Supplemental Disclosure Material - Ono

€10.5 million and €13.4 million in 2010 and 2011, respectively. For the three months ended March 31, 2012, these taxes
added €3.3 million to operating expenses, as compared to €3.0 million in the first quarter of 2011. See “Business—Other
Legal and Regulatory Matters”.
Furthermore, since May 2010, we have become legally required, in certain circumstances, to invest 5% of a
significant portion of the revenues we derive from the provision of our television and audiovisual services into the production
of new Spanish or European television and other audiovisual content. We expect this obligation will result in a cash
expenditure of €5 million to €8 million per year which will be accounted for as a capital expenditure. In 2011, we made an
investment of €7.6 million relating to this obligation. We expect that we will earn revenues from such investments in future
years.
Recent Developments
• Current trading: We have not yet finalized our financial information or operational data in respect of April
2012; accordingly, such data is preliminary in nature and is subject to change. Based on the current available
information, we estimate that our revenues continued to perform well in April 2012 and increased as compared
to the same month of 2011. We estimate our profitability also continued to improve in April 2012, evidenced
by higher EBITDA and continued cash flow generation.
April in 2012 continued to be challenging on the commercial front. The negative macroeconomic environment
and the slowdown in the number of broadband additions experienced in the market, as well as the new market
dynamics by which most operators have continued to focus on initiatives to increase the loyalty of their
customer base, has continued to negatively impact our residential services and customer numbers leading to
marginal negative net additions in April 2012. In an effort to reverse this negative trend, in February we
launched a set of commercial initiatives with the aim of (i) increasing customer value perception, (ii) reducing
churn, (iii) reducing retention calls and (iv) preserving ARPU. We believe there are signs that these initiatives
are having a positive impact, as evidenced by improved churn figures experienced in April 2012 as compared
to March 2012. We believe that our high speed broadband offering will continue to experience success in the
second quarter of 2012, both with respect to our existing customer base and the acquisition of new customers,
and that our new TiVo product will continue to gain traction in the market. In addition, we estimate that
residential fiber ARPU for April 2012 will be higher than that experienced in the same period of 2011. We also
expect the performance of the SME segment to continue to show a positive evolution on the back of our
improved product portfolio with broadband speeds of up to 200 Mbps.
The above information is not intended to be a comprehensive statement of our financial or operational results
for the relevant period. This preliminary information was prepared based on a number of assumptions and
estimates that are subject to inherent uncertainties and subject to change. Accordingly, it is possible that our
actual results for the relevant period will vary from our preliminary results, and such variations could be
material. See “Information Regarding Forward Looking Statements” and “Risk Factors” for a more complete
discussion of the factors that could affect our future performance and results of operations.
• Further advances in high-speed Internet: In February 2012, we completed the deployment of Docsis 3.0
technology in the Canary Islands and currently we have the capacity to deliver high-speed Internet to over
7 million homes within our network coverage areas, representing our entire fiber customer base. In addition, in
February 2012 we further improved our Internet offerings with a 200 Mbps Internet package for Small and
Medium Enterprises (SMEs). We believe that this package is unique in the Spanish market, with our
competitors currently offering Internet speeds of up to 100 Mbps in limited areas.
As of March 31, 2012, over 530 thousand customers subscribed to our high-speed Internet packages (30 Mbps
and higher), which represents approximately 37% of our broadband customer base. We believe that these
commercial results position ONO as the market leader in high-speed Internet in Spain.
• Further advances in next generation TV (TiVo): In October 2011, we officially launched our next
generation TV service (TiVo) to customers in Madrid and Barcelona. We have made this service available in
regions that represent almost 62% of our network as of March 31, 2012. We expect to further extend this
service to the remaining regions within our network coverage areas in the coming quarters. As of March 31,
2012, this product had been available for five months and during this period, we gained over 16 thousand
customers. We expect that TiVo will help us to provide our customers with a best in class experience and a
wide variety of content that integrates broadcast and broadband television in a way that goes beyond traditional
pay television features. We believe these unique functionalities will help us to increase the number of our TV
customers and revenues going forward.
• Success of our +15 Mbps loyalty campaign: In February 2012, we officially launched a commercial
campaign to further improve Internet offerings to our high-end Internet customers. As part of this initiative,
customers subscribing to our 6 to 100 Mbps Internet packages are offered extra 15 Mbps at no cost in exchange
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