VIVO, THE SOUTHERN HEMISPHERE´S LARGEST WIRELESS COMMUNICATION GROUP, ANNOUNCES THIRD QUARTER 2005 CONSOLIDATED RESULTS OF TELESP CELULAR PARTICIPAÇÕES S.A.

•  TCP´s customer base grew 18.4% over 3Q04, recording 19,370 thousand customers.

•  Acquisition mix in the 3Q05 presented an increase in the postpaid segment which represented 23.5% of net adds, 14.6 p.p. superior when compared to the 2Q05

•  Monthly churn at 1.7% in 3Q05, stable since the 3Q04, reflects quality services and client satisfaction in a strong competition environment based on prices.

•  Post-paid ARPU grew 4.9% in relation to 2Q05. In relation to 3Q04 it grew 6.2%.

•  Post-paid MOU increased by 4.9%, with addition of 11 minutes compared to the 2Q05 and 6.3% with addition of 14 minutes compared to 3Q04.

•  Increase of 14.8% and of 12.4% in the subscription and usage revenue in 3Q05 in relation to 3Q04 and 2Q05, respectively.

•  Sustained growth of data revenues , which increased by 41.0 % over last year, accounting for 6.2% of the net services revenue in 3Q05.

•  The qualified base for data services has already reached 91.7% in 3Q05.  

•  Launching of Corporate VIVO Play 3G , service based on a 3 rd Generation technology that offers cellular access to multimedia contents, consolidating the absolute Leadership in innovative and diversity of services launched on the market. Successful in the differentiation strategy as regards its competitors as a result of the provision of innovating services.  

•  EBITDA of R$ 529.5 million, representing a margin of 28.4%, up 7.0 percentile points in relation to 2Q05.

Vivo achieved the goal imposed by Anatel. Vivo is monthly evaluated by Anatel for some indexes and in August 90.7% of them were achieved. One of them is SMP 5, which refers to the operators' rate of completion of calls. The goal required by Anatel is that such rate must exceed 67% in three pre-established periods of two hours each – morning, afternoon and evening, on a Thursday selected in the month by Anatel. Achieving this goal in the 3 periods has been a hard task for any Mobile Personal System (SMP) operator. On August 04, the 14 Vivo operators reached such goal. These indexes published by ANATEL will improve even more our positions in the quality ranking among all cellular phone service providers.

Throughout September and October, about 170 processes of all VIVO companies were audited by internal quality auditors. The purpose thereof is to assist the different businesses in the independent auditing procedures, so that VIVO may be able to keep its ISO-9001:2000 Certification and SMP (based on the method of data collection, calculation and consolidation for publication of Anatel's SPM indexes).

On September 30, 2005, TCP had 207 own sales points, in addition to an efficient network of accredited dealers, whether exclusive or not, totaling about 5,460 sales points, which are able to market services and cellular phones, thus making the Company also a leader in number of distribution channels.

VIVO launched the Corporate 3G, in the cities of São Paulo , Rio de Janeiro and Curitiba , with the purpose of increase the options already made available by it to the companies. An example of such service is the Vivo Smart Mail, which allows personal information to be accessed, at real time, from a PDA. With this service, users will be able to access corporate e-mails, calendars, tasks and contact information whenever they are within the CDMA coverage area, now added by the third-generation technology – 3G.

The partial Bill & Keep (B&K) system was implemented in July 2003, under which payment for use of local network among SMP operators is not made unless traffic rate among them exceeds 55%, which causes an impact on interconnection revenue and cost.

The 2005 and 2004 accumulated numbers correspond to the values registered in the nine months period ending on September 30 of each year.

Some information disclosed for 3Q04, 2Q05 and accumulated 2004 were re-classified, as applicable, for comparison purposes. Figures disclosed are subject to differences, due to rounding-up procedures.

•  Continued market leadership as a result of the increase in the customer base by 18.4% over 3Q04, reaching 19,370 thousand customers, despite strong competition. It is important to also emphasize the conservative company's reckoning procedures of the customer base.

•  In 3Q05, post-paid net additions increased by 163.6% over the same period of last year, reflecting once again the Company's successful commercial actions turned to this segment.

•  SAC decreased by 5.0% over 2Q05 and 3Q04, as a result of reduction of total subsidy, due to the increase in value of "entry level" in the period in the pre paid segment partially offset by the increase in commissions and publicity.

•  Churn recorded 1.7% in the quarter, having remained stable in relation to 3Q04 as a result of quality services, client satisfaction and campaigns adopted by the Company to promote customer loyalty (as for example, the points program, which offers discounts to customers for change of handsets).

•  The blended ARPU of R$ 27.7 recorded a 3.5 % reduction in relation to 2Q05 and 14.5% in relation to 3Q04, resulting from the effect of the customer mix, the drop in the inbound ARPU, which was due, among other factors, to migration of the inbound traffic from fixed-mobile to mobile-mobile, in addition to the partial Bill & Keep effect, a reduction partially offset by the increase in the postpaid outgoing ARPU which had an increase of 18.9% and 11.4% in relation to 3Q04 and 2Q05 respectively.

Net Services Revenue

The net services revenue grew 2.8% in relation to 3Q04, recording R$ 1,596.4 million in the quarter. Such result is caused, partially, by the increase in the customer base and by the increased use of data services, despite the right planning effects. In relation to the previous quarter, due to the seasonality of the period, the revenue remained stable, having been also affected by the profile adequacy effects, such as Vivo Ideal and customer loyalty campaigns and the drop in the fixed-mobile traffic.

It must be highlighted that "subscription and usage revenue" recorded a 14.8% increase over 3Q04, due to the increase in the total outgoing traffic. In the service revenue, this increase was partially offset by a reduction in the inbound traffic revenue, as a result of the transition from fixed-mobile traffic to mobile-mobile traffic, with consequent drop in interconnection revenue and the partial Bill & Keep effect.

Data revenues were up 41.0% in the year-to-year comparison, representing 6.2% of the net service revenues in 3Q05 (4.5% in 3Q04). This increase has continued to occur due to a more widespread access and use of such services, in addition to the several services launched on the market and the increase in the customer base. The SMS accounted for 62.2% of data revenues in 3Q05. Average number of SMS messages sent per month in the quarter was some 75 million.

Personnel Cost

In 3Q05, personnel cost remained stable in relation to the previous quarter. The increase in personnel cost in the comparison between the accumulated totals for 2005 and 2004 is a result of the collective bargaining agreement, training and campaigns for stimulating the selling staff.

Cost of Services Rendered

The 21.8% increase in the cost of services rendered in relation to 3Q04 is mainly due to the adequacy of the accounting practice for the Fistel fee of controlled company TCO and to the increase recorded in "Connection Means" as a result of the increase in circuit rentals, which was explained by the plant increase. In relation to 2Q05, the reduction of 8.4% is a consequence of the reduction in "third parties' services", especially plant maintenance cost. It is worthwhile mentioning that 2Q05 is negatively affected by an extraordinary effect that impacts the entry "others" in Selling Expenses.

Cost of Goods Sold

Cost of goods sold decreased by 33.2% in relation to 2Q05 and 14.8% in relation to 3Q04, due to the decreased number of activated handsets (gross additions decreased by 17% in 3Q05 over 3Q04); the main purpose was adding high-value customers in the postpaid market segment for the medium and high end clients.

Selling Expenses

In 3Q05, selling expenses recorded a 37.8% increase over 3Q04, caused by an intense competition and consequent increase in expenses with third-party services, especially publicity and commissions, in addition to the positive variation in the PDD, as explained below.

In 3Q05, the provision for bad debtors (PDD) of R$ 120.0 million recorded an increase of 35.6% in relation to 2Q05, representing 4.7% of the gross revenue (3.4% in 2Q05), impacted by an extraordinary effect in TCO. The Company has continued to keep the strategy of controlling credit to dealers and corporate customers.

General and Administrative Expenses

General and administrative expenses recorded 23.3% decrease in relation to 3Q04. Such variation was due to the successful structural costs reduction program and to the high level of synergy achieved among the Group Companies. The increase in the variation over the previous quarter is due to increased expenses with data processing, public services and plant maintenance.

The Company recorded a reduction in its revenues in the 3Q05 when compared to the same period of the previous year. In relation to 2Q05, the 87.3% drop (non-recurring) was caused by the increase in commercial discounts.

EBITDA

In the first nine months of the year, the EBITDA (earnings before interest, taxes, depreciation and amortization) was R$ 1,621.0 million, with 29.5% margin.

Considering the competition recorded in 3Q05, the EBITDA recorded R$ 529.5 million, with margin of 28.4% , up 7.0 percentile points in relation to the previous quarter.

Depreciation and Amortization

Depreciation and amortization expenses increased 12.1% in the 3Q05 in relation to 2Q05 due to investments effected and the activation of assets due to the conclusion of works.

Financial
Revenues
(Expenses)

Despite the increase in the interest rate of the period (4.56% in 2Q05 and 4.74% in 3Q05), which had a negative impact over TCP's net debt, the net financial expense in 3Q05 recorded a reduction of R$ 23.4 million when compared to 2Q05. Such variation was caused, mainly, by lower charges assessed on the adjustment of taxes payable and lower expenses with CPMF. Another positive effect in 3Q05 was the discount obtained for advanced payment of a tax incentive occurred in one of the controlled companies (TCO).

In the comparison of 3Q05 in relation to 3Q04, TCP reduced its net financial expense by R$ 31.8 million, mainly due to the reduction of spreads obtained upon renewals of financial transactions.

In consequence of the application of the TCP's hedge policy, for protection against foreign exchange volatility, the company has provided coverage of 100% of the debt exposure, in such a manner that the final cost of the foreign exchange debt (R$ 2,970.7 billion) together with the derivative (swap) is now referenced in Reais (CDI: 4.74% in 3Q05). The result of the foreign exchange debt and derivative is evidenced, mainly, in the sum of losses with derivatives of R$ 315.3 million and gains from foreign exchange variation of R$ 177.2 million.

 Net Result

The loss recorded in 3Q05 was R$ 215.1 million, 22.8% less than in 2Q05.

Indebtedness

On September 30, 2005, TCP's debts related to loans and financings amounted to R$ 4,949.9 million (R$ 4,879.5 million on June 30, 2005), 60% of which is nominated in foreign currency. The Company has signed exchange rate hedging contracts thus protecting 100% of its debt against foreign exchange volatility, so that the final cost (debt and swap) is Reais-referenced. This debt was offset by cash and financial investments (R$ 1,200.6 million) and by derivative assets and liabilities (R$ 555.7 million payable) resulting in a net debt of R$ 4,305.0 million, a 3.3% increase in relation to June 2005.

The increase in TCP's net debt in 3Q05 in relation to 2Q05 in the amount of R$ 138 million is due, mainly, to the carrying cost of the net debt being comparatively higher than the cash generated in the period .

Short-term debt represented 33.1% of total debt at September 30, 2005, the same level recorded in the end of 2Q05, in which period the debt profile was retimed through issuance of Debentures of Telesp Celular Participações S.A. However, there was an improvement, by R$ 251 million, in the short term consolidated net debt, which totaled in the end of 3Q05 the amount of R$ 672 million, which are covered by the company's cash flow.

Capex effected in the quarter totaled R$ 244.3 million. The investments are basically due to the following factors: (i) more accelerated migration from TDMA to CDMA technology, thus following the competing operators, which are also migrating from TDMA; (ii) consolidation and rationalization of the information systems, especially billing, customer care , prepaid platform and SAP management systems; and (iii) maintenance quality and expansion of the coverage provided by the company in order to meet the growth of the customer base .

The positive operating cash flow, an increase of 126.9% and 50.2% when comparing with the 2Q05 and 3Q04 respectively, evidences that TCP has generated funds from its operations to implement its capital expenditures program, recording R$ 285.2 million in the quarter and R$ 674.9 million in the accumulated total for the year.

In 3Q05, the value of TCP's common shares (ON) and preferred shares (PN) dropped 8.9% and 10.5%, respectively, while the Bovespa Index (São Paulo Stock Exchange Index) increased by 26.1%. From July to September 2005, the Company's PN shares were traded in 100% of the trading sessions, with an average daily volume of R$ 10.9 million. By the end of 3Q05, ON and PN shares were traded at R$ 7.79 and R$ 8.90, respectively.

The price of TCP's level II ADRs dropped by 8.4% in the quarter, in face of a 2.9% increase in the Dow Jones index. The average daily volume of transactions in the NYSE during 3Q05 was US$ 7.5 million. The closing price of TCP's ADRs in the quarter was US$ 3.91 .

On July 29, 2005, the Board of Directors of TCP approved an increase in the capital stock as a result of a corporate restructuring process, which was concluded at an AGE (Special Meeting of Shareholders) held on January 14, 2000, involving the company and its controlled and controlling companies. The amortization of the premium resulting from such corporate restructuring process resulted in a tax benefit of R$ 242,595,157.06, of which R$ 120,850,877.93 refer to fiscal year 2004 and R$ 121,744,279.13 are credits remaining from previous fiscal years, with issuance of 29,298,932 new common shares, thus ensuring the preemptive right provided for, in article 171 of Law nº 6404/76. The issue price of R$ 8.28 per common share corresponds to 90% of the weighted average of the main market prices of the 30 trading sessions of Bovespa, in the period from May 16, 2005 to and including June 27, 2005. The period for exercise of the preemptive right occurred from June 29, 2005 until July 28, 2005.

The managements of Telesp Celular Participações S.A. ("TCP") and Tele Centro Oeste Celular Participações S.A. ("TCOPart") disclosed a Relevant Fact on August 15, 2005, in the form and for the purposes of CVM Instructions no. 319/99, 320/99 and 358/02, to the effect that the respective Boards of Directors approved the proposal to their shareholders of the terms, conditions and justifications of a corporate restructuring involving the referred companies, the full contents of which may be obtained from our web site www.vivo.com.br/ir .

•  Instituto Vivo celebrates one year of existence. In celebration for the first year of activities, having acted in 86% of the domestic territory, Instituto Vivo has already benefited more than 300 thousand people within its coverage area, through projects in partnership with large institutions, both of the third sector and public institutions, totaling 37 initiatives, of which 26 focus on Education and Environment.

•  Instituto Vivo was awarded in August the Citizenship Prize of Anuário Telecom 2005 for two projects that were outstanding due to their contribution to the community – Programa Vivo Voluntário , in the Social Action category, and SuperAção Jovem , developed by the Ayrton Senna Institute, in the Education category.

•  Instituto Vivo supports and takes part in Ibama's Environmental Education Course. With the support from Vivo Institute, the coordination of Ibama's Environmental Education – Brazilian Environment and Renewable Hydric Resources Institute, carried out in August, in Rio de Janeiro , the XX Course of Introduction to Education in Environmental Management Process. The purpose of the course is to provide technical staff of Ibama and of other partner institutions, among them Instituto Vivo, with capacity for collectively acting in environmental management actions.

•  VIVO was awarded in August, for the third consecutive year, in São Paulo , the TOP de RH ADVB 2005 prize, with the case entitled "Vivo learning – Initiative for Evaluating, Determination for Growing". The program is divided into 12 and 24 hour modules and is designed for developing Vivo Competences and enhancing the knowledge of the cooperating parties about the business.

•  Vivo is the most dependable brand for Brazilians for the second year. In the 4 th edition of the "Dependable Brands" research, conducted by Revista Seleções, Vivo is the most dependable brand in the category of cellular telephone operator, according to readers, with 38.9% of the votes.

•  Vivo launches "Vivo Ideal". All Vivo regional companies (except for RJ/ES, which will offer the service as from December) now have a new services plan in place. Vivo Ideal is a self-adjustable postpaid plan focused on high potential and variable consumption customers. Upon subscribing to this service plan, the customer is always placed in that minutes range which is most adequate to his consumption in that month. Minimum consumption is 150 minutes and as from this range, there are other 4 consumption ranges, which always ensure savings to the customer. Vivo Ideal is a product that reinforces the concept that "only the company which has the largest cellular community in Brazil has a plan for each customer", in addition to supplementing Vivo's portfolio, making it more competitive and bringing as major benefit the possibility of adapting the plan to the customer's profile.

•  Continued market leadership as a result of the increase in the customer base by 14.0% over 3Q04, reaching 9,986 thousand customers, despite the strong competition in the cellular telephone market. It is important to also emphasize the conservative company's reckoning procedures of the customer base.

•  Total net additions of postpaid customers increased almost three times in relation to 3Q04, reflecting the results of commercial actions carried out by the Company, especially in the post-paid segment, where competition is stronger.

•  SAC increased by 2.3% in relation to 2Q05, as a result of the strong competition recorded on the market with the Father´s day campaign. When compared to 3Q04, the 13.5% reduction results from the reduction in the total subsidy due to the increase in the value of "entry level" in the period in the pre paid segment.

•  Churn recorded 1.6% in the quarter, having remained stable as a result of quality services, client satisfaction and campaigns adopted by the Company to promote customer loyalty (as for example, the points program, which offers discounts to customers for change of handsets).

•  The blended ARPU of R$ 30.8 recorded a 4.9% decrease in relation to 2Q05, partially offset by the growth in the post-paid ARPU which recorded an increase of 2.2%. Year-to-year variation is due to the customer mix effect, drop in inbound ARPU due, among other factors, to the migration of the inbound traffic from fixed-mobile to mobile-mobile, in addition to the effects of the Bill & Keep and customer profile adequacy plans such as Vivo Ideal and customer loyalty campaigns, especially in the postpaid customer base.

•  SAC increased by 8.8% in relation to 2Q05, due to increased pressure for commissions and advertising, as a result of the strong competition partially offset by a reduction of total subsidies, due to the increase of the value of "entry barriers" in the period in the pre paid segment.

•  Churn at 1.8%, an increase of 0.4 percentile point over the previous quarter in a strongly competitive environment with increasing pressure for obtaining new customers.

•  The blended ARPU of R$ 19.6 recorded a reduction of 8.4% and 20.6% in relation to 2Q05 and 3Q04, respectively, due to the customer mix effect, drop in inbound ARPU due, among other factors, to the migration of the inbound traffic from fixed-mobile to mobile-mobile, in addition to the partial Bill & Keep effect and effects of the customer profile adequacy plans such as Vivo Ideal, client care and customer loyalty campaigns, especially in the post-paid customer base.

•  The post-paid MOU increased by 1.3% in relation to 3Q04, as a result of the increase in the outgoing MOU of the post-paid segment. Total MOU was impacted by the reduction in the pre paid customer base, which is affected by the decrease in the inbound fixed-mobile traffic.

•  SAC decreased by 22.8% in relation to 2Q05, as a result of the reduction in the commercial activity in the period and the total subsidies, due to the increase of the value of "entry barriers" during the Father's Day campaign, in the pre paid segment, however continuing with the efforts for customer retention, specially the medium and high end ones .

•  The churn at 1.9% remained stable when compared to 3Q04, thus confirming the result of the commercial practices adopted by the company, with the offer of several plans to meet specific customer demands and service quality, client satisfaction and quality services.

•  The blended ARPU of R$ 26.5 recorded a 0.4% increase, remaining almost stable in relation to 2Q05, basically due to the growth in the post-paid outgoing ARPU by 17.8%, impacted by the reduction in the prepaid inbound ARPU resulting from the change in the customer mix, in addition to the partial Bill & Keep effect.

•  The post-paid MOU increased by 10.8% and 5.4% in relation to 2Q05 and 3Q04, respectively, caused by the increase in the post-paid outgoing MOU. On the other hand, the total MOU was impacted by the changes in the customer mix, once the prepaid MOU is impacted by the reduction in the fixed-mobile inbound traffic.

This press release contains forecasts of future events. Such statements are not statements of historical fact, and merely reflect the expectations of the company's management. The terms "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "projects", "aims" and similar terms are intended to identify these statements, which obviously involve risks or uncertainties which may or may not be foreseen by the company. Accordingly, the future results of operations of the Company may differ from its current expectations, and the reader should not rely exclusively on the positions taken herein. These forecasts speak only 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.

 GLOSSARY

Financial Terms:

CAPEX – Capital Expenditure.

Current Capital (Short-term capital) = Current assets – Current liabilities.

Working capital = Current Capital – Net Debt.

Net debt = Gross debt – cash – financial investments – securities – asset from derivative transactions + liability from derivative transactions.

Net Debt / EBITDA – Index which evaluates the Company's ability to pay its debt with the generation of operating cash within a one-year period.

EBIT – Earnings before interest and taxes.

EBITDA – Earnings result before interest. taxes. depreciation and amortization .

Indebtedness = Net Debt / (Net Debt + NE) – Index which measures the Company's financial leverage.

Operating Cash Flow = EBITDA – CAPEX.

EBITDA Margin = EBITDA / Net Operating Revenue.