Portugal Telecom (Meo) full year 2008 results

LISBON, Portugal — Portugal Telecom (Lisbon: PTC; NYSE: PT) announced today its full year results for the year ended 31 December 2008.

Domestic Operations – Wireline

Meo provides access to a comprehensive content offering, with more than 110 TV channels and over 1,500 real video-on-demand (VoD) titles. The VoD offer, which includes blockbusters from five Hollywood studios, is proving to be a successful and differentiating feature, as circa 45% of Meo’s IPTV customers have already used it on a paid basis, consuming on average 2.8 movies per month. The VoD Christmas campaign was a marked success, increasing by 35% the number of rentals in December as compared to November and increasing by 5pp the number of paid users.

PT also launched a new set-top-box for the satellite platform, which provides access to advanced features such as digital recording and pause live-TV, which were being offered only to Meo IPTV customers. Without legacy constraints, the Meo set-top boxes are all HD ready, using MPEG-4.

PT surpassed the threshold of 300 thousand pay-TV customers on 18 December, thus increasing the pace of customer growth seen in previous quarters. YTD net additions in the pay-TV service reached 291 thousand bringing the total customers to 312 thousand at the end of 2008. Pay-TV subscribers already represent 11.8% of traffic-generating lines and 42.9% of the ADSL customer base, a solid performance considering that the IPTV service was launched in 4Q07 and the satellite service in April 2008.

Wireline operating data (‘000):

                    4Q08  4Q07  2008  2007
                    ----  ----  ----  ----
TV customers         312    21   312    21
  Net additions      101    15   291    21

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