Telefonica O2 Czech Republic, a.s. : January to September 2012 Financial Results

• Telefónica Czech Republic gained 56.5 thousand new mobile customers in Q3 2012. The total mobile customer base reached 5,024 thousand at the end of September 2012, a 2.9% year-on-year increase.
• Smartphone penetration among O2 customers is growing increasingly. Smartphone sales represented 72 % of total handset sales in Q3 2012 and smartphone penetration grew further, reaching 25% at the end of September 2012, up by 2 percentage points quarter-on-quarter.
• The number of xDSL accesses reached 902 thousand at the end of September 2012, up 5.6% year-on-year.
• Decline in fixed accesses continued to decelerate.
• Operational Income before Depreciation and Amortization (OIBDA) (excluding brand fees and management fees) reached CZK 5,275 million in Q3, up from 5,146 million in Q2. OIBDA for the first nine months of 2012 reached (CZK 15,469 million).
• Long term financial debt successfully refinanced at a competitive pricing.

• Consolidated business revenues reached CZK 12,586 million in Q3 2012 (CZK 37,751 million in 9M). Business revenues went down by 3.8% year-on-year, in line with H1 performance.
• At the end of September 2012, contract customers accounted for 62.5% of the base, up 1.2 percentage point year-on-year. The number of prepaid customers reached 1,884 thousand at the end of September 2012, with a strong positive net additions of 29.7 thousand in Q3.
• Guided OIBDA margin (excludes brand fees and management fees) reached healthy 41.9%margin in Q3(up from 40.5% in Q2) and 41.0% in 9M 2012.
• Consolidated net income amounted to CZK 5,019 million and CZK 1,764 million in 9M and Q3 2012,
• Telefónica Slovakia maintained its strong commercial momentum reporting 19.8% year-on-year subscribers' growth (+42.0 thousand in Q3). At the same time, it further improved its financial performance.
• Record date for share capital reduction (CZK 13 per share) set for 14 th November 2012 (ex-date on 12 th November), with payment to commence starting on 14 th December 2012.
• 2012 full year guidance reiterated for all metrics .

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

Telefónica Czech Republic is a major integrated operator in the Czech Republic. It is now operating almost eight 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 launched a LTE (Long Term Evolution) 4rd generation mobile communication network as the first operator in the Czech Republic. The new network offers the fastest available mobile Internet nowadays. Telefónica Czech Republic is also a notable provider of ICT services.

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 312 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.