.0% 
           
           Fixed-Fixed    56.7    52.4    51.6    -1.5%    -9.0%    168.3    155.4    -7.6% 
           Mobile-Fixed    25.8    39.8    49.7    24.9%    92.9%    81.6    119.5    46.4% 
           
     Lease of Means    86.6    105.0    112.4    7.1%    29.7%    262.4    321.0    22.3% 
           
 
     Supplementary and Value    92.4    101.6    106.0    4.3%    14.6%    294.6    307.1    4.2% 
     Added Services                                 
           
     Other    7.8    8.0    7.4    -7.4%    -5.2%    26.4    23.3    -11.8% 
           
MOBILE TELEPHONY             539.6    526.0    540.4    2.7%    0.1%    1,480.8    1,532.5    3.5% 
           
     Services             478.8    466.8    481.9    3.2%    0.6%    1,285.1    1,375.2    7.0% 
         Subscription    114.3    98.4    100.6    2.3%    -12.0%    329.4    296.1    -10.1% 
         Utilization    157.9    150.8    170.7    13.1%    8.1%    395.5    456.2    15.3% 
         Additional for Calls Received    2.1    1.4    1.5    2.6%    -29.5%    5.0    4.6    -7.5% 
         Roaming    4.5    6.2    2.3    -63.1%    -49.3%    13.4    12.0    -10.3% 
         Interconnection    163.9    172.6    169.0    -2.1%    3.1%    453.0    493.4    8.9% 
         Other Services    6.5    1.5    2.4    57.4%    -62.8%    15.7    7.9    -49.9% 
         Data Communications    29.6    35.8    35.5    -1.0%    19.7%    73.1    105.0    43.7% 
     Merchandise Sales (Handsets    60.8    59.2    58.5    -1.2%    -3.8%    195.7    157.3    -19.6% 
     and Accessories)                                
           
DATA COMMUNICATIONS    704.9    899.4    984.8    9.5%    39.7%    2,033.9    2,675.2    31.5% 
           
Deductions    (1,249.0)   (1,355.8)   (1,484.4)   9.5%    18.8%    (3,684.7)   (4,114.3)   11.7% 
% of Gross Revenue             31.2%    32.4%    34.3%    0.1 p.p.    0.1 p.p.    31.0%    32.8%    0.1 p.p. 
           
NET REVENUES           2,748.3    2,823.3    2,841.6    0.6%    3.4%    8,182.5    8,426.9    3.0% 
           
 Net Service Revenues    2,709.7    2,783.0    2,802.8    0.7%    3.4%    8,064.1    8,319.6    3.2% 
 Net Handsets Revenues    38.6    40.3    38.8    -3.7%    0.5%    118.4    107.2    -9.4% 
           

Brasil  Telecom’s  consolidated  gross  revenue  totaled R$4,326.0   million in  the  3Q08, 8.2%   higher  than in  the 3Q07,  thanks to  the  increase in  data  communication  revenue, as  well as to  the 3.01%   tariff  adjustment in services (local and long- distance) and VCs in July 2008.  

Gross local service revenue totaled R$1,654.9 million in the 3Q08, 1.9% higher than in the 3Q07, chiefly due to the increase of 3.7% in subscription revenue and 7.6% in VC- 1 revenue, partially offset by the 13.6% decline in gross  local  traffic  revenue  The  14.1%   increase in  the  number of  clients in  local  alternative  plans  pushed  up subscription revenue, but also reduced surplus traffic. 

Brasil Telecom Participações S.A.    Page 6 of 24 


Traffic1

           
TRAFFIC    3Q07   2Q08   3Q08   D Quarter   D 12 Months
           
Exceeding Local Pulses (Million)   377.6    -    -    N.A.    N.A. 
           
Exceeding Minutes (Million)   2,106.8    2,644.7    2,825.4    6.8%    34.1% 
           
VC-1 (Million Minutes)   673.4    685.8    707.3    3.1%    5.0% 
           
Long Distance Minutes (Million)   1,366.5    1,360.4    1,295.7    -4.8%    -5.2% 
           
           Long Distance    1,070.1    1,084.6    1,017.6    -6.2%    -4.9% 
           VC-2    172.0    160.6    156.7    -2.4%    -8.9% 
           VC-3    124.4    115.2    121.4    5.4%    -2.4% 
           
*The 2Q08 Exceeding Minutes released previously was changed 

Gross  revenue  from  VC-1  calls  came to R$  494.0   million in  the  3Q08,  up  by 7.6%   on  the  3Q07,  due to  tariff adjustments and the 5.0% traffic growth compared to the 3Q07.   

Gross revenue from public telephony  stood at R$106.2 million in the quarter, 23.5% lower than in the 3Q07, chiefly  due to  the  growth in  the  pre-paid  base of  our  mobile  operations, in  addition to  the  increase in  the number of Total Control clients, who used to use public telephony before.  

Gross revenue from long-distance calls totaled R$712.7 million, 1.0% down on the 3Q07 due to the decline of 8.9% and 2.4% in VC-2 and VC-3 traffic, respectively, in turn resulting from the reduction in the use of value-added products that promote this traffic. However, it is important to stress the increase in revenue from long-distance traffic originated by wireline terminals (intra-sectorial, intra-regional, inter-regional and international), which rose due to the tariff increase and the 2.1 p.p. and 4.9 p.p. increase in the market share of inter-regional and international traffic, respectively. 

Market Share of Long-Distance Traffic – Quarterly Average2


Interconnection revenue stood at R$101.4 million, 22.8% higher than the R$82.5 million recorded in the 3Q07, chiefly  due to  the 3.0%   growth in  average  TU-RL in  2008  and  the  rise in  the  total  number of  mobile  phones operating in the region. 

In the 3Q08, gross revenue from data communications totaled R$984.8 million, up by 39.7% on the 3Q07, chiefly due to the increase in ADSL client base expansion and migration to higher-speed plans. 

Consolidated gross revenue from mobile telephony totaled R$540.4 million, R$ 58.5 million of which came from the sale of handsets and accessories. Consolidated gross revenue from mobile services totaled R$481.9 million, up  by 0.6%   on  the  3Q07,  due  to  the 8.1%   upturn in  utilization  revenue  and  the  19.7%   increase in  data communication revenue as a result of the client base expansion and 3G users (in the case of data communications), despite the 12.0% decline in mobile subscription revenue chiefly caused by lower subscription fees, the reduction in discounts offered to clients and the increase in the pre-paid base.  

_______________________________________________
1 No 3T07 ocorreu a conversão da tarifação por pulsos para minutos de 100% dos clientes.
2 The shares of long-distance traffic refer only to the traffic originated in Brasil Telecom’s wireline network in its concession area (Region II of the General Concession Plan).  

Brasil Telecom Participações S.A.    Page 7 of 24 


Brasil Telecom’s consolidated net revenue climbed by 3.4% compared to the 3Q07 reflecting the 8.2% increase in  consolidated  gross  revenue,  offset  by  the  18.8%   upturn in  deductions.  Deductions  rose  on  account of  the discounts on ADSL revenue, which were deducted from gross product revenue in the 3Q07. 

Wireline  ARPU  (excluding  data  communications)  stood at R$75.2, 3.4%   down  on  the  3Q07  due to  growing adhesion to more economical plans, such as Total Control. 

ADSL ARPU came to R$49.5, up by 2.2% on the R$48.4 recorded in the 3Q07.  

Mobile  telephony  ARPU  amounted  to R$28.8,   down  by  17.5%   year-on-year,  chiefly  due  to  the  substantial increase in the number of pre-paid users. 

Mobile ARPU

             
R$ Thousand    3Q07   2Q08   3Q08   D Quarter   D 12 Months
             
(+) Gross Revenues    638.3    627.2    657.4    4.8%    3.0% 
(-) Handsets   (60.8)   (59.2)   (58.5)   -1.2%    -3.8% 
Gross Service Revenues    577.5    567.9    598.9    5.4%    3.7% 
(-) Taxes and Deductions    (167.6)   (145.5)   (156.4)   7.5%    -6.7% 
Net Service Revenues    409.9    422.5    442.5    4.7%    7.9% 
 Mobile-Mobile Interconnection Fee (Full Bill)         N.A.    N.A. 
 Other Net Service Revenues    409.9    422.5    442.5    4.7%    7.9% 
(-) Roaming    # (1.8)   (2.1)   (0.6)   -71.5%    -66.0% 
Net Quarterly Revenues    408.2    420.3    441.9    5.1%    8.3% 
 
Net Monthly Revenues    136.1    140.1    147.3    5.1%    8.3% 
Average Number of Clients    3,894.9    4,793.2    5,112.1    6.7%    31.3% 
 
ARPU (R$)   34.93    29.23    28.81    -1.4%    -17.5% 
Post-Paid ARPU (R$)   57.71    56.80    55.50    -2.3%    -3.8% 
Pre-Paid ARPU (R$)   28.33    23.50    23.40    -0.4%    -17.4% 
             

COSTS AND EXPENSES

Consolidated Operating Costs and Expenses

                 
R$ Million    3Q07    2Q08    3Q08    D Quarter   D 12 Months    9M07    9M08    D Year 
                 
OPERATING COSTS AND EXPENSES    (1,778.2)   (1,691.4)   (1,889.1)   11.7%    6.2%    (5,287.8)   (5,431.7)   2.7% 
                 
     Personnel    (159.4)   (219.0)   (218.0)   -0.5%    36.7%    (466.9)   (653.7)   40.0% 
     Materials    (92.9)   (98.7)   (88.9)   -10.0%    -4.3%    (271.9)   (263.0)   -3.3% 
     Subcontracted Services    (558.2)   (534.4)   (518.4)   -3.0%    -7.1%    (1,685.1)   (1,593.8)   -5.4% 
     Interconnection    (558.0)   (554.8)   (559.9)   0.9%    0.3%    (1,705.0)   (1,678.4)   -1.6% 
     Advertising and Marketing    (39.3)   (40.3)   (45.5)   13.0%    15.8%    (99.7)   (128.2)   28.6% 
     Provisions and Losses    (211.0)   (238.0)   (274.0)   15.1%    29.9%    (700.9)   (791.0)   12.9% 
     Other    (159.4)   (6.3)   (184.4)   N.A.    15.7%    (358.3)   (323.7)   -9.7% 
                 

Brasil Telecom’s consolidated operating costs and expenses totaled R$2,394.7 million in the 3Q08, up by 0.4%  on the 3Q07, chiefly due to the increase of: R$58.6 million in personnel costs and expenses, R$41.8 million in provisions for doubtful accounts, R$25.0  million in other expenses and R$21.2  million in provisions for contingencies, partially offset by a decline R$39.8 million in third-party services. 

At the end of the 3Q08, the Brasil Telecom group had 17,670 employees. The increase of 11,900 people year-on-year was chiefly due to the internalization of Brasil Telecom’s call centers in December 2007 and the Internet Group’s call center in the 2Q08. Excluding the call center operation, Brasil Telecom’s headcount fell by 1.4% . 

Brasil Telecom Participações S.A.    Page 8 of 24 


Personnel

           
EMPLOYEES    3Q07    2Q08    3Q08    D Quarter    D 12 Months 
           
# of Employees - Call Center      12,019    11,868    -1.3%    N.A. 
# of Employees - Fixed Telephony    5,280    5,175    5,158    -0.3%    -2.3% 
# of Employees - Mobile Telephony    605    634    644    1.6%    6.4% 
           

Material  costs  and  expenses  came to R$88.9   million in  the  3Q08,  down  by 4.3%   on  the  3Q07,  due to  the reduction in the cost of goods sold despite the increase in the number of handsets sold.  

Third-party costs and expenses, excluding interconnection, advertising and marketing, totaled R$518.4 million in the 3Q08, 7.1% down on the 3Q07, chiefly due to the reduction of R$65.5 million in the call center line after internalization in late 2007. This decline was partially offset by the increase of R$17.8 million in services related to the mobile network, R$7.6 million in content-providing services, R$4.5   million in legal services, and R$ 2.0  million in software maintenance.  

Advertising and marketing expenses totaled R$45.5 million in the 3Q08, 15.8% higher than in the 3Q07, due to the higher number of campaigns featuring products such as 3GMais and Pluri Uso, as well as a more aggressive Fathers’ Day campaign. 

In the 3Q08, provisions for contingencies totaled R$176.1 million, 13.7% higher than in the 3Q07, basically due to the reappraisal of tax, civil and labor contingences.  

Losses  on  accounts  receivable  totaled R$97.9   million,  versus R$56.0   million in  the  3Q07  chiefly  due to  non-recurring actions carried out in the 3Q07 to recover overdue credits and the increase in co-billing default in the 3Q08.  The  ratio  between  losses  on  accounts  receivable  and  gross  revenue  came to 2.3%,   remaining  stable compared to the previous quarter. 

Gross Accounts Receivable

       
    3Q07    2Q08    3Q08 
       
Total (R$ Millions)   2,627.7    2,646.5    2,687.7 
       
       Due    66.2%    69.8%    70.3% 
       Overdue (up to 30 days)   15.4%    13.4%    15.0% 
       Overdue (between 31-60 days)   4.5%    4.7%    4.3% 
       Overdue (between 61-90 days)   2.9%    2.7%    2.7% 
       Overdue (more than 90 days)   11.0%    9.4%    7.7% 
       

Other operating costs and expenses stood at R$184.4 million in the 3Q08, up by 15.7% on the 3Q07, basically due to the increase in the Company’s booked actuarial liabilities in the amount of R$ 25.1 million.  

EBITDA

Brasil Telecom’s consolidated EBITDA totaled R$952.5 million in the 3Q08, versus R$970.1 million in the 3Q07. The consolidated EBITDA margin stood at 33.5%, versus 35.3% in the 3Q07.  

BrT  Móvel’s  quarterly  EBITDA  stood at R$70.9   million,  108.7%   up  on  the  3Q07,  accompanied  by  an  EBITDA margin of 14.7%, 7.2 p.p wider year-on-year. 

Depreciation and amortization costs totaled R$505.6 million in the 3Q08, 16.8% down on the 3Q07 due to the increase in fully depreciated assets. 

Brasil Telecom Participações S.A.    Page 9 of 24 


FINANCIAL RESULT

In the 3Q08, Brasil Telecom recorded a financial expense of R$59.9 million, versus an expense of R$18.5 million in the previous year chiefly due to the exchange rate variation on loans and financing net of hedge operations in the amount of approximately R$57.8 million as the Brazilian real rose by 4.5% compared to the U.S. dollar in the 3Q07 and fell by 20.3% in the 3Q08.

Consolidated Financial Result

               
R$ Million    3Q07    2Q08    3Q08    D Quarter   D 12 Months    9M07    9M08    D Year 
               
Financial Revenue    145.6    167.9    200.9    19.6%    38.0%    451.0    587.5    30.3% 
     Local Currency    139.5    161.3    191.0    18.4%    36.9%    442.7    568.9    28.5% 
     Foreign Currency    6.1    6.7    9.9    48.2%    62.7%    8.3    18.6    123.7% 
Financial Expenses    (164.1)   (187.6)   (260.8)   39.0%    58.9%    (551.7)   (642.7)   16.5% 
     Local Currency    (141.6)   (185.3)   (174.4)   -5.9%    23.2%    (486.6)   (526.6)   8.2% 
     Foreign Currency       (22.5)   (2.2)      (86.4)   3760.1%    283.6%    (65.1)   (116.1)   78.5% 
Interest on Equity    -    -    -    N.A.    N.A.    (267.8)   (267.2)   N.A. 
               
Financial Result       (18.5)   (19.6)      (59.9)   205.2%    223.5%    (368.5)   (322.4)   -12.5% 
               

NON-OPERATING RESULT

The non-operating result was an expense of R$1.9 million, 27.3% down on the 3Q07, mainly due to the booking of R$1.4 million related to the write-off of fixed assets in the 3Q07. 

NET INCOME

Brasil Telecom’s net income stood at R$164.1 million in the 3Q08, equivalent to R$0.4527 per share, while net earnings per ADR came to US$1.1825. In the 3Q07, net income totaled R$150.3 million, equivalent to R$0.4147  per share, while earnings per ADR stood at US$1.1275.  

INDEBTEDNESS

At  the  end of  the  3Q08,  debt  linked  to  the  exchange  rate  variation,  excluding  hedge  adjustments  totaled R$682.6   million.  On  September  30,  2008,  51.0% of  the  debt  linked to  exchange  rate  variation  was  hedged, leading to a total debt exposure of only 8.4% . Brasil Telecom contracted operations with U.S. dollar options to hedge the cash flow pegged to the debt denominated in foreign currency against substantial hikes in the U.S. dollar. At the end of the 3Q08, these operations recorded net gains of R$3.7 million in the current period3.These operations  refer  to  call  options  fully  funded  by  the  sale  of  put  options,  with  equal  strike  price  for  both operations. These operations will mature in February 2009, when Brasil Telecom will have the obligation to buy US$64 million, in case the dollar is below the strike price, or the right to buy US$ 80 million in case the dollar is above the strike price. 

_______________________________________________
3 The method used to calculate the options’ fair value was Black&Scholes, adapted by Garman-Kohlhagn to consider the specific exchange’s characteristics. 

Brasil Telecom Participações S.A.    Page 10 of 24 


Indebtedness

         
Debt (R$ Million)   3Q07    2Q08    3Q08    D Quarter   D 12 Months
         
Short Term    654.4    521.4    627.8    20.4%    -4.1% 
In R$    412.8    279.8    389.0    39.0%    -5.8% 
In Foreign Currency    83.3    87.2    91.7    5.2%    10.0% 
In US$    13.7    20.4    13.8    -32.2%    0.6% 
In Yen    69.6    66.8    77.9    16.6%    11.9% 
In Currency Basket    37.8    26.1    31.7    21.6%    -16.1% 
Hedge Adjustment    120.5    128.3    115.4    -10.1%    -4.2% 
Long Term    3,354.4    3,715.1    3,637.7    -2.1%    8.4% 
In R$    2,453.0    2,964.9    2,913.1    -1.7%    18.8% 
In Foreign Currency    559.0    459.9    509.5    10.8%    -8.9% 
In US$    386.0    330.5    393.1    18.9%    1.8% 
In Yen    173.0    129.4    116.4    -10.0%    -32.7% 
In Currency Basket    75.7    47.2    49.7    5.2%    -34.4% 
Hedge Adjustment    266.7    243.1    165.4    -31.9%    -38.0% 
Total Debt    4,008.8    4,236.5    4,265.5    0.7%    6.4% 
(-) Cash and Cash Equivalents    742.8    445.5    434.3    -2.5%    -41.5% 
(-) Financial Investments    2,502.6    2,634.3    2,648.9    0.6%    5.8% 
Net Debt    763.5    1,156.7    1,182.4    2.2%    54.9% 
         

Long Term Debt Amortization Schedule

               
Maturity    2009    2010    2011    2012    2013    2014    > 2015 
               
% Long Term Debt    3.8%    20.7%    22.4%    18.4%    18.5%    14.4%    1.8% 
               

At the end of the 3Q08, Brasil Telecom’s consolidated net debt totaled R$1,182.4 million, 54.9% higher than at the end of September 2007, chiefly due to the higher CAPEX, lower working capital and payment of dividends/interest on equity. 

CAPEX

Investment Breakdown

                 
R$ Million    3Q07    2Q08    3Q08    D Quarter    D 12 Months    9M07    9M08    D Year 
                 
FIXED LINE TELEPHONY    251.7    255.6    418.2    63.6%    66.1%    657.5    824.2    25.3% 
       Network Expansion    111.4    88.9    135.6    52.5%    21.7%    288.6    289.0    0.1% 
       Network Operation    55.1    66.1    93.9    42.0%    70.3%    158.0    207.0    31.0% 
       Public Telephony    1.4    4.4    0.5    -88.1%    -62.1%    2.8    5.4    90.3% 
       Information Technology    13.7    16.6    30.7    85.1%    124.8%    52.1    51.1    -1.9% 
       Others    70.1    79.6    157.4    97.8%    124.5%    156.0    271.6    74.1% 
MOBILE TELEPHONY    82.9    556.9    190.0    -65.9%    129.2%    132.4    756.2    471.2% 
                 
TOTAL INVESTMENT    334.6    812.4    608.1    -25.1%    81.8%    789.9    1,580.4    100.1% 
                 
 
                 
CASH FLOW CONCILIATION    3Q07    2Q08    3Q08    D Quarter    D 12 Months    9M07    9M08    D Year 
                 
Variation of Economic and Financial Investment    (87.0)   (519.7)    (30.5)   -94.1%    -65.0%    163.0    (404.7)   N.A. 
                 
INVESTMENT CASH FLOW    247.6    292.7    577.7    97.4%    133.3%    953.0    1,175.7    23.4% 
                 

STOCK MARKET

Brasil Telecom Participações S.A.    Page 11 of 24 


Stock Market Performance

           
        Closing Price as of        Performance     
Stock Performance    30-Sep-08    In 3Q08    In 12 Months    In 24 Months 
           
BrT Holding Company   Common Shares (BRTP3) (in R$/shares)   52.00    -1.9%    6.4%    105.5% 
  Preferred Shares (BRTP4) (in R$/shares)   18.70    -20.8%    -32.0%    44.1% 
  ADR (BRP) (in US$/ADR)   48.86    -33.4%    -34.5%    62.5% 
  Market Capitalization BRP (Million)   11,018    -9.8%    -11.9%    77.7% 
           
BrT Operating Company   Common Shares (BRTO3) (in R$/shares)   46.50    -3.1%    41.6%    150.0% 
  Preferred Shares (BRTO4) (in R$/shares)   15.74    -8.9%    -9.0%    101.8% 
  ADR (BTM) (in US$/ADR)   21.88    -31.5%    -22.4%    101.5% 
  Market Capitalization BTM (Million)   16,293    -4.9%    22.0%    133.9% 
           
Indexes   IBOVESPA (points)   49,541    -23.8%    -18.1%    35.9% 
  ITEL (points)   1,089    -13.2%    -16.8%    24.4% 
  IGC (points)   4,726    -25.7%    -32.2%    13.0% 
  Dow Jones (points)   10,851    -4.4%    -21.9%    -7.1% 
           

Theoretical Portfolio Weighting – September/December

           
        Ibovespa    Itel    IGC 
           
BrT Hold.   BRTP3    0.291%    8.022%    0.353% 
  BRTP4    0.445%    11.978%    0.526% 
           
BrT Oper.   BRTO3    ***    ***    0.014% 
  BRTO4    0.422%    8.516%    0.333% 
           

OWNERSHIP BREAKDOWN

Ownership Breakdown – Brasil Telecom Participações S.A.

             
Sep/08    Common Shares    %    Preferred Shares    %    Total Shares    % 
             
Solpart Participações S.A.    68,907,150    51.41%      0.00%    68,907,150    18.93% 
Copart 1 Participações      0.00%    76,645,842    33.33%    76,645,842    21.06% 
ADR Free Float      0.00%    87,053,790    37.86%    87,053,790    23.92% 
Treasury    1,480,800    1.10%      0.00%    1,480,800    0.41% 
Free Float in Bovespa    63,643,738    47.48%    66,237,893    28.81%    129,881,631    35.68% 
             
Total    134,031,688    100.00%    229,937,525    100.00%    363,969,213    100.00% 
             

Ownership Breakdown – Brasil Telecom S.A.

Brasil Telecom Participações S.A.    Page 12 of 24 


 
Sep/08    Common Shares   %    Preferred Shares   %    Total Shares    % 
 
Brasil Telecom Participações    247,317,180    99.09%    120,911,021    38.83%    368,228,201    65.64% 
Copart 2 Participações        0.00%    58,956,665    18.94%    58,956,665    10.51% 
ADR Free Float      0.00%    21,106,968    6.78%    21,106,968    3.76% 
Treasury      0.00%    13,457,542    4.32%    13,457,542    2.40% 
Free Float at Bovespa    2,279,869    0.91%    96,921,044    31.13%    99,200,913    17.68% 
 
Total    249,597,049    100.00%    311,353,240    100.00%    560,950,289    100.00% 
 

LAW 11,638/07

Due to the disclosure of the accounting effects of the adaptation to Law 11,638/07, the values to be paid related to  the  authorizations  for  exploitation of  the  3G  network  were  adjusted to  present  value.  The  effects  on  the financial statements of Brasil Telecom refer to the application of the items regulated by Law 11,638/07 result from: 

i. Commercial lease agreements, whose leased assets should be booked in line with international accounting standards; and 
ii. Remuneration in the form of shares for managers and employees. 

Effects of Law 11,638/07

     
Shareholders' Equity (R$ Millions)   3Q08 
     
   Law 6,404/76 Presentation    164.1 
   Adaptation Effects    (0.8)
   Pro Forma - Law 11,638/07    163.3 
     
 
Period Net Income (R$ Millions)   3Q08 
     
   Law 6,404/76 Presentation    164.1 
   Adaptation Effects    (0.8)
   Pro Forma - Law 11,638/07    163.3 
     

Brasil Telecom already segregates intangible items in permanent assets and publishes DFC and DVA, the latter accompanying annual accounting statements. The other changes in Law 11,638/07 and CVM Instruction 469/08 have already been adopted or are not applicable to the Company. 

Brasil Telecom Participações S.A.    Page 13 of 24 


ATTACHMENTS

Operating Data

     
    3Q07    2Q08    3Q08    D Quarter    D 12 Months 
     
FIXED LINE PLANT                     
     
Lines in Service - LIS (Thousand)   8,064.2    8,104.5    8,198.3    1.2%    1.7% 
Additional LIS (Thousand)   (65.2)   68.2    93.8    N.A    N.A. 
     
Active Lines (LIS - Blocked Lines)   7,862.1    7,932.4    8,058.1    1.6%    2.5% 
     
Blocked Lines    202.1    172.1    140.2    -18.6%    -30.6% 
     
Average LIS (Thousand)   8,096.8    8,070.4    8,151.4    1.0%    0.7% 
     
LIS/100 Inhabitants    18.3    18.4    18.4    0.1%    0.6% 
Public Telephones/1,000 Inhabitants    6.4    6.3    6.2    -1.7%    -2.5% 
Public Phones/100 Lines Installed    2.7    2.7    2.7    -0.5%    -1.5% 
     
Utilization Rate    77.8%    78.0%    79.0%    1.0 p.p.    1.2 p.p. 
     
Alternative Plans                     
Alternative Local Plans (thousand)   3,491.0    3,736.5    3,983.2    6.6%    14.1% 
Alternative Long Distance Plans (thousand)   747.9    871.1    876.2    0.6%    17.1% 
     
Market Share- Long Distance                     
Intra-sector    90.2%    89.8%    89.8%    0.0 p.p.    -0.4 p.p. 
Intra-region    85.5%    85.0%    85.0%    0.0 p.p.    -0.4 p.p. 
Inter-region    63.7%    65.2%    65.7%    0.5 p.p.    2.1 p.p. 
International    37.4%    44.0%    42.2%    -1.8 p.p.    4.9 p.p. 
     
ARPU - Fixed Telephony    77.92    76.84    75.23    -2.1%    -3.4% 
     
 
 
BROADBAND                     
     
ADSL Users (Thousand)   1,523.2    1,709.8    1,761.9    3.0%    15.7% 
Net Additions (Thousand)   69.8    72.6    52.1    -28.3%    -25.4% 
     
ADSL ARPU    48.4    48.6    49.5    1.9%    2.2% 
     
 
MOBILE TELEPHONY                     
     
Clients (Thousand)   4,023.8    5,015.4    5,245.9    4.6%    30.4% 
   Post-Paid    856.8    832.5    894.9    7.5%    4.4% 
   Pre-Paid    3,167.0    4,182.9    4,351.0    4.0%    37.4% 
     
Net Additions (Thousand)   255.3    437.8    230.5    -47.3%    -9.7% 
   Post-Paid    (33.4)   3.1    62.4    1912.8%    N.A. 
   Pre-Paid    288.7    434.7    168.1    -61.3%    -41.8% 
     
Annualized Churn    39.8%    42.2%    50.9%    20.7%    28.0% 
   Post-Paid    53.3%    45.1%    38.1%    -15.4%    -28.5% 
   Pre-Paid    35.9%    41.6%    53.5%    28.7%    49.1% 
     
SAC (R$)   85.1    77.4    73.1    -5.6%    -14.1% 
Mobile Telephony ARPU    34.9    29.2    28.8    -1.4%    -17.5% 
Served Localities    841    873    939    7.6%    11.7% 
% of Population Covered    87%    88%    89%    0.9 p.p.    1.8 p.p. 
Base Stations    2,515    3,481    3,656    5.0%    45.4% 
Switches    11    11    12    9.1%    9.1% 
     

Brasil Telecom Participações S.A.    Page 14 of 24 


Consolidated Income Statement – Brasil Telecom Participações S.A.

         
R$ Million    3Q07    2Q08    3Q08    D Quarter   D 12 Months     9M07     9M08    D Year 
         
GROSS REVENUES    3,997.3    4,179.1    4,326.0    3.5%    8.2%    11,867.2    12,541.2    5.7% 
         
  FIXED TELEPHONY    2,752.7    2,753.7    2,800.8    1.7%    1.7%    8,352.5    8,333.5    -0.2% 
                 
     Local Service    5 1,624.5    1,613.6    1,654.9    2.6%    1.9%    4,907.0    4,857.3    -1.0% 
     Public Telephony    138.8    120.4    106.2    -11.8%    -23.5%    408.2    360.6    -11.7% 
     Long Distance Service    720.0    713.0    712.7    0.0%    -1.0%    2,203.9    2,189.2    -0.7% 
     Interconnection    82.5    92.2    101.4    9.9%    22.8%    249.9    275.0    10.0% 
     Lease of Means    86.6    105.0    112.4    7.1%    29.7%    262.4    321.0    22.3% 
     Supplementary and Value Added Services    92.4    101.6    106.0    4.3%    14.6%    294.6    307.1    4.2% 
     Other    7.8    8.0    7.4    -7.4%    -5.2%    26.4    23.3    -11.8% 
  MOBILE TELEPHONY    539.6    526.0    540.4    2.7%    0.1%    1,480.8    1,532.5    3.5% 
     Services    478.8    466.8    481.9    3.2%    0.6%    1,285.1    1,375.2    7.0% 
     Merchandise Sales (Handsets and Accessories)   60.8    59.2    58.5    -1.2%    -3.8%    195.7    157.3    -19.6% 
  DATA COMMUNICATIONS    704.9    899.4    984.8    9.5%    39.7%    2,033.9    2,675.2    31.5% 
         
Deductions    (1,249.0)   (1,355.8)   (1,484.4)   9.5%    18.8%    (3,684.7)   (4,114.3)   11.7% 
NET REVENUES    2,748.3    2,823.3    2,841.6    0.6%    3.4%    8,182.5    8,426.9    3.0% 
         
OPERATING COSTS AND EXPENSES    (1,778.2)   (1,691.4)   (1,889.1)   11.7%    6.2%    (5,287.8)   (5,431.7)   2.7% 
     Personnel    (159.4)   (219.0)   (218.0)   -0.5%    36.7%    (466.9)   (653.7)   40.0% 
     Materials    (92.9)   (98.7)   (88.9)   -10.0%    -4.3%    (271.9)   (263.0)   -3.3% 
     Subcontracted Services    (558.2)   (534.4)   (518.4)   -3.0%    -7.1%    (1,685.1)   (1,593.8)   -5.4% 
     Interconnection    (558.0)   (554.8)   (559.9)   0.9%    0.3%    (1,705.0)   (1,678.4)   -1.6% 
     Advertising and Marketing    (39.3)   (40.3)   (45.5)   13.0%    15.8%    (99.7)   (128.2)   28.6% 
     Provisions and Losses    (211.0)   (238.0)   (274.0)   15.1%    29.9%    (700.9)   (791.0)   12.9% 
     Other    (159.4)   (6.3)   (184.4)   N.A.    15.7%    (358.3)   (323.7)   -9.7% 
         
EBITDA    970.1    1,131.9    952.5    -15.8%    -1.8%    2,894.7    2,995.2    3.5% 
EBITDA Margin    35.3%    40.1%    33.5%    -0.2 p.p.    -0.1 p.p.    35.4%    35.5%    0.0 p.p. 
Depreciation and Amortization    (608.1)   (530.2)   (505.6)   -4.6%    -16.8%    (1,884.7)   (1,582.2)   -16.1% 
         
EARNINGS BEFORE FINANCIAL RESULT (EBIT)   362.0    601.7    446.9    -25.7%    23.5%    1,009.9    1,412.9    39.9% 
         
 
Financial Result    (18.5)   (19.6)   (59.9)   205.2%    223.5%    (368.5)   (322.4)   -12.5% 
     Financial Revenues    145.6    167.9    200.9    19.6%    38.0%    451.0    587.5    30.3% 
     Financial Expenses    (164.1)   (187.6)   (260.8)   39.0%    58.9%    (551.7)   (642.7)   16.5% 
     Interest on Equity          N.A.    N.A.    (267.8)   (267.2)   -0.2% 
         
EARNINGS AFTER FINANCIAL RESULT    343.5    582.0    387.0    -33.5%    12.7%    641.5    1,090.5    70.0% 
       
 
Non-Operating Revenues (Expenses)   2.7    (8.3)   1.9    N.A.    -27.3%    8.8    10.7    21.6% 
     Goodwill Amortization          N.A.    N.A.    (0.1)     N.A. 
     Other    2.7    (8.3)   1.9    N.A.    -27.3%    8.9    10.7    19.9% 
         
 
EARNINGS BEFORE INCOME AND SOCIAL    346.1    573.8    388.9    -32.2%    12.4%    650.3    1,101.3    69.3% 
CONTRIBUTION TAXES                 
         
Income and Social Contribution Taxes    (131.9)   (214.1)   (159.7)   -25.4%    21.0%    (260.9)   (426.2)   63.4% 
         
EARNINGS BEFORE PROFIT SHARING    214.2    359.7    229.2    -36.3%    7.0%    389.4    675.1    73.4% 
         
Minority Interest    (63.9)   (105.2)   (65.1)   -38.1%    2.0%    (191.5)   (275.4)   43.8% 
         
EARNINGS BEFORE REVERSION OF INTEREST ON    150.3    254.4    164.1    -35.5%    9.2%    197.9    399.7    102.0% 
EQUITY                 
         
Reversion of Interest on Equity          N.A.    N.A.    267.8    267.2    -0.2% 
         
NET INCOME    150.3    254.4    164.1    -35.5%    9.2%    465.6    666.9    43.2% 
         
 
Net Income/shares - R$    0.4147    0.7019    0.4527    -35.5%    9.2%    1.2846    1.8397    43.2% 
Net Income/ADR - US$    1.1275    2.2047    1.1825    -46.4%    4.9%    3.4928    4.8051    37.6% 
         

Brasil Telecom Participações S.A.    Page 15 of 24 


Consolidated Costs and Expenses – Brasil Telecom Participações S.A.

         
R$ Million    3Q07    2Q08    3Q08    D Quarter   D 12 Months    9M07    9M08    D Year 
         
GROSS REVENUES    3,997.3    4,179.1    4,326.0    3.5%    8.2%    11,867.2    12,541.2    5.7% 
         
Deductions    (1,249.0)   (1,355.8)   (1,484.4)   9.5%    18.8%    (3,684.7)   (4,114.3)   11.7% 
NET REVENUES    2,748.3    2,823.3    2,841.6    0.6%    3.4%    8,182.5    8,426.9    3.0% 
         
 Costs    (1,542.3)   (1,545.6)   (1,520.1)   -1.7%    -1.4%    (4,755.5)   (4,621.5)   -2.8% 
         
     Personnel    (41.7)   (89.7)   (86.6)   -3.4%    108.0%    (123.6)   (269.4)   118.0% 
     Materials    (75.2)   (78.2)   (65.1)   -16.7%    -13.4%    (234.2)   (206.6)   -11.8% 
     Subcontracted Services    (789.1)   (796.7)   (806.0)   1.2%    2.1%    (2,406.4)   (2,404.7)   -0.1% 
       Interconnection    (558.0)   (554.8)   (559.9)   0.9%    0.3%    (1,705.0)   (1,678.4)   -1.6% 
       Other    (231.1)   (241.9)   (246.1)   1.8%    6.5%    (701.4)   (726.3)   3.6% 
     Depreciation and Amortization    (493.9)   (428.9)   (407.7)   -4.9%    -17.4%    (1,556.2)   (1,281.0)   -17.7% 
     Other    (142.5)   (152.3)   (154.6)   1.5%    8.5%    (435.1)   (459.7)   5.7% 
         
GROSS PROFIT    1,205.9    1,277.7    1,321.5    3.4%    9.6%    3,427.0    3,805.4    11.0% 
         
 Sales Expenses    (284.9)   (228.0)   (246.5)   8.1%    -13.5%    (833.8)   (719.6)   -13.7% 
         
     Personnel    (63.6)   (63.7)   (68.0)   6.7%    6.9%    (185.4)   (193.7)   4.5% 
     Materials    (16.7)   (19.4)   (22.9)   18.3%    37.2%    (34.9)   (53.6)   53.7% 
     Subcontracted Services    (181.0)   (117.1)   (132.6)   13.3%    -26.7%    (535.9)   (394.3)   -26.4% 
       Advertising and Marketing    (39.3)   (40.3)   (45.5)   13.0%    15.8%    (99.7)   (128.2)   28.6% 
       Other    (141.7)   (76.8)   (87.1)   13.4%    -38.5%    (436.2)   (266.1)   -39.0% 
     Depreciation and Amortization    (4.8)   (4.7)   (4.7)   -0.7%    -2.2%    (14.3)   (14.0)   -2.0% 
     Other    (18.9)   (23.1)   (18.3)   -20.6%    -2.8%    (63.4)   (64.1)   1.1% 
         
 General and Administrative Expenses    (204.7)   (250.9)   (211.8)   -15.6%    3.5%    (615.7)   (689.6)   12.0% 
         
       Personnel    (48.3)   (58.6)   (56.4)   -3.8%    16.7%    (140.0)   (169.0)   20.7% 
       Materials    (0.6)   (0.9)   (0.6)   -34.1%    2.3%    (1.7)   (2.0)   13.1% 
       Subcontracted Services    (145.7)   (179.8)   (144.8)   -19.5%    -0.6%    (443.7)   (484.8)   9.3% 
       Depreciation and Amortization    (5.6)   (7.1)   (5.8)   -17.7%    3.9%    (18.3)   (20.1)   10.2% 
       Other    (4.5)   (4.6)   (4.2)   -6.9%    -6.5%    (12.0)   (13.8)   15.1% 
         
 Information Technology    (130.6)   (119.5)   (121.6)   1.8%    -6.9%    (374.6)   (369.7)   -1.3% 
         
       Personnel    (5.9)   (7.0)   (7.0)   -0.1%    19.3%    (17.8)   (21.6)   20.9% 
       Materials    (0.4)   (0.3)   (0.3)   -17.2%    -34.2%    (1.0)   (0.8)   -21.3% 
       Subcontracted Services    (39.7)   (35.9)   (40.4)   12.5%    1.6%    (103.8)   (116.6)   12.3% 
       Depreciation and Amortization    (75.7)   (67.5)   (63.8)   -5.5%    -15.7%    (228.3)   (202.0)   -11.5% 
       Other    (8.9)   (8.8)   (10.2)   16.7%    15.0%    (23.6)   (28.7)   21.5% 
         
 Provisions and Losses    (211.0)   (238.0)   (274.0)   15.1%    29.9%    (700.9)   (791.0)   12.9% 
         
       Doubtful Accounts    (56.0)   (96.5)   (97.9)   1.4%    74.7%    (264.2)   (314.2)   18.9% 
       Contingencies    (154.9)   (141.5)   (176.1)   24.5%    13.7%    (436.7)   (476.8)   9.2% 
         
 Other Operating Revenues (Exp.)   (12.8)   160.3    (20.6)   N.A.    61.2%    108.0    177.5    64.3% 
         
       Goodwill Amortization    (28.2)   (22.1)   (23.6)   6.7%    -16.2%    (67.8)   (65.2)   -3.9% 
       Other    15.4    182.4    3.0    -98.4%    -80.7%    175.8    242.7    38.0% 
         
EARNINGS BEFORE FINANCIAL RESULT    362.0    601.7    446.9    -25.7%    23.5%    1,009.9    1,412.9    39.9% 
(EBIT)                                
         
 
R$ Million    3Q07    2Q08    3Q08    DQuarter     D 12 Months   9M07    9M08    D Year 
         
OPERATING COSTS AND EXPENSES    (1,778.2)   (1,691.4)   (1,889.1)   11.7%    6.2%    (5,287.8)   (5,431.7)   2.7% 
         
     Personnel    (159.4)   (219.0)   (218.0)   -0.5%    36.7%    (466.9)   (653.7)   40.0% 
     Materials    (92.9)   (98.7)   (88.9)   -10.0%    -4.3%    (271.9)   (263.0)   -3.3% 
     Subcontracted Services    (558.2)   (534.4)   (518.4)   -3.0%    -7.1%    (1,685.1)   (1,593.8)   -5.4% 
     Interconnection    (558.0)   (554.8)   (559.9)   0.9%    0.3%    (1,705.0)   (1,678.4)   -1.6% 
     Advertising and Marketing    (39.3)   (40.3)   (45.5)   13.0%    15.8%    (99.7)   (128.2)   28.6% 
     Provisions and Losses    (211.0)   (238.0)   (274.0)   15.1%    29.9%    (700.9)   (791.0)   12.9% 
     Other    (159.4)   (6.3)   (184.4)   N.A.    15.7%    (358.3)   (323.7)   -9.7% 
         
                                 

Brasil Telecom Participações S.A.    Page 16 of 24 


Consolidated Balance Sheet – Brasil Telecom Participações S.A.

R$ Million     Sep/07     Jun/08     Sep/08 
 
   
CURRENT ASSETS    7,098.6    7,339.7    7,698.2 
   
Cash and Cash Equivalents    742.8    445.5    434.3 
Financial Investments    2,502.6    2,634.3    2,648.9 
Accounts Receivables (Net)   2,257.6    2,249.4    2,271.7 
Deferred and Recoverable Taxes    1,077.3    1,264.4    1,452.4 
Other Recoverable Amounts    394.8    587.3    746.9 
Inventory    38.5    52.7    46.0 
Other    85.0    106.1    98.0 
   
LONG TERM ASSETS    2,589.0    3,626.3    3,953.4 
   
Loans and Financing    6.4    5.8    5.5 
Deferred and Recoverable Taxes    1,637.8    1,887.4    1,899.9 
Other    944.9    1,733.1    2,048.1 
   
PERMANENT ASSETS    7,063.5    6,887.4    7,003.9 
   
Investment (Net)   265.1    131.4    107.9 
Property, Plant and Equipment (Net)   5,637.2    5,246.3    5,460.9 
   Property, Plant and Equipment (Gross)   26,526.1    27,305.7    27,857.2 
   Accumulated Depreciation    (20,888.9)   (22,059.4)   (22,396.3)
Intangible (Net)   1,053.8    1,429.2    1,365.1 
   Property, Plant and Equipment (Gross)   2,505.4    3,135.6    3,160.0 
   Accumulated Depreciation    (1,451.6)   (1,706.4)   (1,795.0)
Deferred Assets (Net)   107.5    80.5    70.0 
   
TOTAL ASSETS    16,751.1    17,853.4    18,655.4 
   
 
   
CURRENT LIABILITIES    4,218.3    4,671.2    5,271.3 
   
Loans and Financing    654.4    521.4    627.9 
Suppliers    1,353.8    1,409.5    1,478.3 
Taxes and Contributions    1,127.4    1,062.1    1,331.5 
Dividends Payable    348.2    338.3    347.3 
Provisions    187.2    311.9    351.0 
Salaries and Benefits    167.3    161.6    132.9 
Consignment for Third Parties    105.9    126.9    130.7 
Authorization for Services Exploration    74.9    522.2    567.3 
Other    199.1    217.2    304.4 
   
LONG TERM LIABILITIES    5,039.0    5,613.6    5,585.6 
   
Loans and Financing    3,354.4    3,715.1    3,637.7 
Provisions    1,221.2    1,296.5    1,287.5 
Taxes and Contributions    127.1    249.5    298.5 
Authorization for Services Exploration    231.1    184.6    189.6 
Other    105.1    167.9    172.3 
   
DEFERRED INCOME    -    -    - 
   
MINORITY INTEREST    1,924.4    1,963.4    2,029.1 
   
SHAREHOLDERS' EQUITY    5,569.6    5,605.3    5,769.4 
   
Capital Stock    2,596.3    2,596.3    2,596.3 
Capital Reserves    309.2    309.2    309.2 
Profit Reserves    306.3    266.0    266.0 
Retained Earnings    2,378.6    2,454.7    2,618.8 
Treasury Shares    (20.8)   (20.8)   (20.8)
   
TOTAL LIABILITIES    16,751.1    17,853.4    18,655.4 
   
* In compliance with CVM Deliberation 488 and 489 the line of Intangible Permanent Asset was created 

Brasil Telecom Participações S.A.    Page 17 of 24 


Balance Sheet – Holding – Brasil Telecom Participações S.A.

R$ Million    Sep/07    Jun/08    Sep/08 
 
   
CURRENT ASSETS    1,677.9    1,595.8    1,627.9 
   
Cash and Cash Equivalents    133.9    51.7    37.5 
Financial Investments    1,302.1    1,325.7    1,375.4 
Deferred Taxes    92.2    67.7    66.1 
Other Recoverable Amounts    1.2    5.0    5.3 
Dividends / Interest on Equity Receivable    140.1    140.1    140.1 
Other    8.4    5.6    3.5 
   
LONG TERM ASSETS    244.5    301.8    311.9 
   
Deferred and Recoverable Taxes    237.2    296.0    306.3 
Other    7.3    5.8    5.6 
   
PERMANENT ASSETS    3,985.1    4,040.5    4,170.8 
   
Investment (Net)   3,984.2    4,039.8    4,170.2 
Property, Plant and Equipment (Net)   0.8    0.7    0.6 
   Property, Plant and Equipment (Gross)   52.5    52.5    52.5 
   Accumulated Depreciation    (51.6)   (51.8)   (51.9)
Intangible (Net)   0.0    0.0    0.0 
   Property, Plant and Equipment (Gross)   3.9    3.9    3.9 
   Accumulated Depreciation    (3.9)   (3.9)   (3.9)
   
TOTAL ASSETS    5,907.4    5,938.1    6,110.6 
   
 
CURRENT LIABILITIES    329.5    323.6    331.3 
   
Suppliers    0.4    0.5    0.2 
Taxes and Contributions    33.6    39.7    41.8 
Dividends Payable    219.8    208.0    213.8 
Consignment for Third Parties    0.1    0.1    0.1 
Other    75.6    75.3    75.5 
   
LONG TERM LIABILITIES    8.3    9.2    9.9 
   
Taxes and Contributions    3.7    5.4    6.1 
Other    4.6    3.8    3.7 
   
SHAREHOLDERS' EQUITY    5,569.6    5,605.3    5,769.4 
   
Capital Stock    2,596.3    2,596.3    2,596.3 
Capital Reserves    309.2    309.2    309.2 
Profit Reserves    306.3    266.0    266.0 
Retained Earnings    2,378.6    2,454.7    2,618.8 
Treasury Shares    (20.8)   (20.8)   (20.8)
   
TOTAL LIABILITIES    5,907.4    5,938.1    6,110.6 
   
* In compliance with CVM Deliberation 488 and 489 the line of Intangible Permanent Asset was created 

Brasil Telecom Participações S.A.    Page 18 of 24 


Consolidated Cash Flow – Brasil Telecom Participações S.A.

         
R$ Million    3Q07    2Q08    3Q08    D Quarter   D 12 Months    9M07    9M08    D Year 
         
OPERATING ACTIVITIES                                 
(+) Earnings Before Inocme And Social Contribution Taxes    346.1    573.8    388.9    -32.2%    12.4%    918.1    1,368.4    49.1% 
 
(+) Items with no Cash Effects    918.5    855.3    997.5    0.2    8.6%    2,828.7    2,673.5    (0.1)
 
   Depreciation and Amortization    608.1    530.2    505.6    -5%    -16.8%    1,884.9    1,582.2    -16% 
   Losses with Accounts Receivables    56.0    96.5    97.9    1.4%    74.7%    264.2    314.2    18.9% 
   Provision for Contingencies    154.9    141.5    176.1    24.5%    13.7%    436.7    476.8    9.2% 
   Provision for Pension Funds    27.8    0.3    52.9    N.A.    90.1%    12.3    85.8    N.A. 
   Deferred Taxes    (21.5)   (2.2)   (16.8)   N.A.    -21.9%    (82.4)   (145.9)   77.0% 
   Results from the Write-off of Permanent Assets    (2.0)   (25.9)   (16.0)   -38.0%    N.A.    (2.4)   (56.3)   N.A. 
   Gains/Losses in Investments    1.0    43.9    (0.0)   N.A.    N.A.    1.0    43.4    N.A. 
   Provisioned Financial Expenses    94.1    71.0    197.9    178.6%    110.3%    314.5    373.2    18.7% 
 
(-) Equity Changes    21.4    (208.2)   31.6    N.A.    48.1%    (508.3)   (589.5)   16.0% 
   Clients' Accounts Receivable    (169.4)   (124.7)   (120.2)   -3.6%    -29.0%    (394.2)   (396.2)   0.5% 
   Inventories    (1.9)   (14.9)   6.7    N.A.    N.A.    25.6    (13.3)   N.A. 
   Personnel, Charges and Social Benefits    17.0    17.7    19.7    11.3%    15.7%    28.6    42.9    50.1% 
   Accounts Payable and Provisioned Expenses    (22.9)   (96.1)   54.0    N.A.    N.A.    49.0    (1.0)   N.A. 
   Taxes    150.6    (35.2)   147.6    N.A.    -2.0%    178.3    57.6    -67.7% 
   Authorization for Services Exploration    12.5    23.3    23.8    1.9%    89.7%    (49.3)   76.9    N.A. 
   Provision for Contingencies    (130.2)   (69.2)   (185.4)   168.1%    42.4%    (336.2)   (310.3)   -7.7% 
   Provision for Pension Funds    15.4    22.9    22.8    -0.4%    48.1%    (67.2)   (32.2)   -52.1% 
   Other Assets and Liabilities' Accounts    150.3    67.9    62.8    -7.5%    -58.2%    57.1    (13.9)   N.A. 
 
Cash from Operating Activities    1,286.0    1,220.9    1,418.0    16.1%    10.3%    3,238.4    3,452.5    6.6% 
   Financial Expenses Paid    (144.4)   (116.2)   (140.6)   21.0%    -2.6%    (465.6)   (394.1)   -15.3% 
   Income and Social Contribution Taxes Paid    (92.3)   (205.6)   (170.3)   -17.2%    84.5%    (209.4)   (493.4)   135.6% 
 
(=) Net Cash Flow from Operating Activities    1,049.2    899.1    1,107.1    23.1%    5.5%    2,563.4    2,564.9    0.1% 
         
 
 
INVESTMENT ACTIVITIES                                 
   Financial Investments    260.3    863.4    (15.0)   N.A.    N.A.    1,138.0    513.8    -54.9% 
   Funds from Sales of Permanent Assets    0.1    52.3    0.4    -99.2%    268.6%    2.3    77.6    N.A. 
   Court Deposits    (348.6)   (479.2)   (492.4)   2.7%    41.2%    (705.0)   (1,300.4)   84.4% 
   Investments in Permanent Assets    (247.6)   (292.6)   (577.6)   97.4%    133.3%    (953.0)   (1,175.6)   23.4% 
 
(=) Cash Flow from Investment Activities    (335.8)   143.9    (1,084.6)   N.A.    223.0%    (517.6)   (1,884.6)   264.1% 
         
 
FINANCING ACTIVITIES                                 
   Dividens/Interests on Equity paid in the Period    (0.8)   (860.0)   1.2    N.A.    N.A.    (492.7)   (859.6)   74.5% 
   Loans and Financing    (243.8)   (62.6)   (28.2)   -55.0%    -88.4%    (1,215.1)   (96.3)   -92.1% 
      Loans Obtained    0.1      75.0    N.A.    N.A.    0.1    175.0    N.A. 
      Loans Paid    (243.9)   (62.6)   (103.2)   64.8%    -57.7%    (1,215.2)   (271.3)   -77.7% 
   Payment of Lease Obligations    (6.3)   (7.7)   (6.8)   -12.6%    7.7%    (18.0)   (20.1)   11.8% 
 
(=) Cash Flow from Financing Activities    (250.9)   (930.4)   (33.7)   -96.4%    -86.6%    (1,725.8)   (976.1)   -43.4% 
         
 
         
CASH FLOW OF THE PERIOD    462.5    112.6    (11.2)   N.A.    N.A.    320.0    (295.7)   N.A. 
         
 
         
CASH AND CASH EQUIVALENTS                                 
   Current Balance    742.8    445.5    434.3    -2.5%    -41.5%    742.8    434.3    -41.5% 
   Previous Balance    280.3    332.9    445.5    33.8%    58.9%    422.7    730.0    72.7% 
   Variation    462.5    112.6    (11.2)   N.A.    N.A.    320.0    (295.7)   N.A. 
         
 
         
SUPLEMENTARY INFORMATION TO THE CASH FLOW                                 
   Economic and Financial Investment Variation (Property, Plant and    109.7    (519.7)   (30.5)   -94.1%    N.A.    359.7    (404.7)   N.A. 
   Equipment; Intangible; Deferred Assets)                                
         

Brasil Telecom Participações S.A.    Page 19 of 24 


Consolidated Income Statement – Brasil Telecom S.A.

         
R$ Million    3Q07    2Q08    3Q08    D Quarter   D 12 Months     9M07    9M08    D Year 
         
GROSS REVENUES    3,997.3    4,179.1    4,326.0    3.5%    8.2%    11,867.2    12,541.2    5.7% 
         
FIXED TELEPHONY    2,752.7    2,753.7    2,800.8    1.7%    1.7%    8,352.5    8,333.5    -0.2% 
     Local Service    5 1,624.5    1,613.6    1,654.9    2.6%    1.9%    4,907.0    4,857.3    -1.0% 
     Public Telephony    6 138.8    120.4    106.2    -11.8%    -23.5%    408.2    360.6    -11.7% 
     Long Distance Service    7 720.0    713.0    712.7    0.0%    -1.0%    2,203.9    2,189.2    -0.7% 
     Interconnection    8 82.5    92.2    101.4    9.9%    22.8%    249.9    275.0    10.0% 
     Lease of Means    9 86.6    105.0    112.4    7.1%    29.7%    262.4    321.0    22.3% 
     Supplementary and Value Added Services    92.4    101.6    106.0    4.3%    14.6%    294.6    307.1    4.2% 
     Other    7.8    8.0    7.4    -7.4%    -5.2%    26.4    23.3    -11.8% 
MOBILE TELEPHONY    539.6    526.0    540.4    2.7%    0.1%    1,480.8    1,532.5    3.5% 
     Services    478.8    466.8    481.9    3.2%    0.6%    1,285.1    1,375.2    7.0% 
     Merchandise Sales (Handsets and Accessories)   60.8    59.2    58.5    -1.2%    -3.8%    195.7    157.3    -19.6% 
DATA COMMUNICATIONS    704.9    899.4    984.8    9.5%    39.7%    2,033.9    2,675.2    31.5% 
         
Deductions    (1,249.0)   (1,355.8)   (1,484.4)   9.5%    18.8%    (3,684.7)   (4,114.3)   11.7% 
NET REVENUES    2,748.3    2,823.3    2,841.6    0.6%    3.4%    8,182.5    8,426.9    3.0% 
         
OPERATING COSTS AND EXPENSES    (1,773.6)   (1,693.4)   (1,885.2)   11.3%    6.3%    (5,276.1)   (5,424.6)   2.8% 
     Personnel    (158.1)   (217.8)   (216.7)   -0.5%    37.1%    (463.4)   (650.1)   40.3% 
     Materials    (92.9)   (98.7)   (88.9)   -10.0%    -4.3%    (271.9)   (263.0)   -3.3% 
     Subcontracted Services    (556.5)   (533.0)   (518.0)   -2.8%    -6.9%    (1,680.8)   (1,590.2)   -5.4% 
     Interconnection    (558.0)   (554.8)   (559.9)   0.9%    0.3%    (1,705.0)   (1,678.4)   -1.6% 
     Advertising and Marketing    (39.3)   (40.3)   (45.5)   13.0%    15.8%    (99.7)   (128.2)   28.6% 
     Provisions and Losses    (210.8)   (239.4)   (273.9)   14.4%    29.9%    (700.5)   (792.2)   13.1% 
     Other    (158.0)   (9.4)   (182.3)   N.A.    15.4%    (354.8)   (322.5)   -9.1% 
         
EBITDA    974.6    1,129.9    956.4    -15.4%    -1.9%    2,906.4    3,002.3    3.3% 
EBITDA Margin    35.5%    40.0%    33.7%    -0.2 p.p.    -0.1 p.p.    35.5%    35.6%    0.3% 
Depreciation and Amortization    (606.4)   (528.6)   (503.9)   -4.7%    -16.9%    (1,880.5)   (1,577.2)   -16.1% 
         
                                 
EARNINGS BEFORE FINANCIAL RESULT (EBIT)   368.2    601.3    452.5    -24.8%    22.9%    1,025.8    1,425.1    38.9% 
         
Financial Result    (61.2)   (61.8)   (108.5)   75.5%    77.3%    (468.0)   (417.6)   -10.8% 
     Financial Revenues    100.5    126.1    151.4    20.1%    50.8%    303.1    452.8    49.4% 
     Financial Expenses    (161.7)   (188.0)   (260.0)   38.3%    60.8%    (526.1)   (625.4)   18.9% 
     Interest on Equity          N.A.    N.A.    (245.0)   (245.0)   0.0% 
         
 
EARNINGS AFTER FINANCIAL RESULT    307.0    539.5    344.0    -36.2%    12.0%    557.8    1,007.6    80.6% 
         
 
Non-Operating Revenues (Expenses)   3.6    (31.8)   1.9    N.A.    -46.2%    9.2    (27.2)   N.A. 
     Goodwill Amortization          N.A.    N.A.    (0.1)     N.A. 
     Other    3.6    (31.8)   1.9    N.A.    -46.2%    9.3    (27.2)   N.A. 
         
EARNINGS BEFORE INCOME AND SOCIAL    310.6    507.7    345.9    -31.9%    11.4%    567.0    980.4    72.9% 
CONTRIBUTION TAXES                                 
         
Income and Social Contribution Taxes    (115.9)   (186.3)   (148.1)   -20.5%    27.8%    (227.4)   (385.7)   69.6% 
         
EARNINGS BEFORE PROFIT SHARING    194.7    321.4    197.7    -38.5%    1.6%    339.6    594.7    75.1% 
         
Minority Interest    1.1    (0.1)   1.0    N.A.    -11.2%    1.3    1.7    31.4% 
         
EARNINGS BEFORE REVERSION OF INTEREST    195.7    321.3    198.7    -38.1%    1.5%    340.9    596.3    75.0% 
ON EQUITY                                 
         
Reversion of Interest on Equity          N.A.    N.A.    245.0    245.0    0.0% 
         
NET INCOME    195.7    321.3    198.7    -38.1%    1.5%    585.9    841.3    43.6% 
         
 
         
Net Income/shares - R$    0.3577    0.5869    0.3629    -38.2%    1.5%    1.0705    1.5367    43.6% 
Net Income/ADR - US$    0.5835    1.1061    0.5688    -48.6%    -2.5%    1.7464    2.4083    37.9% 
 

Brasil Telecom Participações S.A.    Page 20 of 24 


Consolidated Balance Sheet – Brasil Telecom S.A.

R$ Million     Sep/07     Jun/08     Sep/08 
 
   
CURRENT ASSETS    5,561.8    5,889.2    6,216.2 
   
Cash and Cash Equivalents    608.8    393.8    396.8 
Financial Investments    1,200.5    1,308.6    1,273.5 
Accounts Receivables (Net)   2,257.6    2,249.4    2,271.7 
Deferred and Recoverable Taxes    985.1    1,196.7    1,386.2 
Other Recoverable Amounts    394.6    587.5    747.4 
Inventory    38.5    52.7    46.0 
Other    76.6    100.5    94.5 
   
LONG TERM ASSETS    2,344.6    3,324.5    3,641.6 
   
Loans and Financing    6.4    5.8    5.5 
Deferred and Recoverable Taxes    1,400.6    1,591.4    1,593.6 
Other    937.6    1,727.3    2,042.5 
   
PERMANENT ASSETS    7,040.4    6,877.6    6,995.6 
   
Investment (Net)   242.8    122.3    100.3 
Property, Plant and Equipment (Net)   5,636.4    5,245.7    5,460.3 
   Property, Plant and Equipment (Gross)   26,473.7    27,253.3    27,804.7 
   Accumulated Depreciation    (20,837.3)   (22,007.6)   (22,344.4)
Intangible (Net)   1,053.8    1,429.2    1,365.1 
   Property, Plant and Equipment (Gross)   2,501.5    3,131.7    3,156.1 
   Accumulated Depreciation    (1,447.7)   (1,702.6)   (1,791.1)
Deferred Assets (Net)   107.5    80.5    70.0 
   
TOTAL ASSETS    14,946.8    16,091.3    16,853.4 
   
 
   
CURRENT LIABILITIES    4,029.9    4,492.9    5,086.0 
   
Loans and Financing    654.4    521.4    627.9 
Suppliers    1,353.5    1,409.0    1,478.1 
Taxes and Contributions    1,093.8    1,022.4    1,289.7 
Dividends Payable    268.4    270.4    273.6 
Provisions    187.2    311.9    351.0 
Salaries and Benefits    167.2    161.6    203.1 
Consignment for Third Parties    105.8    126.9    130.6 
Authorization for Services Exploration    74.9    522.2    567.3 
Other    124.4    147.1    164.6 
   
LONG TERM LIABILITIES    5,030.6    5,604.4    5,575.7 
   
Loans and Financing    3,354.4    3,715.1    3,637.7 
Provisions    1,216.5    1,292.7    1,283.7 
Taxes and Contributions    123.4    244.1    292.4 
Authorization for Services Exploration    231.1    184.6    189.6 
Other    105.1    167.9    172.3 
   
DEFERRED INCOME    -    -    - 
   
MINORITY INTEREST    9.4    (2.7)   (4.4)
   
SHAREHOLDERS' EQUITY    5,876.9    5,996.8    6,196.1 
   
Capital Stock    3,470.8    3,470.8    3,470.8 
Capital Reserves    1,482.6    1,483.5    1,483.5 
Profit Reserves    309.3    349.2    349.2 
Retained Earnings    768.9    846.2    1,044.9 
Treasury Shares    (154.7)   (152.9)   (152.2)
   
TOTAL LIABILITIES    14,946.8    16,091.3    16,853.4 
   
* In compliance with CVM Deliberation 488 and 489 the line of Intangible Permanent Asset was created 

Brasil Telecom Participações S.A.    Page 21 of 24 


Cash Flow – Brasil Telecom S.A.

         
R$ Million    3Q07    2Q08    3Q08    D Quarter     D 12 Months   9M07   9M08    D Year 
         
OPERATING ACTIVITIES                                 
(+) Earnings Before Inocme And Social Contribution Taxes    310.6    507.7    345.9    -31.9%    11.4%    812.0    1,225.4    50.9% 
 
(+) Items with no Cash Effects             910.6    849.3    988.3    0.2    8.5%    2,824.6    2,709.1    -4.1% 
 
   Depreciation and Amortization    606.4    528.6    503.9    -5%    -16.9%    1,880.7    1,577.2    -16.1% 
   Losses with Accounts Receivables    56.0    96.5    97.9    1.4%    74.7%    264.2    314.2    18.9% 
   Provision for Contingencies    154.8    142.9    176.0    23.2%    13.7%    436.3    478.0    9.6% 
   Provision for Pension Funds    27.8    0.3    52.9    N.A.    90.1%    12.3    85.8    N.A. 
   Deferred Taxes    (27.5)   (31.5)   (24.8)   -21.2%    -9.8%    (82.3)   (144.4)   75.4% 
   Results from the Write-off of Permanent Assets    (1.1)   6.5    (15.5)   N.A.    N.A.    (1.0)   (10.0)   N.A. 
   Gains/Losses in Investments      35.0      N.A.    N.A.      35.0    N.A. 
   Provisioned Financial Expenses    94.1    71.0    197.9    178.6%    110.3%    314.5    373.2    18.7% 
 
(-) Equity Changes             (34.7)   (182.8)   47.0    N.A.    N.A.    (543.0)   (582.2)   7.2% 
   Clients' Accounts Receivable    (169.4)   (124.7)   (120.2)   -3.6%    -29.0%    (394.2)   (396.2)   0.5% 
   Inventories    (1.9)   (14.9)   6.7    N.A.    N.A.    25.6    (13.3)   N.A. 
   Personnel, Charges and Social Benefits    17.0    17.7    19.7    11.3%    15.7%    28.6    42.9    50.1% 
   Accounts Payable and Provisioned Expenses    (23.0)   (62.7)   54.4    N.A.    N.A.    82.9    21.5    -74.1% 
   Taxes    165.4    (33.7)   170.0    N.A.    2.8%    188.7    47.7    -74.7% 
   Authorization for Services Exploration    12.5    23.3    23.8    1.9%    89.7%    (49.3)   76.9    N.A. 
   Provision for Contingencies    (130.2)   (69.2)   (185.4)   168.1%    42.4%    (336.2)   (310.3)   -7.7% 
   Provision for Pension Funds    15.4    22.9    22.8    -0.4%    48.1%    (67.2)   (32.2)   -52.1% 
   Other Assets and Liabilities' Accounts    79.5    58.4    55.5    -5.1%    -30.3%    (21.9)   (19.2)   -12.2% 
 
Cash from Operating Activities         1,186.5    1,174.3    1,381.2    17.6%    16.4%    3,093.6    3,352.3    8.4% 
   Financial Expenses Paid    (144.4)   (116.2)   (140.6)   21.0%    -2.6%    (465.6)   (394.1)   -15.3% 
   Income and Social Contribution Taxes Paid    (92.3)   (205.6)   (170.3)   -17.2%    84.5%    (209.4)   (493.4)   135.6% 
 
(=) Net Cash Flow from Operating Activities             949.7    852.5    1,070.2    25.5%    12.7%    2,418.6    2,464.7    1.9% 
         
 
INVESTMENT ACTIVITIES                                 
   Financial Investments    292.9    705.9    34.7    -95.1%    -88.2%    1,028.9    572.2    -44.4% 
   Funds from Sales of Permanent Assets    0.1    14.2    0.4    -96.9%    268.6%    2.3    23.3    N.A. 
   Court Deposits    (348.5)   (461.4)   (489.5)   6.1%    40.5%    (704.8)   (1,270.9)   80.3% 
   Investments in Permanent Assets    (247.6)   (292.6)   (577.6)   97.4%    133.3%    (953.0)   (1,175.6)   23.4% 
 
(=) Cash Flow from Investment Activities           (303.1)   (33.9)   (1,032.0)   N.A.    240.5%    (626.5)   (1,851.0)   195.5% 
         
 
FINANCING ACTIVITIES                                 
 
   Dividens/Interests on Equity paid in the Period    (0.5)   (683.4)   (0.3)   -100.0%    -34.7%    (351.8)   (684.4)   94.5% 
 
   Loans and Financing           (243.8)   (62.6)   (28.2)   -55.0%    -88.4%    (1,215.1)   (96.3)   -92.1% 
      Loans Obtained    0.1      75.0    N.A.    N.A.    0.1    175.0    N.A. 
      Loans Paid    (243.9)   (62.6)   (103.2)   64.8%    -57.7%    (1,215.2)   (271.3)   -77.7% 
   Payment of Lease Obligations               (6.3)   (7.7)   (6.8)   -12.6%    7.7%    (18.0)   (20.1)   11.8% 
 
(=) Cash Flow from Financing Activities           (250.6)   (753.8)   (35.3)   -95.3%    -85.9%    (1,584.9)   (800.8)   -49.5% 
         
 
         
CASH FLOW OF THE PERIOD             396.1    64.8    3.0    -95.4%    -99.2%    207.3    (187.2)   N.A. 
         
 
         
CASH AND CASH EQUIVALENTS                                 
   Current Balance    608.8    393.8    396.8    0.8%    -34.8%    608.8    396.8    -34.8% 
   Previous Balance    212.8    329.0    393.8    N.A.    N.A.    401.5    584.0    45.4% 
   Variation             396.1    64.8    3.0    -95%    -99.2%    207.3    (187.2)   N.A. 
         
 
         
SUPLEMENTARY INFORMATION TO THE CASH FLOW                                 
   Economic and Financial Investment Variation (Property, Plant and    109.7    (519.7)   (30.5)   -94.1%    N.A.    359.7    (404.7)   N.A. 
   Equipment; Intangible; Deferred Assets)                                
         

Brasil Telecom Participações S.A.    Page 22 of 24 


Income Statement – BrT Móvel

         
R$ Million    3Q07    2Q08    3Q08    D Quarter   D 12 Months     9M07     9M08    D Year 
         
GROSS REVENUES     638.3     627.2     657.4    4.8%    3.0%    1,788.8    1,861.3    4.1% 
     Services     577.5     567.9     598.9    5.4%    3.7%    1,593.1    1,704.0    7.0% 
           Subscription     114.3    98.4     100.6    2.3%    -12.0%    329.4    296.1    -10.1% 
           Utilization     158.1     151.9     171.0    12.6%    8.2%    408.3    458.8    12.4% 
           Interconnection     262.5     272.7     285.6    4.7%    8.8%    748.1    819.6    9.6% 
           Other Revenues    13.0    9.1    6.1    -32.7%    -52.8%    34.2    24.5    -28.1% 
           Data Communications    29.6    35.8    35.5    -1.0%    19.7%    73.1    105.0    43.7% 
     Merchandise Sales (Handsets and Accessories)   60.8    59.2    58.5    -1.2%    -3.8%    195.7    157.3    -19.6% 
Deductions    (189.8)   (164.4)   (176.1)   7.1%    -7.2%    (525.7)   (491.2)   -6.6% 
         
NET REVENUES     448.5     462.8     481.3    4.0%    7.3%    1,263.1    1,370.1    8.5% 
     Services     409.9     422.5     442.5    4.7%    7.9%    1,144.7    1,262.9    10.3% 
     Merchandise Sales    38.6    40.3    38.8    -3.7%    0.5%    118.4    107.2    -9.4% 
         
OPERATING COSTS AND EXPENSES    (414.5)   (433.6)   (410.4)   -5.4%    -1.0%    (1,219.5)   (1,255.3)   2.9% 
     Personnel    (18.6)   (18.8)   (19.5)   3.5%    4.9%    (55.1)   (55.5)   0.7% 
     Materials    (69.8)   (81.4)   (73.9)   -9.2%    5.8%    (204.5)   (212.0)   3.6% 
     Subcontracted Services    (87.3)   (87.9)   (89.1)   1.3%    2.1%    (271.7)   (276.5)   1.8% 
     Interconnection    (150.9)   (143.6)   (136.6)   -4.9%    -9.5%    (425.5)   (426.0)   0.1% 
     Advertising and Marketing    (8.8)   (19.0)   (19.0)   -0.2%    115.7%    (36.2)   (50.5)   39.8% 
     Provisions and Losses    (16.6)   (13.9)   (15.0)   7.7%    -9.6%    (51.7)   (50.4)   -2.5% 
     Other    (62.5)   (68.9)   (57.3)   -16.8%    -8.3%    (174.8)   (184.4)   5.5% 
         
EBITDA    34.0    29.2    70.9    143.0%    108.7%    43.6    114.8    163.7% 
EBITDA Margin    7.6%    6.3%    14.7%    8.4 p.p.    7.2 p.p.    3.4%    8.4%    4.9 p.p. 
     Depreciation and Amortization    (96.1)   (114.3)   (117.2)   2.5%    22.0%    (285.8)   (338.8)   18.6% 
         
EARNINGS BEFORE FINANCIAL RESULT    (62.1)   (85.1)   (46.2)   -45.7%    -25.5%    (242.2)   (224.0)   -7.5% 
         
     Financial Result    17.0    24.2    11.3    -53.2%    -33.6%    44.8    61.3    36.7% 
          Financial Revenues    33.1    44.9    50.4    12.2%    52.5%    81.6    136.6    67.5% 
          Financial Expenses    (16.0)   (20.7)   (39.1)   88.7%    144.1%    (36.7)   (75.3)   105.0% 
         
EARNINGS AFTER FINANCIAL RESULT    (45.0)   (60.9)   (34.9)   -42.7%    -22.5%    (197.4)   (162.7)   -17.6% 
         
     Non-Operating Revenues (Expenses)     0.9    1.9    108.3%        1.3    2.9    128.7% 
         
EARNINGS BEFORE INCOME AND SOCIAL    (45.0)   (59.9)   (33.0)   -45.0%    -26.8%    (196.2)   (159.8)   -18.5% 
CONTRIBUION TAXES                                 
         
     Income and Social Contribution Taxes    15.2    20.2    7.2    -64.5%    -53.0%    66.0    49.8    -24.5% 
         
NET EARNINGS (LOSSES)   (29.8)   (39.8)   (25.8)   -35.1%    -13.4%    (130.2)   (110.0)   -15.5% 
         

Brasil Telecom Participações S.A.    Page 23 of 24 


Glossary

3G: Third generation of technology for mobile telephony, which represents an evolution in the existing CDMA and GSM technologies. 3G technology allows for a higher- speed connection than what is currently offered, reaching the same level as a broadband connection and permitting a variety of value added services, especially those that rely on internet connections. 

ADSL: Asymmetrical Digital Subscriber Line. System that allows broadband signal transmission through metallic telephone cables. It is the most common DSL technology, which represents a midway transition to fully optical networks. 

ARPU: Average Revenue per User, an indicator used in the telecom industry  

CAPEX: Capital Expenditure. The investments made by a company. 

Churn:  Percentage of  cancellations  during a  determined  period  out of  the  average  client  base in  the  same period. 

EBITDA: Do Earnings Before Interest, Taxes, Depreciation and Amortization.  

FINANCIAL LEVERAGE RATIO: Net Debt / EBITDA. 

GSM:  Global  System  for  Mobile  communications.  GSM is  the  world’s  most  widely  used  mobile  telephony technology and allows users to move around freely and easily with their handsets. The price of GSM handsets is also more attractive, the network is safer and there are constant technological advances. 

IoE (Interest on Equity): Shareholder remuneration option, calculated on shareholders’ equity and limited, for tax purposes, to the variation in the long- term interest rate (TJLP). The tax benefit is due to the reduction in the calculation base used for income  tax and social contribution tax  on net income, given  that interest on equity represents a deductible expense in the calculation of these taxes. IoE payments are subject to withholding tax at 15%. Interest on equity may be paid as part of statutory dividends, net of withholding tax. 

LES: Lines in Service. All the lines in a network that are effectively being used. 

SAC: Subscriber Acquisition Cost, the average amount spent by a company to acquire a new subscriber 

TUP: Public phones. 


This document contains forward‐looking statements. Such statements do not constitute facts occurred in the past and reflect the expectations of the Company's managers only. The words "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans", "predicts," "projects" and "aims", as well as other similar words, are intended to identify those forward‐looking statements, which obviously involve risks or uncertainties predicted or not by the Company. Accordingly, the future results of the Company’s operations may differ from the current expectations, and the reader should not rely exclusively on these forward‐looking statements. Forward‐looking statements speak only as 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.

Brasil Telecom Participações S.A.    Page 24 of 24 

 

 
SIGNATURE
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: October 15, 2008

 
BRASIL TELECOM S.A.
By:
/SPaulo Narcélio Simões Amaral

 
Name:  Paulo Narcélio Simões Amaral
Title:     Chief Financial Officer
 

 

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates offuture economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.