Slide 1

Investor & Analyst Meeting Friday 28 February 2014

Agenda

Slide 2

Introduction Dominique Leroy - CEO

Group financials Ray Stewart

Consumer Dominique Leroy

Business Jan Manssens

2013

strategic focus for 2014 and beyond

Transform & Invest to return to Growth Dominique Leroy & Geert Standaert

Outlook 2014 & Shareholder return Ray Stewart

BICS Daniel Kurgan

Group Financials Ray Stewart

CFO

Ray Stewart

Slide 3

FY 2013

(in mio €)

Slide 4

Group revenue impacted by regulation, pressure on mobile in segments ; and in Q4 by lower BICS revenue

1,644+20

-15-19

-14-2

-29

+3

Q4 2012 Net ImpactOne-offs

2013

Regulatoryimpact

UnderlyingCBU

UnderlyingEBU

UnderlyingSDE

BICS Intra-groupelimination &

S&S

Q4 2013

1,582

-5.0% Like-for-Like

-3.8% reported

6,462+42

-75

-85

-44 -7 -8

+22 +10

FY 2012 Net ImpactOne-offs

Regulatoryimpact

UnderlyingCBU

UnderlyingEBU

UnderlyingSDE

UnderlyingS&S

BICS Intra-groupelimination

FY 2013

6 ,318

-2.2% reported

-2.9% Like-for-like

Q4 2013

(in mio €)

Slide 4

Good cost management Operating expenses (total of HR & non-HR) slightly down vs. 2012

Slide 5

226 224 217

256

218 225216

244

150

170

190

210

230

250

270

Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413

Quarterly Non-HR expenses (€ million)

-5.0%

903 924 -2.3% FY

FY’13 non-HR expenses 2.3% lower. Cost containment more than offsetting

the normal cost inflation.

FY’13 HR expenses 1.4% higher. Inflation based salary indexation more than offsetting lower personnel base

278 281 290278

290 283 288 282

150

170

190

210

230

250

270

290

310

Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413

Quarterly HR expenses (€ million)

+1.7%

1,142 1,126 +1.4%

Group Ebitda impacted by regulation and mobile margin pressure. Q4 2013 showing slight improvement from previous quarters

429

-1

413

+4

+16

-5

-17

-17-4

+8

Q4 2012 One-offs2012

One-offs2013

Regulatoryimpact

UnderlyingCBU

UnderlyingEBU

UnderlyingSDE

UnderlyingS&S

BICS Q4 2013

-8.3% Like for Like

-3.7% reported

1,801

+11 1,713

+36

-48

+35

-47

-61

-18

+4

FY 2012 One-offs2012

One-offs 2013 Regulatoryimpact

UnderlyingCBU

UnderlyingEBU

UnderlyingSDE

UnderlyingS&S

BICS FY 2013

-4.9% reported

-8.7% Like-for-like

FY 2013

(in mio €)

Q4 2013

(in mio €)

Slide 6

EUR 852 million invested, or 13.5% of Group revenue, spectrum license excluded

Slide 7

*This does not include the € 120 mio capex paid for a 800 Mhz spectrum

Increased network investments vs. 2012: to maintain network superiority on mobile speed and coverage, substantially increased bandwidth on fixed network via dlm and vectoring technology making operations leaner through a simplified network bought the 800 MHz spectrum for € 120 m

753

972

13 .5%

FY'12 FY'13

8 52

*

234

426

Q4'12 Q4'13

306 *

FY 2013 performance versus guidance

Metrics FY 2013 outlook

FY 2013 reported

Group revenue

Decline between

-1% and -2%

-2.2%

Group EBITDA* Decline between -4% and -6%

-4.9%

Capex/Revenue Between 13% and 14%

13.5%**

Slide 8

*Compared to the restated 2012 EBITDA of € 1,801 m, following the retrospective application of IAS19R ** excl. € 120m for 800 MHz spectrum

Belgacom met its FY guidance for EBITDA and Capex, while the

revenue guidance was just missed as BICS revenue declined in Q4’13.

691

505

-88

-74

-79

+51 +5

2012 lower EBITDA* income taxpayments

cash paid forcapex

cash providedby working

capital

other 2013

154

95

Q4'12 Q4'13

Free Cash Flow (in mio € )

FY’13 Free Cash Flow of € 505 million

Belgacom generated € 95m of FCF in Q4’13, or € -59m YoY. Main drivers for the FCF decline are :

- lower EBITDA, - higher cash paid for Capex - Higher cash paid for income tax - partly offset by a favorable evolution in working capital.

The 800 Mhz spectrum license acquired in Dec’13 for €120m will be paid in yearly installments , over a 20 year period. This Capex is not included in the FCF as it is a non-cash transaction. The annual reimbursement of €6 m is considered as a financing activity in the cash flow statement.

* Excluding non-recurring and non-cash related items

Q4

FY

Slide 9

( 1 ,601)

50 5(701)

( 38) 25 (6)( 1 ,815)

Net debtDecember 2012

FCF Dividends Non controllinginterests

Net sale oftreasury shares

Other Net debtDecember 2013

Sound financial position

Slide 10

Debt maturing

2015 € 145m

2016 € 950m

2018 € 500m

2023 € 100m

2028 € 150m

2026 € 73m

• Net financial debt at € 1,815m, € 214m 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

Consumer Business

Unit

Dominique Leroy

Consumer Business Unit Dominique Leroy

CEO

Slide 11

Consumer Business Highlights

Our convergence strategy remains successful and is materialised through

more value for the customer and new solutions.

Despite a rough 2013 on the mobile market, we returned to customer growth

for postpaid thanks to strong acquisition campaigns and a persistent churn

management.

The pressure on mobile prices resulted in mobile revenue decline. Since Q4’13

we see that it is slowly recovering.

The strong performance for TV and Fixed Internet combined with the

contribution of Tango and Scarlet partly compensated for the loss on mobile

service revenue.

Our focus will be on growing through the convergence experience and

mobile leadership. Slide 12

CBU revenues under pressure by mobile disruption, partly compensated by solid fixed revenue and contribution of Scarlet and Tango

2,321 7

-27-14

15

31

-103

12

-16

FY 2012 Net ImpactOne-Offs

Regulatoryimpact

Fixed Voice Fixed Data TV Mobile ServiceRevenue

Subsidiaries Terminals &Others

FY 2013

2,226

581

-6-5

47

-24

3

-4

Q4 2012 Regulatoryimpact

Fixed Voice Fixed Data TV Mobile ServiceRevenue

Subsidiaries Terminals &Others

Q4 2013

556

-4.1% reported

-4.4% Like-for-like

-4.2% Reported* Q4

2013 (in mio €)

FY 2013

(in mio €)

* like-for -like idem, no one-off effects in Q4

Slide 13

CBU Mobile Service Revenue Mobile Service revenue showing first signs of recovery in Q4’13, some mobile disruption effects started to annualise

Mobile service revenue showing first signs of recovery in Q4’13

Evolution re-priced postpaid customers

73% of CBU customers re-priced, pace slowing. Financial impact from remaining 27% expected to be low.

-5%

-2%

-9%

-17%

0%

-3%

-3%

-6%

-13%-14%

-15%

-14%

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

CBU Mobile Service Revenue

Reported

On comparable basis

Slide 14

Mobile Postpaid We increased our Postpaid subscriber base by >200K in 2013. Mobile disruption had significant ARPU impact, though somewhat stabilising.

solid Postpaid net adds postpaid churn back to acceptable levels

Blended postpaid ARPU showing some stabilisation

0%

10%

20%

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

‘out of bundle’ revenue dropped with ~50% stabilising around 10% of total postpaid revenue

Slide 15

Mobile Prepaid In a shrinking prepaid market the customer loss is slowing down. Prepaid ARPU is less impacted.

Prepaid loss continued, though is slowing since its peak in Q1’13

Prepaid churn remains high with new telco law removing postpaid barriers

Prepaid ARPU impact less significant

Slide 16

Launch of 4G for all in January Combined with a differentiated and high-end abundant offer is showing promising results

4G access for all High-end abundant

offer SMART 50 4G in Brussels

Differentiated offer in function of pricing plan

x 2.5 active

4G users

4G traffic

increase

+ 68%

Approx. 25% of data traffic is situated in the Brussels Region End February already >31% population coverage

Upside potential higher than possible cannibalisation

Slide 17

>50 €

26-50€

0-25 €

Mobile pressure partly offset by solid performance of Fixed Internet…

Fixed internet customer evolution Fixed internet ARPU evolution

15

1013 12

107

9

17

1,159 1,169 1,181 1,193 1,203 1,210 1,2191,235

-2

3

8

13

18

23

28

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

net adds total

26.9 €26.4 € 26.5 € 26.1 € 26.3 €

26.7 € 26.9 €26.4 €

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

Driven by growing customer base &

price changes

4.5% Revenue increase in 2013

+3.6%

Slide 18

…and Belgacom TV

Continuously evolving customer usage experience

TV Replay Test phase in Wallonia Launched in Flanders

Content Passes, VoD, …

TV Everywhere Evolution active users

Belgacom TV customer evolution Belgacom TV arpu evolution

4348

39

46

26

1619

31

1,2541,301 1,340 1,386 1,412 1,428 1,447 1,479

400

600

800

1,000

1,200

1,400

1,600

0

20

40

60

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

net adds total

75% of CBU Internet

customers have

Belgacom TV

17.6 € 17.6 €18.1 € 18.2 € 18.3 € 18.6 € 18.7 € 19.0 €

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

13.3% Revenue increase in 2013

+6.7%

Slide 19

Our convergence strategy remains Belgacom’s main force….

CBU pack evolution % Packs with mobile voice component

Revenue generating units (RGU) All Packs contain 3G

mobile internet volume (smartphone, tablet or

laptop)

Up to 6 mobile subscriptions in a Pack

All Packs include TV Everywhere (on 3G, 4G, Wi-Fi)

Pilot launch of Belgacom Cloud

5G storage volume in Pack

43 34 32 20 22 16 15 17

884

918 950 970 993 1,008 1,023 1,040

0

10

20

30

40

50

60

70

350

450

550

650

750

850

950

1,050

1,150

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

CBU Pack Net adds CBU Packs

Slide 20

…as well as our diverse and locally anchored distribution channel

Belgacom Centers

133

shops

Partners

Consumer electronics & telco specialists

Contact Centers

50% ‘convergent’

agents

Hu

ma

n in

tera

ctio

n

Dig

ital i

nte

rac

tion

10% of Sales

via website

Website Device

~870K down-loads in 2013

Slide 21

Consumer Business

Unit

Dominique Leroy

Enterprise Business Unit

Jan Manssens

VP Enterprise Business Planning

Slide 22

EBU stood its ground in 2013, which was a very challenging year, marked by

a difficult economic & competitive environment.

EBU continued mobile customer growth through network differentiation and

competitive pricing. We see first signs of recovery on mobile service

revenues since Q4’13, though re-pricing still ongoing.

In IT we managed to slightly grow in a stagnating market. The benefits of

Telco – IT convergence are materialising. We create value through

cross-selling and there is a positive impact on customer loyalty.

In 2014 EBU therefore continues its strategy. We focus on maintaining our

Telco leadership by differentiation through convergence and servicing while

we grow in adjacent IT.

Enterprise Business Highlights

Slide 23

EBU revenues pressured by mobile disruption and roaming regulation

579

-8 -4 -1

-7 -3

Q4 2012 Regulatoryimpact

Fixed Voice Fixed Data ICT Mobile ServiceRevenue

Terminals &Others

Q4 2013

557

2,294 2

-54-12 -8

9

-26 -7

FY 2012 Net ImpactOne-Offs

Regulatoryimpact

Fixed Voice Fixed Data ICT Mobile ServiceRevenue

Terminals &Others

FY 2013

2,198

-4.2% reported

-4.3% Like-for-like

FY 2013

(in mio €)

Q4 2013

(in mio €)

-3.8% Reported*

*like-for -like idem, no one-off effects in Q4

Slide 24

EBU mobile differentiation strategy successful mobile churn under control & subscriber base increased with >140k cards

Continued customer growth in a highly competitive,

saturated market

12% 11% 11%

17%

14% 14%

10% 10%

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

Mobile churn EBU

1125

115

1928 32 3612

10

1011

105

881,413

1,4491,470

1,4861,516

1,549

1,589

1,633

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

Mobile Net Adds M2M Net Adds Park

Mobile Acquisition EBU (K cards)

Slide 25

8%

26%

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

% EBU Packs with mobile voice component

EBU mobile revenue under pressure further erosion to be controlled

-5%

-7%

-11%-13%

-2%-4%

-7%-9%

-13% -12% -12%

-9%

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

EBU Mobile Service Revenue

Reported

On comparable basis

adv. data revenue showing upward trend with regulation impact lessening

mobile service revenue showing first signs of recovery in Q4’13

16% 13%

-6% -8% -7% -7% -3%

9%

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

EBU advanced data YoY % growth

Evolution re-priced SME customers

~35%

~50%~55%

63%

Q1'13 Q2'13 Q3'13 Q4'13

Slide 26

0%

10%

20%

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13

SME ‘out of bundle’ revenue down ~50%, stabilising around 10% of total SME mobile revenues

IT of strategic importance for EBU clear benefits on Telco convergence

EBU’ IT: total revenues (mio €) and Telindus France (potential disposal in 2014)

Benefits IT – Telco convergence are materialising

1 new EBU growth • IT = 32% of EBU total 2013 revenues • pure cloud + 12% full year 2013 • security +43% full year 2013

2 cross-sell effect • in >80% of cases cloud, LAN or UC customers, also have at least

one telecom service

3 churn reduction effect • telco+IT customers have significantly lower telco churn • customers with 4 to 5 IT products/services, have nearly no telco

churn

Slide 27

EBU’s strategy is Telco/IT convergence making it concrete with an example: New Way of Working

Organize business around people by creating flexible workplaces facilitating collaboration between all stakeholders.

New Way Of Working (NWOW) =

As-a-service

Servicing

Convergence

fix + mobile voice / data / video: secure and anywhere network access.

managed and secured devices: laptops, tablets & smartphones

applications: e-mail, portals, video conferencing, collaboration tools

E2E servicing

security and privacy assurance

guaranteed SLA’s

self service tools

delivered ‘as-a-service’ with a fixed fee per user per month

Slide 28

Consumer Business

Unit

Dominique Leroy

BICS

Daniel Kurgan

CEO

Slide 29

BICS Products and Services

Sending End user

Receiving End user

Collecting & terminating international voice traffic all over the world

MESSAGING: Ensuring worldwide interoperability for SMS & MMS

ROAMING: Transport: Signalling, 3G (data) roaming exchange (GRX), IPX

Enabling / Processing: “plug & play”, roaming hub, VAS

Terrestrial, submarine, satellite (managed) bandwidth

• Mobile Data

• Capacity & Infra-structure

Service Providers

• Fixed Operators

• Mobile Operators

• MVNOs

• OTTs

• xSPs

Local partner

• Fixed Operators

• Mobile Operators

• xSPs Wholesale only,

International only

• Voice

Slide 30

Global Presence Network

• 100+ Points of Presence (PoPs) • Ownership in 40 submarine cables • Satellite connectivity to “hard to reach”

countries

Slide 31

Market Segments

Voice Mobile Data Capacity

• Market size

24 B€ 1%

2 B€ 9%

3 B€ n.a.

• Profitability (EBITDA margin)

3-5% 30-40% >20%

• CAPEX intensity

• Labour intensity

Low

Low

Low

Low

High

Low

• BICS Position Leader - #2 Leader - #2 “Niche”

• 2012 revenue • CAGR bottom

line (mid-term)

Slide 32

VOICE commodity in declining trend, managed to protect margins

• Part of business is volatile: 2014 revenue to decline YoY due to end of commercial

agreement of limited duration

• Growth of Peer to Peer VoIP (Skype) impedes market volume growth

• Termination rate downward trend pressures revenue and margins

• Currency fluctuation (mainly EUR/USD) impacts revenue and margin

• OTT are also new voice customers (Skype Out, Google Voice, …)

• BICS has the best traffic mix with very high emerging markets exposure (AMEA)

• Very limited CAPEX requirements to scale it up; BICS has done all the main

investments (NGN, OSS & BSS)

mass volume, low profitability, in decline

+

-

Slide 33

Mobile Data volume growth but price pressure

• Messaging and Roaming transactions still growing steadily

• Opportunities provided by new segments (OTT, MVNO), new applications (Machine to Machine, Application to Person) and technology evolution (4G)

• BICS’ unrivalled customer base is a USP

• Increasing competition in attractive segment. Price pressure on the core services

global market growth, fierce competition, need for differentiation

-

+

Slide 34

Going Forward create more value

new services are the catalysts for long term bottom line growth

Extend the product portfolio with a set of value added

services : business intelligence, fraud

protection and remediation, advanced roaming features…

Leverage on the footprint and the customer base (400+ GSM

operators)

Improve the mix with lower revenue but high margin products

Slide 35

Strategic priorities Dominique Leroy

CEO

Ray Stewart

Slide 36

Customer Experience

Brand

differentiation

Efficient Organisation

Simplification

Slide 37

Good to Gold

culture

Strategic Priorities : ‘Fit for Growth’

Leader in convergent services

Back to sustainable growth

Seamless network and IT

Transform

Invest

Grow

Invest

Slide 38

We estimate our annual investment needs to be around €900m over the coming years to cover network, convergence, new services and content

needs

• Build seamless fixed-mobile hand-over • Push TV replay, TV everywhere • Leverage cloud, unified communication and collaboration • Develop ICT as a service and security

To build the foundation of our next wave of growth • Maintain mobile leadership and further deploy 4G • Push legacy copper network to max capabilities (vectoring, DLM) • Gradually introduce FTTH

• Enrich entertainment offer • Introduce new CPE for better in-house experience

Access networks

Convergence services

Brand image

• Push digital (e-sales, e-services) • Renew selling and ordering • Support end-to-end processes • Improve systems stability and (cyber) security

IT and systems

Transform

Slide 39

As from 2014, we ambition to keep workforce cost at least flat over the next 5 years, while pursuing additional cost savings building up to another €100m annually by 2018 (HR and non-HR opex).

Simplify to structurally reduce cost

• Products and services portfolio • Network • IT and platforms • E sales and services

Develop superior customer experience

• Product usage experience (TV Everywhere, FON, …) • Touchpoints experience (call centers, technicians, …) • End-to-end process (first time right) • 360°customer communication quality

• Address different segments with differentiated offers (Scarlet) • Push convergence via triple-play, quad-play and ICT services • Reinforce brand investment

• Simpler and leaner organization for faster decision • Reduction of resource costs leveraging pension wall • Right talent at right place • Real performance management

Build efficient organization

Improve brand differentiation

To support the transformation and commercial brand image, we foresee about € 20m

exceptional spending (mainly opex) in 2014.

Grow

Slide 40

We ambition to return to top line and EBITDA growth within 2 years

Leverage convergence

value

Capture new growth

potential

• Pursue data monetization • Leverage entertainment platform • Seize the opportunities of cloud and security • Be selective in development of new innovative services

• Deliver solution-centricity to unlock value in EBU • Exploit upselling potential to quad-play • Leverage seamless network integration and convergent applications

Regain market shares

• Exploit mobile leadership • Improved broadband experience • Roll-out fiber in greenfield and gradually in brownfield to offer the

ultimate broadband experience • Superior customer experience (web, shops of the future, …)

Network and Simplification Geert Standaert

EVP Service Delivery Engine & Wholesale

Ray Stewart

Slide 41

Network & simplification strategy Invest and transform to return to growth

Strategic focus is to invest in our Access Networks, in Simplicity and in better Customer Service

Invest in Mobile Transform to reduce cost

Maintain our mobile network leadership by using all our assets while coping in an

intelligent way with the strong mobile data growth

Push our legacy copper network to maximum

capabilities while gradually introducing FTTH in function of

copper network renewal

Accelerate simplification of networks to decrease

operational costs and employ new IT enablers to simplify products & processes for better customer service &

higher efficiency

Invest in Fixed

Slide 42

Belgacom is determined to maintain its mobile leadership through continued investment

Invest in Mobile Maintain mobile network leadership

Best mobile 3G network

• First to reach 50% outdoor population coverage and first to deploy 4G in Brussels (11/02) in line with adapted regulations

• Nationwide 4G coverage by EO 2014

• Significantly better 3G indoor coverage in comparison with competition

• Further improvement of 3G indoor coverage by addressing weak spots and coverage on railway lines

Best mobile 4G network

1 Result based on Q4 2013 national drive test conducted by independent agency CommSquare | 2 Number of Belgians reached with 4G coverage on 21/02/2014. With Mobistar 4G in test phase no data is available

1

Number of Belgians reached with 4G coverage 2

5,800,000

4,200,000

Proximus

BASE

Mobistar

92.9%

89.3%

89.0%

Belgacom

Mobistar

Base

3G indoor coverage 1

Slide 43

High business importance of large urban area of Brussels with nearly a quarter of all data traffic of Belgacom

driven by this area. Therefore, important to be a first mover in 4G seen high market potential

Invest in Mobile Zoom-in: importance of Brussels in Mobile business

Best mobile 3G network in the Brussels region

• 350.000 commuters working in the Brussels region every day next to 1.1 million inhabitants

• High quality mobile voice network in Brussels with 40% less interrupted voice calls vs competition

• High concentration of large enterprises and European & International institutions in capital of Europe

• Strongly positioned in Brussels with substantially better 3G indoor coverage vs competition

Best mobile Voice network in the Brussels region

1

Level of non-interrupted calls in Brussels region 1 3G indoor coverage in Brussels Region 1

97.5%

95.5%

95.8%

Proximus

Mobistar

Base

96.8%

93.3%

87.8%

Proximus

Mobistar

Base

1 Result based on Q4 2013 national drive test conducted by independent agency CommSquare measured throughout the 19 communes of the Brussels Capital Slide 44

Invest in Mobile Best mobile experience for our customers

Belgacom to bring the best mobile experience possible to its customers in a technology agnostic way through

implementation of 4G speed tiering and through introduction of seamless convergence of network connectivity

Speed tiering with 4G for everyone

• All customers with 4G capable devices will have access to 4G through 2 different experience levels

• TIER 1 customers to benefit from maximum 4G capabilities while TIER 2 customers enjoy a 4G experience capped at 20 Mbps

Seamless convergence of network connectivity

• With quickly emerging need for 4G, high focus required to

avoid over-investment in 3G capacity passed forecasted

inflection

• Through tiering, ~10% of 3G data traffic on 4G capable

devices can be already pushed to 4G in 2014

• Employ our fixed assets for better mobile experience with our nationwide network of 800.000 WiFi hotspots (EO JAN)

• Implement seamless handover of device-connectivity between fixed & mobile via intelligent steering and EAP-SIM technology

• Employ intelligent steering to assure highest data experience

on mobile devices by selecting best available network

• Clever off-load strategy through transparent handover of

device connectivity from WiFi to WiFi, WiFi to 3G/4G or

3G/4G to WiFi

1

2

1

1

2

Slide 45

Push our legacy copper network to maximum capabilities while gradually preparing for the introduction of

Fiber-To-The-Home (FTTH) in Brownfield areas in function of copper network renewal

Invest in Fixed Dynamic investment track ahead of us

Speed evolution in Mbps 2014 to >2018

30 Mbps

Download speed

Dynamic Line Management on VDSL2

VDSL2

Vectoring on VDSL2 for customers < 400 m

Vectoring + Dynamic Line Management for Vectoring

FTTH in new zonings

FTTH in Brownfields areas

in function of copper network renewal

2

4

1

5

6

2

Vectoring on VDSL2 for customers < 700 m

Start Q1 2014

Start Q1 2015

Start Q2 2015

Start Q1 2014

3

up-to

50 Mbps

up-to

70 Mbps

up-to

1000 Mbps

up-to

100 Mbps

up-to

200 Mbps

Trial 2014

Done Q1 2013

Slide 46

Invest in Fixed Step Dynamic Line Management & Step Vectoring

After 2.5 years of intensive engineering efforts in close collaboration with Alcatel-Lucent the Vectoring technology has been proven to work on our network. Mass roll-out started at beginning of 2014

Fast track Dynamic Line Management (DLM)

DLM monitors stability of lines and dynamically applies maximum possible speed when a line is sufficiently stable

Vectoring working live on our network today

• 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%

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

• Vectoring is working – Vectoring works on our network with

70 Mbps download speeds at videograde quality

• Roll-out started – Mass deployment started to activate

Vectoring for customers < 400m (60% of population)

2

1

2

1

2

START Q1 2014

DONE Q1 2013

1 2

Slide 47

Invest in Fixed Zoom-in: Vectoring working live in our network today

Belgacom is First in the World with nationwide activation of the Vectoring technology on an existing VDSL2 network for a significantly better broadband experience

Powerful vectoring technology

Through cancellation of crosstalk on a VDSL2 line, Vectoring proofs to enable remarkably higher speeds

Results from the technical field trials

In-depth technical field trials were conducted involving 1000+ customers with both moderate, high and excessive crosstalk

• Speed boost to 70 Mbps – 98% of Vectored lines < 400m in the

technical field trial synchronised to 70Mbps

• Videograde quality maintained – 98% of vectored lines adhere to

the required high-quality videograde criteria of IPTV

• No impact on installed-base – Performance of existing modem

installed base is fully maintained after Vectoring activation

1

2

3

Effect of enabling Vectoring on VDSL2 lines part of the Technical Field Trials (in Mbps)

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Capping at 70 Mbps video-grade speed

Slide 48

To further increase bandwidth the Vectoring technology will be further optimized to support higher ranges while Dynamic Line Management (DLM) will be employed on top of Vectoring to reach up-to-100 Mbps speeds

Further optimization of Vectoring technology

Extend Vectoring capabilities beyond 400 meter through further optimization of the technology (between 400-700m)

Dynamic Line Management on top of Vectoring

• 80% of population – Through this evolution, 80% of

population will benefit from Vectoring speeds

Belgacom is the only operator with the in-house developed technology DLM that brings speed at maximum line capabilities

Towards 100 Mbps – DLM will be applied on top of our

Vectored lines to increase speeds to up-to-100Mbps in

videograde quality

Invest in Fixed Step Vectoring optimization & Step DLM on top

1 2

2

START Q1 2015

START Q2 2015

3 4

Slide 49

Invest in Fixed Step FTTH in new zonings & Step FTTH in Brownfields

Belgacom will deploy Fiber-To-The-Home (FTTH) deployment in new residential zonings and will gradually and selectively introduce FTTH in function of the step-by-step renewal of our copper network

FTTH in new zonings

Fiber deployment costs are comparable to copper deployment for new residential zonings

FTTH in brownfields

• FTTH in Greenfields – FTTH Greenfield development and

pre-equipment of new residential zonings

Prepare for FTTH in Brownfield areas to allow gradual replacement of the legacy copper network over time

• FTTH in Brownfields – Small scale FTTH trial will be

prepared and started

1

2

2

START Q1 2014

TRIAL 2014

5 6

Slide 50

• 410.000 PSTN equivalent lines have

been migrated

• 2014: Migrate 640.000 PSTN

equivalent lines and 200 switches

(which is approximately 1 per

working day)

Fixed Voice consolidation

• 242.500 customer ATM lines have

been migrated

• Finalize 100% of migrations by 2015

• 19 buildings were notified to BIPT; 6

buildings sold in 2013 (31M€ cap

gain)

• Further building sales planned

• Expected capital gains in 2014 about

the same amount as 2013

Network Simplification aims at simplifying our network & decreasing operational costs and generates savings as of year one growing to 35M€ recurrent savings as from 2018

Fixed Data consolidation Technical Building outphasing

DO

NE

P

LA

N

Transform to reduce cost Network simplification on track with 650.000 lines migrated

3

3.700.000 PSTN equivalent lines to

migrate and 1000 switches to be

removed by 2018

250.000 customer lines to be migrated

by end of 2014 while securing

professional data revenues

Outphasing & selling of 30 technical and

office buildings (saving of 250.000 m²

technical floor space; 23% of total)

Slide 51

Full convergence of IT architecture with IT platforms to support a

horizontal product portfolio instead of vertically siloed products

Employ new IT enablers to simplify products & processes for better customer service & higher efficiency

Transform to reduce cost IT enablers for higher efficiency & simplicity

3

• Reduce order introduction time with 50%

• Increase automatic order handling with 25%

• Reduce repair field interventions with 15%

Drive higher efficiency & simplification through transformation in a

converged environment with lean operations

IT to enable a converged customer experience IT to enable higher efficiency & simplicity

• Reduce customer complaints with 25%

• Improve predictability of timely delivery of solutions with

50%

• New selling environment – New selling & ordering tools for

call centers & shops with product catalogue for simplified

portfolio

• More efficient field force – Solve issues more proactively

and remotely through complete view on devices in

customer home

• Higher customer touch point experience – Better e-servicing

experience, improved quotations, more customer friendly

billing lay-out, aligned pre-period billing for mobile & fixed,…

1

2

3

Evolution towards a Digital Belgacom through strong e-transformation to become a more accessible and open company for our customers in terms of finding, buying, servicing and billing

Slide 52

Conclusion Ray Stewart

CFO

Ray Stewart

Slide 53

2014 Outlook

Revenue:

• Core business (excl. BICS): 1% to 2% revenue decline, assuming continued stability in the Belgian Mobile market.

• BICS: 2014 revenue could be 10%

to 15% lower versus 2013, though should only have a minor impact on Belgacom Group EBITDA.

Group EBITDA:

• Decline by 3%-4%

Guidance includes: • Capital gains for about the same amount as in 2013 • About € 20m exceptional spending(mainly opex) on transformation &

commercial brand image; offset by an accounting alignment within the company for capitalisation of network installation activities for customer connections as from of 1 January 2014.

Guidance excludes: effects of potential disposal of Telindus France for which Belgacom is in exclusive dialogue with Vivendi.

Group Capex:

• About €900 m

Slide 54

On 27 February 2014, Belgacom’s Board of Directors approved: For the year 2013: To propose to the Annual Shareholder Meeting of 16 April 2014 to return to the shareholders a total dividend of EUR 2.18 gross per share, of which EUR 0.50 per share was paid in December 2013 and EUR 1.68 per share is payable in April 2014:

• Ex-coupon date: 22 April 2014 • Record date: 24 April 2014 • Payment date: 25 April 2014

Furthermore, Belgacom’s Board of Directors intends to continue to award Belgacom’s shareholders with an attractive and sustainable dividend. Therefore the Board of Directors intends to pay out a stable yearly dividend of EUR 1.50 per share (interim dividend of EUR 0.50 and ordinary dividend of EUR 1.00) for the next 3 years to come, provided Belgacom’s financial performance is in line with its expectations.

Shareholder return

Slide 55

Slide 56

Investor & analyst meeting Friday 28 February 2014

Q&A