2018 ANNUAL RESULTS

FOR THE YEAR ENDED DECEMBER 31, 2018

February 25, 2019 – Hong Kong

This presentation may contain “forward-looking statements” that are not historical in nature. These forward-looking statements, which include, without limitation,

statements regarding PCCW's future results of operations, financial condition or business prospects, are based on the current beliefs, assumptions, expectations, estimates, and projections of the directors and management of PCCW about the

business, the industry and the markets in which PCCW operates. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond PCCW's control and are difficult to predict. Actual results could differ materially from those expressed, implied or forecasted in

these forward-looking statements for a variety of factors

Forward Looking Statements

2

Overview

BG Srinivas Group Managing Director

3

4

Note

1. Include MAU from Viu , Now TV and ViuTV apps and online services

2. Based on employees’ physical presence

PCCW Group employees work outside of HK

37%

Viu OTT revenue from outside of HK

87%

countries with operations2

43 employee nationalities

55

OTT markets

28 monthly active users1

32 mn

Expanding Our Reach Regionally …

… While Sustaining Market Leadership in HK

Financial Review

Susanna Hui Group Chief Financial Officer

5

Financial Highlights

2017 2018 % change (US$ million)

Core Business1

Solutions 513 525 2%

HKT 4,239 4,511 6%

Media 465 509 10%

115 115 -

2017 2018 % change

Consolidated

4,722 4,981 5%

6

Profit 155 167 8% Attributable to Equity Holders

EBITDA 1,625 1,590 (2)%

Revenue 4,701 4,942 5%

From continuing operations

1. Core business includes HKT, Media and Solutions Businesses

The results for the year ended December 31, 2018 reflects the adoption of several new accounting standards and, for comparative purposes, the results for the year ended December 31, 2017 have been restated as if these new accounting standards have been in place during the year

Continuing operations exclude the results and gain on disposal of the wireless broadband and related business component in the United Kingdom

(75) (78)

1,033 1,052

617 636

Mobile

TSS

Others

(109) (107)

20 30 453 460

434 429

958 958

914 945

1,037 1,058

532 738 Mobile Product Sales

Mobile Services

Local Data & Broadband

International

Local Telephony

TSS Others

Others

Eliminations

2018 2017

HKT Revenue (US$ million)

Strong Financial Performance Adjusted Funds Flow up 5% to US$663 million

PCCW to receive a total distribution of approx. US$345 million from HKT for FY18

Mobile +3% yoy

TSS +2% yoy

EBITDA grew 2% to US$1,610 million reflecting sustained improvements in operating efficiency

Steady growth in TSS and Mobile Services revenue

Mobile Services revenue benefited from continued growth in post-paid customer base and customers upgrading to premium 1O1O service as well as recent positive price actions 7

TSS Revenue +1% yoy

HKT EBITDA (US$ million)

2018 2017

1,575 1,610 + 2% yoy

Local Data & Broadband +3% yoy

37% 36%

HKT EBITDA Margin

43% 43%

Total

Exclude Mobile Product Sales

4,239 4,511 + 6% yoy

Mobile Services +2% yoy

8

Revenue boosted by impact of FIFA World CupTM

broadcast and launch of Now E service

Enlarged installed base to 1,344,000 with exit ARPU of

HK$180

UEFA Champions League and exclusive Premier

League coverage to drive further growth

2018 2017

(US$ million) Now TV Revenue

2018 2017

(US$ million) Now TV EBITDA

15% 16% EBITDA Margin

EBITDA exhibited return to growth

Margin improvement reflects content cost

rationalization amid a more benign market

Extending Market Leadership

53

60 +13% yoy

313 332

36 34

349 366

Others

Subscription

+5% yoy

+ 6% yoy

18 24

6

2 24 26

Others

Advertising

9

(28) (45)

340

(US$ million) ViuTV EBITDA

2018 2017

Continued investments in content including

drama production to sustain the expanded

viewership base and future growth

(US$ million) ViuTV Revenue

2018 2017

Advertising revenue grew by 36% largely driven by 2018 FIFA

World Cup™ broadcast and growing library of dramas and variety

shows

Drama related revenues fluctuated; newly renovated studio to

support further drama production

Expansion to artiste management and events diversified revenue

sources

+10% yoy

Broadening Revenue Base

+ 36% yoy

61

85

2018 2017

Video OTT

66 66

26 51

92

117

Advertising & Other

Subscription

2018 2017

(US$ million) OTT Revenue

10

40

Sustained Growth Momentum

Advertising and other revenue surged by 93% reflecting the

expansion of the user base to 30.7million MAUs

Video OTT revenues grew by 39% underpinned by the deepening

penetration of the premium Viu service and popularity of the Viu

Original productions

Balanced mix of advertising and subscription revenue

Further investments in marketing promotions

and resources to build user base and brand

awareness

(30) (43)

2018 2017

(US$ million) OTT EBITDA

+ 93% yoy

49 48

89 90

210 225

303 300

11

Growth in revenue driven by completion of projects for

public sector and enterprise customers

Slowdown in business in mainland China as shift towards

digital technology solutions

Recurring revenue stable as data centers close to fully

utilized

Secured orders of US$922 million

Expanding Regional Presence

Recurring

Project based

Margin sustained supported by recurring

revenue with stable margins

(US$ million) Solutions EBITDA

27% 26% EBITDA Margin

138 138

+1% yoy

+7% yoy

(US$ million) Solutions Revenue

2018 2017

+2% yoy 513 525

2018 2017

(53) (56)

407 373

179 181

179 198

17 17

Solutions

Media

Mobile

TSS

Others

Sustained Operating Cost Efficiencies

Improved overall opex to revenue ratio from

16% to 14%

Sustained improvements in operating

efficiencies at HKT

Investments were made in marketing

activities in the Media business to drive OTT

growth as well as for geographical

expansion of the Solutions business

16% 14% Core Opex

to Revenue Ratio:

12

Core Operating Expenses (US$ million)

2018 2017

729 713

Effective Tax Rate 23% 24% 26% 27%

Revenue 4,701 4,942 5% 4,722 4,981 5%

Cost of Sales (2,347) (2,639) (2,352) (2,646)

Operating Expenses (729) (713) (775) (766)

EBITDA 1,625 1,590

Depreciation (443) (441) (451) (450)

Amortisation (422) (446) (422) (446)

Net Finance Costs (189) (205) (193) (226)

Net Other (Losses)/Gains (7) 81 (5) 82

Profit for the Year 439 447 395 391 Non Controlling Interests (284) (280) (280) (276)

Profit Attributable to Equity Holders of the Company 155 167 8% 115 115

Earnings Per Share (in HK cents) 11.62 11.63 13

YoY

Financial Performance (US$ million)

2017 2018 (Restated) (Continuing operations)

Share of Associates and JVs 7 8 7 8

Profit Before Income Tax 571 586 531 536

Income Tax (132) (139) (136) (145)

Loss on disposal of property, plant & equipment - (1) - (1)

2018 2017

Core Business Consolidated

(Restated) YoY

113 112

210 202

30 46

29 18

18 18

Others

Solutions

Media

TSS

Mobile

-1% yoy 400 396

Capex Investments To Support Future Growth

Capex to revenue ratio decreased to 8.0%,

within the 10% guidance

Capex at HKT primarily incurred for mobile

coverage expansion, infrastructure

enhancement to prepare for 5G and

continued demand for FTTH services and

customized solution projects for enterprise

customers

Media capex for relocation and upgrading

of its production studio facilities

Solutions capex decreased but is expected

to ramp up again to expand data center

capacity in Hong Kong in response to

customer demand Core Business

Capex to Revenue Ratio: 8.5% 8.0%

2018 2017

Core Capex (US$ million)

14

(1) Core gross debt refers to the principal amount of short-term and long-term borrowings (excluding PCPD)

(2) Core net debt refers to the principal amount of short-term and long-term borrowings minus cash balance (excluding PCPD)

(3) Based on core gross debt as at period end divided by EBITDA for the 12-month period

(4) Based on core net debt as at period end divided by EBITDA for the 12-month period

(5) Includes short-term deposits

Healthy Liquidity

15

As of Dec 2017

As of Dec 2018

As of Feb 22, 2019

US$ million

Gross Debt

Cash Balance (5)

Gross Debt

Cash Balance (5)

Undrawn & Committed Facilities

PCCW 480 763 476 441 1,378

HKT 5,043 470 5,178 392 849

PCPD 577 468 787 111 82

Total 6,100 1,701 6,441 944 2,309

Core Gross Debt (1) / EBITDA (3) 3.40 x 3.56 x

Core Net Debt (2) / EBITDA (4) 2.64 x 3.03 x

500 500 750

213 300 262

733 418

1,502

570

159

44

14

300

100

2018 2019 2020 2021 2022 2023 2025 2026 2027 2028 2030

PCCW Bonds

PCPD Bank Loans

PCPD Bonds

HKT Bank Loans

HKT Bonds

500 500 750

213 300

955

262

854

462

292 570

104

11

300

100

2018 2019 2020 2021 2022 2023 2025 2026 2027 2028 2030

PCCW Bonds

PCPD Bank Loans

PCPD Bonds

HKT Bank Loans

HKT Bonds

Current mix of floating and fixed rated debt approximately 50:50

Effective interest rate was approximately 3.3% in 2018

Average debt maturity of approximately 4.8 years

Debt Maturity Profile As of June 30, 2018

(US$ million)

16

As of December 31, 2018

Refinanced in August 2018

6.99 7.96 8.16 8.57 8.91

13.21 17.04

20.17 21.18 22.33

2014 2015 2016 2017 2018

FinalDividend

InterimDividend

25.00

20.20

* Based on PCCW closing price on the annual results announcement date for each respective year

Full-year Dividend YoY Growth

Dividend Yield *

Delivering Sustainable Returns to Shareholders

HKT Distribution Pass-through

(HK cents)

17

28.33

-- 24% 13% 5% 5%

3.81% 4.95% 6.19% 6.79% 6.63%

71% 74% 74% 90% 90%

29.75 31.24

Final Dividend

22.33 HK cents

+ 5% yoy

Yield: 6.63%

Media Business

18

Pay TV Business

19

882K

953K 1,001K

1,039K

1,140K 1,183K

1,237K 1,285K 1,304K 1,303K 1,301K

1,344K

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Installed Base

Market Leadership in Pay TV

20

• Revenue grew by 5% on the back of World Cup broadcast together with the addition of UEFA Champions League

• EBITDA increased by 13% from revenue growth as well as content cost rationalization

• Now E contributed to expansion of customer base to 1.344 million

• Exit ARPU at HK$180

• Secured Exclusive Rights to Premier League until 2021/22 season and First-ever 4K Premier League broadcast in Hong Kong starting form 2019/20 season

• UEFA Champions League completes Now TV’s soccer portfolio

• 6 top European Soccer Leagues on one platform offering 1600+ Live Soccer Matches per season

• Now TV also offering world-class Tennis and Golf events, plus the best lineup of motorsports, badminton and snooker tournaments

Undisputed No. 1 Platform in Hong Kong with the Best Sports Coverage

Spanish LaLiga

Other European Leagues

Serie A, Bundesliga, Ligue 1

UEFA Champions League

Premier League

4K PL

21

Now E – Your All-In-One Personal Entertainment • Expanded to new market segment – digital natives

• Drive subscription revenue through a rich portfolio of vertical content packages including Western and Asian Movies and TV Series; Soccer as well as Badminton, Golf and Boxing

• Added “Rent Now”, a Pay-Per-View service to drive Transaction Revenue, offering the most recent blockbusters from all 6 major Hollywood studios and a stellar collection of Asian Movies.

22

Free TV Business

23

Enhanced Studio Facilities

• Studio expansion

o Relocate to new production hub with studios and post-production facilities in Kowloon Bay

o New studio has a live capacity and offers opportunities for different creative formats and large-scale productions

24

• Upcoming content

o Over 20 dramas in production or pipeline

o Drama production hours to increase from 103 in 2018 to 326 in 2019

o Strengthened weekend lineup with 40 international and local movies and regular sports content

• Spin-off from “King Maker” – formed two boy bands, Mirror and Error

o Artiste management representation

o Additional commercial and advertising opportunities

o Mirror’s first concert in Dec 2018 fully sold out due to popular demand

o Further developed two TV series “Mirror Go” and “Error Crazy Trip”

• Launched “My Very Short Marriage” theatre play

o Adapted from successful ViuTV program

o Sold out 18 shows

• Established as platform of choice for international and local events:

o ViuTV’s first “Hong Kong New Year Countdown Celebration”

o “2017 Ultimate Song Chart Awards Presentation”

o “2018 Mnet Asian Music Awards”

o “MOOV LIVE Jason x Janice”

o “NBA 2018/19” 25

Expand Revenue Stream – Artiste Management and Events

OTT Business

26

17.3

37.5

2017 2018

4.8

16.3

30.7

2016 2017 2018

30 Million + Monthly Active Users

• 30M+ monthly active users • 89% y-o-y growth

37.5 Billion Video Minutes

Highly Engaged User Base…and Growing

• Video minutes reached 37.5 Billion minutes

• 117% y-o-y growth

16 Markets Across Southeast Asia, India, Middle East

So

uth

ea

st

As

ia &

In

dia

Mid

dle

Ea

st

27

• More than 900 episodes of Viu Original in 2018 • Productions in local languages including Chinese, English, Bahasa, Hindi, Arabic, Filipino and Thai • Won 6 Asian Academy Creative Awards, including Best Drama Series, Best Branded Programme

More Viu Original for Further Monetization & Differentiation

New Ecosystem for Original Production

• Viu Original titles bring in over 30%* new viu-ers on average across markets

Acquire new customers and increase usage & engagement

• Regional & Local syndication partners

New revenue stream via syndication

• Strategic co-operation with Group M New program formats to enable

advertising & sponsorship opportunities

* across South East Asia market

28

IT Solutions Business

29

Intelligent Unmanned Store HABBITZZ+ and Premium eCommerce Platform

Award-winning solution to deliver unparalleled O2O experience

Smart Parking and Charging

Implemented Smart Parking system for a leading service provider to optimize its car park operations

Next Generation Insurance Platform

Transformed the producers’ selling journey of a life insurance company across Asia

Digital Business Enablement Systems

End-to-end business enablement and customer relationship systems to enhance digital experience

Infinitum™ Visum Smart Mirror

Empowered a property developer to deliver home automation to residents

Property

Telecom

Insurance

Transportation

Retail

Driving Enterprise Digital Transformation with Our IP

Track Access Management System

Supported a railway operator in Singapore to optimize engineering work planning

Travel & Transportation

30

International Expansion

31

Provide highly scalable data center co-location services to support a US-based high-tech company’s business growth in Asia

Provision of IT infrastructure operations support for a resort group in Hong Kong, Macau, the Philippines and Cyprus

Supporting multinational clients with operations across Asia

Rapidly expanding our delivery and industry specific teams in Singapore

Transform on behalf of the Municipal Services Office, Ministry of National Development of Singapore, its OneService digital products portfolio

Singapore

Expanding resources in Taiwan and the Philippines to drive further growth

Enable digital transformation of an insurance and financial services provider in Taiwan to optimize business process and customer experience

Help two financial services clients in the Philippines to implement customer onboarding system, and to provide IT managed services

Taiwan and the Philippines

Others BFSI

Telecom

High-Tech & Media

Retail & Manufacturing

Travel & Transportation

2018 Revenue by Industry

Public Sector

Secured orders of US$922 million as of December 31, 2018

Business Process Outsourcing

Technical Services

Application Development &

Maintenance

Enterprise Applications

Digital, Cloud Solutions & Infrastructure

2018 Revenue by Services

Revenue by Industry & Services

32

41%

25%

11%

13%

3% 3% 4%

20%

33% 23%

20%

4%

World-class Data Center Expansion

Growing demand for capacity expansion from existing enterprises and hyper-scale clients, including global e-commerce, cloud, and Internet service providers

Planning further expansion in our data center capacity and footprint in Asia Pacific to follow our customers and meet their demands

New world-class data center facility with 15 MW capacity and a total floor area of over 185,000 square feet will be in service in Hong Kong

Healthy pipeline for this new data center, which is designed to cater for high density and capacity requirements

33

Data Center High-Tech

Provision of world-class data center hosting and connectivity services to support client’s business operation and expansion outside of China

Support client’s overseas business with a full suite of hosting and connectivity services across multiple locations

Highly reliable and scalable infrastructure empower client to extend its e-Commerce services to Southeast Asia market

Improve time-to-market by 20% and enhance competitiveness

Design, implement and integrate the access control, security monitoring and communication systems for Global Switch’s data center in TKO

Leverage our strong project management expertise, rich support resources and end-to-end solutions

Achieve efficient implementation and seamless integration with other systems and infrastructure

Value

Solutions

Provide an efficient self-service passenger and vehicular clearance facility at Heung Yuen Wai

Provide round-the clock services to the public to streamline passenger traffic

Significant Wins

A eCommerce company in PRC Global Switch

Public

Hong Kong Immigration Department

34

Provision of Immigration Control System at Heung Yuen Wai Boundary Control Point

35

BFSI Hospitality

Implementation of airport terminal 2 communications and networking systems

Successful rollout of the Next Generation Insurance Platform for the client in Thailand. Pilot run rollout in the Philippines, Vietnam and Indonesia

Shorten product launch time from months to weeks

Achieving Straight Through Process for instant application approval versus previous 2-3 days lead time

With process automation, IT resources were reduced by 50% and training lead time was shortened by 1/3

Design and build a digital planetarium and dome theater system

Realization of the advanced 8K digital dome theater and laser projection system

Deliver novel and immersive experience to visitors, boosting museum attendance

A cornerstone project to provide full-fledged passenger services at terminal 2 of the 3rd runway concourse

Seamlessly maintain service operation at Skypier, HKIA Tower, Airport World Trade Centre Tower during the project period

Significant Wins

A fast-growing insurance group Guangxi Science and Technology Museum

Travel and Transportation

Airport Authority Hong Kong

Value

Solutions

Market Recognition

36 Ranking Source: Gartner Research: Market Share: IT Services, 2017 (dated June 2018) IDC Asia/Pacific Semiannual Services Tracker H1 2018

CHINA

CMO Asia Awards 2018

Brand Excellence in IT

Sector

Best Use of Social Media

Marketing

Asia CEO Awards 2018

Technology Company of the Year –

Circle of Excellence Award

INTERNATIONAL

Business Partner VAR500 Awards 2018 Top 100 Chinese Solutions

Provider 2018 China Top 50 Smart City

Solution Providers 2018 Manufacturing/Retail

Industry Smart Solution Provider 2018 Telecom Industry Digital

Transformation Solution Provider

SMBWorld Awards 2018 Best IT Outsourcing Best SMB Partner

(e-Commerce Platform)

HONG KONG

Hong Kong Retail Innovation Award 2018

Best Retail Innovation (Application) Gold Award – Intelligent unmanned store

China Software & Information Service Industry Network No. 1 in ‘Top 10 China IT

Outsourcing Service Enterprises’

Industry and Marketing Recognitions

HONG KONG

IT Services Application

Development

Systems Integration

Data Center Hosting Services #1 #1

Market Leadership

since 1H2014 to 1H2018

The leading provider of digital services in Asia for consumers and enterprises

PCCW Media will enhance

and differentiate its

services by offering locally

relevant and high quality

content as well as invest in

original IPs on multiple

platforms that are being

embraced by viewers

across the region

PCCW Solutions is

expanding its market

coverage across the region

as enterprises increase

their investment in digital

transformation and

demand vertical solutions

that add value to their

customers

Summary

HKT will continue to invest

in its network infrastructure

and integrate the latest

digital technologies for

smart homes and enable

the business

transformation of

enterprises for smarter

business operations

37