Thank you. So good afternoon, ladies and gentlemen.

Thank you for calling in. I trust you’ve all received the results release this morning and that you have been able to go through the numbers.

So for this call, we will keep the usual format with most of the time reserved to answer your question. I have here with me the Sandrine Dufour, CEO ad Interim and as well as other members of the Executive Committee.

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

Sandrine. Please go ahead.

Thank you, Nancy. Good afternoon, everyone.

Welcome to our third quarter conference call. As you could read in our announcement of this morning, we managed to keep a positive customer momentum with our customer bases for internet, TV and mobile postpaid, growing further in the third quarter.

We achieved this in a market which is increasingly challenging from a competitive point of view. Our segmentation and convergence approach continued to provide good support.

We have further built on this. For example, by revamping our millennials offer, EPIC Combo.

Our second brand Scarlet maintained a strong position in the segment of tricycles, and so a good traction of its repriced Internet only offer which now comes at €32. Through the no-frills offers from Scarlet, we answer the needs of customers that are looking for the cheapest offer in the market, while preserving our premium brand.

The convergence rate of our customer base, i.e. customers taking both fixed and mobile services have further improved.

Thanks to the traction of our triple and quad-play offers. This was driven by enticing more families and small enterprises to our all-in offers Tuttimus and Bizz all-in.

And also an increasing number of customers signing up for our triple play offers Minimus and Epic combo, which both having an average revenue per household largely above-average. On the enterprise side, the competitive intensity remains very high.

We also continue to face the erosion of legacy service, however, soft and by a growing point-to-point fiber park. We were once again able to further grow our mobile customer base, maintaining our strong position.

The tough pricing environment in the enterprise mobile market is however reflected in the lower ARPU. They also manage to keep our Internet base fairly stable in spite of the competitive activity in this area.

On the ICT front, the third-quarter revenue was rather stable in line with our strategic focus, we saw a favorable evolution in high-value professional services, while revenue from legacy infrastructure product decreased. All in all, the domestic revenue was 1.8% down from the prior year.

The low margin terminal revenue excluded. About half of this was related to regulatory effect with the international calling rates now having a full impact on the quarter.

Thanks to the progress made on our digital journey. We realized further cost efficiencies in our domestic operations.

The higher costs related to the ICT acquisitions we did in 2018 have now annualized and hence make our cost efficiencies more visible. For the third quarter, our good cost control, thanks to our shift to digital strategy has led to a slight positive domestic EBITDA evolution compared to 2018.

BICS, the International Carrier Service segment saw another strong increase in the A2P volume supported by TeleSign. The direct margin of BICS was up year-on-year with the progressive in sourcing of services by MTN having so far only a limited impact.

This is rather a timing effect. So we expect this to further build up over the next quarters.

The CapEx level over the first nine months remained in line with our full-year expectations. Our investments included amongst other things, the further development of digital platforms.

The ongoing upgrade of our transport network, investment in mobile continue to guarantee top-quality for our mobile customers and includes of course also the ongoing deployment of our fiber network for so-called Brownfield fiber, we are today deploying in 12 Belgium cities, while we continue to deploy green shield fiber across the country. Our pace of fiber deployment has increased significantly compared to last year.

It's going about 3x as fast and our current fiber plan foresee an even faster rollout next year. To ensure the operational capability to support this, we have now signed up a third consortium.

The free cash flow of the quarter came in strong, bringing us to a year-to-date free cash flow of $517 million acquisition cash out excluding. And note that part is related to a positive signing element on tax payments, so the full-year free cash flow should not be too far from our initial expectations.

Looking at the remainder of the year, we will continue to execute upon our shift to digital strategy. In this challenging market, we will keep focusing on further attracting new customers, driving convergence further in our customer base and continue to focus on improving our cost structure.

We will finalize the mobile access network sharing agreement with Orange Belgium. And regarding the company's transformation program, we have the intention to finalize the negotiations with the unions before the end of the year.

With this, I have covered my introduction and propose. We now start with your questions.

Thank you. I’ve got two questions.

One on business. I was wondering how concerned you are about the naked broadband bundles in the market.

Obviously, something that attract hundred percent of the households long-term, but if you believe in the one third addressable market, there might be some more headwinds to come against your TV base. So I wonder what is your view on this?

And given the EBITDA at risk, how do you see -- actually do you see extra or new type of revenues to come into medium-term to offset this rather than just a cost-cutting? And my second question is about governance.

Is there a deadline for the Board to decide on the CEO role? And also to you, Sandrine, has the Board ask you anything different or on top of what Dominique was asked to deliver by -- previously?

Thank you.

Guillaume speaking. On the -- on your first question, Nicolas, I think that you might refer as well on the net-add growth on TV that we posted this quarter, that are indeed a little bit soft, of course an evolution that we are really clearly monitoring with a strong attention with the team.

Maybe let me comment on the evolution of the quarter and then and then I’m going to comment on the long-term view. Many reasons for these deferments this quarter if you compare to Q2 performances, there is a seasonal effect due to the intake -- higher intake of season customers, no mix during the summer.

Versus Q3 last year, there's also the success of our revamped 1-P Scarlet offer that got very strong commercial focus after the launch this summer. If I look at -- going forward, if I look at the remaining of the year, so it's not yet long-term, but we expect a better TV mix in Q4, supported by the strong commercial focus on conversion product during the Christmas periods.

This is both on Proximus and Scarlet brands. But for sure, all the strategic plan that we put in place as we speak, aim to stay and to keep a relevant place on the video/TV/gaming space as demonstrated with the successful launches of the Pickx in June and Epic Combo in October.

And you may know as well that this strategy will also be supported by the launch of our brand-new set-top box beginning of next year. So for sure, we are putting a lot of strategic execution efforts in making sure that we're going to stay relevant in a broader place than just the TV segment as we are also trying to extend our reach beyond TV and also touching upon the gaming space as we saw in the -- with the Epic Combo launch and the partnership with Shadow.

That's what I can say today, but of course this is key for us to stay relevant in that space.

Okay.

And Nicolos, on your question on governance, there is no deadline for the Board to decide on the CEO role, even though they are very active in currently searching the market on that. And the Board has given me a clear mandate as CEO ad Interim to continue with the team on the execution of our Shift to Digital strategy.

So I think we are in the continuity on that front.

Okay. That's very clear.

Thank you both.

Yes. Hi, good afternoon.

Three questions. One on fiber to the home.

So the decision to potentially accelerate fiber to the home rollout, will that still be taken at the full-year '19 results, or could that be delayed a little bit, because the analysis from the regulator is also taking longer than initially expected. And could you give maybe already a bit more color on what we intend to do.

Then secondly on pricing. So given your KPIs, your customer admissions are softer in the last three quarters, I would say.

How does that make you think about pricing mainly on fixed? And then thirdly, so we have seen a lot of news on Pro being potentially for sale.

Yes, that would obviously be very negative for Proximus. How are you thinking about defending the very dominant market position you have over there?

Thank you.

So on your first question regarding the decision to potentially accelerate FTTH. Indeed, well I confirm the timing we have in mind to come back in February on this, we still as you know working on all the elements that we had mentioned.

One of them as you say has to do with the regulatory elements. We are hearing indeed that it takes a bit more time on the cable.

But hopefully by that time we have more visibility and we will see in February. Pricing?

On the pricing, I think today has you know we have a brand strategy and we are managing a pricing strategy in between those two brands, playing on promotion -- promotional activities. By the way, the average that is the simple order part of the countries and all the part of the -- and other different segments on the Proximus brand and placing on naked price on Scarlet without additional promotion.

And we are quite satisfactory with the operational results that we did in Q2 as you said and mentioned, it was a little bit softer in Q1, Q2, but we went back on track in Q3, especially on the customer numbers both on mobile and Internet. And in fact we have had a very, very good back to school momentum.

As you know, in Internet, that will be partly materialized in your Q4 Internet net growth as they see some delays in between the sales and the activation of the customers. And thanks to the promotional activities that we have as we speak, we plan to sustain this momentum throughout the Christmas period.

And important to note as well, so far we do not see major changes in Proximus performances following the recent competitors' announcements. So I think that we remain quite confident with the current pricing and the current promotional activities on our ability to deliver good commercial performance in Q4.

Of course, this is also supported by the new communication plan that we launched a new building platform. And as you can see also in the numbers, a very, very accurate in performing chain management, especially on mobile.

And on your last question regarding the VOO sale process, of course, we are very vigilant on how this will evolve in terms of which type of shareholders will end up owning VOO, which can have depending on which is a different impact in terms of a competition for Proximus. I think it's a bit early to comment on this.

I can only say that the longer it takes, potentially the better for us.

Thank you.

Thank you for taking my question. So Proximus domestic revenue ex-terminal guidance is now at minus 1.5% versus previously stating nearly stable growth in 2-ish depending on ICT revenues.

What have changed since Q2 for Proximus to tweak the guidance down? Is this mainly ICT revenues, or are there any other reasons for this?

And my second question is on free cash flow generation, which currently covers the guided dividend of €1.5. However, Proximus raised FTTH CapEx, dividend could be uncovered.

How would you -- how should we view shareholder returns going forward and what is your target on leverage? Thank you.

So on your first question regarding the revenue guidance, I think the overall message here to understand on our revenue guidance is that we don't expect big changes in the trends in the last quarter of the year. As we have indicated in Q2, some parts of our revenues are more volatile and that's indeed the ICT segments.

There is as we said a time element to the ICT pipe of projects and we have said some revenue might slip into next year and for some of it, we are rather sure that it will be for next year. But there is also a link to mention, which is with the federal government formation, which as you know is not finalized in Belgium and that has an impact at least to some softer public sector revenue, you know that Proximus exposure to the public sectors is quite high.

And I would also add that what we see in the -- is that the ICT infrastructure -- I'm not mentioning the ICT professional service, which are going, but the ICT infrastructure is facing some pressure. That -- and so that’s how you can explain the fact that in Q2 we were expecting an H2 close to minus 1.4%, now it's close to minus 1.5%.

On your question regarding free cash flow generation, we are confirming our ambition to deliver a free cash flow for the year that that we cover dividend that we had given in terms of guidance. And despite the fact that we are accelerating this year the FTTH CapEx.

We're not giving guidance beyond this. We'll come back in February in terms of guiding towards the dividend.

I can only say that what we have said is that if we were to decide on fiber acceleration, we will use certainly as a priority, the very strong balance sheet we have, the fact that we have a very low level of leverage.

Thank you.

Hi. Thanks for taking the question.

I have a fast one on fiber coverage. If you could just may be tell us what's your current full fiber coverage in the country.

And the second one on data usage, that actually was quite down sequentially. Obviously, it's still up year-over-year, but I was wondering if you could maybe give some color on the sequential seasonal impact of data usage?

And then lastly, I have seen in the press the recent interview of Mr. De Backer, the Minister of Telecoms, and I was wondering if you could give us more color on the recent discussion you had with the government.

It does seem that for the upcoming 5G auction they are willing to maybe use the same model as France used last year, meaning free spectrum against increased coverage obligation. Any color on that and on your sentiment on the fourth entrant will be much helpful.

Okay. So on your first question of fiber coverage, we are not disclosing these elements.

We are still in the first years of our rollout program. So we are still talking about small numbers that at some point we will come back you to provide you more -- with more visibility.

On your second question, I think we will come back to you on this, because it's a trend that I have not seen, so I don’t know if anyone -- Nancy, can take this one?

Maybe an element to add on this one is, don't forget that our data usage that you are providing is national usage. So it doesn't include roaming.

So there is probably some seasonality impact to it as well with the holiday period where it moves more to roaming volumes. So it is only national volume in there.

Okay. So on 5G what we can say that we are of course eager to deploy 5G as soon as spectrum is available.

Today we don't have full visibility on the timing when the spectrum auction will be done. What we can say as well is that if there are opportunities to contributing the forms of further investment in exchange of the spectrum price, we are fully open to have such discussion with the government.

Thank you. And any changes perhaps on what you’ve seen the government position is at both the federal and the regional level, regarding the fourth entrant?

Well on the fourth entrant, we don’t have lots of information on this. We understand that the risk is still there, potentially depending of course of who is going to be forming the future government.

What we can say, however, is that well, we still very much claiming that there is no room for a fourth player on the Belgium market. That since 18 months, you’ve seen that there has been an abundance of new offers in the mobile space with unlimited offers, with lower price.

And so we think that the economic space for a potential fourth entrant has decreased.

Thank you. That's very clear.

Yes, good afternoon. Regarding the transformation plans, I believe you’ve said, that you start negotiation with the unions at the end of August.

And the idea was to conclude talks before the end of the year. This curious to hear, whether anything has changed since the August expected time line in respect to your objectives of the plan?

And related to this, it would be great if we could get some guidance on whether we should be expecting some of the benefits already coming through when we look at next year's forecast? And then, come back on fiber, original question, you said the potential acceleration in the fiber rollout will be further with the balance sheet potentially.

I was just wondering what are sort of the arguments at this stage that would make you go ahead with an accelerated rollout, or what sort of counterarguments would hold you back aside from regulation, of course, from ramping up? Thank you very much.

Okay. So on the transformation plan, what be said is that negotiations are ongoing and that we do have the intention to finalize the negotiation with the unions and with the regulators before the end of the year.

We certainly want to remove the uncertainty that exist today on the employees within the company and be in a position to implement the vast measures next year. I will not come back on the size and what we have said because I want to fully respect the current confidentiality which surrounds the discussion with the unions.

It is of utmost importance that we do not breach this, considering the best events in September and I will give full chance -- full chances to the current negotiations. Sorry, second question on fiber, yes.

Not used to have to answer all questions, so that’s why. So indeed, I will maybe remind everyone the way we look at it and how we are structuring our thinking on the fiber acceleration.

What we have consistently said in the past is that we were waiting to see the various KPIs that we are achieving with fiber on MTS, the uptake, the win back, the ARPU uplift, customer satisfaction, churn, etcetera. And to make sure that we have enough relevant indicators which would give us the comfort to make the decision to accelerate, I must say that on this front, we observed very satisfactory element both on the consumer and the enterprise market.

That's one aspect. The second aspect we said has to do with our ability to not only ramp up capacity, but also make sure that we include the effectiveness of our processes, so that we decrease our costs to connect and our unit costs.

We had announced the target in terms of achieving a certain unit costs. And on this front, we are making progress, but there is still a lot to be done.

But we are making a good progress. At least we see some opportunities to further control and decrease our unit costs.

And the third element has to do with regulation, which is something that I have already commented. And based on all these parameters, then we would make the decision.

Okay. Thank you.

Yes. Hi, everyone.

Thanks for taking my question. First question on the fiber rollout, again.

Sorry to come back on this. My question is to Dufour, would the regulatory change for the wholesale cable regulation that we see, assuming it doesn't change.

Will this make you more open to co-investments? And what type of co-investment could we see?

Could you be ready to consider? Second question on cost savings.

So you have been saying in the -- in the press release that you are somewhat faster on cost savings. What is actually driving the speed of the cost savings?

Is it new initiative? Is it faster execution and what is exactly going faster?

And then last question, the third question, could you comment on the ARPU trend for triple play offers on the kind of -- and dual play. Is it Scarlet impacting the mix?

Is it lower rate of burden expense? Thank you.

Okay. So on your first question , I wouldn't link the wholesale cable regulation with the opportunities for co-investments.

I would repeat what we said on the fact that potentially there are low wholesale cable prices. It's not a good signal that the regulators sending, basically sending a message where you would plan to favor renting the network rather than investing and building in the new network.

And this is where as we consider the cable and the fiber space being from the point of view of the customer being the same broadband market. We don't think it's the right signal to send.

But I wouldn’t link this with the co-investment question. And on your second question related to cost savings, what we have seen in Q3 are -- honestly, very nice benefits from a series of measures that we have been taking over the past years on the customer experience on migrating our customers on one single mass market IT stock.

We close to finalizing this on the deployment of some digital service interface to our various agent. And all of this initiative have materialized into a quite strong decrease of the number of calls to our call centers, so a decrease of such I would call them physical interaction.

So really materializing the benefits of our shift to digital strategy. And so in that sense, combining with probably a better discipline in terms of hiring in the current context.

We have delivered somewhat a bit better OpEx of saving. So with this we are confirming our global ambition for the full 3-year plan that we had announced from the €240 million.

But to a question, are they new initiatives? It's an ongoing process.

They're always a reflection in terms of finding what are going to be the new initiative. And I can just name the one of the mobile network sharing.

As you know the benefits of such initiatives will come beyond the horizon of the 3-year plan.

On your question on ARPU, and the consumer side what is really important to note that the average revenue per home is still growing quite nicely, growing by 1.7% year-over-year. And the growth is supported by increased RGU per home, but also an increased favorable tiering on our mobile customers.

Indeed, what you can see looking at the more precise evolution per play, you see that 40 net customer growth is softer this quarter, but largely compensated by the positive revolution of a 3P conversion customers both generating very high average revenue per home above [indiscernible] per month. So this is what we are really monitoring as this is high value mix within our customer base that is generating the growth of our average revenue per home.

If I come back also on the revenue evolution, which is today fully explained for Q3 by terminals, inbound and regulation. And the first two elements, i.e., terminals and inbound revenue have no impact on margin.

Regulation impact at the revenue level are for consumers amounted to almost €5 million, which is twice the amount of the previous quarter. And if you go back to the direct margin level, at the direct margin level, we managed growth slightly on consumer business the direct margin.

If you exclude this impact of regulation.

Okay. Thanks.

Yes, thanks. Just two questions, please.

Firstly, okay, similar question on ARPU to the previous question, but on the mobile consumer postpaid ARPU. It's still declining even if you strip out the impact from the international call regulation.

And I would have thought that given you potentially got a more accretive spin-off effect as people start to use higher bundle tariffs, including unlimited just over €40, that the ARPU should have stabilized now or could stabilize going forward. So it would be good to get some color on that and how you see that progressing?

And then secondly on free cash flow. Could you just give us a sense of why you think the cash tax on the working capital will end up for the full-year '19?

Thank you.

On mobile postpaid consumer ARPU, first, one thing important to note is if you look at the 1-P mobile postpaid ARPU, this one is growing. Thanks to higher tiering.

And then you have the ARPU within the batch, which is a less difficult element to analyse. But if you look globally at the mobile postpaid ARPU, if you exclude regulation and if you exclude inbound with no impact on margin, then you have an ARPU mobile postpaid which is evolving on the right directions, so growing.

On the question on the ION bundles, one year after the launch of a limited offer, we’ve now fully recovered effect that we had on the first months on the -- out of bundle decrease. And now we are back to the trend of last year in terms of out of bundle growth for our mobile customers.

So we're been able to fully compensate it. Thanks to higher tiering and evolution of the behaviors of our customers, the impact of the [indiscernible] limited on -- out of [indiscernible] ARPU.

Okay. So on your question on free cash flow, we're not providing the detailed granular components of free cash flow.

I just want to reiterate that it's -- for the full-year it's in line with our projection. Not expect to see a lot of cash flow generation in Q4.

There are timing elements with tax, and that's all the elements that we can highlight.

Okay, thanks. [Indiscernible].

Yes. Hello to you.

Just going back to the fiber issue, you mentioned about trying to -- or still targeting your unit cost for rollout. If my memory serves me right, you were looking at about €1,000 unit cost rollout and that was including connection cost.

So, firstly, is that still the right number ? And secondly, on the process, I'm sure that actually the unit cost of building fiber will come down, the greater you actually roll it out.

So can you actually give me numbers, for example, what is your rollout right in the moment and what you expect it to be in 2020 when you have faster rollout target? Thank you.

So on the unit cost fiber we recently said that we are not achieving yet this target. And that this target was something which was over the next month that we’re working towards it.

I think it's important to understand that it's an average and actually this average can have very, very different level depending on where you're building. The key components that can have an impact on the unit cost have to do with the density, have to do with how many -- how you can deploy on façade, on the houses with those trenching.

And these elements can have quite different impact. So to your point, in terms of looking at the unit cost as we build up forward, there is certainly an element of scale and efficiency and learning curve, that’s for sure and that we’re working on in terms of improving our processes.

But at some point in time there will be also a question of moving to lower density areas where we know that we will have to face potentially more trenching than façade. So all these components are playing and having an impact on the unit costs.

And just keep in mind that it's a constant effort to find the ways to decrease it and to industrialize it. And here or there, we are considering that we still have some space to do so.

Thank you.

Good afternoon. Quick question.

How do you view the risk of your network share with Orange attracting antitrust action? Because the Czech Republic share some characteristics in a sense that it is a 3-player market where the two sharing parties have the majority of the mobile market share.

So your take please on how you evaluate that risk?

So on the mobile network sharing, we are confident that its complaint with regulation. I think we are well aware on the Czech Republic decision of statements from the Commissioner.

I don't think it's a fully final decision. It might take time.

But I think every situation is very specific and we see that there are some differences in the current situation versus the Czech Republic one. So still confidence on the regulatory and [indiscernible].

Okay. Thank you.

If we have no more questions, I think we can end the call with this. Should there be any follow-up questions, you can obviously contact the Investor Relations team.

Thank you very much and have a very nice weekend.