ordinary general shareholders’ meeting brussels, 11 april 2007

Ordinary General Shareholders’ Meeting

Brussels, 11 April 2007

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English : channel 3

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Test question

• Sporting Anderlecht will be champion of the Jupiler League this season

1. FOR2. AGAINST3. ABSTAIN

Theo Dilissen

Chairman of the Board

Dirk Lybaert

Secretary General

Theo Dilissen


• Two driving forces in 2006

• Convergence

• Customers’ needs

• Thanks to the involvement of everyone

• The teams of Belgacom, Proximus, Telindus, WIN, Skynet, Belgacom ICS and other Group entities

• Constructive social partners

• Committed Board members

• Determinated management

• The main mission for 2007

• Transforming the Belgacom Group into an integrated operator

Didier Bellens

President & CEO

2006 results presentation

• Buy-out of 25% Vodafone stake in Proximus and commercial partnership

• Completion of Integration of Telindus

• Sale of non-strategic assets: Neuf Cegetel and Mobistar stake

• Belgacom Group revenue increase 7.1% YoY to EUR 6,100 million

• Belgacom TV 139,665 customers end of 2006

• Proximus added 58,000 customers YoY; 71,000 in Q4 2006

• Increased shareholder returns: 200 Mio EUR share buy back & 100 Mio

EUR interim dividend

• New customer-centric organization structure

Highlights

1. Fixed Line Services

1 2VoiceVOICE VOLUMESFlat rates success leading to:

• improved traffic volumes

• continued growth of traffic market share on own network

• but no longer limiting access line loss

VOICE PRICING• Traffic ARPU decrease due to

success of flat rates (free minutes)

• Slight decline of Voice access ARPU driven by promotions

Traffic Volume (mio min)

Traffic Volume (mio min)

8,973 9,150

2,346 2,311

2005Q4 ‘05 2006Q4 ‘06

Voice ARPUEUR/ MonthVoice ARPUEUR/ Month

Access

Traffic

28.0 27.227.8 27.2

2005Q4 ‘05 2006Q4 ‘06

1 2BROADBAND VOLUMES• Growth continues thanks to

Segment specific actionsNew & free Internet services

• Ongoing focus on internet accessibility via hotspots

BROADBAND PRICING• Growing importance of “ADSL

light” on total volume and

• high focus on customer acquisition & retention via discounts and promotions

• leading to lower ARPU.

Broadband

Broadband Broadband Growth lines EOP

2005Q4 ‘05 2006Q4 ‘06

9771,128

45 42

Residential ADSL**

ARPU/month (EUR)

31.6 3332.7

20062005

25

Average ADSL ARPUADSL Light ARPUADSL GO ARPU

1MARKET IMPACT• Integrated Belgacom-Telindus

market approach leading to major new or renewed contracts

Telindus

2REVENUES• YoY turnover growth over

10%, with higher growth in regions South and UK

• Turnover split per quarter remains project driven

Q3‘06Q1 ‘06

Telindus Revenue Contribution evolution (EUR mio)

Q2 ‘06

179 160191172

Q4‘06

FLS TV Customers (‘000)

1VOLUMES• Belgacom TV exceeding full

year guidance by far

• Mainly driven by

• coverage improvement

• offering expansion

• promo’s (try & buy)

Belgacom TV33 42

74103

Q4‘05 Q1‘06 Q2‘06 Q3‘06

FLS TV ARPU(EUR/month)

Q4‘06Q1‘06 Q2‘06

11.910.1

12.4

140

Q4‘06

12.6

Q3‘06

2. Mobile Communications Services

4,311

4,2404,253

EOY'05 End Sept '06 2006

4,311K Proximus customers at the end of 2006

* 3-month active subscribers

• During the last quarter, Proximus increased its customer base by 71,000 and further improved its customer portfolio with 91,000 additional postpaid customers.

• YoY Proximus added 58,000 customers.

+71

EOP Active Customer Base *

42% 45% 46%

58% 55% 54%

45,5%46,4%48,4%

EOY'05 End Sept '06 EOY'06

Postpaid Prepaid Market share

Proximus’ Market Share at 45.5%(*)

* 3-month active subscribers

•Proximus’ active Market Share went down by 2.9pp since end 2005.

•Customer mix significantly improved: during 2006 Proximus acquired

207,000 new active postpaid customers.

(*) BMB estimates

Customer Base and Market Share* (%)

Initiatives launched in 2006

• Segmented new offers: more simplicity & value for money: Prepaid Pay&Go Classic, SME Package Easy & Extended, Vodafone World Exclusive, Data bundles like Data Easy, Mobile Internet Evening&Weekend, Unlimited Roaming Data bundle

• Proximus M-Pay and PlazZza

• 3G coverage and HSDPA launch• Coverage match by EOY’06• Increase of 3G services (Mobile

TV & Music Download offer, Compatible device (VMCC),…)

H1

• Family Call

• Partnering (Plug Mobile)

• Instant Messaging via

Windows Live Messenger

• M-payment and M-ticketing

Q4

• Smile 5

• Pay&Go Generation:

free SMS after 4PM

• Vodafone World Preferred

• Acquisition of Euremis

Q3

• Decrease in blended gross ARPU driven by success of bundled tariff offers

Despite high credits & discounts, MCS keeps leadership in blended Net ARPU

Gross ARPU 3-month active subscribers, includes Machine-to-machine, excludes discounts & promotionsNet ARPU : Gross ARPU including discounts & promotions

Gross ARPU Credits & Discounts

40.941.240.340.3

-3.2-2.5-2.3 -3.9

Q4'05 Q4'06 2005 2006

38.7 37.7

Net ARPU

Blended ARPU (EUR/month) *

38.0 36.4

3. International Carrier Services

Operational Overview

Consolidation & insourcing to become ICS worldleader• Post Merger Integration Swisscom operations going as planned – last

cornerstone in Q1 2007: migration of Swiss traffic to new NGN platform• Insourcing project with MTN Group signed 02/06 – implementation

underway – MTN outsources international connectivity to BICS• Memorandum of Understanding signed with Omantel – BICS reinforces

presence in fast growing Middle East region

Be “All-IP” ready with infrastructure & services• Upgrade switching infrastructure with NGN based capacity extension -

deployment of new soft switching platform• Successful launch of connectivity product for voice over broadband

providers – Hosted VoIP services to be launched in 2007

Move up the mobile value chain• Belgacom ICS world leading GRX1 provider - supports mobile operators in

HSDPA deployment• New SMS platform implemented in Q3 2007• Numbering and roaming solutions under development

1 GRX = backbone network for mobile data roaming

4. Group Financials

Consolidated income statement

EUR Mio 2005 2006 % change .

Total Revenues 5,696 6,100 +7.1%

Among which non-recurring revenues 238

Cost of goods sold -1,555 -2,005 +28.9%

HR expenses -957 -1,106 +15.5%

Other operating expenses -731 -841 +15.0%

Non-recurring expenses -355

Total Operating Expenses -3,598 -3,952 +9.8%

EBITDA 2,098 2,149 +2.4%

Depreciations -726 -802 +10.5%

EBIT 1,372 1,347 -1.8%

Financial Result 64 104 +62.1%

Net Income (Group Share) 959 973 +1.5%

Basic earnings per share 2.78 EUR 2.87 EUR

Revenue adjustments Belgacom GroupEUR Mio

2005 2006% change

Total Revenue 5,696 6,100 +7.1%

of which non-recurring revenue 238

Total Revenue excluding non-recurring items 5,458 6,100 +11.8%

Revenue Adjustments

• Revenue disposed companies (1) -8

• Revenue Telindus -702

Adjusted Revenue Group (2) 5,450 5,399 -0.9%

(1) Disposed companies are Digital Age Design SA and Expercom SA(2) Excluding non-recurring revenue

EUR Mio2005 2006

% change

Total Operating Expenses -3,598 -3,952 +9.8%

of which non-recurring expenses -355

Total operating expenses excluding non-recurring items -3,244 -3,952 +21.8%

OPEX Adjustments

• Operating Expenses disposed companies (1) 3

• Operating expenses Telindus 675

Adjusted Operating Expenses Group (2) -3,240 -3,277 +1.9%

Opex adjustments Belgacom Group

(1) Disposed companies are Digital Age Design SA and Expercom SA(2) Excluding non-recurring items

EUR Mio2005 2006

% change

Total EBITDA 2,098 2,149 2.4%

of which non-recurring items -116

Total EBITDA excluding non-recurring items 2,214 2,149 -3.0%

EBITDA Adjustments

• EBITDA disposed entities (1) -5

• EBITDA Telindus -27

Adjusted EBITDA Group (2) 2,209 2,121 -4.0%

Ebitda adjustments Belgacom Group

(1) Disposed companies are Digital Age Design SA and Expercom SA(2) Excluding non-recurring items

EBITDA (EUR Mio)Revenues (EUR Mio)

Result Segments

2,9613,630

736

2,181

2,136

713

238

2005 2006

1,1161,147

1,0001,041

3327

-1162005 2006

Fixed Line Mobile International Carrier

2,098 2,1495,696*

6,100*

Non recurring items

* Total revenues as reported post inter-segment eliminations

+7.1%+2.4%

Investments

488 448

195214

1513

696 676

2005 2006

Fixed Line Mobile International Carrier

Capex (EUR Mio)

1

1 Excluding the Irrevocable Right of Use of the Belgacom network

Agenda

Questions & Answers

Written questions

Oral questions

Proposed resolutions

Vote on the proposed resolutions

Proposed resolution

Approval of the annual accounts with regard to the financial year closed on 31 December 2006, including the following allocation of the results:

Profit of the period available for appropriation 392,830,467.77 €

Net transfers from the reserves available 257,964,107.04 €

Profit to be distributed 650,794,574.81 €

Remuneration of capital (gross dividends) * 631,200,613.17 €

Other beneficiaries (Personnel) 19,593,961.64 €

(*) : for 2006, the gross dividend amounts to € 1.89 per share, entitling shareholders to a dividend net of withholding tax of € 1.4175 per share, from which on 6 December 2006 an interim dividend of € 0.29 (€ 0.2175 per share net of withholding tax) was paid; so that on 17 April 2007 a gross dividend of € 1.60 per share (€ 1.20 per share net of withholding tax) will be paid.


Proposed resolution

Granting of a discharge to the members of the Board of Directors for the exercise of their mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to Mr. Didier Bellens for the exercise of his mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to Mr. Pierre-Alain De Smedt for the exercise of his mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to Mr. Theo Dilissen for the exercise of his mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to Mrs. Carine Doutrelepont for the exercise of her mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to Mrs. Martine Durez for the exercise of her mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to Mr. Philip Hampton for the exercise of his mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to Mr. Georges Jacobs for the exercise of his mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to Mr. Maurice Lippens for the exercise of his mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to Mr. Michel Moll for the exercise of his mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to Mr. Oren G. Shaffer for the exercise of his mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to Mr. Robert Tollet for the exercise of his mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to Mrs. Lutgart Van den Berghe for the exercise of her mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to Mr. Paul Van de Perre for the exercise of his mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to Mr. Philippe Van de Vyvere for the exercise of his mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a special discharge to Messrs. Johny Cornillie, Didier De Buyst and Norbert Van Broekhoven for the exercise of their mandate which expired on 23 December 2006.


Proposed resolution

Granting of a special discharge to Mr. Johny Cornillie for the exercise of his mandate which expired on December 23, 2006.


Proposed resolution

Granting of a special discharge to Mr. Didier De Buyst for the exercise of his mandate which expired on December 23, 2006.


Proposed resolution

Granting of a special discharge to Mr. Norbert Van Broekhoven for the exercise of his mandate which expired on December 23, 2006.


Proposed resolution

Granting of a discharge to the members of the Joint Auditors for the exercise of their mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to ERNST & YOUNG, Réviseurs d’entreprises S.C.C./Bedrijfsrevisoren B.C.V., represented by Mr. Marnix Van Dooren, for the exercise of his mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to Mr. Romain Lesage for the exercise of his mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to Mr. Pierre Rion for the exercise of his mandate during the financial year closed on 31 December 2006.


Proposed resolution

Granting of a discharge to CALLENS, GUEVAR, VAN IMPE & Co., represented by Mr. Herman Van Impe, for the exercise of his mandate during the financial year closed on 31 December 2006.


Proposed resolution

Appointment of the following persons as Board Member for a period which will expire at the annual general meeting of 2013 : Mrs. Carine Doutrelepont, Messrs. Georges Jacobs, Maurice Lippens, Oren G. Shaffer and Guido J.M. Demuynck.

The remuneration for the above mandates is fixed according to the decision taken by the shareholders’ meeting of 19 February 2004.


Proposed resolution

Appointment of Mrs. Carine Doutrelepont as Board Member for a period which will expire at the annual general meeting of 2013.

The remuneration for the above mandate is fixed according to the decision taken by the shareholders’ meeting of 19 February 2004.


Proposed resolution

Appointment of Mr. Georges Jacobs as Board Member for a period which will expire at the annual general meeting of 2013.



Proposed resolution

Appointment of Mr. Maurice Lippens as Board Member for a period which will expire at the annual general meeting of 2013.



Proposed resolution

Appointment of Mr. Oren G. Shaffer as Board Member for a period which will expire at the annual general meeting of 2013.



Proposed resolution

Appointment of Mr. Guido J.M. Demuynck as Board Member for a period which will expire at the annual general meeting of 2013.



Ordinary General Shareholders’ Meeting Brussels, 11 April 2007

Extraordinary General Shareholders’ Meeting


Theo Dilissen


Questions & Answers

Proposed resolutions

Vote on the proposed resolutions

Proposed resolutionProposal to empower the Board of Directors to acquire the maximum number of shares permitted by law, within an 18-month period, beginning on 11 April 2007. The price of such shares must not be more than 5% above the highest closing price in the 30-day trading period preceding the transaction, and no more than 10% below the lowest closing price in the same 30-day trading period. Pursuant to this decision, proposal to modify Article 13, Section 2 of the Articles of Association as follows:The Board of Directors is hereby empowered to acquire the maximum number of own shares permitted by law. The price paid for these shares must not be more than 5% above the highest closing price in the 30-day trading period preceding the transaction, and no more than 10% below the lowest closing price in that same 30-day trading period. This mandate is granted for a period of eighteen months as of 11 April 2007.


Proposal to empower the Board of Directors to acquire the maximum number of shares permitted by law. This mandate is granted for a period of three years starting on the day that this amendment to the Articles of Association is disclosed by the General Meeting of 11 April 2007. The price paid for such shares may not be more than 5% above the highest closing price in the 30-day trading period preceding the transaction, and no more than 10% below the lowest closing price in that same 30-day trading period, in case this acquisition is necessary for preventing any imminent and serious prejudice to the Company. Pursuant to this decision, motion for a resolution to replace “19 February 2004” by “11 April 2007” in Article 13, Section 4 of the Articles of Association.

Proposed resolution


Proposal to empower the Board of Directors, for a period of three years starting from the day that this amendment to the Articles of Association is disclosed by the General Meeting of 11 April 2007, to increase capital, in any and all forms, including a capital increase where the pre-emptive rights of shareholders are restricted or withdrawn, even after receipt by the Company of notification from the Belgian Banking, Finance and Insurance Commission of a takeover bid for the Company’s shares. Where this is the case, however, the capital increase must comply with the additional terms and conditions laid down in Article 607 of the Commercial Companies Code.Pursuant to this decision, motion for a resolution to replace, in Article 5, Section 3, Sub-section 2 of the Articles of Association, the text “for a period of three years from the date on which this mandate comes into effect” by "for three years starting on the day of disclosure of the amendment of these Articles of Association by the General Meeting of Shareholders of 11 April 2007” .


Proposed resolution

Cancellation of own shares

Proposal to cancel 23,750,000 shares with reduction of the special reserve of own shares not available for distribution, amounting to 644,100,000 EUR.Pursuant to this decision, proposal to modify Article 4, Section 2 of the Articles of Association as follows:“The share capital is represented by 338,025,135 no-par-value shares, each of which represents 1/338,025,135th share in the company’s share capital and ranks pari passu.”

Proposed resolution


In order to comply with the changes in Belgian legislation regarding the abolition of bearer shares and the conversion of shares into dematerialized form, proposal to amend Article 10, Section 1 of the Articles of Association as follows:Shares of the Company may take registered, dematerialized or bearer form, within the limitations of the Law of 14 December 2005 regarding the abolition of bearer shares.Under Article 60/1, §2 of the Law of 21 March 1991, all shares representing share capital held by a public authority – as defined in Article 6, Section 2 of these Articles of Association – must be in registered form.Without prejudice to the foregoing, the holders of registered shares may, at any time and at their own expense, request that their shares be converted into registered or dematerialized shares.In accordance with Article 463 of the Commercial Companies Code, a register of shareholders must be kept at the Company’s registered office.Dematerialized shares are held by being booked to an account, in the name of the owner or holder, with an authorized account holder or a clearing body.Bearer shares issued by the Company and held in a securities account on 1 January 2008, will exist in dematerialized form as from that date. The other bearer stocks will also be automatically dematerialized as and when they are registered on a securities account as from 1 January 2008. (…)

Proposed resolution

Proposal to amend Article 14, Section 2 of the Articles of Association as follows:Without prejudice to Article 6, Section 1, of these Articles of Association, the Company may, at any time, issue bonds convertible into shares and stock-purchase warrants, up to the ceiling for authorized capital, by resolution of the GM, deliberating and deciding on the basis of the quorum and majority required for amendment of these Articles of Association, or by resolution of the Board of Directors. Notwithstanding Article 6, Section 1, of these Articles of Association, and within the limitations of the Law of 14 December 2005 regarding the abolition of bearer shares, these obligations and warrants will be issued in registered, bearer or dematerialized form.

Proposed resolution


Composition of the Board of Directors

Motion for a resolution: reduction of the number of Board members from no more than 18 members to no more than 16 members.Proposal to amend Article 16, Section 1 of the Articles of Association as follows:Section 1 - Board of DirectorsThe Board of Directors is composed of no more than 16 members, including the person appointed as Chief Executive Officer.

Proposed resolution


Notice convening general meetings Proposal to simplify the procedure for convening meetings, in accordance with Article 533 of the Commercial Companies Code.Proposal to amend Article 33, Sections 1 and 2 of the Articles of Association as follows:

“Notices convening general meetings must include the agenda and must be published in the Belgian Gazette and in at least one Dutch-language and one French-language national newspaper at least 24 days before the meeting.”

Proposed resolution


Proposed resolutionProposal to grant all powers to the Secretary General, including that of replacement, for the purpose of coordinating the Articles of Association to reflect the resolutions above.


Extraordinary General Shareholders’ Meeting


ordinary general shareholders’ meeting brussels, 11 april 2007

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