PT Multimédia First Nine Months 2007 Results

Lisbon, Portugal — PT Multimedia today announces its results for the first nine months ended 30 September 2007.

Pay-TV, Broadband and Telephony

PT Multimédia’s customer base increased by 4.8% y.o.y to 1,521 thousand at the end of 3Q07. The number of products per subscriber increased from 1.39 per subscriber at the end of 3Q06 to 1.52 per subscriber at the end of 3Q07, leading to an increase in RGUs of 14.7% to 2,318 thousand. This strong performance reflects the consistent improvement in the quality of service provided by TV Cabo, the success of the cross selling and upselling strategies, and the launch of new double-play packages and triple-play packages including telephony service, which we believe in turn are also contributing to reduce churn levels across all products.

At the beginning of September, TV Cabo launched its first above-the-line advertising campaign for triple-play services, offering promotional discounts to those clients who simultaneously subscribed to more than one product. In 3Q07, over 20% of PT Multimedia’s new subscribers were triple-play, which, coupled with the launch of PT Multimedia’s telephony service and the growth of the digital Pay TV package, underpinned ARPU which increased by 4.7% to Euro 30.9.

In 3Q07, TV Cabo continued to invest in the expansion and upgrade of its network. At the end of September 2007, three of the four high capacity fibre optical rings that comprise greater Oporto’s fibre to the hub architecture had been installed and were functional, increasing the broadband capacity of that area.

The number of homes passed increased by 25 thousand in 1Q07, 21 thousand in 2Q07 and 29 thousand in 3Q07 reaching 2,726 thousand at the end of September 2007. At present, 98% of homes passed are bi-directional and therefore broadband and digital TV enabled, and 96% are VoIP compliant.

Pay-TV

Pay-TV customers reached 1,521 thousand at the end of September 2007, with net additions of 26 thousand in 3Q07, as compared to net additions of 7 thousand in the same period last year. This strong performance reflects a significant decrease in churn levels, primarily related to the significant improvements in the quality of service provided by TV Cabo and a more comprehensive triple-play offer following the launch of voice service.

In September, PT Multimedia enhanced its Pay-TV offer with the inclusion of Fox Life in its cable basic package and the launch of 10 additional channels in the digital cable basic and extended basic packages: Bloomberg España, Phoenix Infonews, Deutsche Welle, Inter+, RTR-Planeta, TVR International, TV Bulgária, Cubavision Internacional, Phoenix CNE and Vesti. These channels target the most representative immigrant communities in Portugal.

Additionally, the extended basic package was strengthened with the introduction of Fox Crime and FX (on an exclusive basis). Currently, this package includes 80 channels, and continues to be a key driver of new customer additions and increased ARPU. The extended basic package reached 356 thousand subscribers at the end of September 2007, with 28 thousand net additions in 3Q07. 

Premium subscriptions reached 803 thousand at the end of September 2007, with 27 thousand net additions in the quarter, reflecting the take-up of the Sport TV premium sports channel following the start of the Portuguese Football Premier League. In 3Q07, TV Cabo strengthed its premium offer with the launch of two new premium channels produced by TV Globo, the leading Brazilian TV Network and content producer: TV Globo Portugal and Premium Futebol Club. TV Globo Portugal is a Brazilian entertainment channel specifically aimed at Portuguese families. Premium Futebol Club covers the main Brazilian regional football championships and Copa Brazil.

Pay-TV ARPU reached Euro 25.0 in 3Q07, an increase of 2.7% y.o.y, boosted by the strong take-up of the digital TV package and the increase in premium sport channels penetration.