Roadshow presentation Q2 2013 by Belgacom Group

Belgacom Presentation Q2 2013 results Roadshow September 2013 Financial highlights

Operational highlights

Detailed segment results

Executive summary – slide 3

Executive summary – slide 15

Revenue – slide 5

Mobile – slide 16

Consumer – slide 27 Enterprise – slide 34

Direct margin – slide 6

Fixed – slide 20

Non-HR expenses - slide 7

Convergence – slide 21

HR expenses – slide 8

Network – slide 22

EBITDA – slide 9 Capex – slide 10 FCF/FIN POS – slide 11-12 Balance sheet – slide 13 P&L – slide 14

SDE&W/S&S slide 40-41 BICS – slide 42

Other topics Shareholder structure – slide 44 Shareholder remuneration – slide 45 Spectrum – slide 46

Pricing – slide 47 Regulation & Legal – slide 52 Macro –slide 56

Cautionary Statement

“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 2

Executive summary- financials Q2 2013 Financial results Q2 on track to meet FY guidance

- Group revenue: € 1,583m; -1.7%* YoY - Group ebitda: € 430m, -1.9%* YoY - Group capex: € 177m, +2.1% YoY

Well positioned to face challenging market dynamics

Regulatory measures significantly impacting financials

Pressure on Mobile revenue fairly stable to Q1 Successful mobile retention/acquisition actions Solid performance of Belgacom’s Fixed business Good cost containment

- Regulation impact on Group revenue estimated at € -30m (-1.8%), EBITDA by € -20m (-4.6%), for larger part within EBU due to data roaming price cap.

*Including a one-off accounting adjustment recorded in Q2 2012 which reduced the revenue by € 12 million and EBITDA by € 34 million in 2012 Slide 3

FY 2013 guidance reiterated

FY 2013 outlook

H1 2013 reported

Group revenue

Decline between -1% and -2%

-0.9%

Group EBITDA*

Decline between -4% and -6%

-4.1%

Capex/Revenue

Between 13% and 14%

11.7%

Metrics

* Compared to the restated 2012 EBITDA of â&#x201A;Ź 1,801 m, following the retrospective application of IAS19R

Slide 4

Q2 2013 Group revenue (mio €)

H1 2013 Group revenue (mio €)

Slide 5

Q2 2013 Group direct margin (mio €)

H1 2013 Group direct margin (mio €)

Slide 6

Non-HR expenses Cost management limiting impact of commercial push Quarterly Non-HR expenses ( € million) - Q2’13 non-HR expenses of € 225m - Company-wide cost containment nearly offset the impact from the increased commercial activity in the second quarter 2013.

+0.7% 25 0

256

24 0 23 0

232

22 0

21 0 20 0

226

224

Q112

Q212

213

217

218

225

Q113

Q213

19 0 18 0

17 0 16 0

15 0

Q311

Q411

Q312

Q412

Consumer

Q2’13 non-HR expenses of € 74 m, up 1.0% mainly driven by the focus on Mobile acquisition, partly offset by cost management

Enterprise

Q2’13 non-HR expenses of € 37m, 5.9% lower compared to the same period of 2012 showing effect from solid cost containment.

Business Unit

SDE & W

5.2% higher non-HR YoY to €52m including resources to support simplification projects

Slide 7

HR expenses Salary indexation partly offset by one-off provision reversal and lower headcount Quarterly HR-expenses (€ million) +0.6% 29 0

Mach 2012 & Jan 2013: 2% inflation based salary indexation

27 0

25 0

278

283

278

281

Q311

Q411

Q112

Q212

290

278

290

283

Q113

Q213

23 0

21 0

19 0

17 0

15 0

Q312

Q412

Belgacom headcount in FTE 25000

Estimated cash-out for termination benefits 2013 2014 2015 2016 2017 2018-2033

EUR million 80 49 21 6 6 21* (* Cumulative for full period)

Telindus +2,600 FTE

PTS -6,300 FTE

20000

Jan ‘12 : The Phone House +518 FTE*

BeST -4,160 FTE

15000

2006-2012 Tutorship & FMS -3,900 FTE

10000

15,778

 15,778 FTEs end June’13 (-216 FTE YoY)  Civil Servants decreased to 33% of total headcount

5000

YE96

YE98

YE00

YE02

YE04

YE06

YE08

YE10

*As part of the agreement with the Competition Council, Belgacom sold some of the Phone House shops in Nov’12, which lowered the headcount accordingly.

YE12 Slide 8

Q2 2013 Group Ebitda (mio €)

H1 2013 Group Ebitda (mio €)

Slide 9

Invest in high-quality fixed & mobile network to maintain leadership in convergence Accelerated network investments

Group Capex in â&#x201A;Ź millio n / % of revenue 11.1%

734

2010

13%-14%

12 .1%

11.7%

777

753

2011

2012

10.8%

11.2%

174

177

Q2'12

Q2'13

Outlook 2013

*This does not include capex for a potential bidding in the 800 Mhz spectrum auction that is planned before year-end

- maintain network superiority on mobile speed and coverage, substantially increase the bandwidth on fixed network via dlm and vectoring technology make operations leaner through a simplified network

900 800 700600 500 400 300 200 100 0

Slide 10

Q2’13 Free Cash Flow of € 47 million, impacted by income tax payments and lower ebitda Q2

2 0 12 (in mio € ) Operating CF before working capital changes CF for Working capital Net cash used in investing activities Fre e Cas h Flo w

IAS Re s t a t e d

379 -95 -174 110

2 0 12

2 0 13 var. 366 -142 -177 47

2 0 13

IAS Re s t a t e d

-13 -47 -3 -63

var.

771 -101 -381 28 9

730 -235 -359 136

-41 -134 22 -153

Lower FCF result of: Free Cash Flow (in mio € )

•

980

797

•

788

a timing difference in income tax payments lower EBITDA

691 409 289 136 2008

2009

2010

2011

2012

Ytd June'12 Ytd June'13

Slide 11

Sound financial position - Net financial debt at € 2,027m, € 426m higher versus end 2012 - The outstanding long term financial gross debt amounted to € 2.1Bio - Credit ratings: Standard & Poor’s A; Moody’s A1 – both stable outlook

(1,601)

136

(538)

(38)

Net debt December 2012

FCF

Dividends

Non controlling Net sale of interests treasury shares

(1)

(2,027)

Other

Net debt June 2013

- Belgacom has an € 2,500m Bonds EMTN Program with an outstanding amount of € 1,825m. Debt maturing

2013

2015

2016

2018

2023

2026

2028

€ 127m

€ 145m

€ 950m

€ 500m

€ 100m

€ 73m

€ 150m Slide 12

Belgacom consolidated balance sheet 31-Dec

30-Jun

(EUR million)

2012

2013

TOTAL ASSETS

8,243

8,196

Non-recurrent assets Goodwill Intangible assets with finite useful life Property, plant and equipment Investments in associates Other participating interests Deferred income tax assets Pension and other non-current assets

6,192 2,339 1,097 2,467 1 7 147 134

6,116 2,339 1,067 2,475 1 6 128 101

Current assets Inventories Trade receivables Current income tax assets & other current assets Investments Cash and cash equivalents

2,051 133 1,341 292 83 202

2,080 147 1,329 324 61 219

LIABILITIES AND EQUITY

8,243

8,196

Equity Shareholders' equity Minority interests

3,093 2,881 211

2,865 2,680 185

Non-current liabilities Interest-bearing liabilities Pensions and other post-employment benefits Provisions Deferred tax liabilities and other amounts payable

2,678 1,761 570 203 144

2,846 1,974 528 203 141

Current liabilities Interest-bearing liabilities Trade payables Income tax payable Other current payables

2,472 215 1,310 236 711

2,485 391 1,260 105 730

• Shareholders’ equity decreased from € 2,881m end 2012 to € 2,680m in June. This results from the 2012 dividend payment, typically exceeding the net income generated over the first six months of the year.

* The 2012 financial figures have been restated after the adoption of the IAS 19R revision

Slide 13

Group – quarterly P&L * The 2012 financial figures have been restated after the adoption of the IAS 19R revision

FY 2012

Q113

Q212

VAR Q2/Q2

1,6 44

6 ,46 2

1,5 8 6

1,5 8 3

-1.7%

-1,156

-1,215

-4,661

-1,144

-1,15 3

-1.7%

-649 -290 -217

-680 -278 -256

-2,611 -1,126 -924

-637 -290 -218

-645 -283 -225

-3.4% 0.6% 0.7%

in mio €

Q112

Q212

Revenues (1)

1,5 8 8

1,6 11

1,6 20

Total OPEX

-1,118

-1,172

Costs of materials and charges-614 to revenues -667 Personnel expenses and pensions -278 -281 Other operating expenses -226 -224

EBITDA (1)

Q312 Q412 Restated

470

438

46 4

429

1,8 01

441

430

-1.9 %

EBITDA margin (1)

29.6%

27.2%

28.6%

26.1%

27.9%

27.8%

27.2%

0.0 pp

Non recurring items

-10

-1

-4

-15

-181

-188

-185

-194

-748

-192

-200

6.8%

EBIT (incl. NR)

28 9

240

278

231

1,038

25 0

230

-4.4%

Financial result Tax expense

-22 -65

-26 -48

-54 -34

-28 -30

-131 -177

-20 -53

-24 -44

-7.0% -8.1%

19 9 3

16 1 5

18 4 5

16 8 5

712 19

171 5

15 5 6

-3.5 % -

0.6 3 0.63

0.5 1 0.53

0.5 8 0.58

0.5 3 0.54

2.24 2.27

0.5 4 0.54

0.49 0.49

-3.6 % -7.7%

Depreciation

Net income (Group) Non-controlling interest

Earnings/share in € Earnings/share in € (excl. NR) (1)

before non-recurring items

Slide 14

Executive summary- operationals Q2 2013 -

+ 46,000 Mobile cards

+128,000

-82,000

Postpaid

Prepaid

+16,000 TV

Total Group mobile customer base of 5,410,000 Strong Mobile Postpaid net adds, growing Belgacom’s postpaid customer base to 3,570,000. Prepaid customer base lower, in shrinking prepaid market, reaching 1,837,000 prepaid cards end June’13

TV customer base grew by 16,000 in Q1, of which 14,000 HH, in line with previous quarter. Total TV customer base of 1,428,000

Packs continued to grow. Total end June’13 at 1,278,000

+ 19,000 PACKS

BB customer base end June ’13 at 1,652,000

+ 5,000 Internet

Fixed voice customer base end June ’13 at 3,002,000

- 39,000 Fixed Voice Slide 15

Retention actions stabilised mobile churn, positive trend seen in Q1 continued Consumer Mobile Churn postpaid

prepaid

Clear effect New telecom law Q1'12

Focus on mobile in H1 through positioning of Proximus network quality, proactive retention and acquisition actions

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Enterprise Mobile Churn

> 60% postpaid customers on new mobile tariff plan

effect in EBU much less pronounced Q1'12

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Slide 16

Q2’13 Focus on Mobile acquisition - Belgacom Group added 46,000 mobile customers in Q2’13, with Postpaid growing by 128,000 Mobile customer evolution 2 net adds

1 00

5,543

Split Postpaid - Prepaid

total

5,504

Net adds Postpaid

5,416

5,364

5,410

128

1 30

5 ,4 00

5 ,2 00 40

Net adds Prepaid & MVNO

5 ,6 00

5 ,0 00

Supported by tactical joint offers & strong marketing actions

4 ,8 00

-39

- 20

-44

-20

4 ,6 00

-52

- 40

-16 -80

4 ,4 00 - 60

-70

-88

- 80

- 10 0

Q3'12

-82 -113

-120

4 ,0 00

Q2'12

-72

4 ,2 00

Q4'12

Q1'13

Q2'12

Q2'13

150

Q3'12

Q4'12

Q1'13

Q2'13

Net adds Consumer Prepaid Net adds Consumer Postpaid

100

50 50

5.5%

-50

-37

-44

23.6%

40.4%

-68

-80

- 100

Mobile

+Tango

-82

-108 - 150

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

market share₁ EBU Net Adds 50

36 30

30.5%

1 Active mobile cards 2 Mobile active customers including mobile customers Luxembourg, and including mobile data cards.

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Slide 17

Mobile offers became more abundant and have been simplified Evolution of comparable offers

Positioning Scarlet as no frills brand, with very attractive pricing for â&#x20AC;&#x2DC;price seekersâ&#x20AC;&#x2122; Feb-13

June-13

Aug-13

Launch

prepaid

postpaid

3-play

offer

Slide 18

Clear Postpaid ARPU impact, while Prepaid ARPU remains fairly stable Since the Telco law came into force, the Consumer Postpaid ARPU decline clearly accelerated.

Consumer blended ARPU: Split Prepaid - Postpaid 27.3 €

28.9 €

Blended Postpaid ARPU

26.6 €

.0270 €

24.1 €

24.4 €

  

.0220 €

Blended Prepaid ARPU .0170 €

14.2 €

13.6 €

14.4 €

13.3 €

14.0 €

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

Initial loss high-value postpaid customers Re-pricing effect ( ~60% of the Postpaid customer base has been re-priced to new tariffs) Prepaid (lower ARPU) moving to Postpaid

.0120 €

.0070 €

In contrary, the Prepaid ARPU was not impacted by the new Telco Law.

Enterprise blended ARPU

The Enterprise Business experiences a more general ARPU decline driven by:

0.0 €

37.2 €

35.5 €

0.0 €

33.9 €

31.5 €

30.8 €

Q1'13

Q2'13

0.0 €

  

Regulation More abundant offers Churn of high-usage customers in the last quarter of ‘12

0.0 €

Q2'12

Q3'12

Q4'12

Slide 19

Solid performance of fixed products Broadband customer evolution net adds

total

1,615

1,626

1,637

1,652

1,647

1,700

Other 7%

23 1,600

Belgacom 44%

18 1,500

 

12 8

1,400

Cable 49%

10 1,300



-2

Belgian Fixed internet market still growing, but at slower pace Internet penetration @ 78% Belgacom market share erosion limited to -0.5% YoY

1,200

Q2'12

Q3'12

Q4'12

Q1'13

Q2'13

TV Lines evolution* Net adds Households

1,301

1,340

Second stream users

1,386

1,412

total

1,600

1,428

Other 5%

1,400

Belgacom 32%

1,200

40 1,000

800

Cable 64%

600

Q1'13

Q2'13

   

Belgian digital TV penetration @ 78% Stable DTV market share of 32% Growth households stable to Q1’13 Total TV market** share of 26% ; +2pp YoY

400

Q2'12

Q3'12

Q4'12

Fixed Voice customer evolution 70

net adds

total 3,500

3,300 30

3,149

3,119

3,085

3,041

3,002

3,100

2,900 -10

-30

-37

-30

-33 -44

-39

-50

2,700

  

Stable market, Fixed Voice penetration @ 72% Belgacom containing Fixed Voice line erosion Fixed Voice line “upgraded” via:  Flat rate calling “Happy Time XL” and “Happy Time International”  Multi-play packaging

2,500

Q2'12

Q3'12

Q4'12

Q1'13

*Corresponds to the total settop boxes, including multi-stream

Q2'13

Slide 20

Convergence strategy - key advantage in challenging market Packs evolution net adds

1,177,000

total

1,214,000

1,278,000 1,237,000 1,259,000

1,300,000

1,200,000

1,100,000

 

Continued uptake of multi-play packs End June 2013; 21% of PACKS included mobile (from 13% previous year)

1,000,000 40

21% of Packs with Mobile

900,000

Q4'12

Q1'13

Q2'13

800,000

700,000

Q2'12

Q3'12

Sustain growth in convergence through more value from mobile components All Packs contain 3G

All mid-end Packs include

mobile internet

TV Everywhere

volume

(as of 1st July)

Supported by tablet joint offer

On 3G, 4G and Wi-Fi

6 mobile subscriptions in a Up to

Pack

More value

Supported by tablet joint offer

FON log-in

at least a€5 reduction per mobile Slide 21

Belgacom brings connectivity anywhere, anytime and on any device Fixed Network @   99.85% DSL

Mobile Network2 @

(among world leaders)

> 99% 3G & 2G

@   > 86% VDSL (2nd in Europe)

~ 93% TV coverage



Wi-fi Hot Spots @

700,000 FON spots in Belgium

~ 36% 4G coverage

All download speeds are up to 50 Mbps 1

55.9 Mbps 21.8 Mbps

On average, a customer gets 33 Mbps

21.2 Mbps 6.2 Mbps

>11 million worldwide (UK, France, the Netherlands, Portugal …)

1 Speeds

depend on such factors as the distance between the connection point & the local exchange, the computer system & the internal cabling.

2 Source:

As measured by independent agency CommSquare during Q2 2013 drive tests

Slide 22

Fixed network Speed evolution in Mbps 2013 to >2018

Launch of Dynamic Line Management

Launched Q1 2013

DLM monitors line stability and dynamically applies max possible speed when a line is sufficiently stable

Preparation for Vectoring roll-out

Planned Q1 2014

Vectoring cancels crosstalk in the copper cables resulting in a significant bit rate increase of copper lines

• To up-to-50 Mbps speeds – One third of our VDSL2 lines already receives a 50 Mbps speed

• Start of Field Trial – Large technical field trial started to prepare Vectoring for massive roll-out

• 30% higher average speed experience – Thanks to DLM, the average speed experience increased with 30%

• Strong regulatory framework was negotiated, disentangling all blocking points

Next step: DLM on Vectoring Slide 23

Mobile network Mobile data evolution — Mobile data usage still in early stages with smartphone penetration just above 30%.

Steep increase in mobile data usage

— However, quickly emerging market need for 4G with much higher mobile data usage each quarter

+60% in 6 months

250

200

Strong increase in number of users X 2 in 1 year

150

100

Belgacom outperforms competition on mobile internet quality as shown in an independent study by the largest Belgian consumer organization

3G+ mobile data experience acceleration

4G roll-out continued

1•

Avg. 3G speed increase from 3.2 Mbps to 6.2 Mbps

•1 Belgacom is only Belgian operator offering 4G

2•

70% increase of network capacity for data

•2 ~36% 4G outdoor coverage end Q2 2013

3•

> 80% of mobile sites have high-speed backhauling

•3 4G available in 146 Belgian cities Slide 24

Network simplification Leaner operations through a simplified all-IP-network SIMPLIFICATION • Out phase 30 buildings • Out phase ATM network • Out phase legacy telephony PSTN & ISDN

SITUATION TODAY • High network complexity, high number of technologies • High maintenance cost • High connectivity cost

FROM

• Estimated to generate savings as of year one, as from 2018 growing to

€ 35m recurrent savings. street cabinet copper fiber

remote optical platform central technical office

Three major components

Major Milestones

Fixed voice consolidation – 3.800.000 PSTN equivalent lines to migrate

•1

Total customer base of ATM customers on Ethernet based alternatives by 2013

•2 No more SIEMENS EWSD switches

Fixed data consolidation – 250.000 ATM customers to migrate Building outphasing – 263.000 m² floor space to consolidate

by 2015 (~40% of install base) •3

No more ALCATEL LUCENT S12 PSTN switches by 2018 (~60% of install base)

•4

30 buildings freed up by 2020 with an average of 5 buildings/year

Already 300.000 lines migrated

Slide 25

Belgacom Company presentation Investor Relations

Q2 2013 results per business unit Consumer Business Unit (CBU) Enterprise Business Unit (EBU)

Service Delivery Engine &Wholesale (SDE&W) Staff and Support (S&S) Belgacom International Carries Services (BICS)

26 26 Slide

Consumer - P&L Pressure on Direct Margin partially offset by cost containment 

CBU revenue (EUR mio) -1.5%

61 0

– – –



Excl Q2’12 €-10.1m accounting adjustment rev -3.1% Regulation impact Q2 ’13 of €-8m (-1.4%) Pressure on Mobile revenue partly offset by firm Fixed performance H1’13 revenue -2.8%; -3.7% like-for-like*



Q2’ 13 Cost of Sales -9.4% lower YoY ; -0.7%,like-for-like

59 0

57 0

55 0

571

572

577

575

587

581

553

53 0

567

51 0

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

CBU Cost of Sales (EUR mio) 21 0

-9.4%

19 0

182

17 0

15 0

158

13 0

168

162

157

166

149

– –

165

11 0

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

CBU Personnel & Non-HR costs (EUR mio) 20 0

Personnel

18 0 16 0

14 0 12 0 10 0

H1’13 CoS of €313m, -8.8% or -4.4% like-for-like



Lower HR expenses, -1.3% ; driven by lower headcount, partially offset by wage indexation. Non-HR expenses 1% up, cost optimization initiatives and partial divesture of The Phone House stores limited impact from Mobile acquisition costs

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213



Q2’13 segment result +3.9% YoY; -6.5% like-for-like

80 60

40 20 0

CBU EBITDA (EUR mio) & margin +3.9%

45.0% 32 0 30 0

40.8%

28 0

43.7%

40.6%

44.7%

44.9% 41.8%

50 .0%

42.8%

45 .0%

26 0

24 0 22 0

257

233

252

Q311

Q411

Q112

20 0

263

234

40 .0%

243

248

243

Q412

Q113

Q213

18 0

35 .0%

30 .0%

Q212

Q312

Q2 ’12 incl. accounting adj. of €16m Acquisition costs offset by: lower MTRs, improved sales channel mix and partial sale of The Phone House stores



-0.3%

Non-HR

Q2’13 Revenue -1.5% lower



– – –

Q2’12 incl one-off acc impact of €-26m Regulation impact of €-3 m Decline contained: sound Fixed revenues & cost control

H1’13 segment result +1% ; -4.1% like-for-like

*Like-for-like excludes the impact from the accounting adjustment recorded in Q2’13

Slide 27

Consumer - Fixed voice Fixed Voice Voice line price adjustments growing ARPU andtocontained Fixed erosion stable;resulted revenueindecline continued persist revenue decline Fixed voice revenue (EUR mio) 14 0



-1.9%

12 0

11 0

10 0

111

110

Q311

Q411

Q112

105

104

103

Q212

Q312

Q412

Q113

Q213

Voice line loss & EOP (000) 50

Fixed Voice revenue erosion limited to -1.9% YoY

–

13 0

1,839 1,818 1,780 1,758 1,737 1,718 1,693 1,673

Price changes brought relief to the declining Voice revenue resulting from the line loss.



H1’13 revenue of €207m, i.e. a 3.4% decline YoY



Fixed Voice customer base of 1,673,000 end Q2’13



Fixed Voice ARPU up with price changes giving some support



The total Fixed Voice traffic was down 3.8% driven by lower national traffic.

2,0 30

1,5 30 10

-10

-31

-20

-21

-22

-21

-18

-26

-30

-19

53 0

-50

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

Fixed voice ARPU (EUR/month) +2.6%

19.7

19.8

20.2

19.7

20.0

20.1

Q311

Q411

Q112

Q212

Q312

Q412

Q113

20.2

Q213

Traffic (mio min) -3.8%

936

Q311

1,036 1,086 1,027

Q411

Q112

1,0 30

Q212

965

Q312

1,060 1,086

Q412

Q113

988

Q213

*Q1 2012 real line loss, differs from QoQ EOP difference due to re-segmentation exercise at start of 2012

Slide 28

Consumer – Mobile Voice Mobile customer base back to growth; Mobile Voice revenue remains under pressure Mobile voice revenue (EUR mio)



16 0

14 0

12 0

143

136

10 0

130

123

133

120 100

Q2’13 Mobile Voice revenue -19.8% like-for-like

– –

-13.2%

107

Driven by regulatory impacts & especially by lower Prepaid customer base and repricing of mobile Postpaid mainly decreasing the out-of-bundle usage

Q311

17 0

12 0

Q411

Q112

Q212

Q312

Q412

Q113

Q213

Mobile growth & EOP (000) 3,774 3,805 3,805 3,811 3,748 3,643 3,561 3,572 48 32 10 11 5

-30

4,1 00



3,7 00

3,5 00

3,3 00

–

3,1 00

-62

-80

-13 0

-18 0

Q311

Q411

* Q112

Q212

Q312

-105

Q412

MoU (min/month)

Q411

Q112

Q212

Q312

2,7 00

2,5 00

Q113

Q412

Q113

12.9

12.2

11.6

12.0

11.1

12.0

9.5 Q311

Q411

Q112

Q212

Q312

Q412

Q113

MoU up YoY to 109.4 minutes/user/month



Net Voice ARPU at € 10.2, or -15.3% YoY like-for-like

Q213

-15.3%

11.1

 109.4

Blended net voice ARPU (EUR/month) -8.5%

Postpaid +93,000 : revised price plans, marketing efforts and tactical handset subsidies pushed customer growth Prepaid -82,000: Prepaid market shrinking with new telco law lowering contract barriers

Q213

+4.5%

103.6 103.8 101.5 104.7 100.5 101.7 102.2

Q311

2,9 00

-82

End Q2’13 Mobile customer base of 3,572,000 cards

–

3,9 00

– 10.2

Impacted by Postpaid repricing with more abundant tariff plans

Q213

*i.e. Mobile net adds differ from QoQ EOP difference due to re-segmentation exercise at start of 2012

Slide 29

Consumer - Fixed Data Fixed Internet revenue grew 5.4%, driven by price indexation and larger customer base Fixed data revenue (EUR mio)



+5.4%

– –

88 86

84 82

80 78

Q311

Q411

Q112

Q212

Q312

Q412

Q2’13 revenue up 5.4% YoY

Positively impacted by price indexation Feb’13 Continued YoY customer growth

76 74 72

Q113

Q213



Broadband growth & EOP (000) 1,138 1,156 1,159 1,169 1,181 1,193 1,203 1,210

– –

1,2 10

1,0 10

81 0

CBU ended Q2’13 with 1,210,000 Fixed Internet customers

61 0 41 0

+7,000 net-adds, in spite of lower focus on Fixed in Q2 supported by the “Internet Everywhere” offer, mainly bought in Pack

21 0

Q311

Q411

Q112 *

Q212

Q312

Q412

Q113

Q213



Broadband ARPU (EUR/month) +0.9%

ARPU Q2’13 of € 26.7; i.e. up by 0.9% YoY

–

26.7

26.1

26.9

26.4

26.5

26.1

26.3

26.7

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

ARPU supported by price indexation

*i.e. Fixed Internet net adds differ from QoQ EOP difference due to re-segmentation of customers

Slide 30

Consumer - Mobile Data Mobile data revenue declined, impacted by regulation, more abundant offers and the mobile customer evolution age Mobile data revenue (EUR mio)  Q2’13 Mobile Data rev -4.3% YoY -4.3% SMS

Adv Data

102

100

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

12 0

93 90

– – –

SMS (units/month) -2.8%

235

Q311

273

280

291

Q411

Q112

Q212

262

Q312

294

280

283

Q412

Q113

Q213

Blended net data ARPU (EUR/month) +0.8%

8.2

8.5

Q311

Q411

Q112

9.0

8.7

9.0

9.1

Q212

Q312

Q412

Q113

Q213

Revenue impacted by regulation, lower mobile customer base and more abundant offers SMS revenue -1.3% Advanced Mobile Data -21.6% : more Mobile data included in price plans, and impact from regulated price cap on retail Data roaming.



H1’13 Mobile Data rev -2.1% YoY to € 195m



SMS usage -2.8% to 283 SMS/Month



Mobile Data ARPU up 0.8% YoY to € 9.1

–

More customers having a price plan including Mobile data

Slide 31

Belgacom TV Double-digit TV revenue growth through larger TV customer base and higher ARPU

TV revenue (EUR mio)



+15.3%

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

– –

TV growth & EOP (000) 10 0

1,428 1,301 1,340 1,386 1,412 1,139 1,211 1,254

 1,0 00

80 0

60 0

Q112

Q212

Q312

Q412

Q113

Q213

Q311

Q411

40 0 20 0 0



TV ARPU (EUR/month) +5.7%

17.5

17.6

18.1

18.2

18.3

18.6

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

Total customer base of 1,428,000; +9.8% YoY Growth households stable to Q1 ‘13 +14,000 households added on Belgacom TV, 2,000 multiple streams

Q2 TV ARPU of EUR 18.6 , a 5.7% growth YoY

–

17.8

Continued growth of subscribers Price increase of rented settop box

Continued customer growth

– – –

1,4 00 1,2 00

TV revenue +15.3% YoY driven by

Supported by the February ’13 price increase for rented settop boxes

Slide 32

Tango Luxembourg

Tango revenue (EUR mio) +16.8%

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

Tango mobile customers EOP (000) 260

264

266

268

270

271

273

274

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

Blended mobile net ARPU (EUR/month) +6.3%

29.3

29.1

28.4

29.2

29.5

30.7

Q311

Q411

Q112

Q212

Q312

Q412

30.1

31.1

Q113

Q213



Q2 2013, Tango’s revenue +16.8% YoY to €32m.

– – –

supported by the growing mobile subscriptions success of the offers for Smartphones increased terminals sales



H1’13 revenue of €62m, up 12% YoY



Continued growth in mobile customer base – Belgacom extended its convergence strategy to Tango: quadruple-play offer “Tango Generation”. – success of Tango's 4G offers among its Smartphone customers – focus placed on the B2B market with the recent acquisition of large accounts

Slide 33

Enterprise – quarterly P&L 

EBU revenue (EUR mio) 64 0

-3.8%

62 0

– – –

60 0

58 0

591

572

56 0

579

576

54 0

560

579 554

554

Q113

Q213

Q2 YoY decline of 3.8%; -4.2% like-for-like*

52 0

Q311

Q411

Q112

Q212

Q312

Q412



EBU Cost of Sales (EUR mio) 20 0

Q2’12 included €-2.1m one-off acc adjustment Regulation impact of € -20m (-3.5%) in Q2’13 increased pressure on mobile only partly offset by higher ICT revenue

Cost of Sales slightly down year-on-year

19 0

– –

-4.9%

18 0

17 0

16 0

164

15 0

154

14 0

149

157

163 150

13 0

148

149

Q113

Q213

12 0

Q311

Q411

Q112

Q212

Q312

Q412

EBU Personnel & Non-HR costs (EUR mio) Personnel

+0.7%

Non-HR

16 0

14 0 12 0 10 0 80 60

102

100

107

105

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213



H1’13 with €297m, 2.8% lower yoy (-0.9% like-for-like).

 

For Q2’13, € 37m- non-HR expenses, -5.9% YoY, showing effect from solid cost containment. H1’13 -5.3% to € 75m. HR expenses +3.3% to € 105m: higher personnel base, salary indexation of Jan’13. H1’13 €212 m HR expenses, up 5.4% YoY.



Q2’13 segment result -5.5% YoY; -8.1% like-for-like basis.

40 20 0

EBU EBITDA (EUR mio) & margin -5.5%

50.9% 50.0% 50.2% 48.3% 48.0% 47.6% 47.0% 39 5

55 .0% 50 .0%

29 5 24 5

19 5

– – –

47.5%

34 5

45 .0%

291

296

291

14 5

278

268

276

40 .0%

260

263

35 .0% 30 .0%

25 .0%

20 .0%

-5

15 .0%

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

Cost of Sales Q2’13 4.9% lower YoY -1.1% like-for-like. lower Mobile Termination Rates, more than offsetting the unfavorable product mix



Q2’12 incl € -8m acc impact new telco law Regulatory impact of €-16 m (-5.7%). Lower Direct margin resulting from the changing product mix.

H1’13 € 524m, -8% YoY

*Like-for-like excludes the impact from the accounting adjustment recorded in Q2’13

Slide 34

Enterprise - Fixed Voice Fixed Voice revenue showing some relief from price changes, ARPU up 1.3% while line erosion continued Fixed voice revenue (EUR mio)  Fixed Voice revenue Q2’13 -2.8% YoY –

-2.8%

14 0

13 0

12 0

11 0

121

122

124

120

118

119

118

117

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

–

10 0

Voice line loss & EOP (000) 20

1,400 1,385 1,394 1,379 1,370 1,356 1,338 1,318

1,9 00 1,7 00 1,5 00

lowered Fixed-to-Mobile rates on 1 January 2013 following the regulated cut in Mobile Termination Rates. continued line erosion, while price changes gave some relief



H1’13 Fixed Voice revenue -3.8% YoY

 

Fixed Line erosion Q1’13 of -19,000 lines Enterprises rationalising on Fixed voice lines



Q2’13 ARPU up 1.3% YoY to € 28.8

1,3 00

1,1 00 0

-13

-14

-20

Q311

Q411

-18 * Q112

-15

-9

90 0

-14

70 0

50 0

-18

-19

Q113

Q213

30 0 10 0

-10 0

Q212

Q312

Q412

Fixed voice ARPU (EUR/month)

– –

+1.3%

28.1

28.6

28.9

28.4

27.9

28.6

28.7

28.8

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213



Traffic (mio min) -6.5%

672

Q311

716

754

Q411

Q112

699

Q212

636

Q312

686

695

Q412

Q113

654

Negative effect from reduced F2M (Jan’13) Partially offset by positive effect from price indexation (Feb’13)

Q2 Fixed Voice traffic was 6.5% lower YoY driven by:

– –

fixed line erosion lower usage per line

Q213

*Fixed line loss differ s from QoQ EOP difference due to re-segmentation exercise at start of 2012 and inclusion of business trunking

Slide 35

Enterprise - Mobile Voice Enterprise - Voice Mobile Voice Pressure on Mobile ARPU stable versus previous quarter; customer Solid revenue undercards pressure due to pricing and regulation basecustomer growinggrowth, with 33,000 mobile Mobile voice revenue (EUR mio)



13 0

-13.2%

12 0

– – –

11 0 10 0

110

108

106

102

100

Q112

Q212

Q312

Q412

Q113

Q213

80 70

60 50 40

Q311

Q411

Q2’13 Mobile voice revenue -13.2% YoY; -15% like-for-like

Mobile growth & EOP (000) 1,486 1,516 1,549 1,380 1,408 1,413 1,449 1,470

Q2’12 revenue incl €2.1m acc adjustment regulated MTR and Voice Roaming prices Repricing effect; general competitive mobile market.



H1’13 Mobile revenue €177m -15.8% YoY (like-for-like)



Solid Mobile customer growth in Q2’13 in spite of aggressive competitor moves in the business market

1,5 00

29 22

– –

1,3 00

30 21

1,1 00

90 0

70 0

50 0

Q311

Q411

Q112 * Q212

Q312

Q412

Q113

Q213



MOU (min/month) -3.3%

Q2 3.3% lower usage YoY

–

327.8 326.6 315.8 305.0 322.8 293.3 314.3 310.2

Q311

Q411

Q112

Q212

Q312

Q412

Q113

24.2

Customer churn Q4 2012 triggered by new telco law included high-user profiles, bringing average usage down

Q213

Net voice ARPU (EUR/month) -19.1%

Retention/acquisition efforts paying off 33,000 net mobile cards added, with especially Voice cards doing sequentially better



-20.7%

26.9

25.9

25.3

23.7

22.9

21.6

19.7

19.2

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

Q2’13 Mobile Voice ARPU of €19.2, -21% YoY like-for-like:

– – –

Regulation impact: MTR cut and lower Voice Roaming rates Mobile re-pricing, with more free voice minutes included in price plans High-usage customers that churned end 2012

*i.e. Mobile net adds differ from QoQ EOP difference due to re-segmentation exercise and cleaning in-active cards at start of 2012

Slide 36

Enterprise - Fixed Data Enterprise - impacted Fixed by Data Fixed Data revenue migrations to Explore platform and Slightly revenue Packs trend continued; Internet customer base fairly stable uptakepositive of converged with internet



Fixed data revenue (EUR mio) 10 2

-3.2%

–

10 0

Q2’13 Fixed Data revenue €96 m, -3.2% vs 2012

Q312

Q412

Q113

Q213

–

Q311

Q411

Q112

Q212



Broadband growth & EOP (000) 434

446

434

445

444

443

444

442 43 0

38 0

33 0

28 0



23 0 18 0

-10

-2 Q311

Q411

Q112

-2

-1

Q212

Q312

Q412

13 0

-2 Q113

Continued migration from older technologies to the Belgacom Explore platform, for which pricing is more favorable for customers Slightly smaller customer base

SME customers opting more and more for advantageous converged Packs including internet. Net loss of 2,000 internet customers in a saturated and increasingly competitive professional Fixed Internet market

80 30

Q213



Broadband ARPU (EUR/month) +0.9%

39.1

38.9

39.5

39.0

39.1

38.8

39.0

39.3

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

Q2’13 ARPU of €39.3 up 0.9%YoY, driven by price adjustments

*i.e. Fixed Internet net adds differ from QoQ EOP difference due to re-segmentation of customers

Slide 37

Enterprise – Mobile Data Regulated price caps pressuring both SMS and advanced Mobile data revenue 

Mobile data revenue (EUR mio) 80

SMS

Q2’13 Mobile Data revenue -7.3% YoY

–

-7.3%

ADV Data

Q411

Q112

Q212

Q312

Q412

Q113

Q213

24 Q311

–



Q2’13 non-SMS Data revenue € 29m, -7.4% YoY fully due to negative regulated price effect. Q2’13 SMS revenue -7.2%; including minor regulation impact, and especially effect of price bundles including unlimited SMS

H1’13 Mobile data revenue of € 106m, -6.6% YoY

SMS (units/month)



+6.4%

107

112

105

118

Q311

Q411

Q112

Q212

Q312

Q412

118

Q113

119



-13.7%

Q311

13.7

Q411

13.5

Q112

13.5

Q212

12.6

Q312

12.2

Q412

–

Mobile Data ARPU down 13.7% YoY to €11.6

– 11.8

Q113

Success of pricing plans, including more and more unlimited SMS volumes.

Q213

Net data ARPU (EUR/month) 13.8

Continued uptake in SMS usage, growing 6.4 % YoY to 119 text messages per user per month

11.6

–

Growth trend reversed since 1 July 2012 due to regulated price caps for Mobile Data roaming aggressive competitor moves on business market

Q213

Slide 38

Enterprise ICT Enterprise –- ICT

ICT revenue up by 6.1% on like-for-like basisin challenging economic Solid ICT revenue, showing 2% growth

context



Q2’13 ICT revenue +2% YoY to €175m

–



Growth somewhat contained due to customers delaying IT projects or opting for private Cloudbased solutions, which triggers a shift from oneshot revenue to monthly services fees.

ICT revenue (EUR mio) 22 0 21 0

+2.0%

20 0

19 0 18 0

16 0

15 0

186

182

17 0

163

167

172

167

Q112

Q212

Q312

174

175

Q113

Q213

14 0 13 0

Ytd June’13 ICT revenue +3.1% to €350m

Q311

Q411

Q412

Slide 39

Service & Wholesale – P&L livery & Delivery Wholesale - P&L SDE&W revenue (EUR mio)



-3.4%

98 93 88 83

– –

73 68

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

63 58 53

SDE&W Cost of Sales (EUR mio) 12

+7.5%

Q2’13 revenue -3.4% YoY driven by slowing wholesale revenue Regulatory measures reduced the Q2 revenue by 1.7%. lower traffic and broadband volumes



H1’13 revenue -3.2 YoY to € 149m



CoS Q2’13 +7.5%



€ 42 million HR expenses for Q2; -2.1% yoy. One salary indexation (January 2013) offset by positive effect from lower headcount. Ytd June ‘13, HR expenses €87 m, +1.3% non-HR expenses up 5.2% to € 52m. H1’13 € 103m, up 4.9% yoy, incl resources for simplification projects.

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

SDE&W Personnel & Non-HR costs (EUR mio) Personnel

Non-HR

+1.8%

14 0

12 0 10 0 80 60

40 20

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213



SDE&W EBITDA (EUR mio) 0

-10

-20

-30

-21

-23

-26

-21

-25



-30

-31

Q113

Q213

Q2 segment result YoY lower due to lower Direct margin combined with higher expenses

-30

-19.2%

-40

-50

-60

Q311

Q411

Q112

Q212

Q312

Q412

Slide 40

Staff & support - P&L Staff & Support – P&L S&S Revenue(EUR mio) -5.2%

• •

Q2’13 revenue of € 7m H1’13 revenue of € 25m, including a capital gain of € 11m realised by Belgacom resulting from the sale of a technical building as part of Belgacom’s ongoing network simplification plan.

• •

HR-expenses remained flattish YoY Inflation-based wage indexations ,partially offset by the benefit from lower headcount compared to end June 2012.

•

Stable YoY Non-HR expenses for Q2’13

Q411

Q112

Q212

Q312

Q412

Q311

Q113

Q213

* Internal invoice; neutral on group level S&S Personnel costs (EUR mio) 48

+0.2%

40 37

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

S&S Non-HR costs (EUR mio) 90

+0.1%

80 70 60 50

67 50

Q112

Q212

Q312

Q113

Q213

20 10 0

Q311

Q411

Q412

Slide 41

International Carrier Services International Carrier Services – P&L P&L •

BICS Revenue (EUR mio) +0.9

44 0

42 0

40 0

401

38 0

409

401

424

430

417

– 413

382

36 0

–

34 0

32 0

30 0

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

BICS Gross margin (EUR mio) Non-Voice

+5.2%

Voice

H’13 BICS revenue of € 829m, up by 4.8% YoY.

•

Gross margin Q2’13 up 5.2% YoY

–

28 31

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

Reduced EU MTRs and slight negative dollar effect impacted Voice revenue More than compensated for by solid Mobile data revenue

•

100

Revenue Q2’13 up 0.9% from strong comparable base

Favorable destination mix led to record Gross margin of € 65m.

•

Ytd June 2013 the Gross margin totaled € 127 million, a 7.4% yoy increase.

•

Consequently to solid Direct margin growth BICS’ segment result for Q2’13 was up by 7.5% and the EBITDA margin ended slightly higher at 8.9%. Ytd June 2013, BICS reported a segment result of € 72m, up 14.8% YoY.

BICS EBITDA (EUR mio) & margin +7.5% 20 .0% 60

8.7%

8.3%

7.3%

8.4%

8.3%

7.3%

8.3%

8.9%

33 28

0.0 %

•

-10 .0%

Q311

Q411

Q112

Q212

Q312

Q412

Q113

Q213

BICS Volumes (in mio) SMS/MMS

Minutes

445

8,2 00

7,7 00

276

6,7 00

6,2 00

5.0 %

-5.0 %

7,2 00

15 .0%

10 .0%

315

323

361

451

428 7,556

6,853

7,018

6,907

6,984

6,934

Q311

Q411

Q112

Q212

Q312

461

• •

Voice volumes: Q2 4% lower to 6.7 billion minutes Non-Voice volumes Q2 up 27.6% to 461 million messages

7,267

6,701

5,7 00

5,2 00

Q412

Q113

Q213

Slide 42

Belgacom Company presentation Investor Relations

Work In Progress

Ytd September 2010 results in detail Other topics Other topics • Consumer Business Unit (CBU) Enterprise Business • Pricing – slide 47 • •Shareholder structure – slide 44Unit (EBU) Serviceremuneration Delivery Engine • Regulation & legal – slide 52 • •Shareholder - slide 45&Wholesale (SDE&W) • Belgian economy – slide 56 Staff– and Support (S&S) • •Spectrum slide 46 • Belgacom International Carries Services (BICS) 43

Slide 43

Shareholder structure* Belgian state owns ~ 53.5% 338,025,135 shares, of which 318,838,944 Outstanding

• Limited liability company under public law - Belgian state main shareholder: 53.5% - Legal obliged threshold: 50%+1 share

Own Shares; 5.7% Free Float; 40.8%

• Free float 40.8%

• Treasury shares 5.7%

Belgian State; 53.5%

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

Status 30 Jun 2013

% shares

% Voting

% Dividend

Belgian state

180,887,569

53.5%

56.7%

55.9%

Free float

137,951,375

40.8%

43.3%

42.7%

19,186,191

5.7%

1.4%

Own shares

*situation at 30 June 2013

Slide 44

Belgacom intends to ensure its shareholders an attractive return

Shareholder remuneration SBB

Dividends

Dividend per share & dividend yield

% of FCF

Mio â&#x201A;Ź 1,000 900 800 700 600 500 400 300 200 100 0

Interim dividend

150% 120%

6.1%

60% 30% 0% 2004 2005 2006 2007 2008 2009 2010 2011 2012

Seriâ&#x20AC;Ś Dividend Yield* 5.7% 5.5%

1.93 1.52

90%

1.38 1.52 0.55 2004

Extra dividend

2005

Normal dividend

8.0%

8.2%

11.2% 8.7%

9.0%

6.5%

2.49

2.18

2.08

2.18

1.68

0.29

0.50

0.40

0.50

0.31 0.50

2006

2007

2008

2009

2010

2011

2012*

1.89 1.60

1.68

*Dividend yield based on annual dividend & share price end of year

Slide 45

Spectrum: Belgian situation Spectrum -The Belgian situation • 900 & 1800 MHzMHz 900MHz MHz & 1800 • Used for 2G, 3G and 4G • Belgian operators allowed to deploy UMTS in 900 MHz spectrum (more efficient in rural areas) and 4G in 1800 MHz • Tacit extension: BGC has to pay €74m for 2010-2015; via annual payments. BGC filed annulment procedure.

800 MHz

Unallocated 2 x 10

900 MHz

Proximus 2 x 12

1800 MHz

2100 MHz 2600 MHz

2100 MHz

2600 MHz

800 MHz

• 900 MHz & 1800 MHz • Used for 3G • Proximus, Mobistar & Base each have a UMTS license since 2001 • BGC paid € 150m • 2 Aug ‘11, BIPT awarded 4th license to Telenet/Voo for an amount of € 71.5m (2X 14.8 MHz) • all licenses expire in 2021

• Will be used for 4G • Out of 5 candidates, 4 have obtained spectrum in 2.6 GHz band • Belgacom acquired 2x20 MHz for an amount of € 20.22 Mio. • License is valid for 15 years as from July 2012

• Will be used for 4G Conditions: • Auction of 3 lots of 2x10 MHz • Minimum price of € 120m per lot • License for 20 years • Spectrum cap of 2x10 MHz. • No spectrum reserved for new entrants. • Coverage obligations • National roaming may be imposed by BIPT. • Process expected to be completed by end 2013.

Unallocated 2 x 10

Mobistar

Base

2 x 12

2 x 10

Proximus 2 x 20,8

Proximus 2 x 15 Proximus 2 x 20

Unallocated 2 x 10

Mobistar 2 x 20,8 1x 5

Mobistar 2 x 15 Mobistar 2 x 20

Unallocated 2 x 11.4

Base 2 x 22 1x5

Base 2 x 15 Base 2 x 15

1x5

Telenet / Voo 1x5 2 x 14.8

Unallocated 2 x 15

BUCD 1 x 45

Slide 46

Pricing – Fixed products Classic

Happy Time XL

No Limit National Anytime

Happy time international

19.99€ / month

29.67€ / month

20.99€ / month

Note: Lower tariffs during peak compared to Happy Time

Free to FIX & to MOB during OffPeak & Weekend

Free to FIX Anytime

Free to FIX ,to MOB & to most European countries during OffPeak & Weekend

Peak: 8-19h

Peak: 8-17h

24/24

Peak: 8-17h

Internet Start

Internet Comfort

Internet Maxi

24.95€ / month

35.95€ / month

46.20€ / month

Volume incl: 150 GB Download speed: 50 Mbps Upload speed: 3 Mbps 3G: 100 MB

Volume incl: Unlimited Download speed: 50 Mbps Upload speed: 4 Mbps 3G: 250 MB

+ 100 MB 3G + hotspot access

+ 250 MB 3G + unlimited hotspot access

Volume incl: 100 GB Download speed: 50 Mbps Upload speed: 2.5 Mbps 3G: 50 MB + 50 MB 3G + hotspot access

All download speeds increased from 30 Mbps up-to-50 Mbps since the deployment of the DLM technology in Q1’13

21.5€ / month >70 channels 3 TV

Note: Belgacom TV only available in pack, not as stand alone service: Internet Start+TV: € 43.95 Tel+TV: € 35.75 Slide 47

Pricing – Mobile Voice (Postpaid)

For nonSmartphone users

For Smartphone users

Easy+ 10

Easy+ 15

Easy+ 25

Easy+ 45

10€ / month

15€ / month 10€/month PACK

20 min + unlimited SMS

150 min + unlimited SMS

25€ / month 20€/month PACK

45€ / month 40€/month PACK

€ 0.25 / min € 0.25 / MMS € 0.85 / MB

Unlimited min € 0.25 / MMS € 0.85 / MB

Smart+ 15

Smart + 25

Smart+ 35

Smart+ 65

15€ / month 10€/month PACK

25€ / month 20€/month PACK

35€ / month 30€/month PACK

65€ / month 55€/month PACK

120 min + Unlimited SMS +0.5GB incl

180 min + + Unlimited SMS + 1 GB incl

300 min + + Unlimited SMS + 2 GB incl

Unlimited voice + Unlimited SMS + 5 GB incl.

€ 0.25 / min € 0.25 / MMS € 0.10 / MB

Unlimited / min € 0.25 / MMS € 0.10 / MB included

240 min unlimited SMS

Unlimited min unlimited SMS

Slide 48

Pricing – Mobile Voice (Prepaid)

Reload bonus

For nonSmartphone users

For Pay&Go Easy you get : Pay & Go Easy € 0.27/ min € 0.12 / SMS € 0.25 / MMS € 0.5 /MB

• Bonus 1 (towards fix and Mobile): 10€ reload= 20min, 15€ reload= 40min, 25€ reload= 70min, 50€ reload= 200 min OR Bonus 2 (towards fix): 10€ reload=150 min, 15€ reload=600 min, 25€ reload=unlimited min, 50€ reload=unlimited

Reload bonus

For Smartphone users

Pay & Go Smart € 0.50 / min Peak € 0.25 / min OffPeak € 0.12 / SMS Peak € 0.08 / SMS OffPeak € 0.25 / MMS € 0.5/MB

For Pay&Go Smart you get: • Bonus 10€ Reload: unltd. SMS OffPeak + 10 MB • Bonus 15€ Reload: unltd. SMS + 100 MB • Bonus 25€ Reload: unltd. SMS + 500 MB

Peak: 7 – 16h

Slide 49

Pricing – Mobile Data 4G Option

Standard

Pay & Surf

10€ / month

0.5€ / MB (prepaid ) Or 0.85€/MB (postpaid)

1 GB incl.

4.99€  50 MB 9.99€  500 MB

€0.1/ MB

General

Post-paid Only

Prepaid Only

GSM Only Laptop & Tablet Only

iPad Only

Laptop Only Prepaid Only

Prepaid Only Pay & Surf

10€  500 MB 15€  750 MB 25€ 1250 MB 50€ 2500 MB

Daily

Comfort

Favorite

Favorite for iPad

Pay & Surf for iPad

4.99€ / month + 1€/day of surf

19.99€ / month

34.99€ / month

24.99€ / month

10€

2 GB incl.

4 GB incl.

3 GB incl.

500MB incl.

1 GB incl. €0.03 / MB

€0.03 / MB

€0.03 / MB included

Reload 10€> in 31d: +50% data volume

included

5€ reduction if you are already a BGC fixed internet customer

(if you use more – usage is free but at a lower speed) included

Slide 50

Pricing converged PACKS - examples of possible combinations TV + Fix

TV + Internet

35.75€ / month TV + Classic (or Happy Time XL)

53.95€ / month TV TV Everywhere + Internet Comfort +Unlimited volume +Unlimited hotspot access +500 MB 3G

Fix+ Internet

53.95€ / month Classic (or Happy Time XL) + Internet Comfort +Unlimited volume +Unlimited hotspot access +500 MB 3G

At least €5/month discount for each Proximus subscription (as of €15 /month) added to your Pack (maximum of 6 Proximus subscriptions per pack)

TV + Fix + Internet

As from 1 Jul’13, the rates of Packs including internet went up: + € 2 for Start + € 3 for Comfort + € 1 for Maxi In exchange, customers get more volume, more speed & more TV

62.95€ / month TV TV Everywhere + Classic (or Happy Time XL) + Internet Comfort +Unlimited volume +Unlimited hotspot access +500 MB 3G

TV + Mobile + Internet

63.95€ / month

TV + Fix + Mobile + Internet

TV TV Everywhere + Smart+/Easy+ 15 + Internet Comfort +Unlimited volume +Unlimited hotspot access +500 MB 3G

72.95€ / month TV TV Everywhere + Classic (or Happy Time XL) + Smart+/Easy+ 15 + Internet Comfort +Unlimited volume +Unlimited hotspot access +500 MB 3G Slide 51

Regulation – 1 Overview financial impact Estimated Impact Regulation impacts (Decrease in EUR million)

Actuals

FY 2013

Q1 2013

Q2 2013

~ €45m

€10m

~ €5m

€1m

MTR & flow-through Fix-to-Mob

Revenue

Roaming (i.e. Voice, SMS and Data)

Revenue

~ €48m

€15m

€19m

EBITDA

~ €48m

€15m

€19m

Revenue EBITDA

~ €93m ~ €53m

€24m €15m

€30m €20m

Total

EBITDA

• Over the second quarter of 2013, Belgacom’s revenues were negatively impacted for a total amount of EUR 30 million by regulation measures. On the EBITDA level, this came down to an impact of EUR 20 million.

• For the full year 2013, the estimated total impact of regulatory measures on revenues is expected to be EUR -93 million. This would result in an EBITDA impact of EUR -53 million.

Slide 52

Regulation – 2 Mobile Termination Rates (MTR) MTR-Glidepath in €ct 11.43 9.02

–

Glidepath in place since August 2010. Full symmetry effective since 1 January 2013

– –

MTR decreases reflected in F2M tariffs of BGC

7.2 4.62 4.62

Before* *

3.94 3.83

01-Aug-10** Proximus

01-Jan-11* Mobistar

2.62 2.62 01-Jan-12*

1.08 1.18 01-Jan-13*

Before*

01-Aug-10*

7.2 9.02 11.43

4.62 5.05 5.81

3.94 4.29 4.90

2.62 2.79 3.11

1.18 1.18 1.18

-36% -44% -49%

-15% -15% -16%

-34% -35% -36%

-55% -58% -62%

9% 26%

9% 24%

6% 19%

0% 0%

25% 59%

•

Suspension procedure: On 15 Feb 2011, Court rejected all the claims

•

Annulment procedure: On 16 May 2012, Court rejected claims regarding the price setting but asked notification to the Community regulators. In the meantime, rates remain valid.

MTR regulation impact 2013

Base

• MTR glide path In euro cent (excluding VAT) Proximus Mobistar Base % change Proximus Mobistar Base Asymmetry Mobistar-Prox Base-Prox

Mobistar & Base filed separate appeal against decision:

01-Jan-11* 01-Jan-12*

01-Jan-13*

1 Jan 2013 MTR’s final reduction of glide path set in 2010

Actual impact on Q2 2013 financials: − Revenue: € -10m − EBITDA: € -1m

MTR regulation impact for 2013 Estimated impact on FY ’13 financials: − Revenue: ~ € -45m − EBITDA: ~ € -5m

*excl VAT, including inflation

Slide 53

Regulation – 3 Mobile voice and data-roaming: EU Roaming III Regulation regulation • • •

Roaming III Regulation entered into force on 1 July 2012.

This regulation covers a ten-year period until 30 June 2022. It imposed a further lowering of the existing regulated price caps, and extended the roaming regulation to retail data as from July 2012. It also imposed transparency measure to avoid bill shocks and has extended the measures to roaming outside EU since July 2012.

•

Roaming III Regulation also foresees structural measures − Wholesale roaming access (1 July 2012) − Decoupling, i.e. separate selling of roaming services from domestic mobile services(1 July 2014) • Strategic review of EU telecom regulation : Mrs Kroes aims at further roaming price reductions (retail and wholesale) as from mid-2014 and alignment of international prices (within EU) to national prices (unless objective cost differences). Plans expected to be presented to EU Summit in October 2013.

–

Actual impact on Q2 2013 financials: − Revenue: ~€ -19m − EBITDA: ~€ -19m

–

Estimated impact on FY 13 financials: − Revenue: ~€ -48m − EBITDA: ~€ -48m

Slide 54

Regulation – 4 Decision to open-up the Belgian Cable Network On 18 July 2011, the Belgian regulators published their final decision on broadband & broadcast regulation: – On the broadcast Market

–

Each cable operator has ‘Significant Market Power’ (SMP) in its area a is submitted to the following obligations: – resell analog TV – open up Digital TV platform – resell broadband -> Belgacom can only obtain access to analog TV On the broadband Market Based on the this decision, Belgacom is sole SMP (cable not included) and has to provide: – bitstream access for television (multicast) - Belgacom reference offer approved by BIPT on 4 Oct. 2012 – pricing decision still pending. Multicast implemented since April 2013 – VDSL2 prices based on strict cost orientation The BIPT maintains a strong focus on operational excellence for wholesale services

Implementation of cable regulation: • Belgian regulators have proposed wholesale prices for access to cable networks: retail minus 20 & 35% after deduction of author & content rights (depending on cable operator). Final decisions expected in Q4 2013. April 2014 earliest possible implementation of cable Opening • BGC has decided not to resale analogue TV (old technology & opening too late). Belgacom has requested a fundamental revision of the market analysis and a full level playing field

Slide 55

Macro economic environment Belgium & Euro area - prospects GDP growth forecast (%) 1

Belgium

Euro area

Unemployment rate forecast (%) 2 Belgium

Euro area

11.4%

1.9%

12.2%

10.2%

1.4%

-0.3%

0.0% -0.4%

-0.6%

7.2%

2011

2012

Inflation forecast (%)3

2013

Belgium

2013

Belgium: 2.6% 2.5%

1.6% 1.0%

2011

2012

8.3%

Euro area

3.4%

2.7%

2011

7.6%

2012

Budget deficit 3.9% end ‘12 2012 Gross public Debt 99.8% of GDP

2013

Source: National Bank, 12/07/2013 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

Slide 56

For further information:

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

Slide 57