Economy Convenience Simplicity

SIMPLICITY CONVENIENCE ECONOMY IN 2008 THE MARKET SHOWED STRONG APPETITE FOR TRIPLE PLAY OFFERS Appetite for type of offering Most relevant attributes 2007. Percentage Percentage Brand (18%) Broadband 2x 63% (21%) 37% TV (51%) Fixed Voice (7%) Others Individual offer Triple play PT LAUNCHED THE TV OF THE FUTURE DIFFERENTIATED +160 channels FAST ZAPPING HD & 3D LOCAL CONTENT SPORTS ENTERT. LEADER IN VOD ADVANCED RECORDING +30 HD CHANNELS Also available on satellite NEWS Pioneer in 3D broadcasts KIDS IN 2009 FIBRE TRANSFORMED THE MEO EXPERIENCE + SPEED BEST FIBRE Internet up to 100 Mbps NETWORK IN TV IN THE ENTIRE HOME EUROPE WITH + Ability to watch TV in any room without a STB +1.6M HOMES PASSED + QUALITY OF SERVICE Better image, reliability and remote support MEO CONTINUED TO INNOVATE WITH THE INTRODUCTION OF INTERACTIVITY… WORLD CUP 2010 SECRET STORY +1 MILLION VISITS 16.5 MILLION VISITS (3RD EDITION) IDOL THE BIGGEST LOSER 1.5 MILLION VISITS ~2 MILLIONS VISITS … AND TV APPS FOOTBALL SPORT TV BENFICA TV MEO RADIO MUSIC BOX MEO KIDDY MEO KIDS MEO SURF MEO TELEJORNAL SAPO KIOSK FACEBOOK FLICKR 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 MEO CUSTOMERS GET NEW MEO CUSTOMERS +3 thousand sales done by MEO customers MEO MULTI-SCREEN AT HOME AND EVERYWHERE TV TABLETS AND PCs SMARTPHONES MEO Go! @home @everywhere Advanced TV experience in all screens • 61 channels FREE PAID • PCs, smartphones and tablets • Wi-Fi, 3G/4G of any operator MULTI-SCREEN MOBILITY • Download & Play in VoD EXPERIENCE EXPERIENCE MEO LEADER IN 3P PT’s 3P market share vs. largest competitor Top of mind (pay-TV) Percentage Percentage 58% 52% 40% 44% 41% 3% 3Q08 3Q10 3Q12 Fixed Fixed player 1 player 2 SOURCE: Annual reports; Publivaga SIMPLICITY CONVENIENCE ECONOMY LEADERSHIP IN MARKET SHARE… Subscriber market share Percentage FIXED MOBILE 3Q12 2Q12 Others Others 6% 5% 2% 1% 4% Player 3 6% 7% 8% 1% Player 2 13% 12% 5% 28% Player 2 19% 33% Player 1 51% Player 1 41% 28% 58% 51% 38% 45% 40% Voice Broadband Pay-TV Voice Broadband1 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 … AND IN TOP OF MIND “What brands do you remember for each of these services?” 2011. 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) LARGEST COMMERCIAL FOOTPRINT IN THE CONSUMER SEGMENTS PROACTIVE CHANNELS (PUSH) REACTIVE CHANNELS (PULL) Door-2- Outbound Branded Multi Inbound Online door stores operator Up & Acquisition Sales conversion and service-2-sales cross-sell 1,300 3,500 315 3,000 331 1.5 M sales force sales agents sales sales monthly stores agents agents visitors CONVERGENCE STRONGLY SUPPORTED BY UNIFIED SYSTEMS AND CRM INTELLIGENCE DEMAND FOR INTEGRATED OFFERS IN PORTUGAL “How do you rank an integrated 4P offer by a single brand?” Percentage 81% are interested in 4P offer 56% 25% 9% 9% Not interested Little Interested Very interest interested SOURCE: My Brand “Estudo de mercado do Grupo PT”, November 2011 (N=1671); Primary market research (conjoint-based) ON THE ROAD TO CONVERGENCE ALL-IP STORAGE FIBRE NETWORK 2G, 3G, 4G WiFi SYSTEMS AND PLATFORMS FOR MORE THAN 9 MONTHS… 100 PEOPLE + dedicated full-time to the project 20 DEPARTMENTS + and functions involved 80,000 HOURS + for project specification and IS development ON THE ROAD TO CONVERGENCE STORAGE COST CONVERGENCEFIBRE COMPETITIVE MULTI-PLATFORM OF OFFER APPS AND ALL-IP NETWORK CLOUD PT SERVICES 6TH LARGEST ACCOUNT DATA CENTRE IN TECHNOLOGICAL SHARING AMONG CONVERGENT THE WORLD CONVERGENCE DEVICES SYSTEMS AND IN HIGH-SPEED PLATFORMS NETWORKSWiFi IN ADDITION TO PRICE, MOBILE AND BRAND ARE THE KEY ATTRIBUTES OF 4P Weight of the Relative importance of F-M offers for 3P households characteristic Percentage Mobile Brand 21% 14% TV Price 14% 39% Broadband 9% Others 3% 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 Mobile Mobile Mobile player 1 player 1 player 2 player 3 MEO BRAND NEEDED TO EVOLVE + CONQUEROR + ENTHUSIAST + INTELLIGENT + DARING + COURAGEOUS + VISIONARY + DETERMINED + CATCHING THE FIRST DAYS OF THE NEW MEO BIRTH MISTERY CAMPAIGN REVELATION Cabeço de Vide Billboards, social Birth of civilisation networks, TV 21.12.2012 11.01.2013 SIMPLICITY CONVENIENCE ECONOMY 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 SIMPLICITY CONVENIENCE ECONOMY M4O KEEPS THE LEADING 3P “DNA” • THE BEST CHANNELS TV • THE BEST INTERACTIVE EXPERIENCE • TV ANYWHERE • GUARANTEED SPEED INTERNET • HIGHEST SATISFACTION INDEX IN PORTUGAL • FREE ACCESS TO PT’S WIFI NETWORK FIXED • UNLIMITED NATIONAL CALLS TO FIXED NETWORKS • UNLIMITED CALLS TO +30 INTERNATIONAL PHONE DESTINATIONS NETWORK EFFECT DOMINATES THE MOBILE MARKET MoU Percentage Off-Net 95% 80% On-Net Tribal Non-Tribal Customers Customers PORTUGUESE WILL NOW BE ABLE TO CALL ALL NETWORKS FOR FREE TOTAL FREEDOM TO TALK AS MUCH AS YOU WANT, WITH WHOMEVER YOU WANT NEW GENERATION DEVICES Smartphones Text Tablets ALWAYS ON, ANYWHERE INTERNET TV AND MUSIC Mobile internet with Free traffic 200 MB per card SIMPLICITY CONVENIENCE ECONOMY A UNIQUE CUSTOMER EXPERIENCE Single invoice and value for the entire Billing family, allowing total cost control Integrated self-care online portal Self-care for all products and services CRM Integrated customer view Integrated experience online and Sales at the store ONE INVOICE TV INTERNET FIXED PHONE MOBILE PHONE ONE VALUE WITHOUT SURPRISES % of Portuguese mobile spending Unlimited voice calls to all networks • INCLUDED IN THE INVOICE Mobile services • NO SURPRISES Unlimited SMS to all networks included • NO PENALTIES in Internet up to 200 MB • NO ADDITIONAL CHARGES 98% International voice calls • CHARGED TO THE PREPAID Other services BALANCE not included Mobile internet >200 MB in • MANAGED INDIVIDUALLY NOT ADDED TO THE INVOICE Other VAS (e.g., ringtones) • 2% ONLINE SELF-CARE PORTAL 1 ACCOUNT 1 USERNAME 1 PASSWORD/CARD ONE PHYSICAL AND ONLINE CHANNEL PHYSICAL ONLINE Unique customer care in 100% online 300 MEO stores across the country experience A TRULY INTEGRATED OFFER Bundle Convergence 1 brand 1 value 1 invoice 1 aggregated 1 aggregated + product ≠ product 1 sales channel 1 call centre 1 website SIMPLICITY CONVENIENCE ECONOMY A NEW ELEMENT IS BORN TV 85 channels and all advanced features 99 INTERNET 79, 100 Mbps guaranteed speed €/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 PORTUGUESE FAMILIES WILL SAVE MONEY… +SAVINGS 3P Current service 2P at home 1P Subscribers of …AND SOME HAVE ALREADY STARTED +100 families have already subscribed and saved Bragança 100% SUBSCRIBERS WITH Castelo Branco BETTER SERVICE… Portalegre … SAVING ~€20/MONTH, Beja 18% OF SAVINGS 6 stores in 4 Districts THE PORTUGUESE WANT SMARTPHONES Smartphone penetration Percentage of the population +50% of Portuguese without 57% a Smartphone would like to acquire one 20% if the price was not an issue SOURCE: Yankee Strategy Analytics INSTALLMENTS INTRODUCED BY MEO Initial Monthly payment payment Installments up to 12 months 25 € + 12 x 6.24 € (25%) (75%) without interest RP = 99.9 € < Upfront payment of 200 € 12 x 16.66 € 25% for retail price <200€ + (50%) (50%) 50% for retail price >200€ RP = 399.9 € MAKING HISTORY AGAIN .

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