Quarterly Comparison

Fixed Net

Note: Detailed data of the  Fixed Net segment are shown in the appendix on page 26

ARPL declines slowed to 4.4% versus 8.0% in 2Q 09

Retail broadband subscriber base grows by 20.8%

Access line loss cut by 3/4

Operating trends of the Fixed Net segment further improved during 3Q 09. The slowdown of fixed net access line loss continued for the 7^th consecutive quarter, which allowed for a reduction in line loss by 74.7% to 7,000 lines in 3Q 09 compared to 27,700 in 3Q 08 due to stronger customer retention and strong uptake of product bundles. The rising number of retail broadband lines further accelerated the growth of total fixed net broadband lines by 17.6% to 982,600 at the end of September 2009 and more than compensated for a decline in wholesale broadband lines. Average revenues per fixed net access line (ARPL) declined by 4.4% in 3Q 09 to EUR 34.9 compared to EUR 36.5 in 3Q 08 marking a significant improvement over the 8.0% decrease in 2Q 09 compared to 2Q 08. The ARPL decline was mainly caused by lower voice volumes. The number of unbundled lines dropped to 287,700 at the end of September 2009 compared to 297,800 at the end of September 2008 reflecting strong competition from the mobile sector. Fixed-to-mobile substitution was still the main driver for the decline in voice minutes by 11.8% to 806.7 million minutes in 3Q 09. Fixed Net voice market share of total voice minutes including mobile minutes decreased from 16.5% in 3Q 08 to 14.4% in 3Q 09.

Fixed Net revenues decline slowed to 5.3% versus 12.5% in 2Q 09

The decline in Fixed Net revenues improved to 5.3% to EUR 470. 7 million in 3Q 09 after a reduction of 12.5% in 2Q 09. The decline was mainly driven by a lower voice volume and a lower number of access lines resulting in lower revenues from Access, Voice & Broadband. 3Q  2008 included cumulative revenues of EUR 10.0 million from eTel Slovensko and Telekom Austria Czech Republic, both of which were sold in November 2008. Furthermore lower revenues from Data and Wholesale Voice & Internet contributed to the decrease in revenues.

Access, Voice & Broadband revenues declined by 9.0% to EUR 241. 3 million as a higher broadband customer base partly offset a lower total access line base and lower voice volumes.

Revenues from Data declined by 6.9% to EUR 97.8 million mainly due to corporate customers’ migration from leased lines to lower priced xDSL-based business networks and lower business customers’ investments in information and communication technology projects, compared to the same period of the previous year.

Wholesale Voice & Internet revenues declined by 8.6% to EUR 91.7 million mainly driven by lower wholesale voice revenues due to lower international traffic and lower prices. The reduction in unbundled lines as well as lower unbundling tariffs also contributed to this decline.

Other revenues increased significantly by 51.9% to EUR 39. 8 million due to higher revenues from voting services for interactive TV-shows.

Operating income grew by 11.2%

Strict cost management result  in stable opex

Strict cost management offset higher material expenses mainly attributable to promotions of product bundles including a notebook resulting in 1.2% lower operating expenses. The decline in operating expenses as well as the one-off reimbursement from the government of EUR 10.2 million mitigated the impact of lower revenues and resulted in a decline in EBITDA of 4.9% to EUR 157. 9 million in 3Q 09. Operating income rose by 11.2% to EUR 52.7 million in 3Q 09 compared to EUR 47.4 million in 3Q 08 driven by significantly lower depreciation and amortization charges.