Telefônica Brasil (VIV) 20-F 20 Feb 20 2019 FY Annual report (foreign) Financial data

Document and Entity Information

Document and Entity Information	12 Months Ended
	Dec. 31, 2019shares
Document and Entity Information
Entity Registrant Name	TELEFONICA BRASIL S.A.
Entity Central Index Key	0001066119
Document Type	20-F
Document Registration Statement	false
Document Annual Report	true
Entity Interactive Data Current	No
Entity Current Reporting Status	Yes
Document Transition Report	false
Document Shell Company Report	false
Document Period End Date	Dec. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Shell Company	false
Entity Emerging Growth Company	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Common shares
Document and Entity Information
Entity Common Stock, Shares Outstanding	0
Preferred shares
Document and Entity Information
Entity Common Stock, Shares Outstanding	0

Consolidated Balance Sheets

Consolidated Balance Sheets - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
ASSETS
Current assets	R$ 18644678	R$ 18362992
Cash and cash equivalents	3,393,377	3,381,328
Trade accounts receivable	8,719,497	8,304,382
Inventories	578,003	462,053
Income and social contribution taxes recoverable	411,595	274,589
Taxes, charges and contributions recoverable	4,176,362	4,674,218
Judicial deposits and garnishments	277,468	313,007
Prepaid expenses	686,503	581,743
Derivative financial instruments	19,282	69,065
Other assets	382,591	302,607
Non-current assets	89,645,044	84,198,326
Short-term investments pledged as collateral	63,766	76,934
Trade accounts receivable	440,453	426,252
Taxes, charges and contributions recoverable	841,198	3,222,262
Deferred taxes	171,042	230,097
Judicial deposits and garnishments	3,393,417	3,597,007
Prepaid expenses	220,082	134,232
Derivative financial instruments	52,881	26,468
Other assets	235,738	47,105
Investments	104,251	101,657
Property, plant and equipment	42,847,264	34,115,327
Intangible assets	41,274,952	42,220,985
TOTAL ASSETS	108,289,722	102,561,318
LIABILITIES AND EQUITY
Current liabilities	17,732,088	17,160,820
Personnel, social charges and benefits	752,246	782,630
Trade accounts payable	6,871,799	7,642,782
Income and social contribution taxes payable	6,585	12,009
Taxes, charges and contributions payable	1,139,812	1,797,965
Dividends and interest on equity	3,587,417	4,172,916
Provisions and contingencies	374,445	377,929
Deferred income	506,181	525,509
Loans, financing, debentures and leases	4,126,490	1,464,166
Derivative financial instruments	1,921	16,538
Other liabilities	365,192	368,376
Non-current liabilities	20,102,056	13,793,471
Personnel, social charges and benefits	36,028	11,903
Income and social contribution taxes payable	86,512
Taxes, charges and contributions payable	285,055	39,245
Deferred taxes	3,146,453	1,982,952
Provisions and contingencies	5,160,973	5,881,396
Deferred income	211,901	250,526
Loans, financing, debentures and leases	9,698,183	4,675,271
Derivative financial instruments	54,212	22,845
Other liabilities	1,422,739	929,333
TOTAL LIABILITIES	37,834,144	30,954,291
Equity	70,455,578	71,607,027
Capital	63,571,416	63,571,416
Capital reserves	1,165,463	1,213,532
Income reserves	3,492,387	4,324,170
Other comprehensive income accumulated	30,737	29,225
Additional proposed dividends	2,195,575	2,468,684
TOTAL LIABILITIES AND EQUITY	R$ 108289722	R$ 102561318

Consolidated Statements of Inco

Consolidated Statements of Income - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Consolidated Statements of Income
Net operating income	R$ 44268171	R$ 43462740	R$ 43206832
Cost of sales	(22,158,947)	(21,025,767)	(20,272,530)
Gross profit	22,109,224	22,436,973	22,934,302
Operating income (expenses)	(14,895,300)	(12,980,789)	(16,302,065)
Selling expenses	(12,701,222)	(12,832,741)	(13,136,474)
General and administrative expenses	(2,498,096)	(2,598,970)	(2,443,105)
Other operating income	929,498	4,077,003	464,182
Other operating expenses	(625,480)	(1,626,081)	(1,186,668)
Operating income	7,213,924	9,456,184	6,632,237
Financial income	1,132,870	4,112,640	1,755,958
Finance expenses	(1,953,011)	(2,285,487)	(2,659,002)
Equity pickup	752	(5,847)	1,580
Income before taxes	6,394,535	11,277,490	5,730,773
Income and social contribution taxes	(1,393,521)	(2,349,232)	(1,121,983)
Net income for the year	R$ 5001014	R$ 8928258	R$ 4608790
Common shares
Consolidated Statements of Income
Basic and diluted earnings per share	R$ 2.78	R$ 4.96	R$ 2.56
Preferred shares
Consolidated Statements of Income
Basic and diluted earnings per share	R$ 3.06	R$ 5.45	R$ 2.82

Consolidated Statements of Othe

Consolidated Statements of Other Comprehensive Income - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Consolidated Statements of Other Comprehensive Income
Net income for the year	R$ 5001014	R$ 8928258	R$ 4608790
Other comprehensive income (losses) that may be reclassified into income (losses) in subsequent periods	1,523	8,309	9,644
Gains (losses) on derivative financial instruments	(509)	(2,450)	(2,417)
Taxes	173	832	822
Cumulative Translation Adjustments (CTA) on transactions in foreign currency	1,859	9,927	11,239
Other comprehensive income (losses) not to be reclassified into income (losses) in subsequent periods	(132,131)	(63,151)	(113,588)
Unrealized gains ( losses) on financial assets at fair value through other comprehensive income	(17)	(625)	338
Actuarial losses and limitation effect of the assets of surplus plan	(201,660)	(93,491)	(171,296)
Taxes	69,546	30,965	57,370
Other comprehensive losses	(130,608)	(54,842)	(103,944)
Total comprehensive income for the year	R$ 4870406	R$ 8873416	R$ 4504846

Consolidated Statements of Chan

Consolidated Statements of Changes in Equity - BRL (R$) R$ in Thousands	Capital	Special goodwill reserve	Other capital reserves	Treasury shares	Legal reserve	Tax incentive reserve	Expansion and modernization reserve	Retained earnings	Proposed additional dividends	Other comprehensive income accumulated	Total
Equity at beginning of period at Dec. 31, 2016	R$ 63571416	R$ 63074	R$ 1297297	R$ 87790	R$ 1907905	R$ 17069	R$ 550000		R$ 1913987	R$ 11461	R$ 69244419
Payment of additional dividend									(1,913,987)		(1,913,987)
Unclaimed dividends and interest on equity								R$ 101778			101,778
Repurchase of preferred shares				(32)							(32)
Preferred shares delivered referring to the judicial process of expansion plan				2							2
DIPJ adjustment - Tax incentives						10,815		(10,815)
Equity transactions			(59,029)								(59,029)
Other comprehensive income (loss)								(113,811)		9,867	(103,944)
Net income for the year								4,608,790			4,608,790
Allocation of income:
Legal reserve					230,439			(230,439)
Interim interest on equity								(2,416,639)			(2,416,639)
Reversal expansion and Modernization Reserve							(550,000)	550,000
Expansion and Modernization Reserve							297,000	(297,000)
Additional proposed dividends								(2,191,864)	2,191,864
Equity at end of period at Dec. 31, 2017	63,571,416	63,074	1,238,268	(87,820)	2,138,344	27,884	297,000		2,191,864	21,328	69,461,358
Effects of the initial adoption of IFRS 9 and 15, net of taxes								(138,663)			(138,663)
Equity at end of period at Jan. 01, 2018	63,571,416	63,074	1,238,268	(87,820)	2,138,344	27,884	297,000	(138,663)	2,191,864	21,328	69,322,695
Equity at beginning of period at Dec. 31, 2017	63,571,416	63,074	1,238,268	(87,820)	2,138,344	27,884	297,000		2,191,864	21,328	69,461,358
Effects of the initial adoption of IFRS 9 and 15, net of taxes											(138,663)
Payment of additional dividend									(2,191,864)		(2,191,864)
Unclaimed dividends and interest on equity								152,770			152,770
DIPJ adjustment - Tax incentives						11,529		(11,529)
Equity transactions			10								10
Other comprehensive income (loss)								(62,739)		7,897	(54,842)
Net income for the year								8,928,258			8,928,258
Allocation of income:
Legal reserve					446,413			(446,413)
Interim interest on equity								(4,550,000)			(4,550,000)
Reversal expansion and Modernization Reserve							(297,000)	297,000
Expansion and Modernization Reserve							1,700,000	(1,700,000)
Additional proposed dividends								(2,468,684)	2,468,684
Equity at end of period at Dec. 31, 2018	63,571,416	63,074	1,238,278	(87,820)	2,584,757	39,413	1,700,000	0	2,468,684	29,225	71,607,027
Payment of additional dividend									(2,468,684)		(2,468,684)
Unclaimed dividends and interest on equity								82,898			82,898
DIPJ adjustment - Tax incentives						18,166		(18,166)
Equity transactions			(48,135)								(48,135)
Other			66								66
Other comprehensive income (loss)								(132,120)		1,512	(130,608)
Net income for the year								5,001,014			5,001,014
Allocation of income:
Legal reserve					250,051			(250,051)
Interim interest on equity								(3,588,000)			(3,588,000)
Reversal expansion and Modernization Reserve							(1,700,000)	1,700,000
Expansion and Modernization Reserve							600,000	(600,000)
Additional proposed dividends								(2,195,575)	2,195,575
Equity at end of period at Dec. 31, 2019	R$ 63571416	R$ 63074	R$ 1190209	R$ 87820	R$ 2834808	R$ 57579	R$ 600000	R$ 0	R$ 2195575	R$ 30737	R$ 70455578

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities
Income before taxes	R$ 6394535	R$ 11277490	R$ 5730773
Adjustment for:
Depreciation and amortization	10,919,792	8,368,623	7,853,734
Foreign exchange on loans and derivative financial instruments	(5,271)	30,664	57,832
Indexation accruals on assets and liabilities	518,833	801,912	543,852
Equity pickup	(752)	5,847	(1,580)
Losses (gains) on write-off/sale of assets	(329,603)	(63,881)	(74,337)
Impairment losses - trade accounts receivable	1,682,348	1,533,660	1,481,015
Change in liability provisions	(116,717)	(80,333)	(93,479)
Write-off and reversals for impairment - inventories	(95,988)	(45,223)	(45,089)
Pension plans and other post-employment benefits	56,012	52,885	31,511
Provisions for tax, civil, labor and regulatory contingencies	625,480	1,098,251	999,419
Interest expense	782,921	497,797	926,220
Other	(143,208)	(14,089)	(8,737)
Changes in assets and liabilities
Trade accounts receivable	(2,078,801)	(1,603,002)	(1,274,181)
Inventories	(15,843)	(68,127)	106,393
Taxes recoverable	87,550	(5,849,648)	(330,398)
Prepaid expenses	(188,641)	41,166	11,051
Other assets	70,265	(20,225)	82,109
Personnel, social charges and benefits	(13,303)	47,870	(42,830)
Trade accounts payable	286,513	1,056,817	121,577
Taxes, charges and contributions	1,872,920	223,059	180,915
Provisions for tax, civil, labor and regulatory contingencies	(1,727,178)	(3,928,925)	(1,592,860)
Other liabilities	(11,477)	(249,571)	(472,771)
Total adjustments	12,175,852	1,835,527	8,459,366
Cash generated from operations	18,570,387	13,113,017	14,190,139
Interest paid	(746,986)	(494,931)	(859,586)
Income and social contribution taxes paid	(102,205)	(676,659)	(689,493)
Net cash generated by operating activities	17,721,196	11,941,427	12,641,060
Cash flows from investing activities
Additions to PP&E, intangible assets and others	(8,838,641)	(8,517,458)	(8,367,660)
Proceeds from sale of assets	698,643	9,053	20,672
Cash paid for acquisition of companies, net of cash acquired	(70,844)		(206,649)
Cash received from sale of investments		10	31,804
Redemption net of judicial deposits	277,894	2,832,062	83,500
Cash and cash equivalents by acquisition	5,760
Other			111
Net cash used in investing activities	(7,927,188)	(5,676,333)	(8,438,222)
Cash flows from financing activities
Payment of loans, financing, debentures and leases	(3,696,660)	(2,893,219)	(4,485,495)
Loans and financing raised			3,055,876
Receipts - derivative financial instruments	192,124	181,117	107,846
Payments - derivative financial instruments	(100,581)	(85,124)	(267,254)
Dividend and interest on equity paid	(6,176,842)	(4,136,878)	(3,668,551)
Treasury shares			(32)
Net cash used in financing activities	(9,781,959)	(6,934,104)	(5,257,610)
Increase (decrease) in cash and cash equivalents	12,049	(669,010)	(1,054,772)
Cash and cash equivalents at beginning of the year	3,381,328	4,050,338	5,105,110
Cash and cash equivalents at end of the year	R$ 3393377	R$ 3381328	R$ 4050338

OPERATIONS

OPERATIONS	12 Months Ended
	Dec. 31, 2019
OPERATIONS
OPERATIONS	1) OPERATIONS a) Background information Telefônica Brasil S.A. (the “Company” or “Telefônica Brasil”) is a publicly-held corporation whose corporate purpose includes operating telecommunications services; development of activities necessary or complementary to the execution of such services, in accordance with the concessions, authorizations and permissions granted; exploration of value-added services; offering of integrated solutions, management and provision of services related to: (i) data centers, including hosting and co-location; (ii) storage, processing and management of data, information, texts, images, videos, applications and information systems and similar; (iii) information technology; (iv) information and communication security; (v) telecommunications; and (vi) electronic security systems; licensing and sublicensing of software of any nature, among others. The Company’s principal offices are located at 1376, Engenheiro Luis Carlos Berrini Avenue, in the city and state of São Paulo, Brazil. It is a member of the Telefónica Group (“Group”), based in Spain and operates in several countries across Europe and Latin America. On December 31, 2019 and 2018, Telefónica S.A. (“Telefónica”), the Group holding company, held a total direct and indirect interest in the Company of 73.58% (Note 23). The Company is registered with the Brazilian Securities Commission ("CVM") as a publicly held company under Category A (issuers authorized to trade any marketable securities). Its shares are traded on the B3. The Company is also registered with the Securities and Exchange Commission ("SEC"), of the United States of America, and its American Depositary Shares ("ADSs") Level II, backed preferred shares are traded on the New York Stock Exchange ("NYSE"). b) Operations The Company renders services for: (i) Fixed Switched Telephone Service Concession Arrangement ("STFC"); (ii) Multimedia Communication Service ("SCM", data communication, including broadband internet); (iii) Personal Mobile Service ("SMP"); and (iv) Conditioned Access Service ("SEAC" - Pay TV), throughout Brazil, through concessions and authorizations, in addition to other activities. Service concessions and authorizations are granted by Brazil's Telecommunications Regulatory Agency ("ANATEL"), the agency responsible for the regulation of the Brazilian telecommunications sector under the terms of Law No. 9472 of July 16, 1997 - General Telecommunications Law ("Lei Geral das Telecomunicações" - LGT). In accordance with the STFC service concession agreement, every two years, during the agreement's 20-year term to December 31, 2025, the Company will pay a fee equivalent to 2% of its prior-year STFC revenue, net of applicable taxes and social contribution taxes (Note 22). With the sanction of Law No. 13.879 / 2019, the terms of authorization to use radio frequencies associated with the SMP may be extendable for successive periods - until then, a single renewal with a validity of up to 15 years was allowed. The extension of these terms is granted against payment. Currently, every two years after the first renewal of these agreements, the Company will pay a fee equivalent to 2% of its prior-year SMP revenue, net of applicable taxes and social contribution taxes (Note 22), and for certain terms, in the 15th year, the Company will pay 1% of its prior-year revenue. The calculation will consider the net revenue from Basic and Alternative Services Plans (Note 22). The Company's authorization terms ("TA") for the operation of SMP, according to the SMP General Authorization Plan ("PGA"), are: (i) Region I - TA n. 078/2012 / PVCP / SPV-ANATEL; (ii) Region II - TA n ° 005/2010 / PVCP / SPV-ANATEL; and (iii) Region III - TA n ° 006/2010 / PVCP / SPV-ANATEL. The terms of authorization for the use of the radio frequency bands are granted based on the results obtained in the respective radio frequency auction conducted by ANATEL. The following is a summary of the authorizations for use of radio frequency bands, granted to the Company, according to the terms of authorization to operate the service in each region. Radiofrequency Band (MHz) License Expiration (Year) 450 MHz 14 2027 700 MHz 20 2029 800 MHz 25 2020-2028 900 MHz 5 2020-2023 1800 MHz 20-50 2020-2023 2100 MHz 20-30 2023 2500 MHz 40-60 2027-2031 c) Corporate events that occurred in 2019 and 2018 c.1) Acquisition of TIS by Wholly Owned Subsidiary - 2019 On September 26, 2019, the Company announced that its wholly-owned subsidiary Terra Networks Brasil S.A. ("Terra Networks") had acquired all the shares representing the capital stock of Telefônica Infraestrutura e Segurança Ltda. ("TIS"), owned by Telefônica Ingeniería de Seguridad S.A. and Telefônica Digital Espanã, S.L.U. ("Transaction"). TIS renders services and technology of information security systems, technical support and other services related to the infrastructure, technology and information. The Transaction will enable Terra Networks, which includes among its activities the development of systems, to expand consulting and operational assistance, maximize commercialization of systems, licenses and applications, enabling the expansion of the portfolio of professional and managed services and the allow for the integration of the TIS and Terra Networks business offerings generating added value for the Company's client portfolio. Synergies will accrue from the companies as these are under the same management, in the activities of information technology, security, IoT and connectivity. The TIS share price purchase consideration was R$70,844, due in a single installment. This was paid in cash by Terra Networks without need of financing. The purchase price was calculated based on the economic value of the TIS on the discounted cash flow criterion, at August 31, 2019, based on an appraisal report contracted by Terra Networks' Board of Directors. The sale and purchase agreement contain terms and provisions common to such transactions, such as seller's representations and warranties, indemnity and others. The Transaction was also preceded by an accounting, financial, legal and procedural audit of TIS. Completion of the Transaction is not subject to regulatory or regulatory authorizations, or approvals by Company bodies. It was approved by Terra Networks' Board of Executive Officers pursuant to its by-laws. The Transaction does not change the Company's ownership structure or cause any dilution to its shareholder value by accelerating their growth and increasing operational efficiency. This Transaction, which involves companies under common control, was accounted for at the book value of the net assets acquired ("Predecessor Value Method"), as certain requirements for the use of the acquisition method set forth in IFRS 3 (R). Consequently, the difference between the consideration given in exchange for the equity interest obtained and the value of the net assets acquired was recorded in Terra Network's equity. Upon completion of the Transaction, as from September 1, 2019, TIS became a direct subsidiary of Terra Networks and indirectly owned by the Company. c.2) Corporate Restructuring - 2018 At the Extraordinary General Meeting ("AGE") held on November 30, 2018, the corporate restructuring was approved, with the merger of the wholly owned subsidiary Telefônica Data SA ("TData") by the Company, with operational effects as from December 1, 2018. TData was a subsidiary of the Company based in Brazil, whose purpose was to provide services, including, without limitation, the provision of audio, video, image and text content, applications and the like, exploration of integrated solutions and the provision of value-added services. TData was the parent company of Telefônica Transportes e Logística Ltda. ("TGLog"), which exploits logistics activity; the administration and operation of general and customs warehouses throughout the national territory, among other logistics activities and of Terra Networks Brasil SA ("Terra Networks"), which provides digital services (value-added services ("SVA") and third parts and carrier billing, as well as mobile channels for sales and relationship) and advertising, with both companies headquartered in Brazil. The TData merger had the objective of standardizing the rendering of services, simplifying the Group current organizational and corporate structure, and assisting in the integration of the Company's business with TData .

BASIS OF PREPARATION AND PRESEN

BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS	12 Months Ended
	Dec. 31, 2019
BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS
BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS	2) BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS a) Statement of compliance The consolidated financial statements were prepared and are presented in accordance with the International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). b) Basis of preparation and presentation The financial statements were prepared on a historical cost basis (except where different criteria are required) and adjusted to reflect the valuation of assets and liabilities measured at fair value or considering the mark-to-market valuation when such valuations are required by IFRS. The Statement of Cash Flows was prepared in accordance with IAS 7 - Statement of Cash Flows and reflects the changes in cash that occurred in the years presented using the indirect method. Assets and liabilities are classified as current when it is probable that their realization or settlement will occur in the next 12 months. Otherwise, they are classified and shown as non-current. The only exception relates to the balances of deferred tax assets and liabilities, which are classified and fully shown as non-current. The Board of Directors authorized the issue of these individual and consolidated financial statements at the meeting held on February 14, 2020. c) Functional and reporting currency The Company’s financial statements for the years ended December 31, 2019, 2018 and 2017 are presented in thousands of Brazilian Real/Reais (R$), unless otherwise stated. The Company’s functional and reporting currency is the Brazilian Real. Transactions in foreign currency are translated into Brazilian Reais as follows: (i) assets, liabilities and shareholders' equity (excluding capital stock and capital reserves) are translated at the closing exchange rate on the balance sheet date; (ii) expenses and revenues are translated at the average exchange rate, except for specific transactions that are converted by the transaction date rate; and (iii) the capital stock and capital reserves are converted at the transaction date rate. Gains and losses from the conversion of investments abroad are recognized in the statement of comprehensive income. Gains and losses from the translation of monetary assets and liabilities between the exchange rate prevailing at the date of the transaction and the year-end closing (except for the conversion of investments abroad) are recognized in the statement of income. d) Basis of consolidation Interest held in subsidiaries or joint ventures is measured under the equity method in the individual financial statements. In the consolidated financial statements, investments and all asset and liability balances, revenues and expenses arising from transactions and interest held in subsidiaries are fully eliminated. Investments in joint ventures are measured under the equity method in the consolidated financial statements. On December 31, 2019 and 2018, the Company holds direct equity interests in subsidiaries and joint ventures. Selected information on the Company's investees is as follows: Investees Type of investment Equity interests Country (Headquarters) Core activity Terra Networks Brasil S.A. ("Terra Networks") Subsidiary 100.00 % Brazil Telecommunications Telefônica Transportes e Logística Ltda ("TGLog") Subsidiary 99.99 % Brazil Transports and logistics POP Internet Ltda ("POP") Subsidiary 99.99 % Brazil Internet Aliança Atlântica Holding B.V. ("Aliança") Joint venture 50.00 % Brazil Telecommunications sector holdings Companhia AIX de Participações ("AIX") Joint venture 50.00 % Holland Operation of underground telecommunications networks Companhia ACT de Participações ("ACT") Joint venture 50.00 % Brazil Technical assistance in telecommunication networks Terra Networks: The Company's direct and wholly-owned subsidiary on December 1, 2018 (Note 1 c.1), with headquarters in Brazil, has the purpose of providing digital services (own value-added services ("VAS") and third parties and carrier billing, as well as mobile channels for sales and relationship) and advertising. Since September 1, 2019, Terra Networks became the direct parent company of TIS (Note 1 c.1), a company headquartered in Brazil, engaged in the exploration and provision of services and technology, information security systems, technical support and other services related to the infrastructure, technology and information. TGLog: The Company's direct subsidiary on December 1, 2018 (Note 1 c.2), with its head office in Brazil, has as its object the provision of logistics activities; and the administration and operation of general and customs warehouses throughout the national territory, among other logistics activities. POP: The Company's direct subsidiary with headquarters in Brazil, is engaged in the performance of activities related to information technology, internet and any other networks; hosting services and the commercial operation of websites and portals; handling, provision and storage of information and data; sale of software, hardware, telecommunication equipment and electronics; development, licensing and maintenance of information systems and routines; development of electronic commerce; creation and administration of own and/or third-party databases; sale of publicity and advertising and, banner vehicles; and holding interest in other companies as member or shareholder, and may also form consortia and/or other forms of association. POP is the direct parent of Innoweb Ltda ("Innoweb"), whose business purpose is to operate as an internet provider; performing information activities; all forms of telecommunications activities, including the transmission of voice, data and information; sale of telecommunications and electronic equipment and/or accessories; and holding interest in other companies as member or shareholder, and may also form consortia and/or other forms of association. Aliança: Joint venture, headquartered in Amsterdam, Netherlands, with 50% interest held by the Company, this entity is engaged in the acquisition and management of subsidiaries, and holding interest in companies of the telecommunications industry. AIX: Joint venture, headquartered in Brazil, with 50% interest held by the Company, this entity is engaged in holding interest in Consórcio Refibra, and in performing activities related to the direct and indirect operation of activities associated with the construction, completion and operation of underground networks for optical fiber ducts. ACT: Joint venture, headquartered in Brazil, with 50% interest held by the Company, this entity is engaged in holding interest in Consórcio Refibra, and in performing activities related to the rendering of technical support services for the preparation of projects and completion of networks, by means of studies required to make them economically feasible, and monitor the progress of Consortium-related activities. e) Segment reporting Business segments are defined as components of a company for which separate financial information is available and regularly assessed by the operational decision-making professional in definition of how to allocate funds to an individual segment and in the assessment of segment performance. Considering that: (i) all officers and managers' decisions are based on consolidated reports; (ii) the Company and its subsidiaries’ mission is to provide their customers with quality telecommunications services; and (iii) all decisions related to strategic planning, finance, purchases, short- and long-term investments are made on a consolidated basis, the Company and its subsidiaries operate in a single operating segment, namely the provision of telecommunications services. f) Significant accounting practices Significant and relevant accounting policies for the understanding of the basis of recognition and measurement applied in the preparation of the Company's financial statements are included in the respective notes to which they refer. The accounting policies adopted in the preparation of the consolidated financial statements for the year ended December 31, 2019 are consistent with those used in the preparation of the consolidated annual financial statements for the year ended December 31, 2018, except for the changes required by the new pronouncements, interpretations and amendments approved for the IASB, which came into effect as of January 1, 2019, as follows: Standards and amendments Improvements to IFRS Standards 2015-2017 Cycle IFRS 16 Leases IFRIC 23 Uncertainty over Income Tax Treatments Amendments to IFRS 9 Prepayment Features with Negative Compensation Amendments to IAS 19 Plan Amendment, Curtailment or Settlement Amendments to IAS 28 Long-term Interest in associates and Joint Ventures The adoption of these standards, changes and interpretations did not have any significant impact on the consolidated financial statements in the initial adoption period, except for the purposes of IFRS 16 and IFRIC 23, which had significant impacts on the individual and consolidated financial position at the time of their adoption and prospectively. The Company does not anticipate the early adoption of any pronouncement, interpretation or amendment that has been issued, before application is mandatory. IFRS 16 Leases IFRS 16 requires lessees to recognize assets and liabilities arising from all leases (except for short-term leases and leases of low-value assets) in the statement of financial position. The Company is a lessee under a significant number of leases for various assets, such as towers and the respective land where they are located, circuits, offices, stores and commercial real estate. The Company concluded its assessment of the impact of this new standard for such contracts. This analyze included an estimate of the lease term, based on the non-cancellable period and the periods covered by options to extend the lease when exercise is at the sole discretion of the Company and where such exercise is reasonably certain. This depends, to a large extent, on the specific facts and circumstances applicable to the main class of assets in the telecom industry (technology, regulation, competition, business model, among others). The Company adopted assumptions to calculate the discount rate, which was based on the incremental borrowing rate of interest over the estimated term. The Company has not separately recognized non-lease components from lease components for those classes of assets in which non-lease components are not material with respect to the total value of the lease. The standard allows for two transition methods: retrospectively for all periods presented, or a modified retrospective approach that the cumulative effect of adoption is recognized on the date of initial application. The Company has adopted the modified retrospective approach as a practical expedient that allows it to avoid having to re-evaluate whether a contract is or contains a lease on the date of the initial adoption of IFRS 16. It will directly apply the new requirements to all contracts that, under the current standard, have been identified as leasing contracts. Certain assumptions are permitted to be adopted on the first application in connection with the right to use, asset measurement, discount rates, impairment, leases that terminate within 12 months from the date of first adoption, direct start-up costs, and contract term of leasing. Accordingly, the Company opted to adopt the following practical transition expedients to the new criteria: (i) use of a common discount rate for groups of contracts with similar characteristics in terms of term, contract object, currency and economic environment; (ii) non-requirement to adopt the new criteria for contracts that expire in 12 months from the date of the initial adoption; and (iii) exclusion of initial direct costs from the initial valuation of the rights-of-use assets on the date of the initial adoption. Because of the number of contracts affected, as well as the high monetary value of future lease commitments, the adoption of IFRS 16 by the Company has had a significant impact on its financial information as of the date of its adoption (January 1, 2019), including recognition of the balance of the rights-of-use assets (Note 12) and their corresponding lease obligations (Note 19) for most of the contracts. The following are the effects of the initial adoption of IFRS 16 on January 1, 2019: Nominal value payable 9,999,696 Unrealized financial expenses (1,381,624) Present value payable 8,618,072 Current 1,711,092 Non-current 6,906,980 Initial adoption effects: Property, plant and equipment (Note 12) 8,618,072 Loans, financing, debentures and leases (Note 20) 8,618,072 The amortization of rights-of-use assets and the recognition of interest costs over the lease obligation in the statement of incomes replaced the amounts recognized as operating lease expenses in accordance with the lease standards. The classification of lease payments in the statement of cash flows is also affected by the requirements of the new lease standard. To facilitate the understanding and comparability of information, the Company discloses in Note 34 the consolidated income statement for the year ended December 31, 2019, excluding the effects of adopting IFRS 16. IFRIC 23 - Uncertainties over Income Tax Treatments IFRIC 23 (Uncertainty about income tax treatment) deals with the accounting of income tax when tax treatments involve uncertainties that affect the application of IAS 12. This interpretation clarifies that the approach that best predicts the resolution of uncertainty must be followed and specifically addresses the assumptions an entity makes about the examination of tax treatments by tax authorities and how an entity determines taxable profit, tax base, tax losses and unused tax credits and tax rates, where there is uncertainty about the treatment of the tax income. With the application of these requirements, on January 1, 2019, the Company carried out an asset reclassification in the amount of R$68,945 between the groups "Provisions and Contingencies" and "Income Tax and Social Contribution to be collected" (notes 7 and 19). Amendments to IFRS 9 - Prepayment Features with Negative Compensation Under IFRS 9, a debt instrument can be measured at amortised cost or at fair value through other comprehensive income, provided that the contractual cash flows are ‘solely payments of principal and interest on the principal amount outstanding’ (the SPPI criterion) and the instrument is held within the appropriate business model for that classification. The amendments to IFRS 9 clarify that a financial asset passes the SPPI criterion regardless of the event or circumstance that causes the early termination of the contract and irrespective of which party pays or receives reasonable compensation for the early termination of the contract. Amendments to IAS 19 - Plan Amendment, Curtailment or Settlement The amendments to IAS 19 specify that when a plan amendment, curtailment or settlement occurs during the annual reporting period, an entity is required to: · Determine current service cost for the remainder of the period after the plan amendment, curtailment or settlement, using the actuarial assumptions used to remeasure the net defined benefit liability (asset) reflecting the benefits offered under the plan and the plan assets after that event. · Determine net interest for the remainder of the period after the plan amendment, curtailment or settlement using: the net defined benefit liability (asset) reflecting the benefits offered under the plan and the plan assets after that event; and the discount rate used to remeasure that net defined benefit liability (asset). The amendments also clarify that an entity first determines any past service cost, or a gain or loss on settlement, without considering the effect of the asset ceiling. This amount is recognized in profit or loss. An entity then determines the effect of the asset ceiling after the plan amendment, curtailment or settlement. Any change in that effect, excluding amounts included in the net interest, is recognized in other comprehensive income . Amendments to IAS 28 - Long-term interests in associates and joint ventures The amendments clarify that an entity applies IFRS 9 to long-term interests in an associate or joint venture to which the equity method is not applied but that, in substance, form part of the net investment in the associate or joint venture (long-term interests). This clarification is relevant because it implies that the expected credit loss model in IFRS 9 applies to such long-term interests. The amendments also clarify that, in applying IFRS 9, an entity does not take account of any losses of the associate or joint venture, or any impairment losses on the net investment, recognized as adjustments to the net investment in the associate or joint venture that arise from applying IAS 28 Investments in Associates and Joint Ventures. Annual Improvements to IFRS Standards 2015-2017 Cycle This text includes a number of improvements to existing IFRSs, mainly to eliminate inconsistencies and clarify the wording of some of these standards. IFRS 3 Business Combinations The amendments clarify that, when an entity obtains control of a business that is a joint operation, it applies the requirements for a business combination achieved in stages, including remeasuring previously held Interests in the assets and liabilities of the joint operation at fair value. In doing so, the acquirer remeasures its entire previously held interest in the joint operation. IFRS 11 Joint Arrangements A party that participates in, but does not have joint control of, a joint operation might obtain joint control of the joint operation in which the activity of the joint operation constitutes a business as defined in IFRS 3. The amendments clarify that the previously held interests in that joint operation are not remeasured. IAS 12 Income Taxes The amendments clarify that the income tax consequences of dividends are linked more directly to past transactions or events that generated distributable profits than to distributions to owners. Therefore, an entity recognises the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity original recognized those past transactions or events. IAS 23 Borrowing Costs The amendments clarify that an entity treats as part of general borrowings any borrowing originally made to develop a qualifying asset when substantially all of the activities necessary to prepare that asset for its intended use or sale are complete. New IFRS pronouncements, issues, amendments and interpretations of the IASB In addition to the previously issued and amended standards, at the date of preparation of these financial statements, the following issues and changes in IFRS and IFRICs had been published but were not mandatory. Mandatory application: annual periods Standards and amendments beginning on or after Amendments to References to the Conceptual Framework in IFRS Standards January 1, 2020 Amendments to IFRS 3 Definition of a Business January 1, 2020 Amendments to IAS 1 and IAS 8 Definition of Material January 1, 2020 IFRS 17 Insurance Contracts January 1, 2021 The adoption of these standards, amendments and interpretations will not have a significant impact on the consolidated financial statements in the initial period of adoption. The Company does not anticipate the early adoption for the year ended December 31, 2019 of any pronouncement, interpretation or amendment that has been issued before application is mandatory. g) Significant accounting judgments estimates and assumptions The preparation of the financial statements requires the use of certain critical accounting estimates and the exercise of judgment by the Company's management in applying its accounting policies. These estimates are based on experience, knowledge, information available at the end of the year, and other factors, including expectations of future events that are believed to be reasonable in the circumstances. Actual results involving these estimates could differ in values from those recorded in the financial statements due to the criteria inherent in the estimation process. The Company reviews its estimates at least annually. The significant and relevant estimates and judgments applied by the Company in the preparation of these financial statements are presented in the following notes: trade accounts receivable (Note 4); income and social contribution taxes (Note 7); property, plant and equipment (Note 12); intangible assets (Note 13); provision and contingencies (Note 19); net operating income (Note 24); pension plans and other post-employment benefits (Note 30); and financial instruments and risk and capital management (Note 31).

CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS	12 Months Ended
	Dec. 31, 2019
CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS	3 ) CASH AND CASH EQUIVALENTS a) Accounting policy These are financial assets classified at amortized cost or measured at fair value through profit or loss maintained in order to meet short-term cash commitments and not for investment or other purposes. The Company and its subsidiaries consider cash equivalents a short-term investment readily convertible into a known amount of cash and subject to insignificant risk of change in value. Short-term investments are classified as cash equivalents when redeemable within 90 days. b) Breakdown Cash and banks 250,168 205,598 Short-term investments 3,143,209 3,175,730 Total 3,393,377 3,381,328 Highly liquid short-term investments basically comprise Bank Deposit Certificates (“CDB”) and Repurchase Agreements with first tier rated financial institutions, indexed to the Interbank Deposit Certificate (“CDI”) rate, with original maturities of up to three months, and with immaterial risk of change in value. Income from these investments are recorded as financial income.

TRADE ACCOUNTS RECEIVABLE

TRADE ACCOUNTS RECEIVABLE	12 Months Ended
	Dec. 31, 2019
TRADE ACCOUNTS RECEIVABLE
TRADE ACCOUNTS RECEIVABLE	4 ) TRADE ACCOUNTS RECEIVABLE a) Accounting policy These are financial assets measured initially at fair value and subsequently, at amortized cost and are evaluated by the value of the services provided and goods sold in accordance with the contracted conditions, net of estimated impairment losses. These include the services provided to customers, which were still not billed at the balance sheet date, as well as other trade accounts receivable related to the sale of cell phones, SIM cards, accessories, advertising and rent of IT equipment (“Soluciona TI” product). The Company measures the provision for estimated impairment losses in an amount equal to the loss of credit expected for a lifetime. b) Critical estimates and judgments In determining whether the credit risk of a financial asset has increased significantly since the initial recognition and in estimating the expected credit losses, the Company considers reasonable and bearable information that is relevant and available. This includes quantitative and qualitative information and analysis, based on the Company's historical experience, credit assessment and considering forward-looking information. Although the Company believes that the assumptions used are reasonable, the results may be different. c) Breakdown Billed amounts 7,018,601 6,789,257 Unbilled amounts 2,866,196 2,454,810 Interconnection amounts 790,046 835,887 Amounts from related parties (Note 28) 129,904 148,814 Gross accounts receivable 10,804,747 10,228,768 Estimated impairment losses (1,644,797) (1,498,134) Total 9,159,950 8,730,634 Current 8,719,497 8,304,382 Non-current 440,453 426,252 Consolidated balances of non-current trade accounts receivable include: Portion resale of goods to legal entities, receivable within 24 months 182,286 180,065 Portion of accounts receivable from the OI group - Bankruptcy process of companies 89,647 119,365 Soluciona IT product (1) 317,988 293,531 Nominal amount receivable 589,921 592,961 Deferred financial income (48,086) (84,060) Present value of accounts receivable 541,835 508,901 Estimated impairment losses (101,382) (82,649) Net amount receivable 440,453 426,252 (1) There are no unsecured residual values resulting in benefits to the lessor nor contingent payments recognized as revenue for the year. The following are amounts receivable, net of estimated losses for impairment of accounts receivable, by maturity: Falling due 6,862,054 6,485,154 Overdue – 1 to 30 days 966,986 1,096,639 Overdue – 31 to 60 days 306,956 305,019 Overdue – 61 to 90 days 192,622 200,401 Overdue – 91 to 120 days 250,029 220,221 Overdue – over 120 days 581,303 423,200 Total 9,159,950 8,730,634 On December 31, 2019 and 2018, no customer represented more than 10% of trade accounts receivable, net. d) Changes in contractual assets The following table shows the changes in contractual assets (arising from the initial adoption of IFRS 15 on January 1, 2018), in the years ended December 31, 2019 and 2018: Contract assets, gross Provision for losses Contract assets, net Initial adoption on 01.01.18 193,675 (33,196) 160,479 Additions 587,733 (512) 587,221 Amortizations (585,675) — (585,675) Balance on 12.31.18 195,733 (33,708) 162,025 Additions 558,883 (12,486) 546,397 Amortizations (485,108) — (485,108) Balance on 12.31.19 269,508 (46,194) 223,314 e) Changes in estimated losses for impairment The following table shows the changes in estimated losses for impairment of accounts receivable. Balance on 12.31.17 (1,433,471) Initial adoption IFRS 9 on 01.01.18 (364,456) Supplement to estimated losses, net of resersal (Note 25) (1,533,660) Write-offs 1,833,453 Balance on 12.31.18 (1,498,134) Supplement to estimated losses, net of resersal (Note 25) (1,682,348) Write-offs 1,547,577 Business combinations (Note 1 c.1) (11,892) Balance on 12.31.19 (1,644,797)

INVENTORIES

INVENTORIES	12 Months Ended
	Dec. 31, 2019
INVENTORIES
INVENTORIES	5 ) INVENTORIES a) Accounting policy These are evaluated and presented at the lower of average acquisition cost and net realizable value, whichever is lower. These include resale materials such as cellphones, SIM cards, prepaid cards, accessories, consumption materials and maintenance. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs to sell. Estimated impairment losses are set up for materials and devices considered obsolete or whose carrying amounts are in excess of those usually sold by the Company within a reasonable period. Additions and reversals of estimated impairment losses and inventory obsolescence are included in cost of goods sold (Note 25). b) Breakdown Materials for resale 539,822 413,843 Materials for consumption 41,584 61,819 Other inventories 24,115 30,013 Gross total 605,521 505,675 Estimated losses from impairment or obsolescence (27,518) (43,622) Total 578,003 462,053

PREPAID EXPENSES

PREPAID EXPENSES	12 Months Ended
	Dec. 31, 2019
PREPAID EXPENSES
PREPAID EXPENSES	6) PREPAID EXPENSES a) Accounting policy These are stated at amounts effectively disbursed referring to services contracted but not yet incurred. Prepaid expenses are allocated to the statement of incomes to the extent that related services are rendered, and economic benefits are obtained. Includes the amounts of incremental costs related to obtaining a contract (sales commissions and other acquisition costs from third parties), resulting from the adoption of IFRS 15 on January 1, 2018, are amortized over the same period as the revenue associated with that asset. b) Breakdown Advertising and publicity 249,433 252,900 Insurance 20,459 24,867 Rental 184,248 32,792 Software and networks maintenance 33,863 17,485 Incremental costs - IFRS 15 330,919 255,391 Financial charges 30,521 43,853 Personal 30,135 33,970 Taxes and other 27,007 54,717 Total 906,585 715,975 Current 686,503 581,743 Non-current 220,082 134,232

INCOME AND SOCIAL CONTRIBUTION

INCOME AND SOCIAL CONTRIBUTION TAXES	12 Months Ended
	Dec. 31, 2019
INCOME AND SOCIAL CONTRIBUTION TAXES
INCOME AND SOCIAL CONTRIBUTION TAXES	7) INCOME AND SOCIAL CONTRIBUTION TAXES a) Accounting policy a.1) Current taxes Current tax assets and liabilities are measured at the estimated amount recoverable from, or payable to, the tax authorities. The tax rates and laws used in calculating the amounts referred to above are those in effect, or substantially in effect, at year-end. In the balance sheet, current taxes are presented net of prepayments over the year. Current income and social contribution taxes, related to items directly recognized in equity, are also recognized in equity. Management regularly assesses the tax position in circumstances in which tax regulation requires interpretation and sets up provision therefore when appropriate. a.2) Deferred taxes Deferred tax assets are recognized for all deductible temporary differences, unused tax credits and losses, to the extent that taxable profit is likely to be available for realization of deductible temporary differences and unused tax credits and losses are likely to be used, except: (i) when the deferred tax asset related to the deductible temporary difference arises from initial recognition of an asset or liability in a transaction other than a business combination and does not impact, at the transaction date, the book profit, income or loss for tax purposes; and (ii) on deductible temporary differences related to investments in subsidiaries that deferred tax assets are recognized only to the extent that it is probable that temporary differences will be reversed in the near future and taxable profit is likely be available so that temporary differences can be used. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit shall be available to allow all or part of the deferred tax asset to be used. Derecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax liabilities are recognized on all temporary tax differences, except: (i) when the deferred tax liability arises from initial recognition of goodwill, or an asset or liability in a transaction other than a business combination, and does not affect book profit or taxable profit or tax losses on the transaction date; and (ii) on temporary tax differences related to investments in subsidiaries, in which the temporary difference reversal period can be controlled and temporary differences are not likely to be reversed in the near future. Deferred tax assets and liabilities are measured at the tax rate expected to be applicable for the year the asset will be realized, or the liability will be settled, based on the rates provided in tax legislation and that were published as at year-end. Deferred tax assets and liabilities are not discounted to present value and are classified in the balance sheet as non-current, irrespective of their expected realization. The tax effects of items recorded directly in equity are also recognized in equity. Deferred tax items are recognized based on the transaction which gave rise to that deferred tax, in comprehensive income or directly in equity. Deferred tax assets and liabilities are presented net when there is a legal or constructive right to offset a tax asset against a tax liability and deferred taxes relate to the same taxpaying entity and are subject to the same tax authority. b) Critical estimates and judgments There are uncertainties regarding the interpretation of complex tax regulations and the amount and timing of future taxable profits. The Company and its subsidiaries set up provision, based on estimates, for possible consequences of different interpretation by the tax authorities. The amount of this provision is based on various factors, such as previous tax audit experience and different interpretations of tax regulations by the taxable entity and by the relevant tax authority. Such differences in interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the Company or those of its subsidiaries. The Company and its subsidiaries evaluate the recoverability of deferred tax assets based on estimates of future profits. This recoverability ultimately depends on the ability to generate taxable profits over the period in which the deferred tax asset is deductible. The analysis considers the reversal period of deferred tax liabilities, as well as estimates of taxable profits, based on updated internal projections reflecting the latest trends. Determining the proper classification of the tax items depends on several factors, including an estimate of the period and the realization of the deferred tax asset and the expected date of payments of these taxes. The actual flow of receipt and payment of income tax could differ from estimates made by the Company and its subsidiaries, as a result of changes in tax laws or of unexpected future transactions that may have an impact on tax balances. c) Income and social contribution taxes recoverable Income taxes recoverable 380,314 245,883 Social contribution taxes recoverable 31,281 28,706 Total 411,595 274,589 d) Income and social contribution taxes payable Income taxes payable 76,483 8,756 Social contribution taxes payable 16,614 3,253 Total 93,097 12,009 Current 6,585 12,009 Non-current 86,512 — The amount of R$86,512, recorded at the Company and consolidated on December 31, 2019, arises from the initial adoption of IFRIC 23 - Uncertainties over Income Tax Treatment on January 1, 2019 (R$68,945) and its movements during the fiscal year. 2019 (Note 19). e) Deferred taxes Significant components of deferred income and social contribution taxes are as follows: Effects of the initial adoption of Balance on Income Comprehensive IFRS 9 and Balance on Income Comprehensive Balance on statement income IFRS 15 statement income Deferred tax assets (liabilities) Income and social contribution taxes on tax losses (1) 793,933 634,543 — — 1,428,476 51,360 — 1,479,836 Income and social contribution taxes on temporary differences (2) (1,131,850) (2,151,290) 31,797 70,012 (3,181,331) (1,343,635) 69,719 (4,455,247) Provisions for legal, labor, tax civil and regulatory contingencies 2,298,735 (333,035) — — 1,965,700 (275,109) — 1,690,591 Trade accounts payable and other provisions 651,417 (79,683) — — 571,734 (40,393) — 531,341 Customer portfolio and trademarks 254,418 (69,815) — — 184,603 (86,525) — 98,078 Estimated losses on impairment of accounts receivable 434,960 (115,661) — 122,977 442,276 36,354 — 478,630 Estimated losses from modems and other P&E items 200,941 (24,811) — — 176,130 6,869 — 182,999 Pension plans and other post-employment benefits 174,534 20,934 30,753 — 226,221 91,746 69,540 387,507 Profit sharing 110,046 19,643 — — 129,689 (9,695) — 119,994 Licenses (1,636,886) (216,328) — — (1,853,214) (216,330) — (2,069,544) Goodwill (Spanish and Navytree, Vivo Part. and GVTPart.) (3,598,172) (1,002,768) — — (4,600,940) (1,002,768) — (5,603,708) Property, plant and equipment of small value — (395,606) — — (395,606) 107,155 — (288,451) Technological Innovation Law (97,533) 47,406 — — (50,127) 25,562 — (24,565) Other temporary differences (3) 75,690 (1,566) 1,044 (52,965) 22,203 19,499 179 41,881 Total deferred tax assets (liabilities), noncurrent (337,917) (1,516,747) 31,797 70,012 (1,752,855) (1,292,275) 69,719 (2,975,411) Deferred tax assets 5,288,176 5,569,885 5,548,581 Deferred tax liabilities (5,626,093) (7,322,740) (8,523,992) Deferred tax assets (liabilities), net (337,917) (1,752,855) (2,975,411) Represented in the balance sheet as follows: Deferred tax assets 371,408 230,097 171,042 Deferred tax liabilities (709,325) (1,982,952) (3,146,453) (1) Under Brazilian tax legislation these may be offset up to 30% of the annual taxable income but otherwise have no expiry date. (2) Amounts that will be realized upon payment of provision, occurrence of impairment losses for trade accounts receivable, or realization of inventories, as well as upon reversal of other provision. (3) Deferred taxes from other temporary differences, such as deferred income, renewal of licenses, and subsidy on the sale of mobile phones, among others. On December 31, 2019, deferred tax assets (income and social contribution tax losses) were not recognized in the subsidiaries' (Innoweb, TGLog and TIS) accounting records, in the amount of R$54,570(R$12,649 on December 31, 2018), as it is not probable that future taxable profits will be sufficient for offset for these subsidiaries to benefit from such tax credits. Expected realization of deferred taxes, net, non-current. The amounts are based on projections subject to change in the future. Year 2020 1,614,967 2021 550,558 2022 531,585 2023 786,837 2024 654,638 2025 onwards (7,113,996) Total (2,975,411) f) Reconciliation of income tax and social contribution expense The Company and its subsidiaries recognize income and social contribution taxes on a monthly basis, on an accrual basis, and pay taxes based on estimates, as per the tax auxiliary trial balance. Taxes calculated on profits up to the balance sheet date are recorded in liabilities or assets, as applicable. Reconciliation of the reported tax expense and the amounts is calculated by applying the statutory tax rate of 34% (income tax of 25% and social contribution tax of 9%) in the table below for the year ended December 31, 2019, 2018 and 2017. Income before taxes 6,394,535 11,277,490 5,730,773 Income and social contribution tax expenses, at the tax rate of 34% (2,174,142) (3,834,347) (1,948,463) Permanent differences Equity pickup, net of effects from interest on equity received and surplus value of the assets purchased attributed to the Company (Note 11) 256 (1,988) 537 Unclaimed interest on equity (13,825) (14,426) (21,843) Temporary differences in subsidiaries — — 2,007 Non-deductible expenses, gifts, incentives (84,487) (76,671) (94,413) Deferred taxes recognized in subsidiaries on tax loss carryforwards, negative basis and temporary differences referring to prior years — — 132,080 Tax benefit related to interest on equity allocated 879,920 1,547,000 821,657 Other (additions) exclusions (1,243) 31,200 (13,545) Tax debits (1,393,521) (2,349,232) (1,121,983) Effective rate 21.8 % 20.8 % 19.6 % Current income and social contribution taxes (101,246) (832,485) (580,578) Deferred income and social contribution taxes (1,292,275) (1,516,747) (541,405) g) Uncertainties about Income Tax Treatments The Company and its subsidiaries has several assessments filed by the Federal Revenue of Brazil (“RFB”) for alleged undue deductions of expenses, mainly related to the amortization of goodwill, in various administrative instances and in the judicial system, in the amount of R$9,895,728. Management, supported by the position of its legal advisors, understands that a large part of these deductions will probably be accepted in decisions of higher courts of last resort (acceptance probability greater than 50%). For tax treatments in which the Company and its subsidiaries believes that the probability of acceptance by the tax authority is less than 50%, an income tax and social contribution liability was recognized in the amount of R$86,512 (R$69,945 on January 1, 2019), in relation to these actions.

TAXES, CHARGES AND CONTRIBUTION

TAXES, CHARGES AND CONTRIBUTIONS RECOVERABLE	12 Months Ended
	Dec. 31, 2019
TAXES, CHARGES AND CONTRIBUTIONS RECOVERABLE
TAXES, CHARGES AND CONTRIBUTIONS RECOVERABLE	8 ) TAXES, CHARGES AND CONTRIBUTIONS RECOVERABLE State VAT (ICMS) (1) 2,664,499 2,549,006 Withholding taxes and contributions (2) 142,940 129,741 PIS and COFINS (3) 2,125,186 5,000,677 Fistel, INSS, ISS and other taxes 84,935 217,056 Total 5,017,560 7,896,480 Current 4,176,362 4,674,218 Non-current 841,198 3,222,262 (1) Includes ICMS credits from the acquisition of property and equipment, available to offset in 48 months; requests for refund of ICMS paid on invoices that were subsequently cancelled; for the rendering of services; tax substitution; and tax rate difference; among others. Non-current consolidated amounts include credits arising from the acquisition of property and equipment of R$537,209 and R$509,920 on December 31, 2019 and 2018, respectively. (2) Withholding income tax (“IRRF”) credits on short-term investments, interest on equity and others, which are used as deduction in operations for the period and social contribution tax withheld at source on services provided to public agencies. (3) The balances of December 31, 2019 and 2018 include the tax credits of PIS and COFINS plus interest accruals based on the SELIC, in the amounts of R$2,046,274 and R$4,915,139, respectively, arising from the final judicial processes on May 17, 2018 and August 28, 2018, in favor of the Company and its subsidiary, which recognized the right to deduct ICMS from the basis of the calculation of PIS and COFINS contributions for the periods from September 2003 to June 2017 and July 2004 to July 2013, respectively. On December 31, 2019 the remaining current balance was R$2,046,274. On December 31, 2018, current and non-current balances were R$2,520,990 and R$2,394,149, respectively. The Internal Revenue Service filed a review, pursuant to Law 13,670/18, with the purpose of approving the PIS and COFINS credits resulting from the dispute that dealt with the exclusion of ICMS from the bases of these contributions. The Company has made every effort, including judicial measures, to meet in a timely manner the requests of this audit procedure and thus continue offsetting its tax credits. The Company has three other lawsuits of the same nature in progress (including lawsuits of companies that have already been merged - GVT and Telemig), treated as contingent assets, which cover several periods between December 2001 and June 2017, whose ranges of values we estimate between R$1,700 million to R$2,200 million.

JUDICIAL DEPOSITS AND GARNISHME

JUDICIAL DEPOSITS AND GARNISHMENTS	12 Months Ended
	Dec. 31, 2019
JUDICIAL DEPOSITS AND GARNISHMENTS
JUDICIAL DEPOSITS AND GARNISHMENTS	9 ) JUDICIAL DEPOSITS AND GARNISHMENTS When granted suspension of tax liability, judicial deposits are required to be made by law to secure the continuance of the claims under discussion. Judicial deposits are recorded at historical cost-plus legal indexation/interest accruals. Judicial deposits Tax 2,007,074 1,929,594 Labor 316,009 522,201 Civil 1,049,922 1,164,835 Regulatory 261,005 208,447 Total 3,634,010 3,825,077 Garnishments 36,875 84,937 Total 3,670,885 3,910,014 Current 277,468 313,007 Non-current 3,393,417 3,597,007 The table below presents the classified balances on December 31, 2019 and 2018 of the tax judicial deposits (classified by tax). Telecommunications Inspection Fund (FISTEL) 46,167 44,771 Corporate Income Tax (IRPJ) and Social Contribution Tax (CSLL) 575,426 551,937 Universal Telecommunication Services Fund (FUST) 518,372 503,246 Social Contribution Tax for Intervention in the Economic Order (CIDE) 286,270 278,685 State Value-Added Tax (ICMS) 269,483 239,220 Social Security, work accident insurance (SAT) and funds to third parties (INSS) 140,186 141,759 Withholding Income Tax (IRRF) 57,142 55,425 Contribution tax on gross revenue for Social Integration Program (PIS) and for Social Security Financing (COFINS) 34,983 39,672 Other taxes, charges and contributions 79,045 74,879 Total 2,007,074 1,929,594

OTHER ASSETS

OTHER ASSETS	12 Months Ended
	Dec. 31, 2019
OTHER ASSETS
OTHER ASSETS	10) OTHER ASSETS Advances to employees and suppliers 73,849 83,094 Related-party receivables (Note 28) 64,966 120,776 Receivables from suppliers 167,540 114,175 Surplus from post-employment benefit plans (Note 30) (1) 220,939 10,997 Goods for sale (2) 76,912 — Other amounts receivable (3) 14,123 20,670 Total 618,329 349,712 Current 382,591 302,607 Non-current 235,738 47,105 (1) On December 31, 2019, includes the amount of R$209,347, referring to the distribution of the PBS-A surplus (Note 30). (2) Refers to the residual balance of property, plant and equipment available for sale, resulting from the contract entered into by the Company on November 28, 2019, for the sale of 1,909 structures (rooftops and towers) owned by the Company to Telxius Torres Brasil Ltda (note 12). (3) On December 31, 2019, includes a receivable of R$10,226 from a subletting agreement in the Curitiba Data Center, for a period of 22 years. There are no unsecured residual amounts that result in lessor benefits and no contingent payments recognized as income during the year (Note 12). Selected information on subletting agreements on December 31, 2019; Nominal value receivable 16,966 Deferred financial income (6,740) Present value of accounts receivable 10,226 Current 759 Non-current 9,467 Schedule of amounts receivable from the subletting agreement, segregated into nominal values and present value: Nominal value Present value Year receivable receivable 2020 780 759 2021 780 721 2022 780 685 2023 780 651 2024 780 619 2025 onwards 13,066 6,791 Total 16,966 10,226

INVESTMENTS

INVESTMENTS	12 Months Ended
	Dec. 31, 2019
INVESTMENTS
INVESTMENTS	11) INVESTMENTS a) Accounting policy The consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ends when the Company ceases to exercise said control. Assets, liabilities and results of a subsidiary acquired or sold during the year are included in the consolidated financial statements from the date on which the Company obtains control until the date on which the Company ceases to exercise control over the subsidiary. Joint control is the contractually agreed sharing of a control, only existing when decisions about relevant activities call for unanimous agreement by the parties sharing control. Control is obtained when the Company is exposed or has the right to variable returns based on its involvement with the investee and has the capacity of affecting those returns through the power exercised over an investee. Based on the equity method, investments are recorded in balance sheets at cost plus changes after the acquisition of the equity interest. The statement of income reflects the portion of the results of operations of the investees. When changes are directly recognized in the investees' equity, the Company will recognize its portion in variations occurred, and record these variations in the statements of changes in equity and in the statements of comprehensive income, where applicable. The financial statements of investees are prepared for the same reporting period of the Company. Whenever necessary, adjustments are made so that the accounting policies are in accordance with those adopted by the Company. After the equity method is applied, the Company determines whether there is any need to recognize additional impairment of its investment in investees. At each closing date, the Company determines whether there is objective evidence of impairment of investment in the affiliate. If so, the Company calculates the recoverable amount as the difference between the recoverable value of the investees and their carrying amount and recognizes the amount in the statement of incomes. When there is loss of significant influence over the investees, the Company evaluates and recognizes the investment, at that moment, at fair value. Any difference between the investees’ carrying amount by the time it loses significant influence and the fair value of the remaining investment and revenue from sale is recognized in the statement of incomes. Foreign exchange variations in Aliança’s equity (jointly controlled entity) are recognized in the Company’s equity in other comprehensive income (“Effects on conversion of investments abroad”, Note 23). b) Information on investees Selected financial data of the direct investees in which the Company holds an interest and corporate changes are described in Note 1 d. Joint Ventures (Aliança / AIX / ACT) Equity interest 50.00 % 50.00 % Summary of balance sheets: Current assets 221,183 213,481 Non-current assets 10,556 12,327 Total assets 231,739 225,808 Current liabilities 7,140 7,103 Non-current liabilities 16,773 16,101 Equity 207,826 202,604 Total liabilities and equity 231,739 225,808 Investment Book value 103,913 101,302 Joint Ventures (Aliança / AIX / ACT) Summary Statements of Income: Net operating income 45,567 45,608 45,704 Operating costs and expenses (44,325) (58,773) (43,571) Financial income (expenses), net 1,030 1,334 1,713 Income and social contribution taxes (768) 137 (686) Net income (loss) for the year 1,504 (11,694) 3,160 Equity pickup, according to interest held 752 (5,847) 1,580 c) Changes in investments Joint Ventures (Aliança / AIX Other Total / ACT) investments (1) investments Balance on 12.31.17 97,222 1,680 98,902 Equity pick-up (5,847) — (5,847) Provision for losses on investments — (700) (700) Other comprehensive income 9,927 (625) 9,302 Balance on 12.31.18 101,302 355 101,657 Equity pick-up 752 — 752 Other comprehensive income 1,859 (17) 1,842 Balance on 12.31.19 103,913 338 104,251 (1) Other investments are measured at fair value .

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT	12 Months Ended
	Dec. 31, 2019
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT	12) PROPERTY, PLANT AND EQUIPMENT a) Accounting policy It is measured at acquisition and/or construction cost, net of accumulated depreciation and/or accumulated impairment losses, if any. Such cost includes the borrowing costs for long-term construction projects if the recognition criteria are met and is stated net of ICMS (State VAT) credits, which were recorded as recoverable taxes. Asset costs are capitalized until the asset becomes operational. Costs incurred after the asset becomes operational and that do not improve the functionality or extend the useful life of the asset are immediately recognized on an accrual basis. When significant parts of fixed assets are required to be replaced at intervals, the Company recognizes such parts as individual assets with specific useful lives and depreciation. Likewise, expenses that represent asset improvement (expanded installed capacity or useful life) are capitalized. All the other repair and maintenance costs are recognized in the statement of income as incurred. The present value of the expected cost for the decommissioning of property, plant and equipment items (towers and equipment on leased property) is capitalized at the cost of the respective asset matched against the provision for dismantling obligations (Note 19) and depreciated over the useful lives of the related assets, which do not exceed the lease term. Depreciation is calculated by the straight-line method over the useful lives of assets at rates that take into account the estimated useful lives of assets based on technical analyses. The assets’ residual values, useful lives and methods of depreciation are reviewed on a yearly basis, adjusted prospectively, if appropriate. Useful lives in terms of depreciation rates are reviewed annually by the Company. Property, plant and equipment items are written off when sold or when no future economic benefit is expected from their use or sale. Any gains or losses arising from write-off of assets (measured as the difference between the net disposal proceeds and the carrying amount of the asset) are recognized in the statement of income in the year in which the asset is written off. b) Critical estimates and judgments The accounting treatment of investment in fixed assets includes estimating the useful life period for depreciation purposes, particularly for assets acquired in business combinations. Useful life determination requires estimates regarding the expected technological developments and alternative uses of assets. The hypotheses related to the technological aspect and its future development imply a significant level of analysis, considering the difficulties in forecasting the time and nature of future technological changes. An impairment loss exists when the carrying amount of an asset or cash-generating unit (“CGU”) exceeds its recoverable amount, which is the higher of fair value less costs to sell and value in use. The calculation of fair value less costs to sell is based on available information from sales transactions of similar assets or market prices less additional costs to dispose of the asset. The calculation of the value in use is based on the discounted cash flow model. The recoverable amount is sensitive to the discount rate used in the discounted cash flow method, as well as the expected future cash receipts and the growth rate used for extrapolation purposes. The Company periodically reviews the performance of the defined CGU in order to identify a possible devaluation. The determination of the recoverable value of the CGU also includes the use of assumptions and estimates and requires a significant degree of judgment and criterion. c) Breakdown and changes We present a brief description of the main items that make up fixed assets and their movements. · Switching and transmission media equipment: Includes switching and control centers, gateway, platforms, base radio station, microcells, minicells, repeaters, antennas, radios, access networks, concentrators, cables, TV equipment and other switching and transmission media equipment. · Terminal/modem equipment: Includes cellphones and modems (rent and free lease), CPCT, public telephones and other terminal equipment. · Infrastructure: This includes buildings, elevators, central air conditioning equipment, towers, posts, containers, energy equipment, land piping, support and protectors, leasehold improvements, etc. · Other fixed asset items: These include vehicles, repair and construction tools and instruments, telesupervision equipment, IT equipment, testing and measurement equipment, fixtures and other goods for general use. Assets and Switching and Terminal facilities transmission equipment / Estimated under equipment modems Infrastructure Land Other P&E losses (1) construction Total Balances and changes: Balance on 12.31.17 22,809,109 2,724,332 3,885,297 314,353 830,452 (228,052) 2,886,825 33,222,316 Additions 10,670 129,640 101,798 550 204,041 (8,975) 6,527,074 6,964,798 Write-offs, net (45,719) (1,721) (8,461) (71) (2,926) 80,135 (61,430) (40,193) Net transfers 5,380,744 1,098,380 449,369 — 124,772 — (7,239,573) (186,308) Depreciation (Note 25) (3,486,592) (1,379,547) (658,915) — (320,232) — — (5,845,286) Balance on 12.31.18 24,668,212 2,571,084 3,769,088 314,832 836,107 (156,892) 2,112,896 34,115,327 Initial adoption IFRS 16 effects 91,836 — 8,526,236 — — — — 8,618,072 Additions 114,517 142,975 1,790,185 — 258,854 (20,465) 6,576,296 8,862,362 Write-offs, net (2) (17,069) (268) (139,857) (5,735) (2,182) 3,540 (21,750) (183,321) Net transfers 4,265,573 1,299,368 504,010 — 88,100 — (6,242,551) (85,500) Transfers of goods destined for sale (3) (1,183) — (248,175) (30,585) (67,143) — (340) (347,426) Subletting (4) — — (10,310) — — — — (10,310) Depreciation (Note 25) (3,936,572) (1,426,890) (2,471,456) — (297,234) — — (8,132,152) Business combinations (Note 1 c. 1) — 9 343 — 10,551 (691) — 10,212 Balance on 12.31.19 25,185,314 2,586,278 11,720,064 278,512 827,053 (174,508) 2,424,551 42,847,264 Balance on 12.31.18 Cost 79,002,102 18,033,246 16,154,562 314,832 4,996,170 (156,892) 2,112,896 120,456,916 Accumulated depreciation (54,333,890) (15,462,162) (12,385,474) — (4,160,063) — — (86,341,589) Total 24,668,212 2,571,084 3,769,088 314,832 836,107 (156,892) 2,112,896 34,115,327 Balance on 12.31.19 Cost 83,028,079 19,329,470 26,269,769 278,512 5,218,153 (174,508) 2,424,551 136,374,026 Accumulated depreciation (57,842,765) (16,743,192) (14,549,705) — (4,391,100) — — (93,526,762) Total 25,185,314 2,586,278 11,720,064 278,512 827,053 (174,508) 2,424,551 42,847,264 (1) The Company and its subsidiaries recognized estimated losses for potential obsolescence of materials used for property and equipment maintenance, based on levels of historical use and expected future use. (2) Includes the amount of R$12,065 in the Infrastructure, related to cancellation of lease agreements (Note 20). (3) Refers to assets sold from the Tamboré and Curitiba (CIC) data centers, sold for the amounts of R$419,690 to a company controlled by Asterion Industrial Partners SGEIC, SA, pursuant to an agreement entered into by the Company on May 8, 2019 and concluded. with the settlement on July 24, 2019, generating a gain in operating income of R$64,275. It also includes the residual balance of property, plant and equipment intended for sale, resulting from the contract entered into by the Company on November 28, 2019, for the sale of 1,909 structures (rooftops and towers) owned by the Company to Telxius Torres Brasil Ltda (note 10). (4) Refers to the lease of areas in the Curitiba data center. d) Depreciation rates In the years ended December 31, 2019 and 2018, the Company performed valuations of useful lives applied to its property, plant and equipment using the direct comparative method of market data. The results of these evaluations indicated the need for changes in useful lives. For the year ended December 31, 2019 and 2018, this change in accounting estimate, which was applied, increased depreciation expense by R$283,552 and R$267,657 in 2019 and 2018, respectively. The depreciation rates below were reviewed as of January 1, 2019, upon adoption of IFRS 16, generating an increase of R$1,882,950 in depreciation costs and expenses in the year ended December 31, 2019. The following is a comparative table of these rates. Description Switching and transmission equipment and media 2.50% to 92.31% 2.50% to 25.00% Terminal equipment / modems 6.67% to 66.67% 6.67% to 66.67% Infrastructure 2.50% to 92.31% 2.50% to 66.67% Other P&E assets 10.00% to 25.00% 10.00% to 25.00% e) Additional information on leases Changes in leases, after the adoption of IFRS 16, already included in the asset movement tables (Note 12.c), are as follows. Switching and transmission equipment Infrastructure Other Total Annual depreciation rate (%) 5.00 to 92.31 3.13 to 92.31 Balances and changes: Balance on 12.31.18 (1) 186,554 189,455 10,950 386,959 Initial Adoption on 01.01.19 91,836 8,526,236 — 8,618,072 Additions 107,108 1,696,833 — 1,803,941 Subletting (Note 12.c) — (10,310) (10,310) Depreciation and write-offs, net (IAS 17) — (50,819) (7,730) (58,549) Depreciation (IFRS 16) (39,192) (1,843,758) — (1,882,950) Cancellation of contracts — (105,952) — (105,952) Balance on 12.31.19 346,306 8,401,685 3,220 8,751,211 (1) Includes lease under IAS 17 and provision for dismantling for the leases. f) Property and equipment items pledged in guarantee On December 31, 2019, the Company had property and equipment pledged in guarantee for lawsuits, of R$81,416 (R$94,641 on December 31, 2018). g) Reversible assets The STFC service concession arrangement establishes that all assets owned by the Company and that are indispensable to the provision of the services described in the arrangement are considered “reversible” (returnable to the concession authority). On December 31, 2019, estimated residual value of reversible assets was R$8,259,852 (R$8,621,863 on December 31, 2018), which comprised switching and transmission equipment and public use terminals, external network equipment, energy, system and operational support equipment.

INTANGIBLE ASSETS

INTANGIBLE ASSETS	12 Months Ended
	Dec. 31, 2019
INTANGIBLE ASSETS
INTANGIBLE ASSETS	13) INTANGIBLE ASSETS a) Accounting policy Intangible assets acquired separately are measured at acquisition / construction cost upon their initial recognition. The cost of an intangible asset acquired in a business combination is its fair value at the acquisition date. After initial recognition, intangible assets are stated at acquisition and/or buildup cost, net of amortization and accumulated provision for impairment, where applicable. Intangible assets generated internally, excluding capitalized development costs, are not capitalized, and the expense is reflected in the statement of income for the year in which it is incurred. The useful lives of intangible assets are considered finite or indefinite. · Intangible assets with finite useful lives are amortized over their economic useful lives under the straight-line method and are tested for impairment whenever there is any indication of impairment loss. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed on an annual basis. Changes in the estimated useful life or the expected pattern of consumption of future economic benefits embodied in an asset are accounted for by changing the amortization period or method, as appropriate, and treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the statement of income in the cost/expense category consistent with the function of the intangible assets. · Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the CGU level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be justifiable. Otherwise, changes in useful life – from indefinite to finite - are carried out prospectively. Goodwill generated upon investment acquisition is treated as an intangible asset with indefinite useful lifes. Gains and losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and recognized in the statement of income on disposal. b) Critical estimates and judgments An impairment loss exists when the carrying amount of an asset or CGU exceeds its recoverable amount, which is the higher of fair value less costs to sell and value in use. The calculation of fair value less costs to sell is based on available information from sales transactions of similar assets or market prices less additional costs to dispose of the asset. The calculation of the value in use is based on the discounted cash flow model. The recoverable amount is sensitive to the discount rate used in the discounted cash flow method, as well as the expected future cash receipts and the growth rate used for extrapolation purposes. The Company periodically reviews the performance of the defined CGU in order to identify a possible devaluation in goodwill and other assets. The determination of the recoverable value of the CGU to which the goodwill is attributed also includes the use of assumptions and estimates and requires a significant degree of judgment and criterion. The accounting treatment of the investment in intangible assets includes making estimates to determine the useful life for amortization purposes, particularly for assets acquired in business combinations. The determination of the useful lives requires estimates in relation to the expected technological evolution and the alternative use of the assets. Hypotheses related to the technological aspect and its future development imply a significant degree of analysis, since the timing and nature of future technological changes are difficult to predict. c) Breakdown, changes and amortization rates A brief description of the key intangible asset items with finite useful lives, is as follows: · Software: This includes licenses for software used in the Company’s operating, commercial and administrative activities. · Customer portfolio and trademarks: This includes intangible assets acquired through business combination. · Licenses: These include concession and authorization licenses, acquired from ANATEL for provision of telecommunication services. These also include licenses from business combinations. Indefinite useful life Finite useful life Estimated Other losses Software Customer intangible for under Goodwill Software portfolio Trademarks Licenses assets software development Total Annual amortization rate (%) 20.00 to 50.00 11.76 to 12.85 5.13 to 66.67 3.60 to 6.67 6.67 to 20.00 Balances and changes: Balance on 12.31.17 23,062,421 2,720,806 1,978,863 1,073,615 13,969,606 20,952 (499) 506,140 43,331,904 Additions — 970,172 — — 6,647 — — 249,307 1,226,126 Write-offs, net — (16) — — — — — — (16) Net transfers — 519,539 — — — 32,539 — (365,770) 186,308 Amortization (Note 25) — (965,459) (549,589) (84,205) (920,116) (3,968) — — (2,523,337) Balance on 12.31.18 23,062,421 3,245,042 1,429,274 989,410 13,056,137 49,523 (499) 389,677 42,220,985 Additions — 374,690 — — — — — 1,390,731 1,765,421 Write-offs, net (1) (3,249) (5,066) — — — (58) — — (8,373) Net transfers — 1,314,978 — — — (6) — (1,229,472) 85,500 Transfers of goods destined for sale (2) — (1,537) — — — — — — (1,537) Business combinations (Note 1 c.1) — 596 — — — — — — 596 Amortization (Note 25) — (1,234,949) (500,441) (84,205) (964,316) (3,729) — — (2,787,640) Balance on 12.31.19 23,059,172 3,693,754 928,833 905,205 12,091,821 45,730 (499) 550,936 41,274,952 Balance on 12.31.18 Cost 23,062,421 16,604,769 4,513,278 1,658,897 20,244,219 270,741 (499) 389,677 66,743,503 Accumulated amortization — (13,359,727) (3,084,004) (669,487) (7,188,082) (221,218) — — (24,522,518) Total 23,062,421 3,245,042 1,429,274 989,410 13,056,137 49,523 (499) 389,677 42,220,985 Balance on 12.31.19 Cost 23,059,172 18,310,812 4,513,278 1,658,897 20,244,219 270,000 (499) 550,936 68,606,815 Accumulated amortization — (14,617,058) (3,584,445) (753,692) (8,152,398) (224,270) — — (27,331,863) Total 23,059,172 3,693,754 928,833 905,205 12,091,821 45,730 (499) 550,936 41,274,952 (1) Refers to proportional write-off in the amount of R$3,249, made in July 2019, resulting from the sale of the Tamboré and Curitiba (CIC) data centers, pursuant to paragraph 86 of IAS 36. (2) Refers to transfers of assets from the Tamboré and Curitiba (CIC) data centers, sold for the amounts of R$419,690 to a company controlled by Asterion Industrial Partners SGEIC, SA, pursuant to an agreement entered into by the Company on May 8, 2019 and concluded. with the settlement on July 24, 2019, generating a gain in operating income of R$64,275. d) Goodwill d.1) Accounting policy Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, recorded at fair value on the acquisition date, and the fair value of any non-controlling interest in the acquiree. For each business combination, the Company measures non-controlling interests in the acquiree either at its fair value or based on its proportional share in the identifiable net assets of the acquiree. Costs directly attributable to an acquisition are recorded as expenses, as incurred. Upon acquiring a business, the Company assesses financial assets acquired and liabilities assumed so as to classify and allocate them in accordance with contractual terms, economic circumstances and relevant conditions on the acquisition date, including the segregation, by the acquiree, of embedded derivatives existing in host contracts in the acquiree. In the event a business combination is conducted in stages, the ownership interest previously held in the acquiree’s capital is reassessed at fair value on the date control is acquired, and any impacts are recognized in the statement of income. Any contingent portion to be transferred by the acquirer shall be recognized at fair value on the acquisition date. Subsequent changes in the fair value of the contingent portion to be considered as an asset or liability is recognized in the statement of income. Contingent consideration on acquisition of a business that is not classified as equity is subsequently measured at fair value through profit or loss, whether or not included in the scope of IFRS 9. Goodwill is initially measured as excess transferred payment amount in relation to acquired net assets (identifiable net assets acquired, and liabilities assumed). If consideration is lower than the fair value of acquired net assets, the difference must be recognized as a gain in the statement of income. After initial recognition, goodwill is measured at cost, less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to the CGUs that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. When goodwill has been allocated to a CGU and part of the operation within that CGU is disposed that, the goodwill associated with that operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is allocated based on the relative fair values of the disposed operation and the portion of the CGU retained. d.2) Goodwill breakdown The table below shows the composition of the goodwill recorded by the Company as of December 31, 2019 and 2018. Ajato Telecomunicação Ltda. 149 149 Spanish and Figueira, by the merger of Telefônica Data Brasil Holding (TDBH) in 2006 212,058 212,058 Santo Genovese Participações, Atrium Telecomunicações, which took place in 2004 71,892 71,892 Telefônica Televisão Participações, former Navytree, occurred in 2008 780,693 780,693 Vivo Participações, occurred in 2011 (1) 9,157,239 9,160,488 GVT Participações, occurred in 2015 12,837,141 12,837,141 Total 23,059,172 23,062,421 (1) The proportional write-off in the amount of R$3,249, made in July 2019, resulting from the sale of the Tamboré and Curitiba (CIC) data centers, pursuant to paragraph 86 of IAS 36.

IMPAIRMENT OF NONFINANCIAL ASSE

IMPAIRMENT OF NONFINANCIAL ASSETS	12 Months Ended
	Dec. 31, 2019
IMPAIRMENT OF NONFINANCIAL ASSETS
IMPAIRMENT OF NONFINANCIAL ASSETS	14) IMPAIRMENT OF NON-FINANCIAL ASSETS a) Accounting policy The Company annually reviews the net carrying amount of assets in order to evaluate events or changes in economic, operating or technological circumstances that may indicate impairment losses. When such evidence is found, and net carrying amount exceeds recoverable amount, a provision for impairment is recorded so as to adjust the net carrying amount to the recoverable amount. The recoverable amount of an asset or a CGU is defined as the higher of value in use and net sales value. Thus, considering the convergence of product and service offerings, in addition, the Company's main operating asset is a single, broadly integrated network, which is used to provide all telecommunications services to its customers, therefore, the Company defines your business as a single CGU. Upon estimation of the value in use of an asset or cash-generating unit, estimated future cash flows are discounted at present value using a discount rate Weighted Average Cost of Capital “WACC” which reflects the weighted rate between (i) the cost of capital (including specific risks) based on the Capital Asset Pricing Model; and (ii) the debt these components being applicable to the asset or CGU before taxes. Whenever possible, the net sale value is determined based on a firm sale agreement executed on an arm’s length basis between knowledgeable and willing parts, adjusted by expenses attributable to the sale of assets or, when there is no firm sale agreement, based on the market price of an active market, or on the latest transaction price involving similar assets. For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine an asset’s or CGU recoverable amount since the last impairment loss was recognized. Any reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount or exceeds the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of income. The following assets have specific characteristics for impairment testing: · Goodwill: Goodwill is tested for impairment annually at the reporting date or earlier when circumstances indicate that the carrying amount may be impaired. Where the recoverable amount is lower than the carrying amount, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods. · Intangible assets: Intangible assets with indefinite useful lives are tested for impairment annually at the reporting date either individually or at the CGU level, as appropriate, and when circumstances indicate that the carrying amount may be impaired. · Determination of value in use: The key assumptions used to estimate value in use are: (i) revenues (projected considering the growth in customer base, growth in market revenue against GDP and the Company’s share of this market); (ii) variable costs and expenses (projected in accordance with the dynamics of the customer base, and fixed costs are projected in line with the historical performance of the Company, as well as with revenue growth); and (iii) capital investments (estimated considering the technological infrastructure necessary to enable the provision of services). b) Key assumptions used in the calculation of value in use: The value in use is mainly impacted by the following assumptions: · Revenue growth: is based on the observation of the historical behavior of each revenue line, as well as trends based on market analysis. The projected revenue differs between product lines and services with a tendency of growth in broadband services, pay TV and IT compared to voice services (fixed). Mobile revenues follow the market trend, including mainly migrations from prepaid to postpaid, price convergence and growth in data and M2M. · Capex volume: the projects and future needs were considered, both in line with the evolution of expected revenues and always aiming at better efficiency in the use of these investments. The Capex volume may also be impacted by inflation and currency fluctuations. · Discount rate: represents the assessment of risks in the current market. The calculation of the discount rate is based on the Company’s specific circumstances and being calculated based on the WACC. The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by Company investors. The cost of debt is based on loans with interest income that the Company is obliged to honor. The specific risk segment is incorporated by applying individual notably Beta factors. · Perpetuity growth rate: reflects the Company's condition to generate cash flow in an eternal manner. The percentage considered mainly takes into account investments over the projected period and reproduces the Company's condition in perpetuity. c) Sensitivity to changes in assumptions: The Company carries out a sensitivity analysis of the impairment test by considering reasonable changes in the main assumptions used in such test. The following table shows the increases in/decreases in the percentage points (pp) which were assumed for the years ended December 31, 2019 and 2018: Changes in key assumptions In percentage points (p.p) Financial variables Discount rate +/- Perpetuity growth rates +/- Operating variables OIBDA Margin +/- Capex/Revenues Margin +/- The sensitivity analysis performed at year-end 2019 and 2018 indicates that there are no significant risks arising from possible changes in the financial and operating variables, considered individually. In other words, the Company considers that within the above limits, no losses would be recognized. d) Goodwill impairment testing The Company assessed recoverability of goodwill carrying amounts based on the value in use and discounted cash flow method. The process for determination of the value in use involves the use of assumptions, judgments and estimates on cash flows, such as revenue, cost and expense growth rates, estimated future investments and working capital and discount rates. The assumptions about cash flow increase projections were based on management’s estimates, market studies and macroeconomic projections. Future cash flows were discounted at the WACC rate. Consistent with the economic analysis techniques, the assessment of value in use is made for a period of five years, and thereafter, considering the perpetuity of the assumptions based on the capacity of business continuity for an indefinite time. Management considered that the period of five years is adequate, based on its past experience in preparing cash flow projections. The growth rate used to extrapolate projections beyond the five years period was 4.5% in 2019 and 2018. The estimated future cash flows were discounted at a discount rate of 10.22% and 11.15%, which before taxes are 11.38% and 13.99% in 2019 and 2018, respectively, also in nominal values. The inflation rate for the period analyzed in the projected cash flows was 3.8% and 4.0% in 2019 and 2018, respectively. Key assumptions were based on the Company’s historical performance and reasonable macroeconomic assumptions grounded on financial market projections, documented and approved by the Company’s management. Based on annual impairment testing of the Company’s assets, prepared using projections considering the financial statements on December 31, 2019 and 2018, growth projections and operating results for the year ended December 31, 2019 and 2018, no impairment losses or evidence of losses were identified, since the value was in use is higher than the net carrying amount as at the assessment date.

PERSONNEL, SOCIAL CHARGES AND B

PERSONNEL, SOCIAL CHARGES AND BENEFITS	12 Months Ended
	Dec. 31, 2019
PERSONNEL, SOCIAL CHARGES AND BENEFITS
PERSONNEL, SOCIAL CHARGES AND BENEFITS	15) PERSONNEL, SOCIAL CHARGES AND BENEFITS Salaries and wages 38,363 34,767 Social charges and benefits 400,470 385,695 Profit sharing 308,918 265,433 Share-based payment plans (Note 29) 40,523 22,638 Other compensation — 86,000 Total 788,274 794,533 Current 752,246 782,630 Non-current 36,028 11,903

TRADE ACCOUNTS PAYABLE

TRADE ACCOUNTS PAYABLE	12 Months Ended
	Dec. 31, 2019
TRADE ACCOUNTS PAYABLE
TRADE ACCOUNTS PAYABLE	16) TRADE ACCOUNTS PAYABLE a) Accounting policy These are obligations to pay for goods, services or goods that were acquired in the normal course of business. They are initially recognized at fair value and subsequently measured at amortized cost using the effective tax rate method, if applicable. b) Breakdown Sundry suppliers (Opex, Capex, Services and Material) 5,958,280 6,790,882 Amounts payable (operators, cobilling) 303,087 198,942 Interconnection / interlink 205,161 269,446 Related parties (Note 28) 405,271 383,512 Total 6,871,799 7,642,782

TAXES, CHARGES AND CONTRIBUTI_2

TAXES, CHARGES AND CONTRIBUTIONS	12 Months Ended
	Dec. 31, 2019
TAXES, CHARGES AND CONTRIBUTIONS
TAXES, CHARGES AND CONTRIBUTIONS	17) TAXES, CHARGES AND CONTRIBUTIONS ICMS 906,447 1,094,769 PIS and COFINS 331,863 512,714 Fust and Funttel 89,394 89,794 ISS, CIDE and other taxes 97,163 139,933 Total 1,424,867 1,837,210 Current 1,139,812 1,797,965 Non-current 285,055 39,245

DIVIDENDS AND INTEREST ON EQUIT

DIVIDENDS AND INTEREST ON EQUITY	12 Months Ended
	Dec. 31, 2019
DIVIDENDS AND INTEREST ON EQUITY
DIVIDENDS AND INTEREST ON EQUITY	18) DIVIDENDS AND INTEREST ON EQUITY a) Accounting policy a.1) Dividends Minimum mandatory dividends are stated in the balance sheet as legal obligations (provision in current liabilities). Dividends in excess of such minimum amount, not yet approved in the Shareholders’ Meeting, are recorded in equity as proposed additional dividends. After approval at the Shareholders’ Meeting, the dividends in excess of the mandatory minimum are transferred to current liabilities and classified as legal obligations. a.2) Interest on equity Brazilian legislation allows companies to pay interest on equity, which is similar to payment of dividends; however, this is deductible for income tax calculation purposes. In order to comply with Brazilian tax legislation, the Company and its subsidiaries provision, in its accounting records, the amount due to match against the financial expenses account in the statement of income for the year. For the presentation of these financial statements, that expense is reversed against a direct charge to equity, resulting in the same accounting treatment adopted for dividends. The distribution of interest on equity to shareholders is subject to withholding income tax at a 15% rate. a.3) Unclaimed dividends and interest on equity The rights to receive unclaimed interest on equity and dividends prescribe after three years from the initial date available for payment. When dividends and interest on equity expire, these amounts are reversed to retained earnings. b) Dividends and interest on equity payable b.1) Breakdown: Telefónica Latinoamérica Holding 787,823 952,217 Telefónica 948,662 1,146,619 SP Telecomunicações Participações 598,064 722,862 Telefónica Chile 1,667 2,015 Non-controlling interest 1,251,201 1,349,203 Total 3,587,417 4,172,916 b.2) Changes: Balance on 12.31.17 2,396,116 Supplementary dividends for 2017 2,191,864 Interim interest on equity (net of IRRF) 3,867,500 Unclaimed dividends and interest on equity (152,770) Payment of dividends and interest on equity (4,136,878) IRRF on shareholders exempt/immune from interest on equity 7,084 Balance on 12.31.18 4,172,916 Supplementary dividends for 2018 2,468,684 Interim interest on equity (net of IRRF) and dividends 3,199,800 Unclaimed dividends and interest on equity (82,898) Payment of dividends and interest on equity (6,176,842) IRRF on shareholders exempt/immune from interest on equity 5,757 Balance on 12.31.19 3,587,417 For purposes of the cash flow statement, interest on equity and dividends paid to shareholders are recognized in “Financing Activities”.

PROVISIONS AND CONTINGENCIES

PROVISIONS AND CONTINGENCIES	12 Months Ended
	Dec. 31, 2019
PROVISIONS AND CONTINGENCIES
PROVISIONS AND CONTINGENCIES	19) PROVISION AND CONTINGENCIES a) Accounting policy Provision is recognized when the Company has a present obligation (legal or constructive) as a result of a past event, when it is probable that economic benefits are required to settle the obligation and a reliable estimate of the value of the obligation can be made. Provision is restated at the balance sheet date considering the likely amount of loss and the nature of each provision. Provision amounts for contingencies are presented at their gross amount, less the corresponding judicial deposits, and are classified as provision for civil, labor, tax and regulatory contingencies. Judicial deposits are classified as assets given that the conditions required for their net presentation with provision do not exist. Provision for civil, labor, tax and regulatory legal claims The Company and its subsidiaries are parts to administrative; labor, tax, civil and regulatory claims, and accounting provision amounts have been recorded in respect of claims whose likelihood of loss was classified as probable. The assessment of the likelihood of loss includes an analysis of available evidence, the hierarchy of laws, available case law, the latest court decisions law and their relevance in the legal system, as well as the opinion of outside legal counsel. Provision is reviewed and adjusted considering changes in existing circumstances, such as the applicable statute of limitations, tax audit conclusions, or additional exposures identified based on new matters or court decisions. Provision for decommissioning of assets Refers to costs to be incurred due to returning sites to owners (locations intended for tower and equipment installation on leased property) in the same condition as these were found at the time of execution of the initial lease agreement. These costs are provisioned as the present value from amounts expected to settle the obligation using estimated cash flows and they are recognized as part of the cost of the corresponding asset. The cash flows are discounted at a current pre-tax rate that reflects the risks specific to decommissioning of assets. The financial effect of the discount is recorded as incurred and recognized in the statement of income as a finance cost. The estimated future costs of decommissioning are reviewed annually and adjusted as appropriate. Changes in the estimated future costs or in the discount rate applied are added to, or deducted from, the cost of the asset. Contingent liabilities recognized in a business combination A contingent liability recognized in business combination is initially measured at fair value. Refers to contingent liabilities from the Purchase Price Allocation (PPA) on acquisition of the controlling interest of Vivo Participações in 2011 and GVTPart. in 2015. b) Critical estimates and judgments Provision is recognized when the Company has a present obligation arising from a past event, settlement of which requires an outflow of resources rated as probable and when it can be reliably estimated. This obligation can be legal or constructive, derived from, among other factors, regulations, contracts, customary practices or public commitments that expose third parties to a valid expectation that the Company or its subsidiaries will assume certain responsibilities. The determination of the provision is based on the best estimate of the disbursement required to settle the corresponding obligation, considering the information available as at the closing date, including the opinion of independent experts, such as legal advisors. c) Information on provisions and contingencies The Company and its subsidiaries are parts to administrative and judicial proceedings and labor, tax and civil claims filed in different courts. The management of the Company and its subsidiaries, based on the opinion of its legal counsel, recognized provision for proceedings for which an unfavorable outcome is considered probable. Breakdown of changes in provision for cases in which an unfavorable outcome is probable, in addition to contingent liabilities and provision for decommissioning are as follows: Provisions for contingencies Contingent Provision for Labor Tax Civil Regulatory liabilities (PPA) decommissioning Total Balance on 12.31.17 980,596 3,579,208 1,055,877 1,103,792 845,796 579,481 8,144,750 Additions (reversal), net (Note 26) 319,056 452,746 395,631 (41,837) (27,345) — 1,098,251 Other additions (reversal) (1) (99,372) (2,443,047) (14,119) — — 16,752 (2,539,786) Write-offs due to payment (541,749) (51,924) (598,294) (117,599) — — (1,309,566) Monetary restatement 121,155 414,914 165,708 77,860 8,824 77,215 865,676 Balance on 12.31.18 779,686 1,951,897 1,004,803 1,022,216 827,275 673,448 6,259,325 Initial adoption IFRIC 23 (Note 7) — (68,945) — — — — (68,945) Additions (reversal), net (Note 26) 152,105 32,719 364,008 93,634 (16,986) (90,159) 535,321 Other additions (reversal) (1) (5,709) — (2,381) — — (4,191) (12,281) Write-offs due to payment (485,539) (364,992) (833,579) (43,068) — — (1,727,178) Monetary restatement 99,526 25,270 264,590 72,954 21,433 57,591 541,364 Business combinations (Note 1 c.1) 7,805 — 7 — — — 7,812 Balance on 12.31.19 547,874 1,575,949 797,448 1,145,736 831,722 636,689 5,535,418 Balance on 12.31.18 Current 245,805 — 132,124 — — — 377,929 Non-current 533,881 1,951,897 872,679 1,022,216 827,275 673,448 5,881,396 Balance on 12.31.19 Current 236,130 — 113,307 25,008 — — 374,445 Non-current 311,744 1,575,949 684,141 1,120,728 831,722 636,689 5,160,973 (1) c.1) Labor provision and contingencies Amounts involved Nature/Degree of Risk Provisions 547,874 779,686 Possible losses 452,070 191,398 Labor provision and contingencies involve labor claims filed by former employees and outsourced employees (the latter involving subsidiary or joint liability) claiming for, among other issues, overtime, salary equalization, post-retirement benefits, allowance for health hazard and risk premium, and matters relating to outsourcing. The Company is also a defendant in labor claims filed by retired former employees who are covered by the Retired Employees Medical Assistance Plan ("PAMA"), and, among other issues, are demanding the cancellation of amendments to this plan. Most of these claims await a decision by the Superior Labor Court. Based on the opinion of its legal counsel and recent decisions of the courts, management considers the risk of loss in these cases as possible. No amount has been specified for these claims, since is not possible to estimate the cost to the Company in the event of loss. In addition, the Company is a part to Public Civil Actions filed by the Public Prosecution Service whose purpose is essentially the determination of the Company to stop hiring a company to perform the Company's core activities. In August 2018, the majority of the Federal Supreme Court (“STF”) Ministers ruled the unrestricted outsourcing to be legally valid, including the end activity, safeguarding the subsidiary responsibility of the service receiver. However, a final judgment has yet to clarify the scope of this decision, including in cases already final and unappealable. The application of the decision will need to be individually evaluated for each case under discussion. Given these considerations, it is not feasible to estimate amounts or likelihood of loss for the Company. c.2) Tax provision and contingencies Amounts involved Nature/Degree of Risk Provisions 1,575,949 1,951,897 Federal (1) 573,229 526,943 State 466,164 909,547 Municipal 34,915 33,607 FUST 501,641 481,800 Possible losses 26,104,867 36,103,128 Federal (1) 2,233,733 12,025,529 State 15,460,028 16,294,685 Municipal 669,114 637,690 FUST, FUNTTEL and FISTEL 7,741,992 7,145,224 (1) On January 1, 2019, the Company applied the requirements of IFRIC 23 - Uncertainties on Income Tax Treatment and, accordingly, we present the information on income tax and social contribution of December 31, 2019 in note 7 c.2.1) Tax provisions Management, under advice of legal counsel believes that the following losses are probable in the following federal, state, municipal and regulatory (FUST) tax proceedings: Federal taxes The Company and/or its subsidiaries are parts to administrative and legal proceedings at the federal level relating to: (i) claims resulting from the non-ratification of compensation and refund requests formulated; (ii) CIDE levied on the remittance of amounts abroad related to technical and administrative assistance and similar services, as well as royalties; (iii) withholding income tax on interest on equity; (iv) Social Investment Fund (Finsocial) offset amounts; and (v) additional charges to the PIS and COFINS tax base, as well as additional charges to COFINS required by Law No. 9,718/98. State taxes The Company and/or its subsidiaries are parts to administrative and judicial proceedings at the state level relating to ICMS, regarding: (i) disallowance credits; (ii) non-taxation of alleged telecommunications services; (iii) tax credit for challenges/disputes over telecommunication services not provided or wrongly charged (Agreement 39/01); (iv) aliquot differential; (v) leasing of infrastructure necessary for internet services (data); (vi) outflows of goods with prices lower than those of acquisition; and (vii) non-taxation of amounts granted as discounts to customers. Municipal taxes The Company and/or its subsidiaries are parts to various municipal tax proceedings, at the judicial level, relating to: (i) Property tax (“IPTU”); (ii) Services tax (“ISS”) on equipment leasing services, non-core activities and supplementary activities; and (iii) withholding of ISS on contractors' services. FUST The Company and/or its subsidiaries have judicial proceedings related to the non-inclusion of interconnection expenses and industrial exploitation of a dedicated line in the calculation basis of FUST. c.2.2) Possible losses - tax contingencies Management, under advice of legal counsel believes that the following losses are possible in the following federal, state, municipal and regulatory (FUST, FUNTTEL and FISTEL): Federal taxes The Company and/or its subsidiaries are parts to various administrative and judicial proceedings, at the federal level, which are awaiting decision in different court levels. The more significant of these proceedings are: (i) statements of dissatisfaction resulting from failure to approve requests for compensation submitted by the Company; (ii) INSS (a) on compensation payment for salary losses arising from the " Plano Verão " and the " Plano Bresser "; (b) SAT, social security amounts owed to third parts (INCRA and SEBRAE); (c) supply of meals to employees, withholding of 11% (assignment of workforce); and (d) Stock Options - requirement of social security contributions on amounts paid to employees under the stock option plan; (iii) withholding income tax and CIDE on the funds remitted abroad related to technical services and to administrative support and similar services, etc., and royalties; (iv) deduction of COFINS on swap operation losses; (v) PIS and COFINS: (a) accrual basis versus cash basis; (b) levied on value-added services; and (c) monthly subscription services; (vi) ex-tariff, cancellation of the benefits under CAMEX Resolution No. 6, increase in the import duty from 4% to 28%; (vii) IPI levied on shipment of fixed access units from the Company's establishment; and (viii) Financial transaction tax (IOF) - required on loan transactions, intercompany loans and credit transactions. State taxes The Company and/or its subsidiaries are parts to various administrative and judicial proceedings, at the state level, related to ICMS, which are awaiting decision in different court levels: (i) rental of movable property; (ii) international calls; (iii) reversal of previously unused credits; (iv) service provided outside São Paulo state paid to São Paulo state; (v) co-billing; (vi) tax substitution with a fictitious tax base (tax guideline); (vii) use of credits related to acquisition of electric power; (viii) secondary activities, value added and supplementary services; (ix) tax credits related to opposition/challenges regarding telecommunications services not provided or mistakenly charged (Agreement 39/01); (x) deferred collection of interconnection (“DETRAF” - Traffic and Service Provision Document); (xi) credits derived from tax benefits granted by other states; (xii) disallowance of tax incentives related to cultural projects; (xiii) transfers of assets among business units owned by the Company; (xiv) communications service tax credits used in provision of services of the same nature; (xv) card donation for prepaid service activation; (xvi) reversal of credit from return and free lease in connection with assignment of networks (used by the Company itself and exemption of public bodies); (xvii) DETRAF fine; (xviii) own consumption; (xix) exemption of public bodies; (xx) amounts given by way of discounts; (xxi) new tax register bookkeeping without prior authorization by tax authorities; (xxii) advertising services; (xxiii) unmeasured services; and (xxiv) monthly subscription, which is in the STF with declaration liens and the Company awaits the judgment of the STF on the request for modulation. Municipal taxes The Company and/or its subsidiaries are parts to various administrative and judicial proceedings, at the municipal level, which are awaiting decision in different court levels. The more significant of these proceedings are: (i) ISS on: (a) non-core activity, value-added and supplementary services; (b) withholding at source; (c) call identification and mobile phone licensing services; (d) full-time services, provision, returns and cancelled tax receipts; (e) data processing and antivirus congeners; (f) charge for use of mobile network and lease of infrastructure; (g) advertising services; (h) services provided by third parties; and (i) advisory services in corporate management provided by Telefónica Latino América Holding; (ii) IPTU; (iii) land use tax; and (iv) various municipal charges. FUST, FUNTTEL and FISTEL Universal Telecommunications Services Fund (“FUST”) Writs of mandamus were filed seeking the right to not include revenues with interconnection and Industrial Use of Dedicated Line (“EILD”) in the FUST tax base, according to Abridgment No. 7 of December 15, 2005, as it does not comply with the provisions contained in the sole paragraph of Article 6 of Law No. 9,998/00, which are awaiting a decision from Higher Courts. Various delinquency notices were issued by ANATEL at the administrative level to collect charges on interconnections, EILD and other revenues not earned from the provision of telecommunication services. On December 31, 2019, the consolidated amount involved totaled R$4,411,759 (R$3,701,208 on December 31, 2018). Fund for Technological Development of Telecommunications (“FUNTTEL”) Proceedings have been filed for the right not to include interconnection revenues and any others arising from the use of resources that are part of the networks in the FUNTTEL calculation basis, as determined by Law 10,052/00 and Decree No. 3,737/01, therefore avoiding the improper application of Article 4, paragraph 5, of Resolution 95/13. There are several notifications of debits drawn up by the Ministry of Communications in administrative actions for constitution of the tax credit related to the interconnection, network resources and other revenues that do not originate from the provision of telecommunication services. On December 31, 2019, the consolidated amount involved totaled R$723,105 (R$618,473 on December 31, 2018). Telecommunications Inspection Fund (“FISTEL”) There are judicial actions for the collection of TFI on: (i) extensions of the term of validity of the licenses for use of telephone exchanges associated with the operation of the fixed switched telephone service; and (ii) extensions of the period of validity of the right to use radiofrequency associated with the operation of the telephone service personal mobile service. On December 31, 2019, the consolidated amount involved totaled R$2,607,128 (R$2,825,543 on December 31, 2018). c.3) Civil provision civil contingencies Amounts involved Nature/Degree of Risk Provisions 797,448 1,004,803 Possible losses 3,494,626 3,493,655 c.3.1) Civil provisions Management, under advice of legal counsel, believes that the following will result in probable losses from civil proceedings: · The Company is part to proceedings involving rights to the supplementary amounts from shares calculated on network expansion plans since 1996 (supplement of share proceedings). These proceedings are at different stages: lower courts, court of justice and high court of justice. On December 31, 2019, the consolidated amount involved totaled R$297,641 (R$334,877 on December 31, 2018). · The Company and/or its subsidiaries are parts to various civil proceedings related to consumers at the administrative and judicial level, relating to the non-provision of services and/or products sold. On December 31, 2019, the consolidated amount involved totaled R$211,865 (R$353,850 on December 31, 2018). · The Company and/or its subsidiaries are parts to various civil proceedings of a non-consumer nature at administrative and judicial levels, all arising in the ordinary course of business. On December 31, 2019, the consolidated amount involved totaled R$287,942 (R$316,076 on December 31, 2018). c.3.2) Possible losses - civil contingencies Management, under advice of legal counsel, believes that losses are possible from the following civil proceedings: · Collective Action filed by SISTEL Participants' Association (“ASTEL”) in the state of São Paulo, in which SISTEL associates in the state of São Paulo challenge the changes made in the PAMA and claim for the reestablishment of the prior "status quo". This proceeding is still in the appeal phase and awaits a decision on the Interlocutory Appeal filed by the Company against the decision on possible admission of the appeal to higher and supreme courts filed in connection with the Court of Appeals' decision, which partially changed the decision rendering the matter groundless. The amount cannot be estimated, and the claims cannot be settled due to their unenforceability because it entails the return to the prior plan conditions. · Civil Class Actions proposed by ASTEL and the Brazilian National Federation of Associations of Retirees, Pensioners and Pension Fund Members of the Telecommunications Industry “(FENAPAS”), both against SISTEL, the Company and other carriers, in order to annul the spin-off of the PBS private pension plan, alleging, in short, the "windup of the supplementary private pension plan of the SISTEL Foundation", which led to various specific mirror PBS plans, and corresponding allocation of funds from technical surplus and tax contingencies existing at the time of the spin-off. As for the action proposed only by ASTEL, there was a favorable decision in the first degree. Subsequently, ASTEL appealed and the appeal was withdrawn, maintaining a favorable decision. As for the action proposed by FENAPAS, the amount cannot be estimated, and the claims cannot be settled due to their unenforceability because this involves the return of the spun-off assets of SISTEL relating to telecommunication carriers of the former Telebrás System. · The Company is part to other civil claims, at several levels, related to service rendering rights. Such claims have been filed by individual consumers, civil associations representing consumer rights or by the Bureau of Consumer Protection (“PROCON”), as well as by the Federal and State Public Prosecutor's Office. The Company is also part to other claims of several types related to the ordinary course of business. On December 31, 2019, the consolidated amount totaled R$3,467,941 (R$3,466,522 on December 31, 2018). · Terra Networks is a part to: (i) a supplier action related to the transmission of events; (ii) PROCON fine (annulment action); (iii) indemnification action related to the use of content; (iv) ECAD action on copyright collection; and (v) claim actions filed by former subscribers regarding unrecognized collection, collection of undue value and contractual non-compliance. On December 31, 2019, the amount was R$15,443 (R$12,926 on December 31, 2018). · The Company has received notices regarding non-compliance with the Customer Service (“SAC”) Decree. The Company is currently a part to various lawsuits (administrative and legal proceedings). On December 31, 2019, 2019 the amount was R$11,626 (R$14,207 on December 31, 2018). · Intellectual Property: Lune Projetos Especiais Telecomunicação Comércio e Ind. Ltda. (“Lune”), a Brazilian company, filed an action on November 20, 2001 against 23 wireless carriers claiming to own the patent for caller ID and the trademark "Bina". The purpose of that lawsuit was to interrupt provision of such service by carriers and to seek indemnification equivalent to the amount paid by consumers for using the service. An unfavorable decision was handed down determining that the Company should refrain from selling mobile phones with caller ID service ("Bina"), subject to a daily fine of R$10 (ten thousand reais) in the event of non-compliance. Furthermore, according to that decision, the Company must pay indemnification for royalties, to be calculated on settlement. Motions for Clarification were proposed by all parts and Lune's motions for clarification were accepted since an injunctive relief in this stage of the proceedings was deemed applicable. A bill of review appeal was filed in view of the current decision which granted a stay of execution suspending that unfavorable decision until final judgment of the review. A bill of review was filed in view of the sentence handed down on September 30, 2016, by the 4th Chamber of the Court of Justice of the Federal District, in order to annul the lower court sentence and remit the proceedings back to the lower court for a new examination. There is no way to determine at this time the extent of potential liability with respect to this claim as the expertise is in its early stages · The Company and other wireless carriers are defendants in several lawsuits filed by the Public Prosecutor's Office and consumer associations challenging the defined period for use of prepaid minutes. The plaintiffs allege that the prepaid minutes should not expire after a specific period. Conflicting decisions were handed down by courts on the matter, even though the Company understands that its criteria for the period determination comply with ANATEL standards. c.4) Regulatory provision and contingencies Amounts involved Nature/Degree of Risk Provisions 1,145,736 1,022,216 Possible losses 5,645,107 6,119,136 c.4.1) Regulatory provisions Management, under advice of legal counsel, believes the likelihood of loss of the following regulatory proceedings is probable: The Company is part to administrative proceedings initiated mainly by ANATEL, which were initiated on the grounds of alleged non-compliance with obligations established in the sectoral regulations, as well as in lawsuits that discuss, in the great majority, sanctions applied by ANATEL at the administrative level. c.4.2) Possible losses - regulatory contingencies Management, under advice of legal counsel believes the likelihood of loss of the following regulatory proceedings is possible: The Company is part to administrative proceedings filed by ANATEL (other agents, including other operators, also have claims against the Company) alleging non-compliance with the obligations set forth in industry regulations, as well as legal claims which discuss the mostly sanctions applied by ANATEL at the administrative level. Relevant cases in the possible regulatory contingency portfolio include: · Administrative and legal proceedings that discuss how ANATEL calculates the amount of the charge due to the extension of the radio frequencies associated with the SMP. In the view of the Agency, the calculation of encumbrances should consider the application of a percentage of 2% over the entire economic benefit resulting from the provision of the STFC / SMP service. In the Company's view, however, revenues that are not part of the STFC / SMP service plans, as defined by the regulations at the time of signing the authorization terms / concession contracts, should not be considered when calculating the burden. As a result of this divergence of understanding, the Company filed administrative claims and lawsuits to challenge ANATEL charge collections. · In May 2018, the Company filed a lawsuit to annul ANATEL final decision, of March of the same year, in the records of the Procedure for Determining Noncompliance with Obligations (“PADO”) for alleged violations of the fixed telephony regulation. The fine imposed by ANATEL, and object of the lawsuit, totals R$211 million as the principal amount. On December 31, 2019, the restated amount, plus interest and monetary restatement, reached approximately R$505 million. On December 31, 2018, this amount was approximately R$482 million. The Company believes that the fine imposed is illegal and undue based, fundamentally, on the following defense arguments: (i) ANATEL's mistake in determining the universe of users considered in the fine (the number of users affected is less than that considered by the ANATEL) and; (ii) the calculation of the fine penalty is disproportionate and without foundation. The lawsuit is in the lower court and, at this moment, awaits judgment, after the Company has gathered an expert report that supports the arguments in favor of reducing the fine. d) Guarantees The Company and its subsidiaries granted guarantees for tax, civil, labor and regulatory proceedings, as follows: Property and equipment 81,416 94,641 Judicial deposits and garnishments 3,670,885 3,910,014 Letters of guarantee 2,608,463 2,301,210 Total 6,360,764 6,305,865 On December 31, 2019, in addition to the guarantees presented above, the Company and its subsidiaries had amounts under short-term investment withheld by courts (except for loan-related investments) in the consolidated amount of R$50,554 (R$64,461 on December 31, 2018).

LOANS, FINANCING, DEBENTURES AN

LOANS, FINANCING, DEBENTURES AND LEASES	12 Months Ended
	Dec. 31, 2019
LOANS, FINANCING, DEBENTURES AND LEASES
LOANS, FINANCING, DEBENTURES AND LEASES	20) LOANS, FINANCING, DEBENTURES AND LEASES a) Accounting policy These are financial liabilities measured initially and recognized by fair value, net of costs incurred to obtain them and subsequently measured by amortized cost (plus pro-rata charges and interest), considering the effective interest rate of each operation, or by fair value through profit or loss. They are classified as current unless the Company has the unconditional right to settle the liability for at least 12 months after the closing date of the year. Borrowing costs directly related to the acquisition, construction or production of an asset that necessarily requires more than 18 months to be completed for use or sale purposes are capitalized as part of the cost of the corresponding asset. The Company did not capitalize borrowing and financing costs and debentures due to the absence of qualifying assets. All other costs of loans, financing, debentures and leases are recorded in expense in the period in which they are incurred. The costs of loans, financing and debentures comprise interest and other costs incurred. b) Breakdown Information on December 31, 2019 12.31.19 12.31.18 Currency Annual interest rate Maturity Guarantees Current Non-current Total Current Non-current Total Local currency 4,126,490 9,698,183 13,824,673 1,367,551 4,675,271 6,042,822 Financial institutions (b.1) 23,865 24,985 48,850 666,213 819,742 1,485,955 BNDES FINEM URTJLP TJLP+ 0 to 4.08% — — — 214,012 — 214,012 BNDES FINEM URTJLP TJLP+ 0 to 3.38% — — — 184,200 122,011 306,211 BNDES FINEM R$ — — — 13,403 — 13,403 BNDES FINEM URTJLP TJLP+ 0 to 3.12% — — — 103,486 316,269 419,755 BNDES FINEM R$ 4.00% to 6.00% — — — 37,837 94,516 132,353 BNDES FINEM R$ Selic Acum. D-2 + 2.32% — — — 80,014 245,887 325,901 PSI R$ 2.5% to 5.5% Jan-23 (1) 8,847 112 8,959 18,207 1,263 19,470 BNB R$ 7.06% to 10% Aug-22 (2) 15,018 24,873 39,891 15,054 39,796 54,850 Suppliers (b.2) R$ 109.2% to 122.5% of CDI Jan-21 996,177 97 996,274 524,244 — 524,244 Debentures (b.3) 1,077,183 2,027,167 3,104,350 123,961 3,049,949 3,173,910 4th issue – Series 3 R$ IPCA+4.00% Oct-19 (3) — — — 41,121 — 41,121 1st issue – Minas Comunica R$ IPCA+0.50% Jul-21 (3) 28,366 28,366 56,732 26,250 52,499 78,749 5th issue R$ 108.25% of CDI Feb-22 (3) 44,504 1,998,801 2,043,305 51,233 1,997,694 2,048,927 6th issue R$ 100% of CDI + 0.24% Nov-20 (3) 1,004,313 — 1,004,313 5,357 999,756 1,005,113 Leases (b.4) R$ 4.90% / IPCA 2,029,265 7,161,886 9,191,151 53,133 339,894 393,027 Contingent consideration (b.5) R$ Selic — 484,048 484,048 — 465,686 465,686 Foreign currency — — — 96,615 — 96,615 Financial institutions (b.1) — — — 96,615 — 96,615 BNDES FINEM UMBND ECM + 2.38% — — — 96,615 — 96,615 Total 4,126,490 9,698,183 13,824,673 1,464,166 4,675,271 6,139,437 Guarantees: (1) Pledge of financed assets. (2) Bank guarantee provided by Banco Safra in an amount equivalent to 100% of the outstanding financing debt balance. Setting up a liquidity fund represented by financial investments in the amount equivalent to three installments of repayment referenced to the average post-grace period performance. Balances were R$13,212 and R$12,473 on December 31, 2019 and 2018, respectively. (3) Unsecured. b.1) Loans and financing - Financial Institutions Some financing agreements with the financial institutions have lower interest rates than those prevailing in the market. These operations fall within the scope of IAS 20 and therefore the subsidies granted up to December 31, 2017 were adjusted to present value and deferred in accordance with the useful lives of the financed assets. The grants on January 1, 2018 adjusted to present value, were recorded in property, plant and equipment and are being depreciated according to the useful lives of the financed underlying assets. b.2) Financing - Suppliers Under bilateral agreements with suppliers, the Company obtained extension of the terms for payment of trade accounts payable at a cost based on the fixed CDI rate for the corresponding periods, with the net cost equivalent to between 109.2% to 122.5% of the CDI (107.9% to 115.9% of the CDI on December 31, 2018). b.3) Debentures The following is a summary of the debentures in effect on December 31, 2019. Amounts Issue Issue date Issued Outstanding Issue value 4th issue – Series 3 (1) 10/15/2009 810,000 — 810,000 1st issue – Minas Comunica 12/17/2007 5,550 5,550 55,500 5th issue 2/8/2017 200,000 200,000 2,000,000 6th issue 11/27/2017 100,000 100,000 1,000,000 (1) On October 15, 2019, this issue was settled in the amount of R$42,895. Transaction costs in connection with the 4th, 5 th and 6th issues, totaling R$2,550 on December 31, 2019 (R$3,951 on December 31, 2018), were treated as a reduction of liabilities as costs to be incurred and are recognized as financial expenses, according to the contractual terms of each issue. b.4) Leases The Company has agreements classified as lease agreements as a lessee: (i) lease of towers and rooftops arising from sale and leaseback transactions; (ii) lease of Built to Suit ("BTS") sites to install antennas and other equipment and transmission facilities; (iii) lease of information technology equipment and; (iv) lease of infrastructure and transmission facilities associated with the power transmission network. The net carrying amount of the assets has remained unchanged until sale thereof, and a liability is recognized corresponding to the present value of mandatory minimum installments as per the agreement. The amounts recorded in property, plant and equipment are depreciated over the estimated useful lives of the assets or the lease term, whichever is shorter. Balances of lease payments payable, including the effects of the adoption of IFRS 16 (Note 2.f): Nominal value payable 10,932,789 766,215 Unrealized financial expenses (1,741,638) (373,188) Present value payable 9,191,151 393,027 Current 2,029,265 53,133 Non-current 7,161,886 339,894 The following is a schedule of the amounts payable on leases on December 31, 2019, settled in nominal amounts and at present value: Year Nominal value Present value payable payable 2020 2,098,941 2,029,265 2021 1,896,313 1,751,557 2022 1,670,508 1,470,364 2023 1,484,652 1,241,102 2024 1,086,093 856,502 2025 onwards 2,696,282 1,842,361 Total 10,932,789 9,191,151 The weighted annual interest rate on lease contracts on December 31, 2019 is 4.90%, with an average maturity of 6.18 years. The present value of lease agreements is measured by discounting future fixed payment flows, which do not include the projected inflation, at market interest rates, estimated with the Company's intrinsic risk spread. The use of nominal or real rates, in estimating future flows, as long as they are applied consistently to the discount rate, would have immaterial effects on the updated balance of the lease liabilities as of December 31, 2019, as well as their respective effects on the income for the year ending on this date. The discount curves used are constructed based on observable data. Real and nominal market interest rates are extracted from B3 and the Company's risk spread is estimated from debt securities issued by companies with comparable risk. Accordingly, the final discount curve reliably reflects the Company's incremental loan interest rate. There were no unsecured residual values resulting in benefits to the lessor or contingent payments recognized as revenue on December 31, 2019 and 2018. b.5) Contingent consideration As part of the Purchase and Sale Agreement and Other Covenants executed by and between the Company and Vivendi to acquire all shares in GVTPart., a contingent consideration relating to the judicial deposit made by GVT for the monthly installments of deferred income tax and social contribution on goodwill amortization was agreed, arising from the corporate restructuring process completed by GVT in 2013. If these funds are realized (being reimbursed, refunded, or via netting), they will be returned to Vivendi, as long as they are obtained in a final unappealable decision. Reimbursement will be made within 15 years and this amount is subject to monthly restatement at the SELIC rate. c) Repayment schedule On December 31, 2019, the breakdown of non-current loans, financing, debentures, leases and contingent consideration by year of maturity was as follows: Loans and financing - financial Financing - Contingent Year institutions suppliers Debentures Leases consideration Total 2021 14,984 97 1,027,167 1,751,557 — 2,793,805 2022 9,996 — 1,000,000 1,470,364 — 2,480,360 2023 5 — — 1,241,102 — 1,241,107 2024 — — — 856,502 — 856,502 2025 onwards — — — 1,842,361 484,048 2,326,409 Total 24,985 97 2,027,167 7,161,886 484,048 9,698,183 d) Covenants Loans and financing with financial institutions and debentures carry specific covenants involving a penalty in the event of breach of contract. A breach of contract as provided for in the agreements with the institutions listed above in item b), is characterized as non-compliance with covenants (analyzed on a quarterly, half-yearly or yearly basis), being a breach of a contractual clause, resulting in the early maturity of the contract. On December 31, 2019 and December 31, 2018, the Company was in compliance with all economic and financial indices. e) Changes Changes in loans and financing, debentures, leases agreements and contingent considerations are as follows: Loans and Financing - Contingent financing Debentures Leases suppliers consideration Total Balance on 12.31.17 2,502,346 4,520,739 385,460 607,152 446,144 8,461,841 Additions — — 18,672 506,397 — 525,069 Government grants (Note 21) (40) — — — — (40) Financial charges (Note 27) 169,771 242,415 45,501 33,169 19,542 510,398 Issue costs — 1,471 — — — 1,471 Foreign exchange variation (Note 27) 28,848 — — — — 28,848 Payments (1,118,355) (1,590,715) (56,606) (622,474) — (3,388,150) Balance on 12.31.18 1,582,570 3,173,910 393,027 524,244 465,686 6,139,437 Initial adoption IFRS 16 (Note 2.f) — — 8,618,072 — — 8,618,072 Additions — — 1,803,941 967,313 — 2,771,254 Government grants (Note 21) 15,787 — — — — 15,787 Financial charges (Note 27) 111,013 197,386 457,985 45,940 18,362 830,686 Issue costs — 1,400 — — — 1,400 Foreign exchange variation (Note 27) (1,104) — — — — (1,104) Write-offs (cancellation of contracts) — — (107,213) — — (107,213) Payments (1,659,416) (268,346) (1,974,661) (541,223) — (4,443,646) Balance on 12.31.19 48,850 3,104,350 9,191,151 996,274 484,048 13,824,673 f) Additions and payments Summary of additions and payments: 2019 2018 Write-offs (payments) Write-offs (payments) Additions Principal Financial Total Additions Principal Financial Total Loans and financing — (1,564,258) (95,158) (1,659,416) — (961,687) (156,668) (1,118,355) BNDES — (1,549,335) (91,939) (1,641,274) — (946,763) (152,447) (1,099,210) BNB — (14,923) (3,219) (18,142) — (14,924) (4,221) (19,145) Debêntures — (66,830) (201,516) (268,346) — (1,324,723) (265,992) (1,590,715) 4th issue – Series 3 — — — — — — (1,583) (1,583) 1st issue – Minas Comunica — (25,583) (1,761) (27,344) — (24,723) (1,082) (25,805) 4th issue — (41,247) (1,650) (42,897) — (1,300,000) (47,257) (1,347,257) 5th issue — — (135,242) (135,242) — — (149,795) (149,795) 6th issue — — (62,863) (62,863) — — (66,275) (66,275) Suppliers 967,313 (506,407) (34,816) (541,223) 506,397 (571,434) (51,040) (622,474) Leases (1) 10,422,013 (1,559,165) (415,496) (1,974,661) 18,672 (35,375) (21,231) (56,606) Total 11,389,326 (3,696,660) (746,986) (4,443,646) 525,069 (2,893,219) (494,931) (3,388,150) (1) Additions include the amount of the initial adoption of IFRS 16 (Note 2.f) .

DEFERRED INCOME

DEFERRED INCOME	12 Months Ended
	Dec. 31, 2019
DEFERRED INCOME
DEFERRED INCOME	21) DEFERRED INCOME Disposal of PP&E (1) 94,383 89,835 Government grants (2) 61,613 94,335 Contractual Liabilities - IFRS 15 (3) 499,035 532,207 Other (4) 63,051 59,658 Total 718,082 776,035 Current 506,181 525,509 Non-current 211,901 250,526 (1) Includes the net balances of the residual values from sale of non-strategic towers and rooftops, transferred to income as the conditions for recognition are fulfilled and a portion of the amount arising from the sale of the Tamboré and Curitiba (CIC) data centers to a company controlled by Asterion Industrial Partners SGEIC, S.A, to be recognized in profit or loss over 10 years, pursuant to contractual conditions. (2) This refers to: i) government subsidy arising from funds obtained from credit lines to be used in the acquisition of domestic equipment, which have been amortized over the useful life cycle of the equipment; and ii) subsidies arising from projects related to state taxes, which are being amortized over the contractual period. (3) Refers to the balance of contractual liabilities of customers, being deferred to the extent that they relate to performance obligations that are satisfied over time. (4) Includes amounts of the reimbursement for costs for leaving radio frequency sub-bands 2,500MHz to 2,690MHz due to cancellation of the Multichannel Multipoint Distribution Service. Changes in contractual liabilities (IFRS 15), mainly related to the sale of prepaid credits in the years ended December 31, 2019 and 2018: Initial adoption on 01.01.18 178,897 Reclassification on 01.01.18 383,688 Additions 7,271,614 Write-offs, net (7,301,992) Balance on 12.31.18 532,207 Additions 6,762,607 Write-offs, net (6,795,779) Balance on 12.31.19 499,035 Current 468,776 Non-current 30,259 Below, we present the expected periods of realization of contractual liabilities. Year 2020 468,776 2021 11,342 2022 3,468 2023 3,468 2024 3,468 2025 onwards 8,513 Total 499,035

OTHER LIABILITIES

OTHER LIABILITIES	12 Months Ended
	Dec. 31, 2019
OTHER LIABILITIES
OTHER LIABILITIES	22) OTHER LIABILITIES Liabilities with ANATEL (1) 300,119 346,950 Liabilities with related parties (Note 28) 30,114 31,716 Third-party withholdings (2) 222,056 120,711 Surplus from post-employment benefit plans (Note 30) 1,155,067 679,478 Amounts to be refunded to subscribers 43,794 56,897 Other liabilities 36,781 61,957 Total 1,787,931 1,297,709 Current 365,192 368,376 Non-current 1,422,739 929,333 (a) Includes the cost of renewing STFC and SMP licenses. (b) This refers to payroll withholdings and taxes withheld from pay-outs of interest on equity and on provision of services .

EQUITY

EQUITY	12 Months Ended
	Dec. 31, 2019
EQUITY
EQUITY	23) EQUITY a) Capital Pursuant to its Articles of Incorporation, the Company is authorized to increase its share capital up to 1,850,000,000 common and preferred shares. The Board of Directors is the competent body to decide on any increase and consequent issue of new shares within the authorized capital limit. Brazilian Corporation Law (Law nº 6404/76, Article 166, item IV) - establishes that capital may be increased by means of a Special Shareholders’ Meeting Resolution by modifying the Articles of Incorporation, if the authorized capital increase limit has been reached. Capital increases are not necessarily in proportion to the number of shares in existing classes, however the number of non-voting or restricted-voting preferred shares must not exceed two-thirds of total shares issued. Preferred shares are non-voting, except for cases set forth in Articles 9 and 10 of the Articles of Incorporation but have priority in the event of reimbursement of capital, without premium, and are entitled to dividends 10% higher than those paid on common shares, as per Article 7 of the Company's Articles of Incorporation and item II, paragraph 1, Article 17 of Law No. 6404/76. Preferred shares are also entitled to full voting rights if the Company fails to pay the minimum dividend to which they are entitled for three consecutive financial years. This right continues until payment of said dividend. Subscribed and paid-in capital on December 31, 2019 and 2018 amounted to R$63,571,416, divided into shares without par value, held as follows: Common Shares Preferred Shares Grand Total Shareholders Number % Number % Number % Controlling Group 540,033,264 94.47 % 704,207,855 62.91 % 1,244,241,119 73.58 % Telefónica Latinoamérica Holding, S.L. 46,746,635 8.18 % 360,532,578 32.21 % 407,279,213 24.09 % Telefónica 198,207,608 34.67 % 305,122,195 27.26 % 503,329,803 29.76 % SP Telecomunicações Participações 294,158,155 51.46 % 38,537,435 3.44 % 332,695,590 19.67 % Telefónica Chile 920,866 0.16 % 15,647 0.00 % 936,513 0.06 % Other shareholders 29,320,789 5.13 % 415,131,868 37.09 % 444,452,657 26.28 % Treasury Shares 2,290,164 0.40 % 983 0.00 % 2,291,147 0.14 % Total shares 571,644,217 100.00 % 1,119,340,706 100.00 % 1,690,984,923 100.00 % Treasury Shares (2,290,164) (983) (2,291,147) Total shares outstanding 569,354,053 1,119,339,723 1,688,693,776 b) Capital reserves b.1) Special goodwill reserve This represents the tax benefit generated by the merger of Telefonica Data do Brasil Ltda. which will be capitalized in favor of the controlling shareholders (SP Telecomunicações Participações) after the tax credits are realized under the terms of CVM Ruling No. 319/99. The balance of this account on December 31, 2019 and 2018 totaled R$63,074. b.2) Other capital reserves The breakdown on December 31, 2019 and 2018 was as follows. Excess of the value in the issue or capitalization, in relation to the basic value of the share on the issue date (1) 2,735,930 2,735,930 Cancelation of treasury shares according to the Special Shareholders' Meeting (SGM) of 3/12/15 (2) (112,107) (112,107) Direct costs of capital increases (3) (62,433) (62,433) Incorporation of shares of GVTPart. (4) (1,188,707) (1,188,707) Effects of the acquisition of Lemontree and GTR by Company and Tglog by TData (5) (75,388) (75,388) Preferred shares delivered referring to the judicial process of expansion plan (6) 2 2 Effects of the acquisition of Terra Networks Brasil by TData (7) (59,029) (59,029) Effects of the acquisition of TIS by Terra Networks (8) (48,135) — Other 76 10 Total 1,190,209 1,238,278 (1) It referes the excess of the value in the issue or capitalization, in relation to the basic value of the share on the issue date. (2) The cancellation of 2,332,686 shares issued by the Company, held in treasury, approved at the Special Shareholders' Meeting held on March 12, 2015. (3) The value refers direct costs (net of taxes) of Company capital that increased on April 30,2015, arising from the Primary Offering of Shares. (4) The value refers the difference between the economic values that comes from the merger of shares owned by GVTPart, issued on the transaction closing date. (5) Regarding the effects of the acquisition of shares of non-controlling shareholders that, with the adoption of IFRS 10, 35 and 36. It would be recorded in equity when there is no change in the shareholding control. (6) It refers about the effects of write-offs due to the transfer of 62 preferred shares in treasury to outstanding shares, for compliance with judicial process decisions in which the Company is involved regarding rights to the complementary receipt of shares calculated in relation to network expansion plans after 1996. (7) The effects refer the acquisition of Terra Networks by TData, related to the difference between the consideration given in exchange for the equity interest obtained and the value of the net assets acquired (Note 1 c.2). (8) The effects referee the acquisition of TIS by Terra Networks, related to the difference between the consideration given in exchange for the equity interest obtained and the value of the net assets acquired (Note 1 c.1). b.3) Treasury shares These are equity instruments that are repurchased and recognized at cost and deducted from shareholders' equity. No gain or loss is recognized in the statement of income on the purchase, sale, issue or cancellation of the equity instruments of the Company. The Company's shares held in treasury whose balance is resulting: (i) from the exercise of the right to withdraw from the Company's common and preferred shareholders, who expressed their dissent regarding the acquisition of GVTPart.; (ii) the acquisition of preferred shares in the financial market in accordance with the share buyback program in effect at the time of the transaction; and (iii) transfers of preferred shares, related to compliance with court decisions in which the Company is involved, which deals with rights to the complementary receipt of shares calculated in relation to network expansion plans after 1996. The balance of this account on December 31, 2019 and 2018 totaled R$87,820, consisting of 2,290,164 common shares and 983 preferred shares. c) Income reserves c.1) Legal Reserve This reserve is obligatorily constituted by the Company on the basis of 5% of net income for the year, up to 20% of the paid-in capital stock. The legal reserve may only be used to increase share capital and to offset accumulated losses. c.2) Expansion and Modernization Reserve This reserve is constituted based on the capital budget, whose purpose is to guarantee the expansion of the network capacity to meet the Company's increasing demand and guarantee the quality of service rendering. In accordance with Article 196 of Law No. 6404/76, the capital budget will be submitted for appreciation and approval by the Annual Shareholders' Meeting. c.3) Tax Incentives The Company has State VAT (ICMS) tax benefits in the states of Minas Gerais and Espírito Santo, relating to tax credits approved by the relevant bodies of said states, in connection with investments in the installation of SMP support equipment, fully operational, in accordance with the rules in force, ensuring that the localities listed in the call for bid be included in the SMP coverage area. The portion of profit subject to the incentive was excluded from dividend calculation and may be used only in the event of capital increase or loss absorption. c.4) Changes of income reserves The amounts of the income reserves are distributed as follows: Expansion and Modernization Legal reserve Reserve Tax incentives Total Balance on 12.31.17 2,138,344 297,000 27,884 2,463,228 Reversal of reserves — (297,000) — (297,000) Recording of reserves 446,413 1,700,000 11,529 2,157,942 Balance on 12.31.18 2,584,757 1,700,000 39,413 4,324,170 Reversal of reserves — (1,700,000) — (1,700,000) Recording of reserves 250,051 600,000 18,166 868,217 Balance on 12.31.19 2,834,808 600,000 57,579 3,492,387 d) Dividend and interest on equity (IOE) d.1) Additional dividends proposed for 2018 On April 11, 2019, the Annual General Meeting approved the allocation of proposed additional dividends for 2018, not yet distributed, amounting to R$2,468,684 to the holders of common and preferred shares that were registered in the Company's records at the end of the day of the Ordinary General Meeting. The amount was paid on December 17, 2019. d.2) Remuneration to shareholders The dividends are calculated in accordance with the Company Articles of Incorporation and the Corporation Law. The table below shows the calculation of dividends and interest on equity for 2019 and 2018: Net income for the year 5,001,014 8,928,258 Allocation to legal reserve (250,051) (446,413) (-) Tax incentives - not distributable (18,166) (11,529) Adjusted net income 4,732,797 8,470,316 Dividend and IOE distributed for the year: (3,588,000) (4,550,000) Interest on equity (gross) (2,588,000) (4,550,000) Interim dividends (1,000,000) — Balance of unallocated net income 1,144,797 3,920,316 (+) Reversal special reserve for modernization and expansion 1,700,000 297,000 (-) Effects of the initial adoption of IFRS 9 and 15, net of taxes on 01.01.18 — (138,663) (+) Unclaimed dividends and interest on equity 82,898 152,770 (+-) Actuarial gains (losses) recognized and effect of limitation of surplus plan assets, net of taxes and other changes (132,120) (62,739) Income available to be distributed 2,795,575 4,168,684 Proposal for Distributions: Special reserve for modernization and expansion 600,000 1,700,000 Additional proposed dividends 2,195,575 2,468,684 Proposed additional dividends - Net income for the year 495,575 2,171,684 Proposed additional dividends - Based on prior year's net income, referring to the reversal of the special reserve for expansion and modernization 1,700,000 297,000 Total 2,795,575 4,168,684 Mandatory minimum dividend - 25% of adjusted net income 1,183,199 2,117,579 The proposal to management of the 2019 financial year that is presented above will be submitted to the annual general meeting to be held in 2020. Total proposed for deliberation - per share Common shares 1.219339 1.371013 Preferred shares 1.341273 1.508114 In 2019 and 2018, the Company allocated interim dividends and interest on equity, which were allocated to mandatory minimum dividends, as follows: 2019 Dates Gross Amount Net Value Amount per Share Beginning of Nature Approval Credit Payment Common Preferred Total Common Preferred Total Common Preferred IOE 02/15/19 02/28/19 Until 12/31/20 221,338 478,662 700,000 188,137 406,863 595,000 0.33044031480 0.36348434628 IOE 04/17/19 04/30/19 Until 12/31/20 180,233 389,767 570,000 153,198 331,302 484,500 0.26907282777 0.29598011054 IOE 06/17/19 06/28/19 Until 12/31/20 306,079 661,921 968,000 260,167 562,633 822,800 0.45695174961 0.50264692458 IOE 12/19/19 12/30/19 Until 12/31/20 110,669 239,331 350,000 94,069 203,431 297,500 0.16522015740 0.18174217314 Dividends 12/19/19 12/30/19 Until 12/31/20 316,198 683,802 1,000,000 316,198 683,802 1,000,000 0.55536187362 0.61089806098 Total 1,134,517 2,453,483 3,588,000 1,011,769 2,188,031 3,199,800 2018 Dates Gross Amount Net Value Amount per Share Beginning of Nature Approval Credit Payment Common Preferred Total Common Preferred Total Common Preferred IOE 06/18/18 06/29/18 08/20/19 126,479 273,521 400,000 107,507 232,493 340,000 0.18882303703 0.20770534073 IOE 09/05/18 09/17/18 08/20/19 885,353 1,914,647 2,800,000 752,550 1,627,450 2,380,000 1.32176125923 1.45393738515 IOE 12/04/18 12/17/18 12/17/19 426,867 923,133 1,350,000 362,837 784,663 1,147,500 0.63727774998 0.70100552498 Total 1,438,699 3,111,301 4,550,000 1,222,894 2,644,606 3,867,500 The amounts of IOE are calculated and presented net of Withholding Income Tax (IRRF). Exempt shareholders received the full IOE amount, without withholding income tax at source. The gross and net values for the preferred shares are 10% higher than those attributed to each common share, as per article 7 of the Company's Articles of Incorporation. d.3) Unclaimed dividends and interest on equity Pursuant to Article 287, paragraph II, item “a” of Law No. 6404, of December 15, 1976, the dividends and interest on equity unclaimed by shareholders are subject to the statute of limitation three years, as from the initial payment date. The Company reverses the amounts of unclaimed dividends and IOE to equity once the statute of limitation occurred. For the years ended December 31, 2019 and 2018, the Company reversed unclaimed dividends and interest on equity amounting to R$82,898 and R$152,770, respectively, which were included in calculations for decisions on Company dividends. e) Other comprehensive income Financial assets at fair value through other comprehensive income: These refer to changes in fair value of financial assets available for sale. Derivative financial instruments: These refer to the effective part of cash flow hedges up to the balance sheet date. Currency translation effects for foreign investments: This refers to currency translation differences arising from the translation of financial statements of Aliança (joint venture). Changes in other comprehensive income were as follows: Financial assets at Currency translation fair value through other effects - foreign comprehensive income Derivative transactions investments Total Balance on 12.31.17 (8,658) 1,954 28,032 21,328 Translation gains — — 9,927 9,927 Losses from future contracts — (1,618) — (1,618) Losses on financial assets at fair value through other comprehensive income (412) — — (412) Balance on 12.31.18 (9,070) 336 37,959 29,225 Translation gains — — 1,859 1,859 Losses from future contracts — (336) — (336) Losses on financial assets at fair value through other comprehensive income (11) — — (11) Balance on 12.31.19 (9,081) — 39,818 30,737 f) Company share repurchase program On December 7, 2018 the Company's Board of Directors, in accordance with Article 17, item XV of the law, the programs were approved for the repurchase of common and preferred shares pursuant to CVM Instruction 567, of September 17, 2015. The acquisition of own shares was made with the intention of subsequently cancelling, selling or holding in treasury, without reducing the capital stock, thereby increasing shareholder value through the efficient application of available resources in cash and optimize the Company's capital allocation. The repurchase will be made through using the balance capital reserve that was included in the balance sheet of September 30, 2018. This program will be in force until June 6, 2020, with the acquisitions made on B3, at market prices, observing the legal and regulatory limits. The maximum amounts authorized for acquisition are 583,422 common shares and 37,736,465 preferred shares. During the year ended December 31, 2019, there were no acquisitions of shares within the Company's share repurchase program to be held in treasury for further sale and / or cancellation. g) Earnings per share Basic and diluted earnings per share were calculated by dividing profit attributed to the Company’s shareholders by the weighted average number of outstanding common and preferred shares. The table below sets out the calculation of earnings per share for the years ended December 31, 2019, 2018 and 2017: Net income for the year 5,001,014 8,928,258 4,608,790 Common shares 1,581,308 2,823,093 1,457,288 Preferred shares 3,419,706 6,105,165 3,151,502 Number of shares (thousands): 1,688,694 1,688,694 1,688,694 Weighted average number of outstanding common shares for the year 569,354 569,354 569,354 Weighted average number of outstanding preferred shares for the year 1,119,340 1,119,340 1,119,340 Basic and diluted earnings per share: Common shares 2.78 4.96 2.56 Preferred shares 3.06 5.45 2.82

NET OPERATING REVENUE

NET OPERATING REVENUE	12 Months Ended
	Dec. 31, 2019
NET OPERATING REVENUE
NET OPERATING REVENUE	24) NET OPERATING REVENUE a) Accounting policy Recognition of revenues from services and goods With the adoption of IFRS 15 on January 1, 2018, for packages combining various fixed network, mobile, data, internet or television products or services, total revenue is now allocated to each performance obligation based on its independent selling prices in relation to the total consideration of the package and recognized when (or as soon as) the obligation is met, regardless of whether or not items are delivered. When packages include a discount on the equipment, there is an increase in revenues recognized for the sale of handsets and other equipment, to the detriment of ongoing service revenue over subsequent periods. To the extent that the packages are marketed at a discount, the difference between the revenue from the sale of equipment and the consideration received from the customer in advance is recognized as a contractual asset in the statement of financial position. Revenues correspond substantially to the value of the consideration received or receivable arising from the provision of telecommunications, communications, sales of goods, advertising and other revenues, and are presented net of taxes, rebates and returns (in the case of sale of goods), incident on them. Revenues from sales of public telephone cards and prepaid cellular recharge credits, as well as the respective taxes due are deferred and recognized in income as services are effectively rendered. Revenues from leasing contracts for equipment classified as financial leasing ("Soluciona IT" product) are recognized at the installation of the equipment, at which time the actual transfer of risk occurs. Revenues are recognized at the present value of future minimum contract payments. Revenue from the sale of appliances to dealers is accounted for at the time of delivery and not at the time of sale to the final customer. Revenues from services and goods are basically subject to the following indirect taxes: ICMS or ISS (as the case may be), PIS and COFINS, as the case may be. b) Critical estimates and judgments The Company has billing systems for services with intermediate cut-off dates. Thus, at the end of each month there are revenues already received by the Company, but not effectively invoiced to its customers. These unbilled revenues are recorded based on estimates, which take into account historical consumption data, number of days elapsed since the last billing date, different cycles of information, and data obtained from different sources which is processed by a large number of application and system, among others. These estimates are subject to significant uncertainties. c) Breakdown Gross operating revenue 66,571,866 65,794,397 66,243,174 Services (1) 60,129,579 61,292,362 62,696,433 Sale of goods (2) 6,442,287 4,502,035 3,546,741 Deductions from gross operating revenue (22,303,695) (22,331,657) (23,036,342) Taxes (13,894,361) (14,559,915) (16,058,584) Services (12,678,809) (13,820,784) (15,468,315) Sale of goods (1,215,552) (739,131) (590,269) Discounts granted and return of goods (8,409,334) (7,771,742) (6,977,758) Services (6,319,584) (6,288,941) (5,340,476) Sale of goods (2,089,750) (1,482,801) (1,637,282) Net operating revenue 44,268,171 43,462,740 43,206,832 Services 41,131,186 41,182,637 41,887,642 Sale of Goods 3,136,985 2,280,103 1,319,190 (1) These include telephone services, use of interconnection network, data and SVA services, cable TV and other services. (2) These include sale of goods (handsets, SIM cards and accessories) and equipment of “Soluciona TI”. No single customer contributed more than 10% of gross operating revenue for the years ended December 31, 2019, 2018 and 2017.

OPERATING COSTS AND EXPENSES

OPERATING COSTS AND EXPENSES	12 Months Ended
	Dec. 31, 2019
OPERATING COSTS AND EXPENSES
OPERATING COSTS AND EXPENSES	25) OPERATING COSTS AND EXPENSES 2019 General and Cost of sales administrative and services Selling expenses expenses Total Personnel (1) (758,780) (2,568,363) (430,409) (3,757,552) Third-party services (2) (6,601,587) (6,686,452) (1,154,823) (14,442,862) Rental, insurance, condominium and connection means (3) (1,388,217) (78,401) (57,359) (1,523,977) Taxes, charges and contributions (4) (1,597,066) (41,810) (31,127) (1,670,003) Estimated impairment losses on accounts receivable (Note 4) — (1,682,348) — (1,682,348) Depreciation and amortization (5) (8,624,228) (1,501,096) (794,468) (10,919,792) Cost of goods sold (3,156,964) — — (3,156,964) Materials and other operating costs and expenses (32,105) (142,752) (29,910) (204,767) Total (22,158,947) (12,701,222) (2,498,096) (37,358,265) 2018 General and Cost of sales administrative and services Selling expenses expenses Total Personnel (1) (872,032) (2,574,498) (549,610) (3,996,140) Third-party services (2) (6,656,924) (6,989,006) (1,237,527) (14,883,457) Rental, insurance, condominium and connection means (3) (2,957,489) (147,613) (202,881) (3,307,983) Taxes, charges and contributions(4) (1,594,836) (30,703) (36,122) (1,661,661) Estimated impairment losses on accounts receivable (Note 4) — (1,533,660) — (1,533,660) Depreciation and amortization (5) (6,487,909) (1,352,638) (528,076) (8,368,623) Cost of goods sold (2,406,099) — — (2,406,099) Materials and other operating costs and expenses (50,478) (204,623) (44,754) (299,855) Total (21,025,767) (12,832,741) (2,598,970) (36,457,478) 2017 General and Cost of sales administrative and services Selling expenses expenses Total Personnel (1) (845,358) (2,387,314) (493,095) (3,725,767) Third-party services (2) (7,032,252) (7,438,937) (1,232,379) (15,703,568) Rental, insurance, condominium and connection means (3) (2,624,405) (151,455) (204,701) (2,980,561) Taxes, charges and contributions (4) (1,792,764) (39,050) (34,779) (1,866,593) Estimated impairment losses on accounts receivable (Note 4) — (1,481,015) — (1,481,015) Depreciation and amortization (5) (5,963,153) (1,433,297) (457,284) (7,853,734) Cost of goods sold (1,955,890) — — (1,955,890) Materials and other operating costs and expenses (58,708) (205,406) (20,867) (284,981) Total (20,272,530) (13,136,474) (2,443,105) (35,852,109) (1) (2) (3) (4) (5)

OTHER OPERATING INCOME (EXPENSE

OTHER OPERATING INCOME (EXPENSES)	12 Months Ended
	Dec. 31, 2019
OTHER OPERATING INCOME (EXPENSES)
OTHER OPERATING INCOME (EXPENSES)	26) OTHER OPERATING INCOME (EXPENSES) Recovered expenses and fines (1) 503,777 3,962,150 355,415 Provisions for labor, tax and civil contingencies (Note 19) (2) (625,480) (1,258,966) (999,419) Net gain (loss) on asset disposal/loss 408,160 114,853 108,767 Other operating income (expenses) 17,561 (367,115) (187,249) Total 304,018 2,450,922 (722,486) Other operating income 929,498 4,077,003 464,182 Other operating expenses (625,480) (1,626,081) (1,186,668) Total 304,018 2,450,922 (722,486) (1) (2)

FINANCIAL INCOME (EXPENSES)

FINANCIAL INCOME (EXPENSES)	12 Months Ended
	Dec. 31, 2019
FINANCIAL INCOME (EXPENSES)
FINANCIAL INCOME (EXPENSES)	27) FINANCIAL INCOME (EXPENSES) a) Accounting policy These include interest, monetary and exchange variations arising from short-term investments, derivative transactions, loans, financing, debentures, present value adjustments of transactions that generate monetary assets and liabilities and other financial transactions. These are recognized on an accrual basis when earned or incurred by the Company. For all financial instruments measured at amortized cost and interest-yielding financial assets classified as financial assets at fair value through other comprehensive income, interest income or expense is recognized using the effective interest method, which exactly discounts estimated future cash payments or receipts over the expected life of the financial instrument or, where appropriate, a shorter period, to the net carrying amount of the financial asset or liability. b) Breakdown Financial Income Interest income 272,158 246,083 655,474 Interest receivable (customers, taxes and other) 177,636 118,476 124,391 Gain on derivative transactions (Note 31) 315,351 305,996 373,971 Foreign exchange variations on loans and financing (Note 20) 5,140 32,326 113,203 Other revenues from foreign exchange and monetary variation (1) 209,447 3,341,211 406,013 Other financial income 153,138 68,548 82,906 Total 1,132,870 4,112,640 1,755,958 Financial Expenses Loan, financing, debenture and finance lease charges (Nota 20) (3) (830,686) (510,398) (932,727) Foreign exchange variation on loans and financing (Note 20) (4,036) (61,174) (129,049) Loss on derivative transactions (Note 31) (263,388) (295,208) (415,956) Interest payable (financial institutions, provisions, trade accounts payable, taxes and other) (144,779) (186,238) (136,425) Other expenses with foreign exchange and monetary variation (615,291) (963,463) (876,948) IOF, Pis, Cofins and other financial expenses (2) (94,831) (269,006) (167,897) Total (1,953,011) (2,285,487) (2,659,002) Financial income (expenses), net (820,141) 1,827,153 (903,044) (1) For the year ended December 31, 2018, includes tax credits amounting to R$2,926,247, arising from the final court proceeding in favor of the Company and its subsidiary (TData), which recognized the right to exclude ICMS (VAT) from the basis of calculation of PIS and COFINS contributions for the periods from September 2003 to June 2017 and July 2004 to June 2013 (Note 8). (2) For the year ended December 31, 2018, includes the amount of R$136,070 of PIS and COFINS on the indexation for inflation credits in (1) above. (3) Includes the consolidated amounts of R$457,98, R$45,501 and R$45,265 in the years ended December 31, 2019, 2018 and 2017, respectively, related to leases charges.

BALANCES AND TRANSACTIONS WITH

BALANCES AND TRANSACTIONS WITH RELATED PARTIES	12 Months Ended
	Dec. 31, 2019
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
BALANCES AND TRANSACTIONS WITH RELATED PARTIES	28) BALANCES AND TRANSACTIONS WITH RELATED PARTS a) Balances and transactions with related parts The main balances of assets and liabilities with related parties arises from transactions with companies related to the controlling group carried out at the prices and other commercial conditions agreed in contracts between the parts as follows: a) Fixed and mobile telephony services provided by Telefónica Group companies. b) Digital TV services provided by Media Networks Latino America. c) Rental, maintenance of safety equipment and construction services provided by Telefônica Infraestrutura e Segurança (formerly Telefônica Inteligência e Segurança Brasil). The controlling interest of this company was acquired by Terra Networks (Note 1.c.1) and, therefore, the amounts presented in the income statement refer to the period from January to August 2019. d) Corporate services passed through at the cost effectively incurred for these services. e) Right to use certain software licenses, including maintenance and support, provided by Telefónica Global Technology. f) International transmission infrastructure for several data circuits and roaming services provided by Telxius Cable Brasil, Telefónica International Wholesale Services Espanha, Telefónica USA; and Telefónica International Wholesale Services Brazil (formerly Media Net Brazil). g) Operations by Telefónica Group companies, relating to the purchase of internet content, advertising and auditing services. h) Marketing services provided by Telefónica Group companies. i) Information access services through the electronic communications network, provided by Telefonica de Espanha. j) Data communication services and integrated solutions provided by Telefónica International Wholesale Services Espanha and Telefónica USA. k) Long distance call and international roaming services provided by Telefónica Group companies. l) Sundry expenses and costs to be reimbursed by Telefónica Group companies. m) Brand fee for assignment of rights to use the brand paid to Telefónica. n) Platform of health services provided by Axismed. o) Cost Sharing Agreement for digital-business related expenses reimbursed to Telefónica Digital. p) Leases/rentals of Telefónica Group companies’ buildings. q) Financial Clearing House roaming, inflows of funds for payments and receipts arising from roaming operation between group companies operated by Telfisa. r) Integrated e-learning, online education and training solutions provided by Telefônica Serviços de Ensino. s) Factoring transactions, credit facilities for services provided by the Group's suppliers. t) Social investment in Fundação Telefônica, innovative use of technology to enhance learning and knowledge, contributing to personal and social development. u) Contracts or agreements assigning user rights for cable ducts, optical fiber duct rental services, and right-of-way related occupancy agreements with several highway concessionaires provided by Companhia AIX. v) Adquira Sourcing platform - online solution provided by Telefónica Compras Electrónicas to transact purchase and sale of all types of goods and services. w) Digital media; marketing and sales, in-store and outdoor digital marketing services provided by Telefônica On The Spot Soluções Digitais Brasil. x) Tower lease transactions between Telefonica Brasil and Telxius Torres Brasil. y) Amounts to be reimbursed by SPTE as a result of contractual clause of the purchase of Terra Networks Brasil equity interest. z) Sale of digital products, creation of an exclusive band channel that responds to the commercial demand for these digital services and products. aa) Hosting services, housing and telecommunications solutions for the corporate market provided by Acens. bb) Consulting services, technical support, import and export of goods with the company Telefonica Ingeniería de Seguridad. cc) Negotiations with suppliers in the different global categories provided by Telefónica Global Services GmBH. The Company and its subsidiaries sponsor pension plans and other post-employment benefits for its employees with Visão Prev and Sistel (Note 30). The following table summarizes the consolidated balances with related parts: Balance Sheet - Assets 12.31.19 12.31.18 Cash and cash Accounts Other assets and Cash and cash Accounts Companies Type of transaction equivalents receivable prepaid expenses equivalents receivable Other assets Parent Companies SP Telecomunicações Participações d) / l) — 6 4,924 — — 10,083 Telefónica LatinoAmerica Holding l) — — 40,105 — — 60,387 Telefónica l) / z) — 10,873 2,555 — 9,300 29,757 — 10,879 47,584 — 9,300 100,227 Other Group companies Colombia Telecomunicaciones k) / l) — 159 520 — 1,334 520 Telefónica International Wholesale Services a) / d) / l) / p) — 1,961 3,602 — 903 4,051 T.O2 Germany GMBH CO. OHG k) — 1,688 — — 20,877 — Telefónica Venezolana k) — 6,498 2,196 — 5,926 2,196 Telefônica Digital España g) / l) — 696 300 — 197 294 Telefônica Factoring do Brasil a) / d) / l) / s) — 2,782 45 — 6,360 133 Telefônica Infraestrutura e Segurança (formerly Telefônica a) / d) / l) — — — — 800 986 Telefónica International Wholesale Services Espanha j) / k) — 58,490 — — 46,537 — Telefônica Serviços de Ensino a) / p) — 153 14 — 286 — Telefónica Moviles Argentina k) — 5,145 — — 5,074 — Telefónica Moviles Espanha k) — 1,536 — — 7,576 — Telefónica USA j) — 5,319 — — 9,005 — Telfisa Global BV q) 59,657 — — 46,755 — — Telxius Cable Brasil a) / d) / l) / p) — 11,382 5,100 — 11,628 5,295 Telxius Torres Brasil d) / p) / x) — 5,429 6,611 — 6,776 4,268 Terra Networks Chile, Terra Networks México, Terra Networks Perú, Terra Networks Argentina and Terra Networks Colômbia g) / h) — 5,598 — — 5,341 — Other a) / d) / k) / l) / p) / bb) — 12,189 2,732 — 10,894 2,806 59,657 119,025 21,120 46,755 139,514 20,549 Total 59,657 129,904 68,704 46,755 148,814 120,776 Current assets Cash and cash equivalents (Note 3) 59,657 — — 46,755 — — Accounts receivable (Note 4) — 129,904 — — 148,814 — Prepaid expenses (Note 6) — — 3,738 — — — Other assets (Note 10) — — 64,471 — — 114,715 Non-current assets Prepaid expenses (Note 6) — — — — — — Other assets (Note 10) — — 495 — — 6,061 Balance Sheet - Liabilities 12.31.19 12.31.18 Trade accounts Other Trade accounts payable and liabilities and payable and Companies Type of transaction other payables leases other payables Other liabilities Parent Companies SP Telecomunicações Participações l) / y) — 23,524 — 21,901 Telefónica l) / m) 2,907 40 687 1,393 2,907 23,564 687 23,294 Other Group companies Colombia Telecomunicaciones k) 816 — 1,056 — Fundação Telefônica l) — 86 — 82 Media Networks Latina America SAC b) 9,245 — 10,212 — Telefónica International Wholesale Services f) 44,835 318 44,693 318 T.O2 Germany GMBH CO. OHG k) 5,000 — 5,706 — Telefónica Venezolana k) 6,044 — 5,410 — Telefónica Compras Electrónicas v) 28,169 — 32,582 — Telefônica Digital España o) 68,015 — 43,340 — Telefônica Factoring do Brasil l) / s) — 4,057 — 2,770 Telefónica Global Technology e) 28,854 — 28,750 — Telefônica Infraestrutura e Segurança (formerly Telefônica c) / l) — — 52,184 27 Telefónica International Wholesale Services Espanha f) / k) 66,976 — 26,097 — Telefônica Serviços de Ensino r) 8,373 — 22,518 — Telefónica Moviles Argentina k) 3,638 — 4,160 — Telefónica Moviles Espanha k) 3,488 — 5,233 — Telefónica USA f) 16,015 267 4,411 200 Telxius Cable Brasil f) / l) 47,168 1,572 39,662 2,067 Telxius Torres Brasil x) 30,018 480,589 38,735 1,926 Terra Networks Chile, Terra Networks México, Terra Networks h) 7,105 — 1,766 — Other a) / d) / g) / k) / h) / l) / bb) 28,605 42 16,310 1,032 402,364 486,931 382,825 8,422 Total 405,271 510,495 383,512 31,716 Current liabilities Trade accounts payable and other payables (Note 15) 405,271 — 383,512 — Leases (Note 20) — 480,381 — — Other liabilities (Note 22) — 29,529 — 22,220 Non-current liabilities Leases (Note 20) — — — — Other liabilities (Note 22) — 585 — 9,496 Income statement 2019 2018 2017 Cost and Cost and Cost and other other other expenses expenses expenses Operating (revenues) Financial Operating (revenues) Financial Operating (revenues) Financial Companies Type of transaction revenues operating result revenues operating result revenues operating result Parent Companies SP Telecomunicações Participações d) / l) 5 497 — — 347 — — 268 — Telefónica LatinoAmerica Holding l) — 18,309 851 — 16,466 9,077 — 36,523 11,030 Telefónica l) / m) — (422,958) (5,226) — (373,690) (16,680) — (331,684) (996) 5 (404,152) (4,375) — (356,877) (7,603) — (294,893) 10,034 Other Group companies Colombia Telecomunicaciones k) 111 321 (17) 250 (4,280) (2,145) 349 (10) 604 Companhia AIX de Participações a) / u) 38 (24,174) — 75 (22,645) — 36 (22,738) — Fundação Telefônica l) / t) — (11,971) — — (12,223) — — (11,395) — Telefónica International Wholesale Services a) / d) / f) / l) / p) 757 (104,105) (54) 2,006 (101,272) — 601 (57,177) — Media Networks Latina America SAC b) — (41,023) (596) — (34,791) (1,007) — (33,133) (516) Telefônica Serviços de Ensino a) / p) / r) 1,085 (35,228) — 1,158 (49,130) — 292 (54,781) — T.O2 Germany GMBH CO. OHG k) (100) 489 1,845 148 (1,975) — 75 (1,409) — Telefónica Compras Electrónicas v) — (30,814) — — (34,534) — — (29,062) — Telefônica Digital España l) / o) 299 (127,182) (3,016) — (124,537) (813) — (81,893) (2,600) Telefônica Factoring do Brasil a) / d) / l) / s) 2,418 239 (4,048) 2,416 212 2,601 69 828 61 Telefónica Global Technology, S.A.U. e) / l) — (63,947) 388 — (36,738) (4,134) — (36,395) 40 Telefônica Infraestrutura e Segurança (formerly Telefônica a) / c) / d) / l) / p) 591 (27,079) — 1,568 (54,210) — 706 (40,918) — Telefónica International Wholesale Services Espanha f) / j) / k) 48,819 (75,693) (4,128) 53,357 (64,036) 9,771 56,728 (49,960) (2,564) Telefónica Moviles Argentina k) 4,030 (3,437) 90 5,916 (3,437) — 3,746 6,147 — Telefónica Moviles Espanha k) 410 (1,737) 545 (209) (4,166) — 1,048 (1,969) — Telefónica USA f) / j) 38 (19,793) 1,700 1,518 (19,441) (539) 2,392 (13,202) (2,185) Telxius Cable Brasil a) / d) / f) / l) / p) 13,585 (252,436) (7,415) 49,777 (206,095) (7,896) 15,045 (200,537) 787 Telxius Torres Brasil d) / l) / p) / x) 3,652 756 (24,144) 3,218 (129,706) — — (107,373) — Terra Networks Chile, Terra Networks México, Terra Networks h) 2,535 (5,639) 567 — (2,794) 1,450 — 1,072 (59) Other a) / d) / g) / i) / k) / l) / n) / p) / w) / aa) / bb) /cc) 6,269 (31,684) 588 4,840 (27,116) (244) 9,311 (29,409) 182 84,537 (854,137) (37,695) 126,038 (932,914) (2,956) 90,398 (763,314) (6,250) Total 84,542 (1,258,289) (42,070) 126,038 (1,289,791) (10,559) 90,398 (1,058,207) 3,784 b) Management compensation Consolidated key management compensation paid by the Company to its Board of Directors and Statutory Officers for the years ended December 31, 2019 and 2018 totaled R$25,483 and R$26,431, respectively. Of this amount, R$16,758 (R$17,493 on December 31, 2018) corresponds to salaries, benefits and social charges and R$8,725 (R$8,938 on December 31, 2018) to variable compensation. These were recorded as personnel expenses in General and administrative expenses (Note 25). For the years ended December 31, 2019 and 2018, the Directors and Officers received no pension, retirement or similar benefits.

SHARE-BASED PAYMENT PLANS

SHARE-BASED PAYMENT PLANS	12 Months Ended
	Dec. 31, 2019
SHARE-BASED PAYMENT PLANS
SHARE-BASED PAYMENT PLANS	29 ) SHARE-BASED PAYMENT PLANS a) Accounting policy The Company and subsidiaries measure the cost of transactions settled with shares issued by the parent company (Telefónica), to its officers and employees. The Company and its subsidiaries measure the cost of transactions settled with employees and officers based on shares issued by the parent company (Telefónica), by reference to the fair value of the shares on the date at which they are granted, using the binomial valuation model. This fair value is charged to the statement of income over the period until the vesting date. The Company and its subsidiaries reimburse Telefónica for the fair value of the benefit delivered on the grant date to the officers and employees. b) Information on share-based payment plans Telefónica as the Company´s parent has different share-based payment plans which are also offered to management and employees of its subsidiaries, including the Company and its subsidiaries. The granting of shares is conditional upon: (i) maintenance of an active employment relationship within the Telefónica Group on the cycle consolidation date; and (ii) achievement, by Telefónica, of results representing fulfillment of the objectives established for the plan. The level of success is based on a comparison of growth in Telefónica shareholder earnings, including their quotations and dividends (Total Shareholder Return - “TSR”), compared with the growth in TSR for companies of the Group in an established basis of comparison and the Telefónica Group's FCF. On December 31, 2019, the value of Telefónica’ share price was Eur 6.2270. Company and subsidiaries share-based compensation plans expenses described above, where applicable, are recorded as personnel expenses, divided into the groups cost of services, selling expenses and general and administrative expenses (Note 25), corresponding to R$10,833 and R$10,433 for the years ended December 31, 2019 and 2018. The main plans in effect on December 31, 2019 are detailed below: b.1) Talent for the Future Share Plan (“TFSP”), for its Senior Managers, Managers and Experts at a global level Telefónica's Annual Shareholders' Meeting, held on June 8, 2018, approved a long-term program with the objective of rewarding the commitment, outstanding performance and high potential of its executives at a global level with the attribution of shares of Telefónica. Participants do not have to pay for their assigned initial actions. The total planned duration of the plan is three years. The cycles are independent of each other. The number of shares is announced at the beginning of the cycle and after the three years period from the grant date, the shares will be transferred to the participants if the goal is achieved. The 2018-2020 cycle (January 1, 2018 to December 31, 2020): includes 158 active executives the potential rights to receive 113,250 shares of Telefónica. The 2019-2021 cycle (January 1, 2019 to December 31, 2021): includes 158 active executives the potential rights to receive 128,750 shares of Telefónica. b.2) Perform Share Plan (“PSP”), for its Vice-Presidents and Directors at the global level Telefónica's Annual Shareholders' Meeting, held on June 8, 2018, approved a long-term program with the objective of rewarding the commitment, outstanding performance and high potential of its Directors at the global level with the attribution of shares of Telefónica. Participants do not have to pay for their assigned shares. The total planned duration of the plan is three years. The cycles are independent of each other. The number of shares is announced at the beginning of the cycle and after the three years period from the grant date, the shares will be transferred to the participants if the target is reached. The 2018-2020 cycle (January 1, 2018 to December 31, 2020): includes 102 active executives (including 3 executives appointed under the Company's by-laws), with the potential right to receive 728,256 shares of Telefónica. The 2019-2021 cycle (January 1, 2019 to December 31, 2021): includes 102 active executives (including 3 executives appointed under the Company's by-laws), with the potential right to receive 997,477 shares of Telefónica. b.3) Global Employee Share Plan (“GESP”) Employees enrolled in the plan acquired Telefónica shares through monthly contributions of €25 to €150 (or the equivalent in local currency) up to €1,800 over 12 months (acquisition period). The 12 months following the purchase period are the retention period for the purchased shares. At the end of the 2nd year, reward shares will be delivered, that is, for every two shares purchased by the employee, a free share will be granted The cycle of this plan is effective from July 1, 2019 to June 31, 2021. The delivery of shares will take place after the vesting period of the plan, after July 31, 2021, and is subject to: (i) remaining in the company during the two years of the program (vesting period), subject to certain special conditions in relation to casualties; and (ii) the exact number of shares to be delivered at the end of the vesting period depends on the number of shares acquired and held by employees. Thus, employees enrolled in the plan, and who remain in the Telefónica Group, who have maintained the acquired shares for an additional period of another twelve months after the end of the purchase period, will be entitled to receive one free share for every two shares they have acquired and maintained until the end of the vesting period.

PENSION PLANS AND OTHER POST-EM

PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS	12 Months Ended
	Dec. 31, 2019
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS	30) PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS a) Accounting policy The Company and its subsidiaries individually sponsor pension funds of post-retirement benefits for active and retired employees, in addition to a multisponsor supplementary retirement plan and health care plan for former employees. Contributions are determined on an actuarial basis and recorded on an accrual basis. Liabilities relating to defined benefit plans are determined based on actuarial evaluations at each year-end, in order to ensure that sufficient reserves have been set up for both current and future commitments. Actuarial liabilities related to defined benefit plans were calculated using the projected unit credit method. Actuarial gains and losses are recognized immediately in equity (in other comprehensive income). For plans with defined contribution characteristics, the obligation is limited to the contributions payable, which are recognized in the P&L in the respective accrual periods. The asset or liability related to defined benefit plan to be recognized in the financial statements corresponds to the present value of the obligation for the defined benefit (using a discount rate based on long-term National Treasury Notes - “NTNs”), less the fair value of plan assets that will be used to settle the obligations. Plan assets are assets held by a privately held supplementary pension plan entity. Plan assets are not available to the Company’s creditors or those of its subsidiaries and cannot be paid directly to the Company or its subsidiaries. The fair value is based on information on market prices and, in the case of securities quoted, on the purchase price disclosed. The value of any defined benefit asset then recognized is limited to the present value of any economic benefits available as a reduction in future plan contribution from the Company. Actuarial costs recognized in the statement of income are limited to the service cost and cost of interest on the defined benefit plan obligation. Any changes in the measurement of plan assets and obligations are initially recognized in other comprehensive income, and immediately reclassified to retained earnings in P&L. The Company and its subsidiaries manage and individually sponsors a health care plan for retired employees and former employees with fixed contributions to the plan, in accordance with Law No. 9656/98 (which provides for private health care and health insurance plans). As provided for in Articles 30 and 31 of said law, participants shall have the right to the health care plan in which they participated while they were active employees. b) Critical estimates and judgments The cost of pension plans with defined benefits and other post-employment health care benefits and the present value of the pension obligation are determined using actuarial valuation methods. Actuarial valuation involves use of assumptions about discount rates, future salary increases, mortality rates and future increases in pension and annuity benefits. The obligation for defined benefits is highly sensitive to changes in these assumptions. All assumptions are reviewed on an annual basis. The mortality rate is based on publicly available mortality tables in the country. Future salary increases, and pension increases are based on expected future inflation rates for the country. c) Information on pension plans and other post-employment benefits The plans sponsored by the Company and its subsidiaries and the related benefit types are as follows: Plan Type Entity Sponsor PBS-A Defined benefit (DB) Sistel Telefônica Brasil, jointly with other telecoms resulting from privatization of the Sistema Telebrás PAMA / PCE Defined benefit (DB) Sistel Telefônica Brasil, jointly with other telecoms resulting from privatization of the Sistema Telebrás Healthcare - Law No. 9656/98 Defined benefit (DB) Telefônica Brasil Telefônica Brasil, Terra Networks, TGLog and TIS CTB Defined benefit (DB) Telefônica Brasil Telefônica Brasil Telefônica BD Defined benefit (DB) VisãoPrev Telefônica Brasil VISÃO Defined contribution (DC) / Hybrid VisãoPrev Telefônica Brasil, Terra Networks, TGLog and TIS The Company has participation in the decisions that directly affect the governance of the plans, with members nominated for both the Deliberative Council and the Fiscal Council of the administrators Sistel and Visão Prev. The defined benefit obligation is made up of different components, according to the pension characteristic of each plan, and may include the actuarial liabilities of supplementary pension liabilities, health care benefits to retirees and dependents or compensation for death or disability of members. This liability is exposed to economic and demographic risks, such as: (i) increases in medical costs that could impact the cost of health care plans; (ii) salary growth; (iii) long-term inflation rate; (iv) nominal discount rate; and (v) life expectancy of members and pensioners. The fair value of plan assets is primarily comprised of fixed income investments (NTN's, LFT’s, LTN's, repurchase agreements, CDBs, debentures, letters of guarantee and FIDC shares) and equity investments (highly liquid, well regarded, large company shares and investments in market indices). Due to the concentration of fixed income and floating rate investments plan assets are mainly exposed to the risks inherent in the financial market and economic environment such as: (i) market risk in the economic sectors where variable income investments are concentrated; (ii) risk events that impact the economic environment and market indices where variable income investments are concentrated; and (iii) the long-term inflation rate that may erode the profitability of fixed income investments at fixed rates. The companies that administer post-employment benefits plans sponsored by the Company (Visão Prev and Sistel) seek to meet the flows of assets and liabilities through the acquisition of fixed income securities and other long-term assets. With the exception of the Companhia Telefônica Brasileira ("CTB") and the healthcare plan under Law No. 9656/98, generally all benefit plans that have funds constituted present a surplus position. The economic benefit recorded in the Company's assets or that of its subsidiaries does not reflect the total surplus determined in these plans. The economic benefit stated under assets considers only the portion of the surplus which presents a real possibility of recovery. The means of plan surplus recovery is solely through reductions in future contributions and given that not all plans currently receive enough contributions for full recovery of surpluses, the economic benefit recorded under assets is limited to the total possible recovery amount in accordance with projected future contributions. The position of plan assets is on December 31, 2019 and 2018, respectively, and plan assets were apportioned based on the Company’s actuarial liabilities in relation to the total actuarial liabilities of the plan. The actuarial gains and losses generated in each year are immediately recognized in equity (in other comprehensive income). The following is a summary of the pension plans and other post-employment benefits: c.1) Post-Employment Health Benefits Plans The actuarial valuation made for the PAMA health plan used the registration of the participants with a base date of October 31, 2019, while the actuarial valuation made for the health plan Law No. 9,656/98 used the registration of the participants with a base date of December 31, 2019, both plans projected for December 31, 2019. For comparative exercises, the actuarial valuation made for the PAMA health plan and health plan Law No. 9,656/98 used the participants of October 31, 2018 and September 30, 2018, respectively, both plans projected for December 31, 2018. c.1.1) Healthcare Plan to Retirees and Special Coverage Program (PAMA and PAMA-PCE) The Company, together with other companies of the former Telebrás System, at shared cost, sponsor health care plans (PAMA and PAMA-PCE) to retirees. These plans are managed by Fundação Sistel and are closed plans, not admitting new members. Contributions to the plans are determined based on actuarial valuations prepared by independent actuaries, in accordance with the rules in force in Brazil. The funding procedure is the capitalization method and the sponsor’s contribution are at the fixed percentage of payroll of employees covered by the Telefônica BD plan. c.1.2) Health care plan – Law No. 9656/98 The Company manages and together with its subsidiaries sponsors a health care plan to retired employees and former employees with fixed contributions to the plan, in accordance with Law No. 9656/98. As provided for in Articles 30 and 31 of said law, participants shall have the right to the health care plan in which they participated while they were active employees. Benefitted participants are classified as retirees and their dependents and dismissed employees and their dependents. Retirees and dismissed employees, in order to keep their right to the benefits, must make contributions to the plan in accordance with the contribution tables by age bracket established by carriers and/or insurance companies. c.2) Post-employment Social Security Plans The actuarial valuation made for the pension plan (CTB, PBS-A, Telefônica BD and Visão Plans) used the registration of the participants with a base date of July 31, 2019, projected for December 31, 2019 and the registration of the participants with a base date of July 31, 2018, projected for December 31, 2018. On August 15, 2018, Visão Prev obtained approvals from the National Superintendence of Private Pension Plans (“PREVIC”) for the incorporation of the TCO Prev plan into the Visão Telefônica and Telefônica BD plans. Thus, as of November 1, 2018, all participants in the TCO Prev plan became participants in the Visão Telefônica and Telefônica BD plans, according to their profile. This unification preserves all acquired rights and provides the participants of the merged plan with access to the benefits of the Visão Telefônica and Telefônica BD plans. The main objective of the spin-off and merger is to create greater synergy in the benefits offered to participants. They include the PBS Assisted Plans (“PBS-A"), CTB, Telefônica DB and Visão. c.2.1) PBS Assisted Plan (PBS-A) The PBS-A plan is a defined benefit private pension plan managed by Sistel and sponsored by the Company jointly with the other telecommunications companies originating in the privatization of the Telebrás System. The plan is subject to funding by sponsors in the case of any asset insufficiency to ensure pension supplementation of participants in the future. The PBS-A plan comprises assisted participants of the Sistel Benefit Plan who were already retirees on January 31, 2000, from all the participating sponsors, with joint liability of all sponsors to the plan and Sistel. According to PREVIC Ordinance No. 1,061, of December 5, 2019, published in the DOU on December 9, 2019, Sistel approved the distribution of part of its surplus, in the form of PBS-A's special reserve, with reversal of values to sponsors and improvement of benefits, in the form of temporary income, to those assisted. The participation corresponding to the Company in the distribution of this reserve was calculated in the amount of R$215,328, with expected distribution in the form of 36 monthly payments, the first in the amount of R$5,981 (amount already received by the Company in December 2019) and the others in same amount but corrected by the plan's income (Note 10). Even considering the distribution of the reserve approved by PREVIC, PBS-A still has assets in excess of actuarial obligations as of December 31, 2019 and 2018. These surpluses were not recognized due to the lack of legal provision for their reimbursement and, as they are not a contributory plan, no deduction is possible in future contributions. c.2.2) CTB Plan Contributions to the CTB plan are determined based on actuarial valuations prepared by independent actuaries, in accordance with the rules in force in Brazil. The funding procedure is the capitalization method and the sponsor’s contribution are a fixed percentage of payroll of employees covered by the plan. The Company also individually manages and sponsors the CTB plan, originally provided to former employees of CTB who were in the Company in 1977, with whom an individual retirement concession agreement was executed to encourage their resignation. This is an informal pension supplementation benefit paid to former employees directly by the Company. These plans are closed, and no other members are admitted . c.2.3) Telefônica DB Plan The Company individually sponsors a defined benefit retirement plan, the Telefônica DB plan. In order to improve allocation of Telefônica DB plan assets and analyze the coverage ratio of plan obligations in future years, a stochastic ALM study was prepared by Visão Prev and Willis Towers Watson. This ALM study aimed at projecting the ratio between coverage of liabilities (solvency ratio) and the risk of mismatching measured by the standard deviation of the solvency ratio. The study concluded that the plan presents sustainable projection of their coverage ratio with the current investments’ portfolio. At the time of the concession, a benefit is calculated, which will be paid in a lifelong form and updated by inflation. This plan is not open to new accessions. The contributions are defined according to the costing plan, which is calculated considering financial, demographic and economic hypotheses in order to accumulate enough resources to pay the benefits to the participants who are already receiving them, and to the new pensions. c.2.4) VISÃO Plans The Visão Telefônica and Visão Multi plans will hereinafter be shown jointly under the name VISÃO, due to their similarity. The Company and its subsidiaries sponsor defined contribution pension plans with defined benefit components (hybrid plans), i.e. the VISÃO Plans, managed by Visão Prev. The contribution is attributed to each subsidiary in the economic and demographic proportion of its respective obligation to the plan. The contributions made by the Company and subsidiaries related to defined contribution plans totaled R$27,963 on December 31, 2019 (R$39,967 on December 31, 2018). The contributions to the Visão Telefônica and Visão Multi plans are: (i) basic and additional contribution, with contributions made by the participant and sponsor; and (ii) additional, sporadic and specific contribution, with contributions made only by the participant. In addition, the participant has the possibility to choose one of five investment profiles to apply to their balance, and they are: Super Conservative, Conservative, Moderate, Aggressive and Aggressive Fixed Income Long-Term. c.3) Consolidated information on pension plans and other post-employment benefits c.3.1) Reconciliation of net liabilities (assets): 12.31.19 12.31.18 Post- Post- Post- Post- retirement retirement retirement retirement pension plans health plans Total pension plans health plans Total Present value of DB plan obligations 2,429,478 2,016,614 4,446,092 2,011,355 1,313,157 3,324,512 Fair value of plan assets 3,696,914 1,001,112 4,698,026 2,999,669 763,325 3,762,994 Net liabilities (assets) (1,267,436) 1,015,502 (251,934) (988,314) 549,832 (438,482) Asset limitation 1,128,691 57,371 1,186,062 1,056,682 50,281 1,106,963 Current assets (71,776) — (71,776) 0 — 0 Non-current assets (149,163) 0 (149,163) (10,997) 0 (10,997) Current liabilities 6,937 18,620 25,557 8,114 11,553 19,667 Non-current liabilities 75,257 1,054,253 1,129,510 71,251 588,560 659,811 c.3.2) Total expenses recognized in the statement of income: 2019 2018 2017 Post- Post- Post- Post- Post- Post- retirement retirement retirement retirement retirement retirement pension plans health plans Total pension plans health plans Total pension plans health plans Total Current service cost 3,155 16,293 19,448 2,931 13,722 16,653 3,044 7,606 10,650 Net interest on net actuarial assets/liabilities 5,713 56,612 62,325 6,074 45,892 51,966 5,258 29,325 34,583 Total 8,868 72,905 81,773 9,005 59,614 68,619 8,302 36,931 45,233 c.3.3) Amounts recognized in other comprehensive income (loss) 2019 2018 2017 Post- Post- Post- Post- Post- Post- retirement retirement retirement retirement retirement retirement pension plans health plans Total pension plans health plans Total pension plans health plans Total Actuarial (losses) gains (188,889) 412,416 223,527 (186,170) 184,527 (1,643) 325,292 208,195 533,487 Asset limitation effect (24,297) 2,430 (21,867) 188,259 (93,125) 95,134 (309,780) (52,411) (362,191) Total (213,186) 414,846 201,660 2,089 91,402 93,491 15,512 155,784 171,296 c.3.4) Changes in amount net of liability (asset) of defined benefit, net 12.31.19 12.31.18 Post-retirement Post-retirement Post-retirement Post-retirement pension plans health plans Total pension plans health plans Total Net defined benefit liability (asset) at the beginning of the year 68,368 600,113 668,481 67,148 454,957 522,105 Business combinations — 1,994 1,994 — — — Expenses 8,868 72,905 81,773 9,005 59,614 68,619 Sponsor contributions (8,776) (16,985) (25,761) (9,874) (5,860) (15,734) Amounts recognized in OCI (213,186) 414,846 201,660 2,089 91,402 93,491 Distribution of reserves 5,981 — 5,981 — — — Net defined benefit liability (asset) at the end of the year (138,745) 1,072,873 934,128 68,368 600,113 668,481 Actuarial assets per balance sheet (220,939) — (220,939) (10,997) — (10,997) Actuarial liabilities per balance sheet 82,194 1,072,873 1,155,067 79,365 600,113 679,478 c.3.5) Changes in defined benefit liability 12.31.19 12.31.18 Post-retirement Post-retirement Post-retirement Post-retirement pension plans health plans Total pension plans health plans Total Defined benefit liability at the beginning of the year 2,011,355 1,313,157 3,324,512 1,861,651 1,050,576 2,912,227 Liability assumed after acquisition of company — 1,994 1,994 — — — Current service costs 3,155 16,293 19,448 2,931 13,722 16,653 Interest on actuarial liabilities 175,695 121,088 296,783 173,842 103,617 277,459 Benefits paid (165,929) (53,724) (219,653) (136,916) (37,838) (174,754) Member contributions paid 323 — 323 451 — 451 Actuarial losses (gains) adjusted by experience 93,699 226,928 320,627 80,126 64,278 144,404 Actuarial losses (gains) adjusted by demographic assumptions — (44,249) (44,249) — 46,122 46,122 Actuarial losses (gains) adjusted by financial assumptions 311,180 435,127 746,307 29,270 72,680 101,950 Defined benefit liability at the end of the year 2,429,478 2,016,614 4,446,092 2,011,355 1,313,157 3,324,512 c.3.6) Changes in the fair value of plan assets 12.31.19 12.31.18 Post-retirement Post-retirement Post-retirement Post-retirement pension plans health plans Total pension plans health plans Total Fair value of plan assets at the beginning of the year 2,999,669 763,325 3,762,994 2,585,679 726,060 3,311,739 Benefits paid (159,001) (36,774) (195,775) (128,991) (32,011) (161,002) Participants contributions paid 323 — 323 451 — 451 Sponsor contributions paid 1,848 35 1,883 1,949 33 1,982 Interest income on plan assets 266,287 69,137 335,424 245,014 70,690 315,704 Return on plan assets excluding interest income 593,769 205,389 799,158 295,567 (1,447) 294,120 Distribution of reserves (5,981) — (5,981) — — — Fair value of plan assets at the end of the year 3,696,914 1,001,112 4,698,026 2,999,669 763,325 3,762,994 c.3.7) Changes in asset limitation 12.31.19 12.31.18 Post-retirement Post-retirement Post-retirement Post-retirement pension plans health plans Total pension plans health plans Total Asset Limitation at the beginning of the year 1,056,682 50,281 1,106,963 791,177 130,440 921,617 Interest on the asset limitation 96,306 4,661 100,967 77,246 12,966 90,212 Changes in the assets limitation, except interest (24,297) 2,429 (21,868) 188,259 (93,125) 95,134 Asset Limitation at the end of the year 1,128,691 57,371 1,186,062 1,056,682 50,281 1,106,963 c.3.8) Results projected for 2020 Post-retirement Post-retirement pension plans health plans Total Current service cost 3,037 26,575 29,612 Net interest on net defined benefit liability/asset (10,386) 82,150 71,764 Total (7,349) 108,725 101,376 c.3.9) Sponsoring company contributions projected for 2020 Post-retirement Post-retirement pension plans health plans Total Sponsor contributions 2,189 6,937 9,126 Benefits paid directly by the sponsor 38 18,630 18,668 Total 2,227 25,567 27,794 c.3.10) Average weighted duration of defined benefit liability Post-retirement Post-retirement pension plans health plans In 2019 8.3 years 18.1 years In 2018 7.8 years 16.5 years c.3.11) Actuarial assumptions 12.31.19 Post-retirement pension plans Post-retirement health plans Discount rate to present value of defined benefit liability Visão: 6.6% PAMA and PCE: 7.4% Future salary growth rate CTB and PBS-A: N/A N/A Medical expense growth rate N/A Nominal annual adjustment rate of pension benefits N/A Medical service eligibility age N/A Female participants: 59 years Estimated retirement age PBS-A, CTB and Telefônica BD: 57 years Female participants: 59 years Mortality table for nondisabled individuals PBS-A, CTB and Telefônica BD: AT- AT-2000 Basic segregated by gender, down-rated by 10% Mortality table for disabled individuals PBS-A, CTB and Telefônica BD: RP- RP-2000 Disabled Feminina, down-rated by 40% Disability table Telefônica BD: Light-Forte Light-Forte Turnover PBS-A, CTB and Telefônica BD: N/A PAMA and PCE: N/A 12.31.18 Post-retirement pension plans Post-retirement health plans Discount rate to present value of defined benefit liability Visão: 9.0% Future salary growth rate CTB and PBS-A: N/A N/A Medical expense growth rate N/A Nominal annual adjustment rate of pension benefits N/A Medical service eligibility age N/A Eligibility on retirement 100% to 57 years Estimated retirement age PBS-A, CTB and Telefônica BD: 57 years 57 years Mortality table for nondisabled individuals PBS-A, CTB and Telefônica BD: AT-2000 Basic AT-2000 Basic segregated by gender, down-rated by 10% Mortality table for disabled individuals PBS-A, CTB and Telefônica BD: RP-2000 Disabled RP-2000 Disabled Feminina, down-rated by 40% Disability table Telefônica BD: Light-Forte Light-Forte Turnover PBS-A, CTB and Telefônica BD: N/A PAMA and PCE: N/A Further to the assumptions stated above, other assumptions common to all plans were adopted in 2019 and 2018 as follows: (i) Long-term inflation rate 3.8%; and (ii) Annual increase in the use of medical services according to age: 4.0%. c.3.12) Changes in actuarial assumptions in relation to the prior year In order to adjust some actuarial assumptions to the economic and demographic reality, a study was conducted for the plans administered by Visão Prev and Sistel, which adopted the definition of the assumptions in their Deliberative Councils. The main economic and financial assumptions that have changed in relation to the previous fiscal year and that interfere with the defined benefit liability are: (i) rates for discount to present value of the defined benefit liability; (ii) long-term inflation rate; (iii) rate of future wage growth; (iv) rate of growth of medical costs; and (v) annual nominal index of adjustment of social security benefits. The impacts on the plans’ defined benefit liabilities due to the new definition of the actuarial assumptions are as follows: Post-retirement Post-retirement pension plans health plans Total Defined benefit liability, based on current actuarial assumptions 2,429,478 2,016,614 4,446,092 Defined benefit liability, based on prior-year actuarial assumptions 2,118,297 1,625,737 3,744,034 Difference from change in actuarial assumptions 311,181 390,877 702,058 c.3.13) Sensitivity analysis for actuarial assumptions The Company believes that the significant actuarial assumptions with reasonable likelihood of variation due to financial and economic scenarios, which could significantly change the amount of the defined benefit obligation, are the discount rate used to adjust the defined benefit liability to present value and the rate of growth of medical costs. Sensitivity analysis of the defined benefit liability for scenarios involving a 0.5% increase and a 0.5% decrease in the discount rate used to discount the defined benefit liability to present value is as follows: Post-retirement Post-retirement pension plans health plans Total Defined benefit liability, discounted to present value at current rate 2,429,478 2,016,614 4,446,092 Defined benefit liability, discounted to present value considering a rate increased by 0.5% 2,331,330 1,860,204 4,191,534 Defined benefit liability, discounted to present value considering a rate decreased by 0.5% 2,536,178 2,193,844 4,730,022 The following is a sensitivity analysis of the defined benefit obligation for scenarios of 1% increase and 1% reduction in the rate of growth of medical costs: Post-retirement Post-retirement pension plans health plans Total Defined benefit liability, projected by the current medical cost growth rate 2,429,478 2,016,614 4,446,092 Defined benefit liability, projected by the current medical cost growth considering a rate increased by 1% 2,429,478 2,384,419 4,813,897 Defined benefit liability, projected by the current medical cost growth considering a rate decreased by 1% 2,429,478 1,724,584 4,154,062 c.3.14) Allocation of plan assets 12.31.19 12.31.18 Post-retirement Post-retirement Post-retirement Post-retirement pension plans health plans pension plans health plans Investments with market value quoted in active market: Fixed income investments National Treasury Note (NTN) 3,067,926 940,144 2,437,547 702,946 Treasury Financial Letter 270,676 60,968 177,319 60,379 Repurchase operations 172,895 — 196,830 — Debentures 16,818 — 13,487 — Treasury Financial Letter (LFT) 14,238 — 12,556 — FIDC shares / Others 24,517 — 2,356 — National Treasury Notes (LTN) 282 — 462 — Bank Deposit Certificates (CDB) — — 232 — Variable income investments Investments in energy sector — — 138 — Investments in food and beverage industry — — 17,921 — Investments in mining sector — — 287 — Investments linked to funds and market indexes 6,265 — 4,242 — Investments in other sectors (1) 622 — 1,580 — Real estate investments 100,701 — 111,417 — Loans to participants 19,870 — 20,561 — Structured and overseas investments 2,104 — 2,734 — Total 3,696,914 1,001,112 2,999,669 763,325 (1) Investments in variable income in the following industries: oil, gas and biofuel; telephony; steel and metals; construction and engineering; sales and distribution; transportation; wood and paper; education; financial services and banks; real estate, among; others.

FINANCIAL INSTRUMENTS AND RISK

FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT	12 Months Ended
	Dec. 31, 2019
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT	31) FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT a) Accounting policy a.1) Financial assets Initial recognition and measurement On initial recognition, a financial asset is classified in the following measurement categories: (i) at fair value through profit or loss; (ii) at amortized cost; or (iii) at fair value through other comprehensive income, depending on the situation. The classification of financial assets according to IFRS 9 is generally based on the business model in which a financial asset is managed and its characteristics of contractual cash flows. The Company’s consolidated financial assets include cash and cash equivalents, trade accounts receivable, short-term investments pledged as collateral and derivative financial instruments. Subsequent measurement Subsequent measurement of financial assets depends on their classification, as follows: Financial assets at fair value through profit or loss: these assets are subsequently measured at fair value. Net income, including interest, is recognized directly in income. Financial assets at amortized cost: these assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in income. Any gain or loss on derecognition is recognized in profit or loss. Financial assets at fair value through other comprehensive income: these assets are subsequently measured at fair value. Interest income is calculated using the effective interest method, and foreign exchange gains and losses and impairment are recognized in profit or loss. Other net income is recognized in other comprehensive income. In derecognition, the accumulated result in other comprehensive income is reclassified to the statement of income. Derecognition A financial asset (or, whenever the case, a part of a financial asset, or a part of a group of similar financial assets) is derecognized when: · The rights to receive the cash flows from the asset have expired; · The Company has transferred its rights to receive cash flows from it has assumed obligation to pay the received cash flows in full without material delay to a third part under a ‘pass-through’ arrangement; and either (i) the Company has transferred substantially all the risks and rewards of the asset, or (ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. a.2) Impairment of financial assets The Company and its subsidiaries apply an impairment model for financial assets based on expected credit losses, using a simplified method for certain short and long-term assets (commercial receivables, lease receivables and contractual assets). Under this simplified approach, credit impairment is recognized by reference to expected credit losses over the life of the asset. For this purpose, the Company and its subsidiaries use matrices based on historical bad debt experience by geographical area on a portfolio segmented by customer category according to credit pattern. The matrix for each category has a defined time horizon divided into intervals in accordance with the collection management policy and is fed with historical data that covers at least 24 collection cycles. This data is updated on a regular basis. Based on the information observable at each close, the Company and its subsidiaries assess the need to adjust the rates resulting from these matrices, considering current conditions and future economic forecasts. a.3) Financial liabilities Initial recognition and measurement Upon initial recognition, the Company’s financial liabilities are classified in the following categories: financial liabilities measured at fair value through profit or loss and other financial liabilities. Financial liabilities are initially recognized at fair value plus, in the case of loans and financing, transaction cost directly attributable thereto. The Company’s consolidated financial liabilities include trade accounts payable, loans and financing, debentures, leases, contingent payments and derivative financial instruments. Subsequent measurement Measurement of financial liabilities depends on their classification, as follows: Financial liabilities at fair value through profit or loss: financial liabilities are designated at initial recognition at fair value through profit or loss. This category also includes derivative financial instruments contracted, except those designated as derivative financial instruments of cash flow hedge. Interest, monetary and exchange variations and changes arising from the valuation at fair value, when applicable, are recognized in the statement of income when incurred. Financial liabilities at amortized cost: after initial recognition, loans and financing subject to interest are subsequently measured at amortized cost using the effective interest rate method. Gains and losses are recognized in the statement of income at the time of write-off of liabilities, as well as during the amortization process using the effective interest rate method. Derecognition A financial liability is derecognized when the obligation has been revoked, cancelled or expired. When an existing financial liability is replaced by another of the same lender, and the terms of the instruments are substantially different, or when the terms of an existing debt instrument are substantially modified, this replacement or modification is treated as derecognition of the original liability and recognition of a new liability, and the difference in the corresponding carrying amounts is recognized in the statement of income. a.4) Fair value measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Fair value measurement is based on the assumption that the transaction to sell the asset or transfer the liability will take place (i) in the principal market for the asset or liability; or (ii) in the absence of a principal market, in the most advantageous market for that asset or liability. The Company and or its subsidiaries must have access to the principal (or most advantageous) market. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing an asset or liability, assuming that market participants act in their best economic interests. Fair value measurement of a non-financial asset takes into consideration the capacity of a market participant to generate economic benefits through the best use of the asset or selling it to another market participant that would also make the best use of the asset. The Company and its subsidiaries use adequate valuation techniques in the circumstances and for which there is sufficient data to measure the fair value, that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs. For assets and liabilities recurrently recognized in the financial statements, the Company determines whether there were transfers between the hierarchy levels, revaluating the classification (based on the lowest level input that is significant to the overall fair value measurement) at the end of each reporting period. For the purposes of fair value disclosures, the Company and its subsidiaries determined classes of assets or liabilities based on the nature, characteristics and risks of those assets or liabilities and the fair value hierarchy level, as mentioned above. a.5) Financial instruments - net Financial assets and liabilities are presented net in the balance sheet if, and only if, there is a current enforceable legal right to offset the amounts recognized and if there is an intention to offset or realize the asset or settle the liability simultaneously. a.6) Derivative financial instruments and hedge accounting IFRS 9 introduced a new accounting record model for hedges, which is less restrictive, which aligns the accounting treatment with risk management activities by requiring an economic relationship between the hedged item and the hedging instrument and that the coverage ratio is the same as the entity applies to its risk management. With this new model, the documentation criteria for hedging relationships are modified and improvements are included in the disclosures about hedging activities. The Company uses derivative financial instruments, such as currency and interest rate swaps or currency non- deliverable forward contracts to hedge against currency risks. Derivative financial instruments designated in hedge transactions are initially recognized at fair value on the date on which the derivative contract is entered into, and subsequently revalued also at fair value. Derivatives are presented as financial assets when the fair value of the instrument is positive and as financial liabilities when the fair value of the instrument is negative. Any gains or losses resulting from changes in fair value of derivatives during the year are posted directly to the statement of income, except for the effective portion of cash flow hedges, which is recognized directly in equity as other comprehensive income and subsequently reclassified to P&L when the hedged item affects P&L. On the inception initial recognition of a hedge relationship, the Company formally designates and documents the hedge relationship to which it wishes to apply hedge accounting, the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the hedged risk, the nature of the risks excluded from the hedge relationship, the prospective statement of hedge effectiveness and how the Company shall assess the effectiveness of changes in the hedging instrument’s fair value in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the hedged risk. For the purpose of hedge accounting, hedges are classified as cash flow hedges and fair value hedges. Cash flow hedges Cash flow hedges meeting the recording criteria are accounted for as follows: (i) the portion of gain or loss from the hedge instrument determined as an effective hedge shall be recognized directly in equity (other comprehensive income), and (ii) the ineffective portion of gain or loss from the hedge instrument shall be recognized in the statement of income. When the Company’s documented risk management strategy for any given hedge relationship excludes from the hedge effectiveness evaluation any particular component of gain or loss or the corresponding cash flows from the hedge instrument, that gains or loss component is recognized in financial income (expenses). Amounts recorded in other comprehensive income are immediately transferred to the statement of income when the hedged transaction affects P&L. When a hedged item is the cost of a non-financial asset or liability, amounts recorded in equity are transferred at the initial carrying amount of the non-financial assets and liabilities. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover (as part of the hedging strategy), or if its designation as a hedge is revoked, or when the hedge fails to meet the hedge accounting criteria, any cumulative gain or loss previously recognized in other comprehensive income remains separately in equity until the forecast transaction occurs or the firm commitment is fulfilled. The Company's contracts are classified as cash flow hedges when they provide protection against changes in cash flows that are attributable to a particular risk associated with a recognized liability that may affect the profit or loss and fair value when they provide protection against exposure to changes in the fair value of the identified part of certain liabilities that is attributable to a particular risk (exchange variation) and may affect the profit or loss. Fair value hedges Fair value hedges meeting the accounting criteria are accounted for as follows: (i) gain or loss from changes in fair value of a hedge instrument shall be recognized in the statement of income as finance costs; and (ii) gain or loss from a hedged item attributable to the hedged risk shall adjust the recorded amount of the hedged item to be recognized in the statement of income, as finance costs. For fair value hedges relating to items carried at amortized cost, any adjustment to carrying amount is amortized through profit or loss over the remaining term of the hedge using the effective interest method. The effective interest rate amortization may begin as soon as any adjustment exists and no later than the point that the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged. If the hedged item is derecognized, the unamortized fair value is recognized immediately in the statement of income. When an unrecognized firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognized as an asset or liability with a corresponding gain or loss recognized in profit and loss. Classification between current and non-current Derivative financial instruments are classified as current and non-current or segregated into short and long-term portions based on an evaluation of the contractual cash flows. When the Company maintains a derivative as an economic hedge (and does not apply hedge accounting), for a period exceeding 12 months after the balance sheet date, the derivative is classified as non-current (or segregated into current and non-current portions), in line with the classification of the corresponding item. Derivative instruments that are designated as effective hedging instruments are classified consistently with the classification of the underlying hedged item. The derivative instrument is segregated into current and non-current portions only when amounts can be reliably allocated. b) Critical estimates and judgments When the fair value of financial assets and liabilities stated in the balance sheet cannot be obtained in active markets, it will be determined using valuation techniques, including the discounted cash flow method. Data for these methods is based on those adopted in the market, whenever possible. However, when this is not feasible, a certain level of judgment is required for fair value determination. Judgment includes consideration of the inputs used, such as liquidity risk, credit risk and volatility. Changes in the assumptions about these factors could affect the reported fair value of financial instruments. c) Derivative transactions The derivative financial instruments contracted by the Company are mainly used for hedging against foreign exchange risk from assets and liabilities in foreign currency and the effects of inflation on leases indexed to the IPCA. There are no derivative financial instruments held for speculative purposes, possible currency risks are hedged. Management believes that the Company's internal controls for its derivatives are adequate to control risks associated with each strategy for the market. Gains/losses obtained or sustained by the Company in relation to its derivatives show that its risk management has been appropriate. As long as these derivative contracts qualify for hedge accounting, the hedged item is adjusted to fair value, offsetting the result of the derivatives, pursuant to the rules of hedge accounting. This hedge accounting applies both to financial liabilities and probable cash flows in foreign currency. Derivatives contracts include specific penalties for breach of contract. Breach of contract provided for in agreements made with financial institutions leads to the anticipated liquidation of the contract. On December 31, 2019 and 2018, the Company held no embedded derivatives contracts. c.1) Fair value of derivative financial instruments The valuation method used to calculate the fair value of financial liabilities (if applicable) and derivative financial instruments was the discounted cash flow method, based on expected settlements or realization of liabilities and assets at market rates prevailing at the balance sheet date. The fair values of positions in Reais are calculated by projecting future inflows from transactions using B3 yield curves and discounting these flows to present value using market DI rates for swaps announced by B3. The market values of foreign exchange derivatives were obtained using the market exchange rates in effect at the balance sheet date and projected market rates obtained from the currency's coupon-rate yield curves. The linear convention of 360 calendar days was used to determine coupon rates of positions indexed in foreign currencies, while the exponential convention of 252 business days was used to determine coupon rates for positions indexed to CDI rates. Consolidated derivatives financial instruments shown below are registered with B3 and classified as swaps, usually, that do not require margin deposits. Accumulated effects from fair value Notional Value Amount receivable (payable) Description Long position 515,261 1,184,064 72,163 95,533 Foreign Currency 72,790 335,194 — 50,536 US$ (1) (2) 72,790 241,332 — 24,608 EUR (2) — 51,971 — — LIBOR US$ (1) — 41,891 — 25,928 Floating rate 369,491 699,595 1,818 7,737 CDI (1) (2) 369,491 554,336 1,818 — TJLP (4) — 145,259 — 7,737 Inflation rates 72,980 149,275 70,345 37,260 IPCA (3) (5) 72,980 149,275 70,345 37,260 Short position (515,261) (1,184,064) (56,133) (39,383) Floating rate (145,770) (608,782) (56,133) (24,916) CDI (1) (2) (3) (4) (5) (145,770) (608,782) (56,133) (24,916) Foreign Currency (369,491) (575,282) — (14,467) US$ (2) (365,161) (439,103) — (9,396) EUR (1) (2) (4,330) (115,233) — (222) LIBOR US$ (1) — (20,946) — (4,849) Long position 72,163 95,533 Current 19,282 69,065 Non-current 52,881 26,468 Short position (56,133) (39,383) Current (1,921) (16,538) Non-current (54,212) (22,845) Amounts receivable, net 16,030 56,150 (1) Foreign currency swaps (US$ and LIBOR) x CDI - swap transactions with maturities up to July 2019, according to the debt maturities, with the purpose of hedging the exchange rate risk of the Company's dollar lending operation. (2) Foreign currency swaps (Euro and CDI x Euro) (R$4,334) and (US$ and CDI x US$) (R$292,347) - maturing through October 30, 2019 to hedge currency risk affecting net amounts payable (carrying amount R$3,806 in Euros and LIBOR) and receivables (carrying amount R$292,347 in US$). (3) IPCA x CDI rate swaps to hedge the same flow as the debentures (4th issue - 3rd series) indexed to the IPCA settled on October 15, 2019. (4) TJLP x CDI swaps transactions contracted with maturities up to July 2019 to hedge the risk of TJLP variation on loan with BNDES. (5) IPCA x CDI swaps (R$262,817) - maturing in 2033 to hedge risk of change rate pegged to IPCA (carrying amount R$319,550). The table below shows the breakdown of swaps maturing after December 31, 2019: Maturing in Amount receivable (payable) on Swap contract 2023 onwards Foreign currency x CDI (1,921) — — — (1,921) CDI x Foreign Currency 1,818 — — — 1,818 IPCA x CDI 17,464 3,239 3,507 (8,077) 16,133 Total 17,361 3,239 3,507 (8,077) 16,030 For the purposes of preparing its financial statements, the Company adopted the fair value hedge accounting methodology for its foreign currency swaps x CDI and IPCA x CDI for hedging or financial debt. Under this arrangement, both derivatives and hedged risk are recognized at fair value. On December 31, 2019 and 2018, the transactions with derivatives generated consolidated positive results of R$51,963 and R$10,788, respectively (Note 27). c.2) Sensitivity analysis to the Company’s risk variables CVM Resolution 475/08 requires listed companies to disclose sensitivity analyses for each type of market risk that management understands to be significant when originated by financial instruments to which the entity is exposed at the end of each period, including all derivative financial instrument transactions. In making the above analysis, each of the transactions with derivative financial instruments was assessed and assumptions included a probable scenario and two others that could adversely impact the Company. In the probable scenario assumption used, on the maturity dates of each of the transactions, were the market rates for the B3 yield curves (currencies and interest rates), and data from the IBGE, Central Bank, FGV, among others. In the probable scenario, there is no impact on the fair value of the above-mentioned derivatives. However, for Scenarios II and III, as per CVM ruling, risk variables were stressed by 25% and 50% respectively. Since the Company only holds derivatives to hedge its foreign currency assets and liabilities, changing scenarios are tracked by the corresponding hedged items the effects are almost non-existent. For these transactions, the Company reported the consolidated net exposure in each of the above-mentioned three scenarios on December 31, 2019. Transaction Risk Probable 25% depreciation 50% depreciation Hedge (long position) Derivatives (depreciation risk EUR) (4,334) (5,418) (6,501) Payables in EUR Debt (appreciation risk EUR) (25,633) (32,041) (38,449) Receivables in EUR Debt (depreciation risk EUR) 29,439 36,799 44,158 Net Exposure (528) (660) (792) Hedge (short position) Derivatives (depreciation risk US$) (292,347) (365,433) (438,520) Payables in US$ Debt (appreciation risk US$) (185,022) (231,277) (277,532) Receivables in US$ Debt (depreciation risk US$) 477,369 596,710 716,052 Net Exposure — — — Hedge (long position) Derivatives (risk of decrease in IPCA) 262,817 250,228 238,939 Debt in IPCA Debt (risk of increase in IPCA) (319,550) (306,961) (295,672) Net Exposure (56,733) (56,733) (56,733) Hedge (CDI position) Hedge US$ and EUR (short and long position) Derivatives (risk of decrease in CDI) (295,777) (295,547) (295,320) Hedge IPCA (short position) Derivatives (risk of increase in CDI) (262,817) (250,228) (238,939) Net Exposure (558,594) (545,775) (534,259) Total net exposure in each scenario (615,855) (603,168) (591,784) Net effect on changes in current fair value — 12,687 24,071 The assumptions used by the Company for the sensitivity analysis on December 31, 2019 were as follows: Risk Variable Probable 25% depreciation 50% depreciation US$ 4.0307 5.0384 6.0461 EUR 4.5102 5.6377 6.7652 IPCA 4.05 % 5.06 % 6.07 % IGPM 3.37 % 4.21 % 5.05 % CDI 6.42 % 8.03 % 9.63 % For calculation of the net exposure for the sensitivity analysis, all derivatives were considered at market value and hedged items designated for hedges for accounting purposes were also considered at fair value. The fair values shown in the table above are based on the portfolio position on December 31, 2019, but do not reflect an estimate for realization due to the dynamism of the market, which is constantly monitored by the Company. The use of different assumptions could significantly affect the estimates. d) Fair value The Company and its subsidiaries assessed their financial assets and liabilities in relation to market values using available information and appropriate valuation methodologies. However, both the interpretation of market data and the selection of valuation methods require considerable judgment and reasonable estimates to produce the most adequate realization value. As a result, the estimates shown do not necessarily indicate amounts that could be realized in the current market. The use of different assumptions for the market and/or methodologies may have a material effect on estimated realization values. The fair values of all assets and liabilities are classified within the fair value hierarchy described below, based on the lowest level of information that is significant to the fair value measurement as a whole: Level 1: quoted market prices (unadjusted) in active markets for identical assets or liabilities; Level 2: valuation techniques for which there is a significantly lower level of information to measure the fair value directly or indirectly observable; and Level 3: valuation techniques for which the lowest and significant level of information to measure the fair value is not available. During the periods shown in the tables below, there were no transfers between fair value measurements of Level 3 and Levels 1 and 2. e) Classification of financial assets and liabilities by category and fair value hierarchy The tables below present the composition and classification of financial assets and liabilities on December 31, 2019 and 2018. Fair value Book value Fair value Classification by category hierarchy Financial Assets Current Cash and cash equivalents (Note 3) Amortized cost 3,393,377 3,381,328 3,393,377 3,381,328 Trade accounts receivable (Note 4) Amortized cost 8,719,497 8,304,382 8,719,497 8,304,382 Derivative transactions (Note 31) Measured at fair value through OCI Level 2 19,282 69,065 19,282 69,065 Non-current Investments pledged as collateral Amortized cost 63,766 76,934 63,766 76,934 Trade accounts receivable (Note 4) Amortized cost 440,453 426,252 440,453 426,252 Derivative transactions (Note 31) Measured at fair value through OCI Level 2 52,881 26,468 52,881 26,468 Total financial assets 12,689,256 12,284,429 12,689,256 12,284,429 Financial Liabilities Current Trade accounts payable, net (Note 16) Amortized cost 6,871,799 7,642,782 6,871,799 7,642,782 Loans, financing and leases (Note 20) Amortized cost 1,020,061 1,076,451 1,021,810 1,135,732 Loans, financing and leases (Note 20) Measured at fair value through profit or loss Level 2 2,029,246 263,754 2,029,246 263,754 Debentures (Note 20) Amortized cost 1,077,183 82,840 1,104,539 237,144 Debentures (Note 20) Measured at fair value through profit or loss Level 2 — 41,121 — 41,121 Derivative transactions (Note 31) Measured at fair value through profit or loss Level 2 1,921 16,316 1,921 16,316 Derivative transactions (Note 31) Measured at fair value through OCI Level 2 — 222 — 222 Non-current Loans, financing and leases (Note 20) Amortized cost 25,093 817,908 24,106 796,481 Loans, financing and leases (Note 20) Measured at fair value through profit or loss Level 2 7,161,875 341,728 7,161,875 341,728 Contingent consideration (Note 20) Measured at fair value through profit or loss Level 2 484,048 465,686 484,048 465,686 Debentures (Note 20) Amortized cost 2,027,167 3,049,949 1,948,705 2,866,981 Derivative transactions (Note 31) Measured at fair value through OCI Level 2 54,212 22,845 54,212 22,845 Total financial liabilities 20,752,605 13,821,602 20,702,261 13,830,792 f) Capital management The purpose of the Company's capital management is to ensure maintenance of a high credit rating and an optimal capital ratio to support the Company's business and maximize shareholder value. The Company manages its capital structure by making adjustments and adapting to current economic conditions. For this purpose, the Company may pay dividends, obtain new loans, issue debentures and contract derivatives. For the year ended December 31, 2019, there were no changes in capital structure objectives, policies or processes. The Company’s debt structure includes loans, financing, debentures, leases, contingent consideration and transactions with derivatives, less cash and cash equivalents, short-term investments to secure BNB financing and guarantor of the contingent consideration liability. The Company’s ratio of consolidated debt to shareholders’ equity consists of the following: Cash and cash equivalents 3,393,377 3,381,328 Loans, financing, debentures, leases and contingent consideration (1) (13,824,673) (6,139,437) Derivative transactions, net 16,030 56,150 Short-term investment pledged as collateral 13,212 12,473 Asset guarantor of contingent consideration 484,048 465,686 Net debt 9,918,006 2,223,800 Net equity 70,455,578 71,607,027 Net debt-to-equity ratio 14.08 % 3.11 % (1) As of December 31, 2019, includes the effects of the adoption of IFRS 16 on January 1, 2019 (Note 19). g) Risk management policy The Company and its subsidiaries are exposed to several market risks as a result of its commercial operations, debts contracted to finance its activities and debt-related financial instruments. g.1) Currency Risk Risk arising from foreign exchange rate volatility, affecting loans denominated in foreign currencies. There is also foreign exchange risk for financial assets and liabilities denominated in foreign currencies, which may generate a smaller amount receivable or larger amount payable depending on the exchange rate in the period. Hedging transactions were executed to minimize the risks associated with exchange rate on financial assets and liabilities in foreign currencies. This balance is subject to daily changes due to the dynamics of the business. However, the Company intends to cover the net balance of these assets and obligations (US$72,530 thousand receivable, €974 thousand and £110 thousand paid by December 31, 2019 and US$61,909 thousand and €15,624 thousand receivable by December 31, 2018) to mitigate its foreign exchange risks. g.2) Interest and Inflation Risk This risk may arise from an unfavorable change in the domestic interest rate, which may adversely affect financial expenses from the portion of debentures referenced to the CDI and liability positions in derivatives (currency hedge and IPCA) pegged to floating interest rates (CDI). To reduce exposure to the floating interest rate (CDI), the Company and its subsidiaries invested cash equivalents of R$3,143,209 and R$3,175,730 on December 31, 2019 and 2018, respectively, mostly in short-term CDI-based financial investments (CDBs). The carrying amounts of these instruments approximate their fair values, as they may be redeemed in the short term. g.3) Liquidity Risk Liquidity risk may arise from having insufficient funds to meet commitments in different currencies and dates of realization of rights and settlement of obligations. The Company structures the maturity dates of non-derivative financial contracts (Note 20), and their respective derivatives, as shown in the schedule of payments disclosed in this note, to avoid affecting their liquidity. The Company’s cash flow and liquidity are managed on a daily basis by the operating departments to ensure that cash flows and contracted funding, when necessary, it is sufficient to meet scheduled commitments in to avoid liquidity risk. The following is a summary of the maturity profile of the consolidated financial liabilities, which include principal and future interest rates up to the date of maturity. For fixed rate liabilities, interest was calculated on the basis of the indices established in each contract. For variable rate liabilities, interest was calculated on the basis of the market forecast for each period. On 12.31.19 2025 onwards Total Trade accounts payable 6,871,799 — — — — — 6,871,799 Loans and financing 1,022,302 16,307 10,243 4 — — 1,048,856 Leases (1) 2,098,941 1,896,313 1,670,508 1,484,652 1,086,093 2,696,282 10,932,789 Contingent consideration — — — — — 484,048 484,048 Debentures 1,148,732 1,083,292 1,034,796 — — — 3,266,820 Derivative transactions 1,921 — — — — 54,212 56,133 Total 11,143,695 2,995,912 2,715,547 1,484,656 1,086,093 3,234,542 22,660,445 (1) Includes the effects of the adoption of IFRS 16 on January 1, 2019 (note 20). g.4) Credit Risk The risk arises from the possibility of the Company and its subsidiaries incurring losses due to difficulty in receiving amounts billed to their customers and sales of prepaid handsets and cards that have been pre-activated for the distribution network. The credit risk on accounts receivable is diversified and mitigated by strict control of the customer base. The Company constantly monitors the level of accounts receivable from postpaid services and limits bad credit risk by cutting off access to telephone lines if bills are past due. The mobile customer base predominantly uses the prepaid system, which requires purchase of credits beforehand and therefore does not pose credit risk. Exceptions are made for emergency services that must be maintained for security or national defense reasons. Credit risk on sales of pre-activated prepaid handsets and cards is managed by a conservative policy for granting credit, using modern credit scoring methods, analyzing financial statements and consultations to commercial databases, in addition to requesting guarantees. The Company and its subsidiaries are also subje

CONTARCTUAL COMMITMENTS

CONTARCTUAL COMMITMENTS	12 Months Ended
	Dec. 31, 2019
CONTRACTUAL COMMITMENTS
CONTRACTUAL COMMITMENTS	32) CONTRACTUAL COMMITMENTS The Company and its subsidiaries have unrecognized contractual commitments arising from the purchase of goods and services, which mature on several dates, with monthly payments. On December 31, 2019, the total nominal values equivalent to the full contract period were: 2020 1,191,801 2021 1,284,244 2022 919,747 2023 279,386 2024 278,609 2025 onwards 569,264 Total 4,523,051

ADDITIONAL INFORMATION ON CASH

ADDITIONAL INFORMATION ON CASH FLOWS	12 Months Ended
	Dec. 31, 2019
ADDITIONAL INFORMATION ON CASH FLOWS
ADDITIONAL INFORMATION ON CASH FLOWS	33) ADDITIONAL INFORMATION ON CASH FLOWS a) Reconciliation of cash flow financing activities The following is a reconciliation of consolidated cash flow financing activities for the years ended December 31, 2019 and 2018. Cash flows from financing activities Cash flows from operating activitiesFinancing activities not involving cash and cash equivalents Cash flows Cash flows from financing from operating activities activities Financing activities not involving cash and cash equivalents Financial Interim and charges and Additions of unclaimed foreign leases and Initial dividends Balance on Write-offs Write-offs exchange supplier adoption and interest Balance on (payments) (payments) variation financing IFRS 16 on equity Interim dividends and interest on equity 4,172,916 (6,176,842) — — — — 5,591,343 3,587,417 Loans and financing 2,106,814 (2,070,665) (129,974) 171,636 967,313 — — 1,045,124 Leases 393,027 (1,559,165) (415,496) 350,772 1,803,941 8,618,072 — 9,191,151 Debentures 3,173,910 (66,830) (201,516) 198,786 — — — 3,104,350 Derivative financial instruments (56,150) 91,543 26,234 (77,657) — — — (16,030) Contingent Consideration 465,686 — — 18,362 — — — 484,048 Total 10,256,203 (9,781,959) (720,752) 661,899 2,771,254 8,618,072 5,591,343 17,396,060 Cash flows Cash flows from financing from operating activities activities Financing activities not involving cash and cash equivalents Financial Interim and charges and Additions of unclaimed foreign leases and dividends Balance on Write-offs Write-offs exchange supplier and interest Balance on 12.31.17 (payments) (payments) variation financing on equity 12.31.18 Interim dividends and interest on equity 2,396,116 (4,136,878) — — — 5,913,678 4,172,916 Loans and financing 3,109,498 (1,533,121) (207,708) 231,748 506,397 — 2,106,814 Leases 385,460 (35,375) (21,231) 45,501 18,672 — 393,027 Debentures 4,520,739 (1,324,723) (265,992) 243,886 — — 3,173,910 Derivative financial instruments (143,754) 95,993 — (8,389) — — (56,150) Contingent Consideration 446,144 — — 19,542 — — 465,686 Total 10,714,203 (6,934,104) (494,931) 532,288 525,069 5,913,678 10,256,203 b) Financing transactions that do not involve cash The main transactions that do not involve cash of the Company refer to the acquisition of assets through leases and income from financing with suppliers, as follows: Initial adoption IFRS 16 on 01.01.19 8,618,072 Financing transactions with suppliers 967,313 506,397 Acquisition of assets through leases 1,803,941 18,672 Total 11,389,326 525,069

ADDITIONAL INFORMATION ON THE C

ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENT OF INCOME - IFRS 16	12 Months Ended
	Dec. 31, 2019
ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENT OF INCOME - IFRS 16
ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENT OF INCOME - IFRS 16	34) ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENT OF INCOME - IFRS 16 The consolidated statement of income in the year ended December 31, 2019 includes the effects of the adoption of IFRS 16. To facilitate the understanding and comparability of the information, the following is the consolidated statement of income in the year ended 31 December 2019, 2018 and 2017, excluding the effects of adopting IFRS 16. General and administrative Item Cost of sales Selling expenses expenses Financial expenses Total Rental costs and expenses (1,699,886) (71,335) (130,477) — (1,901,698) Depreciation costs and expenses 1,604,829 76,591 201,530 — 1,882,950 Financial charges — — — 401,484 401,484 Income and social contribution taxes — — — — (130,130) Total (95,057) 5,256 71,053 401,484 252,606 2019 Statements of IFRS 15 and IFRS Statements of Statements of Statements of income (IFRS 16) 16 adjustments income (IAS 17) income (IAS 17) income (IAS 17) Net operating revenue 44,268,171 — 44,268,171 Cost of sales (22,158,947) (95,057) (22,254,004) (21,025,767) (20,272,530) Gross profit 22,109,224 (95,057) 22,014,167 22,436,973 22,934,302 Operating income (expenses) (14,895,300) 76,309 (14,818,991) (12,980,789) (16,302,065) Selling expenses (12,701,222) 5,256 (12,695,966) (12,832,741) (13,136,474) General and administrative expenses (2,498,096) 71,053 (2,427,043) (2,598,970) (2,443,105) Other operating income 929,498 — 929,498 4,077,003 464,182 Other operating expenses (625,480) — (625,480) (1,626,081) (1,186,668) Operating income 7,213,924 (18,748) 7,195,176 9,456,184 6,632,237 Financial income 1,132,870 — 1,132,870 4,112,640 1,755,958 Financial expenses (1,953,011) 401,484 (1,551,527) (2,285,487) (2,659,002) Equity pickup 752 — 752 (5,847) 1,580 Income before taxes 6,394,535 382,736 6,777,271 11,277,490 5,730,773 Income and social contribution taxes (1,393,521) (130,130) (1,523,651) (2,349,232) (1,121,983) Net income for the year 5,001,014 252,606 5,253,620 8,928,258 4,608,790

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	12 Months Ended
	Dec. 31, 2019
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	35) SUBSEQUENT EVENTS a) Infringement notice from the Brazilian Federal Revenue Service (“RFB”) against the Company On February 3, 2020, the RFB issued a tax assessment notice against the Company, in the amount of R$983,487, alleging insufficient payment of income tax at source on capital gain on the sale of the GVT Group to the Company. Although the preliminary assessment is that there was no insufficiency in the payment of said tax, the Company is protected by an indemnity clause in the purchase and sale agreement signed with the seller, with respect to any losses related to income tax at source on capital gain of the GVT Group in said transaction. b) Sale of the Company's towers On February 7, 2020, the Company concluded the sale of 1,909 structures (rooftops and towers) of its ownership to Telxius Torres Brasil Ltda., indirect subsidiary of Telefónica S.A., for the total amount of R$641 million. The conclusion came after the fulfillment of all suspensive conditions common to this type of operation, including its approval by the Administrative Council for Economic Defense - CADE. c) Interim interest on equity declared by the Company At a meeting held on February 14, 2020, calling upon the General Shareholders’ Meeting to be held in 2021, the Board of Directors approved the payment of interest on equity for the fiscal year 2020, under the terms of article 28 of the Company’s Articles of Incorporation, article 9 of Law No. 9249/95 and CVM Ruling No. 638/12, in the gross amount of R$270,000, equivalent to 0.14994770587 per common share and 0.16494247646 per preferred share, corresponding to a net amount of Withholding Income Tax (IRRF) of R$229,500, equivalent to 0.12745554999 per common share and 0.14020110499 per preferred share, calculated based on the balance sheet of the January 31, 2020. Payment thereof will be made up to the end of fiscal year 2021, on a date to be set by the Board of Directors and timely communicated to the market, being paid individually to shareholders, according to the ownership structure contained in the Company's records, through the end of day February 28, 2020.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES (Policies)	12 Months Ended
	Dec. 31, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
Cash and cash equivalents	These are financial assets classified at amortized cost or measured at fair value through profit or loss maintained in order to meet short-term cash commitments and not for investment or other purposes. The Company and its subsidiaries consider cash equivalents a short-term investment readily convertible into a known amount of cash and subject to insignificant risk of change in value. Short-term investments are classified as cash equivalents when redeemable within 90 days.
Trade accounts receivable	These are financial assets measured initially at fair value and subsequently, at amortized cost and are evaluated by the value of the services provided and goods sold in accordance with the contracted conditions, net of estimated impairment losses. These include the services provided to customers, which were still not billed at the balance sheet date, as well as other trade accounts receivable related to the sale of cell phones, SIM cards, accessories, advertising and rent of IT equipment (“Soluciona TI” product). The Company measures the provision for estimated impairment losses in an amount equal to the loss of credit expected for a lifetime.
Inventories	These are evaluated and presented at the lower of average acquisition cost and net realizable value, whichever is lower. These include resale materials such as cellphones, SIM cards, prepaid cards, accessories, consumption materials and maintenance. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs to sell. Estimated impairment losses are set up for materials and devices considered obsolete or whose carrying amounts are in excess of those usually sold by the Company within a reasonable period. Additions and reversals of estimated impairment losses and inventory obsolescence are included in cost of goods sold (Note 25).
Prepaid expenses	These are stated at amounts effectively disbursed referring to services contracted but not yet incurred. Prepaid expenses are allocated to the statement of incomes to the extent that related services are rendered, and economic benefits are obtained. Includes the amounts of incremental costs related to obtaining a contract (sales commissions and other acquisition costs from third parties), resulting from the adoption of IFRS 15 on January 1, 2018, are amortized over the same period as the revenue associated with that asset.
INCOME AND SOCIAL CONTRIBUTION TAXES	a.1) Current taxes Current tax assets and liabilities are measured at the estimated amount recoverable from, or payable to, the tax authorities. The tax rates and laws used in calculating the amounts referred to above are those in effect, or substantially in effect, at year-end. In the balance sheet, current taxes are presented net of prepayments over the year. Current income and social contribution taxes, related to items directly recognized in equity, are also recognized in equity. Management regularly assesses the tax position in circumstances in which tax regulation requires interpretation and sets up provision therefore when appropriate. a.2) Deferred taxes Deferred tax assets are recognized for all deductible temporary differences, unused tax credits and losses, to the extent that taxable profit is likely to be available for realization of deductible temporary differences and unused tax credits and losses are likely to be used, except: (i) when the deferred tax asset related to the deductible temporary difference arises from initial recognition of an asset or liability in a transaction other than a business combination and does not impact, at the transaction date, the book profit, income or loss for tax purposes; and (ii) on deductible temporary differences related to investments in subsidiaries that deferred tax assets are recognized only to the extent that it is probable that temporary differences will be reversed in the near future and taxable profit is likely be available so that temporary differences can be used. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit shall be available to allow all or part of the deferred tax asset to be used. Derecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax liabilities are recognized on all temporary tax differences, except: (i) when the deferred tax liability arises from initial recognition of goodwill, or an asset or liability in a transaction other than a business combination, and does not affect book profit or taxable profit or tax losses on the transaction date; and (ii) on temporary tax differences related to investments in subsidiaries, in which the temporary difference reversal period can be controlled and temporary differences are not likely to be reversed in the near future. Deferred tax assets and liabilities are measured at the tax rate expected to be applicable for the year the asset will be realized, or the liability will be settled, based on the rates provided in tax legislation and that were published as at year-end. Deferred tax assets and liabilities are not discounted to present value and are classified in the balance sheet as non-current, irrespective of their expected realization. The tax effects of items recorded directly in equity are also recognized in equity. Deferred tax items are recognized based on the transaction which gave rise to that deferred tax, in comprehensive income or directly in equity. Deferred tax assets and liabilities are presented net when there is a legal or constructive right to offset a tax asset against a tax liability and deferred taxes relate to the same taxpaying entity and are subject to the same tax authority.
Investments	The consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ends when the Company ceases to exercise said control. Assets, liabilities and results of a subsidiary acquired or sold during the year are included in the consolidated financial statements from the date on which the Company obtains control until the date on which the Company ceases to exercise control over the subsidiary. Joint control is the contractually agreed sharing of a control, only existing when decisions about relevant activities call for unanimous agreement by the parties sharing control. Control is obtained when the Company is exposed or has the right to variable returns based on its involvement with the investee and has the capacity of affecting those returns through the power exercised over an investee. Based on the equity method, investments are recorded in balance sheets at cost plus changes after the acquisition of the equity interest. The statement of income reflects the portion of the results of operations of the investees. When changes are directly recognized in the investees' equity, the Company will recognize its portion in variations occurred, and record these variations in the statements of changes in equity and in the statements of comprehensive income, where applicable. The financial statements of investees are prepared for the same reporting period of the Company. Whenever necessary, adjustments are made so that the accounting policies are in accordance with those adopted by the Company. After the equity method is applied, the Company determines whether there is any need to recognize additional impairment of its investment in investees. At each closing date, the Company determines whether there is objective evidence of impairment of investment in the affiliate. If so, the Company calculates the recoverable amount as the difference between the recoverable value of the investees and their carrying amount and recognizes the amount in the statement of incomes. When there is loss of significant influence over the investees, the Company evaluates and recognizes the investment, at that moment, at fair value. Any difference between the investees’ carrying amount by the time it loses significant influence and the fair value of the remaining investment and revenue from sale is recognized in the statement of incomes. Foreign exchange variations in Aliança’s equity (jointly controlled entity) are recognized in the Company’s equity in other comprehensive income (“Effects on conversion of investments abroad”, Note 23).
Property, plant and equipment	It is measured at acquisition and/or construction cost, net of accumulated depreciation and/or accumulated impairment losses, if any. Such cost includes the borrowing costs for long-term construction projects if the recognition criteria are met and is stated net of ICMS (State VAT) credits, which were recorded as recoverable taxes. Asset costs are capitalized until the asset becomes operational. Costs incurred after the asset becomes operational and that do not improve the functionality or extend the useful life of the asset are immediately recognized on an accrual basis. When significant parts of fixed assets are required to be replaced at intervals, the Company recognizes such parts as individual assets with specific useful lives and depreciation. Likewise, expenses that represent asset improvement (expanded installed capacity or useful life) are capitalized. All the other repair and maintenance costs are recognized in the statement of income as incurred. The present value of the expected cost for the decommissioning of property, plant and equipment items (towers and equipment on leased property) is capitalized at the cost of the respective asset matched against the provision for dismantling obligations (Note 19) and depreciated over the useful lives of the related assets, which do not exceed the lease term. Depreciation is calculated by the straight-line method over the useful lives of assets at rates that take into account the estimated useful lives of assets based on technical analyses. The assets’ residual values, useful lives and methods of depreciation are reviewed on a yearly basis, adjusted prospectively, if appropriate. Useful lives in terms of depreciation rates are reviewed annually by the Company. Property, plant and equipment items are written off when sold or when no future economic benefit is expected from their use or sale. Any gains or losses arising from write-off of assets (measured as the difference between the net disposal proceeds and the carrying amount of the asset) are recognized in the statement of income in the year in which the asset is written off.
Intangible assets	Intangible assets acquired separately are measured at acquisition / construction cost upon their initial recognition. The cost of an intangible asset acquired in a business combination is its fair value at the acquisition date. After initial recognition, intangible assets are stated at acquisition and/or buildup cost, net of amortization and accumulated provision for impairment, where applicable. Intangible assets generated internally, excluding capitalized development costs, are not capitalized, and the expense is reflected in the statement of income for the year in which it is incurred. The useful lives of intangible assets are considered finite or indefinite. · Intangible assets with finite useful lives are amortized over their economic useful lives under the straight-line method and are tested for impairment whenever there is any indication of impairment loss. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed on an annual basis. Changes in the estimated useful life or the expected pattern of consumption of future economic benefits embodied in an asset are accounted for by changing the amortization period or method, as appropriate, and treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the statement of income in the cost/expense category consistent with the function of the intangible assets. · Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the CGU level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be justifiable. Otherwise, changes in useful life – from indefinite to finite - are carried out prospectively. Goodwill generated upon investment acquisition is treated as an intangible asset with indefinite useful lifes. Gains and losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and recognized in the statement of income on disposal.
Goodwill	Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, recorded at fair value on the acquisition date, and the fair value of any non-controlling interest in the acquiree. For each business combination, the Company measures non-controlling interests in the acquiree either at its fair value or based on its proportional share in the identifiable net assets of the acquiree. Costs directly attributable to an acquisition are recorded as expenses, as incurred. Upon acquiring a business, the Company assesses financial assets acquired and liabilities assumed so as to classify and allocate them in accordance with contractual terms, economic circumstances and relevant conditions on the acquisition date, including the segregation, by the acquiree, of embedded derivatives existing in host contracts in the acquiree. In the event a business combination is conducted in stages, the ownership interest previously held in the acquiree’s capital is reassessed at fair value on the date control is acquired, and any impacts are recognized in the statement of income. Any contingent portion to be transferred by the acquirer shall be recognized at fair value on the acquisition date. Subsequent changes in the fair value of the contingent portion to be considered as an asset or liability is recognized in the statement of income. Contingent consideration on acquisition of a business that is not classified as equity is subsequently measured at fair value through profit or loss, whether or not included in the scope of IFRS 9. Goodwill is initially measured as excess transferred payment amount in relation to acquired net assets (identifiable net assets acquired, and liabilities assumed). If consideration is lower than the fair value of acquired net assets, the difference must be recognized as a gain in the statement of income. After initial recognition, goodwill is measured at cost, less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to the CGUs that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. When goodwill has been allocated to a CGU and part of the operation within that CGU is disposed that, the goodwill associated with that operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is allocated based on the relative fair values of the disposed operation and the portion of the CGU retained.
Impairment of nonfinancial assets	The Company annually reviews the net carrying amount of assets in order to evaluate events or changes in economic, operating or technological circumstances that may indicate impairment losses. When such evidence is found, and net carrying amount exceeds recoverable amount, a provision for impairment is recorded so as to adjust the net carrying amount to the recoverable amount. The recoverable amount of an asset or a CGU is defined as the higher of value in use and net sales value. Thus, considering the convergence of product and service offerings, in addition, the Company's main operating asset is a single, broadly integrated network, which is used to provide all telecommunications services to its customers, therefore, the Company defines your business as a single CGU. Upon estimation of the value in use of an asset or cash-generating unit, estimated future cash flows are discounted at present value using a discount rate Weighted Average Cost of Capital “WACC” which reflects the weighted rate between (i) the cost of capital (including specific risks) based on the Capital Asset Pricing Model; and (ii) the debt these components being applicable to the asset or CGU before taxes. Whenever possible, the net sale value is determined based on a firm sale agreement executed on an arm’s length basis between knowledgeable and willing parts, adjusted by expenses attributable to the sale of assets or, when there is no firm sale agreement, based on the market price of an active market, or on the latest transaction price involving similar assets. For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine an asset’s or CGU recoverable amount since the last impairment loss was recognized. Any reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount or exceeds the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of income. The following assets have specific characteristics for impairment testing: · Goodwill: Goodwill is tested for impairment annually at the reporting date or earlier when circumstances indicate that the carrying amount may be impaired. Where the recoverable amount is lower than the carrying amount, an impairment loss is recognized. Impairment losses relating to goodwill cannot be reversed in future periods. · Intangible assets: Intangible assets with indefinite useful lives are tested for impairment annually at the reporting date either individually or at the CGU level, as appropriate, and when circumstances indicate that the carrying amount may be impaired. · Determination of value in use: The key assumptions used to estimate value in use are: (i) revenues (projected considering the growth in customer base, growth in market revenue against GDP and the Company’s share of this market); (ii) variable costs and expenses (projected in accordance with the dynamics of the customer base, and fixed costs are projected in line with the historical performance of the Company, as well as with revenue growth); and (iii) capital investments (estimated considering the technological infrastructure necessary to enable the provision of services).
DIVIDENDS AND INTEREST ON EQUITY	a.1) Dividends Minimum mandatory dividends are stated in the balance sheet as legal obligations (provision in current liabilities). Dividends in excess of such minimum amount, not yet approved in the Shareholders’ Meeting, are recorded in equity as proposed additional dividends. After approval at the Shareholders’ Meeting, the dividends in excess of the mandatory minimum are transferred to current liabilities and classified as legal obligations. a.2) Interest on equity Brazilian legislation allows companies to pay interest on equity, which is similar to payment of dividends; however, this is deductible for income tax calculation purposes. In order to comply with Brazilian tax legislation, the Company and its subsidiaries provision, in its accounting records, the amount due to match against the financial expenses account in the statement of income for the year. For the presentation of these financial statements, that expense is reversed against a direct charge to equity, resulting in the same accounting treatment adopted for dividends. The distribution of interest on equity to shareholders is subject to withholding income tax at a 15% rate. a.3) Unclaimed dividends and interest on equity The rights to receive unclaimed interest on equity and dividends prescribe after three years from the initial date available for payment. When dividends and interest on equity expire, these amounts are reversed to retained earnings.
PROVISIONS AND CONTINGENCIES	Provision is recognized when the Company has a present obligation (legal or constructive) as a result of a past event, when it is probable that economic benefits are required to settle the obligation and a reliable estimate of the value of the obligation can be made. Provision is restated at the balance sheet date considering the likely amount of loss and the nature of each provision. Provision amounts for contingencies are presented at their gross amount, less the corresponding judicial deposits, and are classified as provision for civil, labor, tax and regulatory contingencies. Judicial deposits are classified as assets given that the conditions required for their net presentation with provision do not exist. Provision for civil, labor, tax and regulatory legal claims The Company and its subsidiaries are parts to administrative; labor, tax, civil and regulatory claims, and accounting provision amounts have been recorded in respect of claims whose likelihood of loss was classified as probable. The assessment of the likelihood of loss includes an analysis of available evidence, the hierarchy of laws, available case law, the latest court decisions law and their relevance in the legal system, as well as the opinion of outside legal counsel. Provision is reviewed and adjusted considering changes in existing circumstances, such as the applicable statute of limitations, tax audit conclusions, or additional exposures identified based on new matters or court decisions. Provision for decommissioning of assets Refers to costs to be incurred due to returning sites to owners (locations intended for tower and equipment installation on leased property) in the same condition as these were found at the time of execution of the initial lease agreement. These costs are provisioned as the present value from amounts expected to settle the obligation using estimated cash flows and they are recognized as part of the cost of the corresponding asset. The cash flows are discounted at a current pre-tax rate that reflects the risks specific to decommissioning of assets. The financial effect of the discount is recorded as incurred and recognized in the statement of income as a finance cost. The estimated future costs of decommissioning are reviewed annually and adjusted as appropriate. Changes in the estimated future costs or in the discount rate applied are added to, or deducted from, the cost of the asset. Contingent liabilities recognized in a business combination A contingent liability recognized in business combination is initially measured at fair value. Refers to contingent liabilities from the Purchase Price Allocation (PPA) on acquisition of the controlling interest of Vivo Participações in 2011 and GVTPart. in 2015.
Loans, financing and debentures	These are financial liabilities measured initially and recognized by fair value, net of costs incurred to obtain them and subsequently measured by amortized cost (plus pro-rata charges and interest), considering the effective interest rate of each operation, or by fair value through profit or loss. They are classified as current unless the Company has the unconditional right to settle the liability for at least 12 months after the closing date of the year. Borrowing costs directly related to the acquisition, construction or production of an asset that necessarily requires more than 18 months to be completed for use or sale purposes are capitalized as part of the cost of the corresponding asset. The Company did not capitalize borrowing and financing costs and debentures due to the absence of qualifying assets. All other costs of loans, financing, debentures and leases are recorded in expense in the period in which they are incurred. The costs of loans, financing and debentures comprise interest and other costs incurred.
NET OPERATING REVENUE	Recognition of revenues from services and goods With the adoption of IFRS 15 on January 1, 2018, for packages combining various fixed network, mobile, data, internet or television products or services, total revenue is now allocated to each performance obligation based on its independent selling prices in relation to the total consideration of the package and recognized when (or as soon as) the obligation is met, regardless of whether or not items are delivered. When packages include a discount on the equipment, there is an increase in revenues recognized for the sale of handsets and other equipment, to the detriment of ongoing service revenue over subsequent periods. To the extent that the packages are marketed at a discount, the difference between the revenue from the sale of equipment and the consideration received from the customer in advance is recognized as a contractual asset in the statement of financial position. Revenues correspond substantially to the value of the consideration received or receivable arising from the provision of telecommunications, communications, sales of goods, advertising and other revenues, and are presented net of taxes, rebates and returns (in the case of sale of goods), incident on them. Revenues from sales of public telephone cards and prepaid cellular recharge credits, as well as the respective taxes due are deferred and recognized in income as services are effectively rendered. Revenues from leasing contracts for equipment classified as financial leasing ("Soluciona IT" product) are recognized at the installation of the equipment, at which time the actual transfer of risk occurs. Revenues are recognized at the present value of future minimum contract payments. Revenue from the sale of appliances to dealers is accounted for at the time of delivery and not at the time of sale to the final customer. Revenues from services and goods are basically subject to the following indirect taxes: ICMS or ISS (as the case may be), PIS and COFINS, as the case may be.
FINANCIAL INCOME (EXPENSES)	These include interest, monetary and exchange variations arising from short-term investments, derivative transactions, loans, financing, debentures, present value adjustments of transactions that generate monetary assets and liabilities and other financial transactions. These are recognized on an accrual basis when earned or incurred by the Company. For all financial instruments measured at amortized cost and interest-yielding financial assets classified as financial assets at fair value through other comprehensive income, interest income or expense is recognized using the effective interest method, which exactly discounts estimated future cash payments or receipts over the expected life of the financial instrument or, where appropriate, a shorter period, to the net carrying amount of the financial asset or liability.
Share-based payments plans	The Company and subsidiaries measure the cost of transactions settled with shares issued by the parent company (Telefónica), to its officers and employees. The Company and its subsidiaries measure the cost of transactions settled with employees and officers based on shares issued by the parent company (Telefónica), by reference to the fair value of the shares on the date at which they are granted, using the binomial valuation model. This fair value is charged to the statement of income over the period until the vesting date. The Company and its subsidiaries reimburse Telefónica for the fair value of the benefit delivered on the grant date to the officers and employees.
Pension plans and other post-employment benefits	The Company and its subsidiaries individually sponsor pension funds of post-retirement benefits for active and retired employees, in addition to a multisponsor supplementary retirement plan and health care plan for former employees. Contributions are determined on an actuarial basis and recorded on an accrual basis. Liabilities relating to defined benefit plans are determined based on actuarial evaluations at each year-end, in order to ensure that sufficient reserves have been set up for both current and future commitments. Actuarial liabilities related to defined benefit plans were calculated using the projected unit credit method. Actuarial gains and losses are recognized immediately in equity (in other comprehensive income). For plans with defined contribution characteristics, the obligation is limited to the contributions payable, which are recognized in the P&L in the respective accrual periods. The asset or liability related to defined benefit plan to be recognized in the financial statements corresponds to the present value of the obligation for the defined benefit (using a discount rate based on long-term National Treasury Notes - “NTNs”), less the fair value of plan assets that will be used to settle the obligations. Plan assets are assets held by a privately held supplementary pension plan entity. Plan assets are not available to the Company’s creditors or those of its subsidiaries and cannot be paid directly to the Company or its subsidiaries. The fair value is based on information on market prices and, in the case of securities quoted, on the purchase price disclosed. The value of any defined benefit asset then recognized is limited to the present value of any economic benefits available as a reduction in future plan contribution from the Company. Actuarial costs recognized in the statement of income are limited to the service cost and cost of interest on the defined benefit plan obligation. Any changes in the measurement of plan assets and obligations are initially recognized in other comprehensive income, and immediately reclassified to retained earnings in P&L. The Company and its subsidiaries manage and individually sponsors a health care plan for retired employees and former employees with fixed contributions to the plan, in accordance with Law No. 9656/98 (which provides for private health care and health insurance plans). As provided for in Articles 30 and 31 of said law, participants shall have the right to the health care plan in which they participated while they were active employees.
Financial Instruments - Initial recognition and subsequent measurement	a.1) Financial assets Initial recognition and measurement On initial recognition, a financial asset is classified in the following measurement categories: (i) at fair value through profit or loss; (ii) at amortized cost; or (iii) at fair value through other comprehensive income, depending on the situation. The classification of financial assets according to IFRS 9 is generally based on the business model in which a financial asset is managed and its characteristics of contractual cash flows. The Company’s consolidated financial assets include cash and cash equivalents, trade accounts receivable, short-term investments pledged as collateral and derivative financial instruments. Subsequent measurement Subsequent measurement of financial assets depends on their classification, as follows: Financial assets at fair value through profit or loss: these assets are subsequently measured at fair value. Net income, including interest, is recognized directly in income. Financial assets at amortized cost: these assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in income. Any gain or loss on derecognition is recognized in profit or loss. Financial assets at fair value through other comprehensive income: these assets are subsequently measured at fair value. Interest income is calculated using the effective interest method, and foreign exchange gains and losses and impairment are recognized in profit or loss. Other net income is recognized in other comprehensive income. In derecognition, the accumulated result in other comprehensive income is reclassified to the statement of income. Derecognition A financial asset (or, whenever the case, a part of a financial asset, or a part of a group of similar financial assets) is derecognized when: · The rights to receive the cash flows from the asset have expired; · The Company has transferred its rights to receive cash flows from it has assumed obligation to pay the received cash flows in full without material delay to a third part under a ‘pass-through’ arrangement; and either (i) the Company has transferred substantially all the risks and rewards of the asset, or (ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. a.2) Impairment of financial assets The Company and its subsidiaries apply an impairment model for financial assets based on expected credit losses, using a simplified method for certain short and long-term assets (commercial receivables, lease receivables and contractual assets). Under this simplified approach, credit impairment is recognized by reference to expected credit losses over the life of the asset. For this purpose, the Company and its subsidiaries use matrices based on historical bad debt experience by geographical area on a portfolio segmented by customer category according to credit pattern. The matrix for each category has a defined time horizon divided into intervals in accordance with the collection management policy and is fed with historical data that covers at least 24 collection cycles. This data is updated on a regular basis. Based on the information observable at each close, the Company and its subsidiaries assess the need to adjust the rates resulting from these matrices, considering current conditions and future economic forecasts. a.3) Financial liabilities Initial recognition and measurement Upon initial recognition, the Company’s financial liabilities are classified in the following categories: financial liabilities measured at fair value through profit or loss and other financial liabilities. Financial liabilities are initially recognized at fair value plus, in the case of loans and financing, transaction cost directly attributable thereto. The Company’s consolidated financial liabilities include trade accounts payable, loans and financing, debentures, leases, contingent payments and derivative financial instruments. Subsequent measurement Measurement of financial liabilities depends on their classification, as follows: Financial liabilities at fair value through profit or loss: financial liabilities are designated at initial recognition at fair value through profit or loss. This category also includes derivative financial instruments contracted, except those designated as derivative financial instruments of cash flow hedge. Interest, monetary and exchange variations and changes arising from the valuation at fair value, when applicable, are recognized in the statement of income when incurred. Financial liabilities at amortized cost: after initial recognition, loans and financing subject to interest are subsequently measured at amortized cost using the effective interest rate method. Gains and losses are recognized in the statement of income at the time of write-off of liabilities, as well as during the amortization process using the effective interest rate method. Derecognition A financial liability is derecognized when the obligation has been revoked, cancelled or expired. When an existing financial liability is replaced by another of the same lender, and the terms of the instruments are substantially different, or when the terms of an existing debt instrument are substantially modified, this replacement or modification is treated as derecognition of the original liability and recognition of a new liability, and the difference in the corresponding carrying amounts is recognized in the statement of income. a.4) Fair value measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Fair value measurement is based on the assumption that the transaction to sell the asset or transfer the liability will take place (i) in the principal market for the asset or liability; or (ii) in the absence of a principal market, in the most advantageous market for that asset or liability. The Company and or its subsidiaries must have access to the principal (or most advantageous) market. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing an asset or liability, assuming that market participants act in their best economic interests. Fair value measurement of a non-financial asset takes into consideration the capacity of a market participant to generate economic benefits through the best use of the asset or selling it to another market participant that would also make the best use of the asset. The Company and its subsidiaries use adequate valuation techniques in the circumstances and for which there is sufficient data to measure the fair value, that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs. For assets and liabilities recurrently recognized in the financial statements, the Company determines whether there were transfers between the hierarchy levels, revaluating the classification (based on the lowest level input that is significant to the overall fair value measurement) at the end of each reporting period. For the purposes of fair value disclosures, the Company and its subsidiaries determined classes of assets or liabilities based on the nature, characteristics and risks of those assets or liabilities and the fair value hierarchy level, as mentioned above. a.5) Financial instruments - net Financial assets and liabilities are presented net in the balance sheet if, and only if, there is a current enforceable legal right to offset the amounts recognized and if there is an intention to offset or realize the asset or settle the liability simultaneously.
Derivative financial instruments and hedge accounting	a.6) Derivative financial instruments and hedge accounting IFRS 9 introduced a new accounting record model for hedges, which is less restrictive, which aligns the accounting treatment with risk management activities by requiring an economic relationship between the hedged item and the hedging instrument and that the coverage ratio is the same as the entity applies to its risk management. With this new model, the documentation criteria for hedging relationships are modified and improvements are included in the disclosures about hedging activities. The Company uses derivative financial instruments, such as currency and interest rate swaps or currency non- deliverable forward contracts to hedge against currency risks. Derivative financial instruments designated in hedge transactions are initially recognized at fair value on the date on which the derivative contract is entered into, and subsequently revalued also at fair value. Derivatives are presented as financial assets when the fair value of the instrument is positive and as financial liabilities when the fair value of the instrument is negative. Any gains or losses resulting from changes in fair value of derivatives during the year are posted directly to the statement of income, except for the effective portion of cash flow hedges, which is recognized directly in equity as other comprehensive income and subsequently reclassified to P&L when the hedged item affects P&L. On the inception initial recognition of a hedge relationship, the Company formally designates and documents the hedge relationship to which it wishes to apply hedge accounting, the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the hedged risk, the nature of the risks excluded from the hedge relationship, the prospective statement of hedge effectiveness and how the Company shall assess the effectiveness of changes in the hedging instrument’s fair value in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the hedged risk. For the purpose of hedge accounting, hedges are classified as cash flow hedges and fair value hedges. Cash flow hedges Cash flow hedges meeting the recording criteria are accounted for as follows: (i) the portion of gain or loss from the hedge instrument determined as an effective hedge shall be recognized directly in equity (other comprehensive income), and (ii) the ineffective portion of gain or loss from the hedge instrument shall be recognized in the statement of income. When the Company’s documented risk management strategy for any given hedge relationship excludes from the hedge effectiveness evaluation any particular component of gain or loss or the corresponding cash flows from the hedge instrument, that gains or loss component is recognized in financial income (expenses). Amounts recorded in other comprehensive income are immediately transferred to the statement of income when the hedged transaction affects P&L. When a hedged item is the cost of a non-financial asset or liability, amounts recorded in equity are transferred at the initial carrying amount of the non-financial assets and liabilities. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover (as part of the hedging strategy), or if its designation as a hedge is revoked, or when the hedge fails to meet the hedge accounting criteria, any cumulative gain or loss previously recognized in other comprehensive income remains separately in equity until the forecast transaction occurs or the firm commitment is fulfilled. The Company's contracts are classified as cash flow hedges when they provide protection against changes in cash flows that are attributable to a particular risk associated with a recognized liability that may affect the profit or loss and fair value when they provide protection against exposure to changes in the fair value of the identified part of certain liabilities that is attributable to a particular risk (exchange variation) and may affect the profit or loss. Fair value hedges Fair value hedges meeting the accounting criteria are accounted for as follows: (i) gain or loss from changes in fair value of a hedge instrument shall be recognized in the statement of income as finance costs; and (ii) gain or loss from a hedged item attributable to the hedged risk shall adjust the recorded amount of the hedged item to be recognized in the statement of income, as finance costs. For fair value hedges relating to items carried at amortized cost, any adjustment to carrying amount is amortized through profit or loss over the remaining term of the hedge using the effective interest method. The effective interest rate amortization may begin as soon as any adjustment exists and no later than the point that the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged. If the hedged item is derecognized, the unamortized fair value is recognized immediately in the statement of income. When an unrecognized firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognized as an asset or liability with a corresponding gain or loss recognized in profit and loss. Classification between current and non-current Derivative financial instruments are classified as current and non-current or segregated into short and long-term portions based on an evaluation of the contractual cash flows. When the Company maintains a derivative as an economic hedge (and does not apply hedge accounting), for a period exceeding 12 months after the balance sheet date, the derivative is classified as non-current (or segregated into current and non-current portions), in line with the classification of the corresponding item. Derivative instruments that are designated as effective hedging instruments are classified consistently with the classification of the underlying hedged item. The derivative instrument is segregated into current and non-current portions only when amounts can be reliably allocated.

OPERATIONS (Tables)

OPERATIONS (Tables)	12 Months Ended
	Dec. 31, 2019
OPERATIONS
Summary of authorizations for rendering SMP services	Radiofrequency Band (MHz) License Expiration (Year) 450 MHz 14 2027 700 MHz 20 2029 800 MHz 25 2020-2028 900 MHz 5 2020-2023 1800 MHz 20-50 2020-2023 2100 MHz 20-30 2023 2500 MHz 40-60 2027-2031

BASIS OF PREPARATION AND PRES_2

BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS (Tables)	12 Months Ended
	Dec. 31, 2019
BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS
Schedule of equity interests	On December 31, 2019 and 2018, the Company holds direct equity interests in subsidiaries and joint ventures. Selected information on the Company's investees is as follows: Investees Type of investment Equity interests Country (Headquarters) Core activity Terra Networks Brasil S.A. ("Terra Networks") Subsidiary 100.00 % Brazil Telecommunications Telefônica Transportes e Logística Ltda ("TGLog") Subsidiary 99.99 % Brazil Transports and logistics POP Internet Ltda ("POP") Subsidiary 99.99 % Brazil Internet Aliança Atlântica Holding B.V. ("Aliança") Joint venture 50.00 % Brazil Telecommunications sector holdings Companhia AIX de Participações ("AIX") Joint venture 50.00 % Holland Operation of underground telecommunications networks Companhia ACT de Participações ("ACT") Joint venture 50.00 % Brazil Technical assistance in telecommunication networks
Schedule of amendments adopted	Standards and amendments Improvements to IFRS Standards 2015-2017 Cycle IFRS 16 Leases IFRIC 23 Uncertainty over Income Tax Treatments Amendments to IFRS 9 Prepayment Features with Negative Compensation Amendments to IAS 19 Plan Amendment, Curtailment or Settlement Amendments to IAS 28 Long-term Interest in associates and Joint Ventures
Schedule of effects of the initial adoption of IFRS 16 on opening balance	Nominal value payable 9,999,696 Unrealized financial expenses (1,381,624) Present value payable 8,618,072 Current 1,711,092 Non-current 6,906,980 Initial adoption effects: Property, plant and equipment (Note 12) 8,618,072 Loans, financing, debentures and leases (Note 20) 8,618,072
Schedule of IFRS amendments	Mandatory application: annual periods Standards and amendments beginning on or after Amendments to References to the Conceptual Framework in IFRS Standards January 1, 2020 Amendments to IFRS 3 Definition of a Business January 1, 2020 Amendments to IAS 1 and IAS 8 Definition of Material January 1, 2020 IFRS 17 Insurance Contracts January 1, 2021

CASH AND CASH EQUIVALENTS (Tabl

CASH AND CASH EQUIVALENTS (Tables)	12 Months Ended
	Dec. 31, 2019
CASH AND CASH EQUIVALENTS
Schedule of cash and cash equivalents	Cash and banks 250,168 205,598 Short-term investments 3,143,209 3,175,730 Total 3,393,377 3,381,328

TRADE ACCOUNTS RECEIVABLE (Tabl

TRADE ACCOUNTS RECEIVABLE (Tables)	12 Months Ended
	Dec. 31, 2019
TRADE ACCOUNTS RECEIVABLE
Schedule of trade accounts receivables	Billed amounts 7,018,601 6,789,257 Unbilled amounts 2,866,196 2,454,810 Interconnection amounts 790,046 835,887 Amounts from related parties (Note 28) 129,904 148,814 Gross accounts receivable 10,804,747 10,228,768 Estimated impairment losses (1,644,797) (1,498,134) Total 9,159,950 8,730,634 Current 8,719,497 8,304,382 Non-current 440,453 426,252
Schedule of accounts receivable balances related to the Soluciona IT	Portion resale of goods to legal entities, receivable within 24 months 182,286 180,065 Portion of accounts receivable from the OI group - Bankruptcy process of companies 89,647 119,365 Soluciona IT product (1) 317,988 293,531 Nominal amount receivable 589,921 592,961 Deferred financial income (48,086) (84,060) Present value of accounts receivable 541,835 508,901 Estimated impairment losses (101,382) (82,649) Net amount receivable 440,453 426,252
Schedule of amounts receivable, net of estimated losses for impairment of accounts receivable, by maturity	Falling due 6,862,054 6,485,154 Overdue – 1 to 30 days 966,986 1,096,639 Overdue – 31 to 60 days 306,956 305,019 Overdue – 61 to 90 days 192,622 200,401 Overdue – 91 to 120 days 250,029 220,221 Overdue – over 120 days 581,303 423,200 Total 9,159,950 8,730,634
Schedule of changes in contractual assets arising from the initial adoption of IFRS 15	Contract assets, gross Provision for losses Contract assets, net Initial adoption on 01.01.18 193,675 (33,196) 160,479 Additions 587,733 (512) 587,221 Amortizations (585,675) — (585,675) Balance on 12.31.18 195,733 (33,708) 162,025 Additions 558,883 (12,486) 546,397 Amortizations (485,108) — (485,108) Balance on 12.31.19 269,508 (46,194) 223,314
Schedule of changes in the estimated impairment losses for accounts receivable	Balance on 12.31.17 (1,433,471) Initial adoption IFRS 9 on 01.01.18 (364,456) Supplement to estimated losses, net of resersal (Note 25) (1,533,660) Write-offs 1,833,453 Balance on 12.31.18 (1,498,134) Supplement to estimated losses, net of resersal (Note 25) (1,682,348) Write-offs 1,547,577 Business combinations (Note 1 c.1) (11,892) Balance on 12.31.19 (1,644,797)

INVENTORIES (Tables)

INVENTORIES (Tables)	12 Months Ended
	Dec. 31, 2019
INVENTORIES
Schedule of inventories	Materials for resale 539,822 413,843 Materials for consumption 41,584 61,819 Other inventories 24,115 30,013 Gross total 605,521 505,675 Estimated losses from impairment or obsolescence (27,518) (43,622) Total 578,003 462,053

PREPAID EXPENSES (Tables)

PREPAID EXPENSES (Tables)	12 Months Ended
	Dec. 31, 2019
PREPAID EXPENSES
Schedule of prepaid expenses	Advertising and publicity 249,433 252,900 Insurance 20,459 24,867 Rental 184,248 32,792 Software and networks maintenance 33,863 17,485 Incremental costs - IFRS 15 330,919 255,391 Financial charges 30,521 43,853 Personal 30,135 33,970 Taxes and other 27,007 54,717 Total 906,585 715,975 Current 686,503 581,743 Non-current 220,082 134,232

INCOME AND SOCIAL CONTRIBUTIO_2

INCOME AND SOCIAL CONTRIBUTION TAXES (Tables)	12 Months Ended
	Dec. 31, 2019
INCOME AND SOCIAL CONTRIBUTION TAXES
Schedule of income and social contribution taxes recoverable	Income taxes recoverable 380,314 245,883 Social contribution taxes recoverable 31,281 28,706 Total 411,595 274,589 d
Schedule of income and social contribution taxes payable	Income taxes payable 76,483 8,756 Social contribution taxes payable 16,614 3,253 Total 93,097 12,009 Current 6,585 12,009 Non-current 86,512 —
Schedule of significant components of deferred income and social contribution taxes	Effects of the initial adoption of Balance on Income Comprehensive IFRS 9 and Balance on Income Comprehensive Balance on statement income IFRS 15 statement income Deferred tax assets (liabilities) Income and social contribution taxes on tax losses (1) 793,933 634,543 — — 1,428,476 51,360 — 1,479,836 Income and social contribution taxes on temporary differences (2) (1,131,850) (2,151,290) 31,797 70,012 (3,181,331) (1,343,635) 69,719 (4,455,247) Provisions for legal, labor, tax civil and regulatory contingencies 2,298,735 (333,035) — — 1,965,700 (275,109) — 1,690,591 Trade accounts payable and other provisions 651,417 (79,683) — — 571,734 (40,393) — 531,341 Customer portfolio and trademarks 254,418 (69,815) — — 184,603 (86,525) — 98,078 Estimated losses on impairment of accounts receivable 434,960 (115,661) — 122,977 442,276 36,354 — 478,630 Estimated losses from modems and other P&E items 200,941 (24,811) — — 176,130 6,869 — 182,999 Pension plans and other post-employment benefits 174,534 20,934 30,753 — 226,221 91,746 69,540 387,507 Profit sharing 110,046 19,643 — — 129,689 (9,695) — 119,994 Licenses (1,636,886) (216,328) — — (1,853,214) (216,330) — (2,069,544) Goodwill (Spanish and Navytree, Vivo Part. and GVTPart.) (3,598,172) (1,002,768) — — (4,600,940) (1,002,768) — (5,603,708) Property, plant and equipment of small value — (395,606) — — (395,606) 107,155 — (288,451) Technological Innovation Law (97,533) 47,406 — — (50,127) 25,562 — (24,565) Other temporary differences (3) 75,690 (1,566) 1,044 (52,965) 22,203 19,499 179 41,881 Total deferred tax assets (liabilities), noncurrent (337,917) (1,516,747) 31,797 70,012 (1,752,855) (1,292,275) 69,719 (2,975,411) Deferred tax assets 5,288,176 5,569,885 5,548,581 Deferred tax liabilities (5,626,093) (7,322,740) (8,523,992) Deferred tax assets (liabilities), net (337,917) (1,752,855) (2,975,411) Represented in the balance sheet as follows: Deferred tax assets 371,408 230,097 171,042 Deferred tax liabilities (709,325) (1,982,952) (3,146,453) (1) Under Brazilian tax legislation these may be offset up to 30% of the annual taxable income but otherwise have no expiry date. (2) Amounts that will be realized upon payment of provision, occurrence of impairment losses for trade accounts receivable, or realization of inventories, as well as upon reversal of other provision. (3) Deferred taxes from other temporary differences, such as deferred income, renewal of licenses, and subsidy on the sale of mobile phones, among others.
Schedule of expected realization of deferred taxes	Year 2020 1,614,967 2021 550,558 2022 531,585 2023 786,837 2024 654,638 2025 onwards (7,113,996) Total (2,975,411)
Schedule of reconciliation of income and social contribution tax expense	Income before taxes 6,394,535 11,277,490 5,730,773 Income and social contribution tax expenses, at the tax rate of 34% (2,174,142) (3,834,347) (1,948,463) Permanent differences Equity pickup, net of effects from interest on equity received and surplus value of the assets purchased attributed to the Company (Note 11) 256 (1,988) 537 Unclaimed interest on equity (13,825) (14,426) (21,843) Temporary differences in subsidiaries — — 2,007 Non-deductible expenses, gifts, incentives (84,487) (76,671) (94,413) Deferred taxes recognized in subsidiaries on tax loss carryforwards, negative basis and temporary differences referring to prior years — — 132,080 Tax benefit related to interest on equity allocated 879,920 1,547,000 821,657 Other (additions) exclusions (1,243) 31,200 (13,545) Tax debits (1,393,521) (2,349,232) (1,121,983) Effective rate 21.8 % 20.8 % 19.6 % Current income and social contribution taxes (101,246) (832,485) (580,578) Deferred income and social contribution taxes (1,292,275) (1,516,747) (541,405)

TAXES, CHARGES AND CONTRIBUTI_3

TAXES, CHARGES AND CONTRIBUTIONS RECOVERABLE (Tables)	12 Months Ended
	Dec. 31, 2019
TAXES, CHARGES AND CONTRIBUTIONS RECOVERABLE
Schedule of taxes, charges and contributions recoverable	State VAT (ICMS) (1) 2,664,499 2,549,006 Withholding taxes and contributions (2) 142,940 129,741 PIS and COFINS (3) 2,125,186 5,000,677 Fistel, INSS, ISS and other taxes 84,935 217,056 Total 5,017,560 7,896,480 Current 4,176,362 4,674,218 Non-current 841,198 3,222,262 (1) Includes ICMS credits from the acquisition of property and equipment, available to offset in 48 months; requests for refund of ICMS paid on invoices that were subsequently cancelled; for the rendering of services; tax substitution; and tax rate difference; among others. Non-current consolidated amounts include credits arising from the acquisition of property and equipment of R$537,209 and R$509,920 on December 31, 2019 and 2018, respectively. (2) Withholding income tax (“IRRF”) credits on short-term investments, interest on equity and others, which are used as deduction in operations for the period and social contribution tax withheld at source on services provided to public agencies. (3) The balances of December 31, 2019 and 2018 include the tax credits of PIS and COFINS plus interest accruals based on the SELIC, in the amounts of R$2,046,274 and R$4,915,139, respectively, arising from the final judicial processes on May 17, 2018 and August 28, 2018, in favor of the Company and its subsidiary, which recognized the right to deduct ICMS from the basis of the calculation of PIS and COFINS contributions for the periods from September 2003 to June 2017 and July 2004 to July 2013, respectively. On December 31, 2019 the remaining current balance was R$2,046,274. On December 31, 2018, current and non-current balances were R$2,520,990 and R$2,394,149, respectively. The Internal Revenue Service filed a review, pursuant to Law 13,670/18, with the purpose of approving the PIS and COFINS credits resulting from the dispute that dealt with the exclusion of ICMS from the bases of these contributions. The Company has made every effort, including judicial measures, to meet in a timely manner the requests of this audit procedure and thus continue offsetting its tax credits. The Company has three other lawsuits of the same nature in progress (including lawsuits of companies that have already been merged - GVT and Telemig), treated as contingent assets, which cover several periods between December 2001 and June 2017, whose ranges of values we estimate between R$1,700 million to R$2,200 million.

JUDICIAL DEPOSITS AND GARNISH_2

JUDICIAL DEPOSITS AND GARNISHMENTS (Tables)	12 Months Ended
	Dec. 31, 2019
JUDICIAL DEPOSITS AND GARNISHMENTS
Schedule of judicial deposits and garnishments	Judicial deposits Tax 2,007,074 1,929,594 Labor 316,009 522,201 Civil 1,049,922 1,164,835 Regulatory 261,005 208,447 Total 3,634,010 3,825,077 Garnishments 36,875 84,937 Total 3,670,885 3,910,014 Current 277,468 313,007 Non-current 3,393,417 3,597,007
Schedule of composition of the balances of the tax judicial deposits	Telecommunications Inspection Fund (FISTEL) 46,167 44,771 Corporate Income Tax (IRPJ) and Social Contribution Tax (CSLL) 575,426 551,937 Universal Telecommunication Services Fund (FUST) 518,372 503,246 Social Contribution Tax for Intervention in the Economic Order (CIDE) 286,270 278,685 State Value-Added Tax (ICMS) 269,483 239,220 Social Security, work accident insurance (SAT) and funds to third parties (INSS) 140,186 141,759 Withholding Income Tax (IRRF) 57,142 55,425 Contribution tax on gross revenue for Social Integration Program (PIS) and for Social Security Financing (COFINS) 34,983 39,672 Other taxes, charges and contributions 79,045 74,879 Total 2,007,074 1,929,594

OTHER ASSETS (Tables)

OTHER ASSETS (Tables)	12 Months Ended
	Dec. 31, 2019
OTHER ASSETS
Schedule of other assets	Advances to employees and suppliers 73,849 83,094 Related-party receivables (Note 28) 64,966 120,776 Receivables from suppliers 167,540 114,175 Surplus from post-employment benefit plans (Note 30) (1) 220,939 10,997 Goods for sale (2) 76,912 — Other amounts receivable (3) 14,123 20,670 Total 618,329 349,712 Current 382,591 302,607 Non-current 235,738 47,105 (1) On December 31, 2019, includes the amount of R$209,347, referring to the distribution of the PBS-A surplus (Note 30). (2) Refers to the residual balance of property, plant and equipment available for sale, resulting from the contract entered into by the Company on November 28, 2019, for the sale of 1,909 structures (rooftops and towers) owned by the Company to Telxius Torres Brasil Ltda (note 12). (3) On December 31, 2019, includes a receivable of R$10,226 from a subletting agreement in the Curitiba Data Center, for a period of 22 years. There are no unsecured residual amounts that result in lessor benefits and no contingent payments recognized as income during the year (Note 12).
Schedule of select information on subletting agreements	Nominal value receivable 16,966 Deferred financial income (6,740) Present value of accounts receivable 10,226 Current 759 Non-current 9,467
Schedule of amounts receivable from the subletting agreement, segregated into nominal values and present value	Nominal value Present value Year receivable receivable 2020 780 759 2021 780 721 2022 780 685 2023 780 651 2024 780 619 2025 onwards 13,066 6,791 Total 16,966 10,226

INVESTMENTS (Tables)

INVESTMENTS (Tables)	12 Months Ended
	Dec. 31, 2019
INVESTMENTS
Summary of the relevant financial data of the investees in which the Company holds a stake	Joint Ventures (Aliança / AIX / ACT) Equity interest 50.00 % 50.00 % Summary of balance sheets: Current assets 221,183 213,481 Non-current assets 10,556 12,327 Total assets 231,739 225,808 Current liabilities 7,140 7,103 Non-current liabilities 16,773 16,101 Equity 207,826 202,604 Total liabilities and equity 231,739 225,808 Investment Book value 103,913 101,302 Joint Ventures (Aliança / AIX / ACT) Summary Statements of Income: Net operating income 45,567 45,608 45,704 Operating costs and expenses (44,325) (58,773) (43,571) Financial income (expenses), net 1,030 1,334 1,713 Income and social contribution taxes (768) 137 (686) Net income (loss) for the year 1,504 (11,694) 3,160 Equity pickup, according to interest held 752 (5,847) 1,580
Schedule of changes in investments	Joint Ventures (Aliança / AIX Other Total / ACT) investments (1) investments Balance on 12.31.17 97,222 1,680 98,902 Equity pick-up (5,847) — (5,847) Provision for losses on investments — (700) (700) Other comprehensive income 9,927 (625) 9,302 Balance on 12.31.18 101,302 355 101,657 Equity pick-up 752 — 752 Other comprehensive income 1,859 (17) 1,842 Balance on 12.31.19 103,913 338 104,251 (1) Other investments are measured at fair value .

PROPERTY, PLANT AND EQUIPMENT (

PROPERTY, PLANT AND EQUIPMENT (Tables)	12 Months Ended
	Dec. 31, 2019
PROPERTY, PLANT AND EQUIPMENT
Schedule of breakdown of and changes to property, plant and equipment	Assets and Switching and Terminal facilities transmission equipment / Estimated under equipment modems Infrastructure Land Other P&E losses (1) construction Total Balances and changes: Balance on 12.31.17 22,809,109 2,724,332 3,885,297 314,353 830,452 (228,052) 2,886,825 33,222,316 Additions 10,670 129,640 101,798 550 204,041 (8,975) 6,527,074 6,964,798 Write-offs, net (45,719) (1,721) (8,461) (71) (2,926) 80,135 (61,430) (40,193) Net transfers 5,380,744 1,098,380 449,369 — 124,772 — (7,239,573) (186,308) Depreciation (Note 25) (3,486,592) (1,379,547) (658,915) — (320,232) — — (5,845,286) Balance on 12.31.18 24,668,212 2,571,084 3,769,088 314,832 836,107 (156,892) 2,112,896 34,115,327 Initial adoption IFRS 16 effects 91,836 — 8,526,236 — — — — 8,618,072 Additions 114,517 142,975 1,790,185 — 258,854 (20,465) 6,576,296 8,862,362 Write-offs, net (2) (17,069) (268) (139,857) (5,735) (2,182) 3,540 (21,750) (183,321) Net transfers 4,265,573 1,299,368 504,010 — 88,100 — (6,242,551) (85,500) Transfers of goods destined for sale (3) (1,183) — (248,175) (30,585) (67,143) — (340) (347,426) Subletting (4) — — (10,310) — — — — (10,310) Depreciation (Note 25) (3,936,572) (1,426,890) (2,471,456) — (297,234) — — (8,132,152) Business combinations (Note 1 c. 1) — 9 343 — 10,551 (691) — 10,212 Balance on 12.31.19 25,185,314 2,586,278 11,720,064 278,512 827,053 (174,508) 2,424,551 42,847,264 Balance on 12.31.18 Cost 79,002,102 18,033,246 16,154,562 314,832 4,996,170 (156,892) 2,112,896 120,456,916 Accumulated depreciation (54,333,890) (15,462,162) (12,385,474) — (4,160,063) — — (86,341,589) Total 24,668,212 2,571,084 3,769,088 314,832 836,107 (156,892) 2,112,896 34,115,327 Balance on 12.31.19 Cost 83,028,079 19,329,470 26,269,769 278,512 5,218,153 (174,508) 2,424,551 136,374,026 Accumulated depreciation (57,842,765) (16,743,192) (14,549,705) — (4,391,100) — — (93,526,762) Total 25,185,314 2,586,278 11,720,064 278,512 827,053 (174,508) 2,424,551 42,847,264 (1) The Company and its subsidiaries recognized estimated losses for potential obsolescence of materials used for property and equipment maintenance, based on levels of historical use and expected future use. (2) Includes the amount of R$12,065 in the Infrastructure, related to cancellation of lease agreements (Note 20). (3) Refers to assets sold from the Tamboré and Curitiba (CIC) data centers, sold for the amounts of R$419,690 to a company controlled by Asterion Industrial Partners SGEIC, SA, pursuant to an agreement entered into by the Company on May 8, 2019 and concluded. with the settlement on July 24, 2019, generating a gain in operating income of R$64,275. It also includes the residual balance of property, plant and equipment intended for sale, resulting from the contract entered into by the Company on November 28, 2019, for the sale of 1,909 structures (rooftops and towers) owned by the Company to Telxius Torres Brasil Ltda (note 10). (4) Refers to the lease of areas in the Curitiba data center.
Schedule of depreciation rates of property, plant and equipment	Description Switching and transmission equipment and media 2.50% to 92.31% 2.50% to 25.00% Terminal equipment / modems 6.67% to 66.67% 6.67% to 66.67% Infrastructure 2.50% to 92.31% 2.50% to 66.67% Other P&E assets 10.00% to 25.00% 10.00% to 25.00%
Schedule of changes in leases, after the adoption of IFRS 16, already included in the asset movement tables	Switching and transmission equipment Infrastructure Other Total Annual depreciation rate (%) 5.00 to 92.31 3.13 to 92.31 Balances and changes: Balance on 12.31.18 (1) 186,554 189,455 10,950 386,959 Initial Adoption on 01.01.19 91,836 8,526,236 — 8,618,072 Additions 107,108 1,696,833 — 1,803,941 Subletting (Note 12.c) — (10,310) (10,310) Depreciation and write-offs, net (IAS 17) — (50,819) (7,730) (58,549) Depreciation (IFRS 16) (39,192) (1,843,758) — (1,882,950) Cancellation of contracts — (105,952) — (105,952) Balance on 12.31.19 346,306 8,401,685 3,220 8,751,211 (1) Includes lease under IAS 17 and provision for dismantling for the leases.

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	12 Months Ended
	Dec. 31, 2019
INTANGIBLE ASSETS
Schedule of breakdown, changes and amortization rates of intangible assets	Indefinite useful life Finite useful life Estimated Other losses Software Customer intangible for under Goodwill Software portfolio Trademarks Licenses assets software development Total Annual amortization rate (%) 20.00 to 50.00 11.76 to 12.85 5.13 to 66.67 3.60 to 6.67 6.67 to 20.00 Balances and changes: Balance on 12.31.17 23,062,421 2,720,806 1,978,863 1,073,615 13,969,606 20,952 (499) 506,140 43,331,904 Additions — 970,172 — — 6,647 — — 249,307 1,226,126 Write-offs, net — (16) — — — — — — (16) Net transfers — 519,539 — — — 32,539 — (365,770) 186,308 Amortization (Note 25) — (965,459) (549,589) (84,205) (920,116) (3,968) — — (2,523,337) Balance on 12.31.18 23,062,421 3,245,042 1,429,274 989,410 13,056,137 49,523 (499) 389,677 42,220,985 Additions — 374,690 — — — — — 1,390,731 1,765,421 Write-offs, net (1) (3,249) (5,066) — — — (58) — — (8,373) Net transfers — 1,314,978 — — — (6) — (1,229,472) 85,500 Transfers of goods destined for sale (2) — (1,537) — — — — — — (1,537) Business combinations (Note 1 c.1) — 596 — — — — — — 596 Amortization (Note 25) — (1,234,949) (500,441) (84,205) (964,316) (3,729) — — (2,787,640) Balance on 12.31.19 23,059,172 3,693,754 928,833 905,205 12,091,821 45,730 (499) 550,936 41,274,952 Balance on 12.31.18 Cost 23,062,421 16,604,769 4,513,278 1,658,897 20,244,219 270,741 (499) 389,677 66,743,503 Accumulated amortization — (13,359,727) (3,084,004) (669,487) (7,188,082) (221,218) — — (24,522,518) Total 23,062,421 3,245,042 1,429,274 989,410 13,056,137 49,523 (499) 389,677 42,220,985 Balance on 12.31.19 Cost 23,059,172 18,310,812 4,513,278 1,658,897 20,244,219 270,000 (499) 550,936 68,606,815 Accumulated amortization — (14,617,058) (3,584,445) (753,692) (8,152,398) (224,270) — — (27,331,863) Total 23,059,172 3,693,754 928,833 905,205 12,091,821 45,730 (499) 550,936 41,274,952 (1) Refers to proportional write-off in the amount of R$3,249, made in July 2019, resulting from the sale of the Tamboré and Curitiba (CIC) data centers, pursuant to paragraph 86 of IAS 36. (2) Refers to transfers of assets from the Tamboré and Curitiba (CIC) data centers, sold for the amounts of R$419,690 to a company controlled by Asterion Industrial Partners SGEIC, SA, pursuant to an agreement entered into by the Company on May 8, 2019 and concluded. with the settlement on July 24, 2019, generating a gain in operating income of R$64,275.
Schedule of breakdown of goodwill	Ajato Telecomunicação Ltda. 149 149 Spanish and Figueira, by the merger of Telefônica Data Brasil Holding (TDBH) in 2006 212,058 212,058 Santo Genovese Participações, Atrium Telecomunicações, which took place in 2004 71,892 71,892 Telefônica Televisão Participações, former Navytree, occurred in 2008 780,693 780,693 Vivo Participações, occurred in 2011 (1) 9,157,239 9,160,488 GVT Participações, occurred in 2015 12,837,141 12,837,141 Total 23,059,172 23,062,421 (1) The proportional write-off in the amount of R$3,249, made in July 2019, resulting from the sale of the Tamboré and Curitiba (CIC) data centers, pursuant to paragraph 86 of IAS 36.

IMPAIRMENT OF NONFINANCIAL AS_2

IMPAIRMENT OF NONFINANCIAL ASSETS (Tables)	12 Months Ended
	Dec. 31, 2019
IMPAIRMENT OF NONFINANCIAL ASSETS
Schedule of sensitivity to changes in assumptions	Changes in key assumptions In percentage points (p.p) Financial variables Discount rate +/- Perpetuity growth rates +/- Operating variables OIBDA Margin +/- Capex/Revenues Margin +/-

PERSONNEL, SOCIAL CHARGES AND_2

PERSONNEL, SOCIAL CHARGES AND BENEFITS (Tables)	12 Months Ended
	Dec. 31, 2019
PERSONNEL, SOCIAL CHARGES AND BENEFITS
Schedule of personnel, social charges and benefits	Salaries and wages 38,363 34,767 Social charges and benefits 400,470 385,695 Profit sharing 308,918 265,433 Share-based payment plans (Note 29) 40,523 22,638 Other compensation — 86,000 Total 788,274 794,533 Current 752,246 782,630 Non-current 36,028 11,903

TRADE ACCOUNTS PAYABLE (Tables)

TRADE ACCOUNTS PAYABLE (Tables)	12 Months Ended
	Dec. 31, 2019
TRADE ACCOUNTS PAYABLE
Schedule of trade accounts payable	Sundry suppliers (Opex, Capex, Services and Material) 5,958,280 6,790,882 Amounts payable (operators, cobilling) 303,087 198,942 Interconnection / interlink 205,161 269,446 Related parties (Note 28) 405,271 383,512 Total 6,871,799 7,642,782

TAXES, CHARGES AND CONTRIBUTI_4

TAXES, CHARGES AND CONTRIBUTIONS (Tables)	12 Months Ended
	Dec. 31, 2019
TAXES, CHARGES AND CONTRIBUTIONS
Schedule of taxes, charges and contributions	ICMS 906,447 1,094,769 PIS and COFINS 331,863 512,714 Fust and Funttel 89,394 89,794 ISS, CIDE and other taxes 97,163 139,933 Total 1,424,867 1,837,210 Current 1,139,812 1,797,965 Non-current 285,055 39,245

DIVIDENDS AND INTEREST ON EQU_2

DIVIDENDS AND INTEREST ON EQUITY (Tables)	12 Months Ended
	Dec. 31, 2019
DIVIDENDS AND INTEREST ON EQUITY
Schedule of breakdown of dividend and interest on equity	Telefónica Latinoamérica Holding 787,823 952,217 Telefónica 948,662 1,146,619 SP Telecomunicações Participações 598,064 722,862 Telefónica Chile 1,667 2,015 Non-controlling interest 1,251,201 1,349,203 Total 3,587,417 4,172,916
Schedule of changes in dividend and interest on equity	Balance on 12.31.17 2,396,116 Supplementary dividends for 2017 2,191,864 Interim interest on equity (net of IRRF) 3,867,500 Unclaimed dividends and interest on equity (152,770) Payment of dividends and interest on equity (4,136,878) IRRF on shareholders exempt/immune from interest on equity 7,084 Balance on 12.31.18 4,172,916 Supplementary dividends for 2018 2,468,684 Interim interest on equity (net of IRRF) and dividends 3,199,800 Unclaimed dividends and interest on equity (82,898) Payment of dividends and interest on equity (6,176,842) IRRF on shareholders exempt/immune from interest on equity 5,757 Balance on 12.31.19 3,587,417

PROVISIONS AND CONTINGENCIES (T

PROVISIONS AND CONTINGENCIES (Tables)	12 Months Ended
	Dec. 31, 2019
PROVISIONS AND CONTINGENCIES
Schedule of breakdown of changes in provisions for cases in which an unfavorable outcome is probable, in addition to contingent liabilities and provisions for dismantling	Provisions for contingencies Contingent Provision for Labor Tax Civil Regulatory liabilities (PPA) decommissioning Total Balance on 12.31.17 980,596 3,579,208 1,055,877 1,103,792 845,796 579,481 8,144,750 Additions (reversal), net (Note 26) 319,056 452,746 395,631 (41,837) (27,345) — 1,098,251 Other additions (reversal) (1) (99,372) (2,443,047) (14,119) — — 16,752 (2,539,786) Write-offs due to payment (541,749) (51,924) (598,294) (117,599) — — (1,309,566) Monetary restatement 121,155 414,914 165,708 77,860 8,824 77,215 865,676 Balance on 12.31.18 779,686 1,951,897 1,004,803 1,022,216 827,275 673,448 6,259,325 Initial adoption IFRIC 23 (Note 7) — (68,945) — — — — (68,945) Additions (reversal), net (Note 26) 152,105 32,719 364,008 93,634 (16,986) (90,159) 535,321 Other additions (reversal) (1) (5,709) — (2,381) — — (4,191) (12,281) Write-offs due to payment (485,539) (364,992) (833,579) (43,068) — — (1,727,178) Monetary restatement 99,526 25,270 264,590 72,954 21,433 57,591 541,364 Business combinations (Note 1 c.1) 7,805 — 7 — — — 7,812 Balance on 12.31.19 547,874 1,575,949 797,448 1,145,736 831,722 636,689 5,535,418 Balance on 12.31.18 Current 245,805 — 132,124 — — — 377,929 Non-current 533,881 1,951,897 872,679 1,022,216 827,275 673,448 5,881,396 Balance on 12.31.19 Current 236,130 — 113,307 25,008 — — 374,445 Non-current 311,744 1,575,949 684,141 1,120,728 831,722 636,689 5,160,973 (1)
Schedule of guarantees granted by contingency	Property and equipment 81,416 94,641 Judicial deposits and garnishments 3,670,885 3,910,014 Letters of guarantee 2,608,463 2,301,210 Total 6,360,764 6,305,865
Labor
PROVISIONS AND CONTINGENCIES
Schedule of provision contingencies	Amounts involved Nature/Degree of Risk Provisions 547,874 779,686 Possible losses 452,070 191,398
Tax
PROVISIONS AND CONTINGENCIES
Schedule of provision contingencies	Amounts involved Nature/Degree of Risk Provisions 1,575,949 1,951,897 Federal (1) 573,229 526,943 State 466,164 909,547 Municipal 34,915 33,607 FUST 501,641 481,800 Possible losses 26,104,867 36,103,128 Federal (1) 2,233,733 12,025,529 State 15,460,028 16,294,685 Municipal 669,114 637,690 FUST, FUNTTEL and FISTEL 7,741,992 7,145,224 (1) On January 1, 2019, the Company applied the requirements of IFRIC 23 - Uncertainties on Income Tax Treatment and, accordingly, we present the information on income tax and social contribution of December 31, 2019 in note 7
Civil
PROVISIONS AND CONTINGENCIES
Schedule of provision contingencies	Amounts involved Nature/Degree of Risk Provisions 797,448 1,004,803 Possible losses 3,494,626 3,493,655
Regulatory
PROVISIONS AND CONTINGENCIES
Schedule of provision contingencies	Amounts involved Nature/Degree of Risk Provisions 1,145,736 1,022,216 Possible losses 5,645,107 6,119,136

LOANS, FINANCING, DEBENTURES _2

LOANS, FINANCING, DEBENTURES AND LEASES (Tables)	12 Months Ended
	Dec. 31, 2019
LOANS, FINANCING, DEBENTURES AND LEASES
Schedule of balance of amounts payable relating to finance leases	Nominal value payable 10,932,789 766,215 Unrealized financial expenses (1,741,638) (373,188) Present value payable 9,191,151 393,027 Current 2,029,265 53,133 Non-current 7,161,886 339,894
Schedule of aging list of finance lease payable	The following is a schedule of the amounts payable on leases on December 31, 2019, settled in nominal amounts and at present value: Year Nominal value Present value payable payable 2020 2,098,941 2,029,265 2021 1,896,313 1,751,557 2022 1,670,508 1,470,364 2023 1,484,652 1,241,102 2024 1,086,093 856,502 2025 onwards 2,696,282 1,842,361 Total 10,932,789 9,191,151
Schedule of repayments by year of maturity	Loans and financing - financial Financing - Contingent Year institutions suppliers Debentures Leases consideration Total 2021 14,984 97 1,027,167 1,751,557 — 2,793,805 2022 9,996 — 1,000,000 1,470,364 — 2,480,360 2023 5 — — 1,241,102 — 1,241,107 2024 — — — 856,502 — 856,502 2025 onwards — — — 1,842,361 484,048 2,326,409 Total 24,985 97 2,027,167 7,161,886 484,048 9,698,183
Schedule of changes in borrowings	Loans and Financing - Contingent financing Debentures Leases suppliers consideration Total Balance on 12.31.17 2,502,346 4,520,739 385,460 607,152 446,144 8,461,841 Additions — — 18,672 506,397 — 525,069 Government grants (Note 21) (40) — — — — (40) Financial charges (Note 27) 169,771 242,415 45,501 33,169 19,542 510,398 Issue costs — 1,471 — — — 1,471 Foreign exchange variation (Note 27) 28,848 — — — — 28,848 Payments (1,118,355) (1,590,715) (56,606) (622,474) — (3,388,150) Balance on 12.31.18 1,582,570 3,173,910 393,027 524,244 465,686 6,139,437 Initial adoption IFRS 16 (Note 2.f) — — 8,618,072 — — 8,618,072 Additions — — 1,803,941 967,313 — 2,771,254 Government grants (Note 21) 15,787 — — — — 15,787 Financial charges (Note 27) 111,013 197,386 457,985 45,940 18,362 830,686 Issue costs — 1,400 — — — 1,400 Foreign exchange variation (Note 27) (1,104) — — — — (1,104) Write-offs (cancellation of contracts) — — (107,213) — — (107,213) Payments (1,659,416) (268,346) (1,974,661) (541,223) — (4,443,646) Balance on 12.31.19 48,850 3,104,350 9,191,151 996,274 484,048 13,824,673
Summary of funding and payments	2019 2018 Write-offs (payments) Write-offs (payments) Additions Principal Financial Total Additions Principal Financial Total Loans and financing — (1,564,258) (95,158) (1,659,416) — (961,687) (156,668) (1,118,355) BNDES — (1,549,335) (91,939) (1,641,274) — (946,763) (152,447) (1,099,210) BNB — (14,923) (3,219) (18,142) — (14,924) (4,221) (19,145) Debêntures — (66,830) (201,516) (268,346) — (1,324,723) (265,992) (1,590,715) 4th issue – Series 3 — — — — — — (1,583) (1,583) 1st issue – Minas Comunica — (25,583) (1,761) (27,344) — (24,723) (1,082) (25,805) 4th issue — (41,247) (1,650) (42,897) — (1,300,000) (47,257) (1,347,257) 5th issue — — (135,242) (135,242) — — (149,795) (149,795) 6th issue — — (62,863) (62,863) — — (66,275) (66,275) Suppliers 967,313 (506,407) (34,816) (541,223) 506,397 (571,434) (51,040) (622,474) Leases (1) 10,422,013 (1,559,165) (415,496) (1,974,661) 18,672 (35,375) (21,231) (56,606) Total 11,389,326 (3,696,660) (746,986) (4,443,646) 525,069 (2,893,219) (494,931) (3,388,150)
Loans and financing
LOANS, FINANCING, DEBENTURES AND LEASES
Schedule of borrowings	Information on December 31, 2019 12.31.19 12.31.18 Currency Annual interest rate Maturity Guarantees Current Non-current Total Current Non-current Total Local currency 4,126,490 9,698,183 13,824,673 1,367,551 4,675,271 6,042,822 Financial institutions (b.1) 23,865 24,985 48,850 666,213 819,742 1,485,955 BNDES FINEM URTJLP TJLP+ 0 to 4.08% — — — 214,012 — 214,012 BNDES FINEM URTJLP TJLP+ 0 to 3.38% — — — 184,200 122,011 306,211 BNDES FINEM R$ — — — 13,403 — 13,403 BNDES FINEM URTJLP TJLP+ 0 to 3.12% — — — 103,486 316,269 419,755 BNDES FINEM R$ 4.00% to 6.00% — — — 37,837 94,516 132,353 BNDES FINEM R$ Selic Acum. D-2 + 2.32% — — — 80,014 245,887 325,901 PSI R$ 2.5% to 5.5% Jan-23 (1) 8,847 112 8,959 18,207 1,263 19,470 BNB R$ 7.06% to 10% Aug-22 (2) 15,018 24,873 39,891 15,054 39,796 54,850 Suppliers (b.2) R$ 109.2% to 122.5% of CDI Jan-21 996,177 97 996,274 524,244 — 524,244 Debentures (b.3) 1,077,183 2,027,167 3,104,350 123,961 3,049,949 3,173,910 4th issue – Series 3 R$ IPCA+4.00% Oct-19 (3) — — — 41,121 — 41,121 1st issue – Minas Comunica R$ IPCA+0.50% Jul-21 (3) 28,366 28,366 56,732 26,250 52,499 78,749 5th issue R$ 108.25% of CDI Feb-22 (3) 44,504 1,998,801 2,043,305 51,233 1,997,694 2,048,927 6th issue R$ 100% of CDI + 0.24% Nov-20 (3) 1,004,313 — 1,004,313 5,357 999,756 1,005,113 Leases (b.4) R$ 4.90% / IPCA 2,029,265 7,161,886 9,191,151 53,133 339,894 393,027 Contingent consideration (b.5) R$ Selic — 484,048 484,048 — 465,686 465,686 Foreign currency — — — 96,615 — 96,615 Financial institutions (b.1) — — — 96,615 — 96,615 BNDES FINEM UMBND ECM + 2.38% — — — 96,615 — 96,615 Total 4,126,490 9,698,183 13,824,673 1,464,166 4,675,271 6,139,437 Guarantees: (1) Pledge of financed assets. (2) Bank guarantee provided by Banco Safra in an amount equivalent to 100% of the outstanding financing debt balance. Setting up a liquidity fund represented by financial investments in the amount equivalent to three installments of repayment referenced to the average post-grace period performance. Balances were R$13,212 and R$12,473 on December 31, 2019 and 2018, respectively. (3) Unsecured.
Debentures
LOANS, FINANCING, DEBENTURES AND LEASES
Schedule of borrowings	Amounts Issue Issue date Issued Outstanding Issue value 4th issue – Series 3 (1) 10/15/2009 810,000 — 810,000 1st issue – Minas Comunica 12/17/2007 5,550 5,550 55,500 5th issue 2/8/2017 200,000 200,000 2,000,000 6th issue 11/27/2017 100,000 100,000 1,000,000

DEFERRED INCOME (Tables)

DEFERRED INCOME (Tables)	12 Months Ended
	Dec. 31, 2019
DEFERRED INCOME
Schedule of deferred income	Disposal of PP&E (1) 94,383 89,835 Government grants (2) 61,613 94,335 Contractual Liabilities - IFRS 15 (3) 499,035 532,207 Other (4) 63,051 59,658 Total 718,082 776,035 Current 506,181 525,509 Non-current 211,901 250,526 (1) Includes the net balances of the residual values from sale of non-strategic towers and rooftops, transferred to income as the conditions for recognition are fulfilled and a portion of the amount arising from the sale of the Tamboré and Curitiba (CIC) data centers to a company controlled by Asterion Industrial Partners SGEIC, S.A, to be recognized in profit or loss over 10 years, pursuant to contractual conditions. (2) This refers to: i) government subsidy arising from funds obtained from credit lines to be used in the acquisition of domestic equipment, which have been amortized over the useful life cycle of the equipment; and ii) subsidies arising from projects related to state taxes, which are being amortized over the contractual period. (3) Refers to the balance of contractual liabilities of customers, being deferred to the extent that they relate to performance obligations that are satisfied over time. (4) Includes amounts of the reimbursement for costs for leaving radio frequency sub-bands 2,500MHz to 2,690MHz due to cancellation of the Multichannel Multipoint Distribution Service.
Schedule of changes in contractual liabilities (IFRS 15), mainly related to the sale of prepaid credits	Initial adoption on 01.01.18 178,897 Reclassification on 01.01.18 383,688 Additions 7,271,614 Write-offs, net (7,301,992) Balance on 12.31.18 532,207 Additions 6,762,607 Write-offs, net (6,795,779) Balance on 12.31.19 499,035 Current 468,776 Non-current 30,259
Schedule of expected periods of realization of contractual liabilities	Year 2020 468,776 2021 11,342 2022 3,468 2023 3,468 2024 3,468 2025 onwards 8,513 Total 499,035

OTHER LIABILITIES (Tables)

OTHER LIABILITIES (Tables)	12 Months Ended
	Dec. 31, 2019
OTHER LIABILITIES
Schedule of other liabilities	Liabilities with ANATEL (1) 300,119 346,950 Liabilities with related parties (Note 28) 30,114 31,716 Third-party withholdings (2) 222,056 120,711 Surplus from post-employment benefit plans (Note 30) 1,155,067 679,478 Amounts to be refunded to subscribers 43,794 56,897 Other liabilities 36,781 61,957 Total 1,787,931 1,297,709 Current 365,192 368,376 Non-current 1,422,739 929,333 (a) Includes the cost of renewing STFC and SMP licenses. (b) This refers to payroll withholdings and taxes withheld from pay-outs of interest on equity and on provision of services .

EQUITY (Tables)

EQUITY (Tables)	12 Months Ended
	Dec. 31, 2019
EQUITY
Schedule of distribution of capital	Common Shares Preferred Shares Grand Total Shareholders Number % Number % Number % Controlling Group 540,033,264 94.47 % 704,207,855 62.91 % 1,244,241,119 73.58 % Telefónica Latinoamérica Holding, S.L. 46,746,635 8.18 % 360,532,578 32.21 % 407,279,213 24.09 % Telefónica 198,207,608 34.67 % 305,122,195 27.26 % 503,329,803 29.76 % SP Telecomunicações Participações 294,158,155 51.46 % 38,537,435 3.44 % 332,695,590 19.67 % Telefónica Chile 920,866 0.16 % 15,647 0.00 % 936,513 0.06 % Other shareholders 29,320,789 5.13 % 415,131,868 37.09 % 444,452,657 26.28 % Treasury Shares 2,290,164 0.40 % 983 0.00 % 2,291,147 0.14 % Total shares 571,644,217 100.00 % 1,119,340,706 100.00 % 1,690,984,923 100.00 % Treasury Shares (2,290,164) (983) (2,291,147) Total shares outstanding 569,354,053 1,119,339,723 1,688,693,776
Schedule of other capital reserves	Excess of the value in the issue or capitalization, in relation to the basic value of the share on the issue date (1) 2,735,930 2,735,930 Cancelation of treasury shares according to the Special Shareholders' Meeting (SGM) of 3/12/15 (2) (112,107) (112,107) Direct costs of capital increases (3) (62,433) (62,433) Incorporation of shares of GVTPart. (4) (1,188,707) (1,188,707) Effects of the acquisition of Lemontree and GTR by Company and Tglog by TData (5) (75,388) (75,388) Preferred shares delivered referring to the judicial process of expansion plan (6) 2 2 Effects of the acquisition of Terra Networks Brasil by TData (7) (59,029) (59,029) Effects of the acquisition of TIS by Terra Networks (8) (48,135) — Other 76 10 Total 1,190,209 1,238,278 (1) It referes the excess of the value in the issue or capitalization, in relation to the basic value of the share on the issue date. (2) The cancellation of 2,332,686 shares issued by the Company, held in treasury, approved at the Special Shareholders' Meeting held on March 12, 2015. (3) The value refers direct costs (net of taxes) of Company capital that increased on April 30,2015, arising from the Primary Offering of Shares. (4) The value refers the difference between the economic values that comes from the merger of shares owned by GVTPart, issued on the transaction closing date. (5) Regarding the effects of the acquisition of shares of non-controlling shareholders that, with the adoption of IFRS 10, 35 and 36. It would be recorded in equity when there is no change in the shareholding control. (6) It refers about the effects of write-offs due to the transfer of 62 preferred shares in treasury to outstanding shares, for compliance with judicial process decisions in which the Company is involved regarding rights to the complementary receipt of shares calculated in relation to network expansion plans after 1996. (7) The effects refer the acquisition of Terra Networks by TData, related to the difference between the consideration given in exchange for the equity interest obtained and the value of the net assets acquired (Note 1 c.2). (8) The effects referee the acquisition of TIS by Terra Networks, related to the difference between the consideration given in exchange for the equity interest obtained and the value of the net assets acquired (Note 1 c.1).
Schedule of income reserves	Expansion and Modernization Legal reserve Reserve Tax incentives Total Balance on 12.31.17 2,138,344 297,000 27,884 2,463,228 Reversal of reserves — (297,000) — (297,000) Recording of reserves 446,413 1,700,000 11,529 2,157,942 Balance on 12.31.18 2,584,757 1,700,000 39,413 4,324,170 Reversal of reserves — (1,700,000) — (1,700,000) Recording of reserves 250,051 600,000 18,166 868,217 Balance on 12.31.19 2,834,808 600,000 57,579 3,492,387
Schedule of calculation of dividends and interest on equity	Net income for the year 5,001,014 8,928,258 Allocation to legal reserve (250,051) (446,413) (-) Tax incentives - not distributable (18,166) (11,529) Adjusted net income 4,732,797 8,470,316 Dividend and IOE distributed for the year: (3,588,000) (4,550,000) Interest on equity (gross) (2,588,000) (4,550,000) Interim dividends (1,000,000) — Balance of unallocated net income 1,144,797 3,920,316 (+) Reversal special reserve for modernization and expansion 1,700,000 297,000 (-) Effects of the initial adoption of IFRS 9 and 15, net of taxes on 01.01.18 — (138,663) (+) Unclaimed dividends and interest on equity 82,898 152,770 (+-) Actuarial gains (losses) recognized and effect of limitation of surplus plan assets, net of taxes and other changes (132,120) (62,739) Income available to be distributed 2,795,575 4,168,684 Proposal for Distributions: Special reserve for modernization and expansion 600,000 1,700,000 Additional proposed dividends 2,195,575 2,468,684 Proposed additional dividends - Net income for the year 495,575 2,171,684 Proposed additional dividends - Based on prior year's net income, referring to the reversal of the special reserve for expansion and modernization 1,700,000 297,000 Total 2,795,575 4,168,684 Mandatory minimum dividend - 25% of adjusted net income 1,183,199 2,117,579
Schedule of proposed for deliberation per share	Total proposed for deliberation - per share Common shares 1.219339 1.371013 Preferred shares 1.341273 1.508114
Schedule of allocation of interim dividends and interest on equity	2019 Dates Gross Amount Net Value Amount per Share Beginning of Nature Approval Credit Payment Common Preferred Total Common Preferred Total Common Preferred IOE 02/15/19 02/28/19 Until 12/31/20 221,338 478,662 700,000 188,137 406,863 595,000 0.33044031480 0.36348434628 IOE 04/17/19 04/30/19 Until 12/31/20 180,233 389,767 570,000 153,198 331,302 484,500 0.26907282777 0.29598011054 IOE 06/17/19 06/28/19 Until 12/31/20 306,079 661,921 968,000 260,167 562,633 822,800 0.45695174961 0.50264692458 IOE 12/19/19 12/30/19 Until 12/31/20 110,669 239,331 350,000 94,069 203,431 297,500 0.16522015740 0.18174217314 Dividends 12/19/19 12/30/19 Until 12/31/20 316,198 683,802 1,000,000 316,198 683,802 1,000,000 0.55536187362 0.61089806098 Total 1,134,517 2,453,483 3,588,000 1,011,769 2,188,031 3,199,800 2018 Dates Gross Amount Net Value Amount per Share Beginning of Nature Approval Credit Payment Common Preferred Total Common Preferred Total Common Preferred IOE 06/18/18 06/29/18 08/20/19 126,479 273,521 400,000 107,507 232,493 340,000 0.18882303703 0.20770534073 IOE 09/05/18 09/17/18 08/20/19 885,353 1,914,647 2,800,000 752,550 1,627,450 2,380,000 1.32176125923 1.45393738515 IOE 12/04/18 12/17/18 12/17/19 426,867 923,133 1,350,000 362,837 784,663 1,147,500 0.63727774998 0.70100552498 Total 1,438,699 3,111,301 4,550,000 1,222,894 2,644,606 3,867,500
Schedule of changes in other comprehensive income	Financial assets at Currency translation fair value through other effects - foreign comprehensive income Derivative transactions investments Total Balance on 12.31.17 (8,658) 1,954 28,032 21,328 Translation gains — — 9,927 9,927 Losses from future contracts — (1,618) — (1,618) Losses on financial assets at fair value through other comprehensive income (412) — — (412) Balance on 12.31.18 (9,070) 336 37,959 29,225 Translation gains — — 1,859 1,859 Losses from future contracts — (336) — (336) Losses on financial assets at fair value through other comprehensive income (11) — — (11) Balance on 12.31.19 (9,081) — 39,818 30,737
Schedule of calculation of earnings per share	Net income for the year 5,001,014 8,928,258 4,608,790 Common shares 1,581,308 2,823,093 1,457,288 Preferred shares 3,419,706 6,105,165 3,151,502 Number of shares (thousands): 1,688,694 1,688,694 1,688,694 Weighted average number of outstanding common shares for the year 569,354 569,354 569,354 Weighted average number of outstanding preferred shares for the year 1,119,340 1,119,340 1,119,340 Basic and diluted earnings per share: Common shares 2.78 4.96 2.56 Preferred shares 3.06 5.45 2.82

NET OPERATING REVENUE (Tables)

NET OPERATING REVENUE (Tables)	12 Months Ended
	Dec. 31, 2019
NET OPERATING REVENUE
Schedule of net operating revenue	Gross operating revenue 66,571,866 65,794,397 66,243,174 Services (1) 60,129,579 61,292,362 62,696,433 Sale of goods (2) 6,442,287 4,502,035 3,546,741 Deductions from gross operating revenue (22,303,695) (22,331,657) (23,036,342) Taxes (13,894,361) (14,559,915) (16,058,584) Services (12,678,809) (13,820,784) (15,468,315) Sale of goods (1,215,552) (739,131) (590,269) Discounts granted and return of goods (8,409,334) (7,771,742) (6,977,758) Services (6,319,584) (6,288,941) (5,340,476) Sale of goods (2,089,750) (1,482,801) (1,637,282) Net operating revenue 44,268,171 43,462,740 43,206,832 Services 41,131,186 41,182,637 41,887,642 Sale of Goods 3,136,985 2,280,103 1,319,190 (1) These include telephone services, use of interconnection network, data and SVA services, cable TV and other services. (2) These include sale of goods (handsets, SIM cards and accessories) and equipment of “Soluciona TI”.

OPERATING COSTS AND EXPENSES (T

OPERATING COSTS AND EXPENSES (Tables)	12 Months Ended
	Dec. 31, 2019
OPERATING COSTS AND EXPENSES
Schedule of operating costs and expenses	2019 General and Cost of sales administrative and services Selling expenses expenses Total Personnel (1) (758,780) (2,568,363) (430,409) (3,757,552) Third-party services (2) (6,601,587) (6,686,452) (1,154,823) (14,442,862) Rental, insurance, condominium and connection means (3) (1,388,217) (78,401) (57,359) (1,523,977) Taxes, charges and contributions (4) (1,597,066) (41,810) (31,127) (1,670,003) Estimated impairment losses on accounts receivable (Note 4) — (1,682,348) — (1,682,348) Depreciation and amortization (5) (8,624,228) (1,501,096) (794,468) (10,919,792) Cost of goods sold (3,156,964) — — (3,156,964) Materials and other operating costs and expenses (32,105) (142,752) (29,910) (204,767) Total (22,158,947) (12,701,222) (2,498,096) (37,358,265) 2018 General and Cost of sales administrative and services Selling expenses expenses Total Personnel (1) (872,032) (2,574,498) (549,610) (3,996,140) Third-party services (2) (6,656,924) (6,989,006) (1,237,527) (14,883,457) Rental, insurance, condominium and connection means (3) (2,957,489) (147,613) (202,881) (3,307,983) Taxes, charges and contributions(4) (1,594,836) (30,703) (36,122) (1,661,661) Estimated impairment losses on accounts receivable (Note 4) — (1,533,660) — (1,533,660) Depreciation and amortization (5) (6,487,909) (1,352,638) (528,076) (8,368,623) Cost of goods sold (2,406,099) — — (2,406,099) Materials and other operating costs and expenses (50,478) (204,623) (44,754) (299,855) Total (21,025,767) (12,832,741) (2,598,970) (36,457,478) 2017 General and Cost of sales administrative and services Selling expenses expenses Total Personnel (1) (845,358) (2,387,314) (493,095) (3,725,767) Third-party services (2) (7,032,252) (7,438,937) (1,232,379) (15,703,568) Rental, insurance, condominium and connection means (3) (2,624,405) (151,455) (204,701) (2,980,561) Taxes, charges and contributions (4) (1,792,764) (39,050) (34,779) (1,866,593) Estimated impairment losses on accounts receivable (Note 4) — (1,481,015) — (1,481,015) Depreciation and amortization (5) (5,963,153) (1,433,297) (457,284) (7,853,734) Cost of goods sold (1,955,890) — — (1,955,890) Materials and other operating costs and expenses (58,708) (205,406) (20,867) (284,981) Total (20,272,530) (13,136,474) (2,443,105) (35,852,109) (1) (2) (3) (4) (5)

OTHER OPERATING INCOME (EXPEN_2

OTHER OPERATING INCOME (EXPENSES) (Tables)	12 Months Ended
	Dec. 31, 2019
OTHER OPERATING INCOME (EXPENSES)
Summary of other operating income (expenses)	Recovered expenses and fines (1) 503,777 3,962,150 355,415 Provisions for labor, tax and civil contingencies (Note 19) (2) (625,480) (1,258,966) (999,419) Net gain (loss) on asset disposal/loss 408,160 114,853 108,767 Other operating income (expenses) 17,561 (367,115) (187,249) Total 304,018 2,450,922 (722,486) Other operating income 929,498 4,077,003 464,182 Other operating expenses (625,480) (1,626,081) (1,186,668) Total 304,018 2,450,922 (722,486) (1) (2)

FINANCIAL INCOME (EXPENSES) (Ta

FINANCIAL INCOME (EXPENSES) (Tables)	12 Months Ended
	Dec. 31, 2019
FINANCIAL INCOME (EXPENSES)
Schedule of financial income (expenses)	Financial Income Interest income 272,158 246,083 655,474 Interest receivable (customers, taxes and other) 177,636 118,476 124,391 Gain on derivative transactions (Note 31) 315,351 305,996 373,971 Foreign exchange variations on loans and financing (Note 20) 5,140 32,326 113,203 Other revenues from foreign exchange and monetary variation (1) 209,447 3,341,211 406,013 Other financial income 153,138 68,548 82,906 Total 1,132,870 4,112,640 1,755,958 Financial Expenses Loan, financing, debenture and finance lease charges (Nota 20) (3) (830,686) (510,398) (932,727) Foreign exchange variation on loans and financing (Note 20) (4,036) (61,174) (129,049) Loss on derivative transactions (Note 31) (263,388) (295,208) (415,956) Interest payable (financial institutions, provisions, trade accounts payable, taxes and other) (144,779) (186,238) (136,425) Other expenses with foreign exchange and monetary variation (615,291) (963,463) (876,948) IOF, Pis, Cofins and other financial expenses (2) (94,831) (269,006) (167,897) Total (1,953,011) (2,285,487) (2,659,002) Financial income (expenses), net (820,141) 1,827,153 (903,044) (1) For the year ended December 31, 2018, includes tax credits amounting to R$2,926,247, arising from the final court proceeding in favor of the Company and its subsidiary (TData), which recognized the right to exclude ICMS (VAT) from the basis of calculation of PIS and COFINS contributions for the periods from September 2003 to June 2017 and July 2004 to June 2013 (Note 8). (2) For the year ended December 31, 2018, includes the amount of R$136,070 of PIS and COFINS on the indexation for inflation credits in (1) above. (3) Includes the consolidated amounts of R$457,98, R$45,501 and R$45,265 in the years ended December 31, 2019, 2018 and 2017, respectively, related to leases charges.

BALANCES AND TRANSACTIONS WIT_2

BALANCES AND TRANSACTIONS WITH RELATED PARTIES (Tables)	12 Months Ended
	Dec. 31, 2019
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Schedule of consolidated balances with the related parties	Balance Sheet - Assets 12.31.19 12.31.18 Cash and cash Accounts Other assets and Cash and cash Accounts Companies Type of transaction equivalents receivable prepaid expenses equivalents receivable Other assets Parent Companies SP Telecomunicações Participações d) / l) — 6 4,924 — — 10,083 Telefónica LatinoAmerica Holding l) — — 40,105 — — 60,387 Telefónica l) / z) — 10,873 2,555 — 9,300 29,757 — 10,879 47,584 — 9,300 100,227 Other Group companies Colombia Telecomunicaciones k) / l) — 159 520 — 1,334 520 Telefónica International Wholesale Services a) / d) / l) / p) — 1,961 3,602 — 903 4,051 T.O2 Germany GMBH CO. OHG k) — 1,688 — — 20,877 — Telefónica Venezolana k) — 6,498 2,196 — 5,926 2,196 Telefônica Digital España g) / l) — 696 300 — 197 294 Telefônica Factoring do Brasil a) / d) / l) / s) — 2,782 45 — 6,360 133 Telefônica Infraestrutura e Segurança (formerly Telefônica a) / d) / l) — — — — 800 986 Telefónica International Wholesale Services Espanha j) / k) — 58,490 — — 46,537 — Telefônica Serviços de Ensino a) / p) — 153 14 — 286 — Telefónica Moviles Argentina k) — 5,145 — — 5,074 — Telefónica Moviles Espanha k) — 1,536 — — 7,576 — Telefónica USA j) — 5,319 — — 9,005 — Telfisa Global BV q) 59,657 — — 46,755 — — Telxius Cable Brasil a) / d) / l) / p) — 11,382 5,100 — 11,628 5,295 Telxius Torres Brasil d) / p) / x) — 5,429 6,611 — 6,776 4,268 Terra Networks Chile, Terra Networks México, Terra Networks Perú, Terra Networks Argentina and Terra Networks Colômbia g) / h) — 5,598 — — 5,341 — Other a) / d) / k) / l) / p) / bb) — 12,189 2,732 — 10,894 2,806 59,657 119,025 21,120 46,755 139,514 20,549 Total 59,657 129,904 68,704 46,755 148,814 120,776 Current assets Cash and cash equivalents (Note 3) 59,657 — — 46,755 — — Accounts receivable (Note 4) — 129,904 — — 148,814 — Prepaid expenses (Note 6) — — 3,738 — — — Other assets (Note 10) — — 64,471 — — 114,715 Non-current assets Prepaid expenses (Note 6) — — — — — — Other assets (Note 10) — — 495 — — 6,061 Balance Sheet - Liabilities 12.31.19 12.31.18 Trade accounts Other Trade accounts payable and liabilities and payable and Companies Type of transaction other payables leases other payables Other liabilities Parent Companies SP Telecomunicações Participações l) / y) — 23,524 — 21,901 Telefónica l) / m) 2,907 40 687 1,393 2,907 23,564 687 23,294 Other Group companies Colombia Telecomunicaciones k) 816 — 1,056 — Fundação Telefônica l) — 86 — 82 Media Networks Latina America SAC b) 9,245 — 10,212 — Telefónica International Wholesale Services f) 44,835 318 44,693 318 T.O2 Germany GMBH CO. OHG k) 5,000 — 5,706 — Telefónica Venezolana k) 6,044 — 5,410 — Telefónica Compras Electrónicas v) 28,169 — 32,582 — Telefônica Digital España o) 68,015 — 43,340 — Telefônica Factoring do Brasil l) / s) — 4,057 — 2,770 Telefónica Global Technology e) 28,854 — 28,750 — Telefônica Infraestrutura e Segurança (formerly Telefônica c) / l) — — 52,184 27 Telefónica International Wholesale Services Espanha f) / k) 66,976 — 26,097 — Telefônica Serviços de Ensino r) 8,373 — 22,518 — Telefónica Moviles Argentina k) 3,638 — 4,160 — Telefónica Moviles Espanha k) 3,488 — 5,233 — Telefónica USA f) 16,015 267 4,411 200 Telxius Cable Brasil f) / l) 47,168 1,572 39,662 2,067 Telxius Torres Brasil x) 30,018 480,589 38,735 1,926 Terra Networks Chile, Terra Networks México, Terra Networks h) 7,105 — 1,766 — Other a) / d) / g) / k) / h) / l) / bb) 28,605 42 16,310 1,032 402,364 486,931 382,825 8,422 Total 405,271 510,495 383,512 31,716 Current liabilities Trade accounts payable and other payables (Note 15) 405,271 — 383,512 — Leases (Note 20) — 480,381 — — Other liabilities (Note 22) — 29,529 — 22,220 Non-current liabilities Leases (Note 20) — — — — Other liabilities (Note 22) — 585 — 9,496 Income statement 2019 2018 2017 Cost and Cost and Cost and other other other expenses expenses expenses Operating (revenues) Financial Operating (revenues) Financial Operating (revenues) Financial Companies Type of transaction revenues operating result revenues operating result revenues operating result Parent Companies SP Telecomunicações Participações d) / l) 5 497 — — 347 — — 268 — Telefónica LatinoAmerica Holding l) — 18,309 851 — 16,466 9,077 — 36,523 11,030 Telefónica l) / m) — (422,958) (5,226) — (373,690) (16,680) — (331,684) (996) 5 (404,152) (4,375) — (356,877) (7,603) — (294,893) 10,034 Other Group companies Colombia Telecomunicaciones k) 111 321 (17) 250 (4,280) (2,145) 349 (10) 604 Companhia AIX de Participações a) / u) 38 (24,174) — 75 (22,645) — 36 (22,738) — Fundação Telefônica l) / t) — (11,971) — — (12,223) — — (11,395) — Telefónica International Wholesale Services a) / d) / f) / l) / p) 757 (104,105) (54) 2,006 (101,272) — 601 (57,177) — Media Networks Latina America SAC b) — (41,023) (596) — (34,791) (1,007) — (33,133) (516) Telefônica Serviços de Ensino a) / p) / r) 1,085 (35,228) — 1,158 (49,130) — 292 (54,781) — T.O2 Germany GMBH CO. OHG k) (100) 489 1,845 148 (1,975) — 75 (1,409) — Telefónica Compras Electrónicas v) — (30,814) — — (34,534) — — (29,062) — Telefônica Digital España l) / o) 299 (127,182) (3,016) — (124,537) (813) — (81,893) (2,600) Telefônica Factoring do Brasil a) / d) / l) / s) 2,418 239 (4,048) 2,416 212 2,601 69 828 61 Telefónica Global Technology, S.A.U. e) / l) — (63,947) 388 — (36,738) (4,134) — (36,395) 40 Telefônica Infraestrutura e Segurança (formerly Telefônica a) / c) / d) / l) / p) 591 (27,079) — 1,568 (54,210) — 706 (40,918) — Telefónica International Wholesale Services Espanha f) / j) / k) 48,819 (75,693) (4,128) 53,357 (64,036) 9,771 56,728 (49,960) (2,564) Telefónica Moviles Argentina k) 4,030 (3,437) 90 5,916 (3,437) — 3,746 6,147 — Telefónica Moviles Espanha k) 410 (1,737) 545 (209) (4,166) — 1,048 (1,969) — Telefónica USA f) / j) 38 (19,793) 1,700 1,518 (19,441) (539) 2,392 (13,202) (2,185) Telxius Cable Brasil a) / d) / f) / l) / p) 13,585 (252,436) (7,415) 49,777 (206,095) (7,896) 15,045 (200,537) 787 Telxius Torres Brasil d) / l) / p) / x) 3,652 756 (24,144) 3,218 (129,706) — — (107,373) — Terra Networks Chile, Terra Networks México, Terra Networks h) 2,535 (5,639) 567 — (2,794) 1,450 — 1,072 (59) Other a) / d) / g) / i) / k) / l) / n) / p) / w) / aa) / bb) /cc) 6,269 (31,684) 588 4,840 (27,116) (244) 9,311 (29,409) 182 84,537 (854,137) (37,695) 126,038 (932,914) (2,956) 90,398 (763,314) (6,250) Total 84,542 (1,258,289) (42,070) 126,038 (1,289,791) (10,559) 90,398 (1,058,207) 3,784

PENSION PLANS AND OTHER POST-_2

PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS (Tables)	12 Months Ended
	Dec. 31, 2019
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Schedule of plans sponsored by the Company and its subsidiaries and related benefit types	Plan Type Entity Sponsor PBS-A Defined benefit (DB) Sistel Telefônica Brasil, jointly with other telecoms resulting from privatization of the Sistema Telebrás PAMA / PCE Defined benefit (DB) Sistel Telefônica Brasil, jointly with other telecoms resulting from privatization of the Sistema Telebrás Healthcare - Law No. 9656/98 Defined benefit (DB) Telefônica Brasil Telefônica Brasil, Terra Networks, TGLog and TIS CTB Defined benefit (DB) Telefônica Brasil Telefônica Brasil Telefônica BD Defined benefit (DB) VisãoPrev Telefônica Brasil VISÃO Defined contribution (DC) / Hybrid VisãoPrev Telefônica Brasil, Terra Networks, TGLog and TIS
Schedule of reconciliation of net liabilities (assets)	12.31.19 12.31.18 Post- Post- Post- Post- retirement retirement retirement retirement pension plans health plans Total pension plans health plans Total Present value of DB plan obligations 2,429,478 2,016,614 4,446,092 2,011,355 1,313,157 3,324,512 Fair value of plan assets 3,696,914 1,001,112 4,698,026 2,999,669 763,325 3,762,994 Net liabilities (assets) (1,267,436) 1,015,502 (251,934) (988,314) 549,832 (438,482) Asset limitation 1,128,691 57,371 1,186,062 1,056,682 50,281 1,106,963 Current assets (71,776) — (71,776) 0 — 0 Non-current assets (149,163) 0 (149,163) (10,997) 0 (10,997) Current liabilities 6,937 18,620 25,557 8,114 11,553 19,667 Non-current liabilities 75,257 1,054,253 1,129,510 71,251 588,560 659,811
Summary of total expenses recognized in the income statement	2019 2018 2017 Post- Post- Post- Post- Post- Post- retirement retirement retirement retirement retirement retirement pension plans health plans Total pension plans health plans Total pension plans health plans Total Current service cost 3,155 16,293 19,448 2,931 13,722 16,653 3,044 7,606 10,650 Net interest on net actuarial assets/liabilities 5,713 56,612 62,325 6,074 45,892 51,966 5,258 29,325 34,583 Total 8,868 72,905 81,773 9,005 59,614 68,619 8,302 36,931 45,233
Summary of amounts recognized in other comprehensive income (loss)	2019 2018 2017 Post- Post- Post- Post- Post- Post- retirement retirement retirement retirement retirement retirement pension plans health plans Total pension plans health plans Total pension plans health plans Total Actuarial (losses) gains (188,889) 412,416 223,527 (186,170) 184,527 (1,643) 325,292 208,195 533,487 Asset limitation effect (24,297) 2,430 (21,867) 188,259 (93,125) 95,134 (309,780) (52,411) (362,191) Total (213,186) 414,846 201,660 2,089 91,402 93,491 15,512 155,784 171,296
Schedule of changes in amount net of liability (asset) of defined benefit, net	12.31.19 12.31.18 Post-retirement Post-retirement Post-retirement Post-retirement pension plans health plans Total pension plans health plans Total Net defined benefit liability (asset) at the beginning of the year 68,368 600,113 668,481 67,148 454,957 522,105 Business combinations — 1,994 1,994 — — — Expenses 8,868 72,905 81,773 9,005 59,614 68,619 Sponsor contributions (8,776) (16,985) (25,761) (9,874) (5,860) (15,734) Amounts recognized in OCI (213,186) 414,846 201,660 2,089 91,402 93,491 Distribution of reserves 5,981 — 5,981 — — — Net defined benefit liability (asset) at the end of the year (138,745) 1,072,873 934,128 68,368 600,113 668,481 Actuarial assets per balance sheet (220,939) — (220,939) (10,997) — (10,997) Actuarial liabilities per balance sheet 82,194 1,072,873 1,155,067 79,365 600,113 679,478
Schedule of results projected for 2020	Post-retirement Post-retirement pension plans health plans Total Current service cost 3,037 26,575 29,612 Net interest on net defined benefit liability/asset (10,386) 82,150 71,764 Total (7,349) 108,725 101,376
Schedule of sponsoring company contributions projected for 2020	Post-retirement Post-retirement pension plans health plans Total Sponsor contributions 2,189 6,937 9,126 Benefits paid directly by the sponsor 38 18,630 18,668 Total 2,227 25,567 27,794
Schedule of average weighted duration of defined benefit liability	Post-retirement Post-retirement pension plans health plans In 2019 8.3 years 18.1 years In 2018 7.8 years 16.5 years
Schedule of actuarial assumptions	12.31.19 Post-retirement pension plans Post-retirement health plans Discount rate to present value of defined benefit liability Visão: 6.6% PAMA and PCE: 7.4% Future salary growth rate CTB and PBS-A: N/A N/A Medical expense growth rate N/A Nominal annual adjustment rate of pension benefits N/A Medical service eligibility age N/A Female participants: 59 years Estimated retirement age PBS-A, CTB and Telefônica BD: 57 years Female participants: 59 years Mortality table for nondisabled individuals PBS-A, CTB and Telefônica BD: AT- AT-2000 Basic segregated by gender, down-rated by 10% Mortality table for disabled individuals PBS-A, CTB and Telefônica BD: RP- RP-2000 Disabled Feminina, down-rated by 40% Disability table Telefônica BD: Light-Forte Light-Forte Turnover PBS-A, CTB and Telefônica BD: N/A PAMA and PCE: N/A 12.31.18 Post-retirement pension plans Post-retirement health plans Discount rate to present value of defined benefit liability Visão: 9.0% Future salary growth rate CTB and PBS-A: N/A N/A Medical expense growth rate N/A Nominal annual adjustment rate of pension benefits N/A Medical service eligibility age N/A Eligibility on retirement 100% to 57 years Estimated retirement age PBS-A, CTB and Telefônica BD: 57 years 57 years Mortality table for nondisabled individuals PBS-A, CTB and Telefônica BD: AT-2000 Basic AT-2000 Basic segregated by gender, down-rated by 10% Mortality table for disabled individuals PBS-A, CTB and Telefônica BD: RP-2000 Disabled RP-2000 Disabled Feminina, down-rated by 40% Disability table Telefônica BD: Light-Forte Light-Forte Turnover PBS-A, CTB and Telefônica BD: N/A PAMA and PCE: N/A
Schedule of impacts on the plans' defined benefit liabilities due to the new definition of the actuarial assumptions	Post-retirement Post-retirement pension plans health plans Total Defined benefit liability, based on current actuarial assumptions 2,429,478 2,016,614 4,446,092 Defined benefit liability, based on prior-year actuarial assumptions 2,118,297 1,625,737 3,744,034 Difference from change in actuarial assumptions 311,181 390,877 702,058
Summary of allocation of plan assets	12.31.19 12.31.18 Post-retirement Post-retirement Post-retirement Post-retirement pension plans health plans pension plans health plans Investments with market value quoted in active market: Fixed income investments National Treasury Note (NTN) 3,067,926 940,144 2,437,547 702,946 Treasury Financial Letter 270,676 60,968 177,319 60,379 Repurchase operations 172,895 — 196,830 — Debentures 16,818 — 13,487 — Treasury Financial Letter (LFT) 14,238 — 12,556 — FIDC shares / Others 24,517 — 2,356 — National Treasury Notes (LTN) 282 — 462 — Bank Deposit Certificates (CDB) — — 232 — Variable income investments Investments in energy sector — — 138 — Investments in food and beverage industry — — 17,921 — Investments in mining sector — — 287 — Investments linked to funds and market indexes 6,265 — 4,242 — Investments in other sectors (1) 622 — 1,580 — Real estate investments 100,701 — 111,417 — Loans to participants 19,870 — 20,561 — Structured and overseas investments 2,104 — 2,734 — Total 3,696,914 1,001,112 2,999,669 763,325
Discount rate
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Schedule of sensitivity analysis for actuarial assumptions	Post-retirement Post-retirement pension plans health plans Total Defined benefit liability, discounted to present value at current rate 2,429,478 2,016,614 4,446,092 Defined benefit liability, discounted to present value considering a rate increased by 0.5% 2,331,330 1,860,204 4,191,534 Defined benefit liability, discounted to present value considering a rate decreased by 0.5% 2,536,178 2,193,844 4,730,022
Rate of growth of medical costs
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Schedule of sensitivity analysis for actuarial assumptions	Post-retirement Post-retirement pension plans health plans Total Defined benefit liability, projected by the current medical cost growth rate 2,429,478 2,016,614 4,446,092 Defined benefit liability, projected by the current medical cost growth considering a rate increased by 1% 2,429,478 2,384,419 4,813,897 Defined benefit liability, projected by the current medical cost growth considering a rate decreased by 1% 2,429,478 1,724,584 4,154,062
Defined benefit liability
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Schedule of changes in amount net of liability (asset) of defined benefit, net	12.31.19 12.31.18 Post-retirement Post-retirement Post-retirement Post-retirement pension plans health plans Total pension plans health plans Total Defined benefit liability at the beginning of the year 2,011,355 1,313,157 3,324,512 1,861,651 1,050,576 2,912,227 Liability assumed after acquisition of company — 1,994 1,994 — — — Current service costs 3,155 16,293 19,448 2,931 13,722 16,653 Interest on actuarial liabilities 175,695 121,088 296,783 173,842 103,617 277,459 Benefits paid (165,929) (53,724) (219,653) (136,916) (37,838) (174,754) Member contributions paid 323 — 323 451 — 451 Actuarial losses (gains) adjusted by experience 93,699 226,928 320,627 80,126 64,278 144,404 Actuarial losses (gains) adjusted by demographic assumptions — (44,249) (44,249) — 46,122 46,122 Actuarial losses (gains) adjusted by financial assumptions 311,180 435,127 746,307 29,270 72,680 101,950 Defined benefit liability at the end of the year 2,429,478 2,016,614 4,446,092 2,011,355 1,313,157 3,324,512
Fair value of plan assets
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Schedule of changes in amount net of liability (asset) of defined benefit, net	12.31.19 12.31.18 Post-retirement Post-retirement Post-retirement Post-retirement pension plans health plans Total pension plans health plans Total Fair value of plan assets at the beginning of the year 2,999,669 763,325 3,762,994 2,585,679 726,060 3,311,739 Benefits paid (159,001) (36,774) (195,775) (128,991) (32,011) (161,002) Participants contributions paid 323 — 323 451 — 451 Sponsor contributions paid 1,848 35 1,883 1,949 33 1,982 Interest income on plan assets 266,287 69,137 335,424 245,014 70,690 315,704 Return on plan assets excluding interest income 593,769 205,389 799,158 295,567 (1,447) 294,120 Distribution of reserves (5,981) — (5,981) — — — Fair value of plan assets at the end of the year 3,696,914 1,001,112 4,698,026 2,999,669 763,325 3,762,994
Asset Limitation
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Schedule of changes in amount net of liability (asset) of defined benefit, net	12.31.19 12.31.18 Post-retirement Post-retirement Post-retirement Post-retirement pension plans health plans Total pension plans health plans Total Asset Limitation at the beginning of the year 1,056,682 50,281 1,106,963 791,177 130,440 921,617 Interest on the asset limitation 96,306 4,661 100,967 77,246 12,966 90,212 Changes in the assets limitation, except interest (24,297) 2,429 (21,868) 188,259 (93,125) 95,134 Asset Limitation at the end of the year 1,128,691 57,371 1,186,062 1,056,682 50,281 1,106,963

FINANCIAL INSTRUMENTS AND RIS_2

FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT (Tables)	12 Months Ended
	Dec. 31, 2019
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Schedule of consolidated derivatives financial instruments that are registered with B3 and classified as swaps and that do not require margin deposits	Accumulated effects from fair value Notional Value Amount receivable (payable) Description Long position 515,261 1,184,064 72,163 95,533 Foreign Currency 72,790 335,194 — 50,536 US$ (1) (2) 72,790 241,332 — 24,608 EUR (2) — 51,971 — — LIBOR US$ (1) — 41,891 — 25,928 Floating rate 369,491 699,595 1,818 7,737 CDI (1) (2) 369,491 554,336 1,818 — TJLP (4) — 145,259 — 7,737 Inflation rates 72,980 149,275 70,345 37,260 IPCA (3) (5) 72,980 149,275 70,345 37,260 Short position (515,261) (1,184,064) (56,133) (39,383) Floating rate (145,770) (608,782) (56,133) (24,916) CDI (1) (2) (3) (4) (5) (145,770) (608,782) (56,133) (24,916) Foreign Currency (369,491) (575,282) — (14,467) US$ (2) (365,161) (439,103) — (9,396) EUR (1) (2) (4,330) (115,233) — (222) LIBOR US$ (1) — (20,946) — (4,849) Long position 72,163 95,533 Current 19,282 69,065 Non-current 52,881 26,468 Short position (56,133) (39,383) Current (1,921) (16,538) Non-current (54,212) (22,845) Amounts receivable, net 16,030 56,150 (1) Foreign currency swaps (US$ and LIBOR) x CDI - swap transactions with maturities up to July 2019, according to the debt maturities, with the purpose of hedging the exchange rate risk of the Company's dollar lending operation. (2) Foreign currency swaps (Euro and CDI x Euro) (R$4,334) and (US$ and CDI x US$) (R$292,347) - maturing through October 30, 2019 to hedge currency risk affecting net amounts payable (carrying amount R$3,806 in Euros and LIBOR) and receivables (carrying amount R$292,347 in US$). (3) IPCA x CDI rate swaps to hedge the same flow as the debentures (4th issue - 3rd series) indexed to the IPCA settled on October 15, 2019. (4) TJLP x CDI swaps transactions contracted with maturities up to July 2019 to hedge the risk of TJLP variation on loan with BNDES. (5) IPCA x CDI swaps (R$262,817) - maturing in 2033 to hedge risk of change rate pegged to IPCA (carrying amount R$319,550).
Schedule of breakdown of swaps maturing after December 31, 2019	Maturing in Amount receivable (payable) on Swap contract 2023 onwards Foreign currency x CDI (1,921) — — — (1,921) CDI x Foreign Currency 1,818 — — — 1,818 IPCA x CDI 17,464 3,239 3,507 (8,077) 16,133 Total 17,361 3,239 3,507 (8,077) 16,030
Schedule of sensitivity analysis net exposure	Transaction Risk Probable 25% depreciation 50% depreciation Hedge (long position) Derivatives (depreciation risk EUR) (4,334) (5,418) (6,501) Payables in EUR Debt (appreciation risk EUR) (25,633) (32,041) (38,449) Receivables in EUR Debt (depreciation risk EUR) 29,439 36,799 44,158 Net Exposure (528) (660) (792) Hedge (short position) Derivatives (depreciation risk US$) (292,347) (365,433) (438,520) Payables in US$ Debt (appreciation risk US$) (185,022) (231,277) (277,532) Receivables in US$ Debt (depreciation risk US$) 477,369 596,710 716,052 Net Exposure — — — Hedge (long position) Derivatives (risk of decrease in IPCA) 262,817 250,228 238,939 Debt in IPCA Debt (risk of increase in IPCA) (319,550) (306,961) (295,672) Net Exposure (56,733) (56,733) (56,733) Hedge (CDI position) Hedge US$ and EUR (short and long position) Derivatives (risk of decrease in CDI) (295,777) (295,547) (295,320) Hedge IPCA (short position) Derivatives (risk of increase in CDI) (262,817) (250,228) (238,939) Net Exposure (558,594) (545,775) (534,259) Total net exposure in each scenario (615,855) (603,168) (591,784) Net effect on changes in current fair value — 12,687 24,071
Schedule of sensitivity analysis assumptions	Risk Variable Probable 25% depreciation 50% depreciation US$ 4.0307 5.0384 6.0461 EUR 4.5102 5.6377 6.7652 IPCA 4.05 % 5.06 % 6.07 % IGPM 3.37 % 4.21 % 5.05 % CDI 6.42 % 8.03 % 9.63 %
Schedule of composition of financial assets and liabilities	Fair value Book value Fair value Classification by category hierarchy Financial Assets Current Cash and cash equivalents (Note 3) Amortized cost 3,393,377 3,381,328 3,393,377 3,381,328 Trade accounts receivable (Note 4) Amortized cost 8,719,497 8,304,382 8,719,497 8,304,382 Derivative transactions (Note 31) Measured at fair value through OCI Level 2 19,282 69,065 19,282 69,065 Non-current Investments pledged as collateral Amortized cost 63,766 76,934 63,766 76,934 Trade accounts receivable (Note 4) Amortized cost 440,453 426,252 440,453 426,252 Derivative transactions (Note 31) Measured at fair value through OCI Level 2 52,881 26,468 52,881 26,468 Total financial assets 12,689,256 12,284,429 12,689,256 12,284,429 Financial Liabilities Current Trade accounts payable, net (Note 16) Amortized cost 6,871,799 7,642,782 6,871,799 7,642,782 Loans, financing and leases (Note 20) Amortized cost 1,020,061 1,076,451 1,021,810 1,135,732 Loans, financing and leases (Note 20) Measured at fair value through profit or loss Level 2 2,029,246 263,754 2,029,246 263,754 Debentures (Note 20) Amortized cost 1,077,183 82,840 1,104,539 237,144 Debentures (Note 20) Measured at fair value through profit or loss Level 2 — 41,121 — 41,121 Derivative transactions (Note 31) Measured at fair value through profit or loss Level 2 1,921 16,316 1,921 16,316 Derivative transactions (Note 31) Measured at fair value through OCI Level 2 — 222 — 222 Non-current Loans, financing and leases (Note 20) Amortized cost 25,093 817,908 24,106 796,481 Loans, financing and leases (Note 20) Measured at fair value through profit or loss Level 2 7,161,875 341,728 7,161,875 341,728 Contingent consideration (Note 20) Measured at fair value through profit or loss Level 2 484,048 465,686 484,048 465,686 Debentures (Note 20) Amortized cost 2,027,167 3,049,949 1,948,705 2,866,981 Derivative transactions (Note 31) Measured at fair value through OCI Level 2 54,212 22,845 54,212 22,845 Total financial liabilities 20,752,605 13,821,602 20,702,261 13,830,792
Schedule of Company's ratio of consolidated debt to shareholders' equity	Cash and cash equivalents 3,393,377 3,381,328 Loans, financing, debentures, leases and contingent consideration (1) (13,824,673) (6,139,437) Derivative transactions, net 16,030 56,150 Short-term investment pledged as collateral 13,212 12,473 Asset guarantor of contingent consideration 484,048 465,686 Net debt 9,918,006 2,223,800 Net equity 70,455,578 71,607,027 Net debt-to-equity ratio 14.08 % 3.11 % (1) As of December 31, 2019, includes the effects of the adoption of IFRS 16 on January 1, 2019 (Note 19).
Summary the maturity profile of our consolidated financial liabilities as set forth in loan agreements	On 12.31.19 2025 onwards Total Trade accounts payable 6,871,799 — — — — — 6,871,799 Loans and financing 1,022,302 16,307 10,243 4 — — 1,048,856 Leases (1) 2,098,941 1,896,313 1,670,508 1,484,652 1,086,093 2,696,282 10,932,789 Contingent consideration — — — — — 484,048 484,048 Debentures 1,148,732 1,083,292 1,034,796 — — — 3,266,820 Derivative transactions 1,921 — — — — 54,212 56,133 Total 11,143,695 2,995,912 2,715,547 1,484,656 1,086,093 3,234,542 22,660,445 (1) Includes the effects of the adoption of IFRS 16 on January 1, 2019 (note 20).

CONTARCTUAL COMMITMENTS (Tables

CONTARCTUAL COMMITMENTS (Tables)	12 Months Ended
	Dec. 31, 2019
CONTRACTUAL COMMITMENTS
Schedule Of Maturity Analysis Contractual Commitments	On December 31, 2019, the total nominal values equivalent to the full contract period were: 2020 1,191,801 2021 1,284,244 2022 919,747 2023 279,386 2024 278,609 2025 onwards 569,264 Total 4,523,051

ADDITIONAL INFORMATION ON CAS_2

ADDITIONAL INFORMATION ON CASH FLOWS (Tables)	12 Months Ended
	Dec. 31, 2019
ADDITIONAL INFORMATION ON CASH FLOWS
Schedule of reconciliation of cash flow financing activities	Cash flows Cash flows from financing from operating activities activities Financing activities not involving cash and cash equivalents Financial Interim and charges and Additions of unclaimed foreign leases and Initial dividends Balance on Write-offs Write-offs exchange supplier adoption and interest Balance on (payments) (payments) variation financing IFRS 16 on equity Interim dividends and interest on equity 4,172,916 (6,176,842) — — — — 5,591,343 3,587,417 Loans and financing 2,106,814 (2,070,665) (129,974) 171,636 967,313 — — 1,045,124 Leases 393,027 (1,559,165) (415,496) 350,772 1,803,941 8,618,072 — 9,191,151 Debentures 3,173,910 (66,830) (201,516) 198,786 — — — 3,104,350 Derivative financial instruments (56,150) 91,543 26,234 (77,657) — — — (16,030) Contingent Consideration 465,686 — — 18,362 — — — 484,048 Total 10,256,203 (9,781,959) (720,752) 661,899 2,771,254 8,618,072 5,591,343 17,396,060 Cash flows Cash flows from financing from operating activities activities Financing activities not involving cash and cash equivalents Financial Interim and charges and Additions of unclaimed foreign leases and dividends Balance on Write-offs Write-offs exchange supplier and interest Balance on 12.31.17 (payments) (payments) variation financing on equity 12.31.18 Interim dividends and interest on equity 2,396,116 (4,136,878) — — — 5,913,678 4,172,916 Loans and financing 3,109,498 (1,533,121) (207,708) 231,748 506,397 — 2,106,814 Leases 385,460 (35,375) (21,231) 45,501 18,672 — 393,027 Debentures 4,520,739 (1,324,723) (265,992) 243,886 — — 3,173,910 Derivative financial instruments (143,754) 95,993 — (8,389) — — (56,150) Contingent Consideration 446,144 — — 19,542 — — 465,686 Total 10,714,203 (6,934,104) (494,931) 532,288 525,069 5,913,678 10,256,203
Schedule of main transactions that do not involve cash	Initial adoption IFRS 16 on 01.01.19 8,618,072 Financing transactions with suppliers 967,313 506,397 Acquisition of assets through leases 1,803,941 18,672 Total 11,389,326 525,069

ADDITIONAL INFORMATION ON THE_2

ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENT OF INCOME - IFRS 16 (Tables)	12 Months Ended
	Dec. 31, 2019
ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENT OF INCOME - IFRS 16
Schedule of effects of the adoption of IFRS 16	The consolidated statement of income in the year ended December 31, 2019 includes the effects of the adoption of IFRS 16. To facilitate the understanding and comparability of the information, the following is the consolidated statement of income in the year ended 31 December 2019, 2018 and 2017, excluding the effects of adopting IFRS 16. General and administrative Item Cost of sales Selling expenses expenses Financial expenses Total Rental costs and expenses (1,699,886) (71,335) (130,477) — (1,901,698) Depreciation costs and expenses 1,604,829 76,591 201,530 — 1,882,950 Financial charges — — — 401,484 401,484 Income and social contribution taxes — — — — (130,130) Total (95,057) 5,256 71,053 401,484 252,606 2019 Statements of IFRS 15 and IFRS Statements of Statements of Statements of income (IFRS 16) 16 adjustments income (IAS 17) income (IAS 17) income (IAS 17) Net operating revenue 44,268,171 — 44,268,171 Cost of sales (22,158,947) (95,057) (22,254,004) (21,025,767) (20,272,530) Gross profit 22,109,224 (95,057) 22,014,167 22,436,973 22,934,302 Operating income (expenses) (14,895,300) 76,309 (14,818,991) (12,980,789) (16,302,065) Selling expenses (12,701,222) 5,256 (12,695,966) (12,832,741) (13,136,474) General and administrative expenses (2,498,096) 71,053 (2,427,043) (2,598,970) (2,443,105) Other operating income 929,498 — 929,498 4,077,003 464,182 Other operating expenses (625,480) — (625,480) (1,626,081) (1,186,668) Operating income 7,213,924 (18,748) 7,195,176 9,456,184 6,632,237 Financial income 1,132,870 — 1,132,870 4,112,640 1,755,958 Financial expenses (1,953,011) 401,484 (1,551,527) (2,285,487) (2,659,002) Equity pickup 752 — 752 (5,847) 1,580 Income before taxes 6,394,535 382,736 6,777,271 11,277,490 5,730,773 Income and social contribution taxes (1,393,521) (130,130) (1,523,651) (2,349,232) (1,121,983) Net income for the year 5,001,014 252,606 5,253,620 8,928,258 4,608,790

OPERATIONS (Details)

OPERATIONS (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Sep. 26, 2019
OPERATIONS
Periodicity of payment of fee payable in an service concession agreement term	2 years
Agreement term	20 years
Percentage of service concession fees based on prior year STFC revenue	2.00%
Periodicity of payment for the usage of frequencies associated with SMP after the first renewal of these agreements	2 years
Percentage of service concession fees based on prior year SMP revenues	2.00%
Percentage of service concession fees based on prior year SMP revenues in fifteen year of agreement term	1.00%
Agreement extension term	15 years
Telefonica
OPERATIONS
Percentage of ownership interest held	73.58%	73.58%
Terra Networks
OPERATIONS
Total consideration for acquisition			R$ 70844

BASIS OF PREPARATION AND PRES_3

BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS (Details) - BRL (R$) R$ in Billions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Jan. 01, 2019
Maximum
Financial effects due to application of IFRS
Right-of-use assets			R$ 12.0
Minimum
Financial effects due to application of IFRS
Right-of-use assets			R$ 12.0
Alianca Atlantica Holding B.V. (Alianca)
Equity interests in subsidiaries
Ownership interest in jointly-controlled subsidiary (as a percent)	50.00%	50.00%
Companhia AIX de Participacoes
Equity interests in subsidiaries
Ownership interest in jointly-controlled subsidiary (as a percent)	50.00%	50.00%
Companhia ACT de Participacoes (ACT)
Equity interests in subsidiaries
Ownership interest in jointly-controlled subsidiary (as a percent)	50.00%	50.00%
Terra Networks
Equity interests in subsidiaries
Ownership interest in wholly-owned subsidiary (as a percent)	100.00%	100.00%
TGLog
Equity interests in subsidiaries
Ownership interest in wholly-owned subsidiary (as a percent)	99.99%	99.99%
POP Internet Ltda ("POP")
Equity interests in subsidiaries
Ownership interest in wholly-owned subsidiary (as a percent)	99.99%	99.99%

BASIS OF PREPARATION AND PRES_4

BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS - Initial adopion of IFRS 16 (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Initial adoption effects:
Property, plant and equipment (Note 12)	R$ 42847264	R$ 34115327	R$ 33222316
IFRS 16
Disclosure of initial application of standards or interpretations [line items]
Nominal value payable	9,999,696
Unrealized financial expenses	(1,381,624)
Present value payable	8,618,072
Current	1,711,092
Non-current	6,906,980
Initial adoption effects:
Property, plant and equipment (Note 12)	8,618,072
Loans, financing, debentures and leases (Note 20)	8,618,072
IFRIC 23
Initial adoption effects:
Asset reclassification	R$ 68945

CASH AND CASH EQUIVALENTS (Deta

CASH AND CASH EQUIVALENTS (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CASH AND CASH EQUIVALENTS
Cash and banks	R$ 250168	R$ 205598
Short-term investments	3,143,209	3,175,730
Total	R$ 3393377	R$ 3381328	R$ 4050338	R$ 5105110

TRADE ACCOUNTS RECEIVABLE (Deta

TRADE ACCOUNTS RECEIVABLE (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Trade accounts receivables
Billed amounts	R$ 7018601	R$ 6789257
Unbilled amounts	2,866,196	2,454,810
Interconnection amounts	790,046	835,887
Amounts from related parties (Note 28)	129,904	148,814
Trade accounts receivable	9,159,950	8,730,634
Current	8,719,497	8,304,382
Noncurrent	440,453	426,252
Gross carrying amount
Trade accounts receivables
Trade accounts receivable	10,804,747	10,228,768
Estimated losses for impairment or obsolescence
Trade accounts receivables
Trade accounts receivable	R$ 1644797	R$ 1498134

TRADE ACCOUNTS RECEIVABLE - Non

TRADE ACCOUNTS RECEIVABLE - Non current trade accounts receivable (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
TRADE ACCOUNTS RECEIVABLE
Maturity schedule	5 years
Discounted unguaranteed residual value of assets subject to finance lease	R$ 0
Soluciona TI
TRADE ACCOUNTS RECEIVABLE
Discounted unguaranteed residual value of assets subject to finance lease	0
Contingent Rents Recognised As Income	0
Trade accounts receivable | Soluciona TI
TRADE ACCOUNTS RECEIVABLE
Portion resale of goods to legal entities, receivable within 24 months	182,286	R$ 180065
Soluciona IT product	317,988	293,531
Nominal amount receivable	589,921	592,961
Deferred financial income	(48,086)	(84,060)
Present value of accounts receivable	541,835	508,901
Estimated impairment losses	(101,382)	(82,649)
Present value of accounts receivable	440,453	426,252
Trade accounts receivable | OI group | Soluciona TI
TRADE ACCOUNTS RECEIVABLE
Portion of accounts receivable from the OI group - Bankruptcy process of companies	R$ 89647	R$ 119365

TRADE ACCOUNTS RECEIVABLE, NET

TRADE ACCOUNTS RECEIVABLE, NET - Aging list of trade accounts receivable (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Aging list of trade accounts receivable
Trade accounts receivable	R$ 9159950	R$ 8730634
Falling due
Aging list of trade accounts receivable
Trade accounts receivable	6,862,054	6,485,154
Overdue - 1 to 30 days
Aging list of trade accounts receivable
Trade accounts receivable	966,986	1,096,639
Overdue - 31 to 60 days
Aging list of trade accounts receivable
Trade accounts receivable	306,956	305,019
Overdue - 61 to 90 days
Aging list of trade accounts receivable
Trade accounts receivable	192,622	200,401
Overdue - 91 to 120 days
Aging list of trade accounts receivable
Trade accounts receivable	250,029	220,221
Overdue - over 120 days
Aging list of trade accounts receivable
Trade accounts receivable	R$ 581303	R$ 423200

TRADE ACCOUNTS RECEIVABLE, NE_2

TRADE ACCOUNTS RECEIVABLE, NET - Changes in contractual assets (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
TRADE ACCOUNTS RECEIVABLE
Balance at the beginning of period	R$ 162025	R$ 160479
Additions	546,397	587,221
Write-offs	(485,108)	(585,675)
Balance at the end of period	223,314	162,025
Gross carrying amount
TRADE ACCOUNTS RECEIVABLE
Balance at the beginning of period	195,733	193,675
Additions	558,883	587,733
Write-offs	(485,108)	(585,675)
Balance at the end of period	269,508	195,733
Provision for losses
TRADE ACCOUNTS RECEIVABLE
Balance at the beginning of period, Provision for losses	(33,708)	(33,196)
Additions, Provision for losses	(12,486)	(512)
Balance at the end of period, Provision for losses	R$ 46194	R$ 33708

TRADE ACCOUNTS RECEIVABLE, NE_3

TRADE ACCOUNTS RECEIVABLE, NET - Changes in losses for impairment (Details) - Trade accounts receivable - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Estimated impairment losses for accounts receivable roll forward
Balance at beginning	R$ 1498134	R$ 1433471
Initial adoption IFRS 9 on 01.01.18		(364,456)
Supplement to estimated losses, net of resersal (Note 25)	(1,682,348)	(1,533,660)
Write-offs	1,547,577	1,833,453
Business combinations (Note 1 c.1)	(11,892)
Balance at ending	R$ 1644797	R$ 1498134

INVENTORIES (Details)

INVENTORIES (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
INVENTORIES
Total	R$ 578003	R$ 462053
Gross carrying amount
INVENTORIES
Materials for resale	539,822	413,843
Materials for consumption	41,584	61,819
Other inventories	24,115	30,013
Total	605,521	505,675
Estimated losses for impairment or obsolescence
INVENTORIES
Total	R$ 27518	R$ 43622

PREPAID EXPENSES (Details)

PREPAID EXPENSES (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
PREPAID EXPENSES
Advertising and publicity	R$ 249433	R$ 252900
Insurance	20,459	24,867
Rental	184,248	32,792
Software and networks maintenance	33,863	17,485
Incremental costs - IFRS 15	330,919	255,391
Financial charges	30,521	43,853
Personal	30,135	33,970
Taxes and other	27,007	54,717
Total	906,585	715,975
Current	686,503	581,743
Non-current	R$ 220082	R$ 134232

INCOME AND SOCIAL CONTRIBUTIO_3

INCOME AND SOCIAL CONTRIBUTION TAXES - Income and Social Contribution taxes recoverable (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
INCOME AND SOCIAL CONTRIBUTION TAXES
Income taxes recoverable	R$ 380314	R$ 245883
Social contribution taxes recoverable	31,281	28,706
Total	R$ 411595	R$ 274589

INCOME AND SOCIAL CONTRIBUTIO_4

INCOME AND SOCIAL CONTRIBUTION TAXES - Income and Social Contribution taxes payable (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
INCOME AND SOCIAL CONTRIBUTION TAXES
Income taxes payable	R$ 76483		R$ 8756
Social contribution taxes payable	16,614		3,253
Total	93,097		12,009
Current	6,585		R$ 12009
Non-current	R$ 86512	R$ 69945
Initial adoption of IFRIC 23		R$ 68945

INCOME AND SOCIAL CONTRIBUTIO_5

INCOME AND SOCIAL CONTRIBUTION TAXES - Deferred taxes (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
DEFERRED TAXES AND TAXES RECOVERABLE
Balance at beginning	R$ 1752855	R$ 337917
Income statement	(1,292,275)	(1,516,747)
Comprehensive income	69,719	31,797
Business combinations (Note 1.c.2)		70,012
Balance at ending	(2,975,411)	(1,752,855)
Deferred tax assets	5,548,581	5,569,885	R$ 5288176
Deferred tax liabilities	(8,523,992)	(7,322,740)	(5,626,093)
Deferred tax assets	171,042	230,097	371,408
Deferred tax liabilities	(3,146,453)	R$ 1982952	R$ 709325
Percentage of tax bases limit used to offset tax losses		30.00%
Deferred tax credits (income and social contribution tax losses) were not recognized in indirect subsidiaries	54,570	R$ 12649
Income and social contribution taxes on tax losses
DEFERRED TAXES AND TAXES RECOVERABLE
Balance at beginning	1,428,476	793,933
Income statement	51,360	634,543
Balance at ending	1,479,836	1,428,476
Income and social contribution taxes on temporary differences
DEFERRED TAXES AND TAXES RECOVERABLE
Balance at beginning	(3,181,331)	(1,131,850)
Income statement	(1,343,635)	(2,151,290)
Comprehensive income	69,719	31,797
Effects of the initial adoption of IFRS 9 and IFRS 15		70,012
Balance at ending	(4,455,247)	(3,181,331)
Provisions for legal, labor, tax civil and regulatory contingencies
DEFERRED TAXES AND TAXES RECOVERABLE
Balance at beginning	1,965,700	2,298,735
Income statement	(275,109)	(333,035)
Balance at ending	1,690,591	1,965,700
Trade accounts payable and other provisions
DEFERRED TAXES AND TAXES RECOVERABLE
Balance at beginning	571,734	651,417
Income statement	(40,393)	(79,683)
Balance at ending	531,341	571,734
Estimated losses on impairment of accounts receivable
DEFERRED TAXES AND TAXES RECOVERABLE
Balance at beginning	442,276	434,960
Income statement	36,354	(115,661)
Effects of the initial adoption of IFRS 9 and IFRS 15		122,977
Balance at ending	478,630	442,276
Customer portfolio and trademarks
DEFERRED TAXES AND TAXES RECOVERABLE
Balance at beginning	184,603	254,418
Income statement	(86,525)	(69,815)
Balance at ending	98,078	184,603
Estimated losses from modems and other P&E items
DEFERRED TAXES AND TAXES RECOVERABLE
Balance at beginning	176,130	200,941
Income statement	6,869	(24,811)
Balance at ending	182,999	176,130
Pension plans and other post-employment benefits
DEFERRED TAXES AND TAXES RECOVERABLE
Balance at beginning	226,221	174,534
Income statement	91,746	20,934
Comprehensive income	69,540	30,753
Balance at ending	387,507	226,221
Profit sharing
DEFERRED TAXES AND TAXES RECOVERABLE
Balance at beginning	129,689	110,046
Income statement	(9,695)	19,643
Balance at ending	119,994	129,689
Licenses
DEFERRED TAXES AND TAXES RECOVERABLE
Balance at beginning	(1,853,214)	(1,636,886)
Income statement	(216,330)	(216,328)
Balance at ending	(2,069,544)	(1,853,214)
Goodwill (Spanish e Navytree, Vivo Part. and GVTPart.)
DEFERRED TAXES AND TAXES RECOVERABLE
Balance at beginning	(4,600,940)	(3,598,172)
Income statement	(1,002,768)	(1,002,768)
Balance at ending	(5,603,708)	(4,600,940)
Property, plant and equipment of small value
DEFERRED TAXES AND TAXES RECOVERABLE
Balance at beginning	(395,606)
Income statement	107,155	(395,606)
Balance at ending	(288,451)	(395,606)
Technological Innovation Law
DEFERRED TAXES AND TAXES RECOVERABLE
Balance at beginning	(50,127)	(97,533)
Income statement	25,562	47,406
Balance at ending	(24,565)	(50,127)
Other temporary differences
DEFERRED TAXES AND TAXES RECOVERABLE
Balance at beginning	22,203	75,690
Income statement	19,499	(1,566)
Comprehensive income	179	1,044
Effects of the initial adoption of IFRS 9 and IFRS 15		(52,965)
Balance at ending	R$ 41881	R$ 22203

INCOME AND SOCIAL CONTRIBUTIO_6

INCOME AND SOCIAL CONTRIBUTION TAXES - Projections (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
DEFERRED TAXES AND TAXES RECOVERABLE
Total	R$ 2975411	R$ 1752855	R$ 337917
2020
DEFERRED TAXES AND TAXES RECOVERABLE
Total	1,614,967
2021
DEFERRED TAXES AND TAXES RECOVERABLE
Total	550,558
2022
DEFERRED TAXES AND TAXES RECOVERABLE
Total	531,585
2023
DEFERRED TAXES AND TAXES RECOVERABLE
Total	786,837
2024
DEFERRED TAXES AND TAXES RECOVERABLE
Total	654,638
2025 onwards
DEFERRED TAXES AND TAXES RECOVERABLE
Total	R$ 7113996

INCOME AND SOCIAL CONTRIBUTIO_7

INCOME AND SOCIAL CONTRIBUTION TAXES - Reconciliation of income tax and social contribution expense (Details) R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)	Dec. 31, 2018BRL (R$)	Dec. 31, 2017BRL (R$)
INCOME AND SOCIAL CONTRIBUTION TAXES
Statutory tax rate	34	34
Income tax rate	25.00%	25.00%
Social contribution tax rate	9.00%	9.00%
Income before taxes	R$ 6394535	R$ 11277490	R$ 5730773
Income and social contribution tax expenses, at the tax rate of 34%	(2,174,142)	(3,834,347)	(1,948,463)
Equity pickup, net of effects from interest on equity received and surplus value of the assets purchased attributed to the Company (Note 11)	256	(1,988)	537
Unclaimed interest on equity	(13,825)	(14,426)	(21,843)
Temporary differences in subsidiaries			2,007
Non-deductible expenses, gifts, incentives	(84,487)	(76,671)	(94,413)
Deferred taxes recognized in subsidiaries on tax loss carryforwards, negative basis and temporary differences referring to prior years			132,080
Tax benefit related to interest on equity allocated	879,920	1,547,000	821,657
Other (additions) exclusions	(1,243)	31,200	(13,545)
Tax debits	R$ 1393521	R$ 2349232	R$ 1121983
Effective rate	21.8	20.8	19.6
Current income and social contribution taxes	R$ 101246	R$ 832485	R$ 580578
Deferred income and social contribution taxes	R$ 1292275	R$ 1516747	R$ 541405

INCOME AND SOCIAL CONTRIBUTIO_8

INCOME AND SOCIAL CONTRIBUTION TAXES - Tax litigation (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Jan. 01, 2019
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Provision for tax litigation, filed by the Federal Revenue of Brazil ("RFB")	R$ 9895728
Income And Social Contribution Taxes Payable Non Current	R$ 86512	R$ 69945
Minimum
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Probability of acceptance (as a percent)	50.00%
Maximum
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Probability of acceptance (as a percent)	50.00%

TAXES, CHARGES AND CONTRIBUTI_5

TAXES, CHARGES AND CONTRIBUTIONS RECOVERABLE (Details) R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)lawsuit	Dec. 31, 2018BRL (R$)
TAXES, CHARGES AND CONTRIBUTIONS RECOVERABLE
State VAT (ICMS)	R$ 2664499	R$ 2549006
Withholding taxes and contributions	142,940	129,741
PIS and COFINS	2,125,186	5,000,677
Fistel, INSS, ISS and other taxes	84,935	217,056
Total	5,017,560	7,896,480
Current	4,176,362	4,674,218
Non-current	R$ 841198	3,222,262
Tax credits offsetting period	48 months
Deferred tax credits from acquisition of property and equipment	R$ 537209	509,920
Tax credits from PIS and COFINS	2,046,274	4,915,139
Current tax credits from PIS and COFINS	R$ 2046274	2,520,990
Non-current tax credits from PIS and COFINS		R$ 2394149
Number of in-progress lawsuits | lawsuit	3
Minimum
TAXES, CHARGES AND CONTRIBUTIONS RECOVERABLE
Contingent assets from in-progress lawsuits	R$ 1700000
Maximum
TAXES, CHARGES AND CONTRIBUTIONS RECOVERABLE
Contingent assets from in-progress lawsuits	R$ 2200000

JUDICIAL DEPOSITS AND GARNISH_3

JUDICIAL DEPOSITS AND GARNISHMENTS - Judicial Deposits and garnishments (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
JUDICIAL DEPOSITS AND GARNISHMENTS
Tax	R$ 2007074	R$ 1929594
Labor	316,009	522,201
Civil	1,049,922	1,164,835
Regulatory	261,005	208,447
Total	3,634,010	3,825,077
Garnishments	36,875	84,937
Total	3,670,885	3,910,014
Current	277,468	313,007
Non-current	R$ 3393417	R$ 3597007

JUDICIAL DEPOSITS AND GARNISH_4

JUDICIAL DEPOSITS AND GARNISHMENTS - Tax related judicial Deposits (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
JUDICIAL DEPOSITS AND GARNISHMENTS
Judicial tax deposits	R$ 2007074	R$ 1929594
Telecommunications Inspection Fund (FISTEL)
JUDICIAL DEPOSITS AND GARNISHMENTS
Judicial tax deposits	46,167	44,771
Corporate Income Tax (IRPJ) and Social Contribution Tax (CSLL)
JUDICIAL DEPOSITS AND GARNISHMENTS
Judicial tax deposits	575,426	551,937
Universal Telecommunication Services Fund (FUST)
JUDICIAL DEPOSITS AND GARNISHMENTS
Judicial tax deposits	518,372	503,246
Social Contribution Tax for Intervention in the Economic Order (CIDE)
JUDICIAL DEPOSITS AND GARNISHMENTS
Judicial tax deposits	286,270	278,685
State Value-Added Tax (ICMS)
JUDICIAL DEPOSITS AND GARNISHMENTS
Judicial tax deposits	269,483	239,220
Social Security, work accident insurance (SAT) and funds to third parties (INSS)
JUDICIAL DEPOSITS AND GARNISHMENTS
Judicial tax deposits	140,186	141,759
Withholding Income Tax (IRRF)
JUDICIAL DEPOSITS AND GARNISHMENTS
Judicial tax deposits	57,142	55,425
Contribution tax on gross revenue for Social Integration Program (PIS) and for Social Security Financing (COFINS)
JUDICIAL DEPOSITS AND GARNISHMENTS
Judicial tax deposits	34,983	39,672
Other taxes, charges and contributions
JUDICIAL DEPOSITS AND GARNISHMENTS
Judicial tax deposits	R$ 79045	R$ 74879

OTHER ASSETS (Details)

OTHER ASSETS (Details) R$ in Thousands	Nov. 28, 2019item	Dec. 31, 2019BRL (R$)	Dec. 31, 2018BRL (R$)
OTHER ASSETS
Advances to employees and suppliers		R$ 73849	R$ 83094
Related-party receivables (Note 28)		64,966	120,776
Receivables from suppliers		167,540	114,175
Surplus from post-employment benefit plans (Note 30)		220,939	10,997
Goods for sale (2)		76,912
Other amounts receivable		14,123	20,670
Total		618,329	349,712
Current		382,591	302,607
Non-current		R$ 235738	R$ 47105
Number of towers sold | item	1,909
Term of the sublease		22 years
Unsecured residual values resulting in benefits to the lessor		R$ 0
PBS Assisted Plan (PBS-A)
OTHER ASSETS
Distribution of PBS - A surplus		R$ 209347

OTHER ASSETS - Selected informa

OTHER ASSETS - Selected information on subletting agreements (Details) - Subletting agreement with Curitiba Data Center R$ in Thousands	Dec. 31, 2019BRL (R$)
OTHER ASSETS
Nominal value receivable	R$ 16966
Deferred financial income	(6,740)
Present value of accounts receivable	10,226
Current	759
Non-current	R$ 9467

OTHER ASSETS - Schedule of amou

OTHER ASSETS - Schedule of amounts receivable from the subletting agreement (Details) - Subletting agreement with Curitiba Data Center R$ in Thousands	Dec. 31, 2019BRL (R$)
OTHER ASSETS
Nominal value receivable	R$ 16966
Present value of accounts receivable	10,226
2020
OTHER ASSETS
Nominal value receivable	780
Present value of accounts receivable	759
2021
OTHER ASSETS
Nominal value receivable	780
Present value of accounts receivable	721
2022
OTHER ASSETS
Nominal value receivable	780
Present value of accounts receivable	685
2023
OTHER ASSETS
Nominal value receivable	780
Present value of accounts receivable	651
2024
OTHER ASSETS
Nominal value receivable	780
Present value of accounts receivable	619
2025 onwards
OTHER ASSETS
Nominal value receivable	13,066
Present value of accounts receivable	R$ 6791

INVESTMENTS (Details)

INVESTMENTS (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Jan. 01, 2018	Dec. 31, 2016
INVESTMENTS
Current assets	R$ 18644678	R$ 18362992
Non-current assets	89,645,044	84,198,326
TOTAL ASSETS	108,289,722	102,561,318
Current liabilities	17,732,088	17,160,820
Non-current liabilities	20,102,056	13,793,471
Equity	70,455,578	71,607,027	R$ 69461358	R$ 69322695	R$ 69244419
TOTAL LIABILITIES AND EQUITY	108,289,722	102,561,318
Investment Book value	104,251	101,657	98,902
Net operating income	44,268,171	43,462,740	43,206,832
Operating costs and expenses	(37,358,265)	(36,457,478)	(35,852,109)
Financial income (expenses), net	(820,141)	1,827,153	(903,044)
Income and social contribution taxes	(1,393,521)	(2,349,232)	(1,121,983)
Net income for the year	5,001,014	8,928,258	4,608,790
Equity pickup, according to interest held	R$ 752	R$ 5847	1,580
Alianca / AIX / ACT
INVESTMENTS
Ownership interest in joint ventures (as a percent)	50.00%	50.00%
Current assets	R$ 221183	R$ 213481
Non-current assets	10,556	12,327
TOTAL ASSETS	231,739	225,808
Current liabilities	7,140	7,103
Non-current liabilities	16,773	16,101
Equity	207,826	202,604
TOTAL LIABILITIES AND EQUITY	231,739	225,808
Investment Book value	103,913	101,302
Net operating income	45,567	45,608	45,704
Operating costs and expenses	(44,325)	(58,773)	(43,571)
Financial income (expenses), net	1,030	1,334	1,713
Income and social contribution taxes	(768)	137	(686)
Net income for the year	1,504	(11,694)	3,160
Equity pickup, according to interest held	R$ 752	R$ 5847	R$ 1580

INVESTMENTS - Changes in invest

INVESTMENTS - Changes in investments (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
INVESTMENTS
Balances at beginning of the period	R$ 101657	R$ 98902
Equity pickup	752	(5,847)	R$ 1580
Provision for losses on investments		(700)
Other comprehensive income	1,842	9,302
Balances at end of the period	104,251	101,657	98,902
Other investments
INVESTMENTS
Balances at beginning of the period	355	1,680
Provision for losses on investments		(700)
Other comprehensive income	(17)	(625)
Balances at end of the period	338	355	1,680
Joint ventures
INVESTMENTS
Balances at beginning of the period	101,302	97,222
Equity pickup	752	(5,847)
Other comprehensive income	1,859	9,927
Balances at end of the period	R$ 103913	R$ 101302	R$ 97222

PROPERTY, PLANT AND EQUIPMENT_2

PROPERTY, PLANT AND EQUIPMENT (Details) R$ in Thousands	Nov. 28, 2019item	Jul. 24, 2019BRL (R$)	Dec. 31, 2019BRL (R$)	Dec. 31, 2018BRL (R$)	Dec. 31, 2017BRL (R$)
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			R$ 34115327	R$ 33222316
Initial adoption IFRS 16 effects			8,618,072
Transfers of goods destined for sale			(347,426)
Subletting			(10,310)
Additions			8,862,362	6,964,798
Write-offs, net			(183,321)	(40,193)
Net transfers			(85,500)	(186,308)
Depreciation			(8,132,152)	(5,845,286)
Business combinations			10,212
Balance at end of the period			42,847,264	34,115,327	R$ 33222316
Proceeds from sale of assets			698,643	9,053	20,672
Number of towers sold | item	1,909
Tambor and Curitiba (CIC) data centers
PROPERTY, PLANT AND EQUIPMENT
Proceeds from sale of assets		R$ 419690	419,690
Gain on sale of assets		R$ 64275	64,275
Gross carrying amount
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			120,456,916
Balance at end of the period			136,374,026	120,456,916
Accumulated depreciation / amortization
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			(86,341,589)
Balance at end of the period			(93,526,762)	(86,341,589)
Switching and transmission equipment
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			24,668,212	22,809,109
Initial adoption IFRS 16 effects			91,836
Transfers of goods destined for sale			(1,183)
Additions			114,517	10,670
Write-offs, net			(17,069)	(45,719)
Net transfers			4,265,573	5,380,744
Depreciation			(3,936,572)	(3,486,592)
Balance at end of the period			25,185,314	24,668,212	22,809,109
Switching and transmission equipment | Gross carrying amount
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			79,002,102
Balance at end of the period			83,028,079	79,002,102
Switching and transmission equipment | Accumulated depreciation / amortization
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			(54,333,890)
Balance at end of the period			(57,842,765)	(54,333,890)
Terminal equipment / modems
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			2,571,084	2,724,332
Additions			142,975	129,640
Write-offs, net			(268)	(1,721)
Net transfers			1,299,368	1,098,380
Depreciation			(1,426,890)	(1,379,547)
Business combinations			9
Balance at end of the period			2,586,278	2,571,084	2,724,332
Terminal equipment / modems | Gross carrying amount
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			18,033,246
Balance at end of the period			19,329,470	18,033,246
Terminal equipment / modems | Accumulated depreciation / amortization
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			(15,462,162)
Balance at end of the period			(16,743,192)	(15,462,162)
Infrastructure
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			3,769,088	3,885,297
Initial adoption IFRS 16 effects			8,526,236
Transfers of goods destined for sale			(248,175)
Subletting			(10,310)
Additions			1,790,185	101,798
Write-offs, net			(139,857)	(8,461)
Net transfers			504,010	449,369
Depreciation			(2,471,456)	(658,915)
Business combinations			343
Balance at end of the period			11,720,064	3,769,088	3,885,297
Write offs, net related to cancellation of lease agreements			12,065
Infrastructure | Gross carrying amount
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			16,154,562
Balance at end of the period			26,269,769	16,154,562
Infrastructure | Accumulated depreciation / amortization
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			(12,385,474)
Balance at end of the period			(14,549,705)	(12,385,474)
Land
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			314,832	314,353
Transfers of goods destined for sale			(30,585)
Additions				550
Write-offs, net			(5,735)	(71)
Balance at end of the period			278,512	314,832	314,353
Land | Gross carrying amount
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			314,832
Balance at end of the period			278,512	314,832
Other P&E
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			836,107	830,452
Transfers of goods destined for sale			(67,143)
Additions			258,854	204,041
Write-offs, net			(2,182)	(2,926)
Net transfers			88,100	124,772
Depreciation			(297,234)	(320,232)
Business combinations			10,551
Balance at end of the period			827,053	836,107	830,452
Other P&E | Gross carrying amount
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			4,996,170
Balance at end of the period			5,218,153	4,996,170
Other P&E | Accumulated depreciation / amortization
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			(4,160,063)
Balance at end of the period			(4,391,100)	(4,160,063)
Estimated losses | Estimated losses for impairment or obsolescence
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			(156,892)	(228,052)
Additions			(20,465)	(8,975)
Write-offs, net			3,540	80,135
Business combinations			(691)
Balance at end of the period			(174,508)	(156,892)	(228,052)
Assets and facilities under construction
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			2,112,896	2,886,825
Transfers of goods destined for sale			(340)
Additions			6,576,296	6,527,074
Write-offs, net			(21,750)	(61,430)
Net transfers			(6,242,551)	(7,239,573)
Balance at end of the period			2,424,551	2,112,896	R$ 2886825
Assets and facilities under construction | Gross carrying amount
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period			2,112,896
Balance at end of the period			R$ 2424551	R$ 2112896

PROPERTY, PLANT AND EQUIPMENT -

PROPERTY, PLANT AND EQUIPMENT - Depreciation rates (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
PROPERTY, PLANT AND EQUIPMENT
Initial adoption IFRS 16 effects on depreciation costs and expenses	R$ 1882950
Switching and transmission equipment and media | Minimum
PROPERTY, PLANT AND EQUIPMENT
Depreciation rate (as a percent)	2.50%	2.50%
Switching and transmission equipment and media | Maximum
PROPERTY, PLANT AND EQUIPMENT
Depreciation rate (as a percent)	92.31%	25.00%
Terminal equipment / modems | Minimum
PROPERTY, PLANT AND EQUIPMENT
Depreciation rate (as a percent)	6.67%	6.67%
Terminal equipment / modems | Maximum
PROPERTY, PLANT AND EQUIPMENT
Depreciation rate (as a percent)	66.67%	66.67%
Infrastructure | Minimum
PROPERTY, PLANT AND EQUIPMENT
Depreciation rate (as a percent)	2.50%	2.50%
Infrastructure | Maximum
PROPERTY, PLANT AND EQUIPMENT
Depreciation rate (as a percent)	92.31%	66.67%
Other P&E assets | Minimum
PROPERTY, PLANT AND EQUIPMENT
Depreciation rate (as a percent)	10.00%	10.00%
Other P&E assets | Maximum
PROPERTY, PLANT AND EQUIPMENT
Depreciation rate (as a percent)	25.00%	25.00%
Depreciation rate accounting estimates
PROPERTY, PLANT AND EQUIPMENT
Increased depreciation expense	R$ 283552	R$ 267657

PROPERTY, PLANT AND EQUIPMENT_3

PROPERTY, PLANT AND EQUIPMENT - Additional information on leases (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period	R$ 34115327	R$ 33222316
Initial Adoption on 01.01.19	8,618,072
Additions	8,862,362	6,964,798
Subletting	(10,310)
Balance at end of the period	42,847,264	34,115,327
Switching and transmission equipment
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period	24,668,212	22,809,109
Initial Adoption on 01.01.19	91,836
Additions	114,517	10,670
Balance at end of the period	25,185,314	24,668,212
Infrastructure
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period	3,769,088	3,885,297
Initial Adoption on 01.01.19	8,526,236
Additions	1,790,185	101,798
Subletting	(10,310)
Balance at end of the period	11,720,064	3,769,088
Other P&E
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period	836,107	830,452
Additions	258,854	204,041
Balance at end of the period	827,053	836,107
Changes in leases, after the adoption of IFRS 16
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period	386,959
Initial Adoption on 01.01.19	8,618,072
Additions	1,803,941
Subletting	(10,310)
Depreciation and write-offs, net (IAS 17)	(58,549)
Depreciation (IFRS 16)	(1,882,950)
Cancellation of contracts	(105,952)
Balance at end of the period	8,751,211	386,959
Changes in leases, after the adoption of IFRS 16 | Switching and transmission equipment
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period	186,554
Initial Adoption on 01.01.19	91,836
Additions	107,108
Depreciation (IFRS 16)	(39,192)
Balance at end of the period	346,306	186,554
Changes in leases, after the adoption of IFRS 16 | Infrastructure
PROPERTY, PLANT AND EQUIPMENT
Balance at beginning of the period	189,455
Initial Adoption on 01.01.19	8,526,236
Additions	1,696,833
Subletting	(10,310)
Depreciation and write-offs, net (IAS 17)	(50,819)
Depreciation (IFRS 16)	(1,843,758)
Cancellation of contracts	(105,952)
Balance at end of the period	R$ 8401685	189,455
Changes in leases, after the adoption of IFRS 16 | Other P&E
PROPERTY, PLANT AND EQUIPMENT
Annual depreciation rate (%)	20.00%
Balance at beginning of the period	R$ 10950
Depreciation and write-offs, net (IAS 17)	(7,730)
Balance at end of the period	R$ 3220	R$ 10950
Minimum | Infrastructure
PROPERTY, PLANT AND EQUIPMENT
Annual depreciation rate (%)	2.50%	2.50%
Minimum | Changes in leases, after the adoption of IFRS 16 | Switching and transmission equipment
PROPERTY, PLANT AND EQUIPMENT
Annual depreciation rate (%)	5.00%
Minimum | Changes in leases, after the adoption of IFRS 16 | Infrastructure
PROPERTY, PLANT AND EQUIPMENT
Annual depreciation rate (%)	3.13%
Maximum | Infrastructure
PROPERTY, PLANT AND EQUIPMENT
Annual depreciation rate (%)	92.31%	66.67%
Maximum | Changes in leases, after the adoption of IFRS 16 | Switching and transmission equipment
PROPERTY, PLANT AND EQUIPMENT
Annual depreciation rate (%)	92.31%
Maximum | Changes in leases, after the adoption of IFRS 16 | Infrastructure
PROPERTY, PLANT AND EQUIPMENT
Annual depreciation rate (%)	92.31%

PROPERTY, PLANT AND EQUIPMENT_4

PROPERTY, PLANT AND EQUIPMENT - Property and equipment items pledged in guarantee and reversible assets (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
PROPERTY, PLANT AND EQUIPMENT
Property and equipment pledged in guarantee	R$ 81416	R$ 94641
Estimated residual value of reversible assets	R$ 8259852	R$ 8621863

INTANGIBLE ASSETS (Details)

INTANGIBLE ASSETS (Details) - BRL (R$) R$ in Thousands	Jul. 24, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
INTANGIBLE ASSETS
Balance at beginning of the period		R$ 42220985	R$ 43331904
Additions		1,765,421	1,226,126
Write-offs, net		(8,373)	(16)
Net transfers		85,500	186,308
Amortization (Note 25)		(2,787,640)	(2,523,337)
Business combination (Note 1.c.2)		596
Balance at end of the period		41,274,952	42,220,985	R$ 43331904
Proceeds from sale of assets		698,643	9,053	20,672
Tambor and Curitiba (CIC) data centers
INTANGIBLE ASSETS
Write-offs, net		3,249
Transfers of goods destined for sale (2)		(1,537)
Proceeds from sale of assets	R$ 419690	419,690
Gain on sale of assets	R$ 64275	64,275
Gross carrying amount
INTANGIBLE ASSETS
Balance at beginning of the period		66,743,503
Balance at end of the period		68,606,815	66,743,503
Accumulated depreciation / amortization
INTANGIBLE ASSETS
Balance at beginning of the period		(24,522,518)
Balance at end of the period		(27,331,863)	(24,522,518)
Software
INTANGIBLE ASSETS
Balance at beginning of the period		3,245,042	2,720,806
Additions		374,690	970,172
Write-offs, net		(5,066)	(16)
Net transfers		1,314,978	519,539
Amortization (Note 25)		(1,234,949)	(965,459)
Business combination (Note 1.c.2)		596
Balance at end of the period		3,693,754	3,245,042	2,720,806
Software | Tambor and Curitiba (CIC) data centers
INTANGIBLE ASSETS
Transfers of goods destined for sale (2)		R$ 1537
Software | Minimum
INTANGIBLE ASSETS
Annual amortization rate (%)		20.00%
Software | Maximum
INTANGIBLE ASSETS
Annual amortization rate (%)		50.00%
Software | Estimated losses for impairment or obsolescence
INTANGIBLE ASSETS
Balance at beginning of the period		R$ 499	(499)
Balance at end of the period		(499)	(499)	(499)
Software | Gross carrying amount
INTANGIBLE ASSETS
Balance at beginning of the period		16,604,769
Balance at end of the period		18,310,812	16,604,769
Software | Accumulated depreciation / amortization
INTANGIBLE ASSETS
Balance at beginning of the period		(13,359,727)
Balance at end of the period		(14,617,058)	(13,359,727)
Customer portfolio
INTANGIBLE ASSETS
Balance at beginning of the period		1,429,274	1,978,863
Amortization (Note 25)		(500,441)	(549,589)
Balance at end of the period		R$ 928833	1,429,274	1,978,863
Customer portfolio | Minimum
INTANGIBLE ASSETS
Annual amortization rate (%)		11.76%
Customer portfolio | Maximum
INTANGIBLE ASSETS
Annual amortization rate (%)		12.85%
Customer portfolio | Gross carrying amount
INTANGIBLE ASSETS
Balance at beginning of the period		R$ 4513278
Balance at end of the period		4,513,278	4,513,278
Customer portfolio | Accumulated depreciation / amortization
INTANGIBLE ASSETS
Balance at beginning of the period		(3,084,004)
Balance at end of the period		(3,584,445)	(3,084,004)
Trademarks
INTANGIBLE ASSETS
Balance at beginning of the period		989,410	1,073,615
Amortization (Note 25)		(84,205)	(84,205)
Balance at end of the period		R$ 905205	989,410	1,073,615
Trademarks | Minimum
INTANGIBLE ASSETS
Annual amortization rate (%)		5.13%
Trademarks | Maximum
INTANGIBLE ASSETS
Annual amortization rate (%)		66.67%
Trademarks | Gross carrying amount
INTANGIBLE ASSETS
Balance at beginning of the period		R$ 1658897
Balance at end of the period		1,658,897	1,658,897
Trademarks | Accumulated depreciation / amortization
INTANGIBLE ASSETS
Balance at beginning of the period		(669,487)
Balance at end of the period		(753,692)	(669,487)
Licenses
INTANGIBLE ASSETS
Balance at beginning of the period		13,056,137	13,969,606
Additions			6,647
Amortization (Note 25)		(964,316)	(920,116)
Balance at end of the period		R$ 12091821	13,056,137	13,969,606
Licenses | Minimum
INTANGIBLE ASSETS
Annual amortization rate (%)		3.60%
Licenses | Maximum
INTANGIBLE ASSETS
Annual amortization rate (%)		6.67%
Licenses | Gross carrying amount
INTANGIBLE ASSETS
Balance at beginning of the period		R$ 20244219
Balance at end of the period		20,244,219	20,244,219
Licenses | Accumulated depreciation / amortization
INTANGIBLE ASSETS
Balance at beginning of the period		(7,188,082)
Balance at end of the period		(8,152,398)	(7,188,082)
Other intangible assets
INTANGIBLE ASSETS
Balance at beginning of the period		49,523	20,952
Write-offs, net		(58)
Net transfers		(6)	32,539
Amortization (Note 25)		(3,729)	(3,968)
Balance at end of the period		R$ 45730	49,523	20,952
Other intangible assets | Minimum
INTANGIBLE ASSETS
Annual amortization rate (%)		6.67%
Other intangible assets | Maximum
INTANGIBLE ASSETS
Annual amortization rate (%)		20.00%
Other intangible assets | Gross carrying amount
INTANGIBLE ASSETS
Balance at beginning of the period		R$ 270741
Balance at end of the period		270,000	270,741
Other intangible assets | Accumulated depreciation / amortization
INTANGIBLE ASSETS
Balance at beginning of the period		(221,218)
Balance at end of the period		(224,270)	(221,218)
Software under development
INTANGIBLE ASSETS
Balance at beginning of the period		389,677	506,140
Additions		1,390,731	249,307
Net transfers		(1,229,472)	(365,770)
Balance at end of the period		550,936	389,677	506,140
Software under development | Gross carrying amount
INTANGIBLE ASSETS
Balance at beginning of the period		389,677
Balance at end of the period		550,936	389,677
Goodwill
INTANGIBLE ASSETS
Balance at beginning of the period		23,062,421	23,062,421
Write-offs, net		(3,249)
Balance at end of the period		23,059,172	23,062,421	R$ 23062421
Goodwill | Gross carrying amount
INTANGIBLE ASSETS
Balance at beginning of the period		23,062,421
Balance at end of the period		R$ 23059172	R$ 23062421

INTANGIBLE ASSETS - Goodwill br

INTANGIBLE ASSETS - Goodwill breakdown (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
INTANGIBLE ASSETS
Goodwill	R$ 23059172	R$ 23062421
Ajato Telecomunicacao Ltda.
INTANGIBLE ASSETS
Goodwill	149	149
Spanish and Figueira, by the merger of Telefonica Data Brasil Holding (TDBH) in 2006
INTANGIBLE ASSETS
Goodwill	212,058	212,058
Santo Genovese Participacoes, Atrium Telecomunicacoes, which took place in 2004
INTANGIBLE ASSETS
Goodwill	71,892	71,892
Telefonica Televisao Participacoes, former Navytree, occurred in 2008
INTANGIBLE ASSETS
Goodwill	780,693	780,693
Vivo Participacoes, occurred in 2011
INTANGIBLE ASSETS
Goodwill	9,157,239	9,160,488
GVT Participacoes, occurred in 2015
INTANGIBLE ASSETS
Goodwill	R$ 12837141	R$ 12837141

IMPAIRMENT OF NONFINANCIAL AS_3

IMPAIRMENT OF NONFINANCIAL ASSETS (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
IMPAIRMENT OF NONFINANCIAL ASSETS
Period of assessment of value of goodwill	5 years	5 years
Growth rate	4.50%	4.50%
Discount rate applied to cash flow projections	10.22%	11.15%
Discount rate for estimated future cash flows before tax	11.38%	13.99%
Inflation rate	3.80%	4.00%
Impairment loss	R$ 0	R$ 0
Non-financial assets | Discount rate
IMPAIRMENT OF NONFINANCIAL ASSETS
Percentage points increase	1.00%	1.00%
Percentage points decrease	1.00%	1.00%
Non-financial assets | Perpetuity growth rates
IMPAIRMENT OF NONFINANCIAL ASSETS
Percentage points increase	0.50%	0.50%
Percentage points decrease	0.50%	0.50%
Non-financial assets | OIBDA Margin
IMPAIRMENT OF NONFINANCIAL ASSETS
Percentage points increase	2.00%	2.00%
Percentage points decrease	2.00%	2.00%
Non-financial assets | Capex/Revenues Margin
IMPAIRMENT OF NONFINANCIAL ASSETS
Percentage points increase	1.50%	1.50%
Percentage points decrease	1.50%	1.50%

PERSONNEL, SOCIAL CHARGES AND_3

PERSONNEL, SOCIAL CHARGES AND BENEFITS (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
PERSONNEL, SOCIAL CHARGES AND BENEFITS
Salaries and wages	R$ 38363	R$ 34767
Social charges and benefits	400,470	385,695
Profit sharing	308,918	265,433
Share-based payment plans (Note 29)	40,523	22,638
Other compensation		86,000
Total	788,274	794,533
Current	752,246	782,630
Non-current	R$ 36028	R$ 11903

TRADE ACCOUNTS PAYABLE (Details

TRADE ACCOUNTS PAYABLE (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
TRADE ACCOUNTS PAYABLE
Sundry suppliers (Opex, Capex, services and Material)	R$ 5958280	R$ 6790882
Amounts payable (operators, co-billing)	303,087	198,942
Payables for purchase of non-current assets	205,161	269,446
Related parties (Note 28)	405,271	383,512
Total	R$ 6871799	R$ 7642782

TAXES, CHARGES AND CONTRIBUTI_6

TAXES, CHARGES AND CONTRIBUTIONS (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
TAXES, CHARGES AND CONTRIBUTIONS
Income taxes payable	R$ 76483	R$ 8756
ICMS	906,447	1,094,769
PIS and COFINS	331,863	512,714
Fust and Funttel	89,394	89,794
ISS, CIDE and other taxes	97,163	139,933
Total	1,424,867	1,837,210
Current	1,139,812	1,797,965
Non-current	R$ 285055	R$ 39245

DIVIDENDS AND INTEREST ON EQU_3

DIVIDENDS AND INTEREST ON EQUITY - Breakdown (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Dividends and interest on equity payable
Withholding tax rate (as a percent)	15.00%
Dividends and interest on equity	R$ 3587417	R$ 4172916	R$ 2396116
Equity attributable to owners of parent [member]
Dividends and interest on equity payable
Dividends and interest on equity	3,587,417	4,172,916
Telefnica Latinoamrica Holding
Dividends and interest on equity payable
Dividends and interest on equity	787,823	952,217
Telefonica
Dividends and interest on equity payable
Dividends and interest on equity	948,662	1,146,619
SP Telecomunicacoes Participacoes
Dividends and interest on equity payable
Dividends and interest on equity	598,064	722,862
Telefonica Chile
Dividends and interest on equity payable
Dividends and interest on equity	1,667	2,015
Non-controlling interest
Dividends and interest on equity payable
Dividends and interest on equity	R$ 1251201	R$ 1349203

DIVIDENDS AND INTEREST ON EQU_4

DIVIDENDS AND INTEREST ON EQUITY - Changes (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
DIVIDENDS AND INTEREST ON EQUITY
Beginning Balance	R$ 4172916	R$ 2396116
Supplementary dividends for previous year	2,468,684	2,191,864
Interim interest on equity (net of IRRF) and dividends	3,199,800	3,867,500
Unclaimed dividends and interest on equity	(82,898)	(152,770)
Payment of dividends and interest on equity	(6,176,842)	(4,136,878)
IRRF on shareholders exempt/immune from interest on equity	5,757	7,084
Ending Balance	R$ 3587417	R$ 4172916

PROVISIONS AND CONTINGENCIES -

PROVISIONS AND CONTINGENCIES - Breakdown of changes in provisions (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
PROVISIONS AND CONTINGENCIES
Balances at the beginning	R$ 6259325	R$ 8144750
Initial adoption IFRIC 23 (Note 7)	(68,945)
Additions (reversal), net (Note 26)	535,321	1,098,251
Other additions (reversal) (1)	(12,281)	(2,539,786)
Write-offs due to payment	(1,727,178)	(1,309,566)
Monetary restatement	541,364	865,676
Business combination (Note 1.c.1)	7,812
Balances at the closing	5,535,418	6,259,325
Current	374,445	377,929
Noncurrent	5,160,973	5,881,396
Labor
PROVISIONS AND CONTINGENCIES
Balances at the beginning	779,686	980,596
Additions (reversal), net (Note 26)	152,105	319,056
Other additions (reversal) (1)	(5,709)	(99,372)
Write-offs due to payment	(485,539)	(541,749)
Monetary restatement	99,526	121,155
Business combination (Note 1.c.1)	7,805
Balances at the closing	547,874	779,686
Current	236,130	245,805
Noncurrent	311,744	533,881
Tax
PROVISIONS AND CONTINGENCIES
Balances at the beginning	1,951,897	3,579,208
Initial adoption IFRIC 23 (Note 7)	(68,945)
Additions (reversal), net (Note 26)	32,719	452,746
Other additions (reversal) (1)		(2,443,047)
Write-offs due to payment	(364,992)	(51,924)
Monetary restatement	25,270	414,914
Balances at the closing	1,575,949	1,951,897
Noncurrent	1,575,949	1,951,897
Civil
PROVISIONS AND CONTINGENCIES
Balances at the beginning	1,004,803	1,055,877
Additions (reversal), net (Note 26)	364,008	395,631
Other additions (reversal) (1)	(2,381)	(14,119)
Write-offs due to payment	(833,579)	(598,294)
Monetary restatement	264,590	165,708
Business combination (Note 1.c.1)	7
Balances at the closing	797,448	1,004,803
Current	113,307	132,124
Noncurrent	684,141	872,679
Regulatory
PROVISIONS AND CONTINGENCIES
Balances at the beginning	1,022,216	1,103,792
Additions (reversal), net (Note 26)	93,634	(41,837)
Write-offs due to payment	(43,068)	(117,599)
Monetary restatement	72,954	77,860
Balances at the closing	1,145,736	1,022,216
Current	25,008
Noncurrent	1,120,728	1,022,216
Contingent liabilities (PPA)
PROVISIONS AND CONTINGENCIES
Balances at the beginning	827,275	845,796
Additions (reversal), net (Note 26)	(16,986)	(27,345)
Monetary restatement	21,433	8,824
Balances at the closing	831,722	827,275
Noncurrent	831,722	827,275
Provision for decommissioning
PROVISIONS AND CONTINGENCIES
Balances at the beginning	673,448	579,481
Additions (reversal), net (Note 26)	(90,159)
Other additions (reversal) (1)	(4,191)	16,752
Monetary restatement	57,591	77,215
Balances at the closing	636,689	673,448
Noncurrent	R$ 636689	R$ 673448

PROVISIONS AND CONTINGENCIES _2

PROVISIONS AND CONTINGENCIES - Labor provisions and contingencies (Details) R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)	Dec. 31, 2018BRL (R$)	Nov. 20, 2001item
PROVISIONS AND CONTINGENCIES
Provision for Universal Telecommunications Services Fund	R$ 4411759	R$ 3701208
Provision under fund for Technological Development of Telecommunications	723,105	618,473
Provision for Telecommunications Inspection Fund	2,607,128	2,825,543
Amount of fine imposed by ANATEL lawsuit	211,000
Interest and correction amount on fine imposed by ANATEL lawsuit	R$ 505000	482,000
Maximum
PROVISIONS AND CONTINGENCIES
Import duty (as a percent)	28.00%
Minimum
PROVISIONS AND CONTINGENCIES
Import duty (as a percent)	4.00%
Labor
PROVISIONS AND CONTINGENCIES
Provisions	R$ 547874	779,686
Possible losses	452,070	191,398
Tax
PROVISIONS AND CONTINGENCIES
Provisions	1,575,949	1,951,897
Federal (1)	573,229	526,943
State	466,164	909,547
Municipal	34,915	33,607
FUST	501,641	481,800
Possible losses	26,104,867	36,103,128
Federal (1)	2,233,733	12,025,529
State	15,460,028	16,294,685
Municipal	669,114	637,690
FUST, FUNTTEL and FISTEL	7,741,992	7,145,224
Civil
PROVISIONS AND CONTINGENCIES
Provisions - probable losses	797,448	1,004,803
Possible losses	3,494,626	3,493,655
Supplement of share proceedings	297,641	334,877
Relating to failure to supply services and/or products sold	211,865	353,850
Civil proceedings of a non-consumer nature	287,942	316,076
Claims at several levels, related to service rendering rights	3,467,941	3,466,522
Civil execution proceeding	15,443	12,926
Lawsuits on various administrative and legal proceedings	11,626	14,207
Number of wireless carriers under lawsuit | item			23
Daily fine in case of noncompliance	R$ 10
Percentage of charge on interconnection services	2.00%
Regulatory
PROVISIONS AND CONTINGENCIES
Provisions - probable losses	R$ 1145736	1,022,216
Possible losses	R$ 5645107	R$ 6119136

PROVISIONS AND CONTINGENCIES _3

PROVISIONS AND CONTINGENCIES - Guarantees (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
PROVISIONS AND CONTINGENCIES
Property and equipment	R$ 81416	R$ 94641
Judicial deposits and garnishments	3,670,885	3,910,014
Letters of guarantee	2,608,463	2,301,210
Short-term investments pledged as collateral	6,360,764	6,305,865
Contingent liability for guarantees
PROVISIONS AND CONTINGENCIES
Short-term investments pledged as collateral	R$ 50554	R$ 64461

LOANS, FINANCING, DEBENTURES _3

LOANS, FINANCING, DEBENTURES AND LEASES - Breakdown (Details) R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)installment	Dec. 31, 2018BRL (R$)
LOANS, FINANCING, DEBENTURES AND LEASES
Current	R$ 4126490	R$ 1464166
Noncurrent	9,698,183	4,675,271
Total	13,824,673	6,139,437
Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Current	4,126,490	1,367,551
Noncurrent	9,698,183	4,675,271
Total	13,824,673	6,042,822
Foreign currency
LOANS, FINANCING, DEBENTURES AND LEASES
Current		96,615
Total		96,615
Loans and financing | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Current	23,865	666,213
Noncurrent	24,985	819,742
Total	R$ 48850	1,485,955
Loans and financing | Foreign currency
LOANS, FINANCING, DEBENTURES AND LEASES
Current		96,615
Total		96,615
Financing - BNDES FINEM - Contract 11.2.0814.1 maturing 7/15/2019 | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Current		214,012
Total		214,012
Financing - BNDES FINEM - Contract 11.2.0814.1 maturing 7/15/2019 | Foreign currency
LOANS, FINANCING, DEBENTURES AND LEASES
Current		96,615
Total		96,615
Financing - BNDES FINEM - Contract 11.2.0814.1 maturing 7/15/2019 | TJLP | Home currency | Minimum
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	0.00%
Financing - BNDES FINEM - Contract 11.2.0814.1 maturing 7/15/2019 | TJLP | Home currency | Maximum
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	4.08%
Financing - BNDES FINEM - Contract 11.2.0814.1 maturing 7/15/2019 | ECM | Foreign currency
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	2.38%
Financing - BNDES FINEM - Contract 11.2.0963.1 maturing 8/15/2020 | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Current		184,200
Noncurrent		122,011
Total		306,211
Financing - BNDES FINEM - Contract 11.2.0963.1 maturing 8/15/2020 | TJLP | Home currency | Minimum
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	0.00%
Financing - BNDES FINEM - Contract 11.2.0963.1 maturing 8/15/2020 | TJLP | Home currency | Maximum
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	3.38%
Financing - BNDES FINEM - Contract 11.2.0963.1 maturing 11/15/2019 | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Current		13,403
Total		13,403
Financing - BNDES FINEM - Contract 11.2.0963.1 maturing 11/15/2019 | Home currency | Maximum
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	5.00%
Financing - BNDES FINEM - Contract 14.2.1192.1 maturing 1/15/2023 (TJLP) | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Current		103,486
Noncurrent		316,269
Total		419,755
Financing - BNDES FINEM - Contract 14.2.1192.1 maturing 1/15/2023 (TJLP) | TJLP | Home currency | Minimum
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	0.00%
Financing - BNDES FINEM - Contract 14.2.1192.1 maturing 1/15/2023 (TJLP) | TJLP | Home currency | Maximum
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	3.12%
Financing - BNDES FINEM - Contract 14.2.1192.1 maturing 1/15/2023 (4% to 6%) | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Current		37,837
Noncurrent		94,516
Total		132,353
Financing - BNDES FINEM - Contract 14.2.1192.1 maturing 1/15/2023 (4% to 6%) | Home currency | Minimum
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	4.00%
Financing - BNDES FINEM - Contract 14.2.1192.1 maturing 1/15/2023 (4% to 6%) | Home currency | Maximum
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	6.00%
Financing - BNDES FINEM - Contract 14.2.1192.1 maturing 1/15/2023 (Selic) | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Current		80,014
Noncurrent		245,887
Total		325,901
Financing - BNDES FINEM - Contract 14.2.1192.1 maturing 1/15/2023 (Selic) | Selic | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	2.32%
Financing - BNDES PSI maturing 1/15/2023 | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Current	R$ 8847	18,207
Noncurrent	112	1,263
Total	R$ 8959	19,470
Financing - BNDES PSI maturing 1/15/2023 | Home currency | Minimum
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	2.50%
Financing - BNDES PSI maturing 1/15/2023 | Home currency | Maximum
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	5.50%
Financing - BNB maturing 8/18/2022 | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Current	R$ 15018	15,054
Noncurrent	24,873	39,796
Total	R$ 39891	54,850
Bank guarantee (in percent)	100.00%
Number of installments | installment	3
Remaining balances	R$ 13212	12,473
Financing - BNB maturing 8/18/2022 | Home currency | Minimum
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	7.06%
Financing - BNB maturing 8/18/2022 | Home currency | Maximum
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	10.00%
Financing - Suppliers | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Current	R$ 996177	524,244
Noncurrent	97
Total	R$ 996274	524,244
Financing - Suppliers | Home currency | Minimum
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	109.20%
Financing - Suppliers | Home currency | Maximum
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	122.50%
Debentures | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Current	R$ 1077183	123,961
Noncurrent	2,027,167	3,049,949
Total	3,104,350	3,173,910
4th issue - Series 3 | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Current		41,121
Total		41,121
1st issue - Minas Comunica | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Current	28,366	26,250
Noncurrent	28,366	52,499
Total	R$ 56732	78,749
5th issue | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
CDI, as percentage	108.25%
Current	R$ 44504	51,233
Noncurrent	1,998,801	1,997,694
Total	R$ 2043305	2,048,927
6th issue | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	0.24%
CDI, as percentage	100.00%
Current	R$ 1004313	5,357
Noncurrent		999,756
Total	1,004,313	1,005,113
Leases
LOANS, FINANCING, DEBENTURES AND LEASES
Current	2,029,265	53,133
Noncurrent	R$ 7161886	339,894
Leases | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Annual interest rate (as a percent)	4.90%
Current	R$ 2029265	53,133
Noncurrent	7,161,886	339,894
Total	9,191,151	393,027
Contingent Consideration | Home currency
LOANS, FINANCING, DEBENTURES AND LEASES
Noncurrent	484,048	465,686
Total	R$ 484048	R$ 465686

LOANS, FINANCING, DEBENTURES _4

LOANS, FINANCING, DEBENTURES AND LEASES - Loans and financing (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
LOANS, FINANCING, DEBENTURES AND LEASES
Loans and financing	R$ 13824673	R$ 6139437
Financing - Suppliers | Minimum
LOANS, FINANCING, DEBENTURES AND LEASES
Net cost of CDI, as percentage	109.20%	107.90%
Financing - Suppliers | Maximum
LOANS, FINANCING, DEBENTURES AND LEASES
Net cost of CDI, as percentage	122.50%	115.90%

LOANS, FINANCING, DEBENTURES _5

LOANS, FINANCING, DEBENTURES AND LEASES - Debentures (Details) R$ in Thousands	Oct. 15, 2019BRL (R$)	Dec. 31, 2019BRL (R$)item	Dec. 31, 2018BRL (R$)
LOANS, FINANCING, DEBENTURES AND LEASES
Proceeds from issue of debentures | R$	R$ 42895
4th issue - Series 3
LOANS, FINANCING, DEBENTURES AND LEASES
Issued		810,000
Issue value | R$		R$ 810000
1st issue - Minas Comunica
LOANS, FINANCING, DEBENTURES AND LEASES
Issued		5,550
Outstanding		5,550
Issue value | R$		R$ 55500
4th, 5th and 6th issues
LOANS, FINANCING, DEBENTURES AND LEASES
Transaction cost | R$		R$ 2550	R$ 3951
5th issue
LOANS, FINANCING, DEBENTURES AND LEASES
Issued		200,000
Outstanding		200,000
Issue value | R$		R$ 2000000
6th issue
LOANS, FINANCING, DEBENTURES AND LEASES
Issued		100,000
Outstanding		100,000
Issue value | R$		R$ 1000000

LOANS, FINANCING, DEBENTURES _6

LOANS, FINANCING, DEBENTURES AND LEASES - Leases and contingent consideration (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
LOANS, FINANCING, DEBENTURES AND LEASES
Current	R$ 4126490	R$ 1464166
Noncurrent	R$ 9698183	4,675,271
Weighted annual interest rate on lease contracts	4.90%
Average maturity on lease contracts	6 years 2 months 5 days
Unsecured residual values resulting in benefits to the lessor	R$ 0
Leases
LOANS, FINANCING, DEBENTURES AND LEASES
Nominal value payable	10,932,789	766,215
Unrealized financial expenses	(1,741,638)	(373,188)
Present value payable	9,191,151	393,027
Current	2,029,265	53,133
Noncurrent	7,161,886	339,894
Unsecured residual values resulting in benefits to the lessor	R$ 0	R$ 0
Contingent Consideration
LOANS, FINANCING, DEBENTURES AND LEASES
Reimbursement period	15 years
2020 | Leases
LOANS, FINANCING, DEBENTURES AND LEASES
Nominal value payable	R$ 2098941
Present value payable	2,029,265
2021 | Leases
LOANS, FINANCING, DEBENTURES AND LEASES
Nominal value payable	1,896,313
Present value payable	1,751,557
2022 | Leases
LOANS, FINANCING, DEBENTURES AND LEASES
Nominal value payable	1,670,508
Present value payable	1,470,364
2023 | Leases
LOANS, FINANCING, DEBENTURES AND LEASES
Nominal value payable	1,484,652
Present value payable	1,241,102
2024 | Leases
LOANS, FINANCING, DEBENTURES AND LEASES
Nominal value payable	1,086,093
Present value payable	856,502
2025 onwards | Leases
LOANS, FINANCING, DEBENTURES AND LEASES
Nominal value payable	2,696,282
Present value payable	R$ 1842361

LOANS, FINANCING, DEBENTURES _7

LOANS, FINANCING, DEBENTURES AND LEASES - Repayment schedule (Details) R$ in Thousands	Dec. 31, 2019BRL (R$)
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	R$ 9698183
Loans and financing
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	24,985
Financing - Suppliers
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	97
Debentures
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	2,027,167
Leases
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	7,161,886
Contingent Consideration
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	484,048
2021
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	2,793,805
2021 | Loans and financing
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	14,984
2021 | Financing - Suppliers
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	97
2021 | Debentures
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	1,027,167
2021 | Leases
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	1,751,557
2022
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	2,480,360
2022 | Loans and financing
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	9,996
2022 | Debentures
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	1,000,000
2022 | Leases
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	1,470,364
2023
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	1,241,107
2023 | Loans and financing
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	5
2023 | Leases
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	1,241,102
2024
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	856,502
2024 | Leases
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	856,502
2025 onwards
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	2,326,409
2025 onwards | Leases
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	1,842,361
2025 onwards | Contingent Consideration
LOANS, FINANCING, DEBENTURES AND LEASES
Repayments	R$ 484048

LOANS, FINANCING, DEBENTURES _8

LOANS, FINANCING, DEBENTURES AND LEASES - Changes (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
LOANS, FINANCING, DEBENTURES AND LEASES
Balance at beginning of the period	R$ 6139437	R$ 8461841
Initial adoption IFRS 16 (Note 2.f)	8,618,072
Additions	2,771,254	525,069
Government grants (Note 21)	15,787	(40)
Financial charges (Note 27)	830,686	510,398	R$ 932727
Issue costs	1,400	1,471
Foreign exchange variation (Note 27)	(1,104)	28,848
Write-offs (payments)	(4,443,646)	(3,388,150)
Write-offs (cancellation of contracts)	(107,213)
Balance at end of the period	13,824,673	6,139,437	8,461,841
Loans and financing
LOANS, FINANCING, DEBENTURES AND LEASES
Balance at beginning of the period	1,582,570	2,502,346
Government grants (Note 21)	15,787	(40)
Financial charges (Note 27)	111,013	169,771
Foreign exchange variation (Note 27)	(1,104)	28,848
Write-offs (payments)	(1,659,416)	(1,118,355)
Balance at end of the period	48,850	1,582,570	2,502,346
Debentures
LOANS, FINANCING, DEBENTURES AND LEASES
Balance at beginning of the period	3,173,910	4,520,739
Financial charges (Note 27)	197,386	242,415
Issue costs	1,400	1,471
Write-offs (payments)	(268,346)	(1,590,715)
Balance at end of the period	3,104,350	3,173,910	4,520,739
Leases
LOANS, FINANCING, DEBENTURES AND LEASES
Balance at beginning of the period	393,027	385,460
Initial adoption IFRS 16 (Note 2.f)	8,618,072
Additions	1,803,941	18,672
Financial charges (Note 27)	457,985	45,501
Write-offs (payments)	(1,974,661)	(56,606)
Write-offs (cancellation of contracts)	(107,213)
Balance at end of the period	9,191,151	393,027	385,460
Financing - Suppliers
LOANS, FINANCING, DEBENTURES AND LEASES
Balance at beginning of the period	524,244	607,152
Additions	967,313	506,397
Financial charges (Note 27)	45,940	33,169
Write-offs (payments)	(541,223)	(622,474)
Balance at end of the period	996,274	524,244	607,152
Contingent Consideration
LOANS, FINANCING, DEBENTURES AND LEASES
Balance at beginning of the period	465,686	446,144
Financial charges (Note 27)	18,362	19,542
Balance at end of the period	R$ 484048	R$ 465686	R$ 446144

LOANS, FINANCING, DEBENTURES _9

LOANS, FINANCING, DEBENTURES AND LEASES - Summary of Funding and Payments (Details) R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)item	Dec. 31, 2018BRL (R$)	Dec. 31, 2017BRL (R$)
LOANS, FINANCING, DEBENTURES AND LEASES
Additions	R$ 11389326	R$ 525069
Write-offs (payments), Principal	(3,696,660)	(2,893,219)	R$ 4485495
Write-offs (payments), Financial charges	(746,986)	(494,931)	R$ 859586
Write-offs (payments), Total	(4,443,646)	(3,388,150)
Loans and financing
LOANS, FINANCING, DEBENTURES AND LEASES
Write-offs (payments), Principal	(1,564,258)	(961,687)
Write-offs (payments), Financial charges	(95,158)	(156,668)
Write-offs (payments), Total	(1,659,416)	(1,118,355)
Financing - BNDES FINEM - Contract 14.2.1192.1 maturing 1/15/2023 (Selic)
LOANS, FINANCING, DEBENTURES AND LEASES
Write-offs (payments), Principal	(1,549,335)	(946,763)
Write-offs (payments), Financial charges	(91,939)	(152,447)
Write-offs (payments), Total	(1,641,274)	(1,099,210)
BNB
LOANS, FINANCING, DEBENTURES AND LEASES
Write-offs (payments), Principal	(14,923)	(14,924)
Write-offs (payments), Financial charges	(3,219)	(4,221)
Write-offs (payments), Total	(18,142)	(19,145)
Debentures
LOANS, FINANCING, DEBENTURES AND LEASES
Write-offs (payments), Principal	(66,830)	(1,324,723)
Write-offs (payments), Financial charges	(201,516)	(265,992)
Write-offs (payments), Total	R$ 268346	(1,590,715)
4th issue - Series 3
LOANS, FINANCING, DEBENTURES AND LEASES
Write-offs (payments), Financial charges		(1,583)
Write-offs (payments), Total		(1,583)
Number of debentures | item	810,000
1st issue - Minas Comunica
LOANS, FINANCING, DEBENTURES AND LEASES
Write-offs (payments), Principal	R$ 25583	(24,723)
Write-offs (payments), Financial charges	(1,761)	(1,082)
Write-offs (payments), Total	R$ 27344	(25,805)
Number of debentures | item	5,550
4th issue
LOANS, FINANCING, DEBENTURES AND LEASES
Write-offs (payments), Principal	R$ 41247	(1,300,000)
Write-offs (payments), Financial charges	(1,650)	(47,257)
Write-offs (payments), Total	(42,897)	(1,347,257)
5th issue
LOANS, FINANCING, DEBENTURES AND LEASES
Write-offs (payments), Financial charges	(135,242)	(149,795)
Write-offs (payments), Total	R$ 135242	(149,795)
Number of debentures | item	200,000
6th issue
LOANS, FINANCING, DEBENTURES AND LEASES
Write-offs (payments), Financial charges	R$ 62863	(66,275)
Write-offs (payments), Total	R$ 62863	(66,275)
Number of debentures | item	100,000
Financing - Suppliers
LOANS, FINANCING, DEBENTURES AND LEASES
Additions	R$ 967313	506,397
Write-offs (payments), Principal	(506,407)	(571,434)
Write-offs (payments), Financial charges	(34,816)	(51,040)
Write-offs (payments), Total	(541,223)	(622,474)
Leases
LOANS, FINANCING, DEBENTURES AND LEASES
Additions	10,422,013	18,672
Write-offs (payments), Principal	(1,559,165)	(35,375)
Write-offs (payments), Financial charges	(415,496)	(21,231)
Write-offs (payments), Total	R$ 1974661	R$ 56606

DEFERRED INCOME (Details)

DEFERRED INCOME (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
DEFERRED INCOME
Disposal of PP&E	R$ 94383	R$ 89835
Government grants	61,613	94,335
Contractual Liabilities - IFRS 15	499,035	532,207
Other	63,051	59,658
Total	718,082	776,035
Current	506,181	525,509
Non-current	R$ 211901	R$ 250526

DEFERRED INCOME - Changes in co

DEFERRED INCOME - Changes in contractual liabilities (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
DEFERRED INCOME
Balance at the beginning of period	R$ 532207
Initial adoption on 01.01.18			R$ 178897
Reclassification on 01.01.18			R$ 383688
Additions	6,762,607	R$ 7271614
Write-offs, net	(6,795,779)	(7,301,992)
Balance at the end of period	499,035	R$ 532207
Current	468,776
Non-current	R$ 30259

DEFERRED INCOME - Expected peri

DEFERRED INCOME - Expected periods of realization of contractual liabilities (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
DEFERRED INCOME
Total	R$ 499035	R$ 532207
2020
DEFERRED INCOME
Total	468,776
2021
DEFERRED INCOME
Total	11,342
2022
DEFERRED INCOME
Total	3,468
2023
DEFERRED INCOME
Total	3,468
2024
DEFERRED INCOME
Total	3,468
2025 onwards
DEFERRED INCOME
Total	R$ 8513

OTHER LIABILITIES (Details)

OTHER LIABILITIES (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
OTHER LIABILITIES
Liabilities with ANATEL	R$ 300119	R$ 346950
Liabilities with related parties (Note 28)	30,114	31,716
Third-party withholdings	222,056	120,711
Surplus from post-employment benefit plans (Note 30)	1,155,067	679,478
Amounts to be refunded to subscribers	43,794	56,897
Other liabilities	36,781	61,957
Total	1,787,931	1,297,709
Current	365,192	368,376
Noncurrent	R$ 1422739	R$ 929333

EQUITY - Capital (Details)

EQUITY - Capital (Details) - shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
EQUITY
Authorized capital	1,850,000,000
Preferred shares
EQUITY
Percentage of increase in amount allocated to common share	10.00%	10.00%	10.00%
Number of consecutive financial years to which minimum dividend to be paid	3 years
Maximum | Preferred shares
EQUITY
Proportion of non-vesting or restricted-voting preferred shares as percentage of total shares	0.67%

EQUITY - Distribution of capita

EQUITY - Distribution of capital (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
EQUITY
Capital	R$ 63571416	R$ 63571416
Total shares outstanding	1,688,693,776
Capital
EQUITY
Number	1,690,984,923
Percentage of shares issued	100.00%
Capital | Controlling Group
EQUITY
Number	1,244,241,119
Percentage of shares issued	73.58%
Capital | Telefnica Latinoamrica Holding
EQUITY
Number	407,279,213
Percentage of shares issued	24.09%
Capital | Telefonica
EQUITY
Number	503,329,803
Percentage of shares issued	29.76%
Capital | SP Telecomunicacoes Participacoes
EQUITY
Number	332,695,590
Percentage of shares issued	19.67%
Capital | Telefonica Chile
EQUITY
Number	936,513
Percentage of shares issued	0.06%
Capital | Other shareholders
EQUITY
Number	444,452,657
Percentage of shares issued	26.28%
Treasury shares
EQUITY
Number	2,291,147
Percentage of shares issued	0.14%
Treasury Shares	(2,291,147)
Common shares
EQUITY
Treasury Shares	(2,290,164)	(2,290,164)
Total shares outstanding	569,354,053
Common shares | Capital
EQUITY
Number	571,644,217
Percentage of shares issued	100.00%
Common shares | Capital | Controlling Group
EQUITY
Number	540,033,264
Percentage of shares issued	94.47%
Common shares | Capital | Telefnica Latinoamrica Holding
EQUITY
Number	46,746,635
Percentage of shares issued	8.18%
Common shares | Capital | Telefonica
EQUITY
Number	198,207,608
Percentage of shares issued	34.67%
Common shares | Capital | SP Telecomunicacoes Participacoes
EQUITY
Number	294,158,155
Percentage of shares issued	51.46%
Common shares | Capital | Telefonica Chile
EQUITY
Number	920,866
Percentage of shares issued	0.16%
Common shares | Capital | Other shareholders
EQUITY
Number	29,320,789
Percentage of shares issued	5.13%
Common shares | Treasury shares
EQUITY
Number	2,290,164
Percentage of shares issued	0.40%
Treasury Shares	(2,290,164)
Preferred shares
EQUITY
Treasury Shares	(983)	(983)
Total shares outstanding	1,119,339,723
Preferred shares | Capital
EQUITY
Number	1,119,340,706
Percentage of shares issued	100.00%
Preferred shares | Capital | Controlling Group
EQUITY
Number	704,207,855
Percentage of shares issued	62.91%
Preferred shares | Capital | Telefnica Latinoamrica Holding
EQUITY
Number	360,532,578
Percentage of shares issued	32.21%
Preferred shares | Capital | Telefonica
EQUITY
Number	305,122,195
Percentage of shares issued	27.26%
Preferred shares | Capital | SP Telecomunicacoes Participacoes
EQUITY
Number	38,537,435
Percentage of shares issued	3.44%
Preferred shares | Capital | Telefonica Chile
EQUITY
Number	15,647
Percentage of shares issued	0.00%
Preferred shares | Capital | Other shareholders
EQUITY
Number	415,131,868
Percentage of shares issued	37.09%
Preferred shares | Treasury shares
EQUITY
Number	983
Percentage of shares issued	0.00%
Treasury Shares	(983)

EQUITY - Capital reserves (Deta

EQUITY - Capital reserves (Details) - BRL (R$) R$ in Thousands	Mar. 12, 2015	Dec. 31, 2019	Dec. 31, 2018
EQUITY
Cancelation of treasury shares according to the Special Shareholders' Meeting (SGM) of 3/12/15 (in shares)	2,332,686
Preferred shares
EQUITY
Transfer of lawsuits concerning judicial proceedings (in shares)		62	62
Other capital reserves
EQUITY
Excess of value in the issue or capitalization		R$ 2735930	R$ 2735930
Cancelation of treasury shares according to the Special Shareholders' Meeting of 3/12/15		(112,107)	(112,107)
Direct costs on capital increase (net of taxes) according to the Special Shareholders Meeting of 04/30/15		(62,433)	(62,433)
Incorporation of shares of GVTPart		(1,188,707)	(1,188,707)
Effects of the acquisition		2	2
Total		1,190,209	1,238,278
Special goodwill reserve
EQUITY
Tax benefit generated by merger		63,074	63,074
Telefonica Data S.A. (TData) | Other capital reserves
EQUITY
Effects of the acquisition		(59,029)	(59,029)
Terra Networks | Other capital reserves
EQUITY
Effects of the acquisition		76	10
Lemontree and GTR and Tglog | Other capital reserves
EQUITY
Effects of the acquisition		(75,388)	R$ 75388
Telefnica Infraestrutura e Segurana Ltda | Other capital reserves
EQUITY
Effects of the acquisition		R$ 48135

EQUITY - Capital reserves - Tre

EQUITY - Capital reserves - Treasury Shares (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
EQUITY
Gain or loss on equity instruments	R$ 0
Balance	R$ 87820	R$ 87820
Common shares
EQUITY
Balance (in shares)	2,290,164	2,290,164
Preferred shares
EQUITY
Balance (in shares)	983	983
Treasury shares
EQUITY
Balance (in shares)	2,291,147
Treasury shares | Common shares
EQUITY
Balance (in shares)	2,290,164
Treasury shares | Preferred shares
EQUITY
Balance (in shares)	983

EQUITY - Legal Reserve and Inco

EQUITY - Legal Reserve and Income reserves (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
EQUITY
Revenue reserve (as a percent)	5.00%
Maximum percentage of revenue reserved in paid-in capital	20.00%
Balance	R$ 4324170
Balance	3,492,387	R$ 4324170
Income reserves
EQUITY
Balance	4,324,170	2,463,228
Reversal of reserves	(1,700,000)	(297,000)
Recording of reserves	868,217	2,157,942
Balance	3,492,387	4,324,170	R$ 2463228
Legal reserve
EQUITY
Balance	2,584,757	2,138,344
Recording of reserves	250,051	446,413
Balance	2,834,808	2,584,757	2,138,344
Expansion and modernization reserve
EQUITY
Balance	1,700,000	297,000
Reversal of reserves	(1,700,000)	(297,000)	(550,000)
Recording of reserves	600,000	1,700,000
Balance	600,000	1,700,000	297,000
Tax incentive reserve
EQUITY
Balance	39,413	27,884
Recording of reserves	18,166	11,529
Balance	R$ 57579	R$ 39413	R$ 27884

EQUITY - Interim dividend and i

EQUITY - Interim dividend and interest on equity (Details) - BRL (R$) R$ / shares in Units, R$ in Thousands	Apr. 11, 2019	Jan. 01, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
EQUITY
Allocation of income to additional dividend proposed	R$ 2468684
Net income for the year			R$ 5001014	R$ 8928258	R$ 4608790
Allocation to legal reserve			(250,051)	(446,413)
Tax incentives - not distributable			(18,166)	(11,529)
Adjusted net income			4,732,797	8,470,316
Dividend and IOE distributed for the year:			(3,588,000)	(4,550,000)	R$ 2416639
Interest on equity (gross)			(2,588,000)	(4,550,000)
Interim dividends			(1,000,000)
Balance of unallocated net income			1,144,797	3,920,316
Reversal special reserve for modernization and expansion			1,700,000	297,000
Effects of the initial adoption of IFRS 9 and 15, net of taxes in 01.01.18		R$ 138663		(138,663)
Unclaimed dividends and interest on equity			82,898	152,770
Actuarial gains (losses) recognized and effect of limitation of surplus plan assets, net of taxes and other changes			(132,120)	(62,739)
Income available to be distributed			2,795,575	4,168,684
Proposal for Distributions: Special reserve for modernization and expansion			600,000	1,700,000
Proposal for Distributions: Additional proposed dividends			2,195,575	2,468,684
Proposed additional dividends - Net income for the year			495,575	2,171,684
Proposed additional dividends - Based on prior year's net income, referring to the reversal of the special reserve for expansion and modernization			R$ 1700000	R$ 297000
Mandatory minimum dividend - as percentage of adjusted net income			25.00%	25.00%
Mandatory minimum dividend - 25% of adjusted net income			R$ 1183199	R$ 2117579
Common shares
EQUITY
Dividend and IOE distributed for the year:			R$ 1134517	R$ 1438699
Total proposed for deliberation - per share			R$ 1.219339	R$ 1.371013
Preferred shares
EQUITY
Dividend and IOE distributed for the year:			R$ 2453483	R$ 3111301
Total proposed for deliberation - per share			R$ 1.341273	R$ 1.508114
Percentage of increase in amount allocated to common share			10.00%	10.00%	10.00%

EQUITY - Allocation of interim

EQUITY - Allocation of interim dividend and interest on equity (Details) - BRL (R$) R$ / shares in Units, R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
EQUITY
Total, Gross	R$ 3588000	R$ 4550000	R$ 2416639
IOE, net	3,199,800	3,867,500
Reversal of unclaimed dividends and interest on equity	82,898	152,770
02/15/2019
EQUITY
Total, Gross	700,000
IOE, net	595,000
04/17/2019
EQUITY
Total, Gross	570,000
IOE, net	484,500
06/17/2019
EQUITY
Total, Gross	968,000
IOE, net	822,800
12/19/2019
EQUITY
Total, Gross	350,000
Dividends, net	1,000,000
IOE, net	297,500
6/18/2018
EQUITY
Total, Gross		400,000
IOE, net		340,000
9/5/2018
EQUITY
Total, Gross		2,800,000
IOE, net		2,380,000
12/4/2018
EQUITY
Total, Gross		1,350,000
IOE, net		1,147,500
Common shares
EQUITY
Total, Gross	1,134,517	1,438,699
IOE, net	1,011,769	1,222,894
Common shares | 02/15/2019
EQUITY
Total, Gross	221,338
IOE, net	R$ 188137
IOE, per share	R$ 0.33044031480
Common shares | 04/17/2019
EQUITY
Total, Gross	R$ 180233
IOE, net	R$ 153198
IOE, per share	R$ 0.26907282777
Common shares | 06/17/2019
EQUITY
Total, Gross	R$ 306079
IOE, net	R$ 260167
IOE, per share	R$ 0.45695174961
Common shares | 12/19/2019
EQUITY
Total, Gross	R$ 110669
Dividends, net	316,198
IOE, net	R$ 94069
Dividends, per share	R$ 0.55536187362
IOE, per share	R$ 0.16522015740
Common shares | 6/18/2018
EQUITY
Total, Gross		126,479
IOE, net		R$ 107507
IOE, per share		R$ 0.18882303703
Common shares | 9/5/2018
EQUITY
Total, Gross		R$ 885353
IOE, net		R$ 752550
IOE, per share		R$ 1.32176125923
Common shares | 12/4/2018
EQUITY
Total, Gross		R$ 426867
IOE, net		R$ 362837
IOE, per share		R$ 0.63727774998
Preferred shares
EQUITY
Total, Gross	R$ 2453483	R$ 3111301
IOE, net	R$ 2188031	R$ 2644606
Percentage of increase in amount allocated to common share	10.00%	10.00%	10.00%
Preferred shares | 02/15/2019
EQUITY
Total, Gross	R$ 478662
IOE, net	R$ 406863
IOE, per share	R$ 0.36348434628
Preferred shares | 04/17/2019
EQUITY
Total, Gross	R$ 389767
IOE, net	R$ 331302
IOE, per share	R$ 0.29598011054
Preferred shares | 06/17/2019
EQUITY
Total, Gross	R$ 661921
IOE, net	R$ 562633
IOE, per share	R$ 0.50264692458
Preferred shares | 12/19/2019
EQUITY
Total, Gross	R$ 239331
Dividends, net	683,802
IOE, net	R$ 203431
Dividends, per share	R$ 0.61089806098
IOE, per share	R$ 0.18174217314
Preferred shares | 6/18/2018
EQUITY
Total, Gross		R$ 273521
IOE, net		R$ 232493
IOE, per share		R$ 0.20770534073
Preferred shares | 9/5/2018
EQUITY
Total, Gross		R$ 1914647
IOE, net		R$ 1627450
IOE, per share		R$ 1.45393738515
Preferred shares | 12/4/2018
EQUITY
Total, Gross		R$ 923133
IOE, net		R$ 784663
IOE, per share		R$ 0.70100552498

EQUITY - Changes in other compr

EQUITY - Changes in other comprehensive income (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Changes in other comprehensive income
Balance	R$ 29225	R$ 21328
Translation gains	1,859	9,927
Losses from future contracts	(336)	(1,618)
Gains (Losses) on financial assets at fair value through other comprehensive income	(11)	(412)
Balance	30,737	29,225
Financial assets at fair value through other comprehensive income
Changes in other comprehensive income
Balance	(9,070)	(8,658)
Gains (Losses) on financial assets at fair value through other comprehensive income	(11)	(412)
Balance	(9,081)	(9,070)
Derivative transactions
Changes in other comprehensive income
Balance	336	1,954
Losses from future contracts	(336)	(1,618)
Balance		336
Currency translation effects - foreign investments
Changes in other comprehensive income
Balance	37,959	28,032
Translation gains	1,859	9,927
Balance	R$ 39818	R$ 37959

EQUITY - Company Share Repurcha

EQUITY - Company Share Repurchase Program (Details) - shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Common shares
EQUITY
Shares to be acquired under repurchase program	0	583,422
Preferred shares
EQUITY
Shares to be acquired under repurchase program	0	37,736,465

EQUITY - Earnings per share (De

EQUITY - Earnings per share (Details) - BRL (R$) R$ / shares in Units, shares in Thousands, R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
EQUITY
Net income for the year	R$ 5001014	R$ 8928258	R$ 4608790
Weighted average number of outstanding shares for the year	1,688,694	1,688,694	1,688,694
Common shares
EQUITY
Net income for the year	R$ 1581308	R$ 2823093	R$ 1457288
Weighted average number of outstanding shares for the year	569,354	569,354	569,354
Basic and diluted earnings per share	R$ 2.78	R$ 4.96	R$ 2.56
Preferred shares
EQUITY
Net income for the year	R$ 3419706	R$ 6105165	R$ 3151502
Weighted average number of outstanding shares for the year	1,119,340	1,119,340	1,119,340
Basic and diluted earnings per share	R$ 3.06	R$ 5.45	R$ 2.82

NET OPERATING REVENUE (Details)

NET OPERATING REVENUE (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Revenue breakdown
Gross operating revenue	R$ 66571866	R$ 65794397	R$ 66243174
Deductions from gross operating revenue	(22,303,695)	(22,331,657)	(23,036,342)
Taxes	(13,894,361)	(14,559,915)	(16,058,584)
Discounts granted and return of goods	(8,409,334)	(7,771,742)	(6,977,758)
Net operating revenue	44,268,171	43,462,740	43,206,832
Services
Revenue breakdown
Gross operating revenue	60,129,579	61,292,362	62,696,433
Taxes	(12,678,809)	(13,820,784)	(15,468,315)
Discounts granted and return of goods	(6,319,584)	(6,288,941)	(5,340,476)
Net operating revenue	41,131,186	41,182,637	41,887,642
Sale of goods
Revenue breakdown
Gross operating revenue	6,442,287	4,502,035	3,546,741
Taxes	(1,215,552)	(739,131)	(590,269)
Discounts granted and return of goods	(2,089,750)	(1,482,801)	(1,637,282)
Net operating revenue	R$ 3136985	R$ 2280103	R$ 1319190

OPERATING COSTS AND EXPENSES (D

OPERATING COSTS AND EXPENSES (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
OPERATING COSTS AND EXPENSES
Personnel (1)	R$ 3757552	R$ 3996140	R$ 3725767
Third-party services (2)	(14,442,862)	(14,883,457)	(15,703,568)
Rental, insurance, condominium and connection means (3)	(1,523,977)	(3,307,983)	(2,980,561)
Taxes, charges and contributions (4)	(1,670,003)	(1,661,661)	(1,866,593)
Estimated impairment losses on accounts receivable (Note 4)	(1,682,348)	(1,533,660)	(1,481,015)
Depreciation and amortization (5)	(10,919,792)	(8,368,623)	(7,853,734)
Cost of goods sold	(3,156,964)	(2,406,099)	(1,955,890)
Material and other operating costs and expenses	(204,767)	(299,855)	(284,981)
Total	(37,358,265)	(36,457,478)	(35,852,109)
Depreciation on lease	1,913,241	29,631	30,291
Non-cumulative PIS and COFINS			1,267
Cost of sales and services
OPERATING COSTS AND EXPENSES
Personnel (1)	(758,780)	(872,032)	(845,358)
Third-party services (2)	(6,601,587)	(6,656,924)	(7,032,252)
Rental, insurance, condominium and connection means (3)	(1,388,217)	(2,957,489)	(2,624,405)
Taxes, charges and contributions (4)	(1,597,066)	(1,594,836)	(1,792,764)
Depreciation and amortization (5)	(8,624,228)	(6,487,909)	(5,963,153)
Cost of goods sold	(3,156,964)	(2,406,099)	(1,955,890)
Material and other operating costs and expenses	(32,105)	(50,478)	(58,708)
Total	(22,158,947)	(21,025,767)	(20,272,530)
Selling expenses
OPERATING COSTS AND EXPENSES
Personnel (1)	(2,568,363)	(2,574,498)	(2,387,314)
Third-party services (2)	(6,686,452)	(6,989,006)	(7,438,937)
Rental, insurance, condominium and connection means (3)	(78,401)	(147,613)	(151,455)
Taxes, charges and contributions (4)	(41,810)	(30,703)	(39,050)
Estimated impairment losses on accounts receivable (Note 4)	(1,682,348)	(1,533,660)	(1,481,015)
Depreciation and amortization (5)	(1,501,096)	(1,352,638)	(1,433,297)
Material and other operating costs and expenses	(142,752)	(204,623)	(205,406)
Total	(12,701,222)	(12,832,741)	(13,136,474)
General and administrative expenses
OPERATING COSTS AND EXPENSES
Personnel (1)	(430,409)	(549,610)	(493,095)
Third-party services (2)	(1,154,823)	(1,237,527)	(1,232,379)
Rental, insurance, condominium and connection means (3)	(57,359)	(202,881)	(204,701)
Taxes, charges and contributions (4)	(31,127)	(36,122)	(34,779)
Depreciation and amortization (5)	(794,468)	(528,076)	(457,284)
Material and other operating costs and expenses	(29,910)	(44,754)	(20,867)
Total	R$ 2498096	R$ 2598970	R$ 2443105

OTHER OPERATING INCOME (EXPEN_3

OTHER OPERATING INCOME (EXPENSES) - Summary of other operating income (expenses) (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
OTHER OPERATING INCOME (EXPENSES), NET
Recovered expenses and fines (1)	R$ 503777	R$ 3962150	R$ 355415
Provisions for labor, tax and civil contingencies (Note 19) (2)	(625,480)	(1,258,966)	(999,419)
Net gain (loss) on asset disposal/loss	408,160	114,853	108,767
Other operating income (expenses)	17,561	(367,115)	(187,249)
Total	304,018	2,450,922	(722,486)
Other operating income	929,498	4,077,003	464,182
Other operating expenses	R$ 625480	R$ 1626081	R$ 1186668

OTHER OPERATING INCOME (EXPEN_4

OTHER OPERATING INCOME (EXPENSES) - Sale of assets (Details) R$ in Thousands	12 Months Ended
	Dec. 31, 2018BRL (R$)
OTHER OPERATING INCOME (EXPENSES), NET
Tax credits arising from final court proceeding in favor of the Company and its subsidiary	R$ 3386433
Write-off of judicial deposits included in provision for labor, tax and civil contingencies	R$ 160715

FINANCIAL INCOME (EXPENSES) (De

FINANCIAL INCOME (EXPENSES) (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
FINANCIAL INCOME (EXPENSES)
Interest income	R$ 272158	R$ 246083	R$ 655474
Interest receivable (customers, taxes and other)	177,636	118,476	124,391
Gain on derivative transactions (Note 31)	315,351	305,996	373,971
Foreign exchange variations on loans and financing (Note 20)	5,140	32,326	113,203
Other revenues from foreign exchange and monetary variation	209,447	3,341,211	406,013
Other financial income	153,138	68,548	82,906
Total	1,132,870	4,112,640	1,755,958
Loan, financing, debenture and finance lease charges (Note 20)	(830,686)	(510,398)	(932,727)
Foreign exchange variation on loans and financing (Note 20)	(4,036)	(61,174)	(129,049)
Loss on derivative transactions (Note 31)	(263,388)	(295,208)	(415,956)
Interest payable (financial institutions, provisions, trade accounts payable, taxes and other)	(144,779)	(186,238)	(136,425)
Other expenses with foreign exchange and monetary variation	(615,291)	(963,463)	(876,948)
IOF, PIS, Cofins and other financial expenses	(94,831)	(269,006)	(167,897)
Total	(1,953,011)	(2,285,487)	(2,659,002)
Financial income (expenses), net	(820,141)	1,827,153	(903,044)
Tax credit value included in other revenues from foreign exchange and monetary variation		2,926,247
PIS and COFINS for indexation for inflation credits, included in other financial expenses		136,070
Leases charges	R$ 45798	R$ 45501	R$ 45265

BALANCES AND TRANSACTIONS WIT_3

BALANCES AND TRANSACTIONS WITH RELATED PARTIES - Balance Sheet (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Cash and cash equivalents	R$ 59657	R$ 46755
Accounts receivable	129,904	148,814
Prepaid expenses	3,738
Other assets and prepaid expenses	68,704
Other assets	64,966	120,776
Other current assets	64,471	114,715
Other noncurrent assets	495	6,061
Trade accounts payable and other payables	405,271	383,512
Trade accounts payable and other payables	405,271	383,512
Leases, current	480,381
Other liabilities	30,114	31,716
Other liabilities and leases	510,495
Other liabilities, current	29,529	22,220
Other liabilities, non-current	585	9,496
Parent
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	10,879	9,300
Other assets and prepaid expenses	47,584
Other assets		100,227
Trade accounts payable and other payables	2,907	687
Other liabilities		23,294
Other liabilities and leases	23,564
SP Telecomunicacoes Participacoes
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	6
Other assets and prepaid expenses	4,924
Other assets		10,083
Other liabilities		21,901
Other liabilities and leases	23,524
Telefonica LatinoAmerica Holding
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Other assets and prepaid expenses	40,105
Other assets		60,387
Telefonica
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	10,873	9,300
Other assets and prepaid expenses	2,555
Other assets		29,757
Trade accounts payable and other payables	2,907	687
Other liabilities		1,393
Other liabilities and leases	40
Other Group companies
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Cash and cash equivalents	59,657	46,755
Accounts receivable	119,025	139,514
Other assets and prepaid expenses	21,120
Other assets		20,549
Trade accounts payable and other payables	402,364	382,825
Other liabilities		8,422
Other liabilities and leases	486,931
Colombia Telecomunicaciones
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	159	1,334
Other assets and prepaid expenses	520
Other assets		520
Trade accounts payable and other payables	816	1,056
Telefonica International Wholesale Services
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	1,961	903
Other assets and prepaid expenses	3,602
Other assets		4,051
Trade accounts payable and other payables	44,835	44,693
Other liabilities		318
Other liabilities and leases	318
T.O2 Germany GMBH CO. OHG
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	1,688	20,877
Trade accounts payable and other payables	5,000	5,706
Telefonica Venezolana
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	6,498	5,926
Other assets and prepaid expenses	2,196
Other assets		2,196
Trade accounts payable and other payables	6,044	5,410
Telefonica Digital Espana
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	696	197
Other assets and prepaid expenses	300
Other assets		294
Trade accounts payable and other payables	68,015	43,340
Telefonica Factoring do Brasil
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	2,782	6,360
Other assets and prepaid expenses	45
Other assets		133
Other liabilities		2,770
Other liabilities and leases	4,057
Telefonica Global Technology
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Trade accounts payable and other payables	28,854	28,750
Telefonica Inteligencia e Seguranca Brasil
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable		800
Other assets		986
Trade accounts payable and other payables		52,184
Other liabilities		27
Telefonica International Wholesale Services Espanha
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	58,490	46,537
Trade accounts payable and other payables	66,976	26,097
Telefonica Servicos de Ensino
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	153	286
Other assets and prepaid expenses	14
Trade accounts payable and other payables	8,373	22,518
Telefonica Moviles Argentina
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	5,145	5,074
Trade accounts payable and other payables	3,638	4,160
Telefonica Moviles Espanha
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	1,536	7,576
Trade accounts payable and other payables	3,488	5,233
Telefonica USA
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	5,319	9,005
Trade accounts payable and other payables	16,015	4,411
Other liabilities		200
Other liabilities and leases	267
Telfisa Global BV
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Cash and cash equivalents	59,657	46,755
Telxius Cable Brasil
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	11,382	11,628
Other assets and prepaid expenses	5,100
Other assets		5,295
Trade accounts payable and other payables	47,168	39,662
Other liabilities		2,067
Other liabilities and leases	1,572
Telxius Torres Brasil
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	5,429	6,776
Other assets and prepaid expenses	6,611
Other assets		4,268
Trade accounts payable and other payables	30,018	38,735
Other liabilities		1,926
Other liabilities and leases	480,589
Terra Networks Chile, Terra Networks Mxico, Terra Networks Per, Terra Networks Argentina and Terra Networks Colmbia
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	5,598	5,341
Trade accounts payable and other payables	7,105	1,766
Fundacao Telefonica
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Other liabilities		82
Other liabilities and leases	86
Media Networks Latina America SAC
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Trade accounts payable and other payables	9,245	10,212
Telefonica Compras Electronicas
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Trade accounts payable and other payables	28,169	32,582
Other
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Accounts receivable	12,189	10,894
Other assets and prepaid expenses	2,732
Other assets		2,806
Trade accounts payable and other payables	28,605	16,310
Other liabilities		R$ 1032
Other liabilities and leases	R$ 42

BALANCES AND TRANSACTIONS WIT_4

BALANCES AND TRANSACTIONS WITH RELATED PARTIES - Income Statement (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	R$ 84542	R$ 126038	R$ 90398
Cost and other expenses (revenues) operating	(1,258,289)	(1,289,791)	(1,058,207)
Financial result	(42,070)	(10,559)	3,784
Parent
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	5
Cost and other expenses (revenues) operating	(404,152)	(356,877)	(294,893)
Financial result	(4,375)	(7,603)	10,034
SP Telecomunicacoes Participacoes
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	5
Cost and other expenses (revenues) operating	497	347	268
Telefonica LatinoAmerica Holding
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Cost and other expenses (revenues) operating	18,309	16,466	36,523
Financial result	851	9,077	11,030
Telefonica
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Cost and other expenses (revenues) operating	(422,958)	(373,690)	(331,684)
Financial result	(5,226)	(16,680)	(996)
Other Group companies
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	84,537	126,038	90,398
Cost and other expenses (revenues) operating	(854,137)	(932,914)	(763,314)
Financial result	(37,695)	(2,956)	(6,250)
Colombia Telecomunicaciones
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	111	250	349
Cost and other expenses (revenues) operating	321	(4,280)	(10)
Financial result	(17)	(2,145)	604
Companhia AIX de Participacoes
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	38	75	36
Cost and other expenses (revenues) operating	(24,174)	(22,645)	(22,738)
Telefonica International Wholesale Services
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	757	2,006	601
Cost and other expenses (revenues) operating	(104,105)	(101,272)	(57,177)
Financial result	(54)
Fundacao Telefonica
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Cost and other expenses (revenues) operating	(11,971)	(12,223)	(11,395)
Media Networks Latina America SAC
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Cost and other expenses (revenues) operating	(41,023)	(34,791)	(33,133)
Financial result	(596)	(1,007)	(516)
Telefonica Moviles Espanha
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	410	(209)	1,048
Cost and other expenses (revenues) operating	(1,737)	(4,166)	(1,969)
Financial result	545
Telefonica Servicos de Ensino
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	1,085	1,158	292
Cost and other expenses (revenues) operating	(35,228)	(49,130)	(54,781)
T.O2 Germany GMBH CO. OHG
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	(100)	148	75
Cost and other expenses (revenues) operating	489	(1,975)	(1,409)
Financial result	1,845
Telefonica Compras Electronicas
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Cost and other expenses (revenues) operating	(30,814)	(34,534)	(29,062)
Telefonica Digital Espana
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	299
Cost and other expenses (revenues) operating	(127,182)	(124,537)	(81,893)
Financial result	(3,016)	(813)	(2,600)
Telefonica Factoring do Brasil
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	2,418	2,416	69
Cost and other expenses (revenues) operating	239	212	828
Financial result	(4,048)	2,601	61
Telefonica Global Technology, S.A.U.
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Cost and other expenses (revenues) operating	(63,947)	(36,738)	(36,395)
Financial result	388	(4,134)	40
Telefonica Inteligencia e Seguranca Brasil
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	591	1,568	706
Cost and other expenses (revenues) operating	(27,079)	(54,210)	(40,918)
Telefonica International Wholesale Services Espanha
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	48,819	53,357	56,728
Cost and other expenses (revenues) operating	(75,693)	(64,036)	(49,960)
Financial result	(4,128)	9,771	(2,564)
Telefonica Moviles Argentina
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	4,030	5,916	3,746
Cost and other expenses (revenues) operating	(3,437)	(3,437)	6,147
Financial result	90
Telefonica USA
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	38	1,518	2,392
Cost and other expenses (revenues) operating	(19,793)	(19,441)	(13,202)
Financial result	1,700	(539)	(2,185)
Telxius Cable Brasil
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	13,585	49,777	15,045
Cost and other expenses (revenues) operating	(252,436)	(206,095)	(200,537)
Financial result	(7,415)	(7,896)	787
Telxius Torres Brasil
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	3,652	3,218
Cost and other expenses (revenues) operating	756	(129,706)	(107,373)
Financial result	(24,144)
Terra Networks Chile, Terra Networks Mxico, Terra Networks Per, Terra Networks Argentina and Terra Networks Colmbia
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	2,535
Cost and other expenses (revenues) operating	(5,639)	(2,794)	1,072
Financial result	567	1,450	(59)
Other
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Operating revenues	6,269	4,840	9,311
Cost and other expenses (revenues) operating	(31,684)	(27,116)	(29,409)
Financial result	R$ 588	R$ 244	R$ 182

BALANCES AND TRANSACTIONS WIT_5

BALANCES AND TRANSACTIONS WITH RELATED PARTIES - Management compensation (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
BALANCES AND TRANSACTIONS WITH RELATED PARTIES
Key management personnel compensation	R$ 25483	R$ 26431
Salaries, benefits and social charges	16,758	17,493
Variable compensation	R$ 8725	R$ 8938

SHARE-BASED PAYMENT PLANS (Deta

SHARE-BASED PAYMENT PLANS (Details) € / shares in Units, € in Thousands, R$ in Thousands	Jun. 08, 2018	Dec. 31, 2019EUR (€)item€ / sharesshares	Dec. 31, 2019BRL (R$)itemshares	Dec. 31, 2018BRL (R$)
SHARE-BASED PAYMENT PLANS
Share price | € / shares		€ 6.2270
Expense from share-based payment transactions with employees | R$			R$ 10833	R$ 10433
Global Employee Share Plan ("GESP")
SHARE-BASED PAYMENT PLANS
Employee monthly contributions | €		€ 1,800
Acquisition period		12 years	12 years
Retention period		12 years	12 years
Number of purchased shares for which free shares will be granted | shares		2	2
Vesting period		2 years	2 years
Number of free shares entitled for every two purchased shares | shares		1	1
Global Employee Share Plan ("GESP") | Minimum
SHARE-BASED PAYMENT PLANS
Employee monthly contributions | €		€ 25
Global Employee Share Plan ("GESP") | Maximum
SHARE-BASED PAYMENT PLANS
Employee monthly contributions | €		€ 150
TFSP 2018-2020 cycle
SHARE-BASED PAYMENT PLANS
Number of active executives | item		158	158
Number of potential shares to be received | shares		113,250	113,250
TFSP 2019-2021 cycle
SHARE-BASED PAYMENT PLANS
Number of active executives | item		158	158
Number of potential shares to be received | shares		128,750	128,750
Talent future share plan
SHARE-BASED PAYMENT PLANS
Initial life of the plan	3 years	3 years	3 years
Perform Share Plan
SHARE-BASED PAYMENT PLANS
Initial life of the plan	3 years
PSP 2018-2020 cycle
SHARE-BASED PAYMENT PLANS
Number of active executives | item		102	102
Number of executives appointed under articles Bylaws | item		3	3
Number of potential shares to be received | shares		728,256	728,256
PSP 2019-2021 cycle
SHARE-BASED PAYMENT PLANS
Number of active executives | item		102	102
Number of executives appointed under articles Bylaws | item		3	3
Number of potential shares to be received | shares		997,477	997,477

PENSION PLANS AND OTHER POST-_3

PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS - Sponsored Plans by Type (Details) R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)installment	Dec. 31, 2018BRL (R$)
PBS Assisted Plan (PBS-A)
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Company's participation in distribution of reserves	R$ 215328
Number of monthly payments for distribution of reserves | installment	36
Proceeds from distribution of reserves	R$ 5981
VISAO Plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Contributions made by the Company and its subsidiaries	R$ 27963	R$ 39967

PENSION PLANS AND OTHER POST-_4

PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS - Reconciliation of net liabilities (assets) (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation of assets and liabilities:
Present value of DB plan obligations	R$ 4446092	R$ 3324512
Fair value of plan assets	4,698,026	3,762,994
Net liabilities (assets)	(251,934)	(438,482)
Net liabilities (assets)	934,128	668,481	R$ 522105
Current assets	(71,776)	0
Noncurrent assets	(149,163)	(10,997)
Current liabilities	25,557	19,667
Noncurrent liabilities	1,129,510	659,811
Post-retirement pension plans
Reconciliation of assets and liabilities:
Present value of DB plan obligations	2,429,478	2,011,355
Fair value of plan assets	3,696,914	2,999,669
Net liabilities (assets)	(1,267,436)	(988,314)
Net liabilities (assets)	(138,745)	68,368	67,148
Current assets	(71,776)	0
Noncurrent assets	(149,163)	(10,997)
Current liabilities	6,937	8,114
Noncurrent liabilities	75,257	71,251
Post-retirement health plans
Reconciliation of assets and liabilities:
Present value of DB plan obligations	2,016,614	1,313,157
Fair value of plan assets	1,001,112	763,325
Net liabilities (assets)	1,015,502	549,832
Net liabilities (assets)	1,072,873	600,113	454,957
Noncurrent assets	0	0
Current liabilities	18,620	11,553
Noncurrent liabilities	1,054,253	588,560
Asset Limitation
Reconciliation of assets and liabilities:
Net liabilities (assets)	1,186,062	1,106,963	921,617
Asset Limitation | Post-retirement pension plans
Reconciliation of assets and liabilities:
Net liabilities (assets)	1,128,691	1,056,682	791,177
Asset Limitation | Post-retirement health plans
Reconciliation of assets and liabilities:
Net liabilities (assets)	R$ 57371	R$ 50281	R$ 130440

PENSION PLANS AND OTHER POST-_5

PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS - Total expenses recognized in the income statement (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Current service cost	R$ 19448	R$ 16653	R$ 10650
Net interest on net actuarial assets/liabilities	62,325	51,966	34,583
Total	81,773	68,619	45,233
Post-retirement pension plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Current service cost	3,155	2,931	3,044
Net interest on net actuarial assets/liabilities	5,713	6,074	5,258
Total	8,868	9,005	8,302
Post-retirement health plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Current service cost	16,293	13,722	7,606
Net interest on net actuarial assets/liabilities	56,612	45,892	29,325
Total	R$ 72905	R$ 59614	R$ 36931

PENSION PLANS AND OTHER POST-_6

PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS - Amounts recognized in other comprehensive income (loss) (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Actuarial (losses) gains	R$ 223527	R$ 1643	R$ 533487
Asset limitation effect	(21,867)	95,134	(362,191)
Total	201,660	93,491	171,296
Post-retirement pension plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Actuarial (losses) gains	(188,889)	(186,170)	325,292
Asset limitation effect	(24,297)	188,259	(309,780)
Total	(213,186)	2,089	15,512
Post-retirement health plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Actuarial (losses) gains	412,416	184,527	208,195
Asset limitation effect	2,430	(93,125)	(52,411)
Total	R$ 414846	R$ 91402	R$ 155784

PENSION PLANS AND OTHER POST-_7

PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS - Changes in amount net of liability (asset) of defined benefit, net (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	R$ 668481	R$ 522105
Business combinations	1,994
Expenses	81,773	68,619
Sponsor contributions	(25,761)	(15,734)
Amounts recognized in OCI	201,660	93,491
Distribution of reserves	5,981
Balance at the end of the year	934,128	668,481
Actuarial assets per balance sheet	(220,939)	(10,997)
Actuarial liabilities per balance sheet	1,155,067	679,478
Post-retirement pension plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	68,368	67,148
Expenses	8,868	9,005
Sponsor contributions	(8,776)	(9,874)
Amounts recognized in OCI	(213,186)	2,089
Distribution of reserves	5,981
Balance at the end of the year	(138,745)	68,368
Actuarial assets per balance sheet	(220,939)	(10,997)
Actuarial liabilities per balance sheet	82,194	79,365
Post-retirement health plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	600,113	454,957
Business combinations	1,994
Expenses	72,905	59,614
Sponsor contributions	(16,985)	(5,860)
Amounts recognized in OCI	414,846	91,402
Balance at the end of the year	1,072,873	600,113
Actuarial liabilities per balance sheet	R$ 1072873	R$ 600113

PENSION PLANS AND OTHER POST-_8

PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS - Changes in defined benefit liability (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	R$ 668481	R$ 522105
Liability assumed after acquisition of company	1,994
Balance at the end of the year	934,128	668,481
Defined benefit liability
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	3,324,512	2,912,227
Liability assumed after acquisition of company	1,994
Current service costs	19,448	16,653
Interest on actuarial liabilities	296,783	277,459
Benefits paid	(219,653)	(174,754)
Member contributions paid	323	451
Actuarial losses (gains) adjusted by experience	320,627	144,404
Actuarial losses (gains) adjusted by demographic assumptions	(44,249)	46,122
Actuarial losses (gains) adjusted by financial assumptions	746,307	101,950
Balance at the end of the year	4,446,092	3,324,512
Post-retirement pension plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	68,368	67,148
Balance at the end of the year	(138,745)	68,368
Post-retirement pension plans | Defined benefit liability
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	2,011,355	1,861,651
Current service costs	3,155	2,931
Interest on actuarial liabilities	175,695	173,842
Benefits paid	(165,929)	(136,916)
Member contributions paid	323	451
Actuarial losses (gains) adjusted by experience	93,699	80,126
Actuarial losses (gains) adjusted by financial assumptions	311,180	29,270
Balance at the end of the year	2,429,478	2,011,355
Post-retirement health plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	600,113	454,957
Liability assumed after acquisition of company	1,994
Balance at the end of the year	1,072,873	600,113
Post-retirement health plans | Defined benefit liability
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	1,313,157	1,050,576
Liability assumed after acquisition of company	1,994
Current service costs	16,293	13,722
Interest on actuarial liabilities	121,088	103,617
Benefits paid	(53,724)	(37,838)
Actuarial losses (gains) adjusted by experience	226,928	64,278
Actuarial losses (gains) adjusted by demographic assumptions	(44,249)	46,122
Actuarial losses (gains) adjusted by financial assumptions	435,127	72,680
Balance at the end of the year	R$ 2016614	R$ 1313157

PENSION PLANS AND OTHER POST-_9

PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS - Changes in the fair value of plan assets (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	R$ 668481	R$ 522105
Asset acquired on acquisition of company	(1,994)
Distribution of reserves	(5,981)
Balance at the end of the year	(934,128)	(668,481)
Fair value of plan assets
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	3,762,994	3,311,739
Benefits paid	(195,775)	(161,002)
Participants contributions paid	323	451
Sponsor contributions paid	1,883	1,982
Interest income on plan assets	335,424	315,704
Return on plan assets excluding interest income	799,158	294,120
Distribution of reserves	(5,981)
Balance at the end of the year	4,698,026	3,762,994
Post-retirement pension plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	(68,368)	(67,148)
Distribution of reserves	(5,981)
Balance at the end of the year	138,745	(68,368)
Post-retirement pension plans | Fair value of plan assets
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	2,999,669	2,585,679
Benefits paid	(159,001)	(128,991)
Participants contributions paid	323	451
Sponsor contributions paid	1,848	1,949
Interest income on plan assets	266,287	245,014
Return on plan assets excluding interest income	593,769	295,567
Distribution of reserves	(5,981)
Balance at the end of the year	3,696,914	2,999,669
Post-retirement health plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	(600,113)	(454,957)
Asset acquired on acquisition of company	(1,994)
Balance at the end of the year	(1,072,873)	(600,113)
Post-retirement health plans | Fair value of plan assets
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	763,325	726,060
Benefits paid	(36,774)	(32,011)
Sponsor contributions paid	35	33
Interest income on plan assets	69,137	70,690
Return on plan assets excluding interest income	205,389	(1,447)
Balance at the end of the year	R$ 1001112	R$ 763325

PENSION PLANS AND OTHER POST_10

PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS - Changes in assets limitation (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	R$ 668481	R$ 522105
Balance at the end of the year	934,128	668,481
Asset Limitation
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	1,106,963	921,617
Interest on the asset limitation	100,967	90,212
Changes in the assets limitation, except interest	(21,868)	95,134
Balance at the end of the year	1,186,062	1,106,963
Post-retirement pension plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	68,368	67,148
Balance at the end of the year	(138,745)	68,368
Post-retirement pension plans | Asset Limitation
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	1,056,682	791,177
Interest on the asset limitation	96,306	77,246
Changes in the assets limitation, except interest	(24,297)	188,259
Balance at the end of the year	1,128,691	1,056,682
Post-retirement health plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	600,113	454,957
Balance at the end of the year	1,072,873	600,113
Post-retirement health plans | Asset Limitation
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Balance at the beginning of the year	50,281	130,440
Interest on the asset limitation	4,661	12,966
Changes in the assets limitation, except interest	2,429	(93,125)
Balance at the end of the year	R$ 57371	R$ 50281

PENSION PLANS AND OTHER POST_11

PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS - Results projected (Details) R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Current service cost	R$ 29612
Net interest on net defined benefit liability/asset	71,764
Total	101,376
Post-retirement pension plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Current service cost	3,037
Net interest on net defined benefit liability/asset	(10,386)
Total	(7,349)
Post-retirement health plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Current service cost	26,575
Net interest on net defined benefit liability/asset	82,150
Total	R$ 108725

PENSION PLANS AND OTHER POST_12

PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS - Sponsoring company contributions projected (Details) R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Sponsor contributions	R$ 9126
Benefits paid directly by the sponsor	18,668
Total	27,794
Post-retirement pension plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Sponsor contributions	2,189
Benefits paid directly by the sponsor	38
Total	2,227
Post-retirement health plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Sponsor contributions	6,937
Benefits paid directly by the sponsor	18,630
Total	R$ 25567

PENSION PLANS AND OTHER POST_13

PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS - Average weighted duration of defined benefit liability (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Post-retirement pension plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Average weighted duration of defined benefit liability	8 years 3 months 18 days	7 years 9 months 18 days
Post-retirement health plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Average weighted duration of defined benefit liability	18 years 1 month 6 days	16 years 6 months

PENSION PLANS AND OTHER POST_14

PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS - Actuarial Assumptions (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Long term inflation rate	3.80%	3.80%
Annual increase in use of healthcare services according to age	4.00%	4.00%
Post-retirement pension plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Nominal annual adjustment rate of pension benefits	3.80%	4.00%
Visao
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Discount rate to present value of defined benefit liability	6.60%	9.00%
Mortality table for nondisabled individuals (as a percent)	50.00%	50.00%
Visao and Tcoprev
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Estimated retirement age	60 years	60 years
PBS-A and CTB
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Discount rate to present value of defined benefit liability	7.20%	9.10%
Telefnica BD and Tcoprev
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Discount rate to present value of defined benefit liability	7.00%	9.20%
Visao and Telefonica BD
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Future salary growth rate	5.50%	5.70%
PBS-A, CTB and Telefonica BD
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Estimated retirement age	57 years	57 years
Mortality table for nondisabled individuals (as a percent)	10.00%	10.00%
Mortality table for disabled individuals (as a percent)	40.00%	40.00%
Post-retirement health plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Discount rate to present value of defined benefit liability		9.30%
Medical expense growth rate	6.90%	7.10%
Medical service eligibility age	63 years	57 years
Contribution eligibility on retirement (as a percent)	59.00%	100.00%
Estimated retirement age	59 years	57 years
Mortality table for nondisabled individuals (as a percent)	10.00%	10.00%
Mortality table for disabled individuals (as a percent)	40.00%	40.00%

PENSION PLANS AND OTHER POST_15

PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS - Changes in Actuarial Assumptions in Relation to Prior Year (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Defined benefit liability	R$ 934128	R$ 668481	R$ 522105
Post-retirement pension plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Defined benefit liability	(138,745)	68,368	67,148
Post-retirement health plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Defined benefit liability	1,072,873	600,113	454,957
Defined benefit liability
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Defined benefit liability	4,446,092	3,324,512	2,912,227
Difference from change in actuarial assumptions	702,058
Defined benefit liability | Post-retirement pension plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Defined benefit liability	2,429,478	2,011,355	1,861,651
Difference from change in actuarial assumptions	311,181
Defined benefit liability | Post-retirement health plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Defined benefit liability	2,016,614	R$ 1313157	R$ 1050576
Difference from change in actuarial assumptions	390,877
Based on prior-year actuarial assumptions | Defined benefit liability
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Defined benefit liability	(3,744,034)
Based on prior-year actuarial assumptions | Defined benefit liability | Post-retirement pension plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Defined benefit liability	(2,118,297)
Based on prior-year actuarial assumptions | Defined benefit liability | Post-retirement health plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Defined benefit liability	R$ 1625737

PENSION PLANS AND OTHER POST_16

PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS - Sensitivity analysis for actuarial assumptions (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Defined benefit liability, discounted to present value at current rate	R$ 4446092	R$ 3324512
Discount rate
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Increase in actuarial assumption (as a percent)	0.50%
Decrease in actuarial assumption (as a percent)	0.50%
Defined benefit liability, discounted to present value at current rate	R$ 4446092
Defined benefit liability, discounted to present value considering a rate increased by 0.5%	4,191,534
Defined benefit liability, discounted to present value considering a rate decreased by 0.5%	R$ 4730022
Rate of growth of medical costs
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Increase in actuarial assumption (as a percent)	1.00%
Decrease in actuarial assumption (as a percent)	1.00%
Defined benefit liability, discounted to present value at current rate	R$ 4446092
Defined benefit liability, discounted to present value considering a rate increased by 0.5%	4,813,897
Defined benefit liability, discounted to present value considering a rate decreased by 0.5%	4,154,062
Post-retirement pension plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Defined benefit liability, discounted to present value at current rate	2,429,478	2,011,355
Post-retirement pension plans | Discount rate
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Defined benefit liability, discounted to present value at current rate	2,429,478
Defined benefit liability, discounted to present value considering a rate increased by 0.5%	2,331,330
Defined benefit liability, discounted to present value considering a rate decreased by 0.5%	2,536,178
Post-retirement pension plans | Rate of growth of medical costs
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Defined benefit liability, discounted to present value at current rate	2,429,478
Defined benefit liability, discounted to present value considering a rate increased by 0.5%	2,429,478
Defined benefit liability, discounted to present value considering a rate decreased by 0.5%	2,429,478
Post-retirement health plans
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Defined benefit liability, discounted to present value at current rate	2,016,614	R$ 1313157
Post-retirement health plans | Discount rate
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Defined benefit liability, discounted to present value at current rate	2,016,614
Defined benefit liability, discounted to present value considering a rate increased by 0.5%	1,860,204
Defined benefit liability, discounted to present value considering a rate decreased by 0.5%	2,193,844
Post-retirement health plans | Rate of growth of medical costs
PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Defined benefit liability, discounted to present value at current rate	2,016,614
Defined benefit liability, discounted to present value considering a rate increased by 0.5%	2,384,419
Defined benefit liability, discounted to present value considering a rate decreased by 0.5%	R$ 1724584

PENSION PLANS AND OTHER POST_17

PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS - Allocation of plan assets (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Allocation of plan assets
Total	R$ 4698026	R$ 3762994
Post-retirement pension plans
Allocation of plan assets
Total	3,696,914	2,999,669
Post-retirement pension plans | Investments linked to funds and market indexes
Allocation of plan assets
Variable income investments	6,265	4,242
Post-retirement pension plans | Market value quoted in active market
Allocation of plan assets
Real estate investments	100,701	111,417
Structured investments	2,104	2,734
Post-retirement pension plans | Market value quoted in active market | National Treasury Note (NTN)
Allocation of plan assets
Fixed income investments and Loans to participants	3,067,926	2,437,547
Post-retirement pension plans | Market value quoted in active market | Treasury Financial Letter (LFT)
Allocation of plan assets
Fixed income investments and Loans to participants	270,676	177,319
Post-retirement pension plans | Market value quoted in active market | Repurchase operations
Allocation of plan assets
Fixed income investments and Loans to participants	172,895	196,830
Post-retirement pension plans | Market value quoted in active market | Debentures
Allocation of plan assets
Fixed income investments and Loans to participants	16,818	13,487
Post-retirement pension plans | Market value quoted in active market | Financial bills
Allocation of plan assets
Fixed income investments and Loans to participants	14,238	12,556
Post-retirement pension plans | Market value quoted in active market | FIDC shares / Others
Allocation of plan assets
Fixed income investments and Loans to participants	24,517	2,356
Post-retirement pension plans | Market value quoted in active market | National Treasury Notes (LTN)
Allocation of plan assets
Fixed income investments and Loans to participants	282	462
Post-retirement pension plans | Market value quoted in active market | Bank Deposit Certificates (CDB)
Allocation of plan assets
Fixed income investments and Loans to participants		232
Post-retirement pension plans | Market value quoted in active market | Investments in energy sector
Allocation of plan assets
Variable income investments		138
Post-retirement pension plans | Market value quoted in active market | Investments in food and beverage industry
Allocation of plan assets
Variable income investments		17,921
Post-retirement pension plans | Market value quoted in active market | Investments in mining sector
Allocation of plan assets
Variable income investments		287
Post-retirement pension plans | Market value quoted in active market | Investments in other sectors
Allocation of plan assets
Variable income investments	622	1,580
Post-retirement pension plans | Market value quoted in active market | Loans to participants
Allocation of plan assets
Fixed income investments and Loans to participants	19,870	20,561
Post-retirement health plans
Allocation of plan assets
Total	1,001,112	763,325
Post-retirement health plans | Market value quoted in active market | National Treasury Note (NTN)
Allocation of plan assets
Fixed income investments and Loans to participants	940,144	702,946
Post-retirement health plans | Market value quoted in active market | Treasury Financial Letter (LFT)
Allocation of plan assets
Fixed income investments and Loans to participants	R$ 60968	R$ 60379

FINANCIAL INSTRUMENTS AND RIS_3

FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT - Impairment of financial assets (Details)	12 Months Ended
	Dec. 31, 2019item
Impairment of financial assets
Number of collection cycles	24

FINANCIAL INSTRUMENTS AND RIS_4

FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT - Derivative financial instruments (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Derivative financial instruments for speculative purposes	0
Embedded derivative financial instruments held	0	0
Threshold business days for linear convention	360 days
Threshold business days for exponential convention	252 days

FINANCIAL INSTRUMENTS AND RIS_5

FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT - Derivatives financial instruments classified as swaps (Details) € in Thousands, R$ in Thousands, $ in Thousands	Dec. 31, 2019USD ($)	Dec. 31, 2019EUR (€)	Dec. 31, 2019BRL (R$)	Dec. 31, 2018BRL (R$)	Dec. 31, 2017BRL (R$)
Derivatives financial instruments
Current			R$ 19282	R$ 69065
Non Current			52,881	26,468
Current			(1,921)	(16,538)
Non Current			(54,212)	(22,845)
Total			16,030	56,150
Carrying amount			13,824,673	6,139,437	R$ 8461841
Foreign currency swaps Euro
Derivatives financial instruments
Notional Value			4,334
Foreign Currency Swaps Maturing Through October 30, 2019
Derivatives financial instruments
Notional Value			292,347
Currency risk affecting net amount payable | €		€ 3,806
Currency risk affecting net amount receivable | $	$ 292,347
Foreign currency swaps maturing in 2033 to hedge risk of change in finance lease rate pegged to IPCA
Derivatives financial instruments
Notional Value			262,817
Carrying amount			319,550
Long position
Derivatives financial instruments
Notional Value			515,261	1,184,064
Accumulated effects from fair value Amount receivable or payable			72,163	95,533
Current			19,282	69,065
Non Current			52,881	26,468
Long position | Floating interest rate
Derivatives financial instruments
Notional Value			369,491	699,595
Accumulated effects from fair value Amount receivable or payable			1,818	7,737
Long position | CDI
Derivatives financial instruments
Notional Value			369,491	554,336
Accumulated effects from fair value Amount receivable or payable			1,818
Long position | TJLP
Derivatives financial instruments
Notional Value				145,259
Accumulated effects from fair value Amount receivable or payable				7,737
Long position | Inflation rates
Derivatives financial instruments
Notional Value			72,980	149,275
Accumulated effects from fair value Amount receivable or payable			70,345	37,260
Long position | IPCA
Derivatives financial instruments
Notional Value			72,980	149,275
Accumulated effects from fair value Amount receivable or payable			70,345	37,260
Long position | Foreign currency
Derivatives financial instruments
Notional Value			72,790	335,194
Accumulated effects from fair value Amount receivable or payable				50,536
Long position | US Dollar
Derivatives financial instruments
Notional Value			72,790	241,332
Accumulated effects from fair value Amount receivable or payable				24,608
Long position | Euro
Derivatives financial instruments
Notional Value				51,971
Long position | LIBOR US$
Derivatives financial instruments
Notional Value				41,891
Accumulated effects from fair value Amount receivable or payable				25,928
Short position
Derivatives financial instruments
Notional value for short position			(515,261)	(1,184,064)
Short position			(56,133)	(39,383)
Current			(1,921)	(16,538)
Non Current			(54,212)	(22,845)
Short position | Floating interest rate
Derivatives financial instruments
Notional value for short position			(145,770)	(608,782)
Short position			(56,133)	(24,916)
Short position | CDI
Derivatives financial instruments
Notional value for short position			(145,770)	(608,782)
Short position			(56,133)	(24,916)
Short position | Foreign currency
Derivatives financial instruments
Notional value for short position			(369,491)	(575,282)
Short position				(14,467)
Short position | US Dollar
Derivatives financial instruments
Notional value for short position			(365,161)	(439,103)
Short position				(9,396)
Short position | Euro
Derivatives financial instruments
Notional value for short position			R$ 4330	(115,233)
Short position				(222)
Short position | LIBOR US$
Derivatives financial instruments
Notional value for short position				(20,946)
Short position				R$ 4849

FINANCIAL INSTRUMENTS AND RIS_6

FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT - Breakdown of swaps (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Derivative financial instruments break down of swaps
Total	R$ 16030	R$ 56150
(Net) result of transactions with derivatives	51,963	R$ 10788
Foreign currency x CDI
Derivative financial instruments break down of swaps
Total	(1,921)
CDI x Foreign Currency
Derivative financial instruments break down of swaps
Total	1,818
IPCA x CDI
Derivative financial instruments break down of swaps
Total	16,133
2020
Derivative financial instruments break down of swaps
Total	17,361
2020 | Foreign currency x CDI
Derivative financial instruments break down of swaps
Total	(1,921)
2020 | CDI x Foreign Currency
Derivative financial instruments break down of swaps
Total	1,818
2020 | IPCA x CDI
Derivative financial instruments break down of swaps
Total	17,464
2021
Derivative financial instruments break down of swaps
Total	3,239
2021 | IPCA x CDI
Derivative financial instruments break down of swaps
Total	3,239
2022
Derivative financial instruments break down of swaps
Total	3,507
2022 | IPCA x CDI
Derivative financial instruments break down of swaps
Total	3,507
2023 onwards
Derivative financial instruments break down of swaps
Total	(8,077)
2023 onwards | IPCA x CDI
Derivative financial instruments break down of swaps
Total	R$ 8077

FINANCIAL INSTRUMENTS AND RIS_7

FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT - Sensitivity analysis net exposure (Details) R$ in Thousands	12 Months Ended
	Dec. 31, 2019BRL (R$)item
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Percentage of risk deterioration for scenario one	25.00%
Percentage of risk deterioration for scenario two	50.00%
Number of scenarios | item	3
Probable
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in euro	R$ 528
Net exposure in IPCA	(56,733)
Net exposure in hedge CDI position	(558,594)
Total net exposure in each scenario	(615,855)
Probable | Hedge (long position) derivatives depreciation risk in Euro [member]
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in euro	(4,334)
Probable | Debt appreciation risk for payables in Euro
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in euro	(25,633)
Probable | Debt depreciation risk for receivables in Euro
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in euro	29,439
Probable | Hedge (short position) derivatives depreciation risk in US dollars
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in us dollars hedge short position	(292,347)
Probable | Debt appreciation risk for payables in US dollars
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in us dollars hedge short position	(185,022)
Probable | Debt depreciation risk for receivables in US dollars
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in us dollars hedge short position	477,369
Probable | Hedge (long position) derivatives risk of decrease risk in IPCA
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in IPCA	262,817
Probable | Debt risk of increase in IPCA
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in IPCA	(319,550)
Probable | Hedge US $ and Euro (short and long position) derivative risk decrease in CDI
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in hedge CDI position	(295,777)
Probable | Hedge IPCA short position derivatives risk of increase in CDI
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in hedge CDI position	(262,817)
25% depreciation
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in euro	(660)
Net exposure in IPCA	(56,733)
Net exposure in hedge CDI position	(545,775)
Total net exposure in each scenario	(603,168)
Net effect on changes in current fair value	12,687
25% depreciation | Hedge (long position) derivatives depreciation risk in Euro [member]
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in euro	(5,418)
25% depreciation | Debt appreciation risk for payables in Euro
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in euro	(32,041)
25% depreciation | Debt depreciation risk for receivables in Euro
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in euro	36,799
25% depreciation | Hedge (short position) derivatives depreciation risk in US dollars
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in us dollars hedge short position	(365,433)
25% depreciation | Debt appreciation risk for payables in US dollars
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in us dollars hedge short position	(231,277)
25% depreciation | Debt depreciation risk for receivables in US dollars
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in us dollars hedge short position	596,710
25% depreciation | Hedge (long position) derivatives risk of decrease risk in IPCA
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in IPCA	250,228
25% depreciation | Debt risk of increase in IPCA
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in IPCA	(306,961)
25% depreciation | Hedge US $ and Euro (short and long position) derivative risk decrease in CDI
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in hedge CDI position	(295,547)
25% depreciation | Hedge IPCA short position derivatives risk of increase in CDI
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in hedge CDI position	(250,228)
50% depreciation
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in euro	(792)
Net exposure in IPCA	(56,733)
Net exposure in hedge CDI position	(534,259)
Total net exposure in each scenario	(591,784)
Net effect on changes in current fair value	24,071
50% depreciation | Hedge (long position) derivatives depreciation risk in Euro [member]
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in euro	(6,501)
50% depreciation | Debt appreciation risk for payables in Euro
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in euro	(38,449)
50% depreciation | Debt depreciation risk for receivables in Euro
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in euro	44,158
50% depreciation | Hedge (short position) derivatives depreciation risk in US dollars
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in us dollars hedge short position	(438,520)
50% depreciation | Debt appreciation risk for payables in US dollars
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in us dollars hedge short position	(277,532)
50% depreciation | Debt depreciation risk for receivables in US dollars
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in us dollars hedge short position	716,052
50% depreciation | Hedge (long position) derivatives risk of decrease risk in IPCA
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in IPCA	238,939
50% depreciation | Debt risk of increase in IPCA
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in IPCA	(295,672)
50% depreciation | Hedge US $ and Euro (short and long position) derivative risk decrease in CDI
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in hedge CDI position	(295,320)
50% depreciation | Hedge IPCA short position derivatives risk of increase in CDI
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net exposure in hedge CDI position	R$ 238939

FINANCIAL INSTRUMENTS AND RIS_8

FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT - Sensitivity analysis assumptions (Details)	12 Months Ended
	Dec. 31, 2019
Probable | IPCA
Sensitivity analysis assumptions
Risk Variable (as a percent)	4.05%
Probable | IGPM
Sensitivity analysis assumptions
Risk Variable (as a percent)	3.37%
Probable | CDI
Sensitivity analysis assumptions
Risk Variable (as a percent)	6.42%
Probable | US Dollar
Sensitivity analysis assumptions
Risk Variable Ratio	4.0307
Probable | Euro
Sensitivity analysis assumptions
Risk Variable Ratio	4.5102
25% depreciation | IPCA
Sensitivity analysis assumptions
Risk Variable (as a percent)	5.06%
25% depreciation | IGPM
Sensitivity analysis assumptions
Risk Variable (as a percent)	4.21%
25% depreciation | CDI
Sensitivity analysis assumptions
Risk Variable (as a percent)	8.03%
25% depreciation | US Dollar
Sensitivity analysis assumptions
Risk Variable Ratio	5.0384
25% depreciation | Euro
Sensitivity analysis assumptions
Risk Variable Ratio	5.6377
50% depreciation | IPCA
Sensitivity analysis assumptions
Risk Variable (as a percent)	6.07%
50% depreciation | IGPM
Sensitivity analysis assumptions
Risk Variable (as a percent)	5.05%
50% depreciation | CDI
Sensitivity analysis assumptions
Risk Variable (as a percent)	9.63%
50% depreciation | US Dollar
Sensitivity analysis assumptions
Risk Variable Ratio	6.0461
50% depreciation | Euro
Sensitivity analysis assumptions
Risk Variable Ratio	6.7652

FINANCIAL INSTRUMENTS AND RIS_9

FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT - Fair value (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Transfers from level 1 to 2 assets	R$ 0	R$ 0
Transfers from level 2 to 1 assets	0	0
Transfers from level 1 to 2 liabilities	0	0
Transfers from level 2 to 1 liabilities	0	0
Transfers in to level 3	0	0
Transfers out of level 3	R$ 0	R$ 0

FINANCIAL INSTRUMENTS AND RI_10

FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT - Composition of consolidated financial assets and liabilities (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Financial assets Book value	R$ 12689256	R$ 12284429
Financial assets Fair value	12,689,256	12,284,429
Financial liabilities Book value	20,752,605	13,821,602
Fair value of financial liabilities	20,702,261	13,830,792
Cash and cash equivalents | Amortized cost
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Current financial assets Book value	3,393,377	3,381,328
Current financial assets Fair value	3,393,377	3,381,328
Investments pledged as collateral | Amortized cost
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Noncurrent financial assets Book value	63,766	76,934
Noncurrent financial assets Fair value	63,766	76,934
Trade accounts receivable | Amortized cost
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Current financial assets Book value	8,719,497	8,304,382
Noncurrent financial assets Book value	440,453	426,252
Current financial assets Fair value	8,719,497	8,304,382
Noncurrent financial assets Fair value	440,453	426,252
Derivative transactions | Measured at fair value through OCI | Level 2
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Current financial assets Book value	19,282	69,065
Noncurrent financial assets Book value	52,881	26,468
Current financial assets Fair value	19,282	69,065
Noncurrent financial assets Fair value	52,881	26,468
Trade accounts payable | Amortized cost
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Current financial liabilities Book value	6,871,799	7,642,782
Current financial liabilities Fair value	6,871,799	7,642,782
Loans and financing | Amortized cost
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Current financial liabilities Book value	1,020,061	1,076,451
Noncurrent financial liabilities Book value	25,093	817,908
Current financial liabilities Fair value	1,021,810	1,135,732
Noncurrent financial liabilities Fair value	24,106	796,481
Loans and financing | Measured at fair value through profit or loss | Level 2
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Current financial liabilities Book value	2,029,246	263,754
Noncurrent financial liabilities Book value	7,161,875	341,728
Current financial liabilities Fair value	2,029,246	263,754
Noncurrent financial liabilities Fair value	7,161,875	341,728
Debentures | Amortized cost
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Current financial liabilities Book value	1,077,183	82,840
Noncurrent financial liabilities Book value	2,027,167	3,049,949
Current financial liabilities Fair value	1,104,539	237,144
Noncurrent financial liabilities Fair value	1,948,705	2,866,981
Debentures | Measured at fair value through profit or loss | Level 2
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Current financial liabilities Book value		41,121
Current financial liabilities Fair value		41,121
Derivative transactions | Measured at fair value through profit or loss | Level 2
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Current financial liabilities Book value	1,921	16,316
Current financial liabilities Fair value	1,921	16,316
Derivative transactions | Measured at fair value through OCI | Level 2
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Current financial liabilities Book value		222
Noncurrent financial liabilities Book value	54,212	22,845
Current financial liabilities Fair value		222
Noncurrent financial liabilities Fair value	54,212	22,845
Contingent Consideration | Measured at fair value through profit or loss | Level 2
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Noncurrent financial liabilities Book value	484,048	465,686
Noncurrent financial liabilities Fair value	R$ 484048	R$ 465686

FINANCIAL INSTRUMENTS AND RI_11

FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT - Capital Management (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Jan. 01, 2018	Dec. 31, 2017	Dec. 31, 2016
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Cash and cash equivalents	R$ 3393377	R$ 3381328		R$ 4050338	R$ 5105110
Loans, financing, debentures, leases and contingent consideration	(13,824,673)	(6,139,437)		(8,461,841)
Derivative transactions, net	16,030	56,150
Short-term investments pledged as collateral	6,360,764	6,305,865
EQUITY	70,455,578	71,607,027	R$ 69322695	R$ 69461358	R$ 69244419
Capital management
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Cash and cash equivalents	3,393,377	3,381,328
Loans, financing, debentures, leases and contingent consideration	(13,824,673)	(6,139,437)
Derivative transactions, net	16,030	56,150
Asset guarantor of contingent consideration	484,048	465,686
Net debt	9,918,006	2,223,800
EQUITY	R$ 70455578	R$ 71607027
Net debt-to-equity ratio	14.08%	3.11%
Financing - BNB maturing 8/18/2022 | Capital management
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Short-term investments pledged as collateral	R$ 13212	R$ 12473

FINANCIAL INSTRUMENTS AND RI_12

FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT - Currency and Interest Risk (Details) € in Thousands, £ in Thousands, R$ in Thousands, $ in Thousands	Dec. 31, 2019GBP (£)	Dec. 31, 2019USD ($)	Dec. 31, 2019EUR (€)	Dec. 31, 2019BRL (R$)	Dec. 31, 2018USD ($)	Dec. 31, 2018EUR (€)	Dec. 31, 2018BRL (R$)	Dec. 31, 2017BRL (R$)	Dec. 31, 2016BRL (R$)
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Cash and cash equivalents				R$ 3393377			R$ 3381328	R$ 4050338	R$ 5105110
Currency Risk
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Net balance of these rights and obligations receivable	£ 110	$ 72,530	€ 974		$ 61,909	€ 15,624
CDI | Interest Risk
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Cash and cash equivalents				R$ 3143209			R$ 3175730

FINANCIAL INSTRUMENTS AND RI_13

FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT - Liquidity Risk (Details) - BRL (R$) R$ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Risk management policy
Financial liabilities	R$ 20752605	R$ 13821602
Liquidity Risk
Risk management policy
Financial liabilities	22,660,445
Liquidity Risk | Trade accounts payable
Risk management policy
Financial liabilities	6,871,799
Liquidity Risk | Loans and financing
Risk management policy
Financial liabilities	1,048,856
Liquidity Risk | Leases
Risk management policy
Financial liabilities	10,932,789
Liquidity Risk | Contingent Consideration
Risk management policy
Financial liabilities	484,048
Liquidity Risk | Debentures
Risk management policy
Financial liabilities	3,266,820
Liquidity Risk | Derivative transactions
Risk management policy
Financial liabilities	56,133
2020 | Liquidity Risk
Risk management policy
Financial liabilities	11,143,695
2020 | Liquidity Risk | Trade accounts payable
Risk management policy
Financial liabilities	6,871,799
2020 | Liquidity Risk | Loans and financing
Risk management policy
Financial liabilities	1,022,302
2020 | Liquidity Risk | Leases
Risk management policy
Financial liabilities	2,098,941
2020 | Liquidity Risk | Debentures
Risk management policy
Financial liabilities	1,148,732
2020 | Liquidity Risk | Derivative transactions
Risk management policy
Financial liabilities	1,921
2021 | Liquidity Risk
Risk management policy
Financial liabilities	2,995,912
2021 | Liquidity Risk | Loans and financing
Risk management policy
Financial liabilities	16,307
2021 | Liquidity Risk | Leases
Risk management policy
Financial liabilities	1,896,313
2021 | Liquidity Risk | Debentures
Risk management policy
Financial liabilities	1,083,292
2022 | Liquidity Risk
Risk management policy
Financial liabilities	2,715,547
2022 | Liquidity Risk | Loans and financing
Risk management policy
Financial liabilities	10,243
2022 | Liquidity Risk | Leases
Risk management policy
Financial liabilities	1,670,508
2022 | Liquidity Risk | Debentures
Risk management policy
Financial liabilities	1,034,796
2023
Risk management policy
Financial liabilities	1,484,656
2023 | Loans and financing
Risk management policy
Financial liabilities	4
2023 | Leases
Risk management policy
Financial liabilities	1,484,652
2024
Risk management policy
Financial liabilities	1,086,093
2024 | Leases
Risk management policy
Financial liabilities	1,086,093
2025 onwards | Liquidity Risk
Risk management policy
Financial liabilities	3,234,542
2025 onwards | Liquidity Risk | Leases
Risk management policy
Financial liabilities	2,696,282
2025 onwards | Liquidity Risk | Contingent Consideration
Risk management policy
Financial liabilities	484,048
2025 onwards | Liquidity Risk | Derivative transactions
Risk management policy
Financial liabilities	R$ 54212

FINANCIAL INSTRUMENTS AND RI_14

FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT - Social and Environmental Risks (Details) R$ in Thousands	Dec. 31, 2019BRL (R$)
Environmental risks
Exposure to contingent liabilities
Maximum fine per breach of environmental law	R$ 50000

FINANCIAL INSTRUMENTS AND RI_15

FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT - Insurance Coverage (Details) R$ in Thousands	Dec. 31, 2019BRL (R$)
FINANCIAL INSTRUMENTS AND RISK AND CAPITAL MANAGEMENT
Maximum limits of claims for operational risks	R$ 900000
Maximum limits of claims for general civil liability risks	R$ 75000

CONTRACTUAL COMMITMENTS (Detail

CONTRACTUAL COMMITMENTS (Details) R$ in Thousands	Dec. 31, 2019BRL (R$)
Disclosure Of Maturity Analysis For Contractual Commitment [Line Items]
Total nominal values	R$ 4523051
2020
Disclosure Of Maturity Analysis For Contractual Commitment [Line Items]
Total nominal values	1,191,801
2021
Disclosure Of Maturity Analysis For Contractual Commitment [Line Items]
Total nominal values	1,284,244
2022
Disclosure Of Maturity Analysis For Contractual Commitment [Line Items]
Total nominal values	919,747
2023
Disclosure Of Maturity Analysis For Contractual Commitment [Line Items]
Total nominal values	279,386
2024
Disclosure Of Maturity Analysis For Contractual Commitment [Line Items]
Total nominal values	278,609
2025 onwards
Disclosure Of Maturity Analysis For Contractual Commitment [Line Items]
Total nominal values	R$ 569264

ADDITIONAL INFORMATION ON CAS_3

ADDITIONAL INFORMATION ON CASH FLOWS (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
ADDITIONAL INFORMATION ON CASH FLOWS
Balance at beginning of the year	R$ 10256203	R$ 10714203
Cash flows from financing activities, Write-offs (payments)	(9,781,959)	(6,934,104)
Cash flows from operating activities, Write-offs (payments)	(720,752)	(494,931)
Financing activities not involving cash and cash equivalents, Financial charges and foreign exchange variation	661,899	532,288
Financing activities not involving cash and cash equivalents, Additions of financial lease and supplier financing	2,771,254	525,069
Initial adoption IFRS 16 on 01.01.19	8,618,072	0
Financing activities not involving cash and cash equivalents, Interim and unclaimed dividends and interest on equity	5,591,343	5,913,678
Balance at end of the year	17,396,060	10,256,203
Financing transactions with suppliers	967,313	506,397
Acquisition of assets through leases	1,803,941	18,672
Total	11,389,326	525,069
Interim dividends and interest on equity
ADDITIONAL INFORMATION ON CASH FLOWS
Balance at beginning of the year	4,172,916	2,396,116
Cash flows from financing activities, Write-offs (payments)	(6,176,842)	(4,136,878)
Financing activities not involving cash and cash equivalents, Interim and unclaimed dividends and interest on equity	5,591,343	5,913,678
Balance at end of the year	3,587,417	4,172,916
Loans and financing
ADDITIONAL INFORMATION ON CASH FLOWS
Balance at beginning of the year	2,106,814	3,109,498
Cash flows from financing activities, Write-offs (payments)	(2,070,665)	(1,533,121)
Cash flows from operating activities, Write-offs (payments)	(129,974)	(207,708)
Financing activities not involving cash and cash equivalents, Financial charges and foreign exchange variation	171,636	231,748
Financing activities not involving cash and cash equivalents, Additions of financial lease and supplier financing	967,313	506,397
Balance at end of the year	1,045,124	2,106,814
Leases
ADDITIONAL INFORMATION ON CASH FLOWS
Balance at beginning of the year	393,027	385,460
Cash flows from financing activities, Write-offs (payments)	(1,559,165)	(35,375)
Cash flows from operating activities, Write-offs (payments)	(415,496)	(21,231)
Financing activities not involving cash and cash equivalents, Financial charges and foreign exchange variation	350,772	45,501
Financing activities not involving cash and cash equivalents, Additions of financial lease and supplier financing	1,803,941	18,672
Initial adoption IFRS 16 on 01.01.19	8,618,072
Balance at end of the year	9,191,151	393,027
Debentures
ADDITIONAL INFORMATION ON CASH FLOWS
Balance at beginning of the year	3,173,910	4,520,739
Cash flows from financing activities, Write-offs (payments)	(66,830)	(1,324,723)
Cash flows from operating activities, Write-offs (payments)	(201,516)	(265,992)
Financing activities not involving cash and cash equivalents, Financial charges and foreign exchange variation	198,786	243,886
Balance at end of the year	3,104,350	3,173,910
Derivative transactions
ADDITIONAL INFORMATION ON CASH FLOWS
Balance at beginning of the year	(56,150)	(143,754)
Cash flows from financing activities, Write-offs (payments)	91,543	95,993
Cash flows from operating activities, Write-offs (payments)	26,234
Financing activities not involving cash and cash equivalents, Financial charges and foreign exchange variation	(77,657)	(8,389)
Balance at end of the year	(16,030)	(56,150)
Contingent Consideration
ADDITIONAL INFORMATION ON CASH FLOWS
Balance at beginning of the year	465,686	446,144
Financing activities not involving cash and cash equivalents, Financial charges and foreign exchange variation	18,362	19,542
Balance at end of the year	R$ 484048	R$ 465686

ADDITIONAL INFORMATION ON THE_3

ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENT OF INCOME - IFRS 16 - Excluding the effects of adopting IFRS 16 (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Consolidated Statements of Income
Cost of sales	R$ 22158947	R$ 21025767	R$ 20272530
Selling expenses	12,701,222	12,832,741	13,136,474
General and administrative expenses	2,498,096	2,598,970	2,443,105
Finance expenses	1,953,011	R$ 2285487	R$ 2659002
Total expenses
Consolidated Statements of Income
Total Cost of sales	(95,057)
Selling expenses	5,256
General and administrative expenses	71,053
Finance expenses	401,484
Total	252,606
Rental cost and expenses
Consolidated Statements of Income
Cost of sales, Rental costs and expenses	(1,699,886)
Rental costs and expenses	(1,901,698)
Selling expenses	(71,335)
General and administrative expenses	(130,477)
Depreciation cost and expenses
Consolidated Statements of Income
Cost of sales	1,604,829
Selling expenses	76,591
General and administrative expenses	201,530
Total	1,882,950
Financial charges
Consolidated Statements of Income
Finance expenses	401,484
Total	401,484
Income and social contribution taxes
Consolidated Statements of Income
Income and social contribution taxes	R$ 130130

ADDITIONAL INFORMATION ON THE_4

ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENT OF INCOME - IFRS 16 (Details) - BRL (R$) R$ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Consolidated Statements of Income
Net operating revenue	R$ 44268171	R$ 43462740	R$ 43206832
Cost of sales	(22,158,947)	(21,025,767)	(20,272,530)
Gross profit	22,109,224	22,436,973	22,934,302
Operating income (expenses)	(14,895,300)	(12,980,789)	(16,302,065)
Selling expenses	(12,701,222)	(12,832,741)	(13,136,474)
General and administrative expenses	(2,498,096)	(2,598,970)	(2,443,105)
Other operating income	929,498	4,077,003	464,182
Other operating expenses	(625,480)	(1,626,081)	(1,186,668)
Operating income	7,213,924	9,456,184	6,632,237
Financial income	1,132,870	4,112,640	1,755,958
Finance expenses	(1,953,011)	(2,285,487)	(2,659,002)
Equity pickup	752	(5,847)	1,580
Income before taxes	6,394,535	11,277,490	5,730,773
Income and social contribution taxes	(1,393,521)	(2,349,232)	(1,121,983)
Net income for the year	5,001,014	R$ 8928258	R$ 4608790
IFRS 15 and IFRS 16 adjustments
Consolidated Statements of Income
Cost of sales	(95,057)
Gross profit	(95,057)
Operating income (expenses)	76,309
Selling expenses	5,256
General and administrative expenses	71,053
Operating income	(18,748)
Finance expenses	401,484
Income before taxes	382,736
Income and social contribution taxes	(130,130)
Net income for the year	252,606
Previously stated
Consolidated Statements of Income
Net operating revenue	44,268,171
Cost of sales	(22,254,004)
Gross profit	22,014,167
Operating income (expenses)	(14,818,991)
Selling expenses	(12,695,966)
General and administrative expenses	(2,427,043)
Other operating income	929,498
Other operating expenses	(625,480)
Operating income	7,195,176
Financial income	1,132,870
Finance expenses	(1,551,527)
Equity pickup	752
Income before taxes	6,777,271
Income and social contribution taxes	(1,523,651)
Net income for the year	R$ 5253620

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) R$ / shares in Units, R$ in Thousands	Feb. 14, 2020BRL (R$)R$ / shares	Feb. 07, 2020BRL (R$)item	Feb. 03, 2020BRL (R$)
Infringement notice from the Brazilian Federal Revenue Service ("RFB") against the Company
SUBSEQUENT EVENTS
Amount of insufficient payment of income tax at source on capital gain | R$			R$ 983487
Sale of the Company's towers
SUBSEQUENT EVENTS
Number of structures sold | item		1,909
Sale consideration | R$		R$ 641000
Interest on equity
SUBSEQUENT EVENTS
Gross interest on equity | R$	R$ 270000
Net interest on equity | R$	R$ 229500
Interest on equity | Common shares
SUBSEQUENT EVENTS
Gross interest on equity, per share | R$ / shares	R$ 0.14994770568
Net interest on equity, per share | R$ / shares	0.12745554978
Interest on equity | Preferred shares
SUBSEQUENT EVENTS
Gross interest on equity, per share | R$ / shares	0.16494247643
Net interest on equity, per share | R$ / shares	R$ 0.14020110480