FOCUS ON THE QUARTER

Focus on the Quarter

Increase of 17.8% in the ADSL accesses in service

Data communication revenue 15.3% higher

Decrease of 4.5% in the Gross Accounts Receivable

Net debt 23.1% lower

Free cash flow of R$521.7 million

EBITDA of R$939.3 million, not considering the non-recurring items

EBITDA margin of 45.3%, not considering the non-recurring items

Highlights

Brasilia, February 12, 2004 – Brasil Telecom Participações S.A. (NYSE: BRP; BOVESPA: BRTP3/BRTP4) announces its consolidated results for the fourth quarter of 2003 (4Q03).

Anatel approved the Brasil Telecom targets certification on January 15, 2004. On January 20, 2004, the Company made public the intention to exercise the call option on MetroRed and Vant. On the 22 nd , following the publication of the amendment to the concession agreements in the Federal Official Journal, Brasil Telecom began to offer inter-regional and international long-distance services.

With the targets certification, Brasil Telecom is also able to launch its mobile operation, which coverage already reaches more than 50% of the metropolitan areas of all Region II capital cities.

The installed plant of Brasil Telecom reached 10,686 thousand lines, an increase of 0.1% and 1.3% in relation to 3Q03 and 4Q02, respectively.

The plant in service achieved 9,851 thousand lines, 0.4% and 4.1% above the amount registered in the 3Q03 and 4Q02, respectively.

The 42 thousand lines in service added in the quarter contributed to the utilization rate growth, which reached 92.2% at the end of December, 0.3 p.p. and 2.4 p.p. above the amount registered in 3Q03 and 4Q02, respectively.

Productivity Ratio stood at 1,871 LIS/employee at the end of 4Q03, against 1,859 in 3Q03. The higher productivity ratio was due to a 0.4% increase in the plant in service combined with a net reduction of 13 employees in 4Q03.

The local traffic remained stable in relation to 3Q03 and DLD traffic grew 2.0% at the same comparison, before excluding the identified frauds.

Brasil Telecom launched BrTurbo Asas , a Wi-Fi technology service that allows high speed Internet access through a wireless network.

Net revenue in 4Q03 reached R$2,073.2 million, a growth of 1.0% and 10.6% in relation to the one observed in 3Q03 and 4Q02, respectively.

Net revenue/Average LIS /month in 4Q03 reached R$70.3, against R$70,0 in 3Q03.

EBITDA of R$939.3 million in 4Q03, not considering the non-recurring items. Thus, EBITDA margin would be 45.3%.

Considering the non-recurring items, EBITDA in the 4Q03 was R$574.3 million and EBITDA margin was 27.7%.

Focus on 12 Months

Increase of 100.4% in the ADSL accesses in service

Net Revenue of 2003 grows 11.9%, reaching R$7.9 billion

Data communication revenue 51.9% higher

EBITDA of R$3,669.1 million, not considering the non-recurring items

Net earnings of R$145.1 million

Net debt is 28.9% lower

Capex in fixed telephony of R$1.3 billion, a reduction of 32,8% in relation to 2002

Free cash flow of R$1,053.5 million in 2003

EBITDA of R$3,669.1 million in 2003 , not considering the non-recurring items. EBITDA margin would be 46.4% at the year .

Considering the non-recurring items related to 4Q03, EBITDA of 2003 was R$3,304.1 million.

Brasil Telecom hedged 66.7% of the debt pegged to exchange variations.

The accumulated debt cost in 2003 is 17.2% or 74.1% of Interbank Domestic Rate for the period.

The financial result in 4Q03 was negative in R$236.2 million, due to the credit of interest on shareholders' equity in the amount of R$98.2 million.

Consolidated net debt was reduced to R$1,833.3 million by the end of December.

The consolidated net debt / shareholder's equity ratio of the Company was 29.4% at the end of 4Q03, against 37.4% at the end of 4Q02.

The dollar-denominated debt represented 4.1% of the total debt, totaling R$156.5 million at the end of 4Q03, including the hedge adjustment.

Free cash flow in the year, taking into account the operating cash flow, excluding investment cash flow and paid interest, was positive at R$1,053.5 million, an increase of 71.2% in relation to 2002.

In 4Q03, Brasil Telecom installed 8.9 thousand lines, ending the year with 10.7 million terminals. In relation to 4Q02, the plant registered an increase of 138.5 thousand lines.

Plant in service totaled 9.9 million lines in 2003, due to the addition of 385.7 thousand lines in the year, representing a growth of 4.1% during 2003. The addition of residential lines accounted for 78.8% of this total amount. Pre-paid lines increased by 29.3% in the year.

During the quarter, Brasil Telecom continued with its policy of not disconnecting defaulting customers at switching centers with idle capacity.

The utilization rate stood at 92.2% in 4Q03, against 89.7% in 4Q02, resulting from the growth of 1.3% in the plant installed, combined with an increase of 4.1% in the plant in service.

Brasil Telecom doubled its ADSL accesses in service in just one year, reaching 281.9 thousand accesses at the end of 2003.

In December 2003, average gross revenue per subscriber reached R$94.0, a 26% growth in relation to the rate registered in December 2002. This growth was a result of the incentive to sell accesses with greater speeds, migration of plans and the tariff adjustment of June.

In 4Q03, Brasil Telecom accomplished all of the quality goals predicted in the General Plan of Quality Targets established by Anatel in relation to the offering of switched fixed telephony service, in long-distance and local segments.

At a meeting held by Anatel’s Board of Directors on January 14 and 15, 2004, Brasil Telecom received approval for the achievement of the universalization targets. At the same occasion, Brasil Telecom received authorization to:

1.

provide local and DLD fixed telephone services in Regions I (Telemar’s Region) and III (Telefonica’s Region), as well as in the sectors 20, 22 and 25 of Region II, corresponding to the operation areas of the concessionaries Sercomtel (Londrina, PR) and CTBC Telecom (partial territories of São Paulo, Minas Gerais, Goiás and Mato Grosso do Sul states);

2.

provide international long distance (ILD) fixed telephone service in Regions I, II and III of the General Concession Plan;

3.

originate DLD calls, through Amendment to the Concession Contracts, to any place within the Brazilian territory;

Regarding the PCS, Anatel authorized Brasil Telecom to use radio frequency for its mobile operation.

Billed local traffic remained stable in comparison to 3Q03. However, due to the ongoing improvement of the ascertainment revenue process and to the implementation of tools aiming at fraud’s detection and elimination, the Company has been carrying out, in a more promptly way, the interruption of that traffic and not considering that in revenues anymore. Due to these measures, local traffic registered a 5.5% drop.

In 4Q03, DLD traffic grew 2.0% in relation to the previous quarter, before excluding the effects of the identified frauds.

The DLD market share of Brasil Telecom in the intra-sector segment reached 89.4% in 4Q03, while in the intra-regional segment Brasil Telecom registered 76.0%.

Fixed-Mobile traffic grew 3.1% in 4Q03, before excluding the effects of the identified frauds. After this effect fixed-mobile traffic totaled 1.0 billion minutes in 4Q03, out of which 91.7% refers to VC-1 calls, 6.7% to VC-2 calls and 1.6% to VC-3 calls.

The recent decision of Higher Justice Court in relation to the rate readjustment did not alter the current situation in relation to the percentages granted and applied on June 29, 2003. It is worth mentioning that the merit of the question has not yet been judged.

Anatel released, on February 09, 2004, the authorized fixed-mobile tariff adjustments. The average adjustments were 6.99% and 9.17% for VC and VU-M, respectively.

In 2003, the main platforms which will be used for the mobile service operation, with emphasis on the prepaid service, voice mail, short messages (SMS), multimedia messages (MMS), data services (WAP, OTA, Middleware) and anti-fraud platforms were defined and contracted.

Brasil Telecom Celular already counts on 146 installed Base Transceiver Stations - BTS, which assures the coverage of more than 50% of the metropolitan area in the ten capital cities of Region II, well over the amount required by Anatel. The minimum coverage required was of at least 50% of the metropolitan area in at least six capital cities in Region II, since there are no cities in the region with more than 500 thousand inhabitants.

The detailing of the mobile strategy was concluded and the bases of the launching offers aimed at attracting and maintaining the clients were outlined. In this stage, innovative and isonomic offers related to the synergy existing between the fixed and mobile operations were enhanced. The first test performed was an offer extended to the employees of Brasil Telecom and their appointees, which were able to acquire accesses with special financing conditions. The offer was successful considering that 11,000 people showed an interest in acquiring postpaid accesses from Brasil Telecom Celular.

Gross revenue from local service reached R$1,165.7 million in 4Q03, a 5.2% increase in relation to 4Q02, basically accompanied by the growth of the average plant in service during the period.

Gross revenue from activation fee totaled R$8.9 million in 4Q03, 48.8% more than the amount registered in 4Q02. This performance is a result of the 480.1 thousand lines activated in the quarter, of which 30% were benefited with promotions.

Gross revenue from basic subscription reached R$748.6 million in the quarter, a growth of 2.9% in comparison to R$727.7 million in 4Q02. This variation can be explained by a 5.2% increase in the average lines in service, compensated by the greater presence of alternative plans.

Gross revenue from measured service totaled R$378.7 million in the 4Q03, an increase of 9.5% in relation to 4Q02, basically due to the tariff readjustment, offset by the effect of frauds.

Gross revenue from public telephony reached R$115.4 million in 4Q03, a 25.0% increase in comparison to 3Q03.

In spite of the stability in card sales for public phones, there was a higher credit usage in Brasil Telecom’ concession area and a CSC 14 supremacy in long distance calls originated in public telephones.

Gross revenue from DLD reached R$377.1 million in 4Q03, representing an increase of 11.0% in comparison with 4Q02 due to the tariff readjustment.

Gross revenue from fixed-mobile calls reached R$613.9 million in 4Q03, a 6.6% increase in relation to 4Q02, explained by the tariff readjustment, partially offset by traffic reduction.

The operation of CSC 14 in the calls originated from cell phones contributed with revenue of R$37.4 million in 4Q03, against R$42.0 million in 3Q03.

In 4Q03, gross revenue from interconnection grew 5.8% in comparison with 3Q03, performance explained by the 21.1% increase in mobile-fixed calls. The mobile plant in Region II grew 14.6% in 4Q03, jumping from 11.3 million accesses in September of 2003 to 13.0 million accesses in December.

In 4Q03, gross revenue from data communication registered a 15.3% increase, reaching R$220.4 million.

The following trends were registered in the quarter:

• Growth of 17.8% in the number of ADSL accesses in service;
• Growth of 8.8% in the number of billed IP dedicated accesses; and
• Growth of 5.4% in the number of billed Frame-Relay accesses.

A year ago, gross revenue from data communication represented 5.4% of total revenue, while in 4Q03 the segment started to represent 7.6% of total gross revenue.

Gross revenue from supplementary and value-added services increased 10.1% in 4Q03, in comparison with 4Q02, totaling R$91.0 million.

In December 2003 there was 5.7 million activated intelligent services, against 4.1 million in December 2002.

In 4Q03, other revenues reached R$39.6 million, a growth of 356.8% in relation to 4Q02, mainly derived from the services offered by iBest and Globenet.

Gross revenue deductions registered R$826.6 million in the 4Q03, representing 28.5% of gross revenue in the quarter, against 28.6% in the 3Q03.

Net operating revenue/Average LIS/month registered in the 4Q03 was R$70.3, against R$70.0 in the 3Q03.

Operating costs and expenses totaled R$2,003.9 million in 4Q03, against R$1,623.4 million in the previous quarter.

Cash cost (operating costs and expenses excluding depreciation, amortization, provisions and losses) was R$1,088.3 million in 4Q03.

At the end of 4Q03, 5,264 employees were working for Brasil Telecom, against 5,277 in the previous quarter. This reduction is a result of the 130 admissions and 165 dismissals which occurred in the period. In addition, 22 employees of Globenet became employees of Brasil Telecom.

Costs and expenses with personnel reached R$145.7 million, due to a change in the profit sharing accounting, reclassified as an operating disbursement.

Excluding the effect of the profit sharing change, the costs and expenses with personnel would have been R$98.3 million, stable in relation to 3Q03.

Brasil Telecom reached a productivity ratio of 1,871 LIS/employee in 4Q03, representing an increase of 0.6% in relation to the presented in 3Q03.

The costs and expenses for third party services, excluding interconnection and advertising & marketing, totaled R$365.1 million in 4Q03.

The R$34.4 million increase in comparison to 3Q03 can basically be explained by higher expenses with: (i) software maintenance; (ii) collection services due to the loss recovery program performed in the quarter; (iii) utilities costs; (iv) maintenance of the data processing plant and equipment; and (v) readjustments related to call center contracts.

Interconnection costs totaled R$461.3 million in 4Q03, stable in relation to the previous quarter.

Expenses with advertising and marketing totaled R$28.3 million in 4Q03, 0.8% lower in comparison to the previous period.

The ratio of Losses with Accounts Receivable with gross revenue for 2003 was stable at 2.7% in relation to 2002. Losses with Accounts Receivable totaled R$298.0 million in 2003.

In 4Q03, gross accounts receivable registered a reduction of R$96.7 million in relation to 3Q03.

Net losses in 4Q03 were lower than those observed in 3Q03 due to the credit recovery campaign promoted in the last quarter. A total of R$26.2 million was recovered in 4Q03 against R$18.1 million in 3Q03.

With basis on the evolution of the balance for installments of accounts receivable, Brasil Telecom noticed that a few defaulting clients, in light of the economic slowdown, were not able to honor the commitments assumed. As a result, the Company increased the provisions for doubtful accounts by R$34.9 million.

By deducting allowance for doubtful accounts worth R$183.0 million, Brasil Telecom’s net receivable accounts totaled R$1,859.7 million at the end of 2003.

In 4Q03, provisions for contingencies totaled R$307.8 million.

According to Brasil Telecom’s legal counsel opinion, contingent liabilities were registered in 4Q03, which amounted to R$245.5 million, related to the operations of the Rio Grande do Sul branch, former Companhia Riograndense de Telecomunicações S.A. - CRT, due to events occurred prior to the acquisition of that company, such as labor, civil and tax proceedings, and court costs and success fees.

The appeals filed in higher courts have not reversed the scenario of such legal proceedings. Besides that, recent court decisions regarding such matters indicate the need for reviewing the risk of loss to “probable”.

Other Operating Costs and Revenues/Expenses totaled R$63.3 million in expenses in 4Q03, a 14.4% reduction in comparison with 3Q03.

EBITDA of Brasil Telecom was R$3,669.1 million in 2003, without considering the non-recurring items. Taking these items into account, Brasil Telecom ended the year of 2003 with an EBITDA of R$3,304.1 million.

EBITDA of 4Q03 would have been R$939.3 million, if the non-recurring items registered in 4Q03 weren’t considered. Thus, EBITDA margin would have been 45.3%.

In 4Q03, Brasil Telecom registered a negative net financial result of R$236.2 million, due to the credit of interest on shareholders’ equity.

The Interest on Shareholder’s Equity of R$98.2 million registered in the financial result of the 4Q03, refers to additional credits relative to fiscal year 2003, approved by Brasil Telecom Participações S.A.’s Board of Directors, on a meeting held o October 31, 2003.

In 4Q03, Brasil Telecom amortized R$31.0 million of reconstituted goodwill referent to the acquisition of CRT (without affecting the cash flow and the distribution of dividends), accounted for as non-operating expenses.

Brasil Telecom booked property, plant & equipment write-offs related to the Rio Grande do Sul branch, former Companhia Riograndense de Telecomunicações S.A. (CRT), as a result of the physical inventory performed for transmission equipment, tools and instruments and multi-pair cables, among others, at the amount of R$302.7 million. Other write-offs, worth R$20.0 million, were added to this amount. These amounts do not represent any disbursement above those already made by the Company.

Net loss of Brasil Telecom Participações totaled R$141.6 million in 4Q03 (-R$0.3971/1,000 shares). Net loss/ADR was -US$0.6792 in 4Q03. Net earnings in 2003 was R$145.1 million due to the non-recurring items.

Net loss adjusted by goodwill totaled R$110.6 million in 4Q03. In 2003, the net earnings adjusted by goodwill was R$269.2 million.

At the end of December, Brasil Telecom’s total consolidated debt was R$3.8 billion, 5.0% less than the amount registered in 3Q03.

Brasil Telecom’s debt had an average accumulated cost for the year of 2003 of 17.2% or 74.1% of CDI (Domestic Interbank Rate).

Net debt totaled R$1,833.3 million, a reduction of 23.1% in relation to September of 2003.

At the end of 4Q03, 55.2% of the total debt was registered in the long term with the following amortization schedule:

At the end of December 2003, the dollar-pegged debt totaled R$156.5 million and the currency basket denominated debt represented R$253.9 million, all the amounts considering their respective hedge adjustments

In 4Q03, Brasil Telecom changed the registering form of hedge contracts, breaking it down according to short and long term foreign currency denominated debt.

On December 31, 2003, Brasil Telecom was hedged for 66.7% of the debt pegged to exchange variation, including the currency basket debt.

On December 31, 2003, Brasil Telecom’s financial leverage, represented by the ratio of its net debt was equal to 29.9%, against 37.4% in September.