1

MARKET OVERVIEW Bob Bunnik

2

NL is a concentrated and competitive market: 4 out of 5 players have a converged strategy

Market: Consolidation

Cable: ‘mobility’ through WiFi, plus MVNO+limited own-roll-out

Full-MVNO on TMNL, transition to MNO

M&A FttH players

‘Quad Play’

‘Convergence Strategy’

Fixed broadband Mobile (3 MNOs & their main brands)

3

Convergence from a customer perspective

Fixed and mobile are converging, providing seamless access on any device and network.

Partnerships are key to enhance the value proposition for both consumer and business.

Services Devices Access

Residential: ‘Packaging’ convergence Business: Real technical convergence

True Convergence is about providing seamless access and convenience (‘one-stop-shop’)

4

Mobile market price levels: NL vs. EU

• The Netherlands mobile market behaves as a protected market with very high price levels.

“774% difference

in Phone call prices

across the EU”

“Up to 100x difference

In Data-only tariff volume

allowances in EU27”

EU Mobile Data price comparison

EU Mobile Voice price comparison

Sources: REWHEEL (2013), EU27 Mobile Data Cost Competitiveness Report and EU Digital Agenda Scorecard 2012 (Aug. 2013)

Average cost per minute (€ cents) in mobile communications,

2011

5

Mobile market: 4G positioned as premium

The Dutch market is moving towards flat-fee Voice & SMS but still with high price levels.

Vodafone KPN

6

Mobile market shares and value

Stable market share development, growth within mobile data

Revenue Market Shares 2005-2012

(x%)

NL Mobile Service Revenue’s 2012-2017

(mEUR)

Sources: Tele2 research and TelecomPaper Q2-2013

3503 3230

2990 2812

2647 2490

2294 2230

2288 2377 2493 2626

0

1000

2000

3000

4000

5000

6000

7000

2012 2013 2014 2015 2016 2017

Voice Non-Voice

0

10

20

30

40

50

60

KPN T-Mobile Vodafone

7

A 4G-centric mobile operator could capture most value at lowest cost.

Mobile handset market development

35% SIM-only May 2013,

up from 26% May 2012

NL:

66%

Very high smartphone penetration

in the Netherlands

SIM-only sales continuous to increase

Source: Comscore Data Gem

8

The addressable market for DSL is declining with clear growth in fiber

A technology shift in fixed broadband

2007 2008 2009 2010 2011 2012 2013 2014 2015

Internet

Internet VoIP

Internet (VoIP) TV

Internet (VoIP/ Mobile)

TV

Internet (Mobile) OTT-TV

xDSL FttH

2016

45% 45% 45% 45% 44% 43%

7% 10% 13% 17% 20% 23%

48% 45% 42% 39% 36% 34%

2012 2013 2014 2015 2016 2017

Cable FttH DSL

Bandwidth demand pushed by TV & Video

Fixed Broadband penetration: a technology shift

Sources: TelecomPaper (Q2-2013), Dutch Broadband

9

Fixed business services shift to mobile & IP

Digital leased lines

IP VPN

Ethernet services

Internet access

IP voice

Traditional fixed voice

2015

100%

2%

19%

13%

20%

21%

25%

2010

100%

5%

19%

6%

21%

8%

41%

Fixed services

Mobile services

2015

5.249 mEUR

45%

55%

2010

5.268 mEUR

54%

46%

Business market value is also shifting to mobile and ‘All-IP’.

FttO regulation more favorable for alternative operators.

Dutch enterprise telecom services Fixed Services Revenue split

Sources: Tele2; Gartner, 2011; IDC, 2011; Cap Gemini Consulting analysis

10

Cloud/Hosted PBX is growing

Fixed and Mobile are integrating

Security is of increased importance

Increasing ICT complexity

Decline in Voice usage

Anywhere, anytime access on any device

Fixed and Mobile convergence

‘Consumerisation’: from ‘investing’

to ‘using’ (Cloud)

Key trends in the business segment

Business market converges into ‘ICT’ business with increased attention for security.

Trends affecting the LE market Trends affecting the SME market

11

Key take-away: Significant growth potential in

mobile

Seamless fixed-mobile operators will be able to capture market value: 4G and fiber will be

pivotal.

Residential growth in Mobile Data &

Fixed Broadband on Fiber

B2B growth in Hosted Voice and

Mobile, Fiber to the office

increasingly important

12

Q&A PART 1

Bob Bunnik