Portugal Telecom - 2008 first half results

Thursday, August 7th, 2008
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LISBON, Portugal — Portugal Telecom (Lisbon: PTC; NYSE: PT) (“PT”) announced today its results for the second quarter and first half, ended 30 June 2008.

Wireline

In the quarter, PT continued to market its pay-TV service, Meo, both through IPTV and satellite, which was commercially launched during April. The advertising campaigns and the marketing initiatives continued to focus on the distinctive features of the service, namely:

  1. high definition, underpinned by the broadcasting of the European football championship games in partnership with free-to-air channel TVI and the broadcast of the Summer Olympic Games in partnership with Eurosport;
  2. digital recording, as PT provides full PVR-like EPG-based digital recording of up to 140 hours;
  3. video on demand with access to an extensive library of over 1,000 movies and documentaries, and
  4. the ability to subscribe to new channels in real time using the self-care features of the set-top box.

During the quarter, PT was notified of the Draft Final Decision of the Committee of Evaluation of the proposals submitted within the public tender procedure relating to the Digital Terrestrial Television (DTT) namely Mux A (transport of free-to-air signal) and Muxes B to F (pay-TV service). PT presented proposals for Mux A and Muxes B to F and has earned the best classification by an independent jury. These preliminary decisions of the Public Tender Committee, which will be subject to prior hearing of the interested parties, thus award PT the victory in both tenders.

Net adds in the pay-TV service reached 70 thousand in the quarter, with PT more than doubling its subscriber base in the quarter to 116 thousand. The pay-TV subscribers already represent 4.3% of traffic generating lines and 17.4% of total ADSL subscriber base, a marked performance taking into consideration that the IPTV service was launched in 4Q07 and the satellite service in April 2008.

Wireline operating data (TV customers):

('000)           2Q08  2Q07    1H08  1H07
                 ----  ----    ----  ----
Subscribers       116     0     116     0
Net additions      70     0      96     0

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