Portugal Telecom First quarter 2008 results

Thursday, May 8th, 2008
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LISBON, Portugal — Portugal Telecom (EuroNext Lisbon: PTC) (NYSE: PT) announced today its results for the quarter ended 31 March 2008.


Wireline operating revenues decreased by 4.3% y.o.y in 1Q08 to Euro 478 million, with the reduction in voice revenues more than offsetting the increase in pay-TV, wholesale and data & corporate revenues in the quarter.

Operating data (‘000)
1Q08 1Q07
Meo TV customers 47 0

In terms of triple-play services, PT continued to market Meo, its television offer, which is showing significantly increased acceptance levels. Until the end of 1Q08, Meo was offered through the IPTV platform over ADSL 2+, with over 100 channels, despite not having been yet advertised above the line during the quarter. This service includes advanced features such as digital recording, pause-TV, video-on-demand, HD (high definition) channels and flexibility in the choice of the channels subscribed. At the end of 1Q08, PT had a total base of 47 thousand pay-TV customers, having added 26 thousand subscribers during the quarter, more than doubling its customer base as at the end of 4Q07. The take-up of the TV service has accelerated throughout the quarter, with net additions of 7, 8 and 11 thousand customers in January, February and March respectively.

On 2 April 2008, PT announced the launch in record time of its nationwide TV offer through satellite (DTH – direct to home), as a means to complement the existing IPTV offer. Meo will be PT’s TV brand across the various platforms, namely at home (through the IPTV and satellite), in the mobile handset (through Meo Mobile) or in a computer (through the horizontal Sapo content platform). This DTH service will allow for nationwide coverage through the Hispasat satellite, the same as its competitors, offering in excess of 70 channels. PT will be using a full high-definition solution based on MPEG4 and Nagra’s latest generation conditional access technology, which will allow for a number of advanced TV features, such as interactive EPG, multi-room and advanced PVR functionalities.

Domestic Mobile

On 2 April, as part of PT’s pay-TV multiplatform strategy, TMN re-launched its mobile TV offer. Meo Mobile offers in excess of 30 channels through a mobile handset. During April, TMN introduced a mobile handset specifically designed for Meo Mobile, further enhancing PT’s fixed-mobile and multimedia convergent services.

Agreement for Digital Terrestrial Television contest

22 April 2008 — PT announced that it reached an agreement with the three free-to-air (FTA) operators – RTP, SIC and TVI – in connection with PT’s bid in the upcoming Digital Terrestrial Television (DTT) contest. The three FTA operators signed a memorandum of understanding (MOU) with PT agreeing to the terms and conditions under which the transmission of the FTA signal for the four channels will be delivered during the simulcast period as well as the digital transmission up to the end of the licence period.

This agreement will allow for the maximisation of synergies between these two networks, as well as the IPTV and Satellite platforms of PT, whilst ensuring that future investments will be directed towards the development of new services that will be critical for the future success of DTT in Portugal.

23 April 2008 — Portugal Telecom delivered two bids to participate in the DTT contest. This contest is organised in two separate parts: Mux A – transport of the free-to-air (FTA) signal (4 existing FTA channels plus a fifth FTA channel to be attributed in 2009), and Muxes B to F – five frequencies for a Pay-TV operator (two nationwide and three regional). The 15-year licences attributed for Mux A and Muxes B to F will run until the end of September 2023. PT was the sole bidder in the Mux A contest.

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