PHAROL, SGPS, S.A.

Major Shareholding Notification • Jul 19, 2017

Announcement | Lisbon | 19 July 2017

Notice to the Market disclosed by Oi

PHAROL, SGPS S.A. hereby informs on the Notice to the Market disclosed by Oi, S.A., according to the company's announcement attached hereto.

PHAROL, SGPS S.A.

Public company Share capital Euro 26,895,375 Registered in the Commercial Registry Office of Lisbon and Corporation no. 503 215 058

PHAROL is listed on the Euronext (PHR). Information may be accessed on Bloomberg under the symbol PHR PL.

Luis Sousa de Macedo Investor Relations Director ir@pharol.pt Tel.: +351 21 500 1701 Fax: +351 21 500 0800

Oi S.A. – In Judicial Reorganization Corporate Taxpayers' Registry (CNPJ/MF) No. 76.535.764/0001-43 Board of Trade (NIRE) No. 33.300.29520-8 Publicly-Held Company

NOTICE TO THE MARKET

Oi S.A. – In Judicial Reorganization ("Oi" or "Company"), pursuant to Article 12 of CVM Instruction No. 358/02, announced that, on this date, it received the following correspondence from Bank of America Corporation, transcribed below:

"Dear Sir,

1 For the purposes of Article 12 of the Brazilian Securities Exchange ("CVM") Ruling No.358, of January 3, 2002, as amended by CVM Instruction No. 568, dated September 17,2015 ("Ruling No.568"), the undersigned, Bank of America Corporation ("Bank of America"), hereby informs that on July 13, 2017, it held through various subsidiaries, shares that total 8,260,257 shares representing 5.24% of the total outstanding shares issued by OI S.A. (the "Company").

Physically Settled Stock / Derivatives
Preferred Shares	7,134,734
ADR	1,125,523
TOTAL	8,260,257
Cash Settled Stock / Derivatives	0
TOTAL	8,260,257

• 2 Bank of America further requests the Company Investors Relations Officer disclose the following information to CVM through the Occasional Periodic Information System - IPE:
• (i) Bank of America Corporation is a corporation validly existing under the laws of the State of Delaware, with the IRS Employer Identification Number is 56- 0906609. Its registered office is located at: Bank of America Corporate Center 100 North Tryon Street, Charlotte, NC 28255 USA;
• (ii) Bank of America holds the equity positions through various subsidiaries that may acquire the securities solely for investment or client facilitation purposes;

however, Bank of America does not seek a change of control or a change in the management structure of the Company;

• (iii) Bank of America has holdings totaling to 8,260,257 preferred shares;
• (iv) No debenture convertible into shares issued by the Company is held by Bank of America;
• (v) No agreement or contract regulating the exercise of the voting right or the purchase and sale of securities issued by the Company was executed by Bank of America; and
• (vi) The equity positions in the Company are held by non-resident subsidiaries of Bank of America represented by CITIBANK DTVM SA (CNPJ: 33.868.597/0001-40).

We look forward to hearing from you with regard to the request above. Please do not hesitate to contact us with any further question or comment on the above at the following contact:

James Damato Assistant Vice President Global Regulatory Equity Aggregation Team-Americas Phone: (212) 670 - 2756 James.Damato@BankofAmerica.com

Yours faithfully,

Ronnie Ojera Vice President Bank of America Corporation"

Rio de Janeiro, July 18, 2017.

Oi S.A. – In Judicial Reorganization

Ricardo Malavazi Martins Chief Financial Officer and Investor Relations Officer