Nancy Goossens - Director, IR Dominique Leroy - President & CEO Sandrine Dufour - CFO Sandrine Dufour - Proximus PLC, CFO Daniel Kurgan - Belgacom International Carrier Services SA, CEO Bart Van Den Meersche - Chief Enterprise Market Officer Guillaume Boutin - Chief Consumer Market Officer Geert Standaert - CTO

David Vagman - ING Groep N.V. Emmanuel Carlier - Kempen & Co.

N.V. Nicolas Cote-Colisson - HSBC Ulrich Rathe - Jefferies Paul Sidney - Credit Suisse Michael Bishop - Goldman Sachs Alexandre Roncier - Exane Ruben Devos - KBC Securities Alexandre Iatrides - ODDO BHF Corporate & Markets David Wright - BofA Merrill Lynch Stefaan Genoe - Banque Degroof Petercam S.A.

Guy Peddy - Macquarie Nicolas Didio - Joh. Berenberg, Gossler & Co.

KG Matthijs Van Leijenhorst - Kepler Cheuvreux

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

As usual, all documents on the results went on this morning and have been published on the website. I hope that you have all well received this and that you have been able to go through our publications.

This call is mainly intended to answer your questions, so we will get to that in a minute. I have here with me the CEO Dominique Leroy; and CFO, Sandrine Dufour; as well as the other members of the executive committee.

They will take your questions in a moment. But before we get to that part, we will start with an introduction by Dominique.

Please go ahead.

Thank you, Nancy, and good afternoon, or good morning for U.S. friends, and welcome to the third quarter conference call.

I'm pleased we could announce this morning yet again a sound set of results, both on commercial drivers and on financials. While we operate in a highly competitive residential market, we have achieved to further attract customers on our TV platforms, we have grown our Internet base, and we further increased our mobile postpaid subscribers.

The sustained growth in our customer base proves that our segmentation approach is paying off. Our all-in offers, Tuttimus and Bizz All-In, continued to do well in the higher end of the markets with especially a sustained traction by families.

Our different approach for millennials with our new mobile offer called Epic is also starting to pay off. We are seeing a good uptake in the full digital experience that we offer to this specific customer segment is very well perceived.

At the same time, we continue to position our Scarlet brands towards the low end of the market, addressing especially customers that look for the lowest price and was Scarlet's no-frills offers fulfills their requirements. On the enterprise side, competition is also very present.

Nonetheless, we realized a sound quarter with a firm mobile customer growth and with higher revenue from ICT. For ICT, we clearly benefit from our convergent strategy, bringing our customers' offer that go well beyond pure connectivity services.

In this view, we have announced over the past year several small acquisition in the ICT domain. These highly specialized companies provide the necessary expertise to offer meaningful solutions for the digital transformation of our enterprise customers.

With good commercial drivers in both the consumer and enterprise segments, we realized a sound direct margin, which in turn drove 1.1% increase in underlying domestic EBITDA. The BICS segment posted a solid 4.8% increase in EBITDA, benefiting from the TeleSign contribution.

All in all, this leads to an underlying group EBITDA increase by 1.4% for the third quarter 2018. Based on the good results we have achieved so far, we have raised our expectation for the underlying group EBITDA and expect to end the year 2018 with a growth of 2% to 3% compared to 2017.

For the domestic revenue, we reiterate our expectation to end 2018 nearly stable to the prior year. Our CapEx outlook for the year remains unchanged as well, so we expect to end 2018 with CapEx of around €1 billion.

As you know, we are spending an increasing part of our CapEx envelope for the rollout of fiber in Belgium, which brings a superfast, future-proof network to all customers. With the build-out gradually ramping up, I'm pleased to see that the first indications are positives in terms of take-up rates and customer satisfaction.

As a last point, we also reiterate the intention to return over the year 2018 a dividend of €1.5 per share, and I'm pleased to announce that the interim dividend of €0.50 will be paid on the 7th of December. With this, I have covered my introduction and propose we now start with your questions.

Thank you.

David Vagman, ING. First question on the wholesale roaming rate.

So could you explain to us the mechanism and the commercial logic of the wholesale roaming rates contract negotiation, all these contracts are linked domestically and internationally? And then I've got a second question on ICT revenues.

So could you give us an indication of the underlying trend of these ICT revenues if we exclude M&A? And also explain to us a bit to clarify the strategy in term of geographies because I see you basically acquired a couple of Dutch ICT service companies?

I'm sorry. I could not understand your first question.

This is Sandrine speaking, on the wholesale roaming rates, could you please repeat it? Thanks.

Yes. So on the wholesale roaming rates that you've negotiated, so is there a link between the rates that you negotiate and the rates -- the domestic rates that basically that you have?

So because I understand that you've negotiated these rates down in the interest of the group. This impacted wholesale revenues, but helps the consumer and the enterprise division.

Okay. Well, maybe let me explain this and a couple of elements here.

The first one is the situation of Belgium, and Proximus has changed in terms of our net sender -- net receiver position before. So over the summer, with the growth of roaming out -- sorry, with the growth of the volumes of roaming out, which have exceeded the growth of volumes of roaming in, we have become structurally a net sender of traffic, which means that there was more consumption of data done by Belgium people on holidays than consumption of data done by foreigners in Belgium.

With these structural changes, it was in our interest to negotiate different tariffs with our partners and to decrease our prices, so that the total costs of traffic being done internationally gets lower than the revenue of the traffic being done domestically. And so that's what we mean and that's why you see that our roaming in revenue, which is largely in the wholesale segment, is decreasing.

But the decrease of the roaming in revenue is lower than the decrease of the total cost for the business segments CBU and EBU. So net-net for the domestic perimeter.

It's a positive contribution in terms of direct margin for the quarter.

For your second question, this is Bart speaking. So your question on the underlying trend excluding M&A, it is true that in this quarter we have a growth in ICT of almost 7%.

This growth is mainly driven by the acquisitions for this quarter, especially because we compare to the third quarter of last year where we had high products revenues, which is, as you know, seasonal. But also I want to highlight that if you take year-to-date, we're still growing substantially in ICT, of which part is also organic growth.

So it's not only the M&A, but this quarter indeed. To answer your second question on the geographical coverage, it is so that we really focus on Benelux.

The acquisitions, by the way, that we do, we also leverage them as much as possible on Benelux as well. So our focus is Benelux.

Next to that, it's more an opportunistic base that we look in other countries, but the focus is really Benelux.

And maybe a very quick follow-up, can you tell us what is basically the competition of this digital M&A? Digital companies have increased and the domestic [indiscernible] that you pay for this acquisition has increased.

Competition is very broad in this case. And so it's not like in the Telco where you have a couple of competitors.

In this area, you have competitors by specification. So if you take Davinsi, who is very specialized in security -- vulnerability management, security analytics.

It's completely different competition than Codit, who is active in application integration and move to Azure cloud and so further.

It's Emmanuel Carlier, Kempen. Three questions.

First of all, are you using a threat of a potential fourth mobile entrant to accelerate your cost-savings program? And if so, what could add that in terms of additional savings compared to the current guidance?

Secondly, on 2019 EBITDA, consensus is only expecting 0.5% growth. Could you help us in explaining the most important drivers into next year's EBITDA?

And thinking about IVR, International Voice Regulation, posted one, I think, in Q2. So maybe there are some other elements that will play a role.

And then lastly, on cable wholesale regulation, so Orange, Belgium stated that they expect a five year reduction on broadband and TV and a 10-year reduction on broadband standalone. So I would like to hear what you expect on that topic and on what basis?

So Dominique speaking. I think on the threat of a fourth entrant, I mean, I think as you read in most of the analyst, I've think the most estimation is that there is 50-50 percent chance or risk that a fourth entrant would come.

As a company, of course, we are preparing ourselves for the eventuality that the fourth entrant would come. So we are currently reviewing a bit of our strategy for the three years to come, with a view on how can we even differentiate more on the market, how can we accelerate our transformation and of course, also, how are we able to further decrease costs.

I think it's too early to give any indication on that for the time being. I think we have a guidance till end of 2019 with $150 million net savings that we announced by the end of 2015.

This is still what we expect to achieve in 2016-2019. And we will come with further savings plan I think ahead of that, but that's too early to say and what type of magnitude is also way too early to give any indication on that.

Perhaps as I have the mic, I will also try to answer your third questions on the cable regulation. I think it's very difficult to see what type of price the regulator will come up to in the course of next year.

For cable, I know that Orange is pretty positive in terms, from their point of view in very low cable price. I'm a bit more cautious on that because I think the regulator has also a very clear view that they what they will bring for cable will also impact fiber and of course, it's important that we continue to invest on fiber.

I think I would be a bit more cautious in terms of expectation on wholesale price regulation for cable. And I don't think that will -- the reduction will be as big as what Orange is speaking currently.

And I would -- I will leave the floor to Sandrine for your questions on EBITDA guidance 2019, although I think it's quite early to say anything on this one.

Well, on this one, I think Dominique has just answered that typically, we give the guidance in February after the full year results, and so I won't be much more precise. What I can say though is that, indeed, we'll have the adverse impact of fixed termination rate decrease.

And by the way, we learned that this decision was going to be potentially enacted in December, which means that we will have 11 months of adverse impact next year. And to your point as well, we will have the negative impact of the international core new legislations, which we ticked, I think, in May, so that's also a negative impact.

But I think it's too early to give a global color on commenting on the consensus. We will come back on this at the end of February.

Could you guide us what kind of impact you expect from international voice regulation?

Yes. I think we said earlier that it would slightly less than 1% of EBITDA growth.

But is that on a full year basis? Or is that in regards in May?

Just for next year, just for next year. So it will continue the year after, yes.

Just for 2019.

Yes, okay. And there -- is there any other important element that could have a positive or negative impact into next year's EBITDA?

We'll come back on this in February. I think I've mentioned the biggest element that is known to be in terms of regulatory environment, which is the one that you had mentioned.

First question is on CBU. If I look at the Fixed business, I understand that 2018 did benefit from price increases.

I was wondering how comfortable you are in taking prices up next year to fuel growth in a context of stronger competition? I was just wondering if a more formal strategy could work in the Belgian market.

And I got a second question still on CBU on the direct margin this time. If I look at Q2 and Q3, I can see a strong improvement year-on-year in the margin, despite actually this quarter from the impact from the collection process.

So I was wondering what are the drivers there to take quarter-after-quarter your margin up strongly? And do you see room for further improvement in Q4 and next year?

Guillaume speaking. On your first question, Nicolas, in Belgium, every beginning of the year, there are a lot of indexations and a lot of sectors, industries, and there is no reason why, as we speak today, that we will not do something as well.

On the second question direct margin improvement, I would say that the same driver that we are seeing for the first two quarters of the year means that we are, despite the fact that the market is very competitive, that we are making some progress commercially as you have seen in the customer numbers. We managed to have [indiscernible] and direct margin improvement quarter after quarter.

If you exclude the fact that, of course, just lowering the vendors' fee that as you mentioned, it means that if we continue to -- on the same kind of customer development, successful convergent strategy and still developing our segmented approach, now we have Scarlet, now we have an offer for millennials and now we are still pushing very strongly our convergent offers. That is the reason why we should not continue in the fourth quarter as well.

Okay. That's very helpful.

If I may, just taking profit of me being online, any things you can say on TeleSign because as you mentioned of '18 in the press release that it's been now a year that you've been with this business? Are you positively surprised by what you bought?

And does it open new area for M&A in the future?

Well, this is Daniel. We were not have positively or negatively surprised.

We are happy with the company performance to date. We've been, I think, good at realizing the synergies using the BICS networks on the back end to deliver the 2-factor authentication of voice and messages, and that has delivered.

Now there are still a wide range of opportunities in this space, this communication platform and service mobile identity. So we have all our math leveraging on the power of the combination.

No more comment on the M&A, I would think.

I have several. The first one is, you sort of have fully mentioned what you see as sort of the market handicapping of the new entrant likelihood.

So just wondering whether you would share your view on how likely it is based on all the conversations you're having? So that will be my first one.

The second one is, the fixed line loss in CBU remains relatively high, I suppose. Would you see the balance between raising price and sort of accepting the volume loss, the right one at this levels?

Or do you think there is room to maybe cut the volume loss a bit possibly at the expense of not rising prices? I'm just wondering how you think about the volume loss -- the rate of the volume the loss.

The third one is on Roam-Like-At-Home, so two sub-questions there. First one is, why is the retail effect of the annualization of Roam-Like-At-Home so small in CBU and EBU?

And also I was wondering you explained helpfully the renegotiation of sort of rights that is a net-net benefit. Would you be able to quantify what the net benefit is on the direct margin?

And then my last question is a very simple one. On the device sales, which were sort of coming down a lot, mobile device sales coming down a lot at the moment.

I understand you're cutting back on sort of some low-margin third-party sales. Is there any trend in the device sales into your own retail customers that is sort of noteworthy outside of this sort of external business you're running?

And if so, could you discuss what the implications are?

It's Dominique. I will answer your first question on the new entrant.

I think how likely to be honest today, there is still quite a lot of discussion between the federal government and the regions before the current auction regulation can be published. And I think we are in the scenario where we will know probably a bit later than anticipated when, and if, a new entrant would come into Belgium because the Royal Decree with the new auctions has not yet been published, and there is still some discussion between regions and federal before the whole thing can be published.

So in that sense, we think that where we expect still the auctions to take place in Q4 next year, it could be that we don't know if there will be a new entrant even for the summer next year. So far we thought that we would know about it before the summer.

Little discussion we have had with the regulator could even be that the new entrant will only be known at the end of the summer. So the time is also opening up perhaps more potentially for a new entrant.

So for me, it's extremely difficult to say will there be a new entrant, yes or no. As I said earlier, I think today, we try to prepare ourselves for the worst, and I think that's what we need to do as management.

And we will know perhaps a bit better at least when the Royal Decree with the full details of the conditions will be published and when the regulator will then be able to publish also the execution modalities and knowing when, then, a new entrant would need to signify itself. So for the time being, as I said, I think it's a 50-50 risk that a new entrant will come, but we're indeed taking that seriously and looking from all sides how we can best prepare.

And -- I mean, as something you've probably seen, we are continuously as well increasing the awareness of Scarlet. There is currently 80% awareness in the country, which means that contrary perhaps to other countries that launch second brands when a new entrant came into the market, we had a strong brand which is sitting there with 80% awareness and that we can, of course, leverage to counter a new entrant.

But that's all measures we take in preparation. The same is true, as I said, we are reviewing our structure, our strategy, but that's all quite early to give indication on that.

But it's for sure that we take the risk seriously.

On the question on fixed lines, it's Guillaume speaking. First, what we try to do every quarter to migrate fixed line only customers to more convergent products.

This is one element of the strategy we have. And -- but also on the price indexation, I think that we do more indexation in the future, what we do is that we get fully when we get the return on investments on those actions.

So if we want to act in that front, we -- for sure, we -- it's only the tradeoff between the risk of churn and -- versus the revenue increase, but I'm not going to disclose what we have in mind for next year. And third on device revenues, most of the decline comes from the role of distributor we do for others.

So it's not revenue declines in the volumes of devices we sell in our shops. It's more the impact of devices that we sell as a distributor for others.

This is Bart speaking on your question for Roaming-Like-At-Home and why is the retail sector annualization smaller than what you would have expected. In a view, that's how I understood your question, it's because there is the annualization, but at the same time, there is a continuous decrease of roaming options that still plays a role.

And next to that, we have a shift to bundles so that we have out of bundle -- less out of bundle revenues. Now in total, still I think it's important that we still grow in mobile services.

Then to answer your question on to quantify the benefits of the effect of the benefit, I don't have -- I don't think we disclosed any information on that one.

Just a couple of questions, please. Firstly on consumer mobile.

Orange Belgium seems to have fairly good traction on the marketing of its unlimited tariff, unlimited data tariff and that it launched, I think, in April of this year and has introduced unlimited voice tariffs as well, and again, that seems to have some good traction on that. My question is, do you think you need to introduce your own unlimited mobile data offers or increase the size of your existing data bundles to defend against those offers?

And then just secondly on the fiber build, I think you gave some comments that there were some good early take-up and seriously progressing well. I was just wondering, is there any way you can give us some data points, some more specific data points on how that build is going in terms of take-up percentages, whether it's on track in terms of the coverage target?

Just really give us a bit more detail around that.

Guillaume. On your first question on unlimited, just for your information, we reacted with the Scarlet brand offering unlimited voice on the hot package as soon as end of August with a good success on this offer on the markets since we launched it, so end of August after the summer.

We also launched some kind of unlimited tariff plans for -- including data for millennials because we included all the most used applications in our Epic offers and portfolio end of June. So we think that it's for sure is a peace of mind in using data is very important, especially for this segment of the population.

And as Dominique said, we had a very nice results and traction on this offer since we launched it. And last but not least, we already have a very -- lot of packages when you are in the convergent offer, when you double your data, and we already are offering for those customers in Tuttimus package more than 20 gigs of data, which is not unlimited, but gives you a lot of security not to be constrained in your data consumption.

So this is what we do.

Okay. So just to summarize here, you're pretty happy with the way your mobile products are currently?

We're making improvements every quarter. So I'm not saying that we are not going to change anything next quarter.

But it mean that we are already tackling this subject, and we are happy with the results of this strategy so far.

Okay. On your question on fiber port, as you know, it's very small numbers.

Now we're now deploying fiber in 8 cities. So in terms of coverage, it's a good sample and it's a small sample.

But since we are seeing good traction, we are seeing good traction on the uptake of the pace of putting customers on the fiber footprint is moving nicely months after months. The weight of win back versus migration is turning out to be better than our expectation.

And the ARPU uplift on the migration is also a slightly better than our anticipation. So I mean, again, small sample, too early to give numbers, but the first indications are positive.

Just a quick follow-up actually on the Fiber-to-the-Home. I was just wondering if you could give us roughly what the ARPU uplift is, maybe just from a retail perspective, i.e., what are you offering customers who are actually taking it?

And then secondly, if I look into U.K., BT, they've seen a considerably lower cost for their initial fiber-to-the-home build versus a couple of years ago, and some of that is effectively driven by improvements in technology and standardization of the boxes and the kits, meaning that a lot of its plug-and-play and you don't need to splice gallops engineers out into the filed for a long time. So I was just wondering whether you're seeing any potential deviation away from your €1,000 per home cost?

That will be great.

So on the ARPU, I believe it's too early to give numbers. Again, as I said, it's a small sample, so I prefer to have more hindsight and come to the market with a very solid and based on a larger footprint.

So be patient, we'll come back to you with the progress when we have a larger footprint.

This is Geert speaking for your question on the cost side. Of course, we started our deployment since two years, and continuously, we are improving on different levels, as you stated, improvements on the technology side itself, but also on the way we approach this, so process wise.

And with this, we are confident that we can aim for that €1,000 unit cost that we have brought in the past towards you.

And if I could just follow-up, are you seeing any savings on the civil side? Or is that probably not likely to happen in Belgium because as I remember you were deploying a lot more over grounds here, effectively not re-using a huge amounts of your existing infrastructure?

Or are you finding some incremental synergies on the civil side?

I mean, on the civil side and that is typically for Belgium, so Belgium is not an adopted country. But what we do is that we work a lot of façade, and that is the way we overcome, in fact, the trench in costs.

And so the balance we have between underground and façade is a crucial parameter in those civil works.

Okay. But are you finding extra efficiencies do you think or was it very much in line with expectations?

Yes. We are constantly looking towards extra efficiencies, of course.

So -- but as I said and the €1,000 indication that we gave, that is our first target. And of course, we will never stopped if we see additional synergies to capture these, but first start is to get there.

Just coming back on your guidance upgrade of 2% to 3% growth. Obviously, there have been a couple of acquisition in B2B and ICT.

Just wondering if you could give us maybe a little bit of color and reminds us of what is the inorganic contribution of those assets for the guidance? And secondly, focusing on Wallonia, I'm wondering what impact you're seeing from the increased promotional activity on mobile data from VOO that has been fairly recent and also fairly, but still VOO offered the newly broadband speed of 400 megabytes.

Maybe it's a bit early, but are you seeing any change of trends here or even regarding portabilities?

So on your question on the guidance, so it's true that since last quarter, we've integrated the newly acquired company Codit in the ICT domain, but contribution as a whole is very limited. So it does not -- it's not what's behind the increase of guidance from 2% to 3%, it's more -- it has more to do with the removal of uncertainty around the roaming, specifically on the volume growth and for model elements, but ICT integration is minimal.

Regarding VOO and new offers, it's obviously too soon to see any kind of impact. But what we saw recently is more an impact of -- a good traction of Orange is offers as you saw in the numbers as well, but nothing else apart from that on the market, so not really specific impact or to describe for VOO at the moment.

All right. And maybe just one follow-up on that VOO, if I may.

In your introductory remarks, you did mention that fiber was actually having good traction. I think in previous call, you mentioned that you were not willing to accelerate fiber deployment without any concrete business case.

With that upgrade at VOO in the south, are you feeling a little bit more pressure while you see maybe incremental benefits of rolling out fiber faster?

Again, we are very cautious, but we are not seeing any kind of additional competitive pressure coming from VOO nor on the offers nor -- neither on the offer nor on the proven technological aspect. For sure, fiber has been to help us be more -- and even the market, but it is going to be in front of us mainly and then in one region.

So we are betting on fiber to be more successful in the future. But so far we are not turning our plan because of smallest change in the VOO portfolio offers.

I got two small ones. The first one is basically on Scarlet.

So I guess, there has been a bit less talk on Scarlet this year than last year I feel. Just wondering on the hybrid brand strategy, how should we view to balance between both brands driving net adds in the last few quarters?

And how that has compared in the first nine months of 2018 compared to last year? And the second question, I understood your comments on the renegotiation of wholesale rates.

But could you maybe give some additional color on the scope of that renegotiation? And whether we should bear in mind a further step down possibly beyond 2019?

Then lastly, just on the decline of the revenues in consumer regarding the renewed collection process. So is it right that there was a change in pricing for these so-called reminder fees and did you therefore, earn less incoming fees going forward?

Or are there other elements we should take into consideration regarding the renewed collection process?

Regarding -- Guillaume again. Regarding Scarlet and the dual brand strategy, we are not disclosing the share of Scarlet versus Proximus growth gains.

But what I can say is that despite the fact that the development of no-frills segment is a reality on the Belgium market, and we are very happy with it because we are the leader in that segment. We still manage to have a value-accretive customer mix because as you saw in our publication, the average revenue per home is still increasing.

So this is what we want to achieve to take benefit of the development of this no-frills market, but still have a value approach and to try to continue to grow our revenue per homes.

Okay. On renegotiation of wholesale, so it's a yearly discussion to try and rearrange our wholesale agreements with all potential partners worldwide.

The biggest discussions are just in place as we speak and are going to set the color for mixture, so it's a bit early to tell you what's the outcome. But of course, the mandate is to see if we are able to get better terms and that would certainly help the businesses.

Knowing that now we are most probably in a net sender position. I mean, the time when we were in a net receiver is behind us, considering the fact that the roaming out growth is higher than the roaming in growth.

So definitely our interest is to see how we can further decrease these rates, but I cannot give more color as to whether that will help next year. And on the new collection process, well, there are actually two elements.

One has to do with rechanging our own internal process and that is decreasing the volumes of the reminder fees that we are sending. So it helps customer experience, it decreases the volumes, and we are charging less reminder fees.

Another aspect has to do more with the regulatory environment, where we typically send the first reminder for free to our customers, but the second one used to be charged €15, and by regulation, since the beginning of July, it's now priced at €10. So this is the pricing impact, which is the second impact.

And so this element will continue over the next quarters.

Two, if I may. First, I would like to have a -- maybe a little bit more color on 5G spectrum and maybe first 5G CapEx that we could expect?

There is a lot of spectrum that is going to come next year, a lot of renewal, 900, 1800, 2.1 and some new one. I suppose, it all depends if there is a fourth player or not.

But maybe can you give us some guidance of what do you expect in terms of prices or competition there? And also if you expect first 5G CapEx to -- when do you expect them?

And the second would be on the guidance and the comments you made last conference call, Q2. If we look at our current guidance and if I understand well, 2% would represent flat or even slightly negative EBITDA in Q4.

You are saying that you had some negative basis effects in H2 that would make the H2 a little bit more difficult than Q2, that was excellent. Is this possible that this basis effect makes Q4 being a negative in terms of EBITDA?

Or is it, I mean, Q3 could be a good assumption of what's going to be in Q4?

This is Geert speaking. With respect to the spectrum, yes, there, the only thing we can say is like yourself stated is that, of course, the spectrum auction will be very different depending on the situation we'll be in with the fourth entrant or not, but more information than that we cannot give.

On 5G, on the other hand, what we can say is that on 5G, this will be more an evolutionary take-up, not a revolutionary one. And so the first case that we will embed in our network will be linked, in fact, with capacity growth and where it becomes more efficient to use 5G to deal with that capacity growth than with other technologies.

But of course, this goes hand-in-hand with the device penetration. And so we will see some of 5G effect in our three year plan, but this is not to be considered as a very disruptive impact there.

It's a gradual impact in our total mobile investment scheme.

So for the guidance, indeed, we give this yearly guidance from 2% to 3%. I think now for Q4, the uncertainty over roaming volumes is behind us because it's largely impacted Q3.

But as you know, Q4 is quite an intense quarter in terms of promotion with the year-end Christmas season. And so we prefer to have this view in terms of a commercial intensity and that's why we give this type of band and Q4, not being more narrowly defined.

I think it's important you keep this in mind.

Yes, two questions. One is actually just following up on a recent comment.

But the spectrum auction, I think you mentioned, you could expect in Q4 next year. I guess, whether there is so much competitive tension or not, we could expect a price for the spectrum.

It's clearly not going to be free. The reason I ask is that consensus net debt really doesn't move '18, '19, which given your payout policy suggests that consensus has practically no 5G spectrum CapEx in next year.

Is that because the spectrum payment could be more stepped? Is there anything we don't understand here?

Or is consensus just maybe thinking it's more like a 2020 event, I'm not so sure? Either way, it looks a little light.

And then my second question, I guess, is a question we're just starting to ask a little wider across the industry, and I hear exactly what you just said about 5G CapEx. But just conceptually, why is the industry so frightened of 5G?

Why is it trying to defend 5G and saying, no, don't worry, it's evolutionary, don't worry about the CapEx? Why the ambition is not bigger?

Every other industry seems to be asking and talking about 5G. Why is the provider of this, the telecoms industry, so afraid of talking up this opportunity?

Why not commit more CapEx? I guess, it's -- why does the ambition seem to be so unstilted?

On your first question, one element, the auction will be next year, but the license of the new spectrum kicks in 2020 and the renewal of the existing spectrum is 2021, so cash out is not before 2020, 2021. But most importantly, the payment of the spectrum is spread over 20 years.

So I would say, the yearly impact is not as high and would not be felt in the net debt next year.

This is Geert speaking, again. So on 5G, in fact, if we look at the different use cases that are out there, and if I refer first to an IoT use cases, a lot can be done today still with 4G, plus in addition, there is some still standardization work that is ongoing.

So the first real use case that we see coming is the one that is linked with capacity growth and dealing with capacity. And where at a certain moment in time, you reach a certain threshold on your 4G and you need more performance technology.

So that is the use case that is now embedded into our plan and which leads to a more step-by-step investment towards this new technology.

Okay. Any comments.

Dominique, on the ambition for 5G, the bigger picture for Telco?

But I think Geert said it, and I think 5G is first for us capacity enhancing. Of course, if you deploy 5G, you need more spectrum.

So the first prerequisite for 5G is, of course, to have the spectrum in the high band and the very low band. So there is no way we can deploy 5G before 2020, 2021.

Secondly, there is indeed the standardization and the fact that you need devices to really be able to lift 5G. And I think the first use case we see will most probably be in the enterprise market where slicing is certainly a potential, but it will also take some time.

So I think there is, of course, opportunity for 5G. We will do 5G.

I never said that we will not do 5G. I don't know think there is any urgency to go to 5G.

And when I discuss with people from the automobile industries and like that, they all are asking for 5G. But when I say, I mean, are you ready to pay for it?

Then, of course, they look at me with a question mark. So I think we will also need to make sure that before we go into a lot of new type of use case that we also align with those type of industries on how we can monetize it.

And I think that's still a bit unclear today. It's unclear on the spectrum price, it's unclear on the standardization, it's still unclear on the monetization of the specific use case you can see.

And it will also be linked to standards in terms of slicings and agreement with other industry. So we will go there, but I don't think there is any urgency to go there.

And that's probably what you hear from most of the Telco..

Yes, Stefaan Genoe, Degroof Petercam. Two questions.

On the personnel expense evolution in the quarter, could you indicate that the constant consolidation scope, what has been that evolution? And how should we see this in the coming quarters?

Is there any kind of indexation that might be coming up in the coming quarters? And then a second question on the trend in the customer loss to Orange convergence offer.

Have you seen a change or a significant change in the third quarter versus the previous quarters?

So on your first question, it's Sandrine, workforce expenses would have decreased at constant perimeter. And in Q4, there is an impact of indexation that's starting in October, that was not the case in Q3.

On Orange, what is very important to see in our numbers is that despite the fact they launched our unlimited offers on mobile, we improved the trends year-over-year in terms of mobile postpaid subscriptions. So this is one.

Second, on convergent offers, there we do not see any change in the market dynamics, and we are still developing very nicely our convergent offers and not that much being hurt by the offers of Orange. And so we can say that we have been very resilient despite this aggressive move from Orange.

Two quick questions. One, a bit of a clarity.

I think Geert mentioned that he was looking to get or target the 100 -- or sorry, €1,000 per home passed on fiber. Is that because you can't actually deliver that number yet and that is still a target?

Or are you already delivering at that level and therefore, it's a reiteration? That's the first point.

On the second point, also on your same CapEx slide, you talked interestingly about renewed and simplified IT systems. Can you just explain what do you mean by new mass-market IT chain, please?

Okay. This is Geert speaking.

With respect to your first question indeed, so we are not there yet at this moment, but we have all the actions in place, and we're confident that we will reach that level of the €1,000 per fiber. So you well understood this one.

On the new market IT chain, it's, in fact, a new digital chain that we did put in production, where we are now putting the last hand on it. We have been migrating already more than two million customers towards this new mass-market chain, but we will be completing this next year.

So next year, in fact, all mass-market CBU customers will be moved on this new mass-market IT chain.

I have three questions. The first is to get a bit of clarification on the CapEx guidance.

I mean, you mentioned around €1 billion, which is, in terms of communication, a bit vague because if I look at where the consensus, it's spot on €1 billion, but around €1 billion to me means from €951 million to €1,049 million. So maybe the way to ask the question is, the consensus is expecting something around €300 million.

Are you okay with that number? Considering that last year when you say the €1 billion is clearly from broadcast, we could not check actually if you were around €1 billion.

That's the first question on CapEx. The second is to come back on your comments on fiber and the impact of cable pricing on fiber rollout.

Do you mean to say you wanted to look the glass half empty, and I don't get it. If there is more competition on convergence, would the impact be positive in terms of pushing you to rollout faster fiber rather than to slow you down?

Okay. On your first question, I think the consensus of CapEx is at around -- closer to -- just closer numbers, €1 billion.

The consensus is €1 billion. So -- and we're very close to that.

So I hope it helps narrow the bracket.

So on the -- Dominique speaking on your second question, I think what we see, of course, the risk is if cable is open and the price of cable is low, you can attract more wholesale competition and you can have a price decrease of the Internet offer and also the convergent offer. And of course, if you have price decreases, you have less leeway to have profit and investments.

So that what I was saying that there is a relationship between cable prices and fiber price because those prices will make sure that -- will open up the network for wholesale offers and that creates a dynamic in the market, which is indeed a competitive dynamic that could be damageable if prices are getting too low. Of course, there are two markets according to the regulator, but we all know that wholesale players are looking at -- for their Internet at all the available technology on the market, being copper, being fiber, being coax, and they will take their decision based on technology and pricing.

Yes, actually, my question has been answered. It was related to the last question.

But yes -- could you, just pro forma, if I look at the balance sheet, you have best-in-class leverage at circa 1.1. Can you remind me your strategic priorities?

Apparently, the chance of an increased CapEx or increased fiber rollout is somewhat limited due to cable wholesale? So could it be the case that you might increase your dividends or do share buyback?

So first on the element you said on fiber, I think what we have always being saying and quite explicitly is that we have a portion of our current €1 billion CapEx, which is on fiber and increasing over the years. But currently, there are still three unknown on the fiber, which is the take-up rate of fiber.

There, we see first traction are positive, but it's a small sample, so we need to have more comforts on the take-up and customer satisfaction. The second one is indeed the cost of deployment, where we are still in early phase.

And as Geert said, we are looking towards the €1,000, but we're not there yet. And the third one is about the regularly price of coax and fiber that we will know around next year.

So depending on those three elements, we have always said that we could, if those are positive, accelerate our fiber rollout and to do that we would use our balance sheet to do that, if there is a strong business case. So that's certainly one of the possibilities to use our balance sheet is to accelerate the fiber rollout.

The second one is about M&A. We have always said that on M&A, we would use the balance sheet to finance M&A.

We have done some M&A last year. We can still see if there are some more opportunities within some market to further do M&A, and that would be our first usage of our current debt level and not so much dividend or share buyback.

Thank you. Thank you all for calling in, and thank you for your questions.

Should you have any follow-up questions, you can contact the Investor Relations team. Thank you.