• The number of mobile customers went up by more than 103 thousand in 2011 compared to five thousand in 2010. More than 4.9 million SIM cardswere active in the O2 network at the end of last year.
• Telefónica reports a record number of contract customers.  A share of 61.7% of contract customers in the total is the highest ever in the history of the company.
• The successful Christmas campaign delivered, for the first time since 2009, a quarter-on-quarter increase in the number of prepaid customers, by 5.5 thousand.
• Every fifth device in the O2 network was in the 'smart' category.
• The number of customers of Telefónica Slovakia increased 32.2% in 2011.
• The Board of Directors approved a proposal to pay the amount of CZK 40 per share in combination of a dividend payment and a reduction of the share capital.
• In 2012, the amount of investment will increase substantially; the projection is for CZK 6.2 billion.

Highlights

Full year 2011

• The total number of mobile customers reached 4.942 million, which represents a year-on-year increase of 2.1%.
• The number of mobile contract customers was up 103.1 thousand on the year; an increase of 6.5% to 3.049 million:
  • This trend was driven by the increasing number of mobile data customers and the lower churn of contract customers.
• The number of xDSL broadband data customers showed a year-on-year increase of 66 thousand to 872 thousand. Last year, 8.1% more new customers subscribed to fixed-line internet access than in 2010.
  • The VDSL proposition continues to drive customer experience, reduce fixed access churn and efficiently manage the ARPU.  
• The business revenues of the Telefónica Czech Republic group reached CZK 52.39 billion last year, which translates into a year-on-year decline of 5.7%:
  • Last year's revenue erosion improved from the year 2010 (-7%), which is attributed to improved mobile revenues, strong ICT segment revenues and continued revenue growth in Slovakia.
• The consolidated operating income before depreciation and amortisation (OIBDA) was down 5.0% year-on-year within the guidance range, and closed on CZK 22.9 billion, while the comparable OIBDA margin was up 0.2 percentage points and reached the respectable level of 43.6%:
  • The result was influenced by the positive effect of operating efficiency measures and the positive OIBDA in Slovakia, which continues to show an upward development.
• Total capital expenditure reached CZK 5.621 billion, which was on target for the year.
• The number of Telefónica Slovakia customers grew 32.2% last year to a total of 1.164 million.

4th quarter 2011

• The number of mobile contract customers grew 54 thousand year-on-year.
• Year-on-year consolidated revenues reached CZK 13.4 billion, which is four percent less than in the same period of 2011; still, it represents a marked improvement on the year 2010.
• The OIBDA margin was up 1.1 percentage points and reached the respectable level of 45.4%.
• Telefónica Slovakia showed a growth in its customer base of 85 thousand.

2012 outlook

• In terms of the business revenues, the group anticipates an improvement from the year 2011, however the OIBDA margin is likely to see a slight year-on-year dip. Capital expenditure should increase to the total of CZK 6.2 billion.

Proposal to pay a dividend for the year 2011 and to redistribute disposable resources

• The Board of Directors approved a proposal which will be presented for approval to the shareholders at the General Meeting, namely to pay the total amount of CZK 40 per share, which consists of CZK 27 in the form of a dividend, and CZK 13 in the form of a reduction of the share capital (nominal value of the share).

Furthermore, the Board of Directors approved another proposal which will be presented for approval to the shareholders at the General Meeting, namely to secure a framework agreement for a potential share buy-out to the extent of 10% of all the company's shares.

Contacts
Hany Farghali
Spokesperson
Telefónica Czech Republic, a.s.
public.relations.cz@o2.com
tel: +420 606 02 02 02

About Telefónica Czech Republic

Telefónica Czech Republic is a major integrated operator in the Czech Republic. It is now operating almost seven million lines, both fixed and mobile, making it one of the world's leading providers of fully converged services. The organization offers the most comprehensive portfolio of voice and data services in this country. It is paying special attention to the exploitation of the growth potential, particularly in the data and Internet sector. Telefónica Czech Republic operates the largest fixed and mobile network including a 3rd generation network, CDMA (for data), and UMTS, enabling voice, data and video transmission. Telefónica Czech Republic is also a notable provider of ICT services.

About Telefónica

Telefónica is one of the world's largest telecommunications operators by market capitalisation. Its activities are centred mainly on the fixed and mobile telephony businesses, while its broadband business is the key growth driver underpinning both. It operates in 25 countries and has a global customer base of almost 300 million. Telefónica's growth strategy is focused on the markets in which it has a strong foothold: Spain, Europe and Latin America. Telefónica is a 100% private sector company with its shares listed in Madrid and other stock exchanges and more than 1.5 million individual shareholders.