ZON announces 1Q08 Consolidated Results

LISBON, Portugal — Today ZON Multimédia announces unaudited results for the first quarter of 2008.

Pay TV (TV Cabo)

The Pay TV customer base grew in 1Q08 by 13.4 thousand customers, representing 60.3% more net additions than in 1Q07 and digitally enabled subscribers (“Funtastic Life”) continued to grow as a percentage of the Pay TV customer base to 26% compared with 20% in 1Q07. Premium channel penetration was significantly higher, with more than 513 thousand Sport TV subscribers at the end of 1Q08, up by 6% compared with 1Q07. The number of subscribers of other premium channel offers increased by 5% over the same period. However, in comparison with 4Q07, premium channel subscription recorded a decline of 1% due in part to the fact that interest in the Portuguese football league started to decline once the winning club became known, very early on in the year. As regards new channel launches, “Caza e Pesca”, a hunting and fishing premium channel, was included in the digital extended offer on 1 April.

In terms of audience, cable channels are increasing their share as a percentage of total TV viewing in Portugal (Free to Air + Cable) which grew from 13.2% in 1Q07 to 13.8% in 1Q08. Cable channel audience as a percentage of total cable audience (includes FTA channels viewed over the cable network) grew to 31.4% compared with 29.2% in 1Q07. Measured as a percentage of the average time spent watching TV per day in Portugal, Cable channels now represent 44% out of total pay TV viewing time (average of 3 hours and 51 minutes), compared with 42% in 1Q07.

Average Pay TV revenue per user was 25.6 euros, up 2.5% from 25 euros in 1Q07.

Business Indicators                                             1Q08/      1Q08/
('000)                            1Q07      4Q07      1Q08       1Q07       4Q07
                               -------   -------   -------   --------   --------
Pay TV, Broadband and Telephony
Homes Passed (1)               2,675.4   2,752.8   2,773.7       3.7%       0.8%
Basic Subscribers (2) (3)      1,488.4   1,547.1   1,560.5       4.8%       0.9%
of which
  Digital Extended Basic         303.4     382.1     399.8      31.8%       4.6%
  Premium Pay TV                 786.9     840.6     832.6       5.8%     (1.0%)
  Broadband Internet             372.3     400.2     415.9      11.7%       3.9%
Net Additions
  Basic Subscribers                8.4      26.3      13.4      60.3%    (49.0%)
  Digital Extended Basic          33.0      25.7      17.7    (46.2%)    (31.1%)
  Premium Pay TV                   6.8      37.8     (8.0)   (217.4%)   (121.2%)
  Broadband Internet              10.4      12.9      15.7      50.2%      21.3%

(1) In 2Q07, TV Cabo undertook an internal audit to its database, reducing the number of recorded homes passed by 230 thousand. Considering the impact of this database clean-up, the number of homes passed would have reduced to approximately 2.676 thousand at the end of 1Q07 and to approximately 2.651 thousand at the end of 2006.
(2) These figures are related to the total number of Pay TV basic customers, including the cable and satellite platforms. ZON Multimedia offers several basic services, based on different technologies, directed to different market segments (residential, real estate and hotels), with a distinct geographical scope (mainland Portugal and the Azores and Madeira islands) and with a variable number of channels.
(3) These figures include products in temporary promotions, such as “Try and Buy” promotions.

More: Earnings Release