in Q1`13 - Proximus.com

Belgacom Presentation
Q1 2013 results
May 2013
Q1 2013 Group
Highlights
Q1 2013 Results
per segment
Other topics
Guidance – slide 4
Q1 2013 Revenue – slide 5
Cost of Sales – slide 6
Consumer – slide 21
Shareholder structure – slide 38
Enterprise – slide 28
Shareholder remuneration – slide 39
Non-HR expenses - slide 7
SDE&W – slide 34
Network & Spectrum – slide 40
HR expenses – slide 8
S&S – slide 35
Pricing – slide 46
EBITDA – slide 9
Capex – slide 10
FCF – slide 11
P&L – slide 14
Operationals – slide 15
BICS – slide 36
Regulation & Legal – slide 52
Macro –slide 56
1
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 on Q1 2013
Financial results
Q1 within
expectations
Competitive
dynamics
changed
Belgacom well
placed to face
the change
-
Financials impacted by regulation & Mobile pressure
Group revenue fairly stable versus Q1 2012
EBITDA -6.1% YoY
Full-year guidance reiterated
– New Telecom law accelerated customer rotation as of Q4’12
– All players responded to the new market conditions
– Belgacom mobile offer repositioned
–
–
–
–
Convergence & network quality giving key support
Mobile customer trends encouraging
Solid growth of Fixed products
PACKS increasingly with mobile
+26,000 TV
+ 10,000 BB
+ 22,000 PACKS
1,412,000 Total
1,647,000 Total
1,259,000 Total
+ 61,000 cards
- 113,000 cards
5,364,000 total Mobile cards
Slide 3
FY 2013 guidance reiterated
FY 2013
outlook
Q1 2013
reported
Group revenue
Decline between
-1% and -2%
-0.1%
Group EBITDA*
Decline between
-4% and -6%
-6.1%
Capex/Revenue
Between
13% and 14%
12.2%
Metrics
* Compared to the restated 2012 EBITDA of € 1,801 m, following the retrospective application of IAS19R
Slide 4
Q1 2013 Group revenue fairly stable
Revenue evolution – in million €
+1.4%
-0.1%
Ex –
Regulation
1,588
-15 Roaming
+35
+11
-10 MTR
-24
regulatory
impact
+6
1,586
intra-group
elimination
Q1 2013
-18
-9
Sale of
technical
building as
part of
simplification
project
Q1 2012
reported
Pressure on the Mobile
Market
capital gain
-1
-2
Voice
volumes,
destination
mix, data
growth
Underlying
CBU
Underlying
EBU
Underlying
SDE
Underlying
S&S
BICS
Slide 5
Q1 Cost of Sales up 3.7%, driven by BICS’ growth
Quarterly Cost of Sales ( € million)
Q1’13 Cost of Sales at € 637m, +3.7% YoY, driven
by the strong growth of BICS partly offset by
the strong decline in Consumer CoS, and
somewhat lower Enterpise CoS
+3.7%
68 0
63 0
58 0
621
633
667
655
680
649
637
614
53 0
48 0
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Consumer
CoS 8.2% lower YoY, last quarters’ positive trend continued, enforced by the
positive impact regulation (lowered MTRs), an improved sales channel mix
(focus on own shops) and partial sale of The Phone House shops
Enterprise
Business Unit
0.7% lower CoS YoY, positive effect from lower MTRs, more than offsetting
the unfavorable evolution of EBU’s overall product mix on the Cost of Sales.
BICS
Higher CoS (+8.9% YoY) lined to strong Q1 revenue growth
Business Unit
Q113
Slide 6
Lower non-HR expenses
Quarterly Non-HR expenses ( € million)
-3.7%
25 0
Q1’13 non-HR expenses of € 218m, explained by
cost containment and a favorable year-onyear currency impact
256
24 0
23 0
22 0
21 0
20 0
19 0
18 0
196
232
226
224
Q411
Q112
Q212
218
217
213
17 0
16 0
15 0
Q211
Q311
Q312
Q412
Consumer
Non-HR expenses 8.1% down, mainly driven by cost optimization initiatives and
partial divesture of The Phone House shops
Enterprise
Non-HR 4.7% lower YoY with Q1 2012 including a negative currency effect
Business Unit
Q113
Business Unit
SDE & W
4.7% higher Non-HR YoY, due to increased use of external resources to
support simplification projects
Slide 7
Q1’13 HR expenses impacted by double
indexation
Quarterly HR-expenses (€ million)


Inflation-based salary indexations (March 2012
and January 2013) main driver of higher HR
expenses
Only partly offset by a year-on-year
reduction in headcount by 136 FTEs to 15,790
FTEs
+4.3%
29 0
27 0
282
278
283
278
281
Q211
Q311
Q411
Q112
Q212
25 0
290
290
278
23 0
21 0
19 0
17 0
15 0
Q312
Q412
Q113
Belgacom headcount in FTE
25000
Estimated cash-out for
termination benefits
2013
2014
2015
2016
2017-2033
EUR million
79
49
21
6
24*
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
15,790
 15,790 FTEs end March’13 (-136 FTE YoY)
 Civil Servants decreased to 33% of total headcount
(* Cumulative for
full period)
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
Q1 2013 Group ebitda pressured by regulation,
lower Direct Margin and higher HR-expenses
Ebitda evolution – in million €
Rev. pressure
largely offset by
cost containment
in Q1
-2.9%
EX Regulation
470
-15 Roaming
Wholesale rev.
slowing &
simplification
projects requiring
resources
+11
-1 MTR
Solid Direct
Margin &
somewhat
lower
operating
expenses
-2
reported
-15
Sale of
technical
building as
part of
simplification
project
Q1 2012
regulatory
impact
-6.1%
capital gain
-18
-7
Changing
product mix
& higher HRexpenses
Underlying
CBU
Underlying
EBU
Underlying
SDE
+7
441
BICS
Q1 2013
-4
Underlying
S&S
Slide 9
Invest in high-quality fixed & mobile network
to maintain leadership in convergence
Accelerated network investments
Group Capex
in € millio n / % of revenue
13%-14%
12 .1%
11.7%
734
777
753
2010
2011
2012
11.1%
Outlook 2013
*This does not include capex for a potential bidding in the 800 Mhz spectrum
- 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
11.7%
12 .2%
195
19 3
190
auction that might occur before year-end
185
18 6
180
175
170
Q1'12
Q1'13
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%
-1.
0%
-2. 0%
0%
-3.
-4. 0%
0%
-5.
-6.
0%
-7.
-8. 0%
0%
-9.
0%
-10.0%
-11.0%
-12.0%
-13.0%
-14.0%
-15.0%
-16.0%
-17.0%
-18.0%
-19.0%
-20.0%
-21.0%
-22.0%
-23.0%
-24.0%
-25.0%
-26.0%
-27.0%
-28.0%
-29.0%
-30.0%
-31.0%
-32.0%
-33.0%
-34.0%
-35.0%
-36.0%
-37.0%
-38.0%
-39.0%
-40.0%
-41.0%
-42.0%
-43.0%
-44.0%
-45.0%
-46.0%
-47.0%
-48.0%
-49.0%
-50.0%
-51.0%
-52.0%
-53.0%
-54.0%
-55.0%
-56.0%
-57.0%
-58.0%
-59.0%
-60.0%
-61.0%
-62.0%
-63.0%
-64.0%
-65.0%
-66.0%
-67.0%
-68.0%
-69.0%
-70.0%
-71.0%
-72.0%
-73.0%
-74.0%
-75.0%
-76.0%
-77.0%
-78.0%
-79.0%
-80.0%
-81.0%
-82.0%
-83.0%
-84.0%
-85.0%
-86.0%
-87.0%
-88.0%
-89.0%
-90.0%
Slide 10
Q1’13 Free Cash Flow of € 89 million
Q 1 2 0 12
Re s tate d
(in mio € )
Q 1 2 0 13
variance
CF from operating activities
386
271
-115
Capex
-186
-193
-7
CF from/used in other activities
-21
11
32
Fre e Cas h Flo w
179
89
-90
Free Cash Flow (in mio € )
980
797
788
691
Lower FCF result of:
- Higher income tax
payments
- Lower EBITDA
- Higher cash paid
for capital
expenditures
- Higher needs in
terms of core
working capital
409
179
2008
2009
2010
2011
2012
Ytd Mar'12
89
Ytd Mar'13
Slide 11
Sound financial position
- Net financial debt at € 1,506 m, € 95m lower versus end 2012
- The outstanding long term financial gross debt amounted to € 2.0Bio
- Credit ratings: Standard & Poor’s A; Moody’s A1 – both stable outlook
( 1 ,601)
7
89
( 1 ,506)
1
( 2)
Net debt
December 2012
Debt maturing
FCF
Dividends
Net sale of
treasury shares
Other
Net debt March
2013
2013
2015
2016
2018
2026
2028
€ 129m
€ 145m
€ 950m
€ 500m
€ 73m
€ 150m
Slide 12
Belgacom consolidated balance sheet
31-Dec
31-Mar
2012 Restated*
2013
TOTAL ASSETS
8,245
8,505
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
6,194
2,339
1,097
2,467
1
7
146
136
6,173
2,339
1,095
2,470
1
7
138
123
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
2,332
147
1,385
348
87
365
LIABILITIES AND EQUITY
8,245
8,505
Equity
Shareholders' equity
Minority interests
3,093
2,882
211
3,275
3,058
217
Non-current liabilities
Interest-bearing liabilities
Pensions and other post-employment benefits
Provisions
Deferred tax liabilities and other amounts payable
2,680
1,761
572
203
144
2,793
1,897
548
203
144
Current liabilities
Interest-bearing liabilities
Trade payables
Income tax payable
Other current payables
2,472
215
1,310
236
711
2,437
139
1,293
244
760
(EUR million)
• Intangible fixed assets and property,
plant and equipment are fairly stable
• Shareholders’ equity increased from
€ 2,882 m end 2012 to € 3,058m in
March. Mainly reflecting the net
income generated so far in 2013.
* The 2012 financial figures have been restated after the adoption of the IAS 19R revision
Slide 13
Group – quarterly P&L
FY 2012
Q113
VAR
Q1/Q1
1,6 44
6 ,46 2
1,5 8 6
-0.1%
-1,156
-649
-290
-217
-1,215
-680
-278
-256
-4,661
-2,611
-1,126
-924
-1,144
-637
-290
-218
2.4%
3.7%
4.3%
-3.6%
438
46 4
429
1,8 01
441
-6 .1%
29.6%
27.2%
28.6%
26.1%
27.9%
27.8%
-1.8 p p
0
-10
-1
-4
-15
0
-
-18 1
-18 8
-18 5
-19 4
-748
-19 2
5.6%
EBIT (incl. NR)
28 9
240
278
231
1,038
25 0
-13.5 %
Financial result
Tax expense
-22
-6 5
-26
-48
-5 4
-34
-28
-30
-131
-177
-20
-5 3
-7.1%
-17.7%
19 9
3
16 1
5
18 4
5
16 8
5
712
19
171
5
-14.0%
-
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
-14.3%
-14.3%
in mio €
Q112
Q212
Revenues (1)
1,5 8 8
1,6 11
1,6 20
Total OPEX
-1,118
-614
-278
-226
-1,172
-667
-281
-224
470
EBITDA margin (1)
Non recurring items
Costs of goods sold
HR-costs
Other expenses
EBITDA (1)
* The 2012 financial
figures have been
restated after the
adoption of the IAS
19R revision
Depreciation
Net income (Group)
Non-controlling interest
Earnings/share in €
Earnings/share in € (excl. NR)
(1)
before non-recurring items
Q312
Q412
Restated*
Slide 14
Solid performance fixed products
Fixed Internet market share
Broadband customer evolution
net adds
total
28
23
1,606
1,615
1,626
1,637
1,647

1,700
1,600
18


1,500
13
15
12
9
8
11
1,400
10
1,300
3
-2
1,200
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
1,386
1,412
Note: Status 31 Dec’12
DTV market share
TV Lines evolution*
net adds
80
1,254
1,600
total
1,301
1,340
40
1%
1,400
60
32%
1,200
43
1,000
48
39
46
800
26
20
0
Belgian Fixed internet market
still growing, but at slower pace
Internet penetration @ 77%
Belgacom market share erosion limited to
-0.3% YoY
Cable
64%
600



Belgian digital TV penetration @ 77%
Stable DTV market share of 32%
Total TV market** share of 26% ; +3pp YoY
400
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
Fixed Voice customer evolution
70
net adds
total
3,500
50
30
3,186
3,149
3,300
3,119
3,085
3,041
3,100
10
2,900
-10
-30
-39
-37
Q1'12
Q2'12
-30
-33
2,700
-44
-50



Stable market, Fixed Voice penetration @ 72%
Belgacom stabilized its Fixed Voice line erosion
Fixed Voice line “upgraded” via:
 Flat rate calling “Happy Time XL” and “Happy Time International”
 Multi-play packaging
2,500
Q3'12
Q4'12
Q1'13
*Corresponds to the total settop boxes, including multi-stream
** Total TV market includes analog TV
Slide 15
Mobile Postpaid back to growth
Mobile customer evolution 2
net adds
total
5,543
5,498
100
5,504
5,416
80
5,364
5,600
5,200
39
20
45
5,000
0
Postpaid: + 61,000
Prepaid: -113,000

Mobile Postpaid back to
growth backed by successful
Dec’12 repricing, retention
actions and the rebuilding of
our image as best network
provider
4,800
-39
-20
-52
-40
4,600
4,400
-60
-88
-80
4,200
-100
4,000
Q1'12
Q2'12
Q3'12
Q4'12
5%
5,400
60
40
Mobile market share 1


Q1'13
24%
41%
31%

Mobile Postpaid customer base back to growth, market conditions pressuring Postpaid ARPU

Mobile Prepaid customer base decline continued, in line with the market evolution. Prepaid ARPU more contained.
Split Postpaid - Prepaid
Consumer blended ARPU: Split Prepaid - Postpaid
Net adds Postpaid
Net adds Prepaid & MVNO
0.0 €
169
27.9 €
Blended
Postpaid
ARPU
27.3 €
28.9 €
26.6 €
0.0 €
119
69
89
39
0.0 €
61
41
Blended
Prepaid
ARPU
0.0 €
19
-31
0
14.0 €
14.2 €
13.6 €
14.4 €
13.3 €
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
0.0 €
-44
-80
-16
-72
-113
-81
Q1'12
24.1 €
Q2'12
Q3'12
Q4'12
Q1'13
1 Active mobile cards
2 Mobile active customers including mobile customers Luxembourg, and including mobile data cards.
0.0 €
Slide 16
From Mobile retention (Q1) to acquisition (Q2)
Q1: Focus on retention and repositioning
 Supported by network campaign & strong retention actions
Q2: Focus on acquisition
 Supported by new mobile portfolio & campaigns
More value
including in
Belgacom’s new
mobile offers
Slide 17
Customer acquisition via convergent Packs
– Mobile in Pack to become the new standard
Packs evolution
net adds
80
1,143,000
total
1,177,000
1,214,000
1,237,000 1,259,000
1,300,000
1,200,000
+116k in YoY
60
1,100,000
54
1,000,000
40
34
37
900,000
20
23
22
0
800,000
700,000
Q1'12
Q2'12
Q3'12
Q4'12
Q1'13
4-Play
+53%
YoY
2-Play
1,259,000 +9%
YoY
PACKS
3-Play
+8%
YoY
Monthly permanent
reduction
of € 5 or € 10* for
ALL Family’s mobile
subscriptions in pack
*for mobile subscriptions > € 50
Slide 18
All assets in hands to cope with changing
telecom market
Belgacom has extensive service coverage and state of the art
service platforms enabling true service convergence
DSL
4G
99.85% DSL
(among world leaders)
86% VDSL
(2nd in Europe)
FTTx homes passed per country
100%
VDSL
50%
25%
> 92% TV
coverage
NL
FR
DE
UK
BE
POR
SWI
0%
Source: IDATE – June 2011
Largest WiFi
network in
Belgium
3G
97.3%
coverage
FTTH/B
75%
First to launch in
November ‘12
FON
2G
99.98%
coverage
650,000 FON spots in
Belgium
7 million throughout the
world
Slide 19
Belgacom
Company presentation
Investor Relations
Q1 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)
20 20
Slide
Consumer - P&L
Pressure on Direct Margin partially offset by cost containment
CBU revenue (EUR mio)

61 0
-4.2%
–
–
59 0
57 0
579
55 0
571
572
577
575
587
581
553
53 0
–
51 0
Q211
Q311
Q411
Q112
Q212
Q312
Q412
CBU Cost of Sales (EUR mio)

-8.2%
19 0
182
17 0
15 0
149
158
168
162
157
166
Regulation (€-7m or -1.1%); this excluded revenue -3.1% YoY
Pressure on Mobile revenue , continued Fixed Voice erosion,
part of The Phone House stores sold
Partly offset by growth of TV and Fixed Internet
Q113
21 0
13 0
Revenue impacted by:
Q1’ 13 Cost of Sales 8.2% lower YoY
–
–
–
149
11 0
Positive impact of regulation (lowered MTRs)
Improved sales channel mix (focus on own shops)
Partial sale of The Phone House stores
90
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113

CBU Personnel & Non-HR costs (EUR mio)
20 0
Personnel
18 0
16 0
14 0
12 0
10 0

Lower HR expenses, -1.2% ; driven by lower headcount,
partially offset by wage indexation.
Non-HR expenses 8.1% down, mainly driven by cost
optimization initiatives and partial divesture of The Phone House
stores

Q1’13 segment result of € 248 m, i.e. - 1.6% YoY.
-4.3%
Non-HR
74
71
84
74
73
77
86
68
85
86
87
89
87
91
87
88
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
80
60
40
20
0
CBU EBITDA (EUR mio) & margin
46.8%
32 0
30 0
-1.6%
45.0%
26 0
24 0
43.7%
40.8%
28 0
271
257
22 0
233
20 0
252
40.6%
44.7% 41.8% 44.9%
263
234
45 .0%
40 .0%
243
248
18 0
–
–
50 .0%
35 .0%

Regulation impact of €-2 m or -0.8%
Limited decline: sound Fixed revenues & cost control
Segment contribution margin up 1.2 p.p. YoY
30 .0%
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
Slide 21
Consumer - Fixed voice
Fixed Voice
Voice line
price
increase
results
in fairlydecline
flat ARPU,
line erosion
largely
Fixed
erosion
stable;
revenue
continued
to persist
explaining revenue decline
Fixed voice revenue (EUR mio)

14 0
-5.0%
13 0
–
–
12 0
11 0
10 0
115
111
110
110
Q311
Q411
Q112
90
Fixed Voice revenue erosion limited to -5% YoY
105
105
105
104
Q212
Q312
Q412
Q113
YoY line erosion
price indexation of Feb’13 giving some relief
80
Q211
Voice line loss & EOP (000)
50
1,870 1,839 1,818 1,780 1,758 1,737 1,718 1,693

Fixed Voice customer base of 1,693,000 end Q1’13

Fairly stable Fixed Voice ARPU, with price indexation giving
some support

Total traffic flat YoY
2,0 30
30
1,5 30
10
-10
-26
-21
-31
-20
-22
*
Q112
-50
Q211
-18
-21
*
-30
Q311
Q411
-26
53 0
30
Q212
Q312
Q412
Q113
Fixed voice ARPU (EUR/month)
-0.5%
20.0
19.7
19.8
20.2
19.7
19.7
20.0
Q211
Q311
Q411
Q112
Q212
Q312
Q412
20.1
Q113
Traffic (mio min)
Stable
977
936
Q211
Q311
1,036 1,086 1,027
Q411
Q112
1,0 30
Q212
965
Q312
1,060 1,086
Q412
–
Positive trend driven by an uptake in Happy Time XL, allowing
free off-peak calls
Q113
*Q1 2012 real line loss, differs from QoQ EOP difference due to re-segmentation exercise at start of 2012
Slide 22
Consumer – Mobile Voice
Mobile Voice revenue under pressure; Postpaid customer base back to
growth with 26,000 net adds

Mobile voice revenue (EUR mio)
-23.2%
14 0
12 0
147
143
136
10 0
130
123
133
120
80
Q1’13 Mobile Voice revenue -23.2% YoY:
–
–
16 0
100
Driven by regulatory impacts &
especially by lower Prepaid customer base and repricing of
mobile Postpaid
60
40
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
Mobile growth & EOP (000)
17 0
12 0
70
20
3,805 3,805 3,811 3,748
3,726 3,774
3
48
32
10
3,9 50
3,643
5
3,561
-62
-13 0
-18 0
Q211
Q311
Q411
*
Q112
3,4 50
–
3,3 50
3,0 50
Q212
Q312
Q412
Postpaid +26,000 : revised price plans and marketing efforts
turned customer growth back to positive
Prepaid -108,000: Prepaid market shrinking with new telco law
lowering contract barriers
Q113

MoU slightly up YoY to 102.2 minutes/user/month

Net Voice ARPU at € 9.5, or -18.6% YoY
103.6 103.8 101.5 104.7
100.5 101.7 102.2
Q311
Q411
Q112
Q212
Q312
Q412
Q113
Blended net voice ARPU (EUR/month)
13.4
3,6 50
3,1 50
+0.7%
Q211
–
3,7 50
3,2 50
-105
MoU (min/month)
106.6
End Q1’13 Mobile customer base of 3,561,000 cards
3,5 50
-82
-30
-80

3,8 50
12.9
12.2
11.6
12.0
11.1
-18.6%
12.0
–
11.1
Impacted by Postpaid repricing of December 2012 ,with more
abundant tariff plans
9.5
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
*i.e. Mobile net adds differ from QoQ EOP difference due to re-segmentation exercise at start of 2012
Slide 23
Consumer - Fixed Data
Continued Fixed Internet revenue growth driven by price indexation and
growing customer base
Fixed data revenue (EUR mio)

+2.2%
88
–
–
86
84
82
83
80
78
82
82
Q311
Q411
85
84
85
Q112
Q212
Q312
85
Q412
Q1’13 revenue up 2.2% YoY
87
Positively impacted by price indexation Feb’13
Continued YoY customer growth
76
74
72
Q211
Q113

Broadband growth & EOP (000)
1,136 1,138 1,156 1,159 1,169 1,181 1,193 1,203
–
1,2 10
18
21
5
*
15
10
*
CBU ended Q1’13 with 1,203,000 Fixed Internet customers
1,0 10
13
12
81 0
10
+10,000 net-adds, supported by the “Internet Everywhere”
offer, mainly bought in Pack
61 0
41 0
1
21 0
1
10
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113

Broadband ARPU (EUR/month)
-2.2%
ARPU Q1’13 of € 26.3; i.e. -2.2% YoY
–
27.0
26.7
26.1
26.9
26.4
26.5
26.1
26.3
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
ARPU slightly down YoY, but somewhat up from the previous
quarter
*i.e. Fixed Internet net adds differ from QoQ EOP difference due to re-segmentation of customers
Slide 24
Consumer - Mobile Data
Mobile data revenue growth trend impacted by regulation and more
abundant offers
age
Mobile data revenue (EUR mio)
 Mobile Data rev stable YoY
+0.1%
SMS
Adv Data
97
97
102
98
100
97
13
12
15
15
13
12
12 0
92
90
93
11
14
80
79
85
85
87
84
87
85
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
–
–
–
60
30
Revenue growth restrained by regulation
SMS revenue was nearly flat (+0,3%)
Advanced Mobile Data -1% : more Mobile data included in
price plans, and impact from regulated price cap on retail
Data roaming.
0
SMS (units/month)
Stable
254
235
Q211
Q311
273
280
291
Q411
Q112
Q212
262
Q312
294
280
Q412
Q113
Blended net data ARPU (EUR/month)
+5.8%
8.2
8.2
8.5
8.5
Q211
Q311
Q411
Q112
9.0
8.7
9.0
9.0
Q212
Q312
Q412
Q113

SMS usage stable YoY at 280 SMS/Month

Mobile Data ARPU up 5.8% YoY to € 9.0
–
More customers having a price plan including Mobile data
Slide 25
Belgacom TV
Continued TV revenue growth through larger TV customer base and higher
ARPU
TV revenue (EUR mio)

+16.9%
53
51
53
55
57
Q211
Q311
Q411
Q112
Q212
61
62
64
Q312
Q412
Q113
–
–
TV growth & EOP (000)
10 0
1,340 1,386 1,412
1,211 1,254 1,301
1,087 1,139
80

1,2 00
60
80 0
20
59
52
72
Continued growth of subscribers
Price increase of rented settop box
Continued customer growth
–
–
1,4 00
1,0 00
40
TV revenue +16.9% YoY driven by
Total customer base of 1,412,000; +16.9% YoY
Total includes 242,000 multiple streams
60 0
43
48
39
46
26
Q112
Q212
Q312
Q412
Q113
0
40 0
20 0
0
Q211
Q311
Q411

TV ARPU (EUR/month)
+4.5%
19.2
Q211
Q1 TV ARPU of EUR 18.3 , a 4.5% growth YoY
–
17.8
17.5
17.6
17.6
18.1
18.2
18.3
Q311
Q411
Q112
Q212
Q312
Q412
Q113
Supported by the price increase for rented settop boxes
Slide 26
Tango Luxembourg
Tango revenue (EUR mio)
+7.1%
26
28
28
27
28
28
Q211
Q311
Q411
Q112
Q212
Q312
28

30
29
Q412
Q113
–
Q211
260
Q311
264
Q411
266
Q112
268
Q212
270
Q312
271
Q412
Postpaid customer growth, including ongoing migration of
prepaid towards postpaid offers.

Tango acquired 3,000 new Mobile customers in the first
quarter 2013.

End 2012, Tango launched a Quadplay offer and was the
first to offer a full 4G coverage in Luxembourg

The ARPU increased to EUR 30.1, i.e. 6.1% YoY
Tango mobile customers EOP (000)
256
Q1 revenue +7.1% YoY
273
Q113
Blended mobile net ARPU (EUR/month)
+6.1%
28.1
29.3
29.1
28.4
29.2
29.5
30.7
30.1
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
–
–
Positive impact from prepaid to postpaid migration
Partly offset by a decline in roaming revenues due to the EU
regulation
Slide 27
Enterprise – quarterly P&L

EBU revenue (EUR mio)
64 0
-4.4%
62 0
60 0
593
58 0
572
56 0
591
579
576
54 0
560
Q1 YoY decline of 4.4% in context of unfavorable economy
and stiff competition
–
–
579
554
52 0
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113

EBU Cost of Sales (EUR mio)
20 0
19 0
17 0
16 0
160
15 0
154
14 0
164
149
157
163
150
Q1’13 CoS -0.7% YoY
–
–
-0.7%
18 0
148
13 0
Regulation impact of € -17m (-2.9%) in Q1
Q1 underlying revenue limited to -1.5% YoY : ICT growth partly
offsetting increased pressure on mobile
positive effect from lower MTRs, more than offsetting
the unfavorable evolution of EBU’s overall product mix on the
Cost of Sales.
12 0
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113

EBU Personnel & Non-HR costs (EUR mio)
Personnel
+4.1%
Non-HR
16 0
14 0
12 0
10 0
80
60
37
34
36
40
39
39
41
38
98
93
96
99
102
102
100
107
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113

40
20
Q1’13 Non-HR 4.7% lower YoY with Q1 2012 including a
negative currency effect
Q1’13 HR cost up 7.6%YoY higher headcount and salary
indexation
0

EBU EBITDA (EUR mio) & margin
-10.4%
50.3% 50.9% 50.0% 50.2% 48.3% 48.0% 47.6%
39 5
47.0%
55 .0%
34 5
50 .0%
29 5
24 5
19 5
45 .0%
298
291
296
291
14 5
278
268
276
40 .0%
260
–
–
lower Direct margin (regulation & product mix)
higher HR-expenses
35 .0%
30 .0%
95
25 .0%
45
20 .0%
-5
Lower Q1’13 segment result due:
15 .0%
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
Slide 28
Enterprise - Fixed Voice
Fixed Voice revenue first quarter 2013 impacted by regulation and line
erosion
Fixed voice revenue (EUR mio)


-4.8%
14 0
13 0
12 0
125
11 0
121
122
Q311
Q411
124
120
118
119
118
Q212
Q312
Q412
Q113
10 0
90
Q211
Q112
Voice line loss & EOP (000)
20
1,412 1,400 1,385 1,394 1,379 1,370 1,356 1,338
1,9 00
1,7 00
1,5 00

Q1 revenue decline of -4.8% YoY
Including negative regulation effect from lowered F2M
tariffs 1 January 2013
Revenue decline driven by YoY line loss


Fixed Line erosion Q1’13 of -18,000 lines, stable vs Q1 2012
Enterprises rationalising on Fixed voice lines

Q1’13 ARPU slightly down YoY to € 28.7
1,3 00
1,1 00
-9
0
-13
-13
-14
-15
-18
90 0
-14
70 0
-18
-20
50 0
30 0
10 0
-10 0
Q211
Q311
Q411
Q112
*
Q212
Q312
Q412
Q113
Fixed voice ARPU (EUR/month)
–
–
-0.8%
28.9
28.1
28.6
28.9
28.4
27.9
28.6
28.7
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113

Traffic (mio min)
-7.7%
732
Q211
672
Q311
716
754
Q411
Q112
699
Q212
636
Q312
686
695
Q412
Q113
Negative effect from reduced F2M (Jan’13)
Partially offset by positive effect from price indexation (Feb’13))
Q1 Fixed Voice traffic was 7.7% lower YoY driven by:
–
–
fixed line erosion
lower usage per line
*Fixed line loss differ s from QoQ EOP difference due to re-segmentation exercise at start of 2012 and inclusion of business trunking
Slide 29
Enterprise - Mobile Voice
Enterprise
- on
Mobile
Voice
Continued pressure
Mobile Voice
revenue; growing Mobile customer
Solid
basecustomer growth, revenue under pressure due to pricing and regulation
Mobile voice revenue (EUR mio)

13 0
-16.7%
12 0
–
–
11 0
10 0
115
90
110
108
106
102
100
96
88
Q311
Q411
Q112
Q212
Q312
Q412
Q113
80
Q1’13 Mobile voice revenue of € 88m, -16.7% YoY
regulated MTR and Voice Roaming prices
Pricing plans and competitive mobile market.
70
60
50
40
Q211

Mobile growth & EOP (000)
1.449 1.470 1.486 1.516
1.357 1.380 1.408 1.413
1.5 00
–
–
1.3 00
30
22
36
29
1.1 00
22
30
21
16
Q312
Q412
90 0
70 0
0
Solid Mobile customer growth in Q1’13 in spite of aggressive
competitor moves in the business market
50 0
Q211
Q311
Q411
Q112 * Q212
Q113

MOU (min/month)
-5.3%
328.3
Q211
–
Q411
Q112
Q212
Q312
Q412

-22.1%
Q211
Customer churn Q4 2012 triggered by new telco law included
high-user profiles, bringing average usage down
Q113
Net voice ARPU (EUR/month)
28.7
Q1 5.3% lower usage YoY
327.8 326.6
305.0 322.8
293.3 314.3 310.2
Q311
Retention efforts paying off
30,000 net mobile cards added, with especially Voice cards
doing better than previous quarter
26.9
25.9
25.3
23.7
22.9
21.6
19.7
Q311
Q411
Q112
Q212
Q312
Q412
Q113
Q1’13 Mobile Voice ARPU of €19.7, -22.1% YoY:
–
–
–
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 30
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
-3.0%
–
10 0
98
96
97
94
97
96
99
Q1’13 Fixed Data revenue €96 m, -3.0% vs 2012
99
96
95
96
Q312
Q412
Q113
Continued migration from older technologies to the Belgacom
Explore platform, for which pricing is more favorable for
customers
92
90
Q211
Q311
Q411
Q112
Q212

Broadband growth & EOP (000)
436
434
434
446
445
444
443
444
43 0
11
38 0
0
0
1
2
33 0
28 0

23 0
18 0
-2
-10
Q211
*
Q311
Q411
*
Q112
-2
*
Q212
-1
-1
Q312
Q412
13 0
SME customers opting more and more for advantageous
converged Packs including internet.
EBU added 1000 customers, in a saturated and increasingly
competitive professional Fixed Internet market
80
30
Q113

Broadband ARPU (EUR/month)
-1.2%
39.3
39.1
38.9
39.5
39.0
39.1
38.8
39.0
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
Q1’13 ARPU of €39.0 slightly down YoY, though stable with
previous quarters
*i.e. Fixed Internet net adds differ from QoQ EOP difference due to re-segmentation of customers
Slide 31
Enterprise – Mobile Data
Regulated price caps pressuring both SMS and advanced Mobile data
revenue

Mobile data revenue (EUR mio)
80
SMS
€ 53m Mobile Data revenue, i.e. -5.9% YoY
-5.9%
ADV Data
–
70
60
56
58
53
56
57
28
32
31
31
32
30
28
28
24
24
26
26
26
25
26
25
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
55
54
53
–
50
40
30
20
Q1’13 non-SMS Data revenue € 28m, -7.2% YoY fully
due to negative regulated price effect.
Q1’13 SMS revenue -4.2%; including minor regulation
impact, and especially effect of price bundles including
unlimited SMS
10
0

SMS (units/month)
+10.5%
90
87
96
107
112
105
118
Q211
Q311
Q411
Q112
Q212
Q312
Q412
118

-12.0%
13.8
13.7
13.5
13.5
12.6
–
Mobile Data ARPU down 12% YoY to €11.8
–
12.2
11.8
–
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Success of pricing plans, including more and more unlimited
SMS volumes.
Q113
Net data ARPU (EUR/month)
13.2
Continued uptake in SMS usage, growing 10.5 % YoY to 118
text messages per user per month
Growth trend reversed since 1 July 2012 due to regulated price
caps for Mobile Data roaming
aggressive competitor moves on business market
Q113
Slide 32
Enterprise
ICT
Enterprise –- ICT
ICT
revenue
up by 6.1%
on like-for-like
basis in challenging
Solid
ICT revenue,
showing
4.2% growth
economic context

Q1’13 ICT revenue +4.2% YoY to €174m
–
–
Seasonally slower quarter ,
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
+4.2%
21 0
20 0
19 0
18 0
17 0
16 0
163
15 0
186
182
177
167
172
167
Q112
Q212
Q312
174
14 0
13 0
Q211
Q311
Q411
Q412
Q113
Slide 33
Service
& Wholesale
– P&L
livery
& Delivery
Wholesale
- P&L

SDE&W revenue (EUR mio)
-3.0%
98
88
83
78
73
68
80
77
80
78
76
75
76
75
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
63
Q1 revenue -3% YoY driven by slowing wholesale revenue
–
–
–
93
58
53
SDE&W Cost of Sales (EUR mio)
+12.6%
12
Regulatory measures reduced the Q1 revenue by 1.3%.
lower traffic volumes , decline in wholesale leased lines
the impact from decreasing Roaming prices was more than
offset by higher Roaming volumes

CoS Q1’13 included higher CPE sales

Operating expenses for Q1’13 up 4.7% YoY
10
8
6
4
2
9
9
9
9
9
9
10
11
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
0
SDE&W Personnel & Non-HR costs (EUR mio)
Personnel
Non-HR
–
+4.7%
14 0
12 0
10 0
80
60
33
48
42
48
50
41
48
50
50
50
50
43
43
46
43
45
Q211**
Q311
Q411
Q112
Q212
Q312
Q412
Q113
40
20
0
SDE&W EBITDA (EUR mio)
0
-10
-12
-30
-20
-21
-23
-26
-21
–

-25
Q1 Non-HR 4.7% higher YoY, due to increased use of external
resources to support simplification projects
Q1 HR expenses up 4.6% YoY : inflation-based salary
increases of March 2012 and January 2013, while headcount
was lower YoY
Q1 segment result YoY lower due to lower Direct margin
combined with higher expenses
-30
-30
-34.4%
-40
-50
-60
Q211**
Q311
Q411
Q112
Q212
Q312
Q412
Q113
** Q2 2011 and Q4 2011 impacted by one-off reversal of provision due to litigation settlement
Slide 34
Staff & support - P&L
Staff & Support – P&L
S&S Revenue(EUR mio)
+109.0%
30
•
Q1’13 revenue of € 18m included 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 were higher YoY driven by inflation-based
wage indexations ,partially offset by the benefit from lower
headcount compared to end March 2012.
•
Stable YoY Non-HR expenses for Q1’13
25
25
20
18
15
10
5
7
8
9
7
7
11
Q411
Q112
Q212
Q312
Q412
0
Q211
Q311
Q113
* Internal invoice; neutral on group level
S&S Personnel costs (EUR mio)
48
46
+6.7%
44
42
40
38
40
36
40
40
37
34
38
40
38
40
32
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
S&S Non-HR costs (EUR mio)
90
80
-0.8%
70
60
66
50
40
30
20
61
41
67
50
50
49
Q112
Q212
Q312
50
10
0
Q211
Q311
Q411
Q412
Q113
Slide 35
International Carrier Services
International Carrier Services – P&L
P&L
•
BICS Revenue (EUR mio)
+9.1
44 0
42 0
40 0
38 0
388
36 0
401
401
409
424
430
–
417
382
–
–
34 0
32 0
30 0
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
•
BICS Gross margin (EUR mio)
Non-Voice
+9.9%
Voice
80
60
20
26
28
27
25
30
31
29
28
29
31
31
31
32
32
34
33
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
Voice revenue +7.7% YoY: strong increase in traffic to African
region and a temporary traffic increase to the Asian region.
Volume driven growth partly offset by EU-wide MTR reduction.
Mobile data revenue +20% with messaging volumes +40%
Gross margin Q1’13 up 9.9% YoY
–
–
10 0
40
Solid revenue growth continued in Q1’13
Gross margin Voice + 7.8% YoY
Gross margin non-Voice + 12.4% YoY
0
BICS EBITDA (EUR mio) & margin
+23.9%
50
7.5%
8.7%
8.3%
7.3%
8.4%
8.3%
7.3%
7.3%
32
35
•
Consequently to solid Direct margin growth and somewhat
lower operating expenses (HR +non-HR) BICS’ segment
result for the first quarter 2013 was up by € 7m (+24%), and
the EBITDA margin ended 1pp higher at 8.3%.
•
•
Voice volumes: Q1 up 5.2% to 7.3 billion minutes
Non-Voice volumes Q1 up 40% to 451 million messages
10 .0%
40
5.0 %
35
30
20
29
33
28
34
35
0
-10 .0%
Q211
Q311
Q411
Q112
Q212
Q312
Q412
Q113
BICS Volumes (in mio)
SMS/MMS
Minutes
253
276
315
323
361
428
6,997
6,853
7,018
6,907
6,984
6,934
Q211
Q311
Q411
Q112
Q212
Q312
445
8,2 00
7,7 00
7,2 00
6,7 00
0.0 %
-5.0 %
10
6,2 00
7,556
451
7,267
5,7 00
5,2 00
Q412
Q113
Slide 36
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 46
• •Shareholder
structure
– slide 38Unit (EBU)
Serviceremuneration
Delivery Engine
• Regulation & legal – slide 52
• •Shareholder
- slide 39&Wholesale (SDE&W)
• Belgian economy – slide 56
Staff
and Support
(S&S)
• •Network
& Spectrum
– slide 40
• Belgacom International Carries Services (BICS)
37
Slide 37
Shareholder structure
Belgian state owns ~ 53.5%
338,025,135 shares,
of which 318,560,303 Outstanding
• Limited liability company under public law
- Belgian state main shareholder: 53.5%
- Legal obliged threshold: 50%+1 share
Own
Shares;
5.8%
• Free float 40.7%
• Treasury shares 5.8%
Belgian
State;
53.5%
Free Float;
40.7%
- Under Belgian law, companies prohibited from owning
>20% of outstanding share capital
- Part of own shares held for personnel incentives: Options
and DSPP
Status
31 Mar 2013
Shares
%
shares
%
Voting
%
Dividend
Belgian state
180,887,569
53.5%
56.8%
56.0%
Free float
137,672,734
40.7%
43.2%
42.6%
Own shares
19,464,832
5.8%
-
1.4%
Slide 38
Belgacom intends to
ensure its shareholders an attractive return
Shareholder remuneration
SBB
Dividends
Dividend per share & dividend yield
% of FCF
Mio €
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
Seri…
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
2.18
2.08
2.18
2.18
1.68
1.68
1.68
1.68
1.68
0.29
0.50
0.50
0.40
0.50
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 39
Global network strategy
Value enablers for a convergent interconnected world
Belgacom has all assets in hands to cope with a changing telecom ecosystem
Mobile network
• Mobile network innovation
driving leadership superiority
Fixed network
• Fixed network innovation
driving customer value
Network simplification
• Network simplification driving
efficiency
40
3G+ upgrade for superior mobile data
experience
Fiber speeds on copper with vectoring and
dynamic line management
Leaner operations through network
simplification
4G roll out as important enabler of our
convergence strategy
Speed acceleration with FTTH in new
zonings
Combined with strong product & process
simplification
Slide 40
Mobile network
Belgacom is determined to remain the best mobile operator for all type of customers. By mid Q2 the 3G+
upgrade be finalised, bringing 8 Mbps download & up-to-21 Mbps top speeds, 42 Mbps for dual carrier devices
Best mobile 3G network
1 Leader in Coverage
Best nationwide outdoor coverage:
99.98% 2G; > 97.3% 3G
Further boosting the experience with the 3G+ upgrade
1
• 30% average speed increase & top speed increase with HSPA+
• 70% increase of overall network capacity for data
2
Best 3G indoor coverage, significantly better than
competitors: 3G indoor coverage > 90%1
2
• Leader in Speed
Fastest down- and upload speed available in the
market1
1 Source:
As measured by independent agency CommSquare during Q1 2013 drive tests
Mobile data usage still in early stages with 35% of
devices on our network being 3G compatible
Important market value with customers having devices
not supporting 4G yet, both now and in future
Belgacom is determined to maintain its mobile leadership through investment in 4G roll-out
First to launch 4G
1• By end Q2’13, another 11 major cities will be covered
with 4G, including the main Belgian coastal cities
2• High speed backhauling deployed for fast data
transmission
Only 4G deployment in Brussels if regulatory framework is changed
Further roll-out of 4G
• 4G further improves mobile speed experience to average
1
20-30Mbps speed with peak speeds up to 50-60Mbps
• 4G is deployed in existing 1800Mhz spectrum
2
New 2600Mhz spectrum will be used for targeted capacity &
performance
Slide 41
Mobile network
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 1 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
DRAFT 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
Unallocated
2 x 10
Mobistar
Base
2 x 12
2 x 10.8
Proximus
2 x 20,8
Proximus
2 x 15
Proximus
2 x 20
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 42
Fixed network
- Dynamic Line Management & Vectoring
Substantially increased bandwidth with Dynamic Line Management (DLM). Vectoring to be deployed
Fast-track Dynamic Line Management
1• A speed profile is applied to a VDSL2 line in function of the
line distance
Powerful vectoring technology
1• Crosstalk is interference between copper pairs in same
cable
2• Line characteristics however often allow higher speeds
2• Crosstalk limits the achievable speed on VDSL
DLM monitors stability of lines and dynamically applies maximum
possible speed when a line is sufficiently stable
Vectoring cancels crosstalk in the copper cables resulting in a
significant bit rate increase of copper lines
DLM is an in-house developed technology
and improved the average speed experience with 30%
Vectoring brings up-to-70 Mbps speeds and 15 Mbps upstream
Belgacom is in better position to increase speed then other EU peers thanks to our access strategy over past
years with a strong Fiber-The-The-Curb network topology and a dense 86% VDSL2 coverage
How we are ahead of other EU operators
How we will further increase speed soon after
• Belgacom is the first operator in the world to deploy
1
vectoring on this scale
• Only operator with an in-house developed technology to
2
bring speed at maximum line capabilities
Strong Regulatory Framework was negotiated, disentangling
all blocking points required for full-fledged vectoring
DLM will be applied on top of our Vectored lines to further
increase speeds up-to-100 Mbps
Slide 43
Fixed network
- Speed acceleration in coming years
Belgacom will start with Fiber-To-The-Home (FTTH) deployment in new residential zonings in 2013.
Future evolutions of speed acceleration is currently described by Pair Bonding and G.fast & Fiber evolution.
Speed evolution in Mbps 2013 to >2018
FTTH in new zonings
G.Fast & Fiber evolution
1
• FTTH will be deployed in new
• G.fast technology is currently
1
analysed by standardization bodies
• Fiber costs are comparable to copper
2
• Both evolutions aim at bringing fiber
2
distribution close to the customer
FTTH offers speeds up-to-200
Mbps
Evolution brings speeds up-to-1000 Mbps
residential zonings as of S2 2013
for new residential zonings
Pair Bonding of VDSL lines
1
• Pair bonding increases bit rate by
combining speed of 2 VDSL lines
2
• Both lines will be vectored and
controlled by DLM
Pair Bonding brings speeds up-to200 Mbps
Slide 44
Network simplification
Leaner operations through a simplified all-IP-network
Program aims at simplifying our network and decreasing operational costs. In its ambition to be an agile
company, Belgacom will also focus on substantially simplifying its IT and product portfolios
Approach in simplifying our networks
Operational benefits from network simplification
Transformation – Physical removal of legacy
technologies, PSTN switches and technical buildings
•1 Lower cost to maintain – Lower maintenance,
utility, powering and building cost of building
facilities
Consolidation – Migration of products & services to
the new IP based network
Automation – Optimization of network architecture
towards fully automated customer activation
•2 Higher efficiency to operate – Substantial cost
savings in operating the network through efficiency
increase of field force
•3 Better customer experience with instant
servicing – Significant simplification & agility gain
with one network for al services
Simplification+ goals
1
• Outphasing of legacy equipment
3• Eliminate technical buildings
2
• Full fiber to the street cabinet
4• Fully automated customer activation
First wave includes outphasing of 30 buildings and outphasing of our legacy ATM and PSTN switching
Combined with product & process simplification
Slide 45
Pricing – Fixed products
Happy time international
Classic
Happy Time XL
No Limit National Anytime
19.99€ / month
19.99€ / month
29.67€ / 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
20.99€ / month
All download
speeds increased from
30 Mbps to 50 Mbps
since the deployment
of the DLM technology
in Q1’13
TV
21.5€ / month
70 channels
3 TV
Parental control
Slide 46
Pricing – Mobile Voice (Postpaid) in Q1’13
For Voice
centric
customers
For
Smartphone
users
For SMS
centric
customers
Easy 10
Easy 15
Easy 25
10€ / month
15€ / month
10€/month PACK
25€ / month
20€/month PACK
50 min ATAN +
50 SMS
100 min ATAN +
100 SMS
100 min ATAN + Unlimited
evening & we +
100 SMS
€ 0.20 / min ATAN
€ 0.25 / MMS ATAN
€ 0.85 / MB
€ 0.20 / min ATAN
€ 0.25 / MMS ATAN
€ 0.85 / MB
€ 0.20 / min ATAN
€ 0.25 / MMS ATAN
€ 0.85 / MB
Smart 20
Smart 35
Smart 45
Smart 75
20€ / month
15€/month PACK
35€ / month
30€/month PACK
75€ / month
60€/month PACK
120 min ATAN +
Unlimited sms ATAN
+ 1 GB incl
400 min ATAN +
+ Unlimited SMS ATAN
+ 2,5 GB incl
€ 0.20 / min ATAN
€ 0.25 / MMS ATAN
€ 0.10 / MB
120 min ATAN +
Unlimited Evening and we
+ Unlimited SMS ATAN
+ 1,5 GB incl
€ 0.20 / min ATAN
€ 0.25 / MMS ATAN
€ 0.10 / MB
45€ / month
40€/month PACK
Unlimited voice ATAN +
Unlimited SMS ATAN +
5 GB incl.
Unlimited / min ATAN
€ 0.25 / MMS ATAN
€ 0.10 / MB
included
Generation MTV 10
Generation MTV 15
Generation MTV 25
10€ / month
15€ / month
10€/month PACK
15 min ATAN +
Unlimited SMS ATAN
+ 10 MB incl
100 min ATAN +
Unlimited SMS ATAN
+ 500 MB incl
25€ / month
20€/month PACK
€ 0.25 / min ATAN
€ 0.25 / MMS ATAN
€ 0.50 / MB
€ 0.25 / min ATAN
€ 0.25 / MMS ATAN
€ 0.10 / MB
€ 0.15 / min ATAN
€ 0.25 / MMS ATAN
€ 0.10 / MB
150 min ATAN +
Unlimited SMS ATAN
+ 1 GB incl.
€ 0.25 / min ATAN
€ 0.25 / MMS ATAN
€ 0.10 / MB
Slide 47
Pricing – Mobile Voice (Postpaid) as from
Q2’13
For nonSmartphone
users
For
Smartphone
users
Easy+ 10
Easy+ 15
Easy+ 25
Easy+ 55
10€ / month
15€ / month
10€/month PACK
20 min ATAN +
unlimited SMS
150 min ATAN +
unlimited SMS
25€ / month
20€/month PACK
55€ / month
45€/month PACK
240 min ATAN
unlimited SMS
Unlimited min ATAN
unlimited SMS
€ 0.25 / min ATAN
€ 0.25 / MMS ATAN
€ 0.85 / MB
€ 0.25 / min ATAN
€ 0.25 / MMS ATAN
€ 0.85 / MB
€ 0.25 / min ATAN
€ 0.25 / MMS ATAN
€ 0.85 / MB
Unlimited min ATAN
€ 0.25 / MMS ATAN
€ 0.85 / MB
Smart+ 15
Smart + 25
Smart+ 35
Smart+ 65
15€ / month
10€/month PACK
25€ / month
20€/month PACK
65€ / month
55€/month PACK
120 min ATAN +
Unlimited sms ATAN
+0,5GB incl
180 min ATAN +
+ Unlimited SMS ATAN
+ 1 GB incl
35€ / month
30€/month PACK
€ 0.25 / min ATAN
€ 0.25 / MMS ATAN
€ 0.10 / MB
€ 0.25 / min ATAN
€ 0.25 / MMS ATAN
€ 0.10 / MB
300 min ATAN +
+ Unlimited SMS ATAN
+ 2 GB incl
€ 0.25 / min ATAN
€ 0.25 / MMS ATAN
€ 0.10 / MB
Unlimited voice ATAN +
Unlimited SMS ATAN +
5 GB incl.
Unlimited / min ATAN
€ 0.25 / MMS ATAN
€ 0.10 / MB
included
Slide 48
Pricing – Mobile Voice (Prepaid) as
from Q2’13
Reload bonus
For nonSmartphone
users
For Pay&Go Easy you get :
Pay & Go Easy
€ 0.27/ min ATAN
€ 0.12 / SMS ATAN
€ 0.25 / MMS ATAN
€ 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 AN Peak
€ 0.25 / min OffPeak
€ 0.12 / SMS Peak
€ 0.08 / SMS OffPeak
€ 0.25 / MMS ATAN
€ 0.5/MB
For Pay&Go Smart you get:
• Bonus 10€ Reload: unltd. SMS OffPeak + 10 MB
• Bonus 15€ Reload: unltd. SMS ATAN + 100 MB
• Bonus 25€ Reload: unltd. SMS ATAN + 500 MB
Peak: 7 – 16h
Slide 49
Pricing – Mobile Data
Standard
Internet on GSM Start
Internet on GSM
Comfort
Internet on GSM
Favorite
Blackberry service
4.99€ / month
9.99€ / month
19.99€ / month
18.15€ / month
50 MB incl.
500 MB incl.
2 GB incl.
500 MB incl.
€0.1 / MB
€0.03 / MB
€0.03 / MB
€0.10 / MB
0.5€ / MB (prepaid )
Or
0.85€/MB (postpaid)
Pay & Surf
2.99€  25 MB
4.99€  50 MB
9.99€  250 MB
included
General
Prepaid Only
Post-paid Only
GSM Only
Laptop & Tablet Only
iPad Only
Laptop Only
Prepaid Only
Prepaid Only
Pay & Surf
10€  200 MB
15€  300 MB
25€ 500 MB
50€ 1 GB
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 15€> in 30d:
+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
As from 1 Jul’13,
the rates of Packs
including internet go up:
+ € 2 for Start
+ € 3 for Comfort
+ € 1 for Maxi
In exchange, customers
get more volume,
more speed &
more TV
TV + Fix
TV + Internet
35.75€ / month
TV comfort
+
Classic (or Happy
Time XL)
50.95€ / month
Fix+ Internet
TV comfort
+
Internet Comfort
+Unlimited volume
+Unlimited hotspot
access
+250 MB 3G
50.95€ / month
Deezer premium Free with Generation packs.
Classic (or Happy
Time XL)
+
Internet Comfort
+Unlimited volume
+Unlimited hotspot
access
+250 MB 3G
TV + Fix + Internet
59.95€ / month
TV + Mobile + Internet
TV comfort
+
Classic (or Happy
Time XL)
+
Internet Comfort
+Unlimited volume
+Unlimited hotspot
access
+250 MB 3G
60.95€ / month
TV + Fix + Mobile +
Internet
TV comfort
+
Smart+/Easy+ 15
+
Internet Comfort
+Unlimited volume
+Unlimited hotspot
access
+250 MB 3G
69.95€ / month
TV comfort
+
Classic (or Happy
Time XL)
+
Smart+/Easy+ 15
+
Internet Comfort
+Unlimited volume
+Unlimited hotspot
access
+250 MB 3G
Slide 51
Regulation – 1
Overview financial impact
Regulation impacts
(Decrease in EUR million)
Estimated Impact
Actuals
FY 2013
Q1 2013
~ €45m
€10m
~ €5m
€1m
MTR &
flow-through Fix-to-Mob
Revenue
Roaming
(i.e. Voice, SMS and Data)
Revenue
~ €48m
€15m
EBITDA
~ €48m
€15m
Revenue
EBITDA
~ €93m
~ €53m
€24m
€15m
Total
EBITDA
• Over the first quarter of 2013, Belgacom’s revenues were negatively impacted for a total amount of EUR 24
million by regulation measures. On the EBITDA level, this came down to an impact of EUR 15 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 Q1 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.
•
Roaming III Regulation also foresees structural measures
−
Wholesale roaming access (1 July 2012)
–
Actual impact on Q1 2013 financials:
−
Revenue: ~€ -15m
−
EBITDA: ~€ -15m
–
Estimated impact on FY 13 financials:
−
Revenue: ~€ -48m
−
EBITDA: ~€ -48m
This new regulation covers a ten-year period until 30 June 2022.
It imposes a further lowering of the existing regulated price
caps, and extended the roaming regulation to retail data as
from July 2012. It also continues to impose transparency
measure to avoid bill shocks and has extended the measures
to roaming outside EU since July 2012.
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’ 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
Belgacom’s broadband regulation is still based on the finding of sole dominance (i.e. Cable
not included in the market)
Based on the new decision, Belgacom has to provide:
– bitstream access for television (multicast) - Belgacom alternative solution based on
shared channels accepted by BIPT on 4 Jan. 2012 – reference offer approved by BIPT on
4 Oct. 2012 – pricing decision still pending
– VDSL2 prices based on strict cost orientation
The BIPT maintains a strong focus on operational excellence for wholesale services
Appeal against regulators’ decisions
Belgacom launched an appeal against (pending):
• its exclusion from digital TV & broadband access on the cable
networks
• the non-inclusion of cable in broadband markets
• the multicast and Operational Excellence in the broadband
markets
Cable operators’ request to suspend their regulation was rejected by
the Court of Appeal in H2 2012. No timing yet for ruling on annulment.
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 regulators’ decisions
about cable reference offers
expected by mid-2013 with implementation
by end 2013
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Macro economic environment
Belgium & Euro area - prospects
Unemployment rate forecast (%)2
Belgium
Euro area
11.0%
11.8%
10.1%
7.2%
7.5%
2011
2012
8.1%
2013
Belgium:
Budget deficit
3.9% end ‘12
2012 Gross public Debt
99.8% of GDP
Source: National Bank
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: [email protected]
Tel: +32 2 202 82 41
http://www.belgacom.com
Slide 57