Greetings and welcome to the Portugal Telecom 2012 Full Year Results. At this time, all participant are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Zeinal Bava, CEO of Portugal Telecom. Thank you. Mr. Bava, you may now begin.

Okay, thank you very much. Good afternoon ladies and gentlemen. Thank you for being on this call (inaudible) EBITDA stood at about €2.269 million, our margin reached 34.4% and it was underpinned by the solid margin of the Portuguese telecom businesses, which stood at 45.5%. In 2012 fully and proportionally consolidated international assets represented 58.4%, I repeat 58.4% of our international assets contribution and 50.4% of EBITDA respectively. So as part of the diversification process of our company, we continue to see the contribution of international assets increased both in terms of revenues and also in terms of EBITDA. Net income amounted to €230 million and this is equivalent to earnings per share of about €0.27. In 2012, our CapEx amounted to €1.317 million that’s roughly 20% of revenues. Needless to say that we are investing in Brazil but with regard to Portugal, our CapEx in Portugal was down 14.1% as we begin to reach the end of the modernization process of our infrastructure and networks. My CFO, Luís Pacheco de Melo who is here with me now will take you through the financials later on. Let me now just focus on the business performance of our businesses not just in Portugal but internationally as well. I will keep it to much shorter than the very long presentation that my IR put on its site this morning, but I will use that as a reference. We are a geographically diversified company, we focused mainly in Portugal and Brazil. We have investments also in Africa. We have gone above the €100 million customer target that we had, and I repeat, we are not just diversified in terms of revenues and EBITDA, but also when it comes to geography, our key focus is Portuguese-speaking countries namely Portugal and Brazil. We continue to…

Thank you, Zeinal. Good afternoon, ladies and gentlemen. Let me focus on the fourth quarter financial highlights. Please bear in mind that we acquired in the beginning of the second quarter of 2011 and for the fourth quarter comparison between 2012 and 2011 are like for like because they have the same consolidation pyramid. On slide 54, on the revenue side, total revenues were down by 6.7% in the fourth quarter including 101 million impact of the depreciation of the real against the euro. And that affected basically Oi and other, and the elimination revenue line. On a like-for-like basis, so, accounting for the depreciation of the real against the euro, consolidated revenues would have declined 1.6% on the fourth quarter. In Portugal, revenues were down 8.1% to $660 million in the quarter within Portugal then also mentioned residential continue to both very solid growth with 3.4% increase, which reflected lower equipment sales but actually reflected some acceleration on the service revenue growth to 4.9% as RGUs and ARPU continue to growth. In the personal segment, customer revenues were down 9.1% having improved the trend from the third quarter, while revenues were down 11.7% also reflecting the impact of the MTR cuts. Enterprise also reflected some improvement throughout the quarter, reflecting growth on non-connectivity services and market share gains on this segment. On the wholesales and other segments, revenues declined by 19.9% in the quarter, reflecting a lower access and traffic revenues due to regulative price cuts and also because other operators are building their own networks, and also the impact of the decline of the public pay phones and lower revenues from the directory business. On the Oi side, Oi’s revenue proportionally consolidated in our income statement totaled $747 million in the fourth quarter, a 4.1% decline year-on-year, which…

Okay. Thank you very much. Before we take your questions, just a few things that I would like to leave as key messages. When it comes to shareholder remuneration policy, Portugal Telecom policy is predictable. We will be paying $32.05. We have ample financial flexibility as indicated by our CFO. We are quite well funded until 2016, and moreover, you should think about our company going forward. We hope and we will work towards increasing our free cash flow on the back half of lower CapEx. In fact, this year, 2013, we would expect CapEx in Portugal Telecom to be Euro 500 million or less. We will remain very focused on costs in the fourth in 2012. All operating costs were down. Our operating costs were down 5.5% in 2012 if you look at just at the fourth quarter, our operating cost were down 7.5%. Wages and salaries are down 5.9% commercial cost were down 20.8%, direct cost were down 5.2%. Other operating cost on the back of significant improvements we’ve already made in the past. It is difficult to maintain the kind of momentum we have, but they were also 11.6%. So we will remain very, very much cost conscious. We are think stabilizing revenue trends and enterprises and personal mobility in Portugal. Not happy, but clearly the macro environment is what it is and we will continue to position both our mobility offer in the personal segment and also in the enterprise segment so as to take advantage of ICT opportunities, data opportunities, and position ourselves were actually leverage any uptick that you may see in the economy going forward. Residential remains resilient, performance is good we are very happy with the market shares that we have we are leaders in triple play and we have been increasing…

Thank you. (Operator Instructions). Our first question comes from Georgios Ierodiaconou from Citi. Please post your question.

Yes, good afternoon. I have a couple of questions. The first one is on Oi, and this is a question I asked in the (inaudible) conference call, and I was wondering if you can give me an answer this time. It’s regarding the guidance for 2013, the BRL9 billion to BRL9.8 billion. My understanding is that exceptionals are included in that guidance, so I wanted to get a feel as to what part of this is organic EBITDA, and what part of the EBITDA concerns sale of non-core assets? And did I understand correctly when you ran through your presentation that that BRL9 billion is more or less minimal for the organic number and any tower sales may come on top of that? And may we also, for the revenue guidance, for 1.5% growth is slower than what you delivered in the fourth quarter. Why would the momentum, which was improving during 2012, reverse or stabilize in 2013 and not be slightly better? And my second question is around working capital. You mentioned that because of the CapEx decline working capital is affected negatively. You are guiding to CapEx decline next year. Would we expect a similar negative move on working capital? And are there any other factors we should bear in mind when we model for 2013? Thank you.

Okay, thank you very much, Georgios. With regard to the Oi guidance as I said Oi report to 2012, that it had BRL200 million plus of non-recurring, so the guidance of BRL9 billion starts to the nine and that has insisted, if you like a 3% to 5% EBITDA growth, which is recurring, and of course, any additional delta will be on the back of, if you like non-recurrent event that might occur during the course of 2013. As Oi’s management indicated, also in the conference call Oi will maintain significant financial discipline in 2013. We have provided those guidance, very clear guidance, when it comes to net debt-to-EBITDA of equal or slightly less than three times and of course that will mean that we will have to maintain financial discipline and we’ll have to of course continue to make progress on the disposal of what we call non-core assets, which in some cases may result in, if you like positive impact on EBITDA. So again, in the nutshell that EBITDA with current EBITDA has implicit 3% to 5% EBITDA growth for current and the rest will be very much dependent on, if you like some of these non-core events, which might occur during 2013. With regard to revenue guidance of 31.5%, 1.4%, I think it’s worth mentioning it’s a full-year guidance. So I think we’ve had, if you like a catch up a significant catch up growth at Oi in 2012 coming from the low base, you’ll no doubt have seen that the growth that we’ve been able to post in personal mobility has been well ahead of what our peer group companies have done in Brazil. But it is a competitive market, it’s a full-year guidance, so we quite comfortable with the guidance that we’ve provided at this stage. And as we continue to report quarterly numbers and no doubt we should be able to address that in the future. On the working capital, let me hand it over to Luis.

Georgios, in 2012, we invested in ex-Brazil around $75 million. Of course, part of this was a reflection of the CapEx decline. We’re forecasting some CapEx decline going forward as well as you’re very well pointed out, and therefore there should be still some impact for 2013. But I would say that if the situation in terms of payments, keeps as it is normal as it is right now. I think we should expect to see more or less $50 million capital working capital investment in 2012 and in 2013 sorry.

Thank you, our next question comes from the Jonathan Dann from Barclays

Hi, there. So, on Oi, looking at the trends themselves, would we expect, I guess, the sort of phasing, would we expect sort of a near-term phasing and, perhaps, a sort of second-half re-acceleration, would be my first question. And then second on M4O, I'm looking at Telefonica’s Fusion this morning and clearly that’s driven I guess a strong reduction SAC for Portugal Tel, would you be expecting sort of I guess more subscribers success or combination of subscribers and lower sack.

Okay thank you Jonathan, with regard to Oi, I mean we’re not going to the comment on the sort first half, second half quarter-by-quarter I think it chosen up to provide a guidance it’s actually in an environment that is very competitive. We are profitable with the guidance that we have provided. I want to made that clear also in this conference call of Portugal Telecom so, with regard to the numbers that we put out we are, we will be supporting the management team with the number of work that we are doing across number of initiatives across the board and we plus our two partners in Brazil fully behind and therefore, comment with the seasonality and we’d like to say that we are behind that guidance, with regard to M4O I think that’s a very good question actually we are presently surprised with the inbound sales that we are making, we are presently surprised with the sales we are making in own stores. We are very happy to see also the kind of sales that we are doing through our online store as well. So, yes, with the success of our ads campaign, which was able to achieve almost record level of notoriety in the Portuguese market, not just in terms of recall, but also understanding of the product that we are offering. Yes, we are seeing significant pull from customers and as you know the way we have priced this, it's slightly different to other markets. In our case you buy a bundle, you actually buy an offer which brings together fixed-line voice broadband fibre Oi sales, 80 or 85 TV channels, plus the two SIM cards, two SIM cards with unlimited calls to all network, also SMS and 150 megabytes of data as well. So altogether, I would say that we believe that the success of M4O will not come necessarily on the back of the discount, but we hope that it will allow us to gain market share not just in terms of TV, but also in terms of mobile. So to answer your question in a very straight way, yes we believe that the blended commission will be lower simply because there is a pull effect as opposed to a push effect, a bigger pull effect than we thought that we were expecting. Having said that, in order for us to remain competitive our commissions have to be competitive vis-à-vis our competitors. So ultimately we need to see how our competitors respond to them come back to with some numbers, almost specific numbers. Thank you.

Thank you.

Thank you. Our next question comes from HSBC.

Yes, good afternoon. Just following up on your answer, I was wondering if you can take us through the rationale for offering two SIM cards with the quadruple play product. It’s something that makes your offer different from other operators in Europe. So I was wondering if you can take us through why you do it, any first indication of whether it’s an element of success, and so on. Thanks.

We actually give four SIM cards not just two, and we believe that up to four SIM cards that we should be able to make our quadruple play offer a family offer. There’s no reason why, for example, young kids at home wouldn’t want their parents to pay their home bill, so our standard offering includes two SIM cards, but then you get an extra two SIM cards for €7.5 each. So the whole idea for us, in terms of making available up to four SIM cards is that we would like our M4O offer to be a family offer. And to provide you simplicity of tax, so basically you are not surprised with, which you bill at the end of the month, exactly what’s you are going to pay. And also to make sure that with roughly €95 or €100 its €95 actually, with €95, a family or full will have all of this telecom, plus entertainment needs fulfilled. We believe that’s very comparative not just in the context of the Portuguese market, but also in the context in our view of any European comparisons as well. I also like to call your attention to the fact that believe that one of the key differentiating factors of our offer is also the fact that we are providing unlimited cost to all networks. So if you are am M4O customer you basically do not have to worry about on-net and off-net and I think the ability for us or the fact that we have been able to free the Portuguese customer from having to worry about whether it’s on-net or off-net is also proving to be something which works in the favor of keeping the offer simple, very convenient, but also save cost. Thank you.

Thanks.

Thank you, our next question comes from Ivon Leal from BBVA.

Yes. Hello. Good afternoon, everybody, a couple of questions. The first one, I don't know if you've already commented on that, but our dividends repatriated have decreased a bit to €76 million this year. So, I don't know if you could tell us what level of dividends you expect for the coming years? And the second one, I think in the past you would say that African assets are not for sale. I wonder if you could reconfirm that? And maybe the last one is, on your quadruple play offer, I don't know if you could share some numbers on how that is performing on January and February, whether that is helping migration from prepaid to postpaid in Portugal? Thanks.

Let me take the first two questions and the second and the third question that Luis will answer the first one. And, we are quite happy with our African footprint, we believe that we have a presence in those markets where it makes sense for us to be in, most of them Portuguese-speaking we also have as you know a presence Namibia, and we manage a business in Botswana. But as I mentioned earlier in my presentation, thinking about if you like the challenges that we have from a business standpoint clearly the focus for us right now is Portugal and Brazil. For Brazil, where we have significant optionality, if you take into account the growth opportunity that exists in that market and a great footprint that Oi has in there furthermore in Portugal, it’s a macro environment. So, we need to be very focused financially and operationally in order to ensure that we can continue to mitigate any topline pressure with cost cutting and be able to take those decisions I have off time to ensure that we continue to obligations with the shareholders but also with the market. With regard to our quadruple play that’s a very good point actually one of the big changes here is also that we are moving prepaid customers to postpaid customers. And we’re not doing that on the back of subsidiary. So normal market behavior in Portugal is when you move from pre to post usually sign up a three-year contract, and on the back of that, you end up with a mobile phone usually smartphone that is subsidized, and in this particular case, we’re doing number portability, and we are not subsidizing handsets. But we have made available is the ability for our future our customers to buy smartphones in installments.…

Our last question is coming from…

Sorry I still have to answer the dividend. On a normalized basis, we should receive at around €270 million from Oi, CTM, and the smaller African assets. As you know we still have to receive parts of the 2010 and 2011 dividends from Angola. It's, as I've explained in the previous call, it's an issue of the Central Bank of Angola authorizing the FX, and, therefore we're still pending. But if things improve slightly we should be able to receive more detail in the next years and one that we have received this year because we still have substantial amount of pending.

Okay, thank you, Luis.

Thank you. Our last question is coming from Mathieu Robilliard from BNP.

Good afternoon. Thank you very much. A few questions. First, on the Portuguese market, we focus a lot on quad play, but you've also been quite innovative or, at least, the first to market, with LTE. And I wanted to know if there was anything worthwhile sharing in terms of improvements of ARPU driven by the availability of LTE, if there was any way that you found that could be a differentiating factor against your competitors in the Portuguese market? Second, coming back to the quad play, you highlighted that it's probably quite difficult for some of your competitors, at least one, to replicate your offer. Are you concerned that maybe at some point if quad play becomes such an important factor in the market the regulator would, one way or another, try to have you open some parts of your offer so that someone else can replicate it? And, finally, on Brazil, in terms of the fixed line competitive environment, about a year ago TIM made quite a bit of noise with a new offer or certainly a new project in Sao Paulo and Rio for broadband. Is that something that has, in one way or another, impacted your business? And, more generally, if you can give us a sense of how competition, both from GVT, Net, Cabo, and maybe also [Telefti] is developing for you on fixed? Thank you.

Okay. Thank you, Mathieu. With regards to LTE, we’ve the coverage in place. We have, we cover more than 90% of the Portuguese population. We’re using fiber so all of the back-hauling pretty much is now done, it’s all IP and using fiber. So I think that is one of the key differentiating factors for us. But I would say that ultimately for us, the LTE, until handsets remain expensive as they are, it is, you unlikely to see significant take-out. And therefore the numbers that we’ve, frankly I don’t think they would represent much in terms of analysis of potential impact at LTE, may or may not have in terms of future usage of data and so on as a full, particularly in this environment where people are very price sensitive. So I would say that for us, the reason why moved forward aggressively with LTE is because we believe that we should be able to give our customers in Portugal a seamless experience of voice, video data at home and outside the home. I don’t think I’ve mentioned in this call, our Meo GO service, I mean that Meo GO service is a one particular service that, again differentiates us from our competitors. You are able to actually carry your TV experience from home to the outside and of course, for those that have LTE, they know that with the kind of speed that we are providing, 50 plus megabits per second, they can enjoy superb video experience at home and on the move. So again, not the ideal market to see major impact of LTE because of the environment. Having said that, it’s a means to an end, as far as we’re concerned, and we’re delighted with investments that we have made because we’re finding that operationally,…

Thank you, this does concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.