Telekom Monitor 2018 Annual Report

Contents Contents RTR Telekom Monitor 2018 Annual Report Preface Market summary Retail revenues from mobile, broadband, ﬁxed voice and leased line services Total revenues from telecommunications Connections for ﬁxed voice telephony Broadband and bundled products Enduser minutes in mobile and ﬁxed networks Fixed and mobile data volumes Fixed and mobile data volume per connection Investments Employees in the telecoms sector Tables 1 2 Mobile communications Mobile penetration Retail revenues from mobile telecommunications Call minutes in the retail market Text messaging Data volume in the retail market SIM cards in use Minutes and text messages per Month Total mobile revenues Porting of mobile telephone numbers Mobile services price index not yet updated Tables 3 Broadband and bundled products 4 Fixed and mobile broadband connections Broadband penetration Retail broadband connections by bundle category – ﬁxed network Revenues from bundled products Tables Fixed network Fixed lines Fixed-line penetration Carrier pre-selection and call-by-call usage 7 9 10 11 12 13 14 15 16 17 18 19 23 24 25 26 27 28 29 30 31 32 33 34 39 40 41 42 43 44 47 48 49 50 RTR Telekom Monitor | 2018 Annual Report

Contents Fixed retail revenues in the private customer segment Fixed retail revenues in the business customer segment Call minutes in the retail market Average call minutes from the ﬁxed network Minutes in the wholesale market Wholesale revenues Geographic numbers in use Service numbers in use Tables 5 Leased lines Number of retail leased lines and Ethernet services Revenues from retail leased lines and Ethernet services Number of terminating segments Wholesale revenues from leased lines and Ethernet services Tables 6 International comparisons and technology indicators 7 Interconnection charges for termination in mobile networks Roaming – retail market Data market within the EU/EEA Roaming – retail market Wholesale roaming market Fixed broadband penetration rate Mobile broadband penetration rate Fixed broadband retail market – market share of incumbents Computers, internet access and broadband in households DESI 2018 – portfolio analysis Gross domestic expenditure on R&D in absolute terms and as a proportion of GDP Explanatory comments and glossary Publishing information 51 52 53 54 55 56 57 58 59 65 66 67 68 69 70 73 74 75 76 77 78 79 80 81 82 83 85 96 RTR Telekom Monitor | 2018 Annual Report

Preface Preface Dear readers, As every year, the highlights of the RTR Telekom Monitor annual report include a year- on-year comparison of market data, developments relating to roaming, comparisons at international level and Austria’s ranking on international technology indexes. The Communications Survey Ordinance (KEV) is the legal basis authorising RTR to survey market data. An amendment to the KEV became effective as of 1 October 2017. The 2018 annual report is the first evaluation prepared entirely based on the new KEV. To allow you easier access to compiled market statistics in future, you can now not only download market data from our Open Data zone but also interactive charts, which you can then build into presentations, for example. The same applies to data deriving from the RTR Internet Monitor and the RTR Post Monitor. This report again clearly shows that Austria is ‘mobile telecoms country’, with mobile phones virtually omnipresent: • As of the end of 2018, the mobile penetration rate was roughly 150%. • Mobile retail revenues increased while also the number of voice calling minutes rose again in that year. • Via mobile devices, users consumed 1.49 million terabytes of data in 2018, 44% more than the year before. All indicators point to continued growth of the mobile telecoms market. In the next issues of the RTR Telekom Monitor, we will as usual keep you informed and up to date on related progress and on current developments in Austria’s telecommunications market. I hope this report provides you with interesting reading. Johannes Gungl Vienna June 2019 Managing Director Telecommunications and Postal Services Division RTR RTR Telekom Monitor | 2018 Annual Report

01 Market summary 1 Market summary 9 Retail revenues from mobile, broadband, fixed voice and leased line services 10 Total revenues from telecommunications Connections for fixed voice telephony Broadband and bundled products End-user minutes in mobile and fixed networks Fixed and mobile data volumes Fixed and mobile data volume per connection Investments Employees in the telecoms sector Tables 11 12 13 14 15 16 17 18 19

section 1 Market summary Retail revenues from mobile, broadband, fixed voice and leased line services Mobile and broadband earn more while ﬁxed voice generates less Mobile Broadband incl. bundled packages Fixed network Leased lines in EUR millions 1,000 10 102 10 98 10 97 10 96 10 94 10 90 9 90 24 91 24 88 24 85 23 83 23 84 210 212 212 213 217 221 224 230 233 237 239 238 575 584 596 591 586 580 589 596 582 592 602 606 800 600 400 200 0 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • Mobile, broadband, fixed voice and leased line services generated a total of EUR 3.76 billion in 2018. That was 2.8% more than in 2017. One portion of the increase resulted from restructuring the category of leased line revenue to include Ethernet services as well from Q4 2017. • 63.3% of total revenues were generated by mobile services (EUR 2.38 billion; +1.2%) and about one quarter by broadband and bundled products (EUR 947.2 million; +6.1%). Income from fixed voiced services declined (EUR 341 million; -6.6%) and accounted for only about 9.1% of total revenues. Leased line and Ethernet revenues represented only a 2.5% share of the overall result (EUR 94 million; +80.9%). The chart includes revenues from the categories of mobile services, broadband (ﬁxed network), bundled products, ﬁxed network voice services and leased lines (see Glossary). Mobile services revenues additionally include income from mobile broadband. 10 RTR Telekom Monitor | 2018 Annual Report

section 1 Market summary Total revenues from telecommunications Strong increase in wholesale revenues since previous year Retail total Wholesale total in EUR millions 97 96 105 103 106 104 113 118 115 108 117 118 897 905 914 911 907 902 913 941 928 937 948 951 1,200 1,000 800 600 400 200 0 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • Retail and wholesale revenues increased by 2.9% compared with the previous year, reaching a total of EUR 4.22 billion in 2018. • Wholesale revenues grew by 3.9% to EUR 457.6 million in total, accounting for 10.8% of overall telecommunications revenues, while retail revenues represented the greater share by far, at about EUR 3.76 billion. Total revenues comprise retail revenues and wholesale revenues. The retail market involves the provision of services directly to consumers, while the wholesale market represents telecoms companies offering services to one another. RTR Telekom Monitor | 2018 Annual Report 11

section 1 Market summary Connections for fixed voice telephony About 40,000 fewer ﬁxed voice connections since late 2017 Total fixed network lines in thousands 3,000 2,500 2,000 1,500 1,000 500 0 2,525 2,515 2,513 2,504 2,485 2,462 2,467 2,449 2,444 2,432 2,408 2,411 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • The number of fixed voice connections is gradually but consistently falling. At the end of 2018, some 2.41 million connections were registered, 1.6% fewer than a year before. The chart above shows the total number of ﬁxed voice lines in households and businesses, regardless of the underlying infrastructure (e.g. copper wire pairs, coaxial cable or optical ﬁbre). This also includes connections that are implemented as voice-over-broadband (VoB) connections. 12 RTR Telekom Monitor | 2018 Annual Report

section 1 Market summary Broadband and bundled products Broadband products increase with standalone decreasing since previous year Fixed standalone broadband Bundles incl. fixed broadband in thousands 3,000 2,500 2,000 1,500 1,000 500 0 1,844 1,854 1,868 1,873 1,877 1,870 1,859 1,852 1,839 1,909 1,908 1,927 583 583 590 608 608 601 600 609 625 567 562 567 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • Fixed broadband connections totalled 2.49 million at the end of 2018. That is a gain of 1.3% compared with 2017. Most of those subscriptions were in combination with other products. • Total broadband standalone products declined in number by 6.9% from the year before, while bundled products increased by 4%. This rise is attributed in part to one provider reclassifying standalone products as ‘bundled products with broadband’ – here without any additional product – as of the beginning of 2018. • As of the end of 2018, a total share of 77.3% of broadband products were a part of subscription packages including other telecoms products. Standalone products are ﬁxed broadband products offered without any other product attached. Fixed broadband sold in combination with other products is referred to as a bundled product. The chart shows only products offered by providers via their own infrastructures. Products provided using an additionally purchased infrastructure base are not included. RTR Telekom Monitor | 2018 Annual Report 13

section 1 Market summary Enduser minutes in mobile and fixed networks More voice minutes overall but fewer in ﬁxed networks Fixed network minutes Mobile network minutes in millions 759 723 692 711 698 652 618 641 630 588 563 570 4,978 5,033 5,038 5,339 5,312 5,237 5,094 5,488 5,379 5,480 5,352 5,623 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • In total, callers logged some 24.19 billion minutes in 2018. That represents a 1.9% increase compared with the previous year, when the total was 23.74 billion minutes. The chart shows technical minutes (millions) for calls from mobile networks and the ﬁxed network (see Glossary). • Calls originating from mobile networks accounted for 90.3% of all call minutes or 21.83 billion minutes in 2018 (3.3% more than in 2017). • Fixed network calls represented only about 9.7% or 2.35 billion minutes in 2018 (9.9% less than in 2017). 14 RTR Telekom Monitor | 2018 Annual Report

section 1 Market summary Fixed and mobile data volumes Strong increase for ﬁxed and mobile data volumes Mobile broadband data volume Fixed broadband data volume (from Q4 2017) Up-/Download in terabyte 1,000,000 800,000 600,000 400,000 200,000 0 109,876 124,488 142,937 194,174 223,084 235,177 266,823 3 2 4 , 0 1 3 8 6 8 , 3 1 7 5 8 1 , 6 4 3 2 8 3 , 8 8 7 3 8 2 , 4 4 3 8 0 6 , 8 3 7 7 2 7 , 9 6 3 1 7 4 , 8 8 7 0 5 5 , 3 3 4 5 7 5 , 5 5 8 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • A total of 4.66 million terabytes of data were consumed in 2018, with about 32% attributed to mobile data volumes (1.49 million terabytes) and 68% to fixed data volumes (3.17 million terabytes). • There was a renewed strong increase in mobile data volumes in 2018. Roughly 44.3% more were consumed than in 2017. • No year-on-year comparison is available for fixed data volumes, since the figures only started being collected in Q4 2017. Even so, a comparison with Q4 2018 reveals a robust 19.9% increase for fixed data volumes as well. The data volume in terabytes that was uploaded and downloaded in the mobile retail market is shown (1 terabyte = 1,024 gigabytes = 1,048,576 megabytes). The data volume for retail ﬁxed networks is only available from Q4 2017. RTR Telekom Monitor | 2018 Annual Report 15

section 1 Market summary Fixed and mobile data volume per connection Signiﬁcant rise in consumed monthly data volumes Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Data volume in GB per connection and month 120 100 80 60 40 20 0 97.0 107.1 99.9 107.1 115.8 47.1 53.2 51.0 53.7 65.2 4.1 4.6 5.1 5.6 5.9 Fixed network Mobile data subscriptions with set monthly rate (no minutes or messages included) Mobile smartphone bundles and data subscriptions without set monthly rate • In Q4 2018 a total of 876 million gigabytes of data were used via fixed broadband, about 20% more than in the same quarter of 2017 (731 million GB). This translates to a monthly average of 115.8 GB per connection in Q4 2018 and compares with 97 GB per month and connection in Q4 2017. • Almost 444 million GB of data were consumed via mobile broadband in Q4 2018, 39.7% more than in the same quarter of 2017. Of that volume, 75.6% was attributed to mobile data subscriptions. This translates to an average monthly volume of about 65.2 GB consumed via each connection in Q4 2018, compared with 47.1 GB in 2017. • In Q4 2018, users consumed 5.9 GB of data per connection per month as part of other mobile subscriptions, that figure being 4.1 GB in 2017. The ﬁxed broadband ﬁgure includes all retail broadband connections. With mobile broadband, a distinction is made between data-only subscriptions (at a set monthly rate) and all other subscriptions (smartphone subscriptions and data subscriptions without a set monthly rate). Only those mobile connections that the customer used to access the internet at least once in the particular quarter are taken into account. 16 RTR Telekom Monitor | 2018 Annual Report

section 1 Market summary Investments Roughly 6.7% more invested than in 2017 Inv. in frequencies Inv. in technical infrastructure Inv. in sales and customer service in EUR millions 10.1 6.3 7.5 7.1 15.9 532.7 645.9 588.9 626.4 660.4 9.3 2014 9.3 2015 4.1 2016 2017 2018 700 600 500 400 300 200 100 0 • Sector player investments amounted to EUR 676.29 million in 2018 (6.7% more than in 2017). • Technical infrastructure investments grew by 5.4% to EUR 660.4 million while investments in distribution and customer service more than doubled to EUR 15.9 million. • Originally planned for 2018, the auctions of the 3.4–3.8 GHz spectrum were not held until early 2019. The investments made in this regard will consequently be reported next year. The chart above shows the changes from year to year in investments in technical infrastructure, sales and customer service. The values reported here are partly based on estimates, so that the total amount invested cannot be determined exactly. The investment volumes shown above only include those investments made directly by telecoms companies. They do not include investments by upstream or downstream branches of the industry. RTR Telekom Monitor | 2018 Annual Report 17

section 1 Market summary Employees in the telecoms sector Drop in telecoms employees over the year Employees number of FTEs Leased personnel 1,246 1,286 1,212 1,256 1,285 1,245 1,150 1,183 1,197 1,144 1,113 1,156 12,599 12,584 12,562 12,498 12,558 12,603 12,701 12,697 12,747 12,672 12,488 12,303 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • The number of permanently employed staff continually dropped over the course of 2018. Roughly 12,700 full-time equivalents were employed as of the end of 2017; this number had fallen to 12,300 by the end of 2018 (-3.1%). • Leased employees also dropped, from 1,180 at the end of 2017 to 1,160 a year later (-1.7%). • This meant a 3% decline in the total number of telecoms employees, to 13,460 full-time equivalents. A distinction is made between employees directly employed by telecoms companies or leased employees, and freelancers The ﬁgures refer to full-time equivalents (FTEs). When interpreting these ﬁgures, it should be noted that only staff employed in the telecoms sector are included. The ﬁgures do not include employees in supplier industries, external call centre employees or outsourced positions. 18 RTR Telekom Monitor | 2018 Annual Report

section 1 Market summary TABLE 01: RETAIL REVENUES FROM MOBILE, BROADBAND, FIXED VOICE AND LEASED LINE SERVICES (IN EUR MILLIONS) SEE PAGE 10 Mobile Broadband incl. bundled packages Fixed network Leased lines Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 575 584 596 591 586 580 589 596 582 592 602 606 210 212 212 213 217 221 224 230 233 237 239 238 102 98 97 96 94 90 90 91 88 85 83 84 * Including Ethernet revenues from Q4 2017 on TABLE 02: TOTAL REVENUES FROM TELECOMMUNICATIONS (IN EUR MILLIONS) 10 10 10 10 10 10 9 24 24 24 23 23 SEE PAGE 11 Retail total Wholesale total TOTAL Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 897 905 914 911 907 902 913 941 928 937 948 951 97 96 105 103 106 104 113 118 115 108 117 118 994 1,001 1,019 1,014 1,013 1,005 1,026 1,058 1,042 1,045 1,065 1,069 TABLE 03: CONNECTIONS FOR FIXED VOICE TELEPHONY (IN THOUSANDS) SEE PAGE 12 Total ﬁxed network lines Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 2,525 2,515 2,513 2,504 2,485 2,462 2,467 2,449 2,444 2,432 2,408 2,411 RTR Telekom Monitor | 2018 Annual Report 19

section 1 Market summary TABLE 04: BROADBAND AND BUNDLED PRODUCTS (IN THOUSANDS) SEE PAGE 13 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Fixed standalone broadband Bundles incl. ﬁxed broadband 583 583 590 608 608 601 600 609 625 567 562 567 1.844 1.854 1.868 1.873 1.877 1.870 1.859 1.852 1.839 1.909 1.908 1.927 TABLE 05: END-USER MINUTES IN MOBILE AND FIXED NETWORKS (IN MILLIONS) SEE PAGE 14 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Fixed network minutes Mobile network minutes 759 723 692 711 698 652 618 641 630 588 563 570 4,978 5,033 5,038 5,339 5,312 5,237 5,094 5,488 5,379 5,480 5,352 5,623 TABLE 06 : FIXED AND MOBILE DATA VOLUMES (IN TERABYTE) SEE PAGE 15 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Mobile broadband data volume Fixed broadband data volume (from Q4 2017) 109,876 124,488 142,937 194,174 223,084 235,177 266,823 310,423 346,185 344,283 369,727 433,550 713,868 788,382 738,608 788,471 855,575 20 RTR Telekom Monitor | 2018 Annual Report

section 1 Market summary TABLE 07: FIXED AND MOBILE DATA VOLUME PER CONNECTION DATA VOLUME IN GB PER CONNECTION AND MONTH SEE PAGE 16 Fixed network Mobile data subscriptions with set monthly rate (no minutes or Mobile smartphone bundles and data subscriptions without messages included) set monthly rate Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 97.0 107.1 99.9 107.1 115.8 47.1 53.2 51.0 53.7 65.2 4.1 4.6 5.1 5.6 5.9 TABLE 08: INVESTMENTS (IN EUR MILLIONS) SEE PAGE 17 2014 2015 2016 2017 2018 Inv. in frequencies Inv. in technical infrastructure Inv. in sales and customer 9.3 9.3 4.1 0.0 0.0 532.7 645.9 588.9 626.4 660.4 service 10.1 6.3 7.5 7.1 15.9 TABLE 09: EMPLOYEES IN THE TELECOMS SECTOR SEE PAGE 18 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Employees Leased personnel 12,599 12,584 12,562 12,498 12,558 12,603 12,701 12,697 12,747 12,672 12,488 12,303 1,246 1,286 1,212 1,256 1,285 1,245 1,150 1,183 1,197 1,144 1,113 1,156 RTR Telekom Monitor | 2018 Annual Report 21

02 Mobile communications 2 Mobile communications Mobile penetration Retail revenues from mobile telecommunications Call minutes in the retail market Text messaging Data volume in the retail market SIM cards in use Minutes and text messages per Month Total mobile revenues Porting of mobile telephone numbers Mobile services price index not yet updated Tables 23 24 25 26 27 28 29 30 31 32 33 34

section 2 Mobile communications Mobile penetration High penetration rate even without M2M SIM cards Incl. M2M SIM cards Excl. M2M SIM cards in percent 200% 150% 100% 50% 0% 186.6% 149.1% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Source for population figure: Statistics Austria • A penetration rate, including M2M SIM cards, of about 186.6% was recorded at the end of 2018. The rate rose by more than 20 percentage points within one year. The number of M2M SIM cards saw a sharp increase, partially due to a major customer of one operator. • Even without counting M2M SIM cards, the penetration rate was 149.1%, which is also much higher than at the end of 2017 (145.4%). The mobile penetration rate is calculated as the number of activated SIM cards divided by the country’s population. This ﬁgure therefore represents the (notional) average number of SIM cards owned by every resident. The penetration rate is presented here including and excluding M2M SIM cards. Machine to machine (M2M) refers to automated information exchange between two terminal devices. 24 RTR Telekom Monitor | 2018 Annual Report

section 2 Mobile communications Retail revenues from mobile telecommunications Growth in mobile retail revenues Voice service connection fee Bundled products and base fees Other subscriptions Text message fee Fees for data and value-added data services Data-only subscriptions Other fees in EUR millions 700 600 500 400 300 200 100 0 84 24 4 82 25 3 86 21 4 85 20 5 83 18 6 86 18 5 89 19 4 444 437 446 455 462 361 365 413 417 419 414 417 101 Q1 2016 109 Q2 2016 71 Q3 2016 65 Q4 2016 59 Q1 2017 58 Q2 2017 60 Q3 2017 152 Q4 2017 145 Q1 2018 145 Q2 2018 147 Q3 2018 144 Q4 2018 • Mobile retail revenues totalled roughly EUR 2.38 billion in 2018, an increase of 1.6% from 2017. • Data-only subscriptions accounted for about 24.4% (EUR 581.5 million) and other subscriptions 75.6% (EUR 1.8 billion). • Only since Q4 2017 has a distinction been made between data- only subscriptions and other plans, and no annual comparison of this figure is possible. A comparison of the final quarters nonetheless reveals a 5.4% decline in data-only subscriptions for Q4 2018 compared with the same period in 2017, while all other revenues increased by 4.0% in total. All retail revenues from mobile services are shown. Since Q4 2017, the only distinction made is between data-only tariff plans (no voice/texts) and other subscriptions. The ﬁgures include other fees (such as one-time fees and charges for exceeding maximum volumes). RTR Telekom Monitor | 2018 Annual Report 25

section 2 Mobile communications Call minutes in the retail market Sharp year-on-year increase in call minutes Call minutes in the retail market (technical measurement) in millions 6,000 5,000 4,000 3,000 2,000 1,000 0 4,978 5,033 5,038 5,339 5,312 5,237 5,094 5,488 5,379 5,480 5,352 5,623 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • At a total of 21.8 billion call minutes, the time spent calling from mobile networks increased by 3.3% compared year-on-year. • The 5.6 billion minutes seen in Q4 2018 also represent a new record for the number of mobile voice minutes in any quarter. Call minutes in mobile networks, based on technical measurement, are shown. The ﬁgure represents voice call minutes including value-added voice services, but not minutes originating in non-voice services or video calls. 26 RTR Telekom Monitor | 2018 Annual Report

section 2 Mobile communications Text messaging Renewed drop in text messaging from previous year Text messages sent (technical measurement) in millions 1,000 800 600 400 200 0 772 765 732 736 663 655 607 622 575 572 556 524 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • As in past years, the number of text messages continued to decrease. The 2.22 billion text messages sent in 2018 represent a 12.6% drop from 2017. Text messages based on technical measurement are shown. For text messages, similar to call minutes, ‘technical measurement’ means that text messages not directly charged to the retail customer are also included (for example, text messages included in a basic monthly fee or ﬂat rate). Multimedia messages (MMS), not being text messages, are not included. RTR Telekom Monitor | 2018 Annual Report 27

section 2 Mobile communications Data volume in the retail market About 44% more data volume used than in 2017 Total data volume Data-only subscriptions Other subscriptions in Terabyte 500,000 400,000 300,000 200,000 100,000 0 105,594 79,209 88,073 97,564 72,138 109,876 124,488 142,937 194,174 223,084 235,177 266,823 238,286 266,976 256,210 272,163 327,956 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • Towards the end of the year, there was a renewed strong increase in data volume usage. Users consumed 1.49 million terabytes of data in 2018, 44.3% more than the year before. • The volume consumed under data-only subscriptions in 2018 amounted to roughly 1.12 million terabytes, while, not surprisingly, other types of subscription accounted for less, about 370,500 terabytes. The data volume in terabytes that was uploaded and downloaded in the mobile retail market is shown (1 terabyte = 1,024 gigabytes = 1,048,576 megabytes). From Q4 2017 onwards, a distinction is made between data volume in data-only subscriptions (no voice/ texts) and in all other plans (e.g. smartphone plans). 28 RTR Telekom Monitor | 2018 Annual Report

section 2 Mobile communications SIM cards in use Roughly 16.5 million SIM cards – one in ﬁve used for M2M SIM cards Data subscriptions Other subscriptions M2M-SIM cards in thousands 20,000 15,000 10,000 5,000 0 2,265 2,672 3,002 3,321 10,792 10,780 10,813 10,984 13,568 13,551 13,954 14,264 14,392 14,628 14,877 14,666 2,207 2,206 2,217 2,225 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • Roughly 16.53 million SIM cards were in use as of the end of 2018. That is 12.7% more than at the end of the year before. M2M SIM cards account for a fair share of the increase; this category is listed separately as of Q1 2018. Roughly 20% (3.3 million) of SIM cards are now used for M2M. • Even when ignoring M2M SIM cards, the number of SIM cards saw an increase over 2018. With about 13.0 million SIM cards in use in the first quarter, the tally had risen to 13.2 million by Q4 of that year. The number of used and active SIM cards (prepaid and postpaid) are shown. In the case of postpaid SIM cards, ‘active’ means that a customer has a valid agreement. From Q4 2017 onwards, a prepaid SIM card is only considered active if the user has been active at least once during the particular quarter (placed or received a call, sent a text or MMS message, or consumed data). As of Q4 2017 a distinction is made between data-only subscriptions and other plans. M2M SIM cards are listed separately from Q1 2018 onwards. RTR Telekom Monitor | 2018 Annual Report 29

section 2 Mobile communications Minutes and text messages per Month More minutes and fewer text messages Minutes / subscriber / month Messages / subscriber / month 200 150 100 50 0 168 19 166 18 169 18 165 17 171 16 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • As of the end of 2018, each subscriber was using an average of 171 call minutes per month, three minutes more than at the end of 2017. The number of text messages per month and subscriber declined from 19 at the end of 2017 to 16 by the end of 2018. The ﬁgures are calculated by dividing the number of minutes, or text messages, by three (months in a quarter) and by the number of SIM cards. Here, only SIM cards not falling under data-only subscriptions are included. 30 RTR Telekom Monitor | 2018 Annual Report

section 2 Mobile communications Total mobile revenues Growth in retail and wholesale revenues Retail revenues Wholesale revenues in EUR millions 63 61 68 60 66 63 72 74 75 69 76 76 575 584 596 591 586 580 589 596 582 592 602 606 700 600 500 400 300 200 100 0 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • Revenues from mobile services were roughly EUR 2.68 billion in 2018, a gain of 2.0% from the previous year. The chart shows revenues from mobile services delivered in the retail and wholesale markets (see Glossary). • At about 1.8 billion, revenues from subscriptions other than data- only plans made up the larger share. • Data-only subscriptions accounted for roughly EUR 581.5 million in revenues. • Wholesale revenues made up about 11.1% of the overall amount. RTR Telekom Monitor | 2018 Annual Report 31

section 2 Mobile communications Porting of mobile telephone numbers More than threefold increase in mobile number porting Mobile number porting: number of cases 200,000 150,000 100,000 50,000 0 55,459 47,650 53,302 68,636 65,013 65,519 50,984 66,119 65,445 51,833 53,906 172,819 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • Whereas usually 40,000 to 60,000 numbers are ported on average each quarter, the figure was roughly 172,800 in Q4 2018. Number porting refers to customers retaining their telephone numbers when switching service providers. The instances of porting procedures/imports of telephone numbers recorded for an operator in one quarter are shown. 32 RTR Telekom Monitor | 2018 Annual Report

section 2 Mobile communications Mobile services price index Index stable for all user groups except low users, slight drop overall Low user Medium user High user Power user Overall index Index points 200 150 100 50 0 10/2015 01/2016 04/2016 07/2016 10/2016 01/2017 04/2017 07/2017 10/2017 01/2018 04/2018 07/2018 10/2018 01/2019 • Following a slight drop in Q4 2018 as a result of Christmas sales, the overall index remained practically at the same level throughout the first quarter of 2019. The overall index fell by less than one index point. • As in previous years, adjustments were made at the beginning of 2019 to the user categories serving as the basis of the price index (see Glossary). Changes in usage data nonetheless do not impact the index itself, since the mobile price index is a linked index, similar to the Consumer Price Index. To calculate the index, the average monthly prices for four different user categories are derived from the subscription information published each month by the Austrian Chamber of Labour. Three of the user categories refer to ‘smartphone users’ who make use of both voice service and text messaging as well as data services. Users in the fourth category (‘low users’) use only voice and text messaging services. For each category, the index is based on the ﬁve cheapest rates per brand (see Glossary). The baseline for calculations is January 2011, and the chart shows the changes over the past three years. In contrast to the other charts in the RTR Telekom Monitor, this chart shows price changes on a monthly and not a quarterly basis. RTR Telekom Monitor | 2018 Annual Report 33

section 2 Mobile communications TABLE 10: MOBILE PENETRATION SEE PAGE 24 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Incl. M2M Excl. M2M 155.5 % 155.1 % 159.3 % 162.6 % 163.9 % 166.3 % 168.7 % 166.2 % 172.9 % 177.2 % 181.0 % 186.6% 153.8 % 153.2 % 153.8 % 154.4 % 154.1 % 153.6 % 153.1 % 145.4 % 147.2 % 146.9 % 147.0 % 149.1% TABLE 11: RETAIL REVENUES FROM MOBILE TELECOMMUNICATIONS (IN EUR MILLIONS) Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 SEE PAGE 25 Data-only subscriptions Other sub- scriptions Voice service connection 152 145 145 147 144 444 437 446 455 462 fee 101 109 71 65 59 58 60 Bundled Other fees Text message Fees for data products and base fees 361 365 413 417 419 414 417 4 3 4 5 6 5 4 fee 24 25 21 20 18 18 19 and value- added data services 84 82 86 85 83 86 89 TABLE 12: CALL MINUTES IN THE RETAIL MARKET (IN MILLIONS) SEE PAGE 26 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Call minutes in the retail market (technical measurement) 4,978 5,033 5,038 5,339 5,312 5,237 5,094 5,488 5,379 5,480 5,352 5,623 34 RTR Telekom Monitor | 2018 Annual Report

TABLE 13: TEXT MESSAGING (IN MILLIONS) SEE PAGE 27 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 section 2 Mobile communications Text messages sent (technical measurement) 772 765 732 736 663 655 607 622 575 572 556 524 TABLE 14: DATA VOLUME IN THE RETAIL MARKET (IN TERABYTE) Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 SEE PAGE 28 Total data volume Data-only subscriptions Other subscriptions 109,876 124,488 142,937 194,174 223,084 235,177 266,823 238,286 266,976 256,210 272,163 327,956 72,138 79,209 88,073 97,564 105,594 TABLE 15: SIM CARDS IN USE (IN THOUSANDS) Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 SEE PAGE 29 SIM cards Data subscriptions Other subscriptions M2M-SIM cards (a separate category from Q1 2018 on) 13.568 13.551 13.954 14.264 14.392 14.628 14.877 14.666 2.207 2.206 2.217 2.225 10.792 10.780 10.813 10.984 2.265 2.672 3.002 3.321 RTR Telekom Monitor | 2018 Annual Report 35

section 2 Mobile communications TABLE 16: MINUTES AND TEXT MESSAGES PER MONTH SEE PAGE 30 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Minutes / subscriber / month Messages / subscriber / month 168 166 169 165 171 19 18 18 17 16 TABLE 17: TOTAL MOBILE REVENUES (IN EUR MILLIONS) SEE PAGE 31 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Retail revenues Wholesale revenues 575 584 596 591 586 580 589 596 582 592 602 606 63 61 68 60 66 63 72 74 75 69 76 76 TABLE 18: PORTING OF MOBILE TELEPHONE NUMBERS SEE PAGE 32 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Mobile number porting: no. of cases 55,459 47,650 53,302 68,636 65,013 65,519 50,984 66,119 65,445 51,833 53,906 172,819 36 RTR Telekom Monitor | 2018 Annual Report

section 2 Mobile communications TABLE 19: MOBILE SERVICES PRICE INDEX (INDEX POINTS) SEE PAGE 33 Low user Medium user High user Power user Overall index September 2015 October 2015 November 2015 December 2015 January 2016 February 2016 March 2016 April 2016 May 2016 June 2016 July 2016 August 2016 September 2016 October 2016 November 2016 December 2016 January 2017 February 2017 March 2017 April 2017 May 2017 June 2017 July 2017 August 2017 September 2017 October 2017 November 2017 December 2017 January 2018 February 2018 March 2018 April 2018 May 2018 June 2018 July 2018 August 2018 September 2018 October 2018 November 2018 December 2018 January 2019 February 2019 March 2019 140.18 139.21 143.35 141.17 141.11 140.45 140.66 140.09 139.24 139.59 138.60 138.67 138.44 137.34 135.00 133.63 132.76 130.81 134.62 135.62 138.13 137.10 138.59 138.73 134.37 143.79 141.38 141.37 132.40 135.25 137.10 146.21 145.33 145.34 136.41 136.12 136.12 135.93 131.88 132.64 132.76 126.96 126.96 88.58 89.72 90.17 87.61 87.12 87.86 87.90 87.30 86.93 89.83 90.81 90.84 90.78 88.46 81.33 80.44 80.23 81.27 80.92 81.31 79.06 74.22 73.39 73.43 70.93 70.67 67.37 67.33 67.53 68.26 68.92 70.02 67.66 67.46 66.84 66.85 67.09 67.47 64.74 64.63 65.16 67.19 67.19 80.97 77.35 77.57 74.34 73.92 74.55 74.58 74.07 73.75 76.22 77.05 77.07 77.02 75.06 69.02 68.26 68.09 69.18 68.88 69.21 66.85 62.77 62.08 62.08 61.69 61.48 58.66 58.63 58.90 59.47 60.02 60.78 58.80 58.09 57.55 57.83 58.03 58.28 55.71 55.61 55.83 56.56 56.53 63.94 60.07 58.69 54.63 54.03 55.35 55.19 54.47 53.39 53.81 54.04 54.05 51.03 49.56 45.52 45.03 45.16 41.74 40.11 39.07 40.47 40.12 39.51 39.51 38.10 37.95 36.23 36.39 36.66 38.68 39.57 39.99 38.72 38.96 36.80 37.09 36.88 36.75 34.08 34.19 34.37 34.70 34.67 93.42 91.59 92.45 89.44 89.05 89.55 89.58 88.98 88.33 89.86 90.13 90.16 89.32 87.61 82.72 81.84 81.56 80.75 81.13 81.30 81.13 78.55 78.39 78.44 76.27 78.47 75.91 75.93 73.87 75.41 76.40 79.25 77.63 77.46 74.40 74.47 74.53 74.60 71.60 71.77 72.03 71.35 71.34 RTR Telekom Monitor | 2018 Annual Report 37

03 Broadband and bundled products 3 Broadband and bundled products Fixed and mobile broadband connections Broadband penetration Retail broadband connections by bundle category – fixed network Revenues from bundled products Tables 39 40 41 42 43 44 RTR Telekom Monitor | 2018 Annual Report 39

section 3 Broadband and bundled products Fixed and mobile broadband connections Number of broadband connections increases moderately Fixed broadband Mobile data subscriptions Smartphone subscriptions in thousands 12,000 10,000 8,000 6,000 4,000 2,000 0 4,223 4,282 4,339 4,661 4,780 4,819 4,909 5,478 5,492 5,472 5,486 5,658 2,417 2,462 2,404 2,464 2,452 2,453 2,462 2,220 2,156 2,140 2,153 2,162 2,479 2,488 2,494 2,524 2,528 2,516 2,506 2,511 2,512 2,523 2,514 2,521 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • The total number of broadband connections rose from 10.2 million to 10.3 million during the year between the final quarters of 2017 and 2018. That represents a 1.3% increase. • Fixed broadband connections increased by 0.4% to a total of 2.5 million connections. • There was a 2.6% decrease in mobile broadband connections, which finally totalled 2.16 million. Smartphone subscriptions increased by 3.3% compared with the end of 2017. Fixed broadband connections include both those based on provider-owned infrastructure and unbundled lines, as well as those purchased in the wholesale market. With mobile broadband, a distinction is made between mobile data subscriptions (with or without data volumes included) and smartphone subscriptions. 40 RTR Telekom Monitor | 2018 Annual Report

section 3 Broadband and bundled products 141.9% 63.2% 54.2% Broadband penetration Renewed strong rise in smartphone subscriptions Fixed broadband Mobile data subscription Smartphone subscriptions Penetration rate (households) 200% 150% 100% 50% 0% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Source for number of households: Statistics Austria • No significant changes were seen in 2018 for either fixed broadband or mobile data subscriptions. The household penetration rate was 63.2% for fixed broadband connections and 54.2% for mobile data subscriptions. • For the first time since Q4 2017, smartphone subscriptions increased again strongly, resulting in a penetration rate of roughly 141.9% by the end of 2018. Growth in smartphone subscriptions is regularly seen during the final quarter, attributed to factors including Christmas sales. The broadband penetration rate is derived by dividing ﬁxed and mobile broadband connections by the number of households in Austria. The penetration rate also takes into account broadband connections used by businesses. RTR Telekom Monitor | 2018 Annual Report 41

section 3 Broadband and bundled products Retail broadband connections by bundle category – fixed network More broadband subscriptions under bundled products Standalone broadband (not in bundle) Broadband + fixed telephony + TV Broadband + TV Broadband + fixed telephony Other bundles incl. broadband in thousands 3,000 2,500 2,000 1,500 1,000 500 0 30 169 28 172 26 175 21 181 20 186 19 187 19 192 36 194 39 196 41 201 42 202 42 205 559 561 563 563 563 561 557 541 534 538 546 548 1,087 1,093 1,104 1,108 1,107 1,103 1,092 1,081 1,071 1,129 1,117 1,132 583 583 590 608 608 601 600 609 625 567 562 567 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • Within one year, broadband standalone connections and bundled products increased by 1.5% to 2.6 million in total. • Much more frequently than at the end of 2017, users were subscribing for a broadband service in combination with other products. While broadband standalone connections declined by 6.9% between Q4 2017 and Q4 2018 to 567,400, bundled products containing broadband saw a 4.2% increase to 1.97 million. Broadband products may be ﬁxed broadband products sold without any other product (standalone), or a combination of ﬁxed broadband with one or more other products (bundled product). Broadband products provided using an additionally purchased infrastructure base are not shown. 42 RTR Telekom Monitor | 2018 Annual Report

section 3 Broadband and bundled products Revenues from bundled products Growth in revenues year-on-year Standalone broadband (not in bundle) Broadband + fixed telephony + TV Broadband + TV Broadband + fixed telephony Other bundles incl. broadband in EUR millions 2 17 54 2 17 54 1 17 54 1 17 54 1 19 1 21 1 22 5 24 5 25 5 25 6 24 6 23 54 55 54 61 63 63 64 62 81 82 83 83 85 86 88 82 82 84 85 86 57 58 57 58 58 59 59 57 58 58 59 59 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 250 200 150 100 50 0 Broadband products may be ﬁxed broadband products sold without any other product (standalone), or a combination of ﬁxed broadband with one or more other products (bundled product). Broadband products provided using an additionally purchased infrastructure base are not shown. The chart shows the revenues from broadband products sold to retail customers. • Despite the moderate drop in broadband and bundled products in Q4 2018, a robust 5.6% increase was observed for the year as a whole. A total of EUR 941.3 million in sales were reported in 2018. • Revenues from broadband standalone came to EUR 233.7 million, which represents a slight increase of 0.5% compared year-on- year. This category accounts for roughly 24.7% of total broadband and bundled product revenues. • At 35.6%, bundled products combining broadband and fixed telephony generated the largest share of total revenue, which amounted to about EUR 337.4 million in 2018. • Bundled products involving broadband, fixed voice and TV increased considerably, by 11.5% to EUR 250.7 million in total. • Significantly higher revenue was also achieved with combined broadband–TV products. The total of EUR 97.4 million translates to a 13.0% increase. RTR Telekom Monitor | 2018 Annual Report 43

section 3 Broadband and bundled products TABLE 20: FIXED AND MOBILE BROADBAND CONNECTIONS SEE PAGE 40 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Fixed broadband Mobile data subscriptions Smartphone subscriptions 2,479 2,488 2,494 2,524 2,528 2,516 2,506 2,511 2,512 2,523 2,514 2,521 2,417 2,462 2,404 2,464 2,452 2,453 2,462 2,220 2,156 2,140 2,153 2,162 4,223 4,282 4,339 4,661 4,780 4,819 4,909 5,478 5,492 5,472 5,486 5,658 TABLE 21: BROADBAND PENETRATION SEE PAGE 41 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Fixed broadband Mobile data subscription Smartphone subscriptions 63.2 % 63.3 % 63.3 % 64.0 % 64.0 % 63.6 % 63.2 % 63.3 % 63.2 % 63.4% 63.1% 63.2% 61.6 % 62.7 % 61.0 % 62.5 % 62.0 % 62.0 % 62.1 % 55.9 % 54.3 % 53.8% 54.0% 54.2% 107.7 % 109.0 % 110.2 % 118.2 % 121.0 % 121.8 % 123.8 % 138.0 % 138.2 % 137.6% 137.7% 141.9% TABLE 22: RETAIL BROADBAND CONNECTIONS BY BUNDLE CATEGORY – FIXED NETWORK Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 (IN THOUSANDS) SEE PAGE 42 Standalone broadband (not Broadband + ﬁxed telephony Broadband + ﬁxed telephony Broadband + TV Other bundles incl. broadband Other bundles excl. broadband in bundle) 583 583 590 608 608 601 600 609 625 567 562 567 1,087 1,093 1,104 1,108 1,107 1,103 1,092 1,081 1,071 1,129 1,117 1,132 + TV 559 561 563 563 563 561 557 541 534 538 546 548 169 172 175 181 186 187 192 194 196 201 202 205 30 28 26 21 20 19 19 36 39 41 42 42 16 16 16 16 44 RTR Telekom Monitor | 2018 Annual Report

04 Fixed network 4 Fixed network Fixed lines Fixed-line penetration Carrier pre-selection and call-by-call usage Fixed retail revenues in the private customer segment Fixed retail revenues in the business customer segment Call minutes in the retail market Average call minutes from the fixed network Minutes in the wholesale market Wholesale revenues Geographic numbers in use Service numbers in use Tables 47 48 49 50 51 52 53 54 55 56 57 58 59 RTR Telekom Monitor | 2018 Annual Report 47

section 4 Fixed network Fixed lines Signiﬁcant rise in VoB connections POTS ISDN and Multi-ISDN classic landline connections VoB Number of connections in thousands 300 296 291 288 284 280 277 846 878 884 925 965 2,225 2,219 2,222 2,216 2,201 2,182 2,191 1,604 1,566 1,548 1,483 1,446 3,000 2,500 2,000 1,500 1,000 500 0 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • Despite another slight increase among fixed lines in Q4 2018, a continued trend towards fewer fixed connections can be seen when compared year-on-year. Compared with 2.45 million subscriber lines at the end of 2017, 2.41 million in Q4 2018 translates into a 1.6% drop. • Although connections based on conventional POTS and ISDN technologies decreased by 9.9%, such fixed lines still accounted for the largest share at 60.0%. • At the end of 2018, voice-over-broadband connections already accounted for roughly 40% of all lines, or 965,000 connections in total (a 14.1% increase in 2018). Up to and including Q3 2017, conventional ﬁxed lines (including VoB) were broken down into POTS and ISDN/multi-ISDN lines. Starting from Q4 2017, VoB is reported as a separate category in comparison with conventional ﬁxed lines. 48 RTR Telekom Monitor | 2018 Annual Report

section 4 Fixed network 173.5% 46.1% Fixed-line penetration Slight decline for businesses and consistent stability for households Household penetration rate Business penetration rate in percent 200% 150% 100% 50% 0% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Source for number of households and businesses: Statistics Austria • At 46.1% at the end of 2018, the penetration rate for households has remained virtually unchanged over time. • The penetration rate for businesses continued to decline, from 184.5% at the end of 2017 to 173.5% a year later. This is also a result of statistics: business data was updated at the end of October 2018, with about 990 more businesses showing up in the report. The ﬁxed-line penetration rate is derived by dividing the number of ﬁxed lines by the number of households in Austria. The higher business penetration rate is due to businesses having a greater number of ﬁxed lines than households, so that the ﬁgures are not comparable. RTR Telekom Monitor | 2018 Annual Report 49

section 4 Fixed network Carrier pre-selection and call-by-call usage Unbroken downward trend CbC customers CPS customers in thousands 300 250 200 150 100 50 0 277 34 270 33 262 32 251 32 239 31 230 31 221 30 211 29 202 28 24 194 185 23 178 23 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • CPS and CbC continue to dwindle in significance. The number of lines with carrier pre-selection dropped by 15.5% within a year, with a full 20.3% decrease recorded for CbC. Carrier pre-selection (CPS) refers to setting a permanent carrier network code (10xx). This contrasts with call-by-call (CbC), where users always have the option of pre-dialling the carrier network code (10xx). The chart shows the number of customers with lines for which CPS is set up and the number of CbC customers who used CbC at least once in the speciﬁed quarter. 50 RTR Telekom Monitor | 2018 Annual Report

section 4 Fixed network Fixed retail revenues in the private customer segment Continued drop in private retail revenues Base and setup fees Connection fees in EUR millions 50 40 30 20 10 0 20.5 19.2 18.2 18.9 17.5 16.4 16.6 17.4 16.3 14.7 14.1 14.5 22.8 22.4 22.2 21.8 21.4 20.9 20.9 20.9 20.6 20.1 19.7 20.5 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • Despite a slight revenue gain in the fourth quarter, there is an unmistakable trend towards declining fixed revenues and numbers of fixed lines. Fixed network sales totalled EUR 341 million in 2018. This equates to a 6.6% decrease from 2017. In the private customer segment, ﬁgures are broken down into basic or set-up fees and connection fees. • Revenues from the private segment dropped more than business revenues. Private customer sales totalled EUR 140.6 million in 2018, 7.5% less than in 2017. • The ratio of base and set-up fees to connection fees continues to rise, as connection fees decrease while base and setup fees remain relatively stable. RTR Telekom Monitor | 2018 Annual Report 51

section 4 Fixed network Fixed retail revenues in the business customer segment Overall decline in business revenues as well Base and setup fees Connection fees in EUR millions 60 50 40 30 20 10 0 29.8 28.9 27.8 27.7 27.4 25.9 25.2 26.1 25.6 24.6 23.6 23.5 28.9 28.0 28.6 27.8 27.5 27.3 27.3 26.4 26.0 25.5 25.8 25.8 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • There was a more moderate decline in business customer revenues than in private revenues. The total of EUR 200.4 million in 2018 makes for a 6% decrease from the year before. In the business customer segment, ﬁgures are broken down into basic or set-up fees and connection fees. 52 RTR Telekom Monitor | 2018 Annual Report

section 4 Fixed network Call minutes in the retail market Private and business customers logged signiﬁcantly fewer call minutes Private customers Business customers in millions 800 600 400 200 0 485 469 456 459 463 437 415 428 428 407 390 389 274 254 236 252 235 215 203 213 202 181 173 182 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • In 2018, 2.35 billion call minutes originated from the fixed network, which equates to a 9.9% drop from 2017. The number of real minutes in the ﬁxed network is shown, broken down by private and business customer segments. • At a total of 738.7 million minutes, private customer calling declined by 14.8%. Dropping by 7.4% to 1.6 billion, the number of call minutes used by businesses decreased moderately in comparison. • The proportion of private customer minutes to business customer minutes remained unchanged at about 30% to 70%. RTR Telekom Monitor | 2018 Annual Report 53

section 4 Fixed network Average call minutes from the fixed network Decrease also in average monthly usage Private customer Business customer in minutes per month 250 200 150 100 50 0 238.7 242.1 232.7 225.4 225.5 38.3 36.3 32.7 31.6 33.0 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • A typical business customer placed some 225.5 call minutes per month in 2018 and a private customer about 33 minutes. The monthly values are calculated as a third of the call minutes originating from the ﬁxed network divided by the total number of ﬁxed network lines at the end of the respective quarter. 54 RTR Telekom Monitor | 2018 Annual Report

section 4 Fixed network Minutes in the wholesale market Merger results in fewer wholesale minutes Origination Termination Transit in millions (minutes) 2,500 2,000 1,500 1,000 500 0 621 695 753 830 793 736 793 773 665 428 409 412 889 832 786 815 812 750 731 757 757 693 671 677 631 605 577 590 587 543 525 533 538 485 454 468 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 With wholesale services in ﬁxed voice telephony, a distinction is made between origination, termination and transit services. • Telecoms operators charged a total of 6.66 billion wholesale minutes, which represents a 20.1% decrease compared year-on- year. Among the factors accounting for the drastic drop was the merger of Hutchison Drei and Tele2 in the second quarter of the year, with Tele2 from then on no longer generating any transit minutes. • Roughly 42% of wholesale minutes are attributed to termination. This equated to 2.8 billion minutes in 2018 (-8.3%). • Origination and transit each accounted for about 1.9 billion minutes. Origination minutes decreased by 11.1% from one year to the next, while transit minutes, for the reason cited above, dropped by 38.1%. RTR Telekom Monitor | 2018 Annual Report 55

section 4 Fixed network Wholesale revenues Wholesale revenues decline in tandem with wholesale minutes Origination Termination Transit in EUR thousands 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 1,092 1,027 1,007 1,055 996 944 999 1,006 962 3,140 3,189 3,307 3,212 3,098 2,732 2,677 2,681 2,699 2,225 2,200 2,265 854 981 986 2,529 2,398 2,226 2,243 2,138 1,936 1,813 2,212 2,160 1,795 1,321 1,324 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • A similar picture is seen for wholesale revenues, which dropped by 14.9% to a total of EUR 19.8 million in 2018. In line with wholesale minutes, wholesale revenues are shown for origination, termination and transit services. Origination, termination and transit services are not charged to the customer directly but are settled between network operators (at wholesale level). 56 RTR Telekom Monitor | 2018 Annual Report

section 4 Fixed network Geographic numbers in use Quantity of geographic numbers in use virtually unchanged over the year Geographic numbers in use in thousands 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2,804 2,791 2,774 2,745 2,733 2,713 2,691 2,677 2,664 2,655 2,654 2,576 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • Compared year-on-year, the quantity of geographic numbers in use declined. At about 2.58 million in 2018, this was roughly 3.8% fewer than a year before. Geographic numbers are domestic telephone numbers preﬁxed by a local area code (01 in the case of Vienna). As more than one number may be assigned to a single line, the number of geographic phone numbers does not equate to the number of ﬁxed subscriber lines. RTR Telekom Monitor | 2018 Annual Report 57

section 4 Fixed network Service numbers in use Use of all number ranges relatively stable throughout the year (0)800 Total for (0)810, (0)820, (0)821, (0)828 Total for (0)900, (0)930 Used service numbers 25,000 20,000 15,000 10,000 5,000 0 20,769 19,292 7,667 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • Use of service numbers also did not change much over the year. • During the period under comparison, the quantity of premium rate (0)900 and (0)930 numbers fell by 0.8% to 20,769. • Telephone numbers in the (0)810, (0)820, (0)821 and (0)828 number ranges climbed by 28.3% from the end of 2017, to total 7,667. • Compared with Q4 of 2017, (0)800 numbers increased by 5.5% and now total 19,292. text message text message The chart shows the number of service numbers in use in the following ranges: - (0)800 range: toll-free services - (0)810 range: max. EUR 0.10 per minute or - (0)820 range: max. EUR 0.20 per minute or - (0)821 range: max. EUR 0.20 per call or text message - (0)828 range: text message services only; standard rates apply - (0)900 range: max. EUR 3.64 per minute or max. EUR 10 per text message - (0)930 range: max. EUR 3.64 per minute or max. EUR 10 per text message (erotic services) 58 RTR Telekom Monitor | 2018 Annual Report

section 4 Fixed network TABLE 24: FIXED LINES (IN THOUSANDS) SEE PAGE 48 POTS ISDN and Multi-ISDN classic VoB landline connections Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q3 2018 2,225 2,219 2,222 2,216 2,201 2,182 2,191 300 296 291 288 284 280 277 1,604 1,566 1,548 1,483 1,446 846 878 884 925 965 TABLE 25: FIXED-LINE PENETRATION SEE PAGE 49 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Household penetration rate Business penetration rate 48.4 % 48.3 % 48.3 % 48.1 % 47.5 % 47.1 % 47.3 % 46.7 % 46.7 % 46.5 % 46.0 % 46.1% 190.9 % 189.0 % 186.8 % 189.4 % 188.7 % 182.2 % 183.3 % 184.5 % 181.9 % 176.6 % 174.0 % 173.5% TABLE 26: CARRIER PRE-SELECTION AND CALL-BY-CALL USAGE (IN THOUSANDS) SEE PAGE 50 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 CbC customers CPS customers 34 33 32 32 31 31 30 29 28 24 23 23 277 270 262 251 239 230 221 211 202 194 185 178 RTR Telekom Monitor | 2018 Annual Report 59

section 4 Fixed network TABLE 27: FIXED RETAIL REVENUES IN THE PRIVATE CUSTOMER SEGMENT (IN EUR MILLIONS) SEE PAGE 51 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Base and setup fees Connection fees 22.8 22.4 22.2 21.8 21.4 20.9 20.9 20.9 20.6 20.1 19.7 20.5 20.5 19.2 18.2 18.9 17.5 16.4 16.6 17.4 16.3 14.7 14.1 14.5 TABLE 28: FIXED RETAIL REVENUES IN THE BUSINESS CUSTOMER SEGMENT (IN EUR MILLIONS) SEE PAGE 52 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Base and setup fees Connection fees 28.9 28.0 28.6 27.8 27.5 27.3 27.3 26.4 26.0 25.5 25.8 25.8 29.8 28.9 27.8 27.7 27.4 25.9 25.2 26.1 25.6 24.6 23.6 23.5 TABLE 29: CALL MINUTES IN THE RETAIL MARKET (IN MILLIONS) SEE PAGE 53 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Private customers Business customers 274 254 236 252 235 215 203 213 202 181 173 182 485 469 456 459 463 437 415 428 428 407 390 389 60 RTR Telekom Monitor | 2018 Annual Report

section 4 Fixed network TABLE 30: AVERAGE CALL MINUTES FROM THE FIXED NETWORK SEE PAGE 54 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Private customer minutes per month Business customer minutes per month 38.3 36.3 32.7 31.6 33.0 238.7 242.1 232.7 225.4 225.5 TABLE 31: MINUTES IN THE WHOLESALE MARKET (IN MILLION - MINUTES) SEE PAGE 55 Origination Termination Transit Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 631 605 577 590 587 543 525 533 538 485 454 468 889 832 786 815 812 750 731 757 757 693 671 677 621 695 753 830 793 736 793 773 665 428 409 412 TABLE 32: WHOLESALE REVENUES (IN EUR THOUSANDS) SEE PAGE 56 Origination Termination Transit Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 2,529 2,398 2,226 2,243 2,138 1,936 1,813 2,212 2,160 1,795 1,321 1,325 3,140 3,189 3,307 3,212 3,098 2,732 2,677 2,681 2,699 2,225 2,200 2,265 1,092 1,027 1,007 1,055 996 944 999 1,006 962 854 981 986 RTR Telekom Monitor | 2018 Annual Report 61

section 4 Fixed network TABLE 33: GEOGRAPHIC NUMBERS IN USE (IN THOUSANDS) SEE PAGE 57 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 TABLE 34: SERVICE NUMBERS IN USE SEE PAGE 58 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 (0)800 17,651 17,540 17,653 17,554 17,673 17,813 17,732 18,285 18,464 19,280 19,538 19,292 Geographic numbers in use 2,804 2,791 2,774 2,745 2,733 2,713 2,691 2,677 2,664 2,655 2,654 2,576 Total for (0)810, (0)820, Total for (0)900, (0)930 (0)821, (0)828 11,864 9,261 10,511 10,811 9,606 8,987 8,984 5,974 6,144 6,215 6,209 7,667 22,208 21,803 21,710 21,717 21,213 21,148 21,270 20,937 20,675 20,838 20,826 20,769 62 RTR Telekom Monitor | 2018 Annual Report

05 Leased lines 5 Leased lines Number of retail leased lines and Ethernet services Revenues from retail leased lines and Ethernet services Number of terminating segments Wholesale revenues from leased lines and Ethernet services Tables 65 66 67 68 69 70

section 5 Leased lines Number of retail leased lines and Ethernet services Fewer retail leased lines and Ethernet services than in Q4 2017 TOTAL ≤ 10 Mbit/s > 10 Mbit/s to < 100 Mbit/s > 100 Mbit/s to < 1 Gbit/s ≥1 Gbit/s in thousands 1 3.12 4.8 1 1 2.8 4.6 2.8 4.7 1 2.9 4.6 1 2.8 4.7 16.2 16.7 15.4 14.5 16.1 15.4 15.4 18.8 18.4 18.2 18.3 18.0 30 25 20 15 10 5 0 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • Compared year-on-year, the number of retail leased lines and Ethernet services fell by 3.2% to a total of 26,800. • Lines of all bandwidths except those over 2 Gbps were affected by the drop. While leased lines with such bandwidths increased by 44.4% from the end of 2017, they still only total 1,300. Up to and including Q3 2017, the survey considered only leased lines, with Ethernet services additionally included as of Q4 2017. This accounts for the signiﬁcantly higher total beginning with the fourth quarter of 2017. • Roughly two thirds (or 18,000) of the lines in this category support speeds of less than 10 Mbps. The number of such lines dropped by 4.3% compared with 2017. 66 RTR Telekom Monitor | 2018 Annual Report

section 5 Leased lines Revenues from retail leased lines and Ethernet services Slight downward trend for retail revenues Leased lines Ethernet services in EUR thousands 30,000 25,000 20,000 15,000 10,000 5,000 0 20,648 20,764 20,392 20,001 20,234 10,089 10,235 9,667 9,848 9,492 9,468 9,082 3,262 3,183 3,108 3,093 3,185 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • Revenues of around EUR 94 million were generated from retail leased lines and Ethernet services in 2018. Roughly 86.6% of the revenues were attributed to Ethernet services and the other 13.4% to leased lines. • Annual revenues in each of the categories cannot be compared since retail revenues from Ethernet services were not surveyed before Q4 2017. Even so, a comparison of the final quarters of 2017 and 2018 reveals a slight decline in revenues, from about EUR 23.9 million in Q4 2017 to about EUR 23.4 million in the fourth quarter of 2018. This represents a 2.1% decrease. Up to and including Q3 2017, the survey considered only leased lines, with Ethernet services additionally included as of Q4 2017. A change has also been made in the distinction between leased lines and Ethernet services. From Q4 2017, leased lines with consumer- side Ethernet interfaces are classiﬁed under ‘Ethernet services’ and no longer under ‘leased lines’. RTR Telekom Monitor | 2018 Annual Report 67

section 5 Leased lines Number of terminating segments Wholesale market shows little change Total ≤ 10 Mbit/s > 10 Mbit/s to < 100 Mbit/s > 100 Mbit/s to < 1 Gbit/s ≥1 Gbit/s 20,000 15,000 10,000 5 ,000 0 410 605 616 619 597 3,083 3,173 3,400 3,485 3,530 6,663 6,677 6,660 6,710 6,744 16,230 17,956 18,419 18,201 18,379 18,426 18,815 7,185 7,007 6,901 6,795 6,389 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • The number of terminating segments was highly stable during 2018, the period under observation. The number rose by 200, from 17,400 at the end of 2017 to roughly 17,200 by the end of 2018. • Like retail lines, the number of terminating segments supporting high bandwidths grew while those with low speeds declined. Terminating segments refer to those leased lines and Ethernet services that do not generally extend to the user’s network termination point. 68 RTR Telekom Monitor | 2018 Annual Report

section 5 Leased lines Wholesale revenues from leased lines and Ethernet services Falling wholesale market revenues Leased lines Ethernet services in EUR millions 35 30 25 20 15 10 5 0 14.6 16.2 14.4 20.7 18.9 19.4 19.5 25.3 20.8 20.9 22.0 24.0 9.4 8.6 9.3 8.8 9.2 8.3 7.6 4.4 4.4 3.9 3.7 3.6 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 • EUR 103.3 million in sales were reported for the wholesale leased line market in 2018. This equates to an 8.4% decrease from 2017. • Almost 85% of revenues were collected for Ethernet services (EUR 87.7 million) while leased line revenues accounted for roughly 15% (EUR 15.5 million). Wholesale revenues refer to revenues generated from terminating segments and trunk segments. Such revenues speciﬁcally include one-off fees and regular fees (including project business). RTR Telekom Monitor | 2018 Annual Report 69

section 5 Leased lines TABLE 35: NUMBER OF RETAIL LEASED LINES AND ETHERNET SERVICES Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 (IN THOUSANDS) SEE PAGE 66 ≤ 10 Mbit/s > 10 to ≤ 100 Mbit/s ≥ 100 to < 1 Gbit/s ≥ 1 Gbit/s TOTAL 18.8 18.4 18.2 18.3 18.0 4.8 4.6 4.7 4.6 4.7 3.2 2.8 2.8 2.9 2.8 0.9 1.3 1.3 1.3 1.3 16.2 16.7 15.4 14.5 16.1 15.4 15.4 TABLE 36: REVENUES FROM RETAIL LEASED LINES AND ETHERNET SERVICES (IN EUR THOUSANDS) SEE PAGE 67 Leased lines Ethernet services 20,648 20,764 20,392 20,001 20,234 TOTAL 16,230 17,956 18,419 18,201 18,379 18,426 18,815 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 10,089 10,235 9,667 9,848 9,492 9,468 9,082 3,262 3,183 3,108 3,093 3,185 TABLE 37: NUMBER OF TERMINATING SEGMENTS Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 SEE PAGE 68 ≤ 10 Mbit/s > 10 to ≤ 100 Mbit/s ≥ 100 to < 1 Gbit/s ≥ 1 Gbit/s 7,185 7,007 6,901 6,795 6,389 6,663 6,677 6,660 6,710 6,744 3,083 3,173 3,400 3,485 3,530 410 605 616 619 597 70 RTR Telekom Monitor | 2018 Annual Report

06 International comparisons and technology indicators This section presents several comparisons of European mobile and broadband services data. The statistics given here are intended as an extended and more in-depth analysis of the data on the Austrian market discussed in sections 1 to 5. The data are taken mainly from the Digital Scoreboard published by the European Commission. It contains a series of indicators charting the progress towards the goals of the Digital Agenda of the European Commission. All other charts in this section draw on the most recent figures available. Regularly updated data, including the option of generating interactive charts, can be found on the website of the Digital Agenda (https://ec.europa. eu/digital-single-market/en/scoreboard). 6 International comparisons and technology indicators Interconnection charges for termination in mobile networks Roaming – retail market Data market within the EU/EEA Roaming – retail market Wholesale roaming market Fixed broadband penetration rate Mobile broadband penetration rate Fixed broadband retail market – market share of incumbents Computers, internet access and broadband in households DESI 2018 – portfolio analysis Gross domestic expenditure on R&D in absolute terms and as a proportion of GDP 73 74 75 76 77 78 79 80 81 82 83 RTR Telekom Monitor | 2018 Annual Report 73

section 6 International comparisons and technology indicators Interconnection charges for termination in mobile networks Austria slightly below EU average July 2017 Juy 2018 EU average July 2018 (= 0,8342 Eurocent) Interconnection charge in eurocent 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 d n a n i F l a i k a v o S l i a n e v o S l d n a o P l y n a m r e G i m u g e B l y l a t I s u r p y C e c e e r G i a n a u h t i L g r u o b m e x u L c i l b u p e R h c e z C a i v t a L i a n a m o R i a n o t s E a i r t s u A d n a e r I l l a g u t r o P e c n a r F a i r a g u B l i n a p S a i t a o r C k r a m n e D n e d e w S s d n a l r e h t e N a t l a M y r a g n u H i m o d g n K d e t i n U Source: BEREC – Termination Rates at European level, July 2018 • With interconnection charges for termination in mobile networks remaining constant at 0.80 euro cents, Austria ranks thirteenth within the EU and just below the average for the Union. • Compared over time, the EU average has continued to fall, from 1.36 euro cents in 2014 to 0.88 euro cents in 2017 and most recent- ly to 0.83 euro cents. The chart above provides an international comparison of mobile termination charges. Telecommunications service providers charge one other termination fees at wholesale level, that is, for routing calls to numbers within their mobile networks. • In about half of the EU Member States, termination rates are the same as in 2017. The sharpest drops were reported by Spain (-39%), followed by Croatia (-21.3%) and Latvia (-16.3%). The Czech Republic was the only country where termination fees rose (+3.4%). • The lowest termination rates are charged in Malta (0.40 euro cents), Hungary (0.54 euro cents) and the UK (0.57 euro cents). • At the other end of the scale, with the highest termination fees, are Finland (1.25 euro cents), Slovakia (1.23 euro cents) and Slove- nia (1.14 euro cents). Figures for termination fees in these coun- tries remain unchanged from the previous two years. 74 RTR Telekom Monitor | 2018 Annual Report

section 6 International comparisons and technology indicators Roaming – retail market Data market within the EU/EEA Data volumes in EU/EEA and Austria increase 125% within one year data volume EU/EEA data volume AT EU/EEA in terabyte in terabyte AT 200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Source: RTR, BEREC (Benchmark Data Report) • Retail roaming data volumes have skyrocketed since roam like at home (RLAH) was introduced as of 15 June 2017. In Q3 2018 roughly 4,345 TB of data were consumed in Austria and a total of roughly 185,800 terabytes throughout the EU. The data volume trend in Austria more or less mirrors the changes in the EU/EEA area. • With the summer travel season, the roaming data volume increases in the third quarter of each year to a level significantly higher than in other quarters. Data volumes were seen to rise by an average of 122% between Q3 2017 and the same quarter in 2018. The chart plots the trend in recent years for retail roaming data volumes (in terabytes) within the EU/EEA against ﬁgures for data consumed in Austria. To support comparisons of values, varying scales are implemented in the chart, with the scale on the right indicating the data volume consumed in Austria. RTR Telekom Monitor | 2018 Annual Report 75

section 6 International comparisons and technology indicators Roaming – retail market Trafﬁc volumes per subscriber and month Austria below EU/EEA average in Q3 2018 Q3 2017 Q3 2018 Q3 2017 Q3 2018 18 16 14 12 10 8 6 4 2 0 14.2 16.7 13.0 13.5 5.8 6.1 2.7 3.5 0,50 0,40 0,30 0,20 0,10 0,00 0.24 0.44 0.18 0.38 EU/EEA AT EU/EEA AT Active minutes Text messages EU/EEA AT Data usage in gigabytes Source: RTR, BEREC (Benchmark Data Report) • Austria is below the EU/EEA average in terms of active roaming minutes (13.5), number of text messages (3.5) and data volume consumed (0.38 GB) per subscriber and month. • Over the course of one year, roaming minutes, roaming text messages and data roaming increased significantly, while in the EU the number of roaming minutes climbed at a higher rate (+17.4%) than in Austria (+4.2%). The opposite trend was seen for roaming text messages (EU: +5.4%; AUT: +27.5%). The charts compare Austrian customers (Austria) with EU and EEA citizens (EU/EEA) in terms of active minutes, texts and data volume per subscriber and month used while roaming. The subscriber tally is based on the number of SIM cards (excluding M2M cards) that were used at least once in the particular quarter to access roaming services (EU/EEA). • The average data volume consumed by each subscriber in Austria more than doubled within one year (+111.1%) while the EU-wide increase was somewhat smaller (+83.3%). • Austria varies most strongly from the EU average when compared in terms of text messages sent from other countries. The average Austrian customer sends ‘only’ 3.5 text messages a month when outside the country, which is explained by OTT services increasingly substituting for texting. 76 RTR Telekom Monitor | 2018 Annual Report Comparison of active roaming minutes and roaming texts per subscriber and month; Average for Austria vs. EU/EEA, Q3 2017Roaming data volume consumed per subscriber and month; Average for Austria vs. EU/EEA, Q3 2017

section 6 International comparisons and technology indicators Wholesale roaming market Wholesale prices below upper limit for wholesale upper limits on wholesale prices paid EU/EEA estimated costs (TERA) lowest wholesale prices paid EU/EEA lowest wholesale prices charged EU/EEA wholesale prices in euro cents wholesale prices in euro 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 3.2 2.2 1.5 1.4 1.0 1.0 0.4 0.4 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 6.0 4.0 1.2 1.2 voice texts data/GB The table contrasts ﬁgures for the upper limits on wholesale prices as set from 15 June 2017 with the lowest wholesale prices actually paid or charged for Q3 2018. The chart also shows a cost estimate based on the cost model developed by TERA Consultants. Source: RTR, BEREC (Benchmark Data Report) • The upper limits for wholesale roaming fees within the EU and EEA, introduced as of 15 June 2017 through the Roaming Regulation, were the same as those applying the previous year in the case of voice calling and text messaging. • The upper limit for data is, however, to be gradually reduced up until 2022. Having been lowered to EUR 6/GB (EUR 0.60/MB) as of 1 January 2018, it was reduced to EUR 4.50/GB as of 1 January 2019. • Both the lowest wholesale roaming fee charged and the lowest price paid for voice calls and text messaging in Q3 2018 were well below that upper limit, and below the cost estimate calculated by TERA Consultants. • The lowest wholesale prices charged for data roaming, EUR 1.20/ GB, were significantly lower than the cost estimate by TERA Consultants (EUR 4/GB) and in fact only 20% of the upper limit for wholesale roaming fees, set at EUR 6/GB. RTR Telekom Monitor | 2018 Annual Report 77

section 6 International comparisons and technology indicators Fixed broadband penetration rate No increase in Austria compared with the previous year Fixed broadband penetration 2018 (based on population) As of June 2018, Penetration rate in percent 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% % 0 4 4 . % 5 3 4 . % 9 2 4 . % 8 0 4 . % 8 0 4 . % 7 9 3 . % 0 9 3 . % 9 8 3 . % 5 7 3 . % 1 6 3 . % 7 5 3 . % 6 5 3 . % 7 4 3 . % 0 3 3 . % 2 2 3 . % 1 2 3 . % 0 1 3 . % 6 0 3 . % 4 0 3 . % 9 9 2 . % 5 8 2 . % 9 7 2 . % 8 7 2 . % 1 7 2 . % 7 6 2 . % 6 6 2 . % 0 6 2 . % 1 4 2 . % 6 8 1 . i m u g e B l e c e e r G l a g u t r o P s u r p y C U E i a n o t s E g r u o b m e x u L n e d e w S i m o d g n K d e t i n U k r a m n e D s d n a l r e h t e N e c n a r F a t l a M y n a m r e G Source: Digital Scoreboard i a n e v o S l i n a p S d n a n i F l y r a g n u H c i l b u p e R h c e z C d n a e r I l a i r t s u A i a n a u h t i L y l a t I a i k a v o S l a i t a o r C a i v t a L a i r a g u B l i a n a m o R d n a o P l • With a fixed broadband penetration rate of 28.5%, Austria ranks twentieth within the EU. In distinction to section 3 above, the penetration rate is expressed here as a percentage of the population, instead of households. • Denmark leads the pack with a penetration rate of 44%, followed by the Netherlands with 43.5% and France with 42.9%. • Coming in last place in terms of fixed broadband, Poland records 18.6%. Only slightly better rates are seen for Romania (24.1%) and Bulgaria (26.0%). Meanwhile, Poland leads in terms of mobile broadband penetration rate (see next page). The chart above provides an international comparison of broadband penetration rates based on ﬁxed infrastructure such as DSL, cable broadband, unbundled lines (see Glossary) and wireless (as of June 2018). The penetration rate is calculated as the number of broadband connections per 100 residents. Mobile broadband access is not included in these ﬁgures. 78 RTR Telekom Monitor | 2018 Annual Report

section 6 International comparisons and technology indicators Mobile broadband penetration rate Austria below EU average Mobile broadband penetration 2018 (based on population) As of June 2018, Penetration rate in percent . % 6 2 6 1 . % 9 5 5 1 . % 3 4 4 1 . % 8 8 3 1 . % 5 1 3 1 . % 0 3 2 1 . % 7 2 2 1 . % 6 1 1 1 . % 1 2 0 1 % 9 8 9 . % 3 7 9 . % 2 7 9 . % 5 6 9 . % 0 6 9 . % 3 4 9 . % 5 0 9 . % 4 9 8 . % 9 8 8 . % 2 8 8 . % 8 6 8 . % 1 5 8 . % 1 4 8 . % 4 2 8 . % 2 1 8 . % 6 5 7 . % 5 4 7 . % 4 4 7 . % 7 9 6 . % 2 9 5 . i m o d g n K d e t i n U a t l a M i n a p S U E a i r a g u B l s d n a l r e h t e N e c n a r F i a n a u h t i L y l a t I a i k a v o S l a i r t s u A i a n a m o R a i t a o r C y n a m r e G c i l b u p e R h c e z C d n a o P l d n a n i F l i a n o t s E g r u o b m e x u L k r a m n e D a i v t a L n e d e w S s u r p y C d n a e r I l Source: Digital Scoreboard i m u g e B l e c e e r G i a n e v o S l l a g u t r o P y r a g n u H 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% • With a broadband penetration rate of 87% in 2018, Austria is below the EU average of 96%. • Compared internationally, Poland is in first place with 163%, an increase of 19 percentage points, relegating Finland to second place, with 156%. Thus, Poland’s broadband strategy is obviously to rely on mobile broadband, ranking first in this category and last on fixed broadband. The chart provides an international comparison of mobile broadband penetration rates (as of June 2018). The penetration rate is calculated as the number of mobile broadband connections (active broadband SIM cards) per 100 residents. Broadband access based on ﬁxed infrastructure (such as DSL and cable broadband) are not included in these ﬁgures. • Tailing the list, Hungary has a mobile broadband penetration rate of 59% – despite improving by almost 10 percentage points. RTR Telekom Monitor | 2018 Annual Report 79

section 6 International comparisons and technology indicators Fixed broadband retail market – market share of incumbents Austria with third-strongest incumbent market share held by the incumbent – Broadband landline As of June 2018, market share in per cent 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% % 4 3 6 . % 9 6 5 . % 6 6 5 . % 5 6 5 . % 6 5 5 . % 0 2 5 . % 4 0 5 . % 0 7 4 . % 0 7 4 . % 4 6 4 . % 1 6 4 . % 7 4 4 . % 0 2 4 . % 5 0 4 . % 0 0 4 . % 8 9 3 . % 7 9 3 . % 7 9 3 . % 7 5 3 . % 6 5 3 . % 8 4 3 . % 2 3 3 . % 8 1 3 . % 4 8 2 . % 9 6 2 . % 4 2 2 . % 4 2 2 . / A N / A N s u r p y C a i r t s u A a i v t a L i a n o t s E i a n a u h t i L k r a m n e D e c e e r G a t l a M g r u o b m e x u L Source: Digital Scoreboard i m u g e B l y l a t I a i t a o r C s d n a l r e h t e N i n a p S y r a g n u H y n a m r e G U E l a g u t r o P a i k a v o S l i m o d g n K d e t i n U i a n e v o S l n e d e w S d n a e r I l d n a o P l a i r a g u B l i a n a m o R e c n a r F d n a n i F l c i l b u p e R h c e z C • Austria ranks third in terms of its incumbent’s market share (56.6%, held by market leader Telekom Austria), behind first-place Luxembourg (63.4%) and runner-up Cyprus (56.9%). • Tailing the list are Bulgaria (26.9%), Romania (22.4%) and the Czech Republic (22.4%). No data are available on the market lea- ders in France and Finland. The chart above shows the share of the retail broadband market held by each of the incumbents (former monopoly operators) as of June 2018. It includes only broadband access based on ﬁxed infrastructure (such as DSL and cable broadband). Mobile broadband access is not included in these ﬁgures. • The EU average for the share held by the market leader in each country is 39.7%. 80 RTR Telekom Monitor | 2018 Annual Report

section 6 International comparisons and technology indicators Computers, internet access and broadband in households Virtually no change from previous year Computer Internet access Broadband connection Household ICT access in percent 100 90 80 70 60 50 40 30 20 10 0 . 5 4 7 . 8 9 6 . 8 7 5 . 2 6 7 . 9 2 7 . 7 3 6 . 1 8 7 . 4 5 7 . 0 2 7 . 3 1 8 . 3 9 7 . 4 7 7 . 9 0 8 . 9 0 8 . 8 9 7 . 0 1 8 . 0 1 8 . 4 9 7 . 1 2 8 . 4 2 8 . 9 0 8 . 1 2 8 . 1 5 8 . 1 5 8 . 1 4 8 . 8 8 8 . 4 8 8 . 4 5 8 . 8 8 8 . 7 7 8 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Statistics Austria • In 2018, 85.4% of all households had a computer, while 88.8% had internet access (87.7% via broadband). About 15% of households have neither fixed nor mobile internet access. This chart shows the percentages of Austrian households with computers, internet access and (ﬁxed or mobile) broadband access, compared over the years. RTR Telekom Monitor | 2018 Annual Report 81

section 6 International comparisons and technology indicators DESI 2018 – portfolio analysis Austria risks falling back 0.0500 0.0400 0.0300 h t w o r G 0.0200 0.0100 0.0000 Catching Up ROM CRO BUL SPA CYP SVK LAT Running ahead SLO CZE POL ITA SWE IRE AUT17 MAL LUX EST NED FIN HUN Falling behind GRE DEN EU 28 FRA POR LIT AUT18 UK BEL GER Lagging ahead -0.0100 0% Source: European Commission, DESI Report 2018 Performance 100% The 28 EU Member States can be assigned to four quadrants based on their DESI performance rating and their growth between 2017 and 2018. This is done by plotting the absolute DESI score achieved by the particular country on the x-axis (‘Performance’) and the growth rate between 2017 and 2018 (‘Growth’) on the y-axis. The chart midpoint represents the average for all 28 countries (‘EU28’). • The countries classified as ‘running ahead’ are those above the EU average and that have grown at an above-average rate. Swe- den, the Netherlands and Finland in particular fall within this quadrant. • The countries termed ‘lagging ahead’, while above average, are nonetheless progressing at a rate lower than the EU average. This indicates a certain level of ICT maturity reached by these coun- tries. Austria falls into this category, alongside leading ICT na- tions such as frontrunner Denmark, Belgium and Germany. Ba- sed on the scores from the last comparison, Austria would still be among the leading nations. This is an indication of how all of the countries are continuing to progress. Here Austria needs to take care not to fall behind the leading group. ‘Catching up countries’, though below the EU average in absolute terms, are quickly moving up. This group includes Spain, Roma- nia, Italy, the Czech Republic and Poland. • • The fourth and final quadrant contains the countries that are ‘falling behind’ the EU average in terms of ICT performance and growth. Greece, Portugal, Hungary and France belong to this group. 82 RTR Telekom Monitor | 2018 Annual Report

section 6 International comparisons and technology indicators Gross domestic expenditure on R&D in absolute terms and as a proportion of GDP Highest-ever R&D intensity 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 R&D expenditure (in EUR millions) GDP expenditure on R&D as percentage of GDP 2.42% 2.57% 2.60% 2.73% 2.67% 2.91% 2.95% 3.09% 3.05% 3.15% 3.16% 3.19% 6,868 7,548 7,480 8,066 8,276 9,288 9,571 10,275 10,499 11,133 11,679 12,337 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Statistics Austria • Expenditure for research and development was about EUR 12.34 billion in 2018, an increase of 5.6% from 2017. Research expenditure increased more than gross domestic product, so that R&D intensity rose from 3.16% to the current level of 3.19%. The annual overall estimate of gross domestic expenditure on research and development (R&D) is based on two sources: the detailed structural data on R&D obtained by Statistics Austria from primary data surveys, and on the annual analysis and evaluation of the research- related items in the budgets of the federal and provincial governments of Austria. Gross domestic expenditure on R&D, expressed as a percentage of gross domestic product, constitutes R&D intensity. RTR Telekom Monitor | 2018 Annual Report 83

section 7 Explanatory comments and glossary Explanatory comments on the survey Published quarterly, the RTR Telekom Monitor details changes in the Austrian telecommunications markets. The legal basis for the data survey underlying the RTR Telekom Monitor is provided by the Communications Survey Ordinance (KEV), Federal Law Gazette II No. 365/2004, which came into force on 1 October 2004. Under the KEV, RTR is obliged to carry out quarterly surveys of communications markets and to compile and publish the statistics. The most recent amendment to the KEV was in late 2017 – five years after the previous extensive revision in 2012. The amended KEV entered into force on 1 October 2017, which means that the data collection process had already been appropriately adjusted in time for Q4 2017. Key changes include the following: • In the mobile segment, retail revenues are no longer differentiated by services and SIM cards are no longer classified as 2G, 3G or 4G; instead, the only differentiation in both cases is between data-only subscriptions and other plans. Data volume figures now also use only these two categories. In broadband, data volume is queried for fixed retail connections. • • Among fixed network figures, connection fee revenues and call duration are no longer distinguished according to call distance. • With leased lines, a change in the definition leads to a shift in figures between leased lines and Ethernet services. On the new survey form, leased lines with consumer-side Ethernet interfaces are no longer recorded under ‘leased lines’ but included in ‘Ethernet services’. Bandwidth subgroupings have also been modified. The revenue data query has also been greatly simplified (no more distinction according to bandwidth). In order to minimise the workload for providers, in accordance with Art. 4 Par. 1 KEV, RTR has selected the sample to represent at least 90% of the total market in each segment (mobile communications, broadband, fixed network and leased lines). From this sample, RTR extrapolates the data for the total market. The data for the total market are available to RTR from the last complete survey taken as part of the market analysis procedure (most recently in 2015). The charts and tables in the RTR Telekom Monitor list for the most part rounded values. Due to occasional post-hoc data corrections, the values in the charts and tables presented here may vary slightly from the information provided in earlier issues of the RTR Telekom Monitor. All datasets resulting from data collection in accordance with the Communications Survey Ordinance can be downloaded from the RTR website as open data in the formats Excel, delimited text, JSON or XML (https://www.rtr.at/de/inf/odKEV; in German). Numeric data provided by the website is not rounded. This website also hosts the mobile price index data (https://www.rtr.at/de/inf/odmfi; in German). 86 RTR Telekom Monitor | 2018 Annual Report

section 7 Explanatory comments and glossary Airtime (mobile telecommunications) Airtime refers to a wholesale service that mobile network operators provide for domestic resellers. A reseller (airtime reseller) is a communications service provider that offers public mobile services to retail customers but does not provide those services via a proprietary network. This includes all mobile service providers, such as resellers or (enhanced) service providers, that do not operate their own (radio or core) communications network to provide mobile services. Bitstream and resale Bitstream and resale access are wholesale products at different levels of the value chain, on the basis of which internet connections can be provided to end users. With bitstream access, data traffic is transferred at predefined (regional or national) handover points, with the wholesale customer directly providing internet connectivity. By comparison, in the case of resale access, internet connectivity is provided by the wholesale supplier, with the wholesale customer acting merely as reseller. Broadband Broadband internet access or a broadband internet connection refers to a (technology neutral) internet connection with a download speed higher than 144 kbps. The internet connection can also be provided as part of a bundle with other services. The connection can be established by the following means: • Proprietary line (a copper wire pair in the A1 Telekom Austria AG network) • Unbundled line (see unbundling) • Virtual unbundling (see virtual unbundling) • Coaxial cable (cable modem) • Fixed wireless access, e.g. WLAN, WiFi or WLL (‘fixed’ access but not via a hotspot) • Other infrastructure, including powerline (PWL) broadband via the power grid and satellite (SAT) broadband access Carrier pre-selection and call-by-call Carrier pre-selection (CPS) refers to setting a permanent carrier network code (10xx) to route all of a subscriber’s traffic (except for calls to value-added services and public service numbers) via a pre-selected carrier network. In contrast, call-by-call carrier selection (CbC) makes it possible to route individual telephone calls via a service provider other than the network that provides the subscriber line. In this case, the subscriber has to dial the carrier network code (10xx) before each call. RTR Telekom Monitor | 2018 Annual Report 87

section 7 Explanatory comments and glossary Unbundling In telecommunications, unbundling refers to the separate provision of specific services which were previously available only in conjunction with other services. The unbundling of subscriber lines from fixed network access as offered by the incumbent operator gives competing service providers direct access to customers without requiring those providers to install the ‘last mile’ themselves, as they can lease (naked) subscriber lines from the incumbent under regulated terms. Unbundled network elements are made available where as a result of a market analysis procedure the regulatory authority has identified one company having significant market power and has imposed on that operator the obligation to grant access to its telecommunications network and the corresponding unbundled elements. Ethernet services Ethernet services with guaranteed bandwidth are lines that provide guaranteed bandwidth between two network termination points. From Q4 2017, leased lines with consumer-side Ethernet interfaces are classified under ‘Ethernet services’ and no longer as previously under ‘leased lines’. Fixed network revenues (voice telephony) Retail revenues from fixed network voice telephony are made up of revenues from basic monthly fees, set- up charges and connection fees. Basic fees refer to revenues that are due periodically and do not depend on the actual traffic volume used via the subscriber line. Such fees include revenues from set monthly rates (e.g. from packages with a specified number of minutes), although such rates have not played a significant role in fixed network services up to now. The category does not include ‘optional tariffs’, ‘flat-rate tariffs’ or revenues from products bundled with broadband. Set-up charges include revenues generated from the set-up, transfer and decommissioning of fixed telephone lines. Retail revenues from carrier services depend on the number of call minutes consumed, in other words, the more telephone calls a fixed subscriber makes, the higher their bill normally is. Wholesale revenues includes revenues from origination, termination and transit services. Fixed wholesale market for voice telephony Within the fixed wholesale market, a distinction is made among origination, termination and transit services. Origination refers to calls that originate from a fixed network termination point in an operator’s own network. Termination refers to the routing of calls to a fixed network termination point in an operator’s own network. Transit refers to calls between two networks or between two interconnectable exchanges in one network. These services can be provided within the same network (proprietary services such as intra- network calling) or externally between network operators (e.g. origination to services and carrier network operators, or termination from an external network).Origination, termination and transit services are not charged to the customer directly but are settled between network operators (at wholesale level). 88 RTR Telekom Monitor | 2018 Annual Report

section 7 Explanatory comments and glossary Hybrid connection Hybrid products allow an internet connection either via mobile or fixed (wired) broadband. (This category excludes products where the mobile connection serves only as a backup in the event that the fixed connection fails.) International roaming Within mobile telecommunications, the term ‘roaming’ refers to the use of a mobile telephone outside the coverage area of the customer’s own network operator (home network), in which case the mobile phone uses the services of another network (host network). In international roaming, the home and host networks are located in different countries and their coverage areas generally do not overlap. Leased lines Leased lines provide symmetric transmission capacity between two points, without switching and with a guaranteed bandwidth. Leased lines are also referred to as ‘dedicated lines’ or ‘point-to-point connections’. A distinction is made between retail and wholesale leased lines. Retail leased lines are leased lines which are provided not for operators or providers of communications networks or services (companies having general authorisation) but for companies outside the telecommunications sector (such as banks, insurance companies and retail stores). Wholesale leased lines are leased lines provided for other operators or providers of communications networks or services. A distinction is made between trunk segments and terminating segments (see trunk segments and terminating segments). In regard to leased lines, it should be noted that time lags between revenues and demand often occur in leased lines markets, frequently resulting in strong fluctuations between months or quarters due to settling accounts for project business and to reimbursements and credits. From Q4 2017, leased lines with consumer-side Ethernet interfaces are classified under ‘Ethernet services’ and no longer as previously under ‘leased lines’. Mobile broadband With mobile broadband, a distinction is made between data-only subscriptions at a set monthly fee, data subscriptions without a set monthly fee and smartphone subscriptions. Up to Q4 2015, data-only subscriptions (which support data but not voice calls or text messages) were re- stricted to those that included at least 250 megabytes in the monthly rate. This restriction was lifted as of Q1 2016. From Q4 2017, an activity criterion was introduced for this category: SIM cards are only counted if they have been used for internet access at least once in the corresponding quarter. RTR Telekom Monitor | 2018 Annual Report 89

section 7 Explanatory comments and glossary Falling within the category of products without a set monthly charge are products with a monthly charge that does not cover free data but are used by customers to access the internet at least once in the particular quarter. Smartphone subscriptions are all contracts for voice and text messaging services that also include data and are used by customers to access the internet at least once in the specific quarter. Prior to Q4 2015, such subscriptions were additionally restricted to those that included at least 250 megabytes in the monthly rate. This restriction was lifted as of Q1 2016. Mobile Virtual Network Operator (MVNO) Mobile Virtual Network Operators (MVNOs) are communications network operators that do not have their own radio communications networks (or the corresponding licenses) but operate essential core network elements (such as a home location register or HLR and a mobile switching centre or MSC), and also possess corresponding addressing elements (such as a mobile network code) and directly administer SIM cards. MVNOs are generally active as providers in both the retail and wholesale markets. Not operating their own radio communications networks, MVNOs are dependent on mobile network operators to provide the corresponding wholesale services. Examples of MVNOs are Mass Response (Spusu) and UPC (UPC mobile). Mobile telecommunications revenues The category of ‘retail revenues from mobile telecommunications’ includes all revenues (such as basic fees, activation charges, service charges and connection fees) a provider collects from (their) retail customers in Austria, including revenues earned when their customers use roaming services in other countries. These were grouped as follows up to and including Q3 2017: a. revenues clearly attributable to mobile voice telephony or value-added voice services; b. revenues clearly attributable to text messaging and value-added text messaging services; c. revenues clearly attributable to mobile data and value-added data services (including multimedia messages); d. bundled products and basic fees: revenues from bundled products and other revenues not clearly attributable to one of the categories above; e. other revenues, such as reminder charges. As of Q4 2017, a distinction is made only between retail revenues from data-only subscriptions and revenues from other plans. Mobile wholesale revenues are revenues from origination and termination charges, from selling airtime to resellers and revenues from national and international roaming (including MVNO access). 90 RTR Telekom Monitor | 2018 Annual Report

section 7 Explanatory comments and glossary Number porting Number porting refers to customers retaining their telephone numbers when switching service providers. The RTR Telekom Monitor reports only the porting procedures/imports of telephone numbers for an operator in one quarter, i.e. SIM cards in the case of mobile operators and subscriber numbers in the fixed network. Cases of ‘reverse porting’, where numbers are ported back to the issuing operator (for example after cancellation by a subscriber), are not considered porting. A subscriber number that is ported several times within a quarter (‘subsequent porting’) is counted separately each time. Mobile services price index RTR calculates the monthly prices for the various user categories based on the subscription information published by the Austrian Chamber of Labour (AK Tarifwegweiser). To allow rate changes (price increases and decreases) to be readily identified, only the new plans available for subscription in the particular month are taken into account. Details relating to minutes, text messages and data services used monthly by the particular user category, as well as information on any subsidies paid out for end-user devices as part of a tariff plan, are based either on any available information provided by mobile network operators or on RTR’s best estimate based on available data. Average prices per month are calculated for four different user categories. The medium, high and power user categories additionally make use of data services; the results for these categories are correspondingly based only on ‘smartphone subscriptions’ (i.e. those including data volumes). Users in the fourth category (‘low users’) use only voice and text messaging services.Users are categorised as follows: for each service (voice, text messaging and data), consumers are ranked according to frequency of usage and then divided into four equally large groups (based on quartiles). Each quartile represents one user category, and the figures for minutes, text messages and megabytes used are based on the respective median for that quartile. The user categories are integrated with the rate data using the procedure described in the following. In each case the usage values collected for the previous year are applied to the subscriptions of the current year (e.g. usage in 2012 is used to calculate the prices for each subscription in 2013). The cheapest subscriptions are then determined for each user category and brand from among the new plans available for subscription. Apart from the basic monthly fees and the included minutes, text messages and data volume, the following rate components are reflected in the calculation: activation fee, SIM/service flat fee, minimum revenue, where appropriate, as well as the price per minute, text messages and megabytes beyond the included quantities and any end-user device subsidies (written off over 24 months). An average price is then calculated from as many as five of the cheapest subscriptions offered under each brand. Here, the following brands are taken into account: A1, T-Mobile, Drei, tele.ring, Yesss!, Bob, Ge.org, Red Bull Mobile, S-Budget; since the first quarter of 2015: HoT and UPC; since Q2 2015: VOLmobil Wowww! and Spusu. Since Q3 2015 subscriptions offered under the Allianz SIM brand by ATK Telekom and Service GmbH have also been reflected and since Q4 2015 eety und Yoopi as well. From Q1 2017 onwards, subscriptions offered by Krone mobile, Kurier mobil, LIWEST, Media Markt Mobil, Rapid Mobil and Saturn Mobil have been included in the Mobile Price Index, as well as, from Q4 2017 onwards, rates offered by Help. The price per brand is subsequently weighted using the brand’s market share. RTR Telekom Monitor | 2018 Annual Report 91

section 7 Explanatory comments and glossary The calculated price index is a linked index, meaning that, similar to the Consumer Price Index, usage is adjusted at regular intervals, in this case once a year. The table below lists for the four user categories the average usage figures on which calculation is based: TABLE USER CATEGORY Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 Power Minutes/year High Minutes/year Medium Minutes/year Low Minutes/year 550 530 510 500 471 469 450 446 441 240 250 240 230 208 210 198 196 191 120 120 100 110 93 94 91 91 87 20 20 20 20 19 21 23 23 22 Power High Medium Low Text messages/year Text messages/year Text messages/year Text messages/year 229 243 260 168 104 90 66 53 36 33 42 46 42 28 23 17 13 8 5 7 7 9 6 6 5 4 2 1 1 1 1 1 1 1 1 0 Power High Medium Low Data in megabytes/year Data in megabytes/year Data in megabytes/year Data in megabytes/year 136 417 932 1,483 2,093 2,382 3,440 5,118 7,664 9 36 134 345 632 816 1,240 1,557 2,106 2 3 2 21 60 171 381 428 524 0 0 0 0 0 0 0 0 0 92 RTR Telekom Monitor | 2018 Annual Report

section 7 Explanatory comments and glossary Private customers vs. business customers Separate differentiators apply to fixed network and mobile in the private and business customer segments. While the fixed network distinguishes by product (private vs. business customer product), mobile networks distinguish by customer. The following applies to fixed connections (DSL, cable, wireless and fibre): ‘Business customer products’ are all broadband products or product bundles with broadband that are aimed directly at business customers. Such products are either discernible by their name (‘business’, ‘office’, etc.) or include certain features that are not typically offered to private customers, such as one or more fixed IP addresses, a larger number of mailboxes, more webspace, a domain name, a security package (antivirus, firewall or similar), business SLAs or lower average overselling on the backbone. SDSL products are also to be viewed as business customer products. ‘Private customer products’ are any products not to be categorised as business customer products. The following applies to mobile connections: ‘Business customers’ are all legal persons and corporations under public or private law, partnerships, registered companies and partnerships under the Civil Code, as well as natural and legal persons who are entrepreneurs within the meaning of Art. 1 of the Austrian Consumer Protection Act, FLG 140/1979 as amended (including start-up activities within the meaning of Art. 1 Par. 3 leg. cit). In this context, a business means any organisation intended as permanent that is for the purpose of independent commercial activity, even if not for profit. ‘Private customers’ are all customers not falling under the definition above. Technical measurement (real minutes) Real minutes refer to the actual duration of calls made by customers. Billed call minutes, in contrast, indicate the number of minutes actually charged to those customers. The main factors accounting for the difference between these two figures are the number of free minutes included in the basic fee, which play a much greater role in mobile networks than in the fixed network, and the billing increment. Trunk segments and terminating segments (leased lines and Ethernet services) At wholesale level, a distinction is made between trunk segments and terminating segments. Trunk segments refer to those leased lines and Ethernet services that do not generally extending to the subscriber’s network termination point but mainly serve to link exchange points in those 28 Austrian towns where A1 Telekom A1 Telekom Austria AG has established points of interconnection (POIs) with other telecommunications operators. Terminating segments, in contrast, refer to those leased lines or Ethernet services at wholesale level which are not classified as trunk segments. RTR Telekom Monitor | 2018 Annual Report 93

section 7 Explanatory comments and glossary Virtual unbundling According to an official TKK decision, A1 Telekom Austria AG is obliged to offer virtual unbundling in areas where it is rolling out fibre optic cable (next generation space access or NGA). Virtual unbundling is a wholesale service that enables alternative providers to offer their own (broadband) products to end users, in a manner similar to physical unbundling. Voice over broadband (VoB) VoB is voice telephony service based on a broadband connection (standalone or bundled). VoB does not include voice over internet services such as Skype, where services are provided on the basis of the (public) internet but with the internet connection provided by an independent third party. 94 RTR Telekom Monitor | 2018 Annual Report

Publishing information Publishing information Owner and publisher Austrian Regulatory Authority for Broadcasting and Telecommunications (Rundfunk und Telekom Regulierungs-GmbH) Mariahilfer Strasse 77–79, 1060 Vienna, Austria Tel.: +43 (0)1 58058-0; fax: +43 (0)1 58058-9191; e-mail: rtr@rtr.at; web: www.rtr.at Responsible for content Johannes Gungl (Telecommunications and Postal Services Division) Austrian Regulatory Authority for Broadcasting and Telecommunications Conceptual design and text Austrian Regulatory Authority for Broadcasting and Telecommunications Graphic design and layout Westgrat - Agentur für Kommunikation cibus Kreativagentur All parts of this publication are protected by copyright. All rights reserved under copyright, especially rights to distribution, reprinting, translations, presentations, the use of illustrations and tables, broadcasting, microfilms or reproduction of this document in photocopies or any other form, as well as storage in computer systems, even in cases where excerpts are used. The contributions to the RTR Telekom Monitor were reviewed with the utmost care. Nonetheless, errors cannot be ruled out. No guarantee of accuracy can consequently be provided for the content. Copyright Rundfunk und Telekom Regulierungs-GmbH 2019