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Portugal Telecom, SGPS S.A. ("PT") hereby informs that Morgan Stanley now holds a qualified holding and a long position higher than 2% of the voting rights corresponding to the share capital of PT.

This change is due to a borrow of 3,290,673 PT ordinary shares by MS Equity Financing Services (Luxembourg) S.a.r.l., made on 9 October 2013. As a result, Morgan Stanley now holds a qualified holding and long position corresponding to 21,960,803 ordinary shares representing 2.45% of PT's share capital.

Additionally, PT was informed that the qualified holding and long position are held as follows:

Holdings in ordinary shares:

 -Morgan Stanley & Co. International plc: 10,666,627 ordinary shares representing 1.19% of the share capital and voting rights in PT;
 - Morgan Stanley & Co. LLC: 5,342,968 ordinary shares representing 0.60% of the share capital and voting rights in PT;
- Morgan Stanley Capital Services LLC: 8,484 ordinary shares representing 0.001% of the share capital and voting rights in PT;
 - Morgan Stanley Smith Barney LLC: 347,963 ordinary shares representing 0.04% of the share capital and voting rights in PT;
 - MS Equity Financing Services (Luxembourg) S.a.r.l.: 3,789,924 ordinary shares representing 0.42% of the share capital and voting rights in PT.

Holdings in financial instruments:


 - Morgan Stanley & Co. International plc: 1,804,837 ordinary shares (via bond exchangeable into shares already in issue) representing 0.20% of the share capital and voting rights in PT.

PT was further informed that the parent company Morgan Stanley controls Morgan Stanley & Co. International plc, Morgan Stanley & Co. LLC, Morgan Stanley Capital Services LLC, MS Equity Financing Services (Luxembourg) S.a.r.l. and Morgan Stanley Smith Barney LLC, through the following chains of companies:

 - Morgan Stanley & Co. International plc: Morgan Stanley International Holding Inc., Morgan Stanley International Limited, Morgan Stanley Group (Europe) and Morgan Stanley UK Group;
-  Morgan Stanley & Co. LLC: Morgan Stanley Capital Management LLC and Morgan Stanley Domestic Holdings Inc;
 - Morgan Stanley Capital Services LLC:  Morgan Stanley Capital Management LLC and Morgan Stanley Domestic Holdings Inc;
 - Morgan Stanley Smith Barney LLC: Morgan Stanley Capital Management LLC, Morgan Stanley Domestic Holdings Inc, Morgan Stanley & Co. LLC, MS Alpha Holdings LLC, Morgan Stanley JV Holdings LLC and Morgan Stanley Smith Barney Holdings LLC;
 - MS Equity Financing Services (Luxembourg) S.a.r.l.:  Morgan Stanley International Holdings Inc..

This statement is pursuant to the terms and for the purposes of articles 17 of the Portuguese Securities Code and 2 and 2-A of the Portuguese Securities Commission Regulation no. 5/2008, following a communication received from Morgan Stanley & Co. International plc, with registered office at 25 Cabot Square, Canary Wharf, London E14 4QA, United Kingdom.

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