GLOBUL Q4’2012 CUSTOMER BASE GROWING 5.9%

As indicated in OTE Group’s Q4’2012 financial results, GLOBUL’s customer base rose by 5.9% year-on-year in the last quarter of 2012, exceeding 4.5 million.

Subdued domestic demand due to tight consumption and stagnating incomes continued to affect the Bulgarian telecom sector in the fourth quarter of 2012 coupled with the ongoing competition-driven erosion of the retail prices, chiefly in the corporate segment. As of the end-2012, market approached saturation with estimated penetration of over 150%.

GLOBUL’s total revenue for Q4’2012 decreased by 12.9%, compared to the same period last year, mainly as a result of the severe mobile termination rate (MTR) glidepath introduced by regulator from July 1, 2012, and was additionally impacted by a change in the accounting treatment of early contract termination, introduced in September 2012. Revenues for Q4’2012, adjusted for both impacts, were 3.0% above the same period of prior year, while adjusted FY’2012 revenues were 1.6% above 2011.

Service revenues decreased by 20.9% in Q4’2012, mainly driven by the MTR regulation and accounting treatment change – adjusted for those effects, service revenues for Q4’2012 were 2.4% below prior year, mainly as a result of the intense competition in the business segment. Adjusted FY’2012 service revenues were in line with prior year.

Despite a number of cost optimization initiatives, GLOBUL earnings before interest, taxes, depreciation and amortization (EBITDA) for Q4’2012 decreased by 27.2% compared to Q4’2011, while the EBITDA margin declined by 6pp compared to prior year. Adjusted Q4’2012 EBITDA for the MTR regulation impact was only 3.7% below prior year, while FY’2012 adjusted EBITDA was in line with 2011.

GLOBUL’s postpaid customer base further improved its growth, reaching 2.8 million, up by 8.0% year-on-year, thus representing about 62% 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 2.8% in Q4’2012.

GLOBUL’s fixed-telephony services continued their stable growth in Q4’2012, with a subscriber base of nealy 220,000, 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 Q4’2012 at 156 min., or 2.5% above Q4’2011, while blended ARPU for Q4’2012 dropped to BGN 11.15, or 25% lower than the same period prior year.

Summary Financial Results for GLOBUL & Germanos for the 3 and 12 months ended December 31, 2012 & 2011.*

*Total figures are after COSMOTE intragroup eliminations.