Nancy Goossens - Director, IR Dominique Leroy - President and CEO Sandrine Dufour - CFO Guillaume Boutin - Chief Consumer Market Officer Bart Van Den Meersche - Chief Enterprise Market Officer

Ulrich Rathe - Jefferies Nicolas Cote-Colisson - HSBC Alexandre Roncier - Exane David Vagman - ING Roshan Ranjit - Deutsche Bank Michael Bishop - Goldman Sachs Paul Sidney - Credit Suisse Ulrich Rathe - Jefferies Nicolas Didio - Berenberg Guy Peddy - Macquarie

Thank you. Good Afternoon, ladies and gentlemen and thank you for calling in.

We have published all documentation on the results this morning. So I think that everybody has well received.

These are found on the website. We trust you have seen the published numbers by now.

So for this call we will reserve maximum of the available time to answer your questions. On our side we have here present the CEO Dominique Leroy and CFO, Sandrine Dufour, as well as other members of the Executive Committee.

And they will take your questions in a moment, but before we get to that part, we will start with an introduction of the CEO. So please Dominique, go ahead.

Thank you, Nancy. Welcome to everyone our second quarter conference call.

I will start by saying that I am and we are all proud of the results we announced this morning. They show continued growth of our customer base for our main products.

While we operate in a competitive environments, we achieved to further attract customers on our Internet offers and our TV platform, supported by a continued good traction for Scarlet and for the Proximus-branded all-in offers. By end-June, we totaled 439,000 Tuttimus and Bizz All-In customers and we're able to further growth of foreplay customer base at a higher revenue per household and having lower churn levels.

We are especially happy about the growth realized for mobile postpaids, adding in total 45,000 cards over the second quarter. This mainly reflects a successful marketing campaign around the World Cup and the Red Devils team.

It also reflects another good quarter for enterprise segment which gained 11,000 mobile cards, underlying its solid position in the market. This was also visible in our strong ICT growth, supported by the investments made to strengthen our ICT portfolio, offering services that go well beyond pure connectivity.

On top of the solid organic ICT progress, we also benefit from the acquired small but highly specialized companies that are especially helping us in deploying meaningful solutions and accompanying our business customers in their digital transformation. These strong commercial achievements have led to a positive revenue evolution for our domestic operations, up by 0.8%.

Through up selling services to customers and targeted price increases, we successfully more than offset the headwinds such as the Roam-like-at-home pricing and the ongoing erosion in fixed voice usage. At the same time, we continued to manage our direct and operational costs leading to a strong domestic EBITDA performance growing by 5.5% for the second quarter, including a net loss in roaming direct margin of €13 million.

Our International Carrier Business, BICS closed a firmed second quarter too, with its direct margin growing by 18.5% and EBITDA by 12.7%. This was strongly supported by the consolidation of TeleSign.

This combination visibly boosts BICS' strategic ambitions in the growing application to platform markets, while meaningful synergies are being delivered. As a result of the good EBITDA progress in domestic and BICS, the underlying EBITDA of the Proximus Group for the second quarter ended 6.1% above the comparable period of 2017.

This is slightly ahead of our expectations with some one off tailwinds included in the consumer direct margin. Based on our estimates for the remainder of the year, we reiterate our full year guidance of flat EBITDA growth for the Group and nearly stable domestic revenue.

We also reconfirm that the CapEx for 2018 is estimated to be around €1 billion and that we intend to return off the results of 2018 a gross dividends per share of €1.5. As a final point and I think you have all picked us up in the press and even yesterday evening on the BIPT site, the federal government has decided to open the upcoming spectrum auctions to a fourth mobile operator.

With this decision, we will anticipate the outcome and work on different scenarios that we will take into account for our new 3-year strategic plan. With this, I have covered my introduction and propose now we start with your questions.

Thank you.

Thanks very Ulrich Rathe, Jefferies here. I have two questions if that's all right.

The first one would regarding the sort of cost trends in the second half. Obviously your H1 performance is now fairly solid, and you've raised your guidance.

So could you maybe highlight what effect might sort of come into second half that prevents you from turning a bit more positive on the full year? And the second question, if I may, is on the, on this sort of regulatory effort at the moment to reserve spectrum and create a case for a new entrant.

I'm just wondering how with everything we know now and it's not complete knowledge as I understand it, how realistic do you think is it that somebody actually takes capital on hand and takes up the offer? Do you think that is essentially we're just discussing the conditions under which this will happen or is there sort of a realistic scenario that there won't be a new entrant after all?

I'm not talking about sort of normative whether it's the right or the wrong thing to do -- just your feeling of how likely it ultimately is given everything we know now? Thank you.

Okay. On the first question, this is Sandrine speaking.

On the cost trend in the second half, I think I just want to highlight the fact that we are still operating in the framework of our global guidance regarding the cost reduction, which is a guidance we gave for last year, decreasing the total OpEx by €160 million between 2016 and 2019, that we've delivered a strong portion of that over the first 2 years in the first half. And that we continue on delivering this guidance, including on the second half of the year.

Now regarding your other included question on the guidance, maybe, it's worth that I highlight a couple of differences between H1 and H2, which is not just related to the cost aspect. As you know, in the first half, there were some one off that I'm sure you've picked up in the Q2 numbers that we've disclosed that won't be repeated.

But beyond this, we had a price increase last year, bit small in July, but also the more formal strategy which started in August,. And this too will annualize.

So that's, I think, one element that you should not to forget when you look at H2. There is another element that was also highlighted in our report, which has to do with the roaming.

There is no more price impact expected in H2 related to the roaming. Because the no roam-like-at-home is annualizing -- has annualized actually in June.

But what we see is that we will continue to observe the consolidation of some options from our enterprise customer in the roaming. And we also see that the traffic growth item for data for roaming out is accelerating faster than the traffic pattern for the roaming in.

And this traffic growth in the roaming out creates no extra revenue while it creates extra cost of goods sold. So we've highlighted that this impact is also potentially a higher impact in the second half of the year versus for the first half.

And maybe last and more on the cost aspect. You should have in mind that we are expecting a new taxation that should happen before year-end.

That's comes as well with negative impact. And there are a couple of other, I would say external elements to have in mind as well.

We still expect the fixed combination rates to potentially come. And all these elements extend potentially, the trend between H1 and H2.

Okay, Dominique speaking. So just one complement on the guidance.

I think on guidance it's relatively broad. And I think when I look at the consensus, which has been put forward, I think the main message I can give is that we are indeed providing higher figures in Q2 than what was expected.

And what we would say that the Q2 better figures are in the bank as we sometimes say so that you can of course relook at your full year consensus, including the better results of Q2. Just to highlight that the good performance and also say that this performance will indeed translate in the year results, despite the fact that what Sandrine said on lot of elements, which indeed has to temper a bit or enthusiasm after the Q2 results.

So that's for your first question. On the second one, regulatory efforts for new entrants.

To be honest, for us, it's extremely difficult to answer that question. I think we are rather happy that you have been able to see the conditions, that been decided, thanks to the dedication that the BIPT disclosed yesterday.

So it makes it more transparent for all of us. I think you've seen these conditions that there is quite some spectrum reserved for a new entrant.

And I think that's indeed something that is not a trivial and certainly that also some spectrum which is currently fully used by the MNO is relocated to a new entrant. And that will have an impact on our network and will enable the new entrant to come in with some good spectrum.

On the other side, it's true that the coverage obligation although slower and lower in the first phase come into the same level of obligation coverage after 8 years. And that's new, because in the previous elements we received, it was 10 years.

So that has been reviewed in the last negotiation round and that makes it indeed for a new entrant, a more difficult tasks to achieve. And we'll ask the new entrant to put a bit more money on the table to build the network on the 8 years periods.

Apart from that, I think Belgium is a relatively small market. We have already 3 MNOs.

And to be honest, thinking of such a sizeable market with 4 networks and 4 operators. I think it's something that is not sustainable.

So I think in the long run, I don't believe that this market can support four operators. And then the question is what could be the strategy of a potential for entrants to enter and then to exits or to partner with someone else.

And to be honest, I am not in a position to give any answer on that. And that's more probably up to you to ask other potential entrants that question.

That's great. Thank you very much.

Thank you. Hi.

My first question is on the broadband market with the weak net adds for the quarter. I was wondering if you could share how much of gross adds is achieved with Scarlet?

And if you think it is still an efficient tool to fight back competition in your view? And my second question is on TeleSign.

The fact that the purchase price allocation is not yet completed, what is that? I was just wondering if you had any positive or negative surprise after the acquisition?

Thank you.

This is Guillaume speaking. On the first question, as you say, the broadband markets in Q2 has been very soft, not a lot of volumes in the market, not a lot of gross gains, not a lot of churn.

So this is what characterized the market in Q2. At that stage, we achieved a nice customer growth on broadband internet.

And again, we truly think that using these two brands strategy with Proximus and Scarlet is the right strategy. As you can see, we are still able to grow on our average revenue per home, which is a good sign that this strategy is value accretive for the Group.

Okay.

Nicolas, this is Sandrine. So on your question on purchase price allocation of TeleSign, as you know, we have 12 months to finalize the work, which is largely done.

The only reason why we've not closed the exercise is that because we're still waiting till Q4, which with the time that we have to look at your tax losses carried forward. So that's it.

Okay, cool. Thank you very much.

Maybe if you don't mind just to follow up. In terms of timing for the fourth entrance, at some point, every operator will have to register for the auction.

Do you have any idea when it could be that January, February next year?

No, I mean the timing has shifted, because indeed today there is a proposal that has been ratified by the Council of ministers. But as Belgium is a special country with federal and region, this proposal needs also to be validated by the regional regulators, needs also to go into the parliament.

And only after all that that this can be really transferred into an official Royal Decree. And then only can the BIPT publish the execution modalities for a new entrant.

So we expect that new entrants could potentially have to register by June-July next year. And the auction would be, would taking place at the earliest, by October 2019.

So we unfortunately, will need to live in uncertainty until June- July next year before we will know if there is a fourth entrants in who that fourth or the various fourth entrant would be. So that is a timing, which is currently we think the most realistic one is mid-next year for the application and October next year for the auction.

Okay. Thank you.

Very interesting. Thank you very much, Dominique.

Thank you very much for taking the question. I was just wondering if you could maybe give a little bit of color in particular to your commercial performance in Q2.

So as you already mentioned, broadband was a little bit soft. But we saw mobile being still quite strong and resilient.

I was just wondering if there was any particular impact from the World Cup and maybe your partnership with the Red Devils? And then secondly in about fiber, we've had a lot of price speculation regarding fiber networks being deployed.

You recently just passed like a new agreement with Flanders for Network of Future. But I was wondering if there was anything in the pipe for Wallonia as well, given that, I mean, we've heard and there's been a report about net issue, and look at all utilities also being interested in digging up fiber and --.

Thank you very much.

Guillaume speaking, on the mobile postpaid performance, as you mentioned, I think we did a great job on the Red Devils campaign. And it has been greatly executed during the 45 days of the World Cup.

But it's not only the attraction of our commercial offers, but it's also improving trends on churn rates. That adds us also achieve this a nice postpaid customer growth.

And then this is Bart peaking. for the enterprise, also there we have a very good performance in mobile.

Actually in this quarter, we're growing again in mobile services, which is quite remarkable. Thanks to a number of elements, of course, and we're still the growing path.

So we added 11,000 new customers. And we're crossing the 1 million milestone of mobile cards in enterprise.

But at the same time, we have a growth in the data usage, mobile data usage and low churn, which again confirms the quality of our network in our services. So those elements together make that we also have an enterprise is very good mobile performance.

And Dominique speaking, concerning your question around fiber and the new agreement with Flanders. First, I can just highlight a bit what has been agreed that you probably have read that there was some questions from the Flemish government to see if they would themselves put some money in financially healthy in the potential search network, which is of course something there is well where we had a lot of question marks, knowing that for the time being, they are already two fixed network in Flanders, one on the co-op we did with Telenet and ourselves with Proximus with fiber up to the speed cabinets.

And the recent announcement of bringing fiber to every homes and enterprises, I mean to the level of what we have committed to. And I think these agreements reflects mainly I think the constructive and good discussions we have had with the region.

While we have highlighting what is really our plan, that our network is open, that our network is open at commercial conditions which are currently having a good a take-up from wholesale. And we have, I think today already agreement with around 8 wholesale suppliers for our fiber network.

So by being able to explain more in detail, our coverage plan for all city and commune center or coverage plan for enterprise and the openness of our network with some already made commercial price agreement. I think we have been able to convince Flanders.

Telenet has done the same at their sites, that there was no need to put more public money or to put public money in building another fiber infrastructure. So I think it's a very good outcome.

And I think it comes mainly from a constructive and good discussion. There is never been on the Wallonia site, any questions on the same subject?

I think in Wallonia people understands that there are two networks, the one of NetEase, the one of Proximus. And that we are deploying the Network of the Futures in Wallonia.

And there, at that site's there has been no question on should there be extra public funds to finance that network. So I think there is no need in doing an agreement with the Wallonia region because that question is not on the table and we haven't heard of any initiatives in that sense.

That's very helpful. Thank you.

Thank you.

Yes, good afternoon. Thanks for taking the questions.

I have two basically. The first one on the fourth operator possibly.

So I understood that they need to achieve 30% population coverage within 3 years. I was wondering what does that mean in terms of roaming agreements with existing operators?

And will those agreement be on a commercial or regulated basis? And then secondly, on the memorandum of understanding with Minister Mathias Alexanders [ph].

So just for clarification, should we understanding that this does not for affect your fiber for enrollment involvement plan. Thank you.

Could you repeat your second question please? Just was not clear.

Yeah. Regarding the memorandum of understanding with Minister Mathias rollout.

The question you just answered. I just wanted to clarify whether that does not have a material effect, let's say on your fiber for Belgium rollout plan.

Because there were some headlines that download speeds will increase to 1 gigabyte but per second by 2020, that sort of thing. So just wondering how that affects your CapEx envelope?

Okay, thank you. So concerning the fourth entrant, I think in the draft resolution, I mean there is no specification for commercial agreement on roaming.

I think this will be up to the new entrants and the current MNO to see if they want to sign any commercial roaming agreement. The only imposition there is there, obligation there is, is that as soon as the new entrant has reached a coverage of 20%, if there is no spontaneous commercial agreements, then the BIPT could impose to provide national roaming to one of the operator as a condition, which is the retail minus.

So I would say it's stick behind the door that if there are new roaming agreements on the commercial basis, there is a possibility for the regulator to impose a national roaming to one of the operator as soon as the new entrant has reached 20% coverage in the country. Concerning the MOU with Flanders, I mean, so far we haven't changed the rollout plan for the fiber.

I mean, our current plan is still aiming at covering all the city and community centers of the country and also of Flanders. There has been no change with the minister.

Of course, our plan currently is foreseen for the next 10-15 years. And we will then see afterwards if there are new technologies or whatever to go further, but for the time being our commitment is in line with what we have said to the market.

Thank you.

Yes, thank you. Good afternoon everyone.

Thanks for taking my question. I've got two.

First on the BIPT and the mobile auction last month, I just wanted to ask you basically whether you think that respecting the new national coverage obligation of 99.8% versus 98% today, I think will force you to increase your CapEx plan for the, let's say for the coming years. And then my second question on the guidance, if you could give us more clarity on the flat EBITDA growth guidance in particular that the thresholds that you have in mind, whether this is low-single digit growth or mid-single digit growth?

Thank you.

Okay. So concerning the coverage obligation for the existing operators, I think, indeed currently the obligation is 98.

I think if you look at the current 4G coverage, we are already providing a 99.8% coverage outdoor. So that do not change.

The question is indeed more relevant for the 700 megahertz where we indeed there is well reaching coverage of 99.8 after I think two years. Indeed we are looking at it currently.

And it will also depend very much how it will be measured. And that's not very clear because it's a new spectrum bands.

And so we need to have some discussions with the BIPT on how the measurements of these 99.8% coverage will be done and in function of how the measurement will be done, it could have a small impact on all foreseen rollout plan, but that's mainly for new bands. While on the existing, we are already at 99.8 on outdoor coverage.

Concerning the guidance, I don't think I can see anything else than I've said before, which I think was rather precise seeing that if you look at the consensus that has been provided by the analyst, you need to take into account the better results of Q2 to come to a renewed annual guidance. And I think that's the more precise guidance I can give on what we think a flat EBITDA growth means.

Thank you. That's very clear.

Thank you.

Hi, good afternoon. Thanks for the questions.

Just to go back to the Flemish agreement, is it possible to understand if there are any difference specifically to the Flemish region to the commitments made to the wider Belgium coverage? And did you, or are you considering some form of co-investment in the Flanders region?

And secondly just on TeleSign quickly, is it possible to get the contribution of TeleSign in the quarter? I think you had previously said, I think at the end of 2017 you had a mid-teens type revenue contribution in that.

Thank you.

Yeah. So to come back on the Flanders' memorandum of understanding, there was no specific commitment to any coverage.

What we have agreed is that we would need to cover as foreseen all the city centers and the community centers in Flanders. There is also no elements of concerning co-investments at this stage.

So I think the memorandum of understanding still opens up any change possibilities. But what we committed for is in line with the plan.

We have a reveal to the market last year. And I think if you look at both the coverage that will be provided by coax and by fiber on Proximus, I think Flanders will have very, very decent fiber and the coax networks for covering the usage in Flanders.

And I think that was the main concern of the Flanders region is they would have a region where the digital would be, the digital Flanders would be possible. And I think with the two current infrastructure and foreseen enhancements of those, I think they'll be reassured that it is the case.

So I don't think there is any new or extra commitments that needed to be taken.

So just on that, I'm sorry. So you highlight that you're guaranteeing the speed of the network and fair prices.

So that guarantee of speed as applicable to the nationwide, I guess?

There is no guarantee to speed. I think the question of the Minister was that, I mean if even the longer term what is needed is, for instance, 2.5 gigabit per second are the investments we are doing currently enable to bring that 2.5 gigabit per second speed.

And that's indeed the case. I think the fiber we are deploying currently, we deploy it with currently a 1 gigabit per second speed, but there is absolutely no big issue to boost that fiber investment to 2.5.

And that was indeed one of the reassurance that the minister wanted, but that's something we could commit to. And that doesn't trigger any extra investments versus what is foreseen in the next coming years for Proximus,

And good afternoon, this is Guilliaume for BICS. When it comes to TeleSign, we don't provide separate information for the simple reason, that first of all, they are using our network to deliver their voice and message of authentication transaction.

And so depending on where you put the value, it's only the total that counts. The other reason is that we have moved some customers and transferred some customers, some into TeleSign and BICS.

And at the end we look at that as one entity. The good news is that it's been growing steadily over Q2 like in Q1 when we don't disclose more separate information.

Okay, that's helpful. Thank you.

Yes, good afternoon. Thanks for the question.

Just sort of two connected questions please. I'm a little bit confused on the coverage obligations for the new operator, because I'd also heard the 20% number put in the BIPT documents.

It looks like it's 30% coverage after 3 years. So is your understanding that the 20% or 30% is the points at which the new operator has to cover before there's potential or need for a roaming agreement and which of the two is it?

And then secondly, have you thought about what the potential invested capital might need to be for a new operator. Because it seems like the regulator has also highlighted that coverage in Belgium is quite difficult to achieve.

And the new entrant would clearly help to build a number of sites, which I think the regulators said on average might be around a 150,000. And if you add that to the fact this spectrum is being sold then presumably you would have to assume that new entrant would at least have to deploy a couple of hundred million euros upfront before any revenue agreement.

Is that your understanding? Thanks very much.

So concerning your first question, I think there are two complete different things. I think there is an obligation related to coverage, which is in the law, which is indeed 30% after 3 years, and I think 70% after 6 years.

So these are coverage obligation. The recent thing which is indeed not disclosed by the BIPT, but according to us there is what I said on -- in terms of national roaming, there is of course free agreement that can be made by a new entrants with the current operator as from day one.

But if there is a willingness of the new entrant to oblige an operator to provide national roaming, then BIPT has foreseen in the new spectrum that as from 20% coverage, it could impose a national roaming agreement to one of the existing operators at a retail minus condition. So they are very different elements.

One is linked to coverage obligation linked to the spectrum. The other one is a roaming obligation imposed by the BIPT as from 20% coverage.

But it could well be that as in other countries that there is commercial agreement before that or at that moment, and that a stick is not needed to be used by the BIPT.

So if I could just to follow up, that's really helpful in terms of the clarification. But is it not an issue of discrimination if the regulator is trying to pick one network.

And it just be interesting to get your views on whether you've looked already at whether that fits within the European framework, a policy like that. Thanks very much.

Yeah. To be honest, I mean, so I have no more information than what I gave you.

I think they have indeed, put that in the publication to make sure that there would be an agreement. I don't think there is a big chance that there will be an imposition.

I think it is there more realistic. But to be honest, I don't know how it will be allocated on onward basis.

So that's not clear and that still needs to be discussed with the BIPT once we will go into the more executional modality. So I can't answer that question.

So concerning the level of investments, to be honest, we haven't done any calculations so far. I think all these figures are very recent.

And we have indeed to see, and we will do and I'm sure you will do some scenario planning on how much a new operator would need to invest to have the 30% or 70% coverage. So far I can't give any answer because we haven't done the calculation as of today, because that all very new and that has changed still the last moment of publication.

Thanks. So very helpful.

Yes, thank you very much. And good afternoon.

And I just had sort of three relatively short questions again on the fourth entrant. I'm sorry to continue on that theme, but given its importance, firstly, can I just get some clarification on what you mean by your 3-year plan in the context of this decision?

Does that -- should we assume that you may look at your investment plans and my actually look to invest less following this decision. And then secondly, could you and the other network operators actually choose not to bid in the auction.

That will be a way to send a very strong message to the Belgian government if you basically weren't going to hand them a couple hundred million euros for your part of the spectrum. And then just lastly, I'm sorry just a follow up in Michael's question.

Did I understand right that you said you hadn't really done any work into whether you could legally challenge, the mandate's varying point. Sorry, I just, I just didn't get the answer to that question.

Thank you.

Okay. So I'll try to clarify your list.

I think on the first one, I mean we will indeed review our 3-year plan. So for the years, 2019-2021, I think like every normal company, when there is such a change in regulation, we will do some scenario planning.

And we will see what we will need to do depending on who could be a fourth entrant. If there would be a fourth entrant, but these are very commercially sensitive information.

And I think it's way too early to give any indication on that. The only thing which I can say will have to be done anyhow, is that we will need to accelerate our transformation towards a more, a simple lean and mean and digital company.

Because the -- most probably the reason of change in the market will accelerate from what we have seen over the last year. But that's in line with the plan we had.

We will most probably just need to accelerate the transformation that we are going through. For the rest, if that would have an impact on our offers or on investments or whatsoever.

It is way too early to give any indication on that. No bid at the auction.

I know that there has been some rumor in Italy that that would be one of the scenario. To be honest, I don't know.

I think spectrum is a scarce resource and spectrum is badly needed. And we have now an action for at least 20 years.

So I'm not sure that would be a right decision. So for the time being, we are more looking at how to bid at the auction but not, not to bid at this auction.

And on the legal challenging. I mean, I didn't see anything on the legal challenging.

I think it was more -- the question was more on the obligation to offer a national roaming as from 20% coverage. And that decision would be imposed by the BIPT on one operator and who the operator will be picked up, and to be honest, I said I don't know how it will be done.

Because we don't have more precision on that. Challenging this decision, I think that's as well too early.

We will have to see after the process is finalized. What we can do if we do anything.

So there I think we reserve all our rights to look at that.

That's very clear. Thank you very much.

Yeah, thanks for allow me a follow-up. A couple of questions.

Actually. The first one is, you mentioned in one of the early answers and resellers [ph] you gained in Flanders on the fiber network.

Could you describe what sort of operators these are? Are all these operators that exist already in broadband or are they actually active nationwide or at least Flanders wide or are they very local?

Just any color on what sort of potentially incremental competition comes from such resellers? Second question is the authorities have said, they actually talking to an interested party, right?

So they presumably are not drafting all these rules just into outer space. They're sort of talking to the other party.

Is it your impression from the way the discussions that you're having with the authorities are going back and forth, is it your impression that it is designing these rules according to what they hear from that interested party, are do you think they are putting it out there and sort of see what happens? And the last question is just looking at this sort of spectrum table that BIPT has put out, I mean, one could argue that spectrum is actually becoming quite scarce for the existing three operators in particular.

Because the spectrum caps seem to allow two players per band if they bid for the full allowance the way it looks. And push effectively could make for a very, very contentious auction in the remaining band.

Is that the right way of looking at it or will people essentially there one particular bands and then you're all going to bid out. I mean, is this a very difficult set up that sort of emerging here for the, for the existing operators or not?

Thank you.

So on your first question, I mean when I talk about resellers. I mean they are resellers, they are national reseller.

So there are companies there are currently reselling or open network most of the case. So these are existing players where we have extended our reselling agreements that we currently have on copper to fiber.

So there are no new players in there and they are not specifically players for Flanders, they are national players. And so I think that's the best proof that the conditions we have offered on the fiber, and the way we managed the opening of the fiber is in line with the market expectations.

And we had done an agreement on current tiering. I mean the two that has been published on the market review, but also some others with, some higher specificities and higher price.

And I think for us it's important that we can keep our fiber network open but with the right conditions and with the right price tiering. And in that sense I think the fact that we have been able to reach agreement with around 8 resellers on the different price points is an important element for us and give us confidence that we can continue to rollout fiber also with a good return on investments on the wholesale side.

On your next question, I mean it's very difficult for me to answer. I mean it's true that the government and the BIPT has said they have received interest from a specific party.

Am I cautioning that to be honest, I don't know. I think it's most probably true because initially when you look at the first rules for auction that was put in the market forward in May last year, there was nothing foreseen for a fourth entrant to say that has been changed relatively recently in the process is indeed something where probably being adopted in function of a specific interest of the party.

But if that party is still interested, are the conditions in line with what that party has in mind, to be honest, I don't know. There has been quite a lot of discussions also within the governments on the conditions.

And so I don't know if they are still in line, and if that party is still interested. That's something you should need ask the regulator or wait till June next year to see if that's the case.

The last question you said about the spectrum scarcity, I mean that's something we have put forward as one of the most negative element of the auction is that in the existing band and mainly the 900 and 1800 megahertz, we are currently using the full spectrum with 3 MNOs. And if there is a fourth entrance, the spectrum that will be available for the 3 current MNO will be lower as a total than the one we are using.

So that will have indeed an impact on the quality of the network. And that is indeed providing some issues.

Because you will need to use new spectrum bands to offer the same quality for your customer. On the other end there is some spectrum reservation for the existing operator.

So it is not that we will end up with no spectrum, but we will end up with a different sets of spectrum bands. And that will indeed lead to some investments in refarming of the band and in building a new equipment for the new spectrum band.

So that's probably the most negative elements of this new auction is that. And I think it's a unique case in Europe where some spectrum that is currently fully used by current operator is taken away and reserved for a new entrant.

Yeah. I think so can just follow up real quick.

It just looks, if this 900 megahertz, 1,800 megahertz, and I think of the 2 gigahertz, is that subtract the new entrant reservation, then what's left, divided by the spectrum cap in each band essentially allows two operator to bid for the full cap. And that sort of structure could make for a very contentious auction.

Because there's the possibility potentially to push someone out entirely out of a particular band. So I was more interested in that element of it, this sort of the overall structure there in the remaining relatively limited bandwidth, fairly high spectrum cap.

Is this a problem or would you particularly push for lower spectrum caps, or is this fine because the 3 operator, remaining operators will sort of manage this between themselves and your view?

Sure. This will be part of the auction strategy.

So I mean, I can't give any answer on that, because that is very sensitive. I think the only thing that I can say that indeed on the, for instance, on all the spectrum, there is reserved part of the spectrum for the new entrance.

So it is not possible that is only going to two operators. I mean the three will have some spectrum, but it's true that for the part we'll be auctioning, there could be some more discussions on the who takes the one that is put in the auction.

But it will all be about the auction strategy that the various operators will do. So for me it's very difficult to give any comments on that.

And we will see in the auction strategy how all these things turns out.

Understood. Fair enough.

Thank you. Thanks very much.

Hi, good afternoon. I have two questions.

The first is regarding the network rollout for a potential new entrant. I was -- I'm curious to see, is there any way where the government could change the rules of the game or a law that will enable an easier rollout for a new entrant.

And can you remind us the kind of experience you have on the ground between the moment you decide to apply for a permit for a new site and the moment you can activate and all. And how long does it take roughly speaking?

And the second question is regarding the banking, maybe you had a question in the past. But Orange had a decent traction so far in France.

We don't have all the numbers but it looks to be an interesting thing to do for I mean, Telco with the good reputation. They're going to launch in Spain, and likely in Belgium.

Is it something you looked at or and you concluded that it's not interesting or something that is still out there. And you have not done any experiments on that?

Thank you.

Okay. So on the rules for permits and things like that is true that in Belgium it's a complicated country.

Again, we have three different regions, Flanders, Brussels and Wallonia, with three sets of different rules for permits and also for emission norms. So I mean those two elements are indeed constraints for us as existing operators, but also certainly for a new operator.

I think the region which is currently the most complex one to potentially cover is Brussels. Because there you have two issues.

You have an emission norms which is extremely restrictive and that even doesn't permit us today to roll out 5G. And that's why you have probably seen that we have signed a letter of intent as a sector with the Brussels region to try to make of Brussels different city where we deploy 5G in Belgium.

And with the help of the region to then change some of the constraints that there are currently and mainly concerning emission rules. So if that change that would allow us to roll out 5G but also a whole entrant to roll out 5G on the basis of new emission, that will anyhow still remain quite constrained.

So I don't think there is any willingness from the region to go to a full liberation of emission norms. Concerning the permit, it's a bit the same in Brussels.

You very often needs up to 400 days to be able to get a new permit. And so that's indeed something that will make the rollout of a network for a new entrance a big constraint.

Concerning your second question in the bank, I mean, we are very aware about what Orange is doing in other countries. I think we have no plan in that sense in Belgium.

I think if you look at the bank market in Belgium, a lot of bank are already very advanced on their digital front. So we think there is not so much opportunity in this market to come up and beat the bank with a digital application.

And that's one argument. The second argument is that we are one of the main provider for banks in terms of connectivity and digital solutions.

So the banks are our biggest customer, one of the biggest customer. So we don't see any interest in entering into a competition with our own customers.

So no plan for us to enter the banking sector.

Okay.

Hello. Just a very quick question please.

You're about to, as you in your next three year view, you'll come up with your next dividend policy. Now in the past you have had the dividend policy based on paying an absolute level of dividend.

Given you're going to have to set this dividend policy before you really know what is going to happen with the next spectrum auction, do you have the flexibility to make your dividend policy proportionate, i.e. proportion of cash flow, proportion of earnings, et cetera.

Do you actually have that flexibility within your government relationships to establish such a thing? Or are you committed to having more of a fixed dividend target?

Thank you.

So currently we have a dividend policy, which is indeed that we distribute most of our free cash flow. And so when we give a guidance on the dividend, it is always based on our best estimates of our plans and of the cash flow delivery of our plan.

So in that sense it is dependent on the cash flow. I mean, that's why we have reconvened the dividend for this year in our quarterly results.

Because with the results we have so far, we are quite confident that we can cover the €1.5 dividend with our operational cash flow of this year. I mean, cash flow is outside acquisitions.

It's the operational cash flow that leads to the dividend. So for the coming years normally, even with the current dividend policy and today there is no discussion on changing that.

I mean the dividend policy should remain in line with the free cash flow. The big question of course is how will a fourth entrant affect the market value and hence the free cash flow generation of Proximus.

But that's today too early to make any guidance on that. I mean, we'll come back to you with a more better view with our year-end results and guidance we will give in February next year.

Can I just come back on that? But what's going to happen between now and February for you to get confidence that you're going to know what's going to happen?

I mean, yeah, it's true that at that time we will not know if the fourth entrants have applied or not. Because we, as I said in the beginning is the application is foreseen currently for June-July, but we will indeed make our best possible assumptions in the 3-year plan exercise to see what we think is achievable in 2019 as a company.

And based on that and after discussions with our Board, we will come with a guidance in February. And we'll try to give you an as precise guidance as possible.

Brilliant. Thank you.

Thank you very much. That leaves me just thank you all for participating in this call.

And I wish you all a great weekend. Should you have follow up questions, you can obviously contact the investor relations team.

Thank you.