GLOBUL Q1’2013 CUSTOMER BASE GROWING 4.5%

As indicated in OTE Group’s Q1’2013 financial results, GLOBUL’s customer base rose by 4.5% year-on-year in the first quarter of 2013, reaching almost 4.6 million.

Subdued domestic demand due to tight consumption and stagnating incomes continued to affect the Bulgarian telecom sector in the first quarter of 2013 coupled with the ongoing competition-driven erosion of the retail prices, chiefly in the corporate segment. As of the end of Q1’2013, market approached saturation with estimated penetration of over 150%.

GLOBUL’s total revenue for Q1’2013 decreased by 14.6%, compared to the same period last year, mainly as a result of the severe mobile termination rate (MTR) cut introduced by the regulator from July 1, 2012 (with a further slash as of January 1, 2013), and was additionally impacted by a change in the accounting policy of the company, introduced in September 2012. Revenues for Q1’2013, adjusted for both impacts, were 5.3% above the same period of prior year.

Service revenues decreased by 20.5% in Q1’2013, mainly driven by the MTR regulation and accounting treatment change – adjusted for those effects, service revenues for Q1’2013 were only 1.0% below prior year, mainly as a result of the intense competition in the business segment.

Despite a number of cost optimization initiatives, GLOBUL earnings before interest, taxes, depreciation and amortization (EBITDA) for Q1’2013 decreased by 22.0% compared to Q1’2012, while the EBITDA margin declined by 3.1pp compared to prior year. Adjusted for the MTR regulation impact, Q1’2013 EBITDA was 12.1% above same period prior year.

GLOBUL’s postpaid customer base further improved its growth, exceeding 2.8 million, up by 7.0% year-on-year, thus representing about 63% of the company’s total client base. Despite market trends regarding customers’ prepaid to postpaid migration through innovative offers, GLOBUL also managed to increase its prepaid customer base by 0.6% in Q1’2013.

GLOBUL’s fixed-telephony services continued their stable growth in Q1’2013, with a subscriber base of nealy 230,000, while its mobile broadband subscriber base (excluding M2M) more than doubled on a yearly basis.

Average usage per customer continued to grow with blended AMOU for Q1’2013 at 153 min., or 0.3% above Q1’2012, while blended ARPU for Q1’2013 dropped to BGN 10.40, or 24% lower than the same period prior year.

Summary Financial Results for GLOBUL & Germanos for the 3 months ended March 31, 2013 & 2012.*

*Total figures are after COSMOTE intragroup eliminations.