Investor Relations Belgacom Company presentation by Belgacom Group

Belgacom Company presentation Investor Relations 7 January 2011

•

Company introduction – slide 2

•

Popular discussion topics – slide 24

•

Ytd September 2010 results per business unit – slide 46 1

History From incumbent to innovative & competitive company 1998

1995

Belgium opens the market to competition

Strategic consolidation with private partners ADSB*

2004 Belgacom IPO

2006

2009

Acquisition Telindus Acquisition remaining 25% in Proximus

2005 Launch Belgacom TV BICS: JV Belgacom & Swisscom

Belgacom launches PingPing BICS and MTN combine international carrier services

2008 Divestment all non-core presences of Telindus International Acquisition Scarlet Acquisition Tele2 Luxembourg (Tango) Acquisition Mobile-for

* ADSB: Ameritech, Tele Denmark, Singapore and Belgacom

Slide 2

Belgacom Today • Listed company on Euronext Brussels with market cap at ~ € 8.5 billion1 • Operating in competitive landscape for both Fixed and Mobile services

• Maintaining strong market shares in both Fixed and Mobile thanks to 1. Consistent strategy, centred around “Convergence” 2. Early Fixed & Mobile network innovation •

Revenue new products growing; regulation impact on Voice & Mobile data products

•

Sound Free Cash-Flow generation

•

Very solid balance sheet

•

Proven discipline in M&A

•

Attractive Shareholder return policy

Market cap based on share price of 14 December 2010 (€25.45)

Slide 3 3

Shareholder structure Belgian state owns ~ 53.5% 338,025,135 shares, of which 321,460,755 Outstanding

• Limited liability company under public law -

Belgian state main shareholder: 53.5% Legal obliged threshold: 50%+1 share Last elections June 2010, government formation ongoing Minister of Public Companies: Inge Vervotte 14 Boardmembers, 50% state-appointed

• Free float 41.59% -

Main shareholders located in US, UK, Benelux, France & Germany

• Treasury shares 4.9% Shares

% shares

% Voting

% Dividend

Belgian state

180,887,569

53.51%

56.27%

55.78%

Free float

140,573,186

41.59%

43.73%

43.35%

Own shares

16,564,380

4.90%

0.87%

Under Belgian law, companies prohibited from owning >20% of outstanding share capital Part of own shares held for personnel incentives: Options and DSPP

Slide 4

Company structure A multi-branded, customer oriented organisation • 2007, transformation from “Fixed & Mobile” to “Customer centric” with 5 Business units Consumer Business Unit (CBU)

Enterprise Business Unit (EBU)

… Fixed & mobile Product /services to residential customers

… Fixed & Mobile & ICT Product/services to professional customers

• Multi-branding

Service Delivery Engine & Wholesale (SDE&W) … groups together the network & IT services … offers services to other operators and suppliers on the Belgian market

BICS … is a joint venture between Belgacom, Swisscom Fixnet, and MTN, and is responsible for international carrier activities

Staff & Support (S&S) … brings together all the horizontal functions that support the Group’s activities

• Share in Group revenue per BU*

24%

35%

5% 36% *Based on ytd Sept 2010

Slide 5

Company strategy - overview

Growth via Cross sell

Operational excellence

Move customers from singleplay to multi-play

High quality networks & platforms



  

   



Growth via M&A

Increase Disciplined value in BICS& consistent Leading approach position in consolidation

* Fiber to the street cabinet

  

… with special focus in 2010 on customer satisfaction

807k multi-play Packs, ~ 78% more than a year ago ~ 44% of consumers customers have at least 2 products Most successful pack includes fixed Internet and TV Full end-to-end solutions for enterprises

Fiber* population coverage >76%, in top 5 worldwide TV footprint of ~89%, ~72% in HD 3G outdoor coverage of ~97% Business transformation project: Move-to-All IP Main focus on Belgian market Outside opportunities monitored in a disciplined way Strict valuation criteria, focus on shareholder value Since 2006, > € 3 billion on M&A: minority Proximus, Telindus, Tango, Scarlet,…

Slide 6

Company strategy - overview

International Carrier Growth

Increase value in BICS Leading position in consolidation

Innovation

Strengthen leadership through innovation

Sustainability

CSR embedded in all operation layers

  

Belgacom ICS merged with Swisscom ICS and MTN ICS Belgacom owns 57.6% of enlarged entity, Swisscom 22.4% and MTN 20% World-leading position both on the International voice and mobile data markets

Address changing needs of customers Innovation focus: efforts grouped in dedicated team In 2010, several strategic partnerships signed to further develop the Belgacom Entertainment platform (OnLive, Jinni, Softkinetic & Blinkx)

Commitment on being socially responsible company Focus: “telecom access for all”, “health” & “climate change” Reduce Belgacom‟s CO² emissions & help our customers lower their environmental impact

Slide 7

The Belgian market

• Key figures Belgian market: -

Fully wired, fragmented market

~4.7 million households ~10.7 million individuals ~840k SME and 2k corporate1

• Population spread over 3 regions2: -

Flanders: ~55% Brussels: ~10% Wallonia: ~35%

Flanders

• > 70% of households is Belgacom customer

• „Mobile-only„ stable @ 28%

Wallonia

• Mobile active customer penetration of 110% Brussels

• Both Broadband and Cable cover almost 100% of country

• Consumer internet penetration at 58%3 • Digital TV penetration of 53%4 SME (< 200 employees); corporate (> 200 employees), Belgacom estimation Source: Belgian federal government 3 Consumer internet penetration: all residential ISPA lines on households (source: ISPA) Slide 8 4 DTV penetration: all digital TV subscribers on households 1 2

Belgacom customer base Active mobile customers (in „000) 5.161

5.318

Mobile Postpaid evolution (in %)

5.318

4.620

49%

2007

2008*

2009*

Q3 2010*

Fixed Voice customers (in „000) 3.906

3.710

3.519

Broadband customers (in „000)

2007

55%

57%

46%

2008

1.237

2009

Q3 2010

TV customers (in „000)

2008

2009

Q3 2010

* Including mobile customers Luxembourg

2007

2009

Q3 2010

807 560

302

305

2008

1.552

920

506

2007

1.520

Number of Packs (in „000) 752

3.425

2007

1.345

153

2008

2009

Q3 2010

2007

2008

2009

Q3 2010

Slide 9 9

Zoom-in Consumer Competitive landscape • Fixed ( Voice, Internet & TV) • Cable main competitor, split per region − Telenet: in the North of the country (Flanders) & Brussels − VOO: active in the South (Wallonia) & Brussels • Rational competition ; rather on services than on price • Internet Market shares1: BGC ~47% - Cable ~44% - OLO ~9% • Digital TV market shares2: BGC ~32% - Cable ~64% - Other ~4%

• Mobile (Voice, Internet)

Consumer Business Unit (CBU) … Fixed & mobile Product /services to residential customers

Belgacom leader in Voice, BB and DTV in South

• 3 nation-wide mobile networks; Proximus market leader − Proximus: 100% Belgacom, focus on Postpaid ; Residential and Business − Mobistar >50% owned by FT; focus on Postpaid ; Residential and Business − BASE: 100% owned by KPN - mainly active in Residential prepaid segment • Active customer market share3: Proximus ~42% - Mobistar ~33% - BASE ~25% • Competition is tough but so far no price wars

   

Few but strong competitors Main competitors have network assets (cable/mobile) and strong international shareholders (Liberty Global, France Telecom, KPN) Belgacom only one having a nation-wide fixed and mobile network Other players moving to convergence as well

Source: ISPA – status end September 2010 Status end September 2010 3 Total mobile market incl. Consumer and Business – status end September 2010 1 2

Slide 10

Zoom-in Consumer Resilient revenue & focus on cost control • CBU Sales in ytd Sept 2010: € 1,768m 8% TV

Like-for-like ytd revenue up by 0.4%

4% 4%

Half of revenue from Fixed & Mobile voice:

Scarlet & Tango Other

Terminals

28% Data

49% Voice

• Convergence through Packs

− Both Fixed & Mobile Voice negatively impacted by regulation − Fixed Line erosion stabilizing − Highly penetrated mobile market, focus on postpaid

Growing Fixed and Mobile Data revenue − Fixed internet revenue up by 6% ytd Sept „10 − Mobile data (incl SMS and Advanced data) growing 7%; regulation slowing growth

TV revenue growing 42% yoy Segment contribution: € 807m; 46% margin • Convergence of fixed & mobile internet Internet “One” • TV = Success story

− Focus on Sales related costs − Company-wide cost reduction − Declining headcount lowering HR-costs

Convergence strategy via offering of Packs 11 Slide 11

Enterprise Business Unit (EBU)

Zoom-in Enterprise

… Fixed & Mobile & ICT Product/serv. to professional customers

Competitive landscape EBU holds very strong position in most markets

(SME)

Mobile data

Mobile voice

(COR)

Data centre services & hosted applications

Belgacom converged ICT

Fixed voice (SME)

(SME)

(COR)

Unified Comm. & LAN integration

Fixed data (COR)

(SME)

 Fragmented competitive landscape, spread over all domains  Belgacom has unique selling proposition: full & convergent solutions incl. fixed, mobile & IT services Slide 12

Zoom-in Enterprise Some exposure to crisis, recovery continuing • EBU Sales in ytd Sept 2010: € 1,816m

Like-for-like revenue -1.8% ytd; trend improving ~44% revenue from Fixed & Mobile voice: − Both Fixed & Mobile Voice impacted by regulation − Fixed Line erosion stabilizing − Mobile customer base growing despite competitive market

Fixed internet saturating, Mobile Data revenue growing • Convergence - “Explore”-platform offering integrated end-to-end mobile and fixed solutions - Targeted convergent solutions for SMEs - Convergence of fixed & mobile internet (Internet “One” )

• Building a strong SME-identity - Strong SME presence in Belgium (~840k SME‟s) - Push ICT for SME

− Growing Mobile data revenues (incl SMS and Advanced data) ; regulation impact

ICT recovering from crisis, revenue yoy +5% @ lower margin, ICT ~2% of EBU EBITDA Segment contribution: € 905m or ~ 50% − Focus on Sales related costs − Company-wide cost reduction − Declining headcount lowering HR-costs

Convergent, end-to-end mobile and fixed 13 solutions Slide 13

Group - Financial highlights ytd Sept 2010 Ytd Group revenue of € 4,945m or +10.6% yoy  Positive growth trend since start of 2010 continued; Q310 +11.1% yoy  Normalised for full-consolidation BICS & contribution MTN ICS: -0.3% yoy  €75m negative impact from regulatory measures  Underlying business +1.4% ytd driven by organic growth BICS, CBU & improving trend EBU Strong focus on cost efficiencies continued  Improving trend CoS driven by regulation & initiatives to enhance product profitability  Lower yoy HR costs following fewer fte‟s; Q3 impacted by upward revision HR-related provisions  Non-HR cost efficiencies Q310 offset by revaluation foreign currency, upgrade RAN & Scarlet EBITDA flat at € 1,489m; margin of 30.1%  Like-for-like* EBITDA -2.6% yoy partly due to regulation (€ 22m)  Like-for-like* margin at 32.5% vs 33.3% last year  Slight erosion driven by revenue growth at lower margins: ICT & organic growth BICS FCF of € 849m compared to € 681m for September 2009  Positive impact of timing differences & one-off items * Adjusted for full consolidation BICS & contribution of MTN

Slide 14

Belgacom Group Financials

in mio €

Q109

Q209

Q309

YTD09

Q110

Q210

Q310

YTD10

VAR Q3/Q3

VAR YTD

Like-for(2) like VAR YTD

Revenues (1)

1,492

1,504

1,476

4,472

1,641

1,664

1,640

4,945

11.1%

10.6%

-0.3%

Total OPEX

-1,000

-1,002

-982

-2,984

-1,146

-1,161

-1,150

-3,456

17.1%

15.8%

0.9%

Cost of goods sold

-511

-515

-1,537

-662

-674

-651

-1,987

26.5%

29.3%

2.0%

HR-costs

-281

-280

-271

-831

-274

-275

-281

-829

3.7%

-0.3%

-1.7%

Other expenses

-207

-211

-196

-615

-210

-212

-218

-640

10.8%

4.1%

1.4%

492

502

494

1,488

495

503

490

1,489

-0.8%

0.0%

-2.6%

33.0%

33.4%

33.5%

33.3%

30.2%

29.9%

30.1%

-3.6pp

-3.2pp

-0.8pp

-62

436

-174

-178

-169

-521

-194

-206

-203

-604

20.0%

15.8%

318

262

325

905

737

298

287

1,322

-11.7%

46.0%

Financial result

-37

-23

-30

-90

-28

-26

-80

-14.7%

-11.1%

Tax expense

-69

-51

-79

-199

-68

-64

-62

-195

-21.0%

-2.1%

212

188

617

638

203

1,036

-9.9%

67.9%

-1

0.66

0.59

1.93

1.99

0.63

3.23

-10.1%

67.6%

As reported

EBITDA

(1)

EBITDA margin

(1)

Non-recurring items Depreciation

EBIT

Net income (Group) Non-controlling interest

Earnings/share in € (1 )

before non-recurring items

(2)

217 0

0.68

195 4

0.61

2010 BICS results consolidated at 57.6%

Slide 15

Group - 2010 Guidance reiterated Based on the solid result so far, we expect for FY 2010:   

A revenue growth in the upper-end of the range 9% to 10% (excl non-recurring revenue) We still target a FY EBITDA margin of 30% as we will continue to focus on direct margin improvements and overall cost efficiencies Group capex around 10% of Group revenue, excl. 2G-license renewal

Including an estimated regulation impact for 2010 of:  Revenue: ~ €115m  EBITDA: < €30m Due to lower MTR (+ flow-through fixed-to-mob tariffs), Roaming regulation (voice + data) & Financial collecting model for Premium Rate Services Outlook 20101

Q1101

Q2101

Q3101

Ytd 20101

Group revenue growth

Upper-end of range "9% - 10%"

10.0%

10.7%

11.1%

10.6%

Group EBITDA margin

Targeting a margin of 30%

30.2%

29.9%

30.1%

Around 10%2

9.4%

8.9%

8.5%

8.9%

Metrics

CAPEX/Revenue 1 2

Before non-recurring items Excl CAPEX for 2G-license renewal

Slide 16

Group – Cost structure High focus to reduce costs • Ytd September € 3,456m of costs; including Cost of Sales, Personnel expenses and other non-HR costs • Direct margin of ~ 60%

•

Company-wide effort to reduce costs

− Increase product profitability − Reducing headcount through HR-programs − Cost efficiencies on non-HR expenses

non-HR costs 19% HR expenses 24%

Cost of Sales 57%

Cost of Sales highly driven by strong presence of International Carrier Business at lower margin

Slide 17

Group - Headcount Benefitting from headcount reduction programs • Personnel expenses of € 829m ytd Sep‟10, i.e. ~24% of Group costs & ~17% of Group revenue

•

HR costs positively impacted by ongoing headcount reduction programs

− HR costs Sept‟10 -1.7% yoy, like-for-like* − Decrease in headcount -648 FTE compared to September ‟09

•

Belgacom decreased its headcount considerably over the years, to 16,214 FTEs ytd Sep‟10

•

About 40% of headcount has civil servant status, no new civil servant contracts since 1997

25000

20000

PTS - 6,300 FTE

Telindus + 2,600 FTE 2006-2012: - 3,900 FTE BeST - 4,160 FTE

Tutorship FMS

15000

10000

Sept‟10 16,214 FTE

Move to IP supporting lower headcount

5000

YE96 YE97 YE98 YE99 YE00 YE01 YE02 YE03 YE04 YE05 YE06 YE07 YE08 YE09

* BICS consolidated at 57.6%

YE10 YE11 YE12

Slide 18

Group - Investments Belgacom invested so far 10.4% of its revenues, incl the capex for the 2G license

• €515m invested, incl €74m for the renewal of the 2G license • Since the launch in 2008, €77m invested in MaIP

− Move to all IP (MaIP): business transformation project entailing a full re-engineering of the network −

& processes €37m invested in 2010; investments allocated to new IT systems

• Since the start in 2003, €540m invested in Broadway (fibre to the curb & VDSL2) − Coverage over 76% of Belgian households 1,200 1,000 800

12.8% 11.4% 676

10.3%

764

625

10.4%

10.0% 9.1% 597

515

600

405 400

• 2008 incl. exclusive •

Broadcasting rights Belgian soccer 2010 incl. renewal 2Glicense

200 0

2006

2007

2008

2009

Capex in Mio €

15.0% 14.0% 13.0% 12.0% 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%

Investment rate of 10%-12% of revenue

ytd '09 ytd '10 % of revenue Slide 19

Group - Free cash flow Sound FCF generation FCF ytd Sept ‟10 of €849m, yoy variance impacted by one-offs & timing differences

• • •

2009 impacted by payment of fine (€66m) 2010 positively impacted by full consolidation BICS (€51m) Lower income tax payments

− −

Timing differences Following legal entity merger, full use of Belgacom SA tax losses carried forward

1210

FCF in million €

1,000

• 2006 acquisition remaining 25% of • •

Proximus for € 2bn , acquisition Telindus for € 584m 2007 disposal of remaining interest in Mobistar and Eutelsal for €242m 2008 acquisition Tango and Scarlet for aggregated amount of € 380m

797

681

849

409

500 0

2006

2007

2008

2009

ytd '09

ytd '10

-500 -1,000 Slide 20

-1,500

-1313

Group - Net financial position Belgacom continues to have a sound financial position

• • •

Net financial debt decreased by €291m to €1,425m Outstanding financial debt at €2.1 billion Most of the debt maturing in 2011 and 2016

Credit rating Standard & Poor‟s: A+ Credit rating Moody‟s: A1 0

849

(540)

(30)

(1.425)

(1,716)

Net debt December 2009

(in million euro)

FCF

Dividends

Dividends to non controlling interests

Other

Net debt September 2010

Slide 21

Group – Shareholder return policy Shareholder remuneration SBB

Dividends

EVA supports our 150% customers on different 120% forums 90%

% of FCF

Mio € 1,000 900 800 700 600 500 400 300 200 100 0

60% 30% 0% 2004

2005

2006

2007

2008

2009

• Belgacom commits to an attractive shareholder remuneration policy by returning, in principle, most of its annual free cash flow1, to its shareholders.

• The return of free cash flow, either through dividends or share buybacks, will be reviewed on an annual basis, in order to keep strategic financial flexibility for future growth, organically or via selective M&A, with a clear focus on value creation. This also includes confirming appropriate levels of distributable reserves.

• From the financial result of the year 2010, Belgacom expects to return an annual dividend of € 2.18 per share, payable in two tranches: an interim dividend of € 0.50 per share and a normal dividend of € 1.68 per share.

• The shareholder remuneration policy is based on a number of assumptions regarding future business and market evolutions, and may be subject to change in case of unforeseen risks or events outside the company‟s control. 1

Belgacom defines free cash flow as cash flow generated by operating activities, minus capital expenditures and including other investing activities such as acquisitions or divestments. Slide 22 22

Group – Shareholder return Interim dividend of € 0.50/share approved by Board of Directors In October 2010, the Board of Directors approved the payment of the interim dividend of €0.50 per share gross (€0.375 net) • Ex-dividend date: 7 December 2010 • Record date: 9 December 2010 • Payment date: 10 December 2010

Dividend per share Interim dividend

Extra-ordinary dividend

1.93 1.38

2.18

2.08

2.18

1.68

0.29

0.50

0.40

0.50

2006

2007

2008

2009

2010 Expected

1.89

1.52

Normal dividend

1.60

1.52

0.55 2004

2005

Slide 23

Belgacom Company presentation Investor Relations

Ytd September 2010 results in detail Popular discussion topics • • • •

• • • • •

Consumer Business Unit (CBU) Enterprise Business Regulation – slide 25 Unit (EBU) • BICS – slide 34 Service Delivery Engine &Wholesale (SDE&W) Convergence – slide 28 • Network – slide 37 Staff and Support (S&S) Belgacom TV – slide 29 • Belgian economy – slide 42 Belgacom International Carries Services (BICS) Mobile Data – slide 32 • Customer centricity – slide 44 24 Slide 24

Regulation Mobile Termination Rates (MTR) Big drop in asymmetry as from August 2010

MTR-Glidepath in €ct Proximus

Mobistar

Base

11,43 9,02 7,2 4,62

3,83 2,46

Before*

01-Aug-10*

01-Jan-11

1,08

01-Jan-12

Before* 7.2 9.02 11.43

25% 59%

MTR as of 1 August 2010, lowering asymmetry with BASE and Mobistar. Gradual decreases resulting in full symmetry as from Jan 2013

•

Any MTR decrease reflected in F2M tariffs of Belgacom

•

Cut in MTR impacts revenue of all mobile players. EBITDA impact very limited for Belgacom due to reduced asymmetry

•

Mobistar and Base filed separate appeals against the decision

•

Estimated impact FY2010 (incl lower MTRs + flow-through to F2M tariffs): − Revenue: ~ €40m − EBITDA: < €5m Impact so far (ytd Sep‟10): − Revenue: ~ €15m − EBITDA: ~ €1m Slide 2525 Slide

01-Jan-13

Final decision on MTR €ct Proximus Mobistar Base % change Proximus Mobistar Base Assymmetry Mobistar-Prox Base-Prox

•

01-Aug-10* 4.62 5.05 5.81

01-Jan-11* 3.94 4.29 4.90

01-Jan-12 2.46 2.62 2.92

01-Jan-13 1.08 1.08 1.08

-36% -44% -49%

-15% -15% -16%

-38% -39% -40%

-56% -59% -63%

9% 26%

9% 24%

7% 19%

0% 0%

*excl VAT, including inflation Rates 2012-2013 excl VAT, final rates will be corrected for inflation

•

Regulation Mobile voice and data roaming regulation Voice Roaming (€ct per minute) Retail Outgoing

Retail Incoming

Wholesale Outgoing

95 44

Before regulation

43 26

End Aug'07

End Aug '08

19 July '09

•

2010 was impacted Carry-over impact from lower rates on 1 July 2009

•

Roaming rates for voice further decreased on 1 July 2010

•

Data roaming rates are regulated at wholesale level

•

Measures taken to prevent bill shocks

•

Estimated impact for 2010: − Revenue: ~ €25m − EBITDA: slightly below €25m

•

Impact so far (ytd Sep‟10): − Revenue: ~ €22m − EBITDA: ~ €20m

15 July '10

July'11

SMS Roaming (€ct per sms) Retail Wholesale 39

11 4

Before regulation

Data Roaming Wholesale

1 July '09

(€ct per Mb)

100 80

1 July '09

1 July '10

1 July '11

Tariffs before regulation are indicative averages of European tariffs, mix of postpaid/prepaid and residential/business

Slide 2626 Slide

Regulation National directive on Premium Rate Services

Collecting Model for premium rate services

•

As from 1 April 2010, financial collecting model for Premium Rate Services

•

Following circulars issued end 2009 by Ministry of Finance concerning VAT on Premium Rate Services and Tax on chance games

•

Applicable for services where Belgacom collects on behalf of a third party content provider

•

Revenue no longer considered as full revenue of Belgacom, only the margin is booked as revenue

•

Estimated impact for 2010: − Revenue: ~ €50m − EBITDA: no impact

•

Impact so far (ytd Sep‟10): − Revenue: ~ €37m − EBITDA: none

Slide 2727 Slide

Group - Convergence Execution of consistent convergence strategy paying-off Evolution Pack-customer base since launch

807,000 741,000

560,000

Multiplay overview residential customers

~ 44% of customers have ≥ 2 BGC products

384,000 302,000

231,000 153,000

56% single play Q4'07 Q4'07

Q2'08 Q3'08 Q4'08

Q2'09 Q2'09

Q4'09 Q1'10 Q2'10 Q3'10

Single

double



Fixed line with free “happy time” option – free calling to fixed lines after 5 pm & on weekends



Internet Favorite – Download speed of 25Mbps, upload 3.5 Mbps, 100 GB volume



Belgacom TV Comfort, renting decoder included

100.000 80.000 60.000 40.000 20.000 0

Q2'08

Quadruple

Example of triple-play Pack @ € 62.46/month1

Pack net adds

Q4'07

Triple

Q4'08

Q2'09

New prices as from 1 January 2011; incl VAT

Q4'09

Q2'10 Q3'10

Customers save €18.5/month Slide 28

Belgacom TV Market overview

32% DTV market share

Competitive landscape

• • • • •

Flanders Telenet-zone

Brussels

Belgacom - zone

Numéricable

Wallonia Voo-zone

* Source: Company figures & estimates, competitor press releases

• •

~ 4.7 m households in Belgium Digital TV penetration Belgium of ~53%* Belgacom present in all regions Belgacom TV coverage >88% Belgacom Market share of 32% − Share in total TV market: 18% − Belgacom 2nd player in DTV market Belgacom TV customer base of 920k fairly evenly spread North/South Digital TV market penetration & market share Belgacom:

Analoge 47%

32% Digital 53%

Slide 2929 Slide

Belgacom TV An international recognized success story Evolution TV customer base since launch *

920,000

752,000

+39% TV customers yoy

506,000 305,000 140,000 42,000 Q405

Q406

Q407

Q408

Q409

•

Strong customer growth since launch in June „05 − In 5 yrs time Belgacom gained 920k TV subscribers − Customer gain boosted with Packs incl.TV − Unique market positioning with “Free TV” claim

•

ARPU per household grew significantly since launch − Growing customer base lowers impact of promotions − Services (VoD,„bouquets‟, football...) adding to ARPU

•

~65% CBU customer having a TV subscription

Q310

Evolution TV ARPU since launch 18.5

21.3 19.3

16.6

11.9

Q405

12.6

Q406

Q407

Q408

Q409

Q310

BGC TV as % on CBU broadband customer base Evolution 2007-2010

~65% ~45% ~35%

~20%

* Including second stream customers (125k ytd September 2010)

Slide 3030 Slide

Belgacom TV A complete and competitive offer Rich basic offer around 90 channels, incl HD

Soccer

Bouquets

VOD > 700 movies

Advanced functionalities

 Additional

 Movies on

 Pause TV,

=  Basic pricing of 

€18.5/month Incl. settop box ( €6/month)

 “All Foot”  

€19.95/month “My Club” €9.95/month Per match €5-€10

channels as from €5/month



demand €2-€6.5 HD movies from €4-€7

recording, Instant rewind

Belgacom TV Magazine

3D TV demo

 Sent to VoD users  Objective: usage stimulation,



education, retention, create a community feeling New e-version



March 2010 live transmission of a football match As from October 2010, two 3D demo channels Slide 31

Mobile data Growing mobile data market

Market

Mobile data ~30% of Mobile service revenue

60% 40%

Advanced data ~35% of Mobile data revenue

Belgacom Mobile Internet customer base* 158,000

•

100,000

+58% yoy

57,000

Q208 Q308 Q408 Q109 Q209 Q309 * Total subscriptions for internet on laptop CBU

Mobile Data ARPU *

Q409

•

Q110

Q210

Q310

EBU

12,3

12,5

12,4

12,9

13,4

12,9

12,1

12,5

12,3

6,3

6,1

6,4

6,3

6,8

6,7

7,1

7,0

7,1

7,0

Q208

Q308

Q408

Q109

Q209

Q309

Q409

Q110

Q210

Q310

* Mix of SMS and advanced data

• •

Mobile internet users growing strongly, for internet on GSM & for Internet on laptop High potential for future growth: current market penetration of Smartphone < 20% of Belgian population, but growing Belgacom market share of Mobile internet customers* growing for the 6th consecutive quarter Strong growth Mobile internet on laptop + 58% yoy to 158,000 customers 32 Slide 32

Mobile data Belgacom well positioned to capture mobile data growth

High-quality 3G-network & strategic option to offload data to sustain customer experience and keep investments under control

â&#x20AC;˘ 55% of private mobile data is consumed at home â&#x20AC;˘ Opportunity to redirect data from Mobile network to fixed network

Fix DSL Network

WiFi 3G

Femto Macro

Mobile Network

DATA VOICE Slide 33

International Carrier Services BICS delivers best in class global solutions BICS ownership

• • • •

• Active in the international carrier market since 1997 • January „05: spin off of Belgacom ICS as an independent affiliate of Belgacom 20% 57.6% • Since Dec „09 JV held by Belgacom, Swisscom & MTN 22.4% • In top 4 of largest operators worldwide in terms of voice traffic volume* • World leader in mobile data carrier services (SMS, MMS, GPRS Roaming, Signaling…) 550 customers, incl. > 250 mobile operators > 95 points of presence (PoPs) in 45 cities and 33 countries, 9 Metropolitan area networks Participations in 40 submarine cables Offices in Brussels, Bern, Monaco, New York, Dubai and Singapore Sender

Retail market

Local partner

Belgacom Swisscom MTN

Fixed Operators

Fixed Operators Mobile Operators xSPs

*company estimates end 2009

Mobile Operators xSPs

Receiver

• VOICE: collecting & terminating international voice traffic • MESSAGING: ensuring interoperability for SMS & MMS • ROAMING: full set of services to enable roaming traffic • CONNECTIVITY: transport of signalling, roaming GPRS (3GRX) and IPX and the provisioning of tailored, high-quality bandwidth solutions • MOBILE FINANCIAL SERVICES: enabling deployment of mobile money transfers Slide 34

International Carrier Services World-leading position Strong position both on the International Voice and Mobile Data markets thanks to: • Quality of customer base and product mix with leadership in Voice and Mobile Data, complemented with healthy capacity business • Focus on geographies with strong growing traffic (AMEA & Asia Pac) • Innovative approach: e.g. Launch of “HomeSend” a global hub service providing a mobile-centric approach to international remittance • Track record of executing on partnerships:

July 2005: JV with Swisscom in exchange for 28% of ownership and joint control.

February 2006: Outsourcing agreement with MTN regarding MTN‟s international Voice & Data traffic

November 2006: Partnership between BICS and Omantel for delivering high quality traffic

May 2008: Next step in partnership of BICS with Omantel, investing jointly in the Europe – India Gateway

December 2009: MTN contributes its international carrier services to BICS

Slide 35

International Carrier Services BICS grew significantly over the last 5 years Revenue growth (in mio €)

Evolution EBITDA & EBITDA margin 1.208

892 713

2005

736

2006

746

2007

812

2008

2009

Q3 2010

99 89 79 69 59 49 39 29 19 9 -1

78 64 53 33

27 3,8%

4,5%

2005

2006

7,2%

7,9%

8,7%

7,7%

2007

2008

2009

Q3 2010

50,0% 49,0% 48,0% 47,0% 46,0% 45,0% 44,0% 43,0% 42,0% 41,0% 40,0% 39,0% 38,0% 37,0% 36,0% 35,0% 34,0% 33,0% 32,0% 31,0% 30,0% 29,0% 28,0% 27,0% 26,0% 25,0% 24,0% 23,0% 22,0% 21,0% 20,0% 19,0% 18,0% 17,0% 16,0% 15,0% 14,0% 13,0% 12,0% 11,0% 10,0% 9,0% 8,0% 7,0% 6,0% 5,0% 4,0% 3,0% 2,0% 1,0% 0,0%

*Proportionally consolidated until end 2009 @ 72%

Volume growth (in mio) 19.858

19.174

16.232

12.209

13.841

9.573

2005

2006

2007

*Total BICS volumes, i.e. @ 100%

2008

2009

Q3 2010

• Strong revenue growth driven by successful partnerships, boosting volumes • Proportion of BICS revenue in Belgacom Group revenue grew from 13% in 2005 to 24% in ytd Sept 2010, impacting the Belgacom Group margin • 2010: Growth of BICS at typical lower margin continued and is impacting the Group margin in two ways: - As a result of the full-consolidation as of 1 Jan „10 - A growing organic business Slide 36

Network - Fixed

Belgacom amongst world leaders for fiber coverage

Nation-wide, high-quality fixed network • • • •

•

Strategic decision end 2003 to invest in FttC*

So far ~€ 540 m invested Enabler for organic growth and innovation, answering customer needs High-quality & nation-wide coverage: − >76% FTTC* coverage (Sep 2010) − VDSL : up to 30 Mbps Street − ADSL : 99.85 % - world record Local exchange / cabinet & Central Office Remote Quality DSL network, driving TV coverage optical − Belgacom TV ~89% 1) 17 MHz platform 3) DSM − HDTV service coverage: 72% Further maximise network efficiencies: Access network toolkit & compression techniques

Compression * Fiber to the Curb

Homes / businesses

2) VBB 3) DSM

4) Pair bonding = copper = fiber

1. 2. 3. 4. 5.

5) FTTH

Increase spectrum Reduce copper distance Neutralize interference between copper pairs Use of several pairs Use of fiber end-to-end in the network Slide 37

Network - Fixed Move to all-IP program

ISDN

CPE

Access Network

SDSL ADSL2 + Leased Lines

From

Ethern. & SDH

Video on Demand

TV Broadcasting

Internet PSTN ATM/SDH Mobile

ROP

CPE

Fibre VDSL2 UMTS HSDPA

Aggregation Point

Access Network

Central Office

ADSL

VoD

IP Ethernet DWDM

Internet

Dedicated Dedicated infrastructure infrastructure per perservice service Little Little convergence convergence capabilities capabilities

Voice Data / LL Mobile

IMS

VoIP

Mobile

SDP

Future Services

Video on Demand TV Broadcasting Internet

Network simplification

Future Futureproof proof fixed/mobile fixed/mobile integration integration Shared Shared infrastructure infrastructure for forall allservices services

•

Continued roll-out of MaIP project, a business transformation project entailing a full reengineering of the network, IT-systems & processes

•

€77m invested since launch in 2008, of which €37m in first nine months of 2010 Investments allocated to new IT systems to automate & control operational processes

•

Enabler for long term headcount efficiencies

•

Future out phasing of ~10% of local exchanges

Slide 38

Network - Mobile Nation-wide, high-quality mobile network Spectrum efficiency

50-100Mbps

•

HSPA +: A few 10Mbps HSDPA : A few Mbps UMTS : 128 to 384 kbps GPRS : 30 to 50 kbps EDGE : Voice/Circuit 150 à 200 kb/s

1995

2005

EDGE Evolution: 10-14 Mbps

• 2010

Leader in coverage − GSM sites covering 99.98% of Belgian population − 3G sites covering 97% of Belgian population Leader in speed − Drive tests show best data transfer speed of 3 operators − Best in class in upload speed

•

2003 – strategic decision to invest in 3G

•

Current Radio access network (RAN) being replaced by state-of-the-art single RAN hybrid product providing a simplified, high capacity, high performance and future proof network − Keep network superiority − Lower the cost of adding extra transport technology Leader − Act swifter to strategic changes in coverage − Go for Long Term Evolution (LTE) reusing part of the equipment & speed Slide 39

Network Our key beliefs

Copper has still a promising evolutionary path • Current bandwidth covers foreseeable customer needs • Stepwise increase of bit rate, meeting customer needs • Faster and far less expensive solutions to make most of copper assets:  

Access network toolkit Enhanced compression techniques

*Fibre-to-the-home

Step by step fibre approach • Further roll-out of Broadway project to 80% VDSL2 coverage • FttH* 

 



Only very selective Ongoing test cases Competitive landscape Belgium different from peers: no FttH players in Belgium Roll-out time-consuming & capital intensive

Copper & cable inherently different • Point-to-point versus shared access network • Both have strengths and weaknesses • Cable has high speed claim, but depends on activity rate • Strengths of copper network: guaranteed bandwidth sustainability, upload speed, volumes, on-demand services Slide 40

Network Our key beliefs

Continued improvements mobile network • Hybrid equipment for future readiness • Enabler to act swifter to strategic changes

Network off-load to anticipate mobile data explosion

Fixed & mobile networks complementary to one another

• Competitive advantage of owning a nation-wide fixed and mobile network • Fulfil customer expectations while keeping investment under control • Different options to offload data are being explored

• Belgacom owning nation-wide fixed and mobile network • Well positioned for convergence • E.g. “Internet One”-offer: Fixed internet @ home; combined with mobile internet on the move

Slide 41

Macro economic environment Belgium & Euro area Unemployment rate (%)2

GDP growth (%)1 Belgium

Belgium

Euro area

2.0% 1.0%

1.7%

0.4% 1 2008

2 2009

3 2010

1.8%

2.0%

1.5%

1.8%

4 2011

20125

9.5%

7.0% 1 2008

Inflation (%)3 Belgium

9.6%

7,9%

8.6%

8.8%

8.7%

2 2009

3 2010

4 2011

5 2012

- Belgian economy is following German lead - Growth likely to remain above European average 2.1%

3,3% 0.3% 2008

10.0%

• 2011 GDP growth to be ~2% driven by strong export and private consumption growth

Euro area

4.2%

10.1%

7.5%

-2.8%

-4.1%

Euro area

2009

1.5% 3

2010

2.0%

1.9%

1.8%

1.7%

2011

2012

Source: European Economic forecasts – Autumn 2010 1 GDP – percentage change on preceding year 2 Number of unemployed as a percentage of total labour force 3 Index of consumer prices – percentage change on preceding year

• Inflation for 2011 projected at 2% or slightly lower than 2010 as energy-prices should stabilize • 2011 unemployment rate of 8.8%; 1pp below euro area

Slide 42

Debt & deficit as % of GDP Belgium versus Europe Debt and debt deficit in % of GDP* Belgian budget deficit • on track to fall from 6% of GDP in 2009, to 4.8% in 2010 • 2011 currently projected at ~4.7% Debt as % of GDP • For 2010 debt as % of GDP estimated at 98.6%; expected to rise to 100.5% in 2011 • Overall debt euro area expect to rise with 2.5 pp

Belgium belongs to the core countries in terms of debt sustainability * Source: ING Research – Presentation “Belgium in the core of Europe” (November 2010)

Slide 43

Focus on Customer Centricity Belgacom is accessible and close to each customer

All our customerfacing teams have made a step forward towards our clients

Accessible via call center • Shorter waiting time • Simplification access numbers • Larger opening hours: − 24/24 7D/7 for mobile − 7d/7 till 10pm for technical help (fix) Close physically • We introduced cutting-edge changes in our sales network to maximize our ability to connect with our customers: − 120 shops operated by Belgacom − 1,646 points-of-sale with Belgacom products all over the country • We initiated a service differentiation in our front-office contacts Accessible online • + 56% of online sales via e-channel • + Online support Close technically • Evening installations or repair at the customer‟s home, thanks to flexible technical intervention teams 44 Slide 44

Customer Centricity Belgacom cares for and listens to its customers EVA supports our customers on different forums

BGC wants to improve end-to-end customer experience from purchase to billing, through install & repair But also during key moments •

• •

We have introduced an SMS-based notification system: − sms to inform customers about the progress of their orders − sms to check customer satisfaction after a product has been installed We are improving billing: more clarity + launch green bill We have created a Move Coordination Desk: a virtual team that helps customers when they change address

Listening constantly •

Quality circles use customer feedback to increase customer satisfaction 45 Slide 45

Belgacom Company presentation Investor Relations

Ytd September 2010 results per business unit • • • • •

Consumer Business Unit (CBU) – slide 47 Enterprise Business Unit (EBU) – slide 55 Service Delivery Engine &Wholesale (SDE&W) – slide 61 Staff and Support (S&S) – slide 62 Belgacom International Carries Services (BICS) – slide 63 46 Slide 46

Consumer – Highlights Underlying business revenue growing 2.5% • Ytd revenue of € 1,768m, on adjusted* basis +0.4%

• •

•

2010 result impacted by legal entity merger and regulation (€37m ytd Sept) Sound underlying business trend (+2.5% yoy) driven by TV, data & Tango

Trend of Sales related costs improving

• • •

Yoy on adjusted* basis +3.2% Positive impact from regulation (MTR & collecting model) Positive impact from initiatives to improve product profitability

•

Non-HR expenses -3.9% as a result of ongoing cost focus

•

Personnel expenses -5.6% yoy benefitting from lower headcount following ongoing restructuring programs

•

Segment result +0.4% incl regulation impact & Scarlet migration Reported contribution margin at 45.7%

•

Operational results supported by sale of Packs. >800k Packs end of September 2010

47 Slide 47

Consumer - P&L • Revenue like-for-like +0.4%; underlying business +2.5%

CBU revenue (EUR mio) 2009 Reported

617

630 620

604

602

579

589

592

606

590

592

585

Q109

Q209

Q309

Q409

Q110

Q210

Q310

610

591

600

− €37m regulation impact (-2.1%): MTR & flow-through

Like-for-like

590

− −

580 570

560 550 540

CBU Cost of Sales (EUR mio)

• CoS+3.2% like-for-like; focus direct margin paying-off

2009 Reported

205

− Like-for-like ytd +3.2%; Q310 -7% − Lower costs following MTR cut & Collecting model − Initiatives taken to improve direct margin

Like-for-like

200

174

178

158

166

170

Q109

Q209

Q309

166

180

160

140

120

195

180

171

158

Q409

Q110

Q210

Q310

100

• Personnel costs -5.6% yoy due to decreasing headcount

CBU Personnel & non-HR costs (EUR mio) Non-HR

− -636 fte‟s following headcount reduction programs &

Personnel

180 160 140 120

Q109

Q209

Q309

Q409

Q110

Q210

Q310

100

−

80 60 40 20 0

45.4%

44.1%

44.8%

290

39.6%

44.7%

45.1%

• Ytd EBITDA +0.4% while absorbing €14m regulation

47,1% 4 5 ,0 %

280 4 0 ,0 % 270

260 250

268

266

269

240 230

244

264

267

276

3 5 ,0 %

3 0 ,0 %

2 5 ,0 %

220

2 0 ,0 %

Q109

Q209

Q309

Q409

Q110

Q210

natural attrition Q3 yoy variance somewhat impacted by upward revision of HR-related provisions

• Non-HR costs -3.9% ytd

CBU EBITDA (EUR mio) & Margin

300

fix-to-mob, collecting model, roaming Underlying growth driven by TV, data and Tango Underlying business growing yoy for 3rd consecutive quarter

− Ytd contribution margin at 45.7% − Q310 margin of 47.1% or +0.8ppt on comparable basis

Q310

*2009 result adjusted for intercompany items & changes in revenue & cost allocations

Slide 48

Consumer - Fixed voice Fixed voice revenue impacted by line loss & regulation Fixed voice revenue (EUR mio)

• Ytd revenue -9.9%

− Line loss main driver − Increased regulation impacts in Q3:

150 145

140 135

144

130

141

138

125

138

133

120 115

125

124

Q210

Q310

- Impact of Collecting model Premium Rate Services - Decrease Fix-to-Mob tariffs following MTR cuts

110 105 100

Q109

Q209

Q309

Q409

Q110

Voice line loss & EOP (000) 2,123

2,086

2,057

2,028

2,029

• Q3 line loss remained stable

1,999

1.970

50 2 .0 3 0 30

1 .5 3 0 10

-1 0

-3 0

-43

-37

-29

-33

-30

Q109

Q209

Q309

Q409

Q110

Q210

Q310

-5 0

1 .0 3 0

530

− -30k lines in Q310 − -92k ytd‟10 or an improvement vs ytd„09 (-109k) − Customer base at 1,970k, incl Scarlet VoIP

Fixed voice ARPU (EUR/month) 21.7

21.6

21.5

21.7

21.2

20.3

• Ytd ARPU at €20.6 (-4.6% yoy) driven by: 20.3

− Regulatory measures & discounts Packs − Slightly tempered by price increases

• Q3 ARPU stable compared to Q2‟10 Q109

Q209

Q309

Q409

Q110

Q210

Q310

• Traffic slightly lower than Q2 due to line loss &

Traffic (mio min) 1,230

Q109

1,124

Q209

1,060

Q309

1,181

Q409

1,178

Q110

1,052

1,004

Q210

Q310

seasonality  Quarterly evolution fairly stable  As from Q2‟10, Slide 49

Consumer - Mobile Voice Revenue -2.7% like-for-like, fully due to regulation – MoU up 4.2% • Ytd revenue -2.7% like-for-like; reported -6.5%

Mobile voice revenue (EUR mio) 2009 Reported

180

179

176

164

171

175

170

161

168

165

Q109

Q209

Q309

Q409

Q110

Q210

Q310

170

− 2009 included Fix-to-Mob intercompany revenue − Like-for-like decline fully due to regulation:

Like-for-like

178

190

170

160

- MTR & roaming - Collecting model Premium Rate Services

150

140

130

Mobile growth & EOP (000) 3,787

3,809

3,829

3,824

3,739

• +28k net adds in Q3‟10 driven by multi-brand strategy:

3,745

55 35

Q109

Q209

Q309

Q409

-85

-6 -2 6 -4 6

Q110

Q210

Q310

-6 6

-8 6

MOU (min/month) 2009 reported

107,9

99,4

Q109

112,9

104,5

Q209

108,9

111,8

100,9

103,2

104,0

Q309

Q409

Q110

109,8

Q210

14.9

Q109

15.7

15.4

15.5

15.2

Q209

Q309

Q409

− Ytd paying MoU were up 1% to 87.5

Q310

Like-for-like

15.9

• Ytd MoU +4.2% to 105.7 on a comparable basis

104,8

2009 reported

15.9

3 .8 0 3 .7 00 0 3 .6 3 .5 0 00 0 3 .4 0 0 3 .3 0 00 0 3 .2 3 .1 0 0 3 .0 0 00 0 2 .8 .9 2 0 0 2 .7 0 0 2 .5 .6 0 00 0 2 2 .4 0 0 2 .3 0 0 2 .1 .2 0 00 0 2 2 .0 0 0 1 .9 0 0 1 .7 .8 0 00 0 1 1 .6 0 0 1 .5 0 0 1 .3 .4 0 00 0 1 1 .2 0 1 00 0 19.1 .0 00 00 0 8 0 7 0 60 0 5 00 0 4 0 0 3 0 20 0 0 1 0 0 0 00 -1 -2 0 0 -3 0 0 -4 0 00 0 -5 -6 0 0 -7 0 0 -8 0 00 0 -9 -1 .0 0 00 0 -1 .1 -1 .3 .2 0 00 0 -1 -1 .5 .4 0 00 0 -1 -1 .6 0 0 -1 .7 0 0 -1 .9 .8 0 00 0 -1 -2 .0 0 0 -2 -2 .1 .2 0 00 0 -2 .3 0 0 -2 .4 0 0 -2 -2 .5 .6 0 00 0 -2 .7 0 0 -2 .8 0 0 -2 -3 .9 .0 0 00 0 -3 .1 0 0 -3 .2 0 0 -3 -3 .3 .4 0 00 0 -3 .5 0 0 -3 .6 0 0 -3 -3 .7 .8 0 00 0 -3 .9 0 0 -4 .0 0 0 -4 .1 0 0 -4 .2 0 0 -4 .4 .3 0 00 0 -4 -4 -4 .5 .6 0 00 0 -4 .7 0 0 -4 .8 0 0 -4 .9 0 0 -5 .0 0 0

Like-for-like

Blended net voice ARPU (EUR/month) 15.3

− Postpaid (+17k): packs combining fix & mobile − Scarlet owned brand „Mobisud‟ +18k

3,773

14.5

Q110

* 2009 result adjusted for intercompany items

15.2

Q210

14.9

• Ytd net voice ARPU was €14.9 or -2.9% yoy on a •

comparable basis Decline fully due to regulation

Q310

Slide 50

Consumer - Fixed Data Solid revenue (+6.1% yoy) in highly competitive market

• Revenue +6.1% yoy

Fixed data revenue (EUR mio)

− Growing customer base: +50k yoy − Revamped internet offer: more speed & volume at

slightly higher price

Q109

Q209

Q309

Q409

Q110

Q210

Q310

Broadband growth & EOP (000) 1,042

1,044

1,057

1,075

1,091

1,099

• +8k net adds in Q3 1,107 1 .0 1 0

810

610

− Supported by Packs & boosted internet offer − Somewhat below last year as competition over the Internet customer is becoming more fierce

410

210

Q109

Q209

Q309

Q409

Q110

Q210

Q310

EOP customers including Belgian residential customers of Scarlet

Broadband ARPU (EUR/month) 29.1

29.0

28.6

28.7

− More customers benefit from recurring monthly

28.5

28.1

Q109

Q209

• Ytd ARPU €28.4 or -0.6% yoy 28.1

Q309

Q409

Q110

Q210

−

discount on packs, which offset positive impact of price increase

Q310

Slide 51

Consumer - Mobile Data Revenue up 6.8% yoy; impacted by Regulation • Ytd Data revenue +6.8%

Mobile data revenue (EUR mio) 82 80 78

74 72 70 68 66

−

64 62

Q109

Q209

Q309

Q409

Q110

Q210

Q310

Q109

202

179

168

Q209

Q309

Q409

215

227

Q110

Q210

204

6.8

6.7

Q109

Q209

Q309

− „Paying‟ SMS up 22% to 87.1

Q310

Blended net data ARPU (EUR/month)

6.3

7.3% Impact from Collecting model for Premium Rate Services & SMS roaming regulation

• Ytd SMS at 215.3 or +28.5% yoy

SMS (units/month)

156

− Change in cost allocation Credits & Discounts − Like-for-like SMS revenue +10.7%; advanced data -

• Ytd ARPU at €7.0 or 6.7% yoy

7.1

7.0

7.1

7.0

Q409

Q110

Q210

Q310

Ytd'09*

Ytd'10

VAR Adj

Mobile data revenue

223

238

6.8%

SMS Advanced data

173 50

191 46

10.7% -7.3%

• Advanced data impacted by

− Collecting model as from Q2‟10 − Excl collecting model, yoy +11.2%

*2009 adjusted for the reallocation of credits & discounts

Slide 52

Belgacom TV Solid growing revenue; 920k customers TV revenue (EUR mio)

• TV revenue +42% yoy to €132m

− Continued customer growth − Growth driver for CBU

Q109

Q209

Q110

Q210

Q310

868

920

Q309

Q409

TV growth & EOP (000) 111

555

589

663

752

814

• Solid customer growth continued 1 .0 0 0 900 800 700

600

Q109

400

Q209

500

300

Q210

Q310

100

Q309

Q409

Q110

TV ARPU (EUR/month) 21.3 20.6

20.4

200

− 920k customers, incl 125k second streams − +52k in Q3; +168k in 2010 - driven by Packs − Yoy impact of Free TV Pack somewhat fading

• Ytd TV ARPU at €19.7

20.7

19.2

19.1

19.3

− 2% or €0.4 lower than Ytd Sept 2009 − As from Q3‟10, lower one time revenues from activation and installation

Q109

Q209

Q309

Q409

Q110

Q210

Q310

Slide 53

Tango – Mobile activities in Luxembourg

• Ytd revenue of €74m or + 7.3% yoy − Successful launch iPhone 4 − Strong sales of smart phones

• As a result ARPU increased 4.4% or € 25.3 Nine months ended 30 September Variance Variance % 2010/2009 2010/2009

2009

2010

7.3%

Total active mobile customers (in '000)

252

260

2.8%

Blended mobile net ARPU (EUR/month)

24.2

25.3

1.1

4.4%

Revenue1 (in EUR mio)

Slide 54

Enterprise – Highlights Recovery from crisis continuing

•

• • •

Revenue of € 1,816m, -1.8% compared to last year on adjusted* basis

• • •

Yoy trend improving: from -2.9% for Q1 to -0.9% for Q3 Total regulation impact of € 24m ytd Sept, -1.3% of revenue Underlying business revenue only 0.5% lower than last year

Domains hurt by the economic crisis are recovering:

• •

ICT revenue +4.9% ytd Sept, Q3 up by 9.1% Mobile Voice : negative yoy trend improving. Q3 -2.3%, incl. -5.1% regulation impact

Continued focus on Sales related costs challenged by growth in ICT

• •

Sales related costs of € 521m, or +0.8% Yoy * Positive impact from regulation , offset by ICT-growth at typical lower margin

Cost-reduction efforts continue to positively impact level non-HR expenses

• •

Ytd Sept yoy -3.2% Q3 negatively impacted by balance sheet revaluation on Exchange rates

Solid Contribution margin of 49.9% , compared to 50.7% on adjusted* basis

55 Slide 55

Enterprise - Fixed Voice Fixed line loss stable, revenue Q3 impacted by F2M price decrease • Ytd Sept. revenue of € 407 m; -5.8% yoy • Q3 revenue of € 130m or -6.8%

Fixed voice revenue (EUR mio) 150

145

140

148

135

144

139

130

142

141

136

125

120

− −

130

115

Seasonality effect and impact from Line loss Regulation (F2M & Collecting model)

110

Q109

Q209

Q309

Q409

Q110

Q210

Q310

Voice line loss & EOP (000) 20

1,529

1,515

1,504

1,491

1,477

1,466

1.455

1 .9 0 0 1 .7 0 0 1 .5 0 0 1 .3 0 0 1 .1 0 0

-15

-11

-14

-13

-14

-11

900

-11

700

• Ytd Line loss at -36k improved vs -40k last year • Q3 Line loss stable

− Less disconnections in search for cost savings

500 300 100

-2 0

-1 0 0

Q109

Q209

Q309

Q409

Q110

Q210

Q310

Traffic (mio min) 901

Q109

837

Q209

770

Q309

828

Q409

848

Q110

790

Q210

727

Q310

Fixed voice ARPU (EUR/month) 31.3

30.9

30.1

• Ytd ARPU @ € 30, - 2.4% to last year • Decrease to € 29 in Q3

30.2 29,0

Q109

Q209

Q309

Q409

Q110

Q210

• Ytd Traffic of 2.4 bn minutes, - 5.8% • Impact line loss • Seasonality effect in Q3

Q310

− Seasonality effect − Impact from regulation (lower F2M-tariffs & collecting model for Premium Rate Services) Slide 56

Enterprise - Mobile Voice Revenue trend improving, in spite of regulation pressure • Ytd Sept revenue of € 383m, -4.6% like-for-like* • Trend improving from -6.5% in Q1‟10 to -2.3% in Q3‟10 • Q3 revenue of € 124m, -2.3% like for like*

Mobile voice revenue (EUR mio) 2009 Reported 150

146

145

144

like-for-like

140 135

135

130 125 120

− Regulation (MTR, Roaming, Collecting model) − Underlying growth of 2.8%

115 110

105

138

137

127

128

129

130

124

Q109

Q209

Q309

Q409

Q110

Q210

Q310

1,271

1,286

100

Mobile growth & EOP (000)

1,170

1,190

1,211

1,235

1,252

1 .3 0 0 1 .2 0 0 1 .1 0 0

1 .0 0 0

900

• 6.2% customer growth yoy • Slowdown in Q3 2010 due to focus on “Value”-strategy rather then going for volumes with low ARPU

800

700 600 500

Q109

Q209

Q309

Q409

Q110

Q210

Q310

MOU (min/month) 2009 reported

355,4

354,5

Like-for-like

346,6 329,3

332,8

333,0

309,8

Q109

Q209

Q309

325,7

Q409

319,7

321,8

Q110

Q210

305,6

Q310

Blended Net voice net voice ARPU ARPU (EUR/month) (EUR/month) 2009 reported

42.1

40.7

40.2

38.9

Q109

Q209

Like-for-like

37.6

37.2

35.6

35.1

Q309

Q409

34.8

34.5

Q110

Q210

* 2009 result adjusted for intercompany items

• Decline MoU stabilizing: -2.9% ytd* • Seasonality effect on Q3 2010 • Yoy decrease limited in Q3 to -1.3% • Ytd Mobile Voice ARPU €33.9, -11.3% to last year* • Regulation impact: MTR, Roaming, Collecting model • Q3 impacted by lower usage in summer holiday season

32.4

Q310

Slide 57

Enterprise - Fixed Data Stable customer base in competitive and saturated market

• Ytd Sept revenue of € 295 m, -2.2% yoy • Connectivity revenue impacted by migration from older

Fixed data revenue (EUR mio)

110

105

100

101

100

Q209

Q309

Q409

Q110

Q210

Q310

•

Q109

• Stable customer base

Broadband growth & EOP (000) 445

443

442

446

445

446

446 430

380

4 -2

330

-1

technologies to advantageous “Explore” platform SME customers more and more signing-up for Bizz solutions

280

− Competitive market − Professional BB market saturated

230

180 130 80

-4

Q109

Q209

Q309

Q409

Q110

Q210

Q310

• ARPU ytd 2% lower to €39.2, impacted by discounts on

Broadband ARPU (EUR/month) 40.1

39.8

40.1

39.7

39.4

39.1

39,0

Q109

Q209

Q309

Q409

Q110

Q210

Q310

− Bizz Packs, and Bizz Internet − “Consumer”-Packs

Slide 58

Enterprise - Mobile Data Revenue growth tempered by regulation • Ytd Sept revenue of € 139m, +3.8%*

Mobile data revenue (EUR mio) 51

− Regulation impact (-4.2%); +8% underlying growth − Carry-over impact SMS roaming & collecting model

• Q3 -1.2% yoy; impact bill shock‟ measurements

Q109

Q209

Q309

Q409

Q110

Q210

Q310

• SMS ytd Sept revenue of € 55.7m, +2.6%*

SMS (units/month) 76 65

− Regulation impact -8.4%; +11% underlying growth − Carry-over impact roaming SMS

• Q3 slight seasonality effect Q109

Q209

Q309

Q409

Q110

Q210

Q310

• ARPU impacted by regulation

Net data ARPU (EUR/month) 12.4

Q109

12.9

Q209

13.4

Q309

Mobile data revenue SMS Advanced data

* SMS excluding free usage

12.9

Q409

12,1

12,5

12,3

Q110

Q210

Q310

Ytd'09*

Ytd'10

VAR Adj

134

139

3.8%

54 79

56 83

2.6% 4.7%

• Advanced Data ytd revenue of € 83.1m; +4.7%* • Impact collecting model premium rate services • Impact “bill shock” measurements in Q3

*2009 adjusted for reallocation of credits & discounts and eliminated intercompany revenue

* Like-for-like, i.e. Compared to 2009 result adjusted for intercompany items & changes in revenue & cost allocations

Slide 59

Enterprise - ICT Recovery from crisis continued Ytd Sept revenue of € 513 m, +4.9% • Recovery from crisis continues: trend improved from +1.8% in Q1 to +9.1% for Q3 • Yoy Q3 variance results from

− A strong Q3„10 result from Telindus International compared to − A low Q3 09 negatively impacted by crisis and exchange rate effect

ICT revenue (EUR mio) 185 180

181

175 170 165 160

171

155

166

174

172

Q110

Q210

167

150

153

145 140 135

Q109

Q209

Q309

Q409

Q310

Slide 60

Service Delivery & Wholesale Highlights • Revenue of €259m or flat on like-for-like* basis

SDE&W revenue (EUR mio)

− Impact from legal entity merger − €14m regulation impact − Excl regulation revenue was up driven by Scarlet

2009 Reported 120

100

Q109

Q209

Q309

Q409

Q110

Q210

Q310

like-for-like

customers moving from BROBA to carrier DSL

• Cost of sales positively impacted by collecting model &

SDE&W Cost of Sales (EUR mio)

eliminated intercompany flows

20 15

Q210

Q310

Q109

Q209

Q309

Q409

Q110

• HR costs in Q3 impacted by upward revision of HR

SDE&W personnel & non-HR costs (EUR mio) Non-HR

Personnel

120

100

Q109

Q209

Q309

Q409

Q110

Q210

Q310

•

SDE&W EBITDA (EUR mio) 0

-5

-1 0

-16

-1 5

-18

-13

-18

-23

provisions Non-HR cost negatively impacted by:

− Swap of mobile RAN with Huawei equipment − Additional costs Scarlet migration

• EBITDA ytd at €-81m • On a like-for-like* basis, EBITDA about 7% down

-2 0

-2 5

-36

-3 0

0 -3 5

-4 0

Q109

Q209

Q309

Q409

Q110

Q210

Q310

 Quarterly evolution fairly stable

*2009 result adjusted for intercompany items & changes in revenue & cost allocations

Slide 61

Staff & support - Highlights

• Ytd revenue € 28m or + 10.5%

S&S revenue (EUR mio)

− Q3‟10: more capital gains realized on the sale of

10 7

building than in Q3‟09

Q109

Q209

Q309

Q409

Q110

Q210

Q310

• Ytd costs at €125m or fairly flat compared to ytd Sept‟09

S&S Personnel costs (EUR mio) 44 43

42 41

Q109

Q209

41 40 40

42 41

Q309

Q409

Q110

Q210

Q310

S&S non-HR costs (EUR mio)

• Non-HR costs-2.2% resulting from company-wide efforts to reduce costs

Q109

Q209

Q210

Q310

Q309

Q409

Q110

Slide 62

International Carrier Services Organic growth trend persisted in Q3 2010 ICS total revenue (EUR mio)

• Ytd revenues at €1,208m

− Impacted by full conso BICS and additional business

450 400

414

350

378

300 250

415

− −

200 150 100

217

227

228

221

Q109

Q209

Q309

Q409

50 0

Q110

Q210

Q310

ICS direct margin (EUR mio)

• Gross margin up 56% yoy to €168m

Voice Non-Voice 7 0 ,0

− Positive impact consolidation − Margin as % of revenue impacted low voice unit

6 0 ,0

19.4

23.1

28,0

33.1

32.7

31,7

Q110

Q210

Q310

5 0 ,0

4 0 ,0

3 0 ,0

2 0 ,0

1 0 ,0

12.3 20.3

16.5

15.2

14.0

23.7

19.6

21.3

Q109

Q209

Q309

Q409

margins, feeling pressure from competition & fluctuations EUR/USD

0 ,0

ICS EBITDA (EUR mio) & Margin 48

8.7%

10.0% 7.4%

8.8%

7.4%

7.7%

8,1%

• EBITDA at €94m incl full conso & additional business 1 0 ,0 %

8 ,0 % 33 28 23

18 13

23 17

Q309

Q409

6 ,0 %

4 ,0 %

2 ,0 %

-2

Q209

Q110

Q210

Q310

168

188

212

5,923

6,254

6.433

Q110

Q210

Q310

ICS volumes (in mio) Minutes 6 .0 0 0

5 .0 0 0

4 .0 0 0

3 .0 0 0

•

MTN ICS Solid performance in non-voice business brings Q3 margin to 8.1%

0 ,0 %

Q109

7 .0 0 0

coming from MTN Like-for-like revenue +3.7% ytd Strong organic growth Q3‟10: +5% yoy

SMS/MMS

117

119

149

4,498

4,707

4,805

Q109

Q209

Q309

164 5,324

2 .0 0 0

1 .0 0 0

• Volumes continued stable increase

− Positive impact additional MTN business − Voice volumes up ~33% − Non-voice up 46.5%

Q409

Slide 63

Cautionary statement regarding forward-looking statements “This communication might include some forward-looking statements, without limitation, regarding Belgacom‟s financial or operational results, certain strategic plans or objectives, macro-economic trends, regulation, future market conditions and other risk factors. These forward-looking statements rely on a number of assumptions concerning future events and are subject to uncertainties and other factors, many of which are outside Belgacom‟s control. Therefore the actual future results may differ materially from those expressed in or implied by the statements. Readers are cautioned not to put undue reliance on forward-looking statements, which speak only of the date of this communication. Belgacom disclaims any intention or obligation to update and revise any forwardlooking statements, whether as a result of new information, future events or otherwise.“

Slide 64

For further information: Belgacom Investor Relations e-mail: investor.relations@belgacom.be Tel: +32 2 202 82 41 http://www.belgacom.com

Slide 65