Nancy Goossens - Director, IR Dominique Leroy - CEO Sandrine Dufour - CFO Bart Van Den Meersche - Chief, Enterprise Segment Daniel Kurgan - CEO, BICS Geert Standaert - CTO

Paul Sidney - Credit Suisse Emmanuel Carlier - ING Nicolas Cote Colisson - HSBC Roshan Ranjit - Deutsche Bank Michael Bishop - Goldman Sachs Vikram Karnany - UBS Ruben Devos - KBC Securities Luis Prota - Morgan Stanley Stephane Beyazian - Raymond James Marc Hesselink - ABN AMRO Stefaan Genoe - Degroof Petercam David Wright - Bank of America Merrill Lynch Sam McHugh - Exane BNP Paribas Guy Peddy - Macquarie Securities

Thank you. Yes, good afternoon ladies and gentlemen and thank you for joining us on this conference call.

We trust you have all received and seen the detailed numbers by now. Just a quick reminder that all documents related to the results are published on the website, including a full set of slides.

Before getting started, allow me just to quickly introduce the participants on our side for the Q&A in a moment. So we have Dominique Leroy, the CEO; Sandrine Dufour, the CFO; Bart Van Den Meersche, for your questions on the Enterprise segment; Geert Standaert, the CTO; Daniel Kurgan, the CEO of BICS; and also Dirk Lybaert, our Chief Corporate Affairs officer.

So they will take your questions in a moment. I will pass now the word to Dominique.

Please go ahead.

Yes, good afternoon everyone. Thank you, Nancy and welcome to our conference call.

From the results that we have released this morning, it is clear that we have started this year on a solid note. I am personally especially pleased that we have maintained a very good increase in our customer base in the first quarter.

We grew our mobile postpaid customer base by a solid 44,000 cards and on the fixed side, Proximus took the largest share in the market growth by adding another 24,000 Internet lines and 27,000 TV subscriptions. This is the results of a number of elements which -- with one being the continued success of the Tuttimus & Bizz All-in offer.

By end of March we have already 192,000 customers signed up on one of those two quad-play offers. Another contributor to the overall growing customer base is the good traction from our no frills brand Scarlet.

Scarlet has achieved to maintain a more prominent position in the Belgian market and has been successful in acquiring customers that are more price sensitive. So we have both the Proximus and Scarlet brands doing well in acquiring customers and at the same time we have been able to keep the churn figures of Internet and TV well below those of one-year back.

All-in-all these allowed us to further progress our market shares in all regions of the country. For fixed Internet we now reach a market share of 46.6% and for digital TV of 36.3%.

I believe we can be proud of this especially in a market that has become more competitive over the past year. It shows that the company's hard work to improve and simplify the offers, enhance the customer interactions and provide a very good network experience is paying off and turned Proximus into a sound resilient company.

The solid commercial results are also reflected in the first quarter financials with the domestic underlying revenue for the first quarter up to 3.2%. This was driven by higher revenue from fixed data, TV and some higher mobile device sales versus a low comparable base.

For ICT too, we posted a strong revenue increase which explains largely the 4.7% revenue growth in our enterprise segment. Although we see serious competition in the enterprise market we managed to maintain a positive trend thanks to our customer-centric strategy, the quality of the network and the focus on service quality and innovation.

On the mobile front, the mobile services revenue for the consumer and enterprise segments combined ended 3.1% below the prior year. For postpaid we achieved a fairly stable service revenues thanks to our growing mobile postpaid customer base and improved tiering which could offset the price pressure from the roaming regulation.

The revenue erosion of mobile prepaid, however, accelerated in the first quarter triggered by the identification legislation and this in a market which has already in a declining trend for some years. I am proud that we achieved solid growth in our domestic EBITDA.

Even if we exclude the positive impacts from the pylon tax provision in the first quarter 2016, we grew our domestic EBITDA by 4.9% in the first quarter and this in spite of the significant negative impact from the roaming regulation. The main contributor to the domestic EBITDA growth was our ability to lower our cost base.

Our first quarter domestic expenses ended 4.9% below the prior year, again not taking into account the pylon tax provisions. Besides the continued effects from company-wide cost initiatives, this also includes the benefits from the early leave plan prior to retirement for which we had the second wave of employees leaving at the start of this year.

BICS as you know by now operates in a more volatile business and posted first quarter 2017 EBITDA of €33 million which is a year-on-year decrease by €2 million due to a lower direct margin. Domestic and BICS combined, the underlying group EBITDA totaled €449 million which is 7.5% above last year, or growth by 4% if we exclude the regional pylon taxes provision.

So notwithstanding the regulatory and competitive headwinds, we remain well on track to achieve our ambition to close the year with nearly stable domestic revenue and a slightly growing group EBITDA. We also confirm the outlook given for CapEx.

We have initiated our fiber rollout now in five cities, so the CapEx related to fiber will gradually increase over the next quarters. By end 2017 we expect therefore the CapEx to be around €1 billion.

We also confirm our dividend outlook expecting to return over the three year period 2017 to 2019 a stable dividend of €1.5 per share. Over the remainder of the year, we will further deliver upon our Fit for Growth strategy transforming Proximus into a digital service provider and focused on innovative and meaningful technologies.

It is in this view that we recently announced the signed agreement to acquire TeleSign. This will strengthen and accelerate the strategy of BICS.

We also announced yesterday a small but nevertheless strategic acquisition of the Belgian cybersecurity company Davinsi Labs. This will reinforce our enterprise segment in terms of ICT expertise and will also complete our offering in cybersecurity.

Before we go over to the Q&A, I propose now to give the floor to Daniel Kurgan, CEO of BICS to quickly highlight the strategic rationale behind the acquisition of TeleSign by BICS.

Good morning and good afternoon. TeleSign is a market leader of what is called two-factor authentication, which is digital platform user authentication by SMS, and 20 out of the top 25 Internet companies are customers of TeleSign to improve the security of their user accounts.

So as such TeleSign generates billions of SMS to all mobile network operators around the world, while we are basically connected to all these operators to which we are arriving by messaging and roaming services. So TeleSign fits completely with our transformation strategy of extending our service offerings to the digital service provider with security related services and also building a strong presence in North America.

And by doing so in combining BICS and TeleSign we are actually bridging the telco world with the digital world and create what we call the world's first end-to-end CPaaS or Communication Platform as a Service provider. We will welcome questions on that.

Thank you.

Thank you, Daniel. Operator, I think we can turn to the questions now.

I just had a couple of questions, please. Just the first question, it's now a year since Orange Belgium had launched a cable resell products and Telenet launched WIGO.

I was wondering do you think you're kind of over the worst now in terms of competing against the increased competition in wireline and multiplay and do you see the markets sort of settling down a bit from here? And then second question, it's a few months on from your fiber announcement that you made back in December.

I was just wondering if you could share with us the reaction of the regulator and the governments so far and actually do you see in the future potential pressure for you to actually extend or speed up the rate of fiber build?

So on the first question concerning the launch of Telenet in the market, I'm not sure we can say over the worst, I think there is a different marketing dynamics currently where [indiscernible] now several players which are offering triple and quad-play offer and in that sense I think it makes the markets a bit more dynamic. And what you see looking at all figures is that more dynamic market has been positive for Proximus as a whole where at one hand of the markets we are able to compete with the Tuttimus & Bizz All-in offer under the Proximus brand where we have a quite high quality more for more offer, which is gaining very good traction in the market, which as I said already 192,000 customers on it.

And at the other end of the market we are offering the lowest price of the markets through the Scarlet brand and I think that dual-brand strategy enables us to really be even more resilient and even grow our market share in a market which is indeed a bit more dynamic, but the dynamism is currently more benefiting Proximus than anything else. So I think that’s certainly how we see it and I don't think that I think the market will continue to evolve in that direction.

On the fiber announcements, I think it's quite early to say any comments on regulator or government. I think there is a very large support from the government and it has even been highlighted by the prime minister that it has launched a strategic investment plan for the country where the announcement of fiber investment from Proximus, as also we highlighted as one of the strategic investments.

So I think there is quite good support from the governments behind our investments. From the regulator today is proceeding with a new market analysis, they will normally reveal the first draft of that market analysis by the end of Q2 and we will then indeed see what type of direction the regulation will take both for cable and for fiber and other technologies, I think it is way too early to give any indication on that.

So today we are quite confident that we will be able to further invest in our fiber plan and we started already in five cities, and I think the implementation is proceeding according to plan.

Thank you. Can I just follow-up – should we understand that to mean that that fiber won't be a part of this review?

But I think you said in the past but just to confirm.

I think today the way they review the market is indeed fully the broadband market and fully the TV market. So I guess the various technologies will be included in the market review, it doesn't mean that fiber will be regulated.

I think what we have said is that we have -- we want to have a wholesale offer on our fiber and that's normally when markets are open and wholesale offer are available, there is no need for regulation ex ante. So I think this is still our understanding of what's happening but I think the market review will of course take into account the various announcements of investments both in cable and in fiber.

Yes, good afternoon. Two questions; one on Scarlet.

Could you provide maybe a bit more color on the operational performance of Scarlet? By that I mean how many customers do you have?

And if you don't want to provide that, could you maybe just indicate how important Scarlet was as an acquisition tool? So in other words, so how much percent of the net-adds are coming from Scarlet?

Then secondly, also related to customer growth, that was very strong I would say in Q1. Do you expect that run rate to continue in the coming quarters or should we see the strong Q1 or is the strong Q1 mainly related by the fact that Tuttimus was only launched at the end of 2016, and that was still helping good net-adds in Q1?

Thank you.

So on Scarlet, I mean we usually don't give things on Scarlet currently, to give you a favour, I can still say that Scarlet is less than half of our acquisition in Q1. So that if you flavoured, because as we say Scarlet has more acquisitions than in the past but still the Proximus brand is the main brand in our acquisition portfolio.

On customer growth for the coming quarter, to be honest it is difficult to give an estimation in this stage. I think Tuttimus is working well.

We continue to sustain Tuttimus, we still have several promotional activities foreseen for the rest of the year. One element that we have changed in all offer is our joint offer mechanism where in the past every joint offer was linked with one tariff plan and we have now changed that in the course of April where we are now leaving the choice for the customer to choose whatever device they want, with whatever subscription they want and in that sense we are probably able there to attract a wider range of customers on our mobile platform.

But that's currently the only changes that we have done on our portfolio, and I think I have no indication at this stage that the customer growth should significantly differ from the phasing of the previous years.

Hi just to follow up on the Scarlet. Can you explain or describe the difference if any between the cost structure of a Scarlet pack compared to Proximus branded product?

And my second question is on B2B, obviously there is a strong level of competition on the mobile side. If you could describe what's going on there and what is the plan to maybe slow down the erosion in service revenue on your side?

Thank you.

On the Scarlet, it I mean the cost structure of Scarlet is really very different from that of Proximus, that is a separate legal entity, it’s completely run as an MVNO on the Proximus network, there is their P&L, they have their own structure which is an extremely light structure. Their sales channel is almost exclusively digital channel and call center channel which are different call centers from the one of Proximus.

So we do that for two reasons. First of all, it’s to make sure that the service and the product offering of Scarlet and Proximus are still very differentiated.

So we offer way more services, way more accessibility on Proximus being it in terms of accessibility, the number of channels, the number of SLAs, the proximity to the customers, the content we offer and that's one reason why it's like that. And the second reason is of course, if you want to be profitable with a triple play price of €39 you need to be very low cost operator, and that's really what is the key focus for us on Scarlet, is to make sure that they keep completely their low cost structure, with very lean and mean over its structure, very low marketing structure and mainly extremely low cost of sales structure and on top of that, they of course have no network on investments as they operate as an MVNO on Proximus.

So that's the only reason why we are able to offer a trio offer at €39 with profitability within Scarlet.

Sorry, Dominique, just an additional question on this; would you say that the gross margin in euros term would be similar or it is still very different?

But in euro terms it's not similar. I think it's more an MVNO type of business, so in that sense you have to more to look at MVNO type of business to estimate the margin of Scarlet.

So it's indeed different from the one we have on Proximus.

Then on the mobile for B2B, so it’s indeed, I mean, so that we have a fierce competition in mobile in B2B. But we have been able to sustain our position until now based on all the elements that have been discussed earlier, mobile quality services and so further important is that for this quarter we have again been able to increase our current customer growth with 12,000 net adds.

Next to that you have the growth in data and we have a low churn and you have a higher penetration of 4G in smartphones. Having said this, you're right that the ARPU is under pressure.

Now the ARPU is under pressure mainly because of regulation -- roaming regulation where the impact in B2B is substantially higher than in the new consumer. But having said this, also next to the roaming impact and the roaming pressure we also have indeed competitive pressure.

I mean actually we have two elements -- there is competitive pressure and especially in the corporate markets and then you have medium enterprise, you have customers more moving into smart enterprise bundles, so that there is less part of bundle revenues, which in itself is an evolution still that we are encouraging. So but that is basically it.

So now how do we intend to manage this? So roaming -- roaming will have in the second quarter a little less impact because it started in April of last year but then you have the new roaming regulation coming on June 16.

And next to that competitive pressure we have actions around smart pricing, this has allowed us to sustain our position.

I have question just on the enterprise segment again, but mainly on the fixed side, you previously said that this segment has suffered from quite intense competition. Now this quarter you delivered strong results with the ICT revenues, if I look at the phase-in, seems to be a quite fund, no debt quarter, previously it’s mainly been back – we’ve seen slightly a change in dynamics in this overall segment or is it just a question of phase in through this year?

And secondly, just on Proximus side, can you explain why you work state of the art on the Belgium soccer rights please?

On your first question, just to be sure that I understood your question very well, is your question whether the ICT performance will be sustainable over the next quarter, is that your question?

I guess through the year because I think it was quite a strong quarter delivered today, what we see in a change in phasing, or –

So indeed we have a very strong quarter in ICT, so actually we have a growth of 16% quarter over quarter in ICT. Now as I said before ICT business is a bit, how would I say, less predictive than it is for the telco business because there's also link to profit sales.

And so we had a very good quarter in product sales which is not itself a recurring business but next to that we also had good results in security and cloud outsourcing services. But having said that it's not to be expected that the 16% growth is something that is going to be repeated every quarter.

And so on the football rights, I think the main thing I want to say is that we are quite happy that for the time being Pro League has re-conducted the model that we had for the last three years, so that's the football rights given in non-inclusive basis to the various telco operator and that they have not been given for instance to Eleven Sports Network which would be then a different model. So I think that certainly what we highlight and where we are quite happy with.

On the other end, you’d probably read in the press that there is already an agreement with Ruh [ph] and Telenet on the Belgian football rights, but not yet with Proximus. I think it is just a question of a few weeks where we are still negotiating the price for that.

I mean our position is that we try to get those football rights at the lowest possible price to still be able to offer them at a very affordable price to a big number of customers and that’s still a discussion that is ongoing. So I think it’s just a question of a few weeks before you will hear more on agreement of Proximus with Pro League on football rights.

Yes thank you. Just two questions for me.

Firstly, I was wondering if you could give us an estimation of how far you're through the prepaid registration and effectively how far you're through the potential impact of that whether it can ease throughout the year? And then secondly looking at the three play average revenue per home, it seems to have fallen by two euros a month, and despite the price increases in January.

So I was wondering if you could give us a little bit more color on what's happening there. Clearly there might be some impact from more Scarlet customers but I was wondering if there is anything else?

So on the prepaid I mean we are so far around 70%, so 7-0, 70% of our customers that have registered themselves. I think we are in the process now of almost sending SMS almost every week on the one that has not registered and we see of course an acceleration on the last week.

So we still have good hope that we will be able to identify the very big majority of our customers there. On the triple play, it’s true that the main reason for the revenue decline is mix.

It's a mix between Scarlet and Proximus and price increase -- I just want to highlight that the price increase we have done in the beginning of the year was mainly on old products and mainly on single play products, to push the people towards more triple and quad-play products. So you don't see so much price increase specifically on the triple play and the decrease you see is mainly linked to mix.

Yes thank you. I've got a couple of questions as well.

Let’s see on your savings outlook for this year, how should we think about the phasing for rest of the year after the strong Q1? Your outlook of slight EBITDA growth for 2017 would imply that we have a significant drag in second half EBITDA which I guess is coming from roaming unless your targets are conservative, so we should expect still some cost savings to come through in the second half which would imply that there could be upside risk in terms of that outlook?

Secondly, in terms of fixed line regulation, I know there's a lot of noise and you don't want to make a lot of comments on that. But should that regulation change to cost plus, will have some implications on your CapEx profile do you think with more pressure maybe to defend your position and will you kind of change the mix in terms of your CapEx or would you be kind of thinking about increasing that CapEx envelope maybe at a faster rate?

Just wanted to get your thoughts.

So I will take the first question on your question on the phasing of cost saving and the outlook. So as you saw Q1 was certainly helped by the fact that we didn't have in Q1 -- we had in Q1 last year provision impact from pylon that we did not have in this quarter, that helped certainly the OpEx decrease this quarter.

But regarding seasonality, you have to bear in mind that we also helped in this quarter by the fact that we have two wave of early leave plan which are impacting the numbers. So we had the first departures which took place in first of July 2016 and the one first of January this year.

And when we get further down in the year as of July this year we will we have just one wave in terms of comparison, so that that's one element. The second element is that we are expecting some wage indexation as well as of July this year that will have an impact when you will be comparing Q-over-Q OpEX reduction.

So that’s on the side of the OpEx. On the side of the top line and margins, certainly Roam-Like-At-Home is something that will hit us harder as of mid June this year and that will put some pressure on the balance of second half of the year.

And you remember that we said that we were expecting an impact – the total impact for the year of 61 million for the Roam-Like-At-Home and we were in Q1 the impact was 17 million. So there's certainly more to come in over the next quarters.

And when you add all these elements both on top line and on the OpEx line that explains the outlook for the rest of the year.

So on the move to cost -- so I think you referred to the fact that cable price currently is retail minus and that there is some discussion or at least it is very much pushed from, or go to cost price. I think first of all I don't think anything will come through before the end of the year because we will first have the markets review, first draft by end of the second quarter and then you still have quite some process to go through with the regional regulators.

So I don't expect any movement on that before the end of the year but more generally I don't think we will change anything to or CapEx and or spending if that would change. And so we would speak to our current plan independently of the regulation of cable.

Yes good afternoon; thanks for taking my questions. First on handsets, throughout Q1, it seemed that you sort of captured your foot on the gas pedal in terms of asset sales, it’s somewhat different from your peers who have rather taken aback in pushing the assets.

Should we read that, that the promotions remain a priority to attract new customers in the mobile market or should we assume that it is rather an inter-year phasing effect in that now you’re subscribing acquisition costs should normalize throughout the year? The second question regarding mobile competition.

So lately there seems to be an increasing competition in the mobile market, Yahoo introducing eight year old data boost option for 8GB base doubling, data allowance, I guess Orange Belgium yesterday gifted 1 gigabyte for free, so how would you see the competitive landscape in 2017 to what degree do you believe your current postpaid portfolio is set up well to further drive upsell?

So concerning the handset, I mean you need to know that the handset sales is not only handset sales in our own shops or use for promotion and we have a big part of the handset sales which are sales to order in direct channels. And so a big part of that increase on handset sales you see Q1 this year versus last year is the fact that we have really increased significantly the number of handsets we sell to third party players in the Belgian market.

So our promotional share of handsets has not particularly changed versus last year. Concerning the increase in promotional activity on data, it's true that we see some movements, mainly weak operates that have low base on postpaid, so it’s mainly routes and -- where the really there I think who mainly try to get some position on the mobile and starting from a very low base and where this is very much a prepaid operator and when they try now to in the identification – prepaid identification phase to try to move people up to postpaid.

So I view those elements mainly as specific movements from some players to either get some mobile or move people to postpaids. It's true that globally speaking Belgium is still on a relatively low usage of data.

I think if you look at all people on our network 4G consumption on average is around 1.3 GB per month, so it’s still low and we have of course to see and follow the evolution of consumptions and usage and we'll make our offer evolving function of the users where one element will also be the similar where people for the first time will be able to roam with local tariffs and could also have an impact on data, but at this stage nothing foreseen.

And if I could just have one additional question please, for BICS. So similar to last year you’ve seen high volatility in the voice business, some of it was compensated by the shift toward number service last year.

I guess the trend has somewhat moderated versus that run rate last year. So just wondering does it have a particular reason or is it basically just an effect of the lumping in revenue generation of the BICS business?

Well, the voice business is a bit volatile. As you know overall the volumes we think are still good because we keep gaining market share in a market which is declining.

Now the CapEx mix is a bit different. We are, as you know, very strong in Africa, and in Africa there is strong pressure from the OTT and you see CapEx decrease in everywhere, we’ve compensated that with more traffic towards other destinations when there is still growth, but at lower prices and that explains a bit different.

Messaging will be the same, I mean we’ve got the A2P messaging that keeps growing while the P2P messaging no surprise is in decline and that explains the movements but they are not very big and the same time we keep conforming the business with new initiatives on the roaming side, cloud communications that’s getting traction but of course takes time to offset to its decline in structural part of the call.

Yes thank you; two questions please. First one is on churn rate which I have seen a slightly going up in the first quarter.

I am wondering if there's anything specific behind these or is just increase due to competition? And I know that the increase is not big but it is like a change in the declining trend of the previous quarters.

And the second question is a bit theoretical question on regulation on this retail minus versus cost plus. You were already answering the question saying you're not going to change CapEx or spending on the back of these or not expecting to -- the question is more whether if regulation was moving to a cost plus, there's a risk of widening the gross margin available for Orange and this might turn into a more competitive landscape in broadband and putting some risk on pricing?

How would you see that? Thank you.

So concerning the churn rate, I think what we see is rather a reduction of the churn and that's certainly on the fixed segment. If you look at Internet and TV, your churn rate is significantly lower versus last year.

If you look at mobile, you have a mix between postpaid and prepaid where I think churn on the postpaid is also lower significantly versus last quarter. The only place where churn is slightly increasing is on prepaid but that's mainly due to the end of anonymity and a lot of people not renewing their prepaid subscription.

I think for me the churn today is much more an element of satisfaction where next to good at tradition, we also see a reduction of churn which is very important because it means that you can continue to leverage the business with much lower acquisition costs. So that’s for me the element on churn.

On the retail minus, to be honest when you listen carefully to overall, mainly the comments they give to analysts, is that they have already anticipated the cost plus regulation in their offering and I think today they don't make any gross margin on their offer at 49 or 39 with high mobile, and I think if the regulation would go to cost plus, I don't expect the rush to decrease their pricing. Secondly they would probably use it to give probably more body, and more features in their offer but I don't think they would lower the price and I think also longer term for the markets, if we want to keep three operators, which is somewhere also the willingness of the regulator, I think it's good if all can have some margin on their product.

Yes thank you; just one question on TeleSign. I think I guess I'm trying to understand what extent it is a, let’s say, a game changer for Proximus in the international B2B market.

So in terms of strategy and perhaps in terms of financial, are you sort of able to share some data with us in terms of what is TeleSign’s market share in its addressable market and the size of its addressable market? I suspect the market and the focus will remain on the sort of e-companies, so sort of Internet companies rather than try to compete in the overall multi-national space where we see Orange, BT Global Services, T-Systems and perhaps you could confirm that?

And then in terms of financials, can you sell more on terms of what sort of revenue growth momentum is currently, so not over the last three years but currently that you are seeing at TeleSign now and the possible cost synergies and margin outlook that that you would be hopeful to see from this company?

First of all, your assumption is correct. The core market of TeleSign will definitely remain the digital platform and certainly not the multi-national even if, well there are some verticals where we see traction, I think we see two axes on the one hand, SMS authentication, it provides a lot of white space due to the fact that there are not so many users that they do it while the digital platform promote this heavily.

So there is still a room for significant growth with the existing customer base. On the other hand, TeleSign has 500 internet companies as customers, they are very strong in APIs and they have developed all the set of APIs to interact with those platforms and we can extend especially with our capability the messaging services authentication to the more general, reminder and notifications which overall is nice and bigger.

But when it comes to CPaaS services, well I mean I'm just feeling to some specialized analysts on the other side of the Atlantic they foresee a tremendous growth in a market where today TeleSign is clearly the number two. And while it's difficult to assess exactly the market shares, is because there are no data into that but it’s in today's world -- I mean a double digit market share right, but it’s in a market which is called to grow significantly.

Now in terms of similar lead, I mean we are not disclosing numbers but obviously when giving TeleSign access to our reach to hundreds of mobile operators worldwide, I mean that would definitely improve, I mean the profitability from the cost of goods sold perspective also giving us more bargaining and market power into the messaging market to the high most of the news but also at the higher profitability which is of course at the highway for the acquisition.

Thank you and just a follow up if I may, sorry for my ignorance on TeleSign. But can you tell more on the sort of geographic breakdown of clients currently?

I'm just trying to understand out of the 500, how many are in the U.S. or in Europe?

Most of digital platforms are in the U.S. So today developed customer – is above 80% of customers are U.S.

located, or HQ is U.S. located, then the rest is present of course as you can imagine in Europe and Asia.

And obviously I mean now with big switches I mean, they are European, I mean we think we can -- I mean cater more of this platform – when I say the European market, and the other ambition is to get up to doing phase-in the promising Asian markets which are the three regions where there is growth. But today above 80% of customers are not America based.

First question is on mobile. Can you explain or tell a little bit more about how the data usage at the moment, means increasing rapidly but are you approaching, have people filled up -- and if they have to upgrade?

And also in relation to that, do you think that is off-trading rather soon or that you have also a tendency to increase the buckets as was done by the competition? And secondly, also on TeleSign.

Also to come back on that one, if it's a really strategic change; does it mean that you are looking now to also to do other acquisitions in this area outside the core business that you have been in BICS? And finally, you extended the long running contract with Vodafone; does that change anything for you financially or also strategically or is it just a simple continuation of the contract that you already have?

On the mobile side, I think the average usage today on the 4G bundle is 1.3 GB where or entry bundle is at 1G per month. So I think today there is still for us an opportunity to increase smartphone penetration and increased consumption of the customer.

To give you an indication there is around 10% of our customers that are doing out of bundle today. So it is still relatively low number.

So you can immediately derive from that the second one, I think it's -- I mean when I say this will follow the usage to see how we have to do the tiering but I think today it’s too early to give any indication on that elements, today and we see the competition but today we speak to what we have.

On TeleSign, well again as I explained at the beginning it fits completely with our strategy and as the company and we're buying a profitable business. We're going to first concern the data and extracting the value from the acquisition.

Our market is consolidating and I expect -- I mean a lot of movement in the years to come, so we cannot exclude -- certainly not being part of this, it makes sense but we are not announcing that we are launching a series of acquisitions, certainly not.

And on Vodafone, the partnership so for us it's indeed a strategic partnership, so that's why we have signed a five year extension with Vodafone and it has confirmed that from both parties, it’s considered as a strategic but it’s changed something financially not really because from one side it is an extension from the existing but from the other side, we also have defined a number of areas where we will explore further expansion of our partnership and so that should -- that can bring an additional change in value from this contract.

Two follow-up questions. First on the higher allowances, we've seen some data bundles from competition.

I understand, if I read the answers correctly, if you've seen virtually no impact on your customer acquisition or churn in the mobile from these offers in the last couple of weeks or months? And secondly, coming back on the Scarlet Proximus you indicated that you saw even churn or churn going down compared to last year and we understood from Orange Belgium actually that they were gaining market share from or gaining customers from the different players corresponding to their respective market share.

Have you really seen this impact which was indicated given that your KPIs are strong and churn is down. And as an add on to this, Orange expects to the same number of net additions towards 100,000 on the triple play in the second half of the year; do you expect the same I would say market momentum and competition in the second half as you saw in the first half?

Thank you.

So indeed I mean the first question was about mobile data bundle. I think so far we haven't seen a lot of churn from our mobile customers to competition because of data.

The only exception where we see a bit more close-out is VOO where the bundle that come with, which is 8 euro for 8 GB has got some more traction than their previous offer. But for the rest we don't see important movements on port out on the mobile.

Your next question is about the same, but mainly on the fixed side. I guess, I hear as well that or are seeing that they gain customers from all operators in all region, the only element that I can give you that -- so much impact on port-out to Orange from all networks, I mean I think all figures both in terms of acquisition and in terms of churn, prove that we are currently well protected from churn to Orange.

What we have in our estimation is that the gain that Orange has is mainly coming from cable, it's also of course due to technology, easier to switch from cable to cable, they don't need to send technicians, they can recuperate some modem of the cable to make their offer run. So I think both from a customer point of view it's easier but also from Orange point of view, it is less costly to move people from cable to their offer than to move from Proximus where they need to send technicians and like that.

So I think both element, the customer side and the operator side, indicates that the Orange success -- I mean the 50,000 people they’ve got is mainly coming from cable. What do I expect for the second half?

To be honest I don't know. I think Orange has come quite forcefully in the market with a lot of commercial means.

I mean there has been extremely presence in terms of TV, in terms of activation, so I think the success will also depend a bit on how much means they have to continue this acquisition where I assume that today with the current retail minus pricing, they don't have a lot of margin. So it will very much also depend on how much extra fire power Orange is able to put in the market.

Just a couple of checkpoints, so the guidance excludes TeleSign, I would assume so we just need to do a little bit of adjustment given that the guidance is obviously given before the tail, if you could confirm that. And could you just give us the margin for TeleSign just for our modeling purposes and possibly even some kind of indication on CapEx to sales just so we can have a decent shot at bringing up that business into the financials?

Thank you.

Indeed guidance excludes TeleSign and by the way we don't know when we are going to close this transaction because it's subject to a certain number of conditions that do not -- one of them being the antitrust but the other one being the issues examination in the US. So time wise it's not possible for us to assess when we close the deal.

And related to some financials we don't plan to give much more detail, I think when we close the transaction we’ll see how we help you integrate these numbers in the BICS projection.

Just two quick questions; number one, in the consumer business, could you talk a little bit about that Net Promoter Scores, whether you are seeing material uptick in Net Promoter Scores to Tuttimus customers, whether that Net Promoter Scores are generally trending up or downwards? And secondly just on the B2B side, can you talk a little bit about the margin differential between your historical traditional telco business relative to the ICT which is obviously growing a lot faster, is that materially different margin in those two businesses?

I guess your first question was related to net promoter scores. We calculate net promoter scores but we don't give those figures, the only thing I can say is that we track really very thoroughly the customer satisfaction and that we see that over the last quarters we have been able to significantly improve customer satisfaction, also not only related to service level but also related to the quality of our new TV interfaces that we launch beginning of next year where we had some small issues at the beginning of the launch but today we see that people are really very satisfied with the new TV interfaces and also we have put really -- a lot of efforts to put our customers on the latest available technology in terms of fixed.

And so those two elements, way better Internet of the best internet connection and the new TV interfaces that significant improved our net promoter score on the residential side. So they're definitely positive figures.

And then on your question on the margins for the B2B, so it's no secret that margins in ICT are fundamentally different than the margins in core telco. And you see this is also in our figures where we have a revenue growth of 4.7% in revenue driven by – for a large part by ICT but at the same time we have a slight decrease in direct margin of 0.6%.

So indeed, I mean we have a changing portfolio mix and the margins in ICT as this is also very often are more people intensive business, are different than the telco business.

I just wanted to follow up on the churn comment from earlier. I know you’ve mentioned a lot about not seeing a major competitive impact from Orange on the fixed line side.

But I'm just wondering whether you feel that actually on your mobile assets you’re going to start to see a little bit pressure especially as the base business within Telenet gets more material and whether churn, whilst they haven’t moved year on year that’s largely probably down as much mathematics as anything, whether you expect sort of industry churn to pick up in the wider segment going forward? Thank you.

So I think on the mobile, I mean currently our churn is a bit lower than last year but the churn on mobile is very dependent about the promotional intensity of the market. So what we see on mobile is in Belgium we have no contract apart for people taking their subscription together with a device which is not the majority of the markets, we see much more propensity to mobility and to churn.

And that figure is very dependent on mainly on the promotional activity, not always so much on the offer themselves but very much on promotion. So it's very difficult to give any estimation or expectations for the rest of the year, it will very much depend on the commercial intensity and promotional intensity of the market.

But for a residential area, I mean on the enterprise of course these are still contracts and that’s a very different dynamics but if you look at churn within consumer, it's very much depending on competition.

Yes. Hi I have one question left actually.

On the regulatory change -- potential changes, so if there would be a move from retail minus to cost plus, what could in your opinion be the impact on the whole pricing because on the one hand you say that that Orange bottom is loss making, on the other hand you say that they anticipate the change to cost plus but I think that Orange Belgium is saying that the wholesale price on a cost plus basis needs to move towards around €12 which would be more or less half of the current pricing. Is that something you believe also?

I don't think it's up to me to answer that but I mean the indication that we have between the retail minus and cost plus is not at all in the range of €12, it’s much more in the range of copper wholesale plus 20% premium something like that. So I don't think it's at all in those areas.

I don't even know where it would come from. And so if I did myself on the figures that we have, we don't expect big impacts on the retail pricing from that.

And the copper wholesale, could you remind me the current pricing of that?

We will give you that offline, if you want. End of Q&A

Thank you all for participating in this call. If there would be anyone with follow-up questions you can obviously address them to the investor relations team.

Thank you and have a good weekend. Bye.