roadshow presentation q2 2013
DESCRIPTION
More info at the belgacom Group IR website: www.belgacom.com/irTRANSCRIPT
1
Detailed segment results Consumer – slide 27
Enterprise – slide 34
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
Belgacom Presentation Q2 2013 results Roadshow September 2013
Financial highlights
Executive summary – slide 3
Revenue – slide 5
Direct margin – slide 6
Non-HR expenses - slide 7
HR expenses – slide 8
EBITDA – slide 9
Capex – slide 10
FCF/FIN POS – slide 11-12
Balance sheet – slide 13
P&L – slide 14
Operational highlights
Executive summary – slide 15
Mobile – slide 16
Fixed – slide 20
Convergence – slide 21
Network – slide 22
Cautionary Statement
Slide 2
“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 forward-looking statements, whether as a result of new information, future events or otherwise.“
Executive summary- financials Q2 2013
Slide 3
- Group revenue: € 1,583m; -1.7%* YoY
- Group ebitda: € 430m, -1.9%* YoY
- Group capex: € 177m, +2.1% YoY
- 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
Financial results Q2 on track to
meet FY guidance
Well positioned to face
challenging market
dynamics
Regulatory measures
significantly impacting financials
FY 2013 guidance reiterated
Metrics 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%
Slide 4
* Compared to the restated 2012 EBITDA of € 1,801 m, following the retrospective application of IAS19R
H1 2013 Group revenue (mio €)
Slide 5
Q2 2013 Group revenue (mio €)
H1 2013 Group direct margin (mio €)
Slide 6
Q2 2013 Group direct margin (mio €)
213
232226 224
217
256
218 225
150
160
170
180
190
200
210
220
230
240
250
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Non-HR expenses Cost management limiting impact of commercial push
+0.7%
Consumer
Enterprise
Business Unit
Business Unit
Quarterly Non-HR expenses ( € million)
Slide 7
SDE & W
- 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.
Q2’13 non-HR expenses of € 74 m, up 1.0% mainly driven by the focus on Mobile acquisition, partly offset by cost management
Q2’13 non-HR expenses of € 37m, 5.9% lower compared to the same period of 2012 showing effect from solid cost containment.
5.2% higher non-HR YoY to €52m including resources to support simplification projects
278 283 278 281290
278290 283
150
170
190
210
230
250
270
290
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Quarterly HR-expenses (€ million)
5000
10000
15000
20000
25000
YE96 YE98 YE00 YE02 YE04 YE06 YE08 YE10 YE12
Belgacom headcount in FTE
HR expenses Salary indexation partly offset by one-off provision reversal and lower headcount
+0.6%
15,778 FTEs end June’13 (-216 FTE YoY) Civil Servants decreased to 33% of total headcount
Estimated cash-out for termination benefits
EUR million
2013 80
2014 49
2015 21
2016 6
2017 6
2018-2033 21*
(* Cumulative for full period)
PTS -6,300 FTE
BeST -4,160 FTE
2006-2012 Tutorship & FMS -3,900
FTE
Jan ‘12 : The Phone House
+518 FTE*
Telindus +2,600 FTE
15,778
Slide 8 *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.
Mach 2012 & Jan 2013:
2% inflation based salary
indexation
H1 2013 Group Ebitda (mio €)
Slide 9
Q2 2013 Group Ebitda (mio €)
Invest in high-quality fixed & mobile network to maintain leadership in convergence
Slide 10
734 777 753
11.1%12.1% 11.7%
0
100
200
300
400
500
600
700
800
900
0%
2%
4%
6%
8%
10%
12%
14%
2010 2011 2012 Outlook 2013
Group Capex in € million / % of revenue
13%-14%
*This does not include capex for a potential bidding in the 800 Mhz spectrum auction that is planned before year-end
174 177
10.8% 11.2%
Q2'12 Q2'13
Accelerated network investments - 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
409
797
980
788691
289
136
2008 2009 2010 2011 2012 Ytd June'12 Ytd June'13
Free Cash Flow (in mio € )
Q2’13 Free Cash Flow of € 47 million, impacted by income tax payments and lower ebitda
Slide 11
Lower FCF result of: • a timing difference in
income tax payments • lower EBITDA
(in mio € )
2012 IAS
Res ta ted
2013
var.
20 12 IAS
Res ta ted
2013
var.
Operating CF before working capital changes 379 366 -13 771 730 -41
CF for Working capital -95 -142 -47 -101 -235 -134
Net cash used in investing activities -174 -177 -3 -381 -359 22
Free Cas h Flo w 110 47 -63 28 9 136 -153
Q2 H1
(1,601)136 (538)
(38) 14 (1) (2,027)
Net debtDecember 2012
FCF Dividends Non controllinginterests
Net sale oftreasury shares
Other Net debt June2013
Sound financial position
Slide 12
- 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
Debt maturing
2013 € 127m
2015 € 145m
2016 € 950m
2018 € 500m
2023 € 100m
2028 € 150m
2026 € 73m
- Belgacom has an € 2,500m Bonds EMTN Program with an outstanding amount of € 1,825m.
Belgacom consolidated balance sheet
• 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.
Slide 13 * The 2012 financial figures have been restated after the adoption of the IAS 19R revision
31-Dec 30-Jun
(EUR million) 2012 2013
TOTAL ASSETS 8,243 8,196 Non-recurrent assets 6,192 6,116
Goodwill 2,339 2,339
Intangible assets with finite useful life 1,097 1,067
Property, plant and equipment 2,467 2,475
Investments in associates 1 1
Other participating interests 7 6
Deferred income tax assets 147 128
Pension and other non-current assets 134 101
Current assets 2,051 2,080
Inventories 133 147
Trade receivables 1,341 1,329
Current income tax assets & other current assets 292 324
Investments 83 61
Cash and cash equivalents 202 219
LIABILITIES AND EQUITY 8,243 8,196
Equity 3,093 2,865
Shareholders' equity 2,881 2,680
Minority interests 211 185
Non-current liabilities 2,678 2,846
Interest-bearing liabilities 1,761 1,974
Pensions and other post-employment benefits 570 528
Provisions 203 203
Deferred tax liabilities and other amounts payable 144 141
Current liabilities 2,472 2,485
Interest-bearing liabilities 215 391
Trade payables 1,310 1,260
Income tax payable 236 105
Other current payables 711 730
Group – quarterly P&L
Slide 14
* The 2012 financial figures have been restated after the adoption of the IAS 19R revision
VARQ2/Q2
Revenues (1) 1,588 1,6 11 1,620 1,644 6 ,462 1,586 1,583 -1.7%
Total OPEX -1,118 -1,172 -1,156 -1,215 -4,661 -1,144 -1,153 -1.7%
Costs of materials and charges to revenues-614 -667 -649 -680 -2,611 -637 -645 -3.4%
Personnel expenses and pensions-278 -281 -290 -278 -1,126 -290 -283 0.6%
Other operating expenses -226 -224 -217 -256 -924 -218 -225 0.7%
EBITDA (1) 470 438 464 429 1,801 441 430 -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 0 -10 -1 -4 -15 0 0 -
Depreciation -181 -188 -185 -194 -748 -192 -200 6.8%
EBIT (incl. NR) 289 240 278 231 1,038 250 230 -4.4%
Financial result -22 -26 -54 -28 -131 -20 -24 -7.0%
Tax expense -65 -48 -34 -30 -177 -53 -44 -8.1%
Net income (Group) 199 16 1 184 168 712 171 155 -3.5%
Non-controlling interest 3 5 5 5 19 5 6 -
Earnings/share in € 0.63 0.5 1 0.58 0.53 2.24 0.54 0.49 -3.6%
Earnings/share in € (excl. NR) 0.63 0.53 0.58 0.54 2.27 0.54 0.49 -7.7%
Restated
(1) before non-recurring items
in mio € Q112 Q212 Q312 Q412 FY 2012 Q113 Q212
Executive summary- operationals Q2 2013
Slide 15
+16,000 TV + 5,000 Internet
+ 19,000 PACKS
+128,000 Postpaid
-82,000 Prepaid
- 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
- BB customer base end June
’13 at 1,652,000
- Packs continued to grow. Total end
June’13 at 1,278,000
- 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
+ 46,000 Mobile cards
- 39,000 Fixed Voice
- Fixed voice customer base
end June ’13 at 3,002,000
Retention actions stabilised mobile churn, positive trend seen in Q1 continued
Slide 16
Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
postpaid
prepaid
Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Clear effect New
telecom law
effect in EBU much less
pronounced
Consumer Mobile Churn
Enterprise Mobile Churn
Focus on mobile in H1 through positioning of Proximus network quality, proactive
retention and acquisition actions
> 60% postpaid
customers on new
mobile tariff plan
40.4%
30.5%
23.6%
5.5%
Q2’13 Focus on Mobile acquisition
Slide 17
45
-39
-88
-52
46
5,543 5,504 5,416 5,364 5,410
4,000
4,200
4,400
4,600
4,800
5,000
5,200
5,400
5,600
-100
-80
-60
-40
-20
0
20
40
60
80
100
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Mobile customer evolution2
net adds total
89
41
-16
61
128
-44-80 -72
-113-82
-120
-70
-20
30
80
130
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Split Postpaid - Prepaid
Net adds Postpaid Net adds Prepaid & MVNO
- Belgacom Group added 46,000 mobile customers in Q2’13, with Postpaid growing by
128,000
50
17
-37
26
93
-44
-80 -68
-108-82
-150
-100
-50
0
50
100
150
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Net adds Consumer Prepaid
Net adds Consumer Postpaid
36
2116
3033
0
5
10
15
20
25
30
35
40
45
50
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
EBU Net Adds
Mobile
market share₁
+Tango
Supported by tactical joint offers & strong
marketing actions
1 Active mobile cards 2 Mobile active customers including mobile customers Luxembourg, and including mobile data cards.
Slide 18
Mobile offers became more abundant and have been simplified
Positioning Scarlet as no frills brand, with very attractive pricing for ‘price seekers’
Feb-13 June-13 Aug-13
Launch
prepaid offer
Launch
postpaid offer
Launch
3-play offer
Evolution of comparable
offers
Since the Telco law came into force, the Consumer
Postpaid ARPU decline clearly accelerated. 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
In contrary, the Prepaid ARPU was not impacted by
the new Telco Law.
Clear Postpaid ARPU impact, while Prepaid ARPU remains fairly stable
27.3 €28.9 €
26.6 €24.1 € 24.4 €
14.2 € 13.6 € 14.4 € 13.3 € 14.0 €
.0070 €
.0120 €
.0170 €
.0220 €
.0270 €
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Consumer blended ARPU: Split Prepaid - Postpaid
BlendedPostpaid
ARPU
BlendedPrepaid
ARPU
37.2 € 35.5 € 33.9 €31.5 € 30.8 €
0.0 €
0.0 €
0.0 €
0.0 €
0.0 €
0.0 €
0.0 €
0.0 €
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Enterprise blended ARPU
The Enterprise Business experiences a more general
ARPU decline driven by: Regulation
More abundant offers
Churn of high-usage customers in the last quarter of ‘12
Slide 19
Belgacom44%
Cable 49%
Other 7%
Solid performance of fixed products
3532 31
14 14
1,301 1,3401,386 1,412 1,428
400
600
800
1,000
1,200
1,400
1,600
0
20
40
60
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
TV Lines evolution* Net adds Households Second stream users total
-37-30 -33
-44-39
3,149 3,119 3,085 3,0413,002
2,500
2,700
2,900
3,100
3,300
3,500
-50
-30
-10
10
30
50
70
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Fixed Voice customer evolution net adds total
9
12 1110
5
1,615 1,626 1,637 1,647 1,652
1,200
1,300
1,400
1,500
1,600
1,700
-2
3
8
13
18
23
28
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Broadband customer evolution net adds total
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
Belgian Fixed internet market
still growing, but at slower pace
Internet penetration @ 78%
Belgacom market share erosion limited to -0.5% YoY
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
*Corresponds to the total settop boxes, including multi-stream ** Total TV market includes analog TV
Belgacom 32%
Cable 64%
Other 5%
Slide 20
Convergence strategy - key advantage in challenging market
34 37
23 22 19
1,177,0001,214,000 1,237,000 1,259,000 1,278,000
700,000
800,000
900,000
1,000,000
1,100,000
1,200,000
1,300,000
0
20
40
60
80
Q2'12 Q3'12 Q4'12 Q1'13 Q2'13
Packs evolution
net adds total
Continued uptake of multi-play packs
End June 2013; 21% of PACKS included mobile (from 13% previous year)
21% of Packs with
Mobile
Sustain growth in convergence through more value from mobile components
Supported by tablet joint offer
All Packs contain 3G
mobile internet
volume
All mid-end Packs include
TV Everywhere (as of 1st July)
Up to 6 mobile
subscriptions in a
Pack
Supported by tablet joint offer On 3G, 4G and Wi-Fi More value
at least a € 5
reduction per
mobile
FON log-in
Slide 21
Belgacom brings connectivity anywhere, anytime and on any device
Slide 22
99.85% DSL (among world leaders)
> 86% VDSL (2nd in Europe)
~ 93% TV coverage
Fixed Network Wi-fi Hot Spots
700,000 FON spots in Belgium
>11 million worldwide (UK, France, the
Netherlands, Portugal …)
> 99% 3G & 2G
~ 36% 4G
coverage
@ @
Mobile Network2
@
55.9 Mbps
21.8 Mbps
21.2 Mbps
6.2 Mbps
2 Source: As measured by independent agency CommSquare during Q2 2013 drive tests
All download speeds are up to
50 Mbps 1 On average, a customer gets
33 Mbps
1 Speeds depend on such factors as the distance between the connection point & the local exchange, the computer system & the internal cabling.
@ HD
@
• Start of Field Trial – Large technical field trial started to
prepare Vectoring for massive roll-out
• Strong regulatory framework was negotiated,
disentangling all blocking points
• To up-to-50 Mbps speeds – One third of our VDSL2 lines
already receives a 50 Mbps speed
• 30% higher average speed experience – Thanks to DLM, the
average speed experience increased with 30%
Preparation for Vectoring roll-out
Fixed network
Launch of Dynamic Line Management
DLM monitors line stability and dynamically applies max
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
Launched Q1 2013
Planned Q1 2014
Speed evolution in Mbps 2013 to >2018
Next step: DLM on
Vectoring
Slide 23
Mobile data evolution
• Avg. 3G speed increase from 3.2 Mbps to 6.2 Mbps
• 70% increase of network capacity for data
• > 80% of mobile sites have high-speed backhauling
• Belgacom is only Belgian operator offering 4G
• ~36% 4G outdoor coverage end Q2 2013
• 4G available in 146 Belgian cities
4G roll-out continued
Mobile network
3G+ mobile data experience acceleration
1
2
3
0
50
100
150
200
250
Strong
increase in
number of
users X 2 in 1 year
— Mobile data usage still in early stages with
smartphone penetration just above 30%.
— However, quickly emerging market need for 4G with
much higher mobile data usage each quarter
Steep
increase in
mobile data
usage
+60% in 6
months
1
2
3
Slide 24
Belgacom outperforms competition
on mobile internet quality as shown in
an independent study by the largest
Belgian consumer organization
Network simplification
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
TO FROM
copper
fiber
street cabinet
remote optical platform
central technical office
Leaner operations through a simplified all-IP-network
• Estimated to
generate savings as
of year one, as from
2018 growing to
€ 35m recurrent
savings.
Major Milestones Three major components
Fixed voice consolidation – 3.800.000 PSTN equivalent
lines to migrate
Fixed data consolidation – 250.000 ATM customers to
migrate
Building outphasing – 263.000 m² floor space to
consolidate
• Total customer base of ATM customers on Ethernet
based alternatives by 2013
• No more SIEMENS EWSD switches
by 2015 (~40% of install base)
• No more ALCATEL LUCENT S12 PSTN switches
by 2018 (~60% of install base)
• 30 buildings freed up by 2020
with an average of 5 buildings/year
1
2
3
4
Already 300.000
lines migrated
Slide 25
26
Belgacom Company presentation Investor Relations
Consumer Business Unit (CBU)
Enterprise Business Unit (EBU)
Service Delivery Engine &Wholesale (SDE&W)
Staff and Support (S&S)
Belgacom International Carries Services (BICS)
Q2 2013 results per business unit
Slide 26
571 572 577 575587
581
553567
510
530
550
570
590
610
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
CBU revenue (EUR mio)
158168 162
182
157166
149165
90
110
130
150
170
190
210
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
CBU Cost of Sales (EUR mio)
86 87 89 87 91 87 88 86
71 84 74 73 77 86 68 74
0
20
40
60
80
100
120
140
160
180
200
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Personnel Non-HR
CBU Personnel & Non-HR costs (EUR mio)
257 233 252234
263243 248 243
45.0%
40.8%43.7%
40.6%44.7%
41.8%
44.9%42.8%
30.0%
35.0%
40.0%
45.0%
50.0%
180
200
220
240
260
280
300
320
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
CBU EBITDA (EUR mio) & margin
Consumer - P&L
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
Q2’13 segment result +3.9% YoY; -6.5% like-for-like
– 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
Q2’13 Revenue -1.5% lower
– 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*
-1.5%
-9.4%
-0.3%
+3.9%
Pressure on Direct Margin partially offset by cost containment
Slide 27
Q2’ 13 Cost of Sales -9.4% lower YoY ; -0.7%,like-for-like
– 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
H1’13 CoS of €313m, -8.8% or -4.4% like-for-like
*Like-for-like excludes the impact from the accounting adjustment recorded in Q2’13
111 110 110105 105 105 104 103
80
90
100
110
120
130
140
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Fixed voice revenue (EUR mio)
9361,036 1,086
1,027965
1,060 1,086988
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Traffic (mio min)
19.7 19.8 20.2 19.7 19.7 20.0 20.1 20.2
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Fixed voice ARPU (EUR/month)
Consumer - Fixed voice Fixed Voice line erosion stable; revenue decline continued to persist
*
*Q1 2012 real line loss, differs from QoQ EOP difference due to re-segmentation exercise at start of 2012
Fixed Voice customer base of 1,673,000 end Q2’13
The total Fixed Voice traffic was down 3.8% driven by lower national traffic.
Fixed Voice ARPU up with price changes giving some support
Fixed Voice revenue erosion limited to -1.9% YoY
– 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
-1.9%
+2.6%
-3.8%
Fixed Voice price adjustments resulted in growing ARPU and contained revenue decline
Slide 28
-31 -21 -20 -22 -21 -18 -26 -19
1,839 1,818 1,780 1,758 1,737 1,718 1,693 1,673
30
530
1,030
1,530
2,030
-50
-30
-10
10
30
50
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Voice line loss & EOP (000)
*
143 136 130 123133
120
100107
40
60
80
100
120
140
160
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Mobile voice revenue (EUR mio)
103.6 103.8 101.5104.7
100.5 101.7 102.2
109.4
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
MoU (min/month)
12.912.2
11.611.1
12.011.1
9.510.2
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Blended net voice ARPU (EUR/month)Blended net voice ARPU (EUR/month)
48 3210 5
-62-105
-82
11
3,774 3,805 3,805 3,811 3,748 3,643 3,561 3,572
2,500
2,700
2,900
3,100
3,300
3,500
3,700
3,900
4,100
-180
-130
-80
-30
20
70
120
170
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Mobile growth & EOP (000)
Consumer – Mobile Voice Mobile customer base back to growth; Mobile Voice revenue remains under pressure
*
*i.e. Mobile net adds differ from QoQ EOP difference due to re-segmentation exercise at start of 2012
End Q2’13 Mobile customer base of 3,572,000 cards
– 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
Net Voice ARPU at € 10.2, or -15.3% YoY like-for-like
– Impacted by Postpaid repricing with more abundant tariff plans
MoU up YoY to 109.4 minutes/user/month
Q2’13 Mobile Voice revenue -19.8% like-for-like
– Driven by regulatory impacts &
– especially by lower Prepaid customer base and repricing of mobile Postpaid mainly decreasing the out-of-bundle usage
-13.2%
+4.5%
-8.5%
12.0
Slide 29
-15.3%
82 8285 84 85 85
8789
72
74
76
78
80
82
84
86
88
90
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Fixed data revenue (EUR mio)
26.7 26.1 26.9 26.4 26.5 26.1 26.3 26.7
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Broadband ARPU (EUR/month)
Consumer - Fixed Data Fixed Internet revenue grew 5.4%, driven by price indexation and larger customer base
*i.e. Fixed Internet net adds differ from QoQ EOP difference due to re-segmentation of customers
Q2’13 revenue up 5.4% YoY
– Positively impacted by price indexation Feb’13
– Continued YoY customer growth
CBU ended Q2’13 with 1,210,000 Fixed Internet customers
– +7,000 net-adds, in spite of lower focus on Fixed in Q2
– supported by the “Internet Everywhere” offer, mainly bought in Pack
ARPU Q2’13 of € 26.7; i.e. up by 0.9% YoY
– ARPU supported by price indexation
*
+5.4%
+0.9%
Slide 30
1
1815
1013 12
10 7
1,138 1,156 1,159 1,169 1,181 1,193 1,203 1,210
10
210
410
610
810
1,010
1,210
1
21
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Broadband growth & EOP (000)Broadband growth & EOP (000)Broadband growth & EOP (000)Broadband growth & EOP (000)
*
79 85 85 87 84 87 85 86
14 14 12 15 15 13 12 12
0
30
60
90
120
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
SMS Adv Data
Mobile data revenue (EUR mio)
9397 97 102 98 97 98100
235273 280 291
262294 280 283
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
SMS (units/month)
8.2 8.5 8.59.0 8.7 9.0 9.0 9.1
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Blended net data ARPU (EUR/month)
Consumer - Mobile Data Mobile data revenue declined, impacted by regulation, more abundant offers and the mobile customer evolution age
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
Q2’13 Mobile Data rev -4.3% YoY
– 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
-4.3%
-2.8%
+0.8%
Slide 31
51 53 55 57 61 62 64 66
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
TV revenue (EUR mio)TV revenue (EUR mio)
17.8 17.5 17.6 17.6 18.1 18.2 18.3 18.6
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
TV ARPU (EUR/month)
Belgacom TV
Double-digit TV revenue growth through larger TV customer base and higher ARPU
Continued customer growth
– 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
– Supported by the February ’13 price increase for rented settop boxes
TV revenue +15.3% YoY driven by
– Continued growth of subscribers
– Price increase of rented settop box
+15.3%
+5.7%
Slide 32
5272
43 48 39 46 26 16
1,139 1,211 1,254 1,301 1,340 1,386 1,412 1,428
0
200
400
600
800
1,000
1,200
1,400
0
20
40
60
80
100
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
TV growth & EOP (000)
28 28 27 28 2830 29
32
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Tango revenue (EUR mio)Tango revenue (EUR mio)Tango revenue (EUR mio)Tango revenue (EUR mio)Tango revenue (EUR mio)Tango revenue (EUR mio)Tango revenue (EUR mio)Tango revenue (EUR mio)Tango revenue (EUR mio)Tango revenue (EUR mio)Tango revenue (EUR mio)Tango revenue (EUR mio)Tango revenue (EUR mio)Tango revenue (EUR mio)Tango revenue (EUR mio)Tango revenue (EUR mio)
28
29.3 29.1 28.4 29.2 29.5 30.7 30.1 31.1
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Blended mobile net ARPU (EUR/month)
Tango Luxembourg
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
+16.8%
+6.3%
Slide 33
260 264 266 268 270 271 273 274
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Tango mobile customers EOP (000)
291 296 291 278 268 276 260 263
50.9% 50.0% 50.2% 48.3% 48.0% 47.6% 47.0% 47.5%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
55.0%
-5
45
95
145
195
245
295
345
395
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
EBU EBITDA (EUR mio) & margin
93 96 99 102 102 100 107 105
34 36 40 39 39 41 38 37
0
20
40
60
80
100
120
140
160
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Personnel Non-HR
EBU Personnel & Non-HR costs (EUR mio)
572591
579 576560
579
554 554520
540
560
580
600
620
640
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
EBU revenue (EUR mio)
Enterprise – quarterly P&L
Cost of Sales slightly down year-on-year
– 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
H1’13 with €297m, 2.8% lower yoy (-0.9% like-for-like).
Q2’13 segment result -5.5% YoY; -8.1% like-for-like basis.
– 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
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 YoY decline of 3.8%; -4.2% like-for-like*
– 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
-3.8%
-4.9%
+0.7%
-5.5%
Slide 34
154164
149157
150
163
148 149
120
130
140
150
160
170
180
190
200
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
EBU Cost of Sales (EUR mio)
*Like-for-like excludes the impact from the accounting adjustment recorded in Q2’13
121 122 124 120 118 119 118 117
90
100
110
120
130
140
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Fixed voice revenue (EUR mio)
672716 754
699636
686 695654
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Traffic (mio min)
28.1 28.6 28.9 28.4 27.9 28.6 28.7 28.8
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Fixed voice ARPU (EUR/month)
-13 -14-18
-15-9
-14-18 -19
1,400 1,385 1,394 1,379 1,370 1,356 1,338 1,318
-100
100
300
500
700
900
1,100
1,300
1,500
1,700
1,900
-20
0
20
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Voice line loss & EOP (000)
Enterprise - Fixed Voice Fixed Voice revenue showing some relief from price changes, ARPU up 1.3% while line erosion continued
Fixed Line erosion Q1’13 of -19,000 lines
Enterprises rationalising on Fixed voice lines
Q2 Fixed Voice traffic was 6.5% lower YoY driven by:
– fixed line erosion
– lower usage per line
Q2’13 ARPU up 1.3% YoY to € 28.8
– Negative effect from reduced F2M (Jan’13)
– Partially offset by positive effect from price indexation (Feb’13)
Fixed Voice revenue Q2’13 -2.8% YoY
– 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 loss differ s from QoQ EOP difference due to re-segmentation exercise at start of 2012 and inclusion of business trunking
-2.8%
+1.3%
-6.5%
Slide 35
110 108 106 102 100 96 88 88
40
50
60
70
80
90
100
110
120
130
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Mobile voice revenue (EUR mio)
305.0 322.8 327.8 326.6293.3
314.3 310.2 315.8
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
MOU (min/month)
26.9 25.9 25.3 23.7 22.9 21.6 19.7 19.2
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Net voice ARPU (EUR/month)
22
2922
36
2116
30 33
1,380 1,408 1,413 1,449 1,470 1,486 1,516 1,549
500
700
900
1,100
1,300
1,500
0
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Mobile growth & EOP (000)
Enterprise - Mobile Voice Solid customer growth, revenue under pressure due to pricing and regulation
Solid Mobile customer growth in Q2’13 in spite of aggressive competitor moves in the business market
– Retention/acquisition efforts paying off
– 33,000 net mobile cards added, with especially Voice cards doing sequentially better
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
Q2 3.3% lower usage YoY
– Customer churn Q4 2012 triggered by new telco law included high-user profiles, bringing average usage down
Q2’13 Mobile voice revenue -13.2% YoY; -15% like-for-like
– 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)
*
*i.e. Mobile net adds differ from QoQ EOP difference due to re-segmentation exercise and cleaning in-active cards at start of 2012
-13.2%
-3.3%
-19.1%
Enterprise - Mobile Voice Pressure on Mobile Voice ARPU stable versus previous quarter; customer base growing with 33,000 mobile cards
Slide 36
24.2
-20.7%
9697
99 99
96 95 96 96
90
92
94
96
98
100
102
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Fixed data revenue (EUR mio)
39.1 38.939.5 39.0 39.1 38.8 39.0 39.3
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Broadband ARPU (EUR/month)
434 434 446 445 444 443 444 442
-2
0 0
-2 -1 -1
1
-230
80
130
180
230
280
330
380
430
-10
11
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Broadband growth & EOP (000)
Enterprise - Fixed Data Slightly positive revenue trend continued; Internet customer base fairly stable
Q2’13 Fixed Data revenue €96 m, -3.2% vs 2012
– 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
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
-3.2%
+0.9%
Enterprise - Fixed Data Fixed Data revenue impacted by migrations to Explore platform and uptake of converged Packs with internet
Slide 37
*
24 26 26 26 25 26 25 24
32 31 31 32 30 28 28 29
0
10
20
30
40
50
60
70
80
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
SMS ADV Data
Mobile data revenue (EUR mio)
56 57 56 58 55 54 53 53
87 96 107 112 105 118 118 119
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
SMS (units/month)
13.8 13.7 13.5 13.512.6 12.2 11.8 11.6
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Net data ARPU (EUR/month)
Enterprise – Mobile Data Regulated price caps pressuring both SMS and advanced Mobile data revenue
Continued uptake in SMS usage, growing 6.4 % YoY to 119 text messages per user per month
– Success of pricing plans, including more and more unlimited SMS volumes.
Mobile Data ARPU down 13.7% YoY to €11.6
– Growth trend reversed since 1 July 2012 due to regulated price caps for Mobile Data roaming
– aggressive competitor moves on business market
-7.3%
+6.4%
-13.7%
Slide 38
Q2’13 Mobile Data revenue -7.3% YoY
– 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
163
182
167 172 167
186174 175
130
140
150
160
170
180
190
200
210
220
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
ICT revenue (EUR mio)
Enterprise – ICT ICT revenue up by 6.1% on like-for-like basis
Q2’13 ICT revenue +2% YoY to €175m
– Growth somewhat contained due to customers delaying IT projects or opting for private Cloud-based solutions, which triggers a shift from one-shot revenue to monthly services fees.
Ytd June’13 ICT revenue +3.1% to €350m
+2.0%
Enterprise - ICT Solid ICT revenue, showing 2% growth in challenging economic context
Slide 39
-30-21 -23
-26-21 -25
-30 -31
-60
-50
-40
-30
-20
-10
0
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
SDE&W EBITDA (EUR mio)
50 50 43 43 46 43 45 42
48 42 48 50 41 48 50 52
0
20
40
60
80
100
120
140
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Personnel Non-HR
SDE&W Personnel & Non-HR costs (EUR mio)
9 9 9 9 9 10 11 100
2
4
6
8
10
12
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
SDE&W Cost of Sales (EUR mio)
77 80 78 76 75 76 75 74
53
58
63
68
73
78
83
88
93
98
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
SDE&W revenue (EUR mio)
livery & Wholesale - P&L
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.
Q2 segment result YoY lower due to lower Direct margin combined with higher expenses
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
-3.4%
+7.5%
+1.8%
-19.2%
Service Delivery & Wholesale – P&L
Slide 40
66 6150 50 49
67
50 50
0
10
20
30
40
50
60
70
80
90
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
S&S Non-HR costs (EUR mio)
40 40
3738
4038
4038
32
34
36
38
40
42
44
46
48
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
S&S Personnel costs (EUR mio)
25
8 9 7 7 11
18
70
5
10
15
20
25
30
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
S&S Revenue(EUR mio)
Staff & support - P&L
• 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
* Internal invoice; neutral on group level
-5.2%
+0.2%
+0.1%
Staff & Support – P&L
Slide 41
35 33
2834 35 32 35 37
8.7%8.3% 7.3% 8.4% 8.3% 7.3% 8.3% 8.9%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
0
10
20
30
40
50
60
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
BICS EBITDA (EUR mio) & margin
31 31 31 32 32 34 33 38
28 27 25 30 31 29 28 27
0
20
40
60
80
100
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
Non-Voice Voice
BICS Gross margin (EUR mio)
401 401382
409424 430
417 413
300
320
340
360
380
400
420
440
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
BICS Revenue (EUR mio)
International Carrier Services P&L
• Voice volumes: Q2 4% lower to 6.7 billion minutes
• Non-Voice volumes Q2 up 27.6% to 461 million messages
• 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.
• Gross margin Q2’13 up 5.2% YoY
– Favorable destination mix led to record Gross margin of € 65m.
• Ytd June 2013 the Gross margin totaled € 127 million, a 7.4% yoy increase.
• Revenue Q2’13 up 0.9% from strong comparable base
– Reduced EU MTRs and slight negative dollar effect impacted Voice revenue
– More than compensated for by solid Mobile data revenue
• H’13 BICS revenue of € 829m, up by 4.8% YoY.
+0.9
+5.2%
+7.5%
International Carrier Services – P&L
Slide 42
6,853 7,018 6,907 6,984 6,934
7,5567,267
6,701
276315 323 361 428
445451
461
5,200
5,700
6,200
6,700
7,200
7,700
8,200
Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213
SMS/MMS Minutes
BICS Volumes (in mio)
43
Belgacom Company presentation Investor Relations
Ytd September 2010 results in detail
• Consumer Business Unit (CBU) • Enterprise Business Unit (EBU) • Service Delivery Engine &Wholesale (SDE&W) • Staff and Support (S&S) • Belgacom International Carries Services (BICS)
Other topics
Slide 43
Work In Progress
• Shareholder structure – slide 44 • Shareholder remuneration - slide 45 • Spectrum – slide 46
Other topics
• Pricing – slide 47 • Regulation & legal – slide 52 • Belgian economy – slide 56
Shareholder structure*
Belgian state owns ~ 53.5%
Status 30 Jun 2013
Shares %
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%
Own shares 19,186,191 5.7% - 1.4%
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
• Free float 40.8%
• Treasury shares 5.7%
- Under Belgian law, companies prohibited from owning >20% of outstanding share capital
- Part of own shares held for personnel incentives
Slide 44
Belgian State; 53.5%
Free Float; 40.8%
Own Shares;
5.7%
*situation at 30 June 2013
Belgacom intends to ensure its shareholders an attractive return
Slide 45
0%
30%
60%
90%
120%
150%
0100200300400500600700800900
1,000
2004 2005 2006 2007 2008 2009 2010 2011 2012
SBB Dividends % of FCFShareholder remuneration
Mio €
0.29 0.50 0.50 0.40 0.50 0.50 0.50 0.55 0.31
1.38
1.52 1.60
1.68 1.68 1.68 1.68 1.68 1.68
2004 2005 2006 2007 2008 2009 2010 2011 2012*
Interim dividend Extra dividend Normal dividend
Dividend per share & dividend yield
1.93 1.52
1.89 2.18 2.18 2.18 2.08 2.18
2.49 6.1% 5.5% 5.7%
6.5% 8.0% 8.2% 8.7% 9.0%
11.2%
Seri…Dividend Yield*
*Dividend yield based on annual dividend & share price end of year
Spectrum - Belgian situation
Slide 46
Spectrum: The Belgian situation
Proximus 2 x 12
Mobistar 2 x 12
Base 2 x 10
Proximus 2 x 20,8
Mobistar 2 x 20,8
Base 2 x 22
Unallocated 2 x 11.4
Unallocated 2 x 15
800 MHz
900 MHz
1800 MHz
2100 MHz
2600 MHz
Proximus 2 x 15
Mobistar 2 x 15
Base 2 x 15
1x 5
1x5 1x5 Telenet / Voo
2 x 14.8 1x5
Proximus 2 x 20
Mobistar 2 x 20
Base 2 x 15
BUCD 1 x 45
• 900 MHz & 1800 MHz
• 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.
900 MHz & 1800 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
2100 MHz
• 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
2600 MHz
• 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.
800 MHz
Unallocated 2 x 10
Unallocated 2 x 10
Unallocated 2 x 10
Pricing – Fixed products
29.67€ / month
Free to FIX Anytime
24/24
No Limit National Anytime
19.99€ / month
Free to FIX & to MOB during OffPeak & Weekend
Peak: 8-17h
Happy Time XL
46.20€ / month
Volume incl: Unlimited Download speed: 50 Mbps Upload speed: 4 Mbps 3G: 250 MB + 250 MB 3G + unlimited hotspot access
Internet Maxi
35.95€ / month
Volume incl: 150 GB Download speed: 50 Mbps Upload speed: 3 Mbps 3G: 100 MB + 100 MB 3G + hotspot access
Internet Comfort
24.95€ / month
Volume incl: 100 GB Download speed: 50 Mbps Upload speed: 2.5 Mbps 3G: 50 MB
+ 50 MB 3G + hotspot access
Internet Start
21.5€ / month
>70 channels 3 TV
TV
19.99€ / month
Note: Lower tariffs during peak compared to Happy Time
Peak: 8-19h
Classic
20.99€ / month
Free to FIX ,to MOB & to most European countries
during OffPeak & Weekend
Peak: 8-17h
Happy time international
Slide 47
All download speeds increased from
30 Mbps up-to-50 Mbps since the deployment
of the DLM technology in Q1’13
Note: Belgacom TV only
available in pack, not as stand alone service:
Internet Start+TV: € 43.95 Tel+TV: € 35.75
25€ / month 20€/month PACK
240 min unlimited SMS
€ 0.25 / min € 0.25 / MMS € 0.85 / MB
Easy+ 25
15€ / month 10€/month PACK
150 min + unlimited SMS
€ 0.25 / min € 0.25 / MMS € 0.85 / MB
Easy+ 15
For non-Smartphone
users
35€ / month 30€/month PACK
300 min + + Unlimited SMS
+ 2 GB incl
€ 0.25 / min € 0.25 / MMS € 0.10 / MB
Smart+ 35
25€ / month 20€/month PACK
180 min + + Unlimited SMS
+ 1 GB incl
€ 0.25 / min € 0.25 / MMS € 0.10 / MB
Smart + 25
15€ / month 10€/month PACK
120 min + Unlimited SMS
+0.5GB incl
€ 0.25 / min € 0.25 / MMS € 0.10 / MB
Smart+ 15
65€ / month 55€/month PACK
Unlimited voice + Unlimited SMS +
5 GB incl.
Unlimited / min € 0.25 / MMS € 0.10 / MB
Smart+ 65
10€ / month
20 min + unlimited SMS
€ 0.25 / min € 0.25 / MMS € 0.85 / MB
Easy+ 10
For Smartphone
users
Slide 48
included
45€ / month 40€/month PACK
Unlimited min unlimited SMS
Unlimited min € 0.25 / MMS € 0.85 / MB
Easy+ 45
Pricing – Mobile Voice (Postpaid)
Pricing – Mobile Voice (Prepaid)
Reload bonus For Pay&Go Easy you get :
• 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
€ 0.50 / min Peak € 0.25 / min OffPeak
€ 0.12 / SMS Peak € 0.08 / SMS OffPeak
€ 0.25 / MMS € 0.5/MB
Pay & Go Smart
€ 0.27/ min € 0.12 / SMS
€ 0.25 / MMS € 0.5 /MB
Pay & Go Easy
Slide 49
For non-Smartphone
users
For Smartphone
users
Reload bonus For Pay&Go Smart you get:
• Bonus 10€ Reload: unltd. SMS OffPeak + 10 MB Peak: 7 – 16h • Bonus 15€ Reload: unltd. SMS + 100 MB • Bonus 25€ Reload: unltd. SMS + 500 MB
Pricing – Mobile Data
4.99€ 50 MB 9.99€ 500 MB
0.5€ / MB (prepaid ) Or
0.85€/MB (postpaid)
34.99€ / month
4 GB incl.
€0.03 / MB
Favorite
19.99€ / month
2 GB incl.
€0.03 / MB
Comfort
4.99€ / month
+ 1€/day of surf
1 GB incl.
€0.03 / MB
Daily
10€
500MB incl.
Pay & Surf for iPad
24.99€ / month
3 GB incl. (if you use more – usage
is free but at a lower speed)
Favorite for iPad
Laptop & Tablet Only
GSM Only
iPad Only
Post-paid Only General Prepaid Only
Laptop Only
10€ 500 MB 15€ 750 MB 25€ 1250 MB 50€ 2500 MB
Pay & Surf
5€ reduction if you are already a BGC fixed internet customer
Prepaid Only Prepaid Only
Reload 10€> in 31d: +50% data volume
10€ / month
1 GB incl.
€0.1/ MB
4G Option Pay & Surf Standard
Slide 50
included included included
Pricing converged PACKS - examples of possible combinations
53.95€ / month
TV TV Everywhere
+ Internet Comfort
+Unlimited volume +Unlimited hotspot
access +500 MB 3G
TV + Internet
53.95€ / month
Classic (or Happy
Time XL) +
Internet Comfort +Unlimited volume +Unlimited hotspot
access +500 MB 3G
Fix+ Internet
35.75€ / month
TV +
Classic (or Happy Time XL)
TV + Fix
62.95€ / month
TV
TV Everywhere +
Classic (or Happy Time XL)
+ Internet Comfort
+Unlimited volume +Unlimited hotspot
access +500 MB 3G
TV + Fix + Internet
63.95€ / month
TV TV Everywhere
+ Smart+/Easy+ 15
+ Internet Comfort
+Unlimited volume +Unlimited hotspot
access +500 MB 3G
TV + Mobile + Internet
72.95€ / month
TV TV Everywhere
+ Classic (or Happy
Time XL) +
Smart+/Easy+ 15 +
Internet Comfort +Unlimited volume +Unlimited hotspot
access +500 MB 3G
TV + Fix + Mobile + Internet
Slide 51
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
At least €5/month discount for each Proximus subscription (as of €15 /month) added to your Pack
(maximum of 6 Proximus subscriptions per pack)
• 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.
Regulation – 1 Overview financial impact
Slide 52
Estimated Impact
Regulation impacts
(Decrease in EUR million)
Revenue ~ €45m €10m €10m
EBITDA ~ €5m €1m €1m
Revenue ~ €48m €15m €19m
EBITDA ~ €48m €15m €19m
Revenue ~ €93m €24m €30m
EBITDA ~ €53m €15m €20m
Actuals
MTR &
flow-through Fix-to-Mob
Roaming
(i.e. Voice, SMS and Data)
Q2 2013Q1 2013
Total
FY 2013
7.2
4.623.83
2.62
9.02
11.43
1.08
Before* 01-Aug-10* 01-Jan-11 01-Jan-12 01-Jan-13
MTR-Glidepath in €ct
Proximus Mobistar Base
*excl VAT, including inflation
– Glidepath in place since August 2010. Full symmetry effective since 1 January 2013
– MTR decreases reflected in F2M tariffs of BGC
– Mobistar & Base filed separate appeal against decision:
• 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 • 1 Jan 2013 MTR’s final reduction of glide path set in 2010
Actual impact on Q2 2013 financials: − Revenue: € -10m − EBITDA: € -1m
Regulation – 2
Mobile Termination Rates (MTR)
* *
Slide 53
MTR glide path Before* 01-Aug-10* 01-Jan-11* 01-Jan-12* 01-Jan-13*
In euro cent (excluding VAT)
Proximus 7.2 4.62 3.94 2.62 1.18
Mobistar 9.02 5.05 4.29 2.79 1.18
Base 11.43 5.81 4.90 3.11 1.18
% change
Proximus -36% -15% -34% -55%
Mobistar -44% -15% -35% -58%
Base -49% -16% -36% -62%
Asymmetry
Mobistar-Prox 25% 9% 9% 6% 0%
Base-Prox 59% 26% 24% 19% 0%
* * *
1.18
MTR regulation impact for 2013
Estimated impact on FY ’13 financials: − Revenue: ~ € -45m − EBITDA: ~ € -5m
2.62
3.94 4.62
• 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
Regulation – 3
Mobile voice and data-roaming: EU Roaming III Regulation regulation
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:
Slide 55
– 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
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
Macro economic environment
Belgium & Euro area - prospects
Belgium:
Budget deficit 3.9% end ‘12
2012 Gross public Debt 99.8% of GDP
Slide 56
7.2% 7.6%8.3%
10.2%
11.4%12.2%
2011 2012 2013
Belgium Euro area
Unemployment rate forecast (%)2
2.7% 2.5% 1.6%
3.4%
2.6%
1.0%
2011 2012 2013
Belgium Euro areaInflation forecast (%)3
1.9%
-0.3% 0.0%1.4%
-0.6% -0.4%
2011 2012 2013
Belgium Euro areaGDP growth forecast (%)1
For further information: Belgacom Investor Relations e-mail: [email protected] Tel: +32 2 202 82 41
http://www.belgacom.com
Slide 57