SIMPLICITY CONVENIENCE ECONOMY

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2 SIMPLICITY CONVENIENCE ECONOMY

3 IN 2008 THE MARKET SHOWED STRONG APPETITE FOR TRIPLE PLAY OFFERS Appetite for type of offering Percentage Most relevant attributes Percentage 2x 63% Brand (18%) Broadband (21%) 37% TV (51%) Fixed Voice (7%) Others Individual offer Triple play

4 PT LAUNCHED THE TV OF THE FUTURE +160 channels FAST ZAPPING HD & 3D DIFFERENTIATED LOCAL CONTENT LEADER IN VOD ADVANCED RECORDING +30 HD CHANNELS ENTERT. Also available on satellite NEWS SPORTS Pioneer in 3D broadcasts KIDS

5 IN 2009 FIBRE TRANSFORMED THE MEO EXPERIENCE + SPEED Internet up to 100 Mbps + + TV IN THE ENTIRE HOME Ability to watch TV in any room without a STB QUALITY OF SERVICE Better image, reliability and remote support BEST FIBRE NETWORK IN EUROPE WITH +1.6M HOMES PASSED

6 MEO CONTINUED TO INNOVATE WITH THE INTRODUCTION OF INTERACTIVITY WORLD CUP 2010 SECRET STORY +1 MILLION VISITS 16.5 MILLION VISITS (3 RD EDITION) IDOL THE BIGGEST LOSER 1.5 MILLION VISITS ~2 MILLIONS VISITS

7 AND TV APPS FOOTBALL SPORT TV BENFICA TV MEO RADIO MUSIC BOX MEO KIDDY MEO KIDS MEO SURF MEO TELEJORNAL SAPO KIOSK FACEBOOK FLICKR

8 MEO KANAL: A CHANNEL FOR EACH MEO CUSTOMER 28 thousand channels created to date 29 thousand hours of content 191 thousand uploaded videos into channels Top categories: Family & Friends, Humor and Music +450 thousand homes have watched Meo Kanal

9 MEO CUSTOMERS GET NEW MEO CUSTOMERS +3 thousand sales done by MEO customers

10 MEO MULTI-SCREEN AT HOME AND EVERYWHERE TV TABLETS AND PCs SMARTPHONES MEO Go! Advanced TV experience in all screens 61 channels PCs, smartphones and tablets Wi-Fi, 3G/4G of any operator Download & Play in FREE MULTI-SCREEN MOBILITY EXPERIENCE PAID

11 MEO LEADER IN 3P PT s 3P market share vs. largest competitor Percentage Top of mind (pay-tv) Percentage 40% 44% 52% 58% 41% 3% 3Q08 3Q10 3Q12 Fixed player 1 Fixed player 2 SOURCE: Annual reports; Publivaga

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13 LEADERSHIP IN MARKET SHARE Subscriber market share Percentage FIXED 3Q12 MOBILE 2Q12 Others Player 3 Player 2 Player 1 6% 12% 6% 19% 5% 7% 5% 33% 8% 2% 51% 1% Others Player 2 Player 1 1% 13% 41% 4% 28% 28% 58% 51% 38% 45% 40% Voice Broadband Pay-TV Voice Broadband 1 1 Mobile broadband market share in number of users with dongle NOTE: Data relative to the whole market (not only consumer segment) in the case of fixed SOURCE: ANACOM; Companies reports

14 AND IN TOP OF MIND What brands do you remember for each of these services? Top of mind. Percentage of respondents MOBILE INTERNET 34% 20% Player 1 29% Player 1 15% Player 2 10% Player 2 12% PAY-TV FIXED TELEPHONE 36% 66% Player 1 35% Player 1 7% Player 2 17% Player 2 5% SOURCE: My Brand 2011 Study (sample of 1,671 respondents)

15 LARGEST COMMERCIAL FOOTPRINT IN THE CONSUMER SEGMENTS PROACTIVE CHANNELS (PUSH) REACTIVE CHANNELS (PULL) Door-2- door Outbound Branded stores Multi operator Inbound Online Acquisition 1,300 sales force Up & cross-sell 3,500 sales agents 315 stores Sales conversion and service-2-sales 3,000 sales agents 331 sales agents 1.5 M monthly visitors CONVERGENCE STRONGLY SUPPORTED BY UNIFIED SYSTEMS AND CRM INTELLIGENCE

16 DEMAND FOR INTEGRATED OFFERS IN PORTUGAL How do you rank an integrated 4P offer by a single brand? Percentage 56% 81% are interested in 4P offer 9% 9% 25% Not interested Little interest Interested Very interested SOURCE: My Brand Estudo de mercado do Grupo PT, November 2011 (N=1671); Primary market research (conjoint-based)

17 ON THE ROAD TO CONVERGENCE FIBRE ALL-IP NETWORK STORAGE 2G, 3G, 4G WiFi SYSTEMS AND PLATFORMS

18 FOR MORE THAN 9 MONTHS PEOPLE dedicated full-time to the project DEPARTMENTS and functions involved 80,000 HOURS for project specification and IS development

19 ON THE ROAD TO CONVERGENCE MULTI-PLATFORM APPS AND SERVICES ACCOUNT SHARING AMONG DEVICES FIBRE CONVERGENCE OF OFFER TECHNOLOGICAL CONVERGENCE IN HIGH-SPEED NETWORKS WiFi COST COMPETITIVE ALL-IP NETWORK CONVERGENT SYSTEMS AND PLATFORMS STORAGE CLOUD PT 6 TH LARGEST DATA CENTRE IN THE WORLD

20 IN ADDITION TO PRICE, MOBILE AND BRAND ARE THE KEY ATTRIBUTES OF 4P Relative importance of F-M offers for 3P households Percentage Weight of the characteristic 21% Mobile Brand 14% 39% Price TV Broadband Others 14% 9% 3%

21 MEO IS THE SELECTED BRAND FOR AN INTEGRATED OFFER Which brand would you choose for a 4P offer? Percentage 31.4% 17.2% 16.2% 13.3% 5.8% Fixed player 1 Mobile player 1 Mobile player 2 Mobile player 3

22 MEO BRAND NEEDED TO EVOLVE + ENTHUSIAST + CONQUEROR + INTELLIGENT + DARING + COURAGEOUS + VISIONARY + CATCHING + DETERMINED

23 THE FIRST DAYS OF THE NEW MEO BIRTH MISTERY CAMPAIGN REVELATION Cabeço de Vide Birth of civilisation Billboards, social networks, TV

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27 A NEW ELEMENT IS BORN TV 85 channels and all advanced features INTERNET 100 Mbps guaranteed speed FIXED PHONE Unlimited national and international calls to fixed networks (from 9 p.m. to 9 a.m.) MOBILE PHONE 2 SIM cards with unlimited calls and SMS to all networks + 200MB mobile internet per SIM card

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29 M 4 O KEEPS THE LEADING 3P DNA TV THE BEST CHANNELS THE BEST INTERACTIVE EXPERIENCE TV ANYWHERE INTERNET FIXED PHONE GUARANTEED SPEED HIGHEST SATISFACTION INDEX IN PORTUGAL FREE ACCESS TO PT S WIFI NETWORK UNLIMITED NATIONAL CALLS TO FIXED NETWORKS UNLIMITED CALLS TO +30 INTERNATIONAL DESTINATIONS

30 NETWORK EFFECT DOMINATES THE MOBILE MARKET MoU Percentage Off-Net 95% 80% On-Net Tribal Customers Non-Tribal Customers

31 PORTUGUESE WILL NOW BE ABLE TO CALL ALL NETWORKS FOR FREE TOTAL FREEDOM TO TALK AS MUCH AS YOU WANT, WITH WHOMEVER YOU WANT

32 NEW GENERATION DEVICES Smartphones Text Tablets

33 ALWAYS ON, ANYWHERE INTERNET Mobile internet with 200 MB per card TV AND MUSIC Free traffic

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35 A UNIQUE CUSTOMER EXPERIENCE Billing Self-care Single invoice and value for the entire family, allowing total cost control Integrated self-care online portal for all products and services CRM Sales Integrated customer view Integrated experience online and at the store

36 ONE INVOICE TV INTERNET FIXED PHONE MOBILE PHONE

37 ONE VALUE WITHOUT SURPRISES % of Portuguese mobile spending Mobile services included in 98% Unlimited voice calls to all networks Unlimited SMS to all networks Internet up to 200 MB INCLUDED IN THE INVOICE NO SURPRISES NO PENALTIES NO ADDITIONAL CHARGES Other services not included in 2% International voice calls Mobile internet >200 MB Other VAS (e.g., ringtones) CHARGED TO THE PREPAID BALANCE MANAGED INDIVIDUALLY NOT ADDED TO THE INVOICE

38 ONLINE SELF-CARE PORTAL 1 ACCOUNT 1 USERNAME 1 PASSWORD/CARD

39 ONE PHYSICAL AND ONLINE CHANNEL PHYSICAL ONLINE Unique customer care in 300 MEO stores across the country 100% online experience

40 A TRULY INTEGRATED OFFER Bundle Convergence 1 brand 1 value 1 aggregated product 1 aggregated product + 1 invoice 1 sales channel 1 call centre 1 website

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42 A NEW ELEMENT IS BORN TV 85 channels and all advanced features INTERNET 100 Mbps guaranteed speed 79,99 /month FIXED PHONE Unlimited national and international calls to fixed networks (from 9 p.m. to 9 a.m.) MOBILE PHONE 2 SIM cards with unlimited calls and SMS to all networks +200MB mobile internet per SIM card

43 PORTUGUESE FAMILIES WILL SAVE MONEY 3P +SAVINGS Current service at home 2P 1P Subscribers of

44 AND SOME HAVE ALREADY STARTED +100 families have already subscribed and saved Bragança Castelo Branco Portalegre Beja 6 stores in 4 Districts 100% SUBSCRIBERS WITH BETTER SERVICE SAVING ~ 20/MONTH, 18% OF SAVINGS

45 THE PORTUGUESE WANT SMARTPHONES Smartphone penetration Percentage of the population 20% 57% +50% of Portuguese without a Smartphone would like to acquire one if the price was not an issue SOURCE: Yankee Strategy Analytics

46 INSTALLMENTS INTRODUCED BY MEO Initial payment Monthly payment Installments up to 12 months without interest RP = 99.9 < 25 (25%) + 12 x 6.24 (75%) Upfront payment of 25% for retail price <200 50% for retail price >200 RP = (50%) + 12 x (50%)

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48 MAKING HISTORY AGAIN