PROXIMUS, SA DE DROIT PUBLIC2956)-EN...PROXIMUS, SA DE DROIT PUBLIC Enterprise number 0202.239.951, Register of Legal Entities Brussels Euro Medium Term Note Programme) relating to

This base prospectus (the public (the Issuermonths from the date of approval. Any Notes (as defined below) issued under the Programme are issued subject to the provisionany Notes issued prior to the date hereof.

Under the Programme, the Issuer may from time to time issue notes (the agreed between the Issuer and the relevant DCoupon Notes (each as defined herein) or a combination of any of the foregoing.The minimum Specified Denomination of Notes shequivalent in other currencies). The maximum aggregate nominal amount of all Notes from time to time outstanding will not excequivalent in other currencies) subject to increase as described herein. A description of tmaturity of certain Notes is set out on pages 1

The Notes may be issued on a continuing basis to one or more of the Dealers specified on page time to time, which appointment may be for a specific issue or on an ongoing basis (each a the relevant Dealer shall, in the case of an issue of NoNotes.

An investment in Notes issued under the Programme involves certain risks. For a discussion of these risks see “Risk Factors”.

This Base Prospectus has been apcapacity as competent authority under the Law of 16 June 2006 on public offerings of investment instruments and thon a regulated market (as amended from time to time) (the approval by the FSMA does not imply any approval oapplication has been made to Euronext Brussels for Notes issued under the Programme to be admitted to trading and listing on Brussels.

References in this Base Prospectus to Notes being listed (and all related references) shall mean that such Notes have been adof Euronext Brussels. The regulated market of Euronext Brussels isInstruments Directive

Notice of the aggregate nominal amount of Notes, interest (if any) payable in respect of Notes, the issue price of Notes and applicable to each Tranche (as defined under “Terms and Conditions of the Notes”) of Notes will be set forth in a final termswith respect to Notes to be listed on the regulated market of Euronext Brussels the regulated market of Euronext Brussels will also be published on the website of Euronext Brussels (

The Programme provides that Notes may be listed and/or admitted to trading, as the case may be, on such other or further stock exbetween the Issuer and the relevant Dealer. The Issuer may also issue unlisted Notes and/or Notes not adrespect of the issue of any Notes will specify whether or not such Notes will be listed and admitted to trading on the regulaother stock exchange).

Each Tranche of Notes will be cleared through the clearing system operated by the National Bank of Belgium or any successor theretSystem). Such Notes will be issued in dematerialised form.

The Issuer has been rated A1Programme has been rated (EC) No. 1060/2009 (as amended) (the European Securities and Markets Authority (ESMA) on its website (at http://www.esma.europa.eu/CRA Regulation. Tranches of Notes issued under the Programme may be rated or unrated by either of the rating agencies referreNotes is rated, such rating will be agency. A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reductionassigning rating agency.

Barclays

Crédit Agricole CIB

J.P. Morgan

Lloyds Bank

The date of this Base Prospectus is 3

due from one This base prospectus (the Base Prospectus

Issuer) is valid, for the purpose of the admission to trmonths from the date of approval. Any Notes (as defined below) issued under the Programme are issued subject to the provisionany Notes issued prior to the date hereof.

Under the Programme, the Issuer may from time to time issue notes (the agreed between the Issuer and the relevant DCoupon Notes (each as defined herein) or a combination of any of the foregoing.The minimum Specified Denomination of Notes shequivalent in other currencies). The maximum aggregate nominal amount of all Notes from time to time outstanding will not excequivalent in other currencies) subject to increase as described herein. A description of tmaturity of certain Notes is set out on pages 1

The Notes may be issued on a continuing basis to one or more of the Dealers specified on page time to time, which appointment may be for a specific issue or on an ongoing basis (each a the relevant Dealer shall, in the case of an issue of No


ospectus has been apcapacity as competent authority under the Law of 16 June 2006 on public offerings of investment instruments and thon a regulated market (as amended from time to time) (the approval by the FSMA does not imply any approval oapplication has been made to Euronext Brussels for Notes issued under the Programme to be admitted to trading and listing on

References in this Base Prospectus to Notes being listed (and all related references) shall mean that such Notes have been adof Euronext Brussels. The regulated market of Euronext Brussels isInstruments Directive).


Programme provides that Notes may be listed and/or admitted to trading, as the case may be, on such other or further stock exbetween the Issuer and the relevant Dealer. The Issuer may also issue unlisted Notes and/or Notes not adrespect of the issue of any Notes will specify whether or not such Notes will be listed and admitted to trading on the regulaother stock exchange).

Tranche of Notes will be cleared through the clearing system operated by the National Bank of Belgium or any successor theret). Such Notes will be issued in dematerialised form.

The Issuer has been rated A1 by Moody's InProgramme has been rated A1 by Moody’s and A (EC) No. 1060/2009 (as amended) (the European Securities and Markets Authority (ESMA) on its website (at http://www.esma.europa.eu/CRA Regulation. Tranches of Notes issued under the Programme may be rated or unrated by either of the rating agencies referreNotes is rated, such rating will be agency. A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reductionassigning rating agency.

Crédit Agricole CIB

te of this Base Prospectus is 3

PROXIMUS, SA DE DROIT PUBLIC

Enterprise number 0202.239.951, Register of Legal Entities Brussels

Euro Medium Term Note Programmedue from one

Base Prospectus) relating to the EUR 3,500,000,000 Euro Medium Term Note Programme (the ) is valid, for the purpose of the admission to tr

months from the date of approval. Any Notes (as defined below) issued under the Programme are issued subject to the provisionany Notes issued prior to the date hereof.

Under the Programme, the Issuer may from time to time issue notes (the agreed between the Issuer and the relevant Dealer (as defined below). The Notes issued under the Programme may be Fixed Rate Notes, Floating Rate Notes, Zero Coupon Notes (each as defined herein) or a combination of any of the foregoing.The minimum Specified Denomination of Notes shequivalent in other currencies). The maximum aggregate nominal amount of all Notes from time to time outstanding will not excequivalent in other currencies) subject to increase as described herein. A description of tmaturity of certain Notes is set out on pages 132-134.

The Notes may be issued on a continuing basis to one or more of the Dealers specified on page time to time, which appointment may be for a specific issue or on an ongoing basis (each a the relevant Dealer shall, in the case of an issue of No


ospectus has been approved as a base prospectus on 3capacity as competent authority under the Law of 16 June 2006 on public offerings of investment instruments and thon a regulated market (as amended from time to time) (the approval by the FSMA does not imply any approval oapplication has been made to Euronext Brussels for Notes issued under the Programme to be admitted to trading and listing on

References in this Base Prospectus to Notes being listed (and all related references) shall mean that such Notes have been adof Euronext Brussels. The regulated market of Euronext Brussels is


Programme provides that Notes may be listed and/or admitted to trading, as the case may be, on such other or further stock exbetween the Issuer and the relevant Dealer. The Issuer may also issue unlisted Notes and/or Notes not adrespect of the issue of any Notes will specify whether or not such Notes will be listed and admitted to trading on the regula


by Moody's Investors Service España, S.A. (by Moody’s and A by S&P. Each of Moody’s and S&P is established in the European Union and is registered under the Reg

(EC) No. 1060/2009 (as amended) (the CRA RegulationEuropean Securities and Markets Authority (ESMA) on its website (at http://www.esma.europa.eu/CRA Regulation. Tranches of Notes issued under the Programme may be rated or unrated by either of the rating agencies referreNotes is rated, such rating will be disclosed in the Final Terms and will not necessarily be the same as the rating assigned to the Programme by the relevant ratagency. A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction

te of this Base Prospectus is 3 September

PROXIMUS, SA DE DROIT PUBLICKoning Albert II

incorporated with limited liability in Belgium


EUR Euro Medium Term Note Programme

due from one month from the date of original issue) relating to the EUR 3,500,000,000 Euro Medium Term Note Programme (the

) is valid, for the purpose of the admission to trading and listing of the Notes on the regulated market of Euronext Brussels, for a period of twelve months from the date of approval. Any Notes (as defined below) issued under the Programme are issued subject to the provision

Under the Programme, the Issuer may from time to time issue notes (the ealer (as defined below). The Notes issued under the Programme may be Fixed Rate Notes, Floating Rate Notes, Zero

Coupon Notes (each as defined herein) or a combination of any of the foregoing.The minimum Specified Denomination of Notes shequivalent in other currencies). The maximum aggregate nominal amount of all Notes from time to time outstanding will not excequivalent in other currencies) subject to increase as described herein. A description of t

The Notes may be issued on a continuing basis to one or more of the Dealers specified on page time to time, which appointment may be for a specific issue or on an ongoing basis (each a the relevant Dealer shall, in the case of an issue of Notes being (or intended to be) subscribed by more than one Dealer, be to all Dealers agreeing to subscribe such


proved as a base prospectus on 3 September 2015 by the Belgian Financial Services and Markets Authority (the capacity as competent authority under the Law of 16 June 2006 on public offerings of investment instruments and thon a regulated market (as amended from time to time) (the Prospectus Lawapproval by the FSMA does not imply any approval of the appropriateness of the merits of any issue of the Notes, nor of the situation of the Issuer. In addition application has been made to Euronext Brussels for Notes issued under the Programme to be admitted to trading and listing on

References in this Base Prospectus to Notes being listed (and all related references) shall mean that such Notes have been adof Euronext Brussels. The regulated market of Euronext Brussels is a regulated market for the purposes of Directive 2004/39/EC (the




vestors Service España, S.A. (by S&P. Each of Moody’s and S&P is established in the European Union and is registered under the Reg

CRA Regulation). As such, each of Moody’s and S&P is included in the list of credit rating agencies published by the European Securities and Markets Authority (ESMA) on its website (at http://www.esma.europa.eu/CRA Regulation. Tranches of Notes issued under the Programme may be rated or unrated by either of the rating agencies referre

disclosed in the Final Terms and will not necessarily be the same as the rating assigned to the Programme by the relevant ratagency. A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction

September 2015.

PROXIMUS, SA DE DROIT PUBLICKoning Albert II-laan 27, B-1030 Brussels



EUR 3,500,000,000Euro Medium Term Note Programme

month from the date of original issue) relating to the EUR 3,500,000,000 Euro Medium Term Note Programme (the

ading and listing of the Notes on the regulated market of Euronext Brussels, for a period of twelve months from the date of approval. Any Notes (as defined below) issued under the Programme are issued subject to the provision

Under the Programme, the Issuer may from time to time issue notes (the Notes) in the Specified Denomination(s) specified in the applicable Final Terms as may be ealer (as defined below). The Notes issued under the Programme may be Fixed Rate Notes, Floating Rate Notes, Zero

Coupon Notes (each as defined herein) or a combination of any of the foregoing.The minimum Specified Denomination of Notes shequivalent in other currencies). The maximum aggregate nominal amount of all Notes from time to time outstanding will not excequivalent in other currencies) subject to increase as described herein. A description of the restrictions applicable at the date of this Base Prospectus relating to the

The Notes may be issued on a continuing basis to one or more of the Dealers specified on page time to time, which appointment may be for a specific issue or on an ongoing basis (each a

tes being (or intended to be) subscribed by more than one Dealer, be to all Dealers agreeing to subscribe such


September 2015 by the Belgian Financial Services and Markets Authority (the capacity as competent authority under the Law of 16 June 2006 on public offerings of investment instruments and th

Prospectus Law), which implemented Directive 2003/71/EC as amended (the f the appropriateness of the merits of any issue of the Notes, nor of the situation of the Issuer. In addition

application has been made to Euronext Brussels for Notes issued under the Programme to be admitted to trading and listing on

References in this Base Prospectus to Notes being listed (and all related references) shall mean that such Notes have been ada regulated market for the purposes of Directive 2004/39/EC (the

Notice of the aggregate nominal amount of Notes, interest (if any) payable in respect of Notes, the issue price of Notes and applicable to each Tranche (as defined under “Terms and Conditions of the Notes”) of Notes will be set forth in a final termswith respect to Notes to be listed on the regulated market of Euronext Brussels will be filed with the FSMA. Copies of Final Terms in relation to Notes to be listed on the regulated market of Euronext Brussels will also be published on the website of Euronext Brussels (


Tranche of Notes will be cleared through the clearing system operated by the National Bank of Belgium or any successor theret

vestors Service España, S.A. (Moody’s) and Aby S&P. Each of Moody’s and S&P is established in the European Union and is registered under the Reg

). As such, each of Moody’s and S&P is included in the list of credit rating agencies published by the European Securities and Markets Authority (ESMA) on its website (at http://www.esma.europa.eu/CRA Regulation. Tranches of Notes issued under the Programme may be rated or unrated by either of the rating agencies referre


Arranger

BNP PARIBAS

Dealers

PROXIMUS, SA DE DROIT PUBLIC1030 Brussels



3,500,000,000Euro Medium Term Note Programme

month from the date of original issue) relating to the EUR 3,500,000,000 Euro Medium Term Note Programme (the

ading and listing of the Notes on the regulated market of Euronext Brussels, for a period of twelve months from the date of approval. Any Notes (as defined below) issued under the Programme are issued subject to the provision

) in the Specified Denomination(s) specified in the applicable Final Terms as may be ealer (as defined below). The Notes issued under the Programme may be Fixed Rate Notes, Floating Rate Notes, Zero

Coupon Notes (each as defined herein) or a combination of any of the foregoing.The minimum Specified Denomination of Notes shequivalent in other currencies). The maximum aggregate nominal amount of all Notes from time to time outstanding will not exc

he restrictions applicable at the date of this Base Prospectus relating to the

The Notes may be issued on a continuing basis to one or more of the Dealers specified on page 139 and any additional Dealetime to time, which appointment may be for a specific issue or on an ongoing basis (each a Dealer and together the



September 2015 by the Belgian Financial Services and Markets Authority (the capacity as competent authority under the Law of 16 June 2006 on public offerings of investment instruments and th

), which implemented Directive 2003/71/EC as amended (the f the appropriateness of the merits of any issue of the Notes, nor of the situation of the Issuer. In addition


References in this Base Prospectus to Notes being listed (and all related references) shall mean that such Notes have been ada regulated market for the purposes of Directive 2004/39/EC (the

Notice of the aggregate nominal amount of Notes, interest (if any) payable in respect of Notes, the issue price of Notes and applicable to each Tranche (as defined under “Terms and Conditions of the Notes”) of Notes will be set forth in a final terms

will be filed with the FSMA. Copies of Final Terms in relation to Notes to be listed on the regulated market of Euronext Brussels will also be published on the website of Euronext Brussels (www.euronext.com

Programme provides that Notes may be listed and/or admitted to trading, as the case may be, on such other or further stock exbetween the Issuer and the relevant Dealer. The Issuer may also issue unlisted Notes and/or Notes not admitted to trading on any market. The relevant Final Terms in respect of the issue of any Notes will specify whether or not such Notes will be listed and admitted to trading on the regula


) and A by Standard & Poor's Credit Market Services France SAS (by S&P. Each of Moody’s and S&P is established in the European Union and is registered under the Reg

). As such, each of Moody’s and S&P is included in the list of credit rating agencies published by the European Securities and Markets Authority (ESMA) on its website (at http://www.esma.europa.eu/page/List-registeredCRA Regulation. Tranches of Notes issued under the Programme may be rated or unrated by either of the rating agencies referre




Euro Medium Term Note Programmemonth from the date of original issue

) relating to the EUR 3,500,000,000 Euro Medium Term Note Programme (the Programmeading and listing of the Notes on the regulated market of Euronext Brussels, for a period of twelve

months from the date of approval. Any Notes (as defined below) issued under the Programme are issued subject to the provisions set out herein. This does not


Coupon Notes (each as defined herein) or a combination of any of the foregoing.The minimum Specified Denomination of Notes shequivalent in other currencies). The maximum aggregate nominal amount of all Notes from time to time outstanding will not exc


and any additional Dealer appointed under the Programme from and together the Dealers). References in this Base Prospectus to



September 2015 by the Belgian Financial Services and Markets Authority (the capacity as competent authority under the Law of 16 June 2006 on public offerings of investment instruments and the admission of investment instruments to trading

), which implemented Directive 2003/71/EC as amended (the f the appropriateness of the merits of any issue of the Notes, nor of the situation of the Issuer. In addition


References in this Base Prospectus to Notes being listed (and all related references) shall mean that such Notes have been admitted to trading on the regulated market a regulated market for the purposes of Directive 2004/39/EC (the

Notice of the aggregate nominal amount of Notes, interest (if any) payable in respect of Notes, the issue price of Notes and applicable to each Tranche (as defined under “Terms and Conditions of the Notes”) of Notes will be set forth in a final terms document (the

will be filed with the FSMA. Copies of Final Terms in relation to Notes to be listed on www.euronext.com).

Programme provides that Notes may be listed and/or admitted to trading, as the case may be, on such other or further stock exmitted to trading on any market. The relevant Final Terms in

respect of the issue of any Notes will specify whether or not such Notes will be listed and admitted to trading on the regulated market of Euronext Brussels (or on any


by Standard & Poor's Credit Market Services France SAS (by S&P. Each of Moody’s and S&P is established in the European Union and is registered under the Reg

). As such, each of Moody’s and S&P is included in the list of credit rating agencies published by the registered-and-certified

CRA Regulation. Tranches of Notes issued under the Programme may be rated or unrated by either of the rating agencies referredisclosed in the Final Terms and will not necessarily be the same as the rating assigned to the Programme by the relevant rat

agency. A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction

month from the date of original issueProgramme) of Proximus, SA de droit

ading and listing of the Notes on the regulated market of Euronext Brussels, for a period of twelve s set out herein. This does not


Coupon Notes (each as defined herein) or a combination of any of the foregoing.The minimum Specified Denomination of Notes shall be EUR 100,00equivalent in other currencies). The maximum aggregate nominal amount of all Notes from time to time outstanding will not exceed EUR 3,500,000,000 (or its


r appointed under the Programme from ). References in this Base Prospectus to


September 2015 by the Belgian Financial Services and Markets Authority (the e admission of investment instruments to trading

), which implemented Directive 2003/71/EC as amended (the Prospectus Directivef the appropriateness of the merits of any issue of the Notes, nor of the situation of the Issuer. In addition

application has been made to Euronext Brussels for Notes issued under the Programme to be admitted to trading and listing on the regulated market

mitted to trading on the regulated market a regulated market for the purposes of Directive 2004/39/EC (the Markets in Financial

Notice of the aggregate nominal amount of Notes, interest (if any) payable in respect of Notes, the issue price of Notes and certain other information which is document (the Final Terms

will be filed with the FSMA. Copies of Final Terms in relation to Notes to be listed on

Programme provides that Notes may be listed and/or admitted to trading, as the case may be, on such other or further stock exchange(s) as may be agreed mitted to trading on any market. The relevant Final Terms in

ted market of Euronext Brussels (or on any

Tranche of Notes will be cleared through the clearing system operated by the National Bank of Belgium or any successor thereto (the Securities Settlement

by Standard & Poor's Credit Market Services France SAS (by S&P. Each of Moody’s and S&P is established in the European Union and is registered under the Reg

). As such, each of Moody’s and S&P is included in the list of credit rating agencies published by the certified-CRAs) in accordance with the

CRA Regulation. Tranches of Notes issued under the Programme may be rated or unrated by either of the rating agencies referred to above. Where a Tranche of disclosed in the Final Terms and will not necessarily be the same as the rating assigned to the Programme by the relevant rat

agency. A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the

BNP PARIBAS

The Royal Bank of Scotland

) of Proximus, SA de droit ading and listing of the Notes on the regulated market of Euronext Brussels, for a period of twelve

s set out herein. This does not affect


all be EUR 100,000 (or its 3,500,000,000 (or its


r appointed under the Programme from ). References in this Base Prospectus to


September 2015 by the Belgian Financial Services and Markets Authority (the FSMA) in its e admission of investment instruments to trading

Prospectus Directive). The f the appropriateness of the merits of any issue of the Notes, nor of the situation of the Issuer. In addition

the regulated market of Euronext

mitted to trading on the regulated market Markets in Financial

mation which is Final Terms) which,

will be filed with the FSMA. Copies of Final Terms in relation to Notes to be listed on

change(s) as may be agreed mitted to trading on any market. The relevant Final Terms in

ted market of Euronext Brussels (or on any

Securities Settlement

by Standard & Poor's Credit Market Services France SAS (S&P). The by S&P. Each of Moody’s and S&P is established in the European Union and is registered under the Regulation

). As such, each of Moody’s and S&P is included in the list of credit rating agencies published by the CRAs) in accordance with the

d to above. Where a Tranche of disclosed in the Final Terms and will not necessarily be the same as the rating assigned to the Programme by the relevant rating

r withdrawal at any time by the

BNP PARIBAS

ING

KBC Bank NV

The Royal Bank of Scotland

2

IMPORTANT INFORMATION

This document constitutes, for the purposes of Article 5.4 of the Prospectus Directive, a base prospectus for

Proximus (as defined below) in respect of all Notes to be issued by Proximus under the Programme.

In this Base Prospectus, references to the Issuer are to Proximus, as the issuer or intended issuer of Notes

under the Programme, and references to Group are to Proximus and its consolidated subsidiaries.

This Base Prospectus is to be read in conjunction with all documents which are deemed to be incorporated

herein by reference (see “Documents Incorporated by Reference” below). This Base Prospectus shall be read

and construed on the basis that such documents are incorporated and form part of this Base Prospectus.

Neither the Arranger nor the Dealers have independently verified the information contained herein.

Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility or

liability is accepted by the Arranger or the Dealers as to the accuracy or completeness of the information

contained or incorporated in this Base Prospectus or any other information provided by the Issuer in

connection with the Programme. Neither the Arranger nor any Dealer accepts any liability in relation to the

information contained or incorporated by reference in this Base Prospectus or any other information

provided by the Issuer in connection with the Programme.

No person is or has been authorised by the Issuer to give any information or to make any representation not

contained in or not consistent with this Base Prospectus or any other information supplied in connection with

the Programme or the Notes and, if given or made, such information or representation must not be relied

upon as having been authorised by the Issuer, the Arranger or any of the Dealers.

Neither this Base Prospectus nor any other information supplied in connection with the Programme or any

Notes (i) is intended to provide the basis of any credit or other evaluation or (ii) should be considered as a

recommendation by the Issuer, the Arranger or any of the Dealers that any recipient of this Base Prospectus

or any other information supplied in connection with the Programme or any Notes should purchase any

Notes. Each investor contemplating purchasing any Notes should make its own independent investigation of

the financial condition and affairs, and its own appraisal of the creditworthiness of the Issuer. Neither this

Base Prospectus nor any other information supplied in connection with the Programme or the issue of any

Notes constitutes an offer or invitation by or on behalf of the Issuer, the Arranger or any of the Dealers to any

person to subscribe for or to purchase any Notes.

Neither the delivery of this Base Prospectus nor the offering, sale or delivery of any Notes shall in any

circumstances imply that the information contained herein concerning the Issuer is correct at any time

subsequent to the date hereof or that any other information supplied in connection with the Programme is

correct as of any time subsequent to the date indicated in the document containing the same. The Arranger

and the Dealers expressly do not undertake to review the financial condition or affairs of the Issuer during the

life of the Programme or to advise any investor in the Notes of any information coming to their attention.

IMPORTANT INFORMATION RELATING TO THE USE OF THIS BASE PROSPECTUS AND

OFFERS OF NOTES GENERALLY

This Base Prospectus does not constitute an offer to sell or the solicitation of an offer to buy any Notes in any

jurisdiction to any person to whom it is unlawful to make the offer or solicitation in any such jurisdiction.

The distribution of this Base Prospectus and the offer or sale of Notes may be restricted by law in certain

jurisdictions. None of the Issuer, the Arranger or any of the Dealers represents that this Base Prospectus may

be lawfully distributed, or that any Notes may be lawfully offered, in compliance with any applicable

registration or other requirements in any such jurisdiction, or pursuant to an exemption available thereunder,

3

or assume any responsibility for facilitating any such distribution or offering. In particular, unless specifically

indicated to the contrary in the applicable Final Terms, no action has been taken by the Issuer, the Arranger

or any of the Dealers which is intended to permit an offer to the public of any Notes or distribution of this

Base Prospectus in any jurisdiction where action for that purpose is required. Accordingly, no Notes may be

offered or sold, directly or indirectly, and neither this Base Prospectus nor any advertisement or other

offering material may be distributed or published in any jurisdiction, except under circumstances that will

result in compliance with any applicable laws and regulations. Persons into whose possession this Base

Prospectus or any Notes may come must inform themselves about, and observe, any such restrictions on the

distribution of this Base Prospectus and the offering and sale of Notes. In particular, there are restrictions on

the distribution of this Base Prospectus and the offer or sale of Notes in the United States, the European

Economic Area (including the United Kingdom) and Japan (see “Subscription and Sale”).

The Notes have not been and will not be registered under the United States Securities Act of 1933, as

amended (the Securities Act) or any U.S. State securities laws and are subject to U.S. tax law requirements.

Subject to certain exceptions, Notes may not be offered, sold or delivered within the United States or to, or for

the account or benefit of, U.S. persons unless an exemption from the registration requirements of the

Securities Act is available and in accordance with all applicable securities laws of any state of the United

States and any other jurisdiction (see “Subscription and Sale”).

The Notes may not be a suitable investment for all investors. In particular, each potential investor may wish to

consider, either on its own or with the help of its financial and other professional advisers, whether it:

(i) has sufficient knowledge and experience to make a meaningful evaluation of the Notes, the merits and

risks of investing in the Notes and the information contained or incorporated by reference in this Base

Prospectus or any applicable supplement;

(ii) has access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its

particular financial situation, an investment in the Notes and the impact the Notes will have on its

overall investment portfolio;

(iii) has sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes,

including Notes where the currency for principal or interest payments is different from the potential

investor's currency;

(iv) understands thoroughly the terms of the Notes and is familiar with the behaviour of any relevant

financial markets; and

(v) is able to evaluate possible scenarios for economic, interest rate and other factors that may affect its

investment and its ability to bear the applicable risks.

Legal investment considerations may restrict certain investments. The investment activities of certain

investors are subject to legal investment laws and regulations, or review or regulation by certain authorities.

Each potential investor should consult its legal advisers to determine whether and to what extent (1) Notes

are legal investments for it, (2) Notes can be used as collateral for various types of borrowing and (3) other

restrictions apply to its purchase or pledge of any Notes. Financial institutions should consult their legal

advisors or the appropriate regulators to determine the appropriate treatment of Notes under any applicable

risk-based capital or similar rules.

PRESENTATION OF INFORMATION

All references in this document to U.S. dollars, U.S.$, USD and $ refer to United States dollars and all

references to “£”, “pounds” and “Sterling” are to pounds sterling. In addition, all references to EUR, euro

4

and € refer to the currency introduced at the start of the third stage of European economic and monetary

union pursuant to the Treaty on the Functioning of the European Union, as amended.

RESPONSIBILITY STATEMENT

The Issuer accepts responsibility for the information contained in this Base Prospectus and the Final Terms

for each Tranche of Notes issued under the Programme. To the best of the knowledge of the Issuer (having

taken all reasonable care to ensure that this is the case) the information contained in this Base Prospectus is

in accordance with the facts and does not omit anything likely to affect its import. Where information has

been sourced from a third party, the Issuer confirms that this information has been accurately reproduced and

that, as far as the Issuer is aware and is able to ascertain from information published by that third party, no

facts have been omitted which would render the reproduced information inaccurate or misleading.

PROSPECTUS SUPPLEMENT

If at any time the Issuer shall be required to prepare a Prospectus supplement pursuant to Article 34 of the

Prospectus Law, the Issuer will prepare and make available an appropriate amendment or supplement to this

Base Prospectus which, in respect of any subsequent issue of Notes to be listed and admitted to trading on the

Euronext Brussels' regulated market, shall constitute a Prospectus supplement as required by Article 34 of the

Prospectus Law.

If at any time during the duration of the Programme there is a significant new factor, material mistake or

inaccuracy relating to information contained in this Base Prospectus which is capable of affecting the

assessment of any Notes and whose inclusion in or removal from this Base Prospectus is necessary for the

purpose of allowing an investor to make an informed assessment of the assets and liabilities, financial

position, profits and losses and prospects of the Issuer, and the rights attaching to the Notes, the Issuer shall

prepare an amendment or supplement to this Base Prospectus or publish a replacement Prospectus for use in

connection with any subsequent offering of the Notes and shall supply to each Dealer such number of copies

of such supplement hereto as such Dealer may reasonably request.

5

TABLE OF CONTENTS

Page

IMPORTANT INFORMATION 2

OVERVIEW OF THE PROGRAMME 6

RISK FACTORS 11

DOCUMENTS INCORPORATED BY REFERENCE 32

FORM OF THE NOTES 34

APPLICABLE FINAL TERMS 35

TERMS AND CONDITIONS OF THE NOTES 43

USE OF PROCEEDS 68

DESCRIPTION OF PROXIMUS, SA DE DROIT PUBLIC 69

TAXATION 122

SUBSCRIPTION AND SALE 132

GENERAL INFORMATION 135

STABILISATION

In connection with the issue of any Tranche of Notes, the Dealer or Dealers (if any) named as the

Stabilising Manager(s) (or persons acting on behalf of any Stabilising Manager(s)) in the applicable

Final Terms may over-allot Notes or effect transactions with a view to supporting the market price of

the Notes at a level higher than that which might otherwise prevail. However, there is no assurance that

the Stabilising Manager(s) (or persons acting on behalf of a Stabilising Manager) will undertake

stabilisation action. Any stabilisation action or over-allotment may begin on or after the date on which

adequate public disclosure of the terms of the offer of the relevant Tranche of Notes is made and, if

begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue date

of the relevant Tranche of Notes and 60 days after the date of the allotment of the relevant Tranche of

Notes.

Any stabilisation action or over-allotment must be conducted by the relevant Stabilising Manager(s) (or

persons acting on behalf of any Stabilising Manager(s)) in accordance with all applicable laws and

rules.

6

OVERVIEW OF THE PROGRAMME

The following Overview does not purport to be complete and is taken from, and is qualified in its entirety by,

the remainder of this Base Prospectus and, in relation to the terms and conditions of any particular Tranche

of Notes, the applicable Final Terms.

The Issuer and any relevant Dealer may agree that Notes shall be issued in a form other than that

contemplated in the Terms and Conditions, in which event, a new prospectus will be made available which

will describe the effect of the agreement reached in relation to such Notes.

This Overview constitutes a general description of the Programme for the purposes of Article 22.5(3) of

Commission Regulation (EC) No 809/2004 implementing the Prospectus Directive, as amended (the

Prospectus Regulation).

Words and expressions defined in “Form of the Notes” and “Terms and Conditions of the Notes” below shall

have the same meanings in this overview.

Issuer: Proximus, SA de droit public (a company having

made a public call on savings)

Description: Euro Medium Term Note Programme

Arranger: BNP Paribas

Dealers: Barclays Bank PLC

BNP Paribas

Crédit Agricole Corporate and Investment Bank

ING Bank N.V., Belgian branch

J.P. Morgan Securities plc

KBC Bank NV

Lloyds Bank plc

The Royal Bank of Scotland plc

and any other Dealers appointed in accordance with

the Programme Agreement.

Certain restrictions: Each issue of Notes denominated in a currency in

respect of which particular laws, guidelines,

regulations, restrictions or reporting requirements

apply will only be issued in circumstances which

comply with such laws, guidelines, regulations,

restrictions or reporting requirements from time to

time (see “Subscription and Sale”).

Notes with a maturity of less than one year

Notes having a maturity of less than one year will, if

the proceeds of the issue are accepted in the United

Kingdom, constitute deposits for the purposes of the

prohibition on accepting deposits contained in

section 19 of the Financial Services and Markets Act

2000 unless they are issued to a limited class of

professional investors and have a denomination of at

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least £100,000 or its equivalent, see “Subscription

and Sale”.

Domiciliary Agent: BNP Paribas Securities Services SCA, Brussels

Branch

The Notes will be issued pursuant to and with the

benefit of a Domiciliary and Belgian Paying Agency

Agreement dated 3 September 2015 between the

Issuer and BNP Paribas Securities Services SCA,

Brussels Branch.

Belgian Listing Agent: BNP Paribas Securities Services, SCA, Brussels

Branch

Programme Size: Up to EUR 3,500,000,000 (or its equivalent in other

currencies calculated as described in the Programme

Agreement) outstanding at any time. The Issuer may

increase the amount of the Programme in accordance

with the terms of the Programme Agreement.

Distribution: Notes may be distributed on a syndicated or non-

syndicated basis.

Currencies: Notes may be denominated in euro or, subject to any

applicable legal or regulatory restrictions and the

requirements of the Securities Settlement System,

any other currency agreed between the Issuer and the

relevant Dealer.

Maturities: The Notes will have such maturities as may be

agreed between the Issuer and the relevant Dealer,

subject to such minimum or maximum maturities as

may be allowed or required from time to time by the

relevant central bank (or equivalent body) or any

laws or regulations applicable to the Issuer or the

Specified Currency.

Issue Price: Notes may be issued on a fully-paid basis and at an

issue price which is at par or at a discount to, or

premium over, par, as specified in the applicable

Final Terms.

Form of Notes: Each Tranche of Notes will be cleared through the

Securities Settlement System. Such Notes will be

issued in dematerialised form. They will be

represented by book entries in the records of the

Securities Settlement System. The Noteholders will

not be entitled to exchange the Notes into definitive

notes in bearer form.

Fixed Rate Notes: Interest on Fixed Rate Notes will be payable on such

date or dates as may be agreed between the Issuer

and the relevant Dealer (as indicated in the applicable

Final Terms) and on redemption, and will be

8

calculated on the basis of such Day Count Fraction as

may be agreed between the Issuer and the relevant

Dealer.

Floating Rate Notes: Floating Rate Notes will bear interest at a rate

determined:

(i) on the same basis as the floating rate under a

notional interest rate swap transaction in the

relevant Specified Currency governed by an

agreement incorporating the 2006 ISDA

Definitions (as published by the International

Swaps and Derivatives Association, Inc., and as

amended and updated as at the Issue Date of the

first Tranche of the Notes of the relevant

Series); or

(ii) on the basis of the reference rate set out in the

applicable Final Terms.

The margin (if any) relating to such floating rate will

be agreed between the Issuer and the relevant Dealer

for each Series of Floating Rate Notes.

Other provisions in relation to Floating Rate

Notes:

Floating Rate Notes may also have a maximum

interest rate, a minimum interest rate or both (as

indicated in the applicable Final Terms).

Interest on Floating Rate Notes in respect of each

Interest Period, as agreed prior to issue by the Issuer

and the relevant Dealer, will be payable on such

Interest Payment Dates and will be calculated on the

basis of such Day Count Fraction as may be agreed

between the Issuer and the relevant Dealer.

Zero Coupon Notes: Zero Coupon Notes will be offered and sold at a

discount to their nominal amount and will not bear

interest other than in the case of late payment.

Redemption: The applicable Final Terms will indicate either that

the relevant Notes cannot be redeemed prior to their

stated maturity, if applicable (other than for taxation

reasons or following an Event of Default) or that

such Notes will be redeemable at the option of the

Issuer and/or the Noteholders upon giving notice to

the Noteholders or the Issuer, as the case may be, on

a date or dates specified prior to such stated maturity

and at a price or prices and on such terms as may be

agreed between the Issuer and the relevant Dealer.

Notes having a maturity of less than one year may be

subject to restrictions on their denomination and

distribution, see “Certain Restrictions – Notes having

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a maturity of less than one year” above.

Denomination of Notes: The Notes will be in such denominations as may be

specified in the relevant Final Terms save that in the

case of any Notes, the minimum Specified

Denomination shall be EUR 100,000 (or its

equivalent in other currencies).

Negative Pledge: See “Terms and Conditions of the Notes – Negative

Pledge” on pages 45-46.

Certain Conditions of the Notes: See “Terms and Conditions of the Notes” on pages

43-67 for a description of certain terms and

conditions applicable to all Notes issued under the

Programme.

Rating: The Programme has been rated by S&P and by

Moody’s. The rating of certain Series of Notes to be

issued under the Programme may be specified in the

applicable Final Terms. Where an issue of Notes is

rated, its rating will not necessarily be the same as

the rating assigned to the Programme. A rating is not

a recommendation to buy, sell or hold securities and

may be subject to suspension, reduction or

withdrawal at any time by the assigning rating

agency.

Approval, Admission to trading and Listing: This Base Prospectus has been approved as a base

prospectus on 3 September 2015 by the FSMA in its

capacity as competent authority under the Prospectus

Law, which implemented the Prospectus Directive.

Application has also been made for Notes issued

under the Programme to be admitted to trading on the

regulated market of Euronext Brussels.

Notes may be listed or admitted to trading, as the

case may be, on other or further stock exchanges or

markets agreed between the Issuer and the relevant

Dealer in relation to the Series. Notes which are

neither listed nor admitted to trading on any market

may also be issued.

The applicable Final Terms will state whether or not

the relevant Notes are to be listed and/or admitted to

trading and, if so, on which stock exchanges and/or

markets.

Selling Restrictions: There are restrictions on the offer, sale and transfer of

the Notes in the United States, the European

Economic Area (including the United Kingdom) and

Japan and such other restrictions as may be required

in connection with the offering and sale of a

particular Tranche of Notes, see “Subscription and

10

Sale”.

United States Selling Restrictions: Regulation S, Category 2. TEFRA is not applicable to

the Notes.

11

RISK FACTORS

In purchasing Notes, investors assume the risk that the Issuer may become insolvent or otherwise be unable to

make all payments due in respect of the Notes. There are a wide range of factors which individually or

together could result in the Issuer becoming unable to make all payments due in respect of the Notes. It is not

possible to identify all such factors or to determine which factors are most likely to occur, as the Issuer may

not be aware of all relevant factors and certain factors which it currently deems not to be material may

become material as a result of the occurrence of events outside the Issuer's control. The Issuer has identified

in this Base Prospectus a number of factors which could materially adversely affect its business and ability to

make payments due under the Notes. All of these factors are contingencies which may or may not occur and

the Issuer is not in a position to express a view on the likelihood of any such contingency occurring.

In addition, factors which are material for the purpose of assessing the market risks associated with Notes

issued under the Programme are also described below.

Prospective investors should, however, read the detailed information set out elsewhere in this Base Prospectus

and in the documents incorporated by reference herein and reach their own views prior to making any

investment decision.

To the best of the knowledge of the Issuer (having taken all reasonable care to ensure that this is the case) the

information contained in this “Risk Factors” section of this Base Prospectus is in accordance with the facts

as at the date of approval of this Base Prospectus and does not omit anything likely to affect its import.

FACTORS THAT MAY AFFECT THE ISSUER'S ABILITY TO FULFIL ITS OBLIGATIONS

UNDER NOTES ISSUED UNDER THE PROGRAMME

Risks Related to the Group's Business

Proximus’ operating income and net profit may decline if growth in the Belgian telecommunications

market continues to slow down.

Proximus’ primary business is the provision of telecommunications/information technology (ICT) services in

Belgium and Europe both for the consumer and professional market segments. The majority of Proximus’

revenues is derived from Belgium or from Belgian customers, and Proximus’ future revenues and profitability

are dependent in substantial part on the growth of the Belgian telecommunications/ICT market and the

evolution of average telecommunications spending by Belgian customers.

The market for IT solutions is exposed to economical evolution and substantial economic downturn could

impact the IT budget of global and local accounts leading to the reduction, or postponement of planned

investments which might influence the foreseen growth in this business line.

Proximus’ business is mainly focussed on Belgium, a small country with only a few large telecom players,

among which Proximus is one of the incumbents. Proximus is operating in maturing, and for some, even

saturating markets. In such circumstances, market value is vulnerable to disruptive behaviour among

competitors. Moreover, Proximus’ main competitors Mobistar, BASE and Telenet, are subsidiaries of large

international operators, respectively Orange, KPN, and Liberty Global. Regarding TV services, Proximus

plays a challenger role, facing strong cable competition.

According to Proximus’ estimates based on market research data, the value of the consumer market

(residential customers) for 2014 is approximately EUR 5 billion and is expected to display a compound

annual growth rate of approximately 1.5% (over the period 2015 to 2019). The telecommunications industry

in Belgium is getting saturated. At the end of 2014, residential fixed voice penetration in Belgium was

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approximately 71% in terms of households, retail internet broadband 80%, digital television 82% and mobile

penetration based on active customers was around 110% of the total population. The value of the professional

segment (professional customers) can be estimated at around EUR 10.9 billion for the IT and Telecom

domains, forecasted to display a compound annual growth rate of 1.0% (over the period 2015 to 2019).

Future revenue growth is likely to be dependent upon growth in advanced data, digital television, IT, moving

customers to multi-play and commercial take-up of new services.

Belgium currently has four licenced mobile network operators: Proximus (2G, 3G and 4G licences), Mobistar

(2G, 3G and 4G licences), KPN Group/BASE (2G, 3G and 4G licences) and Voyacom (ex-BUCD bvba)

(backed by Asian investors) (4G licence). Voyacom has not yet started operating as mobile network operator.

Telenet/Tecteo Bidco (TTB: partnership between the cable operator Telenet and VOO) was granted a 3G

licence in August 2011 but never deployed a network. As a consequence, TTB has decided to return this

spectrum to the Belgian Institute for Postal services and Telecommunicatoins (BIPT) that finally withdrew it

on 24 September 2014. Telenet and Voo currently operate as full Mobile Virtual Network Operator (MVNO).

Belgium’s new Telecom Law (which since 1 October 2012 applies) resulted in a significant increase in

Mobile customer churn. This, combined with aggressive competitor Mobile pricing (in both retail and

wholesale), forced Proximus to revise its Mobile pricing offer at the end of 2012 and in 2013, greatly

increasing the value for customers for similar monthly price commitments. With churn levels normalising in

2013 and 2014 and Mobile customer net additions back to positive, Proximus applies a disciplined customer

pricing strategy, being careful not to trigger further market value destruction. In case of market share loss due

to a significant further reduction of competitor prices, however, Proximus could be forced to revise its Mobile

pricing plans accordingly, which might result in additionals pressure on Mobile revenue.

Mobile data growth could be harmed by the more intensive use of wifi network, especially indoors. Proximus’

FON offer (Proximus internet customers can also surf for free wherever they are on their laptop, tablet or

smartphone using the more than 600,000 Wi-Fi hotspots in Belgium and more than 7 million hotspots

worldwide) is key to materialise real convergence for our customers and to reduce our cost base by off-

loading important volumes from the mobile network to the fixed network via wi-fi. However it could reduce

the willingness of customers to pay specifically for mobile data services. The challenge becomes to maintain

mobile ARPU as a whole as high as possible.

The growing penetration and use of Over-The-Top (OTT) services will stimulate growth of mobile internet. It

will lead to an increase of mobile data revenue but could lead to a decrease of traditional revenue (voice and

SMS) cannibalised by OTT calling, chat and messaging services.

Proximus faces increasing infrastructure competition from cable operators on the Belgian fixed market

Proximus has lost fixed broadband market share due to infrastructure competition between Proximus and the

cable operators; not being able to reverse this trend could cause further decline of broadband market share. On

top other licenced operators (OLOs) which are currently hosted in Proximus premises will have a choice of

alternative infrastructure (cable wholesale) in the future. Until now, Mobistar is the only player that has

expressed interest to use the cable infrastructure in wholesale.

To counter competition from cable operators, Proximus has developed a strategy based on the convergence of

fixed and mobile products (broadband, fixed line digital TV and mobile). The first phase mainly focused on a

packs strategy via upsell on existing Proximus’ customer base and a strong acquisition phase has been

developed over recent years. Even if this acquisition phase continues to be important, a second phase has

started aiming at delivering “Real convergence” based on the claim “Anyway, anytime, anywhere” easing the

way for the customer to use telco solutions proposed. Within this phase, Proximus wants to capitalise on its

main differentiation advantages over its competitions via 4 play converged products. This strategy is

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dependent on the hardware penetration (tablets, connected TV). Over time, cable operators could replicate this

strategy and thereby hinder its differentiation potential. In case the acquisition of Base by Telenet would be

approved, we could see the emergence of a very strong convergent player in the north of the country.

Substitution of fixed line services (e.g. by apps and social media like Skype, Facebook, etc.), TV content

(such as Stevie) could put further pressure on revenues and margins.

Some of the Group’s fixed and mobile tariffs, as well as regulated technical offers, are subject to

regulatory approval which may limit the Group’s flexibility in pricing and could reduce the Group’s

net profit. Proximus’ operating revenue and net profit could decline if additional wholesale price

controls or access requirements are imposed.

The Group’s tariffs for regulated wholesale services including fixed and mobile interconnection, local loop

unbundling, wholesale broadband access (WBA) bitstream access, and wholesale leased lines are subject to

prior regulatory approval (See “Regulation” below).

The last fixed interconnection (termination and collection) rates were set by BIPT in 2008. BIPT has not

adopted any new decision for interconnection tariffs yet. It has started to review these rates to implement Pure

LRIC as the relevant cost methodology. On 14 July 2015, BIPT has submitted to a public consultation (until 1

September 2015) a draft decision proposing the Fixed Termination Rates (FTR) for the period 2016-2019 for

all fixed operators that hold a significant market power (symmetric rates). The draft decision foresees sharp

decrease as from 1 January 2016.

On 3 February 2015, the Luxembourg regulator, ILR, published a decision on the review of the fixed

terminating market. The text sets the maximum fixed termination rate at 0.14 eurocent/min from 1 March

2015 until 31 December 2016 (from 0.72 eurocent/min previously).

In its second round analysis of the wholesale leased lines market (August 2013), BIPT decided to impose the

creation of “Next Generation Leased Lines” (NGLL) and decided to put in place two types of price control

measures: (i) cost orientation for classical lines as well as for transport part and local copper part of NGLL

and (ii) price squeeze control for local fiber parts of NGLL. The prices of NGLL based on the new NGN cost

model have been approved in March 2015. An appeal has been submitted against the BIPT decision of August

2013.

The last monthly rental fee for unbundled copper line (BRUO) has been set at EUR 8.03 since 15 August

2010. Since the BRUO tariffs are a building block for bitstream (BROBA ADSL) tariffs, these tariffs were

adapted accordingly at the same time. The impact of the new “NGN cost model” currently developed by BIPT

on the BRUO prices is not yet known.

BIPT has extended Proximus’ access obligations under regulated terms and conditions to ADSL2+ (which is a

variant of ADSL that extends the capability of basic ADSL by doubling the number of downstream bits) and

VDSL2 (which is a variant of VDSL that is a more recent and advanced standard of DSL broadband wireline

communications). A decision of the Belgian regulators of 1 July 2011 concerning the wholesale broadband

market has imposed a strict cost orientation for WBA (wholesale bitstream access). On 13 January 2015,

BIPT took a decision concerning the wholesale tariffs for Ethernet transport for bitstream services which

apply as from March 2015. This decision is the first applicable result of the modelling exercise started in 2011

and aims to define new cost oriented regulated tariffs for Proximus. It had an impact on the BROBA and

WBA prices that were modified again on 1 May 2015 as a consequence of the application of the new WACC.

BIPT intends also to review the BROBA and WBA access prices in the context of its new NGN cost model.

The timing and outcome of this analysis is not known at this stage. The Commission Recommendation of 11

September 2013 on consistent non-discrimination obligations and costing methodologies seeks to provide

guidance about the circumstances under which price regulation on new NGA (Next Generation Access)

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investments can be lifted. Further price decreases for BROBA and WBA cannot be excluded despite the

Commission Recommendation.

Based on the regulators’ decision of 1 July 2011 on the wholesale broadband market, Proximus also offers

bitstream access for television (multicast). Proximus’ reference offer was approved by BIPT on 4 October

2012. The prices have been set by a BIPT decision of 13 January 2015. The multicast tariffs are mainly

channel driven whatever the number of end-customers. They have been revised in May 2015 following to the

application of the new WACC. Additional competition on triple play (3P) could cause a downward pressure

on prices and revenues.

On 23 May 2014, the directive aiming at a reduction of the cost of roll-out of broadband networks was

published. The text aims to achieve this by measures such as promoting sharing of infrastructure, better

coordination of civil works, better information about the infrastructure, etc. Civil engineering, such as digging

up roads to lay fibre, can account for up to 80% of the costs of deploying high-speed networks and the

Commission claims that these measures can save as much as 30% on the cost of rolling out a fibre network.

Member States have to transpose the Directive into their national legislations by 1 January 2016 and must

apply the new measures by 1 July 2016.

Proximus - as a network operator - will have the obligation to meet all reasonable requests for access to its

physical infrastructure (i.e. any element of a network which is not active such as pipes, masts, ducts,

inspection chambers, manholes, cabinets, buildings or entries to buildings, antenna installations, towers and

poles and their associated facilities) under fair terms and conditions. Proximus will also have to provide

information concerning its existing physical infrastructure. As the directive only sets minimum requirements,

Member States may adopt additional measures in this area.

Decisions of 1 July 2011 of the Belgian regulators related to the broadcast market oblige the dominant cable

operators to open their network (resale of their analogue TV, access to their digital TV platform and resale of

their broadband offer) (See “Regulation” below). The wholesale regulated prices of the cable operators were

set for the first time on 12 December 2013. At the end of May-early June 2015, the Belgian regulators

published draft decisions concerning the review of these prices (for analogue TV, digital TV and broadband).

The draft submitted to a public consultation until mid-July proposes important decreases of the prices. The

new proposal also includes additional temporary discounts for new entrants (would be applicable during 2 - 3

years). The final decision is expected by the end of 2015. Additional competition on cable linked to cable

wholesale obligation could trigger additional competition on 3P.

Any action by BIPT that requires a change in wholesale pricing (level or structure) could result in loss of

revenue and have a material adverse effect on the Group’s operating revenue and net profit. There can be no

assurance that such modifications would allow the Group to fully recover the costs incurred to offer its

wholesale service or would not materially limit the Group’s ability to make a profit from its services or

compete on an equal basis with competitors not subject to the same constraints.

In 2015, BIPT intends to determine new mobile termination rates MTR tariffs as from 2016. In November

2013, BIPT communicated the preliminary version of its cost model to the mobile operators. First results have

shown a further decrease of the MTR. If the European authorities or BIPT change the interconnection models,

this could have a material adverse effect on Proximus’ ability to recoup its costs and meet its business

objectives because this could impact the product portfolio of all the mobile operators with potential further

price erosion on the mobile market.

In Luxembourg, final MTR have been set by the regulator, ILR, at 0.97 eurocent/min as from 1 April 2015.

Tango has decided to appeal this decision. The MTR had already been set provisionally at 0.98 eurocent/min

by a decision of ILR of 6 January 2014. In the meantime this decision has been annulled by the Luxembourg

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Administrative Court following to an appeal launched by Tango. ILR has appealed this ruling on 23 April

2015.

At retail level, Proximus’ fixed to mobile calls were in the past subject to strict BIPT controls on

excessiveness and had to reflect the MTR and FRT decreases. On 25 July 2008, BIPT imposed a fine on

Proximus for not having fully reflected the past decreases of the mobile termination rates in the fixed to

mobile tariffs. Proximus filed an appeal against this decision. The case is still pending. On 24 September

2014, BIPT took a decision concerning the third round analysis of the national retail fixed voice traffic

markets (residential and business), deciding to de-regulate these markets and therefore to withdraw the

obligations imposed by the previous market analysis. This has lifted this regulatory burden on Proximus.

There has been increased attention from BIPT and the competition authority on price squeeze tests

(verification of margin between wholesale and retail prices) and discount policy which may constrain pricing

flexibility. In Belgium, the Telecom Minister has also commissioned since 2012 several studies/benchmarks

on telecom prices both national and international. Repeated political intervention with regard to retail pricing

could affect consumers’ trust in the operators, trigger increased churn and have a negative impact on margins.

In addition, it can not be excluded that the regulator will further focus on the regulation of business services

over the coming years. This might bring further pressure on the business market revenues and Proximus

market shares.

A new law that entered into force on 6 September 2013 has strengthened the role of the Pricing Observatory

(that analyses pricing trends on the Belgian market). The Observatory is able to call directly on the Belgian

competition authorities when it considers that there is a problem with respect to prices or margins in the

Belgian market, or when it notices an abnormal price trend or a structural market deficiency. Based on reports

of the Pricing Observatory, the competition authority has the power to adopt interim measures in order to

address issues reported. The Brussels Appeal Court would have the final say.

The Roaming III Regulation entered into force on 1 July 2012. It imposed a further lowering of the existing

regulated retail and wholesale price caps (from 35 eurocents to 19 eurocents for retail outgoing calls and from

11 eurocents to 6 eurocents for SMS by 1 July 2014) and has extended the regulation to retail data as from

July 2012 (70 eurocents per megabyte on 1 July 2012 decreasing to 20 eurocents per megabyte as from 1 July

2014). In addition, two structural measures to encourage competition have been imposed: (i) MVNO

wholesale access from 1 July 2012 and (ii) de-coupling, i.e. separate selling of roaming services from

domestic mobile services, from 1 July 2014. The Regulation also imposed rules aimed at increasing price

transparency and improving the provision of information on charges to roaming customers. The Roaming III

Regulation should have expired in principle on 30 June 2022. However, in the meantime, the EU Council and

Parliament have, on 30 June 2015, reached an agreement on the future of the roaming charges in the context

of the Telecom Single Market Regulation (TSM). As from June 2017, provided that the legislative act on the

wholesale roaming review is applicable on this date, ‘Roam-Like-At-Home’ will be implemented in the EU

zone, with the obligation to charge retail roaming within the EU at domestic retail price, except for the

consumption beyond the “Fair Use Policy” (to be defined by December 2016 by the European Commission).

During the transitory period from April 2016 until June 2017, operators will be able to apply a surcharge not

exceeding the current regulated wholesale rates. The TSM text will be finalised under Luxembourg

presidency. Final approval by the EU Parliament plenary and EU Council is expected in September/October

2015. Remaining uncertainties exist on the implementation acts defining the Fair Use Policy and the

sustainability rules as well as on the outcome of the wholesale roaming review. The Roaming Regulation can

create additional competitive pressure on domestic businesses and could lead to pan-European offers or even

pan-European operators.

Proximus depends on the reliability of its networks and IT infrastructure, and a system failure or a

breach of its security measures could result in a loss of customers and reduced revenues.

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Proximus is able to deliver services only to the extent that it can protect its network systems against damage

from telecommunication failures, computer viruses, natural disasters and unauthorised access. Any system

failure, accident, or security breach that causes interruptions in the Group’s operations could impair its ability

to provide services to the Group’s customers and negatively impact on the Group’s revenues operational

results. As service portfolio are becoming more complex, increasing dependence on numerous IT platforms is

creating a risk. This complexity needs to be managed in order to guarantee improved stability, processing time

and agility to preserve the quality of the service delivered to Proximus’ customers. Any disruption or security

breach resulting in loss or damage to customers’ data or applications, or leading to inappropriate disclosure of

confidential information, may lead to Proximus incurring liability. In addition, the Group may incur additional

costs to remedy the damages caused by these disruptions or security breaches. Although Proximus currently is

covered by general & professional liability insurance, business interruption insurance and insurance

specifically to guard against certain losses resulting from, for instance, computer viruses and security

breaches, these policies may not provide effective coverage if traditional insurance exclusion terms (non

accidental event) should apply.

With xDSL technologies, signal strength is attenuated by distance, copper quality and cross-talks between

various copper pairs in the same network. Even if Proximus invests heavily to improve its network and the

performance it delivers to customers, these elements may impact the quality of the service delivered.

In some circumstances (road works, floods, etc) the quality of the installed copper might degrade over time.

Proximus may need to replace some of these degraded cable segments.

In order to expand capacities of Proximus’ network, Proximus has developed partnerships with suppliers. If

those suppliers are not able to carry out their engaged services or face adverse economic situations, this may

impact on the timing planned technology enhancements.

If the global voice and/or data market grows less than expected, voice margins in BICS segment could

decrease.

In the international carrier services market, Proximus anticipates that growth in the voice transit market will

be mainly driven by expected increases in mobile traffic. Several developing markets might see their growth

pattern slow down or reverse once the saturation point nears. The fast adoption of OTT (over-the-top)

communication applications on smartphones might reveal to be a strong driver of mobiles minutes

cannibalisation putting additional pressure on expected growth. Furthermore, voice margins per minute have

been under significant pressure over the past few years as a result of price competition and the ease with

which customers are able to change providers. If pressure on voice margins should continue and/or if the

Group does not offset price decreases with increased volume, BICS’ growth rate, operating revenue and net

profit could come under pressure. In addition, BICS has been taking a leading role in the growing

international mobile data market, which saw recently a consolidation of the competitors forming a strong

contender that might raise the pressure on the mobile data market therefore affecting the growth profile of the

International Carrier Services. Roaming III Regulation might also affect BICS’ margins, which might not be

offset by expected volume growth.

Actual or perceived health risks or other problems relating to mobile handsets or base stations could

lead to a decrease of mobile communication usage.

Concern has been expressed that the electromagnetic signals from mobile handsets and base stations may

pose health risks or interfere with the operation of electronic equipment. Actual or perceived risks associated

with mobile handsets or base stations and related publicity, regulation or litigation could reduce the Group’s

mobile telephone customer base, make it difficult to find or maintain attractive sites for base stations or cause

mobile telephone customers to use their mobile phone less.

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Proximus may be sued by third parties for infringement of proprietary rights.

The telecommunications industry and related service businesses are characterised by the existence of a large

number of patents and trademarks. Litigation based on allegations of patent infringement or other violations

of intellectual property rights is common. As the number of entrants into the market grows and the overlap of

product functions increases, the possibility of an intellectual property infringement claim against Proximus

increases. In addition, the Group may be sued for copyright or trademark infringement for purchasing and

distributing content through various fixed line or wireless communications and other media, such as through

its portals.

Any such claims or lawsuits, with or without merit, could be time-consuming, result in costly litigation and

diversion of technical and management personnel, cause product shipment delays or delays in the granting of

patent applications or require the Group to develop non-infringing technology or to enter into royalty or

licensing agreements. Such royalty or licensing agreements, if required, may not be available on

commercially reasonable terms or at all. If a successful claim of product infringement were made against the

Group or it could not develop non-infringing technology or licence the infringed or similar technology in a

timely manner and on a cost-effective basis and commercially reasonable terms, operating revenue and net

profit could decline.

Risks related to jurisdiction and tax assessment

The Belgian tax authorities notified a foreign subsidiary of the Group in 2007 that it was considered as a tax

resident of Belgium and therefore subject to Belgian corporate income tax during 2004. In 2008, the Belgian

tax authorities maintained their 2004 assessment and assessed the Belgian corporate income tax for the

subsequent years 2005 and 2006 for a total amount of EUR 69 million excluding interest. The Court of

Brussels decided in June 2014 in favour of Proximus. The tax authorities filed an appeal against this decision.

On July 16, 2015 the Constitutional Court annulled the Walloon decree which introduced for 2014 a regional

tax on GSM infrastructure of 8,000 euro per site and which gave the Walloon municipalities the possibility to

impose an additional surtax for an equivalent amount. Nevertheless, the Constitutional Court deemed that the

tax could be upheld for the previous years, "given the financial problems that the annulment decision would

entail”. Proximus continues to appeal all pending cases.

Our policies and procedures are designed to comply with all applicable laws, accounting and reporting

requirements, regulations and tax requirements, including those imposed by foreign countries, the EU, as well

as applicable labour laws.

The complexity of the legal and regulatory environment in which we operate and the related cost of

compliance are both increasing due to additional requirements. Furthermore, foreign and supranational laws

occasionally conflict with domestic laws. Failure to comply with the various laws and regulations as well as

changes in laws and regulations or the manner in which they are interpreted or applied, may result, in damage

to our reputation, civil and criminal liability, fines and penalties, increased tax burden or cost of regulatory

compliance and restatements of our financial statements.

Risks Related to Regulatory Matters

Proximus is subject to significant regulation and supervision (see ‘Regulation’ below for further details),

which could require it to make additional expenditures or limit its revenues and otherwise adversely affect its

business.

Future changes in the European and Belgian communications laws or the powers and organisation of

the Federal and Communities regulators could affect Proximus’ business.

18

Belgium implemented the 2009 European framework concerning the regulation of electronic communications

networks and services in the electronic-communications law of 13 June 2005 (the 2005 Law) as modified by

the law of 10 July 2012. Some implementation details are left for secondary legislation (Royal Decrees,

Ministerial decrees and BIPT decisions). Therefore their exact impact is not possible to assess yet. The 2005

Law was modified again on 27 March 2014. Proximus cannot predict the effect on Proximus’ business of

subsequent changes in the law or regulations other than those required to implement the new EU framework

(see “Regulation” below for further details).

Under the regulatory framework, the Belgian regulatory authorities have a significant degree of flexibility to

impose regulatory obligations on operators with significant market power (SMP) in order to remedy market

failures in certain markets. BIPT has finalised the first round and for some markets the second or even

third round market analysis. Based on these analyses, several markets were considered as competitive

(fixed national and international retail calls markets, wholesale trunk segments of leased lines, retail leased

lines, wholesale mobile access and call origination and transit). However, some other markets continue to be

submitted to ex-ante regulation (fixed retail access market, fixed wholesale call origination and termination,

wholesale terminating segments of leased lines, local loop unbundling wholesale broadband access, mobile

terminating). The analysis of the markets must in principle be updated every three years or any time after

adoption of a new Commission recommendation on relevant markets, at which time BIPT will need to

reassess the regulatory obligations it has imposed.

On 9 October 2014, the European Commission published the third edition of its “Recommendation on

relevant markets” that defines the perimeter of the markets susceptible to be submitted to ex-ante regulation.

The Commission has reduced the number of markets included in the recommendation (from 7 to 5) by

excluding the retail regulations for fixed telephony and the wholesale call origination on the fixed telephone

network (used for carrier selection services). However the Commission acknowledged that specific national

circumstances may justify further regulation of these markets at the wholesale level. The Commission has

also re-formulated the two current wholesale broadband access markets (unbundling and bitstream) (see

‘Regulation’ below for further details).

The Ethical Commission was created by the 2005 Law. The Royal Decree of 9 February 2011 containing the

Ethical Code for telecommunications determines the rules mainly for the service providers to commercialise

premium services (SMS and voice). The Ethical Commission can impose fines in cases of non-compliance.

BIPT operates in Belgium as a federal sector-specific regulator for both the post and the telecoms sector. In

cases of infringement, BIPT may impose remedies (immediately or within its own time limits). The obligation

to remedy can be accompanied by (i) measures to remedy and/or (ii) administrative fine (up to a maximum of

5 % of annual turnover). If remedies are not sufficient, a new fine can be imposed (up to a maximum of 10 %

of annual turnover). In addition, BIPT has now the power to impose fines without prior formal notice even for

past infringements). BIPT can to a large extent make retroactive decisions to correct decisions that have been

annulled by a court. In March 2014, BIPT also got a new arbitration power to make binding decisions upon

request of all parties.

Under the Belgian constitutional regime, telecommunications fall within the competency of the Federal

State while matters relating to broadcasting are considered cultural matters falling under the competency of

the “Communities” (Flemish, French-speaking and German-speaking communities). As a consequence, when

a network or service relates to telecommunications and broadcasting, both the federal authorities and the

relevant Communities are deemed ‘competent’. A cooperation agreement between the Federal Government

and the Communities’ Governments to allow the regulation of these common networks entered into force on

19 September 2007. These regulators intervene frequently in the decision making process linked to market

analysis. Proximus cannot predict whether there will be changes in the Belgian constitutional framework.

19

Proximus cannot exclude either that the requirement to coordinate among the parties to the cooperation

agreement will not hinder or slow down the adoption of certain regulatory measures.

On 6 September 2013, a new law redesigning the Belgian competition authority entered into force. The

law also contains a whole set of new procedural provisions, some of which impact the rights of defense of the

operators concerned.

The outcome of pending disputes involving Proximus with or before Belgian Government bodies could

adversely affect Proximus’ operating revenue and net profit.

Proximus is a party to a number of proceedings with or before BIPT and the Belgian Competition College

concerning regulatory and competition matters. Adverse decisions in some or all of these proceedings could

cause Proximus’ operating revenue and net profit to decline as no or limited provisions have been accrued for

these per end of June 2015 (see “Litigation” below).

There are instances where the Belgian Competition Authority’s powers to resolve disputes in the

telecommunications sector overlap with those exercised by BIPT or the Belgian courts, which may

result in the Group being subject to parallel proceedings and conflicting decisions on the same issues.

The Belgian Competition Authority has authority to resolve disputes between telecommunication operators

regarding among other things, interconnection, special access and unbundling of the local loop. BIPT may

still intervene in such disputes on the basis of its general power to enforce the provisions of the 2005 Law.

BIPT can also intervene on the basis of the new arbitration power it has received following a modification

brought to the BIPT Law in March 2014. Operators asking for arbitration by BIPT should however renounce

to the proceedings before the Competition Authority. In addition, Belgian courts have jurisdiction with respect

to certain aspects of general competition law. These overlapping powers may result in Proximus being forced

to litigate competitors’ complaints in multiple forums on the same issue. There can be no assurance that the

Belgian Competition Authority, BIPT and the Belgian courts will reach consistent conclusions on identical

or similar issues. Such uncertainty can lead to potentially conflicting compliance obligations being imposed

on Proximus and forum shopping by potential litigants. Proximus cannot predict the effect of the

consequences of these overlapping powers on its operating revenue and net profit.

Increased regulation and changes in the regulatory environment in other countries in which Proximus

operates could adversely affect Proximus’ business.

Proximus’ international carrier operations could be subject to increased regulation in any of the countries in

which Proximus operates. In each of these countries there are governmental authorities that monitor and

enforce competition and sector-specific laws applicable to the telecommunications industry. It is difficult for

Proximus to predict the precise impact of any proposed or potential changes in the regulatory environment of

government policies on the Group’s operations. If regulators decide to expand restrictions and obligations

applicable to the Group’s business operation or to extend these or other obligations to new services and

products, this could adversely affect the Group’s business operations and competitiveness in such countries.

In addition, Proximus provides to or obtains from other carriers what is commonly referred to as least-cost

routing. The use of least-cost routing mechanisms has not been universally accepted by regulatory authorities

and should the use of lease-cost routing mechanisms be limited or terminated by a substantial number of

countries where Proximus does business, Proximus International Carrier Services’ operating revenue and net

profit could be materially adversely affected.

Network related risks

Proximus is currently moving to a next generation network based on IP and new technologies. Certain

elements of Proximus’ plans in this respect (outphasing and migration of legacy technologies such as ATM

and SDH, migration from PSTN to IP solutions, building outphasing) affect existing wholesale product

20

services. As a consequence, they are subject to regulatory analysis and/or approval by BIPT. The main risk for

Proximus regarding the move to IP technologies relates to delays in the migration process and lack of

suitability of some of the alternative solutions for the market. The efficiency of the migrations and of the out-

phasing of legacy technologies depends on the competitors’ willingness to eventually migrate towards the

proposed solutions. Those risks exist, even though incentives are created to convince the competitors of the

benefits that moving to an IP based network will bring both for the operators and the final users. If BIPT

makes further requests of Proximus concerning this operation, Proximus’ plans could be delayed or may result

in additional costs for Proximus.

Fiber to the home (FTTH) and fiber to the building (FTTB) technologies are currently not included in the

scope of the Belgian regulation. However, BIPT requires Proximus to notify one year prior to a retail offer.

BIPT will address the question regarding the regulatory treatment of FTTH in the context of its review of the

market analysis for broadband (forthcoming, date unknown). BIPT could decide that FTTH needs to be

regulated and opened to third parties. Regulation of FTTH and FTTB could have a negative impact on the

return on the investment.

There is currently no specific net neutrality legislation in Belgium but new rules will be imposed at EU level

in the context of the Telecom Single Market Regulation (TSM) on which the European Council and

Parliament have reached a compromise agreement in June 2015. This Regulation will for the first time

introduce this principle in the EU law. The new rules foresee among others that all traffic must be treated

equally and prohibit blocking or throttling of traffic. Reasonable traffic management will be allowed based on

justified technical requirements. Offer of “Specialised services” of higher quality will still allowed if they are

not supplied at the expense of the quality of the open Internet. “Zero rating” (also called “sponsored

connectivity” i.e. a commercial practice used by some providers of Internet access, especially mobile

operators, not to count the data volume of particular applications or services against the user's limited monthly

data volume) will be allowed but will be monitored by regulators. Regulators will receive powers to monitor

and enforce the new rules and set minimum quality of service requirements. Effective, proportionate and

dissuasive penalties will be imposed in case of infringement. The new rules will officially apply as of 30 April

2016. The associated risk of specific advanced net neutrality legislation is that Proximus could lose the ability

to sufficiently manage its network, with a loss of service quality as a consequence. Proximus could also be

blocked from developing commercial models allowing it to monetise its network, which could negatively

impact revenues.

BIPT is also imposing strict operational timers and tracks performance for Proximus wholesale

operations. Failing to respect the terms could result in fines or increased regulatory pressure leading to

reinforcement of its non-discrimination obligation. Eventually, BIPT could possibly impose functional

separation if it considers that no sufficient improvement is established.

On 20 May 2014, BIPT has fined Proximus EUR 403,000 for alleged errors in the technical specifications

of its wholesale VDSL reference offer "WBA" (limitations of certain features not accurately described). BIPT

considers that Proximus was in breach of its "transparency obligation" regarding its regulated reference offers.

The reference offer was updated in November 2012. This follows a complaint lodged by an alternative

operator that claimed that the errors affected their ability to develop services to compete with Proximus.

Proximus has appealed this decision.

Risks related to numbering

The Electronic Communications Committee (ECC) numbering and network working group of the European

Conference of Postal and Telecommunications Administrations (CEPT) regularly issue recommendations

about the evolution of numbering. Those recommendations influence decision making by the national

21

regulators and may impact market conditions. They may have significant technical and operational

consequences.

End 2014, BIPT consulted the market on possible changes of some principles related to the management

of the national numbering plan taking into account the evolution of the market since the publication of the

related Royal Decree in 2007. Based on this first consultation, BIPT will issue a second consultation -

expected by the end of 2015 - related to the detailed changes in the Royal Decree. This Royal Decree could

have technical and operational consequences.

On 2 July 2013, the Royal Decree imposing the one day delay for number portability (NP) was published. If

the NP process is delayed, the customer can request his or her new operator to be compensated EUR 3 to EUR

5 per day of delay and per number. The implementation has now been completed.

As the IP addresses used in the internet (IPv4) are nearly exhausted, the internet world prepares the migration

to IPv6 addresses offering a huge amount of addresses. Several projects are running at Proximus to gradually

introduce IPv6 for its customers in parallel with the current IPv4. During the EU council of 5 December 2013,

the Telecom Minister stressed the need for a recommendation on IPv6.

Risks related to spectrum

Spectrum auctions are always an important source of uncertainty and risk. Indeed the outcome is by definition

unknown and depends on many parameters for which operators do not have full control (price, number of

interested operators, amounts of spectrum to be allocated, etc.). If operators are not able to obtain the amount

of spectrum they need or have to pay a price which is much too high, this has a direct impact on their network

performance and on their financials.

2G (900MHz and 1800MHz) and 3G (2100MHz) licences will expire on 15 March 2021. BIPT has

communicated its intention to consider the organization of a multiband auction possibly together with the

700MHz band. As such multiband auction would create a lot of uncertainty, the sector has communicated its

preference for an extension of existing licences (900MHz, 1800MHz and 2100MHz) instead of an auction. In

case of an auction, the risk would be that operators would not be able to secure the spectrum they need to

sustain their mobile activities. That is why the sector is pleading for an extension of existing spectrum by

additional periods of for example 5 years. Such possibility for extensions already exists in the 800MHz or the

2.6 GHz bands. Another solution could be to make all existing licences indefinite. In such case there would be

no multiband auction and only the 700MHz band would be auctioned.

The auctioning of the 700MHz band could happen around 2018 (with the objective to put it in service by

2020). This will be also a source of uncertainty as such. BIPT still has to decide on the price, duration,

coverage obligations, etc.

Moreover, there is still some spectrum free to be auctioned: (i) 2x15MHz in the 2100MHz: in an attempt to

increase the interest in the 2100MHz band for existing operators, BIPT has proposed in a communication

published on 15 April 2015 to increase the applicable spectrum cap (currently set at 2x20 MHz) in a dynamic

way taking into account the number of interested operators. In 2015, BIPT will propose to the Government to

review the 3G Royal Decree accordingly. No timing has been provided for an auction yet and (ii) 2x15MHz

in the 2600MHz band – for those frequencies, BIPT does not exclude the arrival of a new entrant. Spectrum

allocation could occur early 2016. In this band there is also still uncertainty as to the intention of BUCD (now

Voyacom) in what they could do with their TDD spectrum (1x45MHz).

Besides the unique fee that operators have to pay when spectrum is auctioned, they have also to pay annual

fees (management fees and usage fees) to BIPT for the management of the spectrum. Those fees are

increasing over the years as operators use more and more spectrum while mobile revenues are decreasing or

22

stagnating. Today, payments already far exceed the administrative costs of BIPT. This could create an

important disincentive for operators to activate more spectrum and further deploy their network.

BIPT will investigate the possibility to review the 2005 Law so as to allow spectrum sharing. This issue will

be debated in the context of a broader revision of BIPT guidelines concerning infrastructure sharing.

Spectrum sharing is considered as an important way to improve spectrum efficiency and increase mobile

coverage and quality in the most rural areas. Such review could have an impact on existing or future mobile

sharing discussions.

The norms for electromagnetic fields in Belgium are a regional matter. These norms are different depending

on the region. The Brussels norm was the most stringent norm in the world and the mobile operators had

repeatedly criticised it because it would have obliged them to deploy additional sites and would have

seriously hindered the possibility to roll out new mobile technologies in Brussels such as 4G LTE on top of

2G and 3G. Finally, the environmental framework was modified, imposing a global norm of 6 V/m. The

modification of the Ordinance was adopted on 24 January 2014 and the executing decree on the 3 April 2014.

The new legal framework entered into force on 15 May 2014. This enables Proximus to start its 4G

deployment in Brussels too but does not offer a long term solution when data usage will increase.

Local authorities, municipalities, provinces and/or regions are taxing mobile infrastructure (pylons, masts and

or antennas) located on their territory. The mobile operators continue to challenge these taxes before the

courts.

Risks relating to protection of end users

Consumer protection is subject to special scrutiny by the authorities.

The law of 10 July 2012 modifying the 2005 Law has strengthened consumer protection rules and introduced

new measures related to contract regulation such as the possibility of early termination of fixed term contracts

after 6 months (without any penalty except potential reimbursement of residual value of a free device) for

consumers and small enterprises. The law has also reinforced the measures related to transparency (standard

information sheets) and cost control (free alerts in case of abnormal or excessive consumption). The 2005

Law has been modified again in March 2014 to strenghten the protection of end users (e.g. e-mail

portability extended from 6 months previously to 18 months) (See ‘Regulation’ for further details).

BIPT has consulted the market until 1 July 2015 about concrete modalities aimed at facilitating migration for

the consumers (residential clients) of fixed services (telephony, internet, TV and packs) (so-called “Easy

Switch project”). The draft foresees in particular a “One stop shopping” procedure (inspired by the current

number portability process), the obligation for the operators to establish a signed visit report describing the

field intervention or to prove the absence of customer and compensations for the customers in case of delay in

the execution of the migration. Protection of end users is under close scrutiny and control by BIPT. BIPT may

impose fines in case of infringement. A too strict interpretation of the current obligations or the imposition of

additional obligations by the Belgian authorities could constrain the commercial activities of the Belgian

operators including Proximus.

Risks relating to universal service

The Belgian scope of the Universal Service (USO) has been extended to broadband by the law of 10 July

2012 modifying the 2005 Law while some other obligations have been withdrawn in 2013 (payphones,

directory inquiry services and paper/electronic directories) (see ‘Regulation’ below). The Royal Decree of 2

April 2014 has determined the required minimum speed that Belgian citizens are entitled to at 1 Mbps (100%

coverage for reasonable requests) all the time except one hour/day maximum. Thereafter, the provision of

internet access with this minimum speed will have to be guaranteed to all. BIPT proposes an open procedure

and will make sure that this procedure will allow application by consortiums of operators using different

23

technologies. Proximus may submit an application or, in the absence of a successful open procedure, BIPT

might decide to assign Proximus or another operator as broadband USO operator.

So far, Proximus has not been compensated for providing the Universal Service. The former funding system

set up in 2005 for the social tariffs was withdrawn following appeals introduced by competitors before the

Belgian and EU Courts. The law of 10 July 2012 has modified the financing system of social tariffs and has

foreseen calculation of the net cost and a potential financing as from mid-2005. Proximus renewed its request

for compensation immediately after the entering into force of this law. Mobistar and KPN/BASE jointly filed

a request for annulment of the new legal provisions before the Belgian Constitutional Court regarding the

inclusion of the social tariffs for mobile voice and internet subscriptions in the Universal Service obligations

compensation system and the retro-activity of the right to ask for compensation for the net costs related to the

offer of social tariffs. On 19 December 2013, the Constitutional Court rejected these appeals and confirmed

the possibility of retroactive funding since 2005. The Court also decided to submit a prejudicial question to

the European Court of Justice regarding the compatibility with the Universal Service directive of social tariffs

related to internet and mobile voice. On 11 June 2015, the EU Court issued its final ruling indicating that the

inclusion of mobile telephony in the social tariffs is not compatible with the EU directive. The Court does not

oppose to social tariffs for internet subscription via a connection at a fixed position (without clarifying this

concept or its implications in terms of universal service speeds that may be imposed). The Court stated that if

Belgium wishes to impose “additional mandatory services” for mobile telephony, the funding of these

services cannot be made through the sectorial universal service fund. The case will now go back to the

Belgian court that will have to take the final decision. In the meantime the Telecom Minister has announced a

modification of the law to modernise the social tariffs. The matter of whether Proximus will receive any

compensation for the social tariffs has not been determined and will depend on the assessment of the

unfairness of the burden.

Risks relating to cooperation with justice, security and emergency services

Several obligations have been or could be modified related to the cooperation with justice and the emergency

services as well as those related to network and data security. These new measures might result in additional

implementation costs or a decreased remuneration for Proximus.

The Royal Decree published on 4 March 2013 reduced the compensation of telecoms network operators and

telecoms service providers for the collaboration with judicial authorities. A consultation with the sector

took place to further reduce the compensation for this collaboration in line with the cost model determined by

BIPT.

A new data retention law was published on 23 August 2013 and the Royal Decree describing the modalities

on 8 October 2013. Internet service providers should have data retention systems ready by 8 October 2014.

On 11 June 2015, the Constitutional Court has declared the Belgian law invalid. The Constitutional Court

follows the ruling of the European Court of Justice that, on 8 April 2014, invalidated the Data Retention

Directive of 2006 since the day it was adopted, on the grounds that it constitutes a “serious interference” with

fundamental privacy rights which goes beyond “what it is strictly necessary” to fight against serious crime

(disproportionality). On 31 July 2015, a draft new law repairing this situation has been submitted to the sector

for consultation. This could result in additional obligations for the operators.

The 2005 Law obliges the telecoms operators to contribute partially to the cost of the emergency services. A

fund for the emergency services was created and is managed by BIPT. A first decision was made by the Fund

requesting the mobile operators to contribute for the period from 2009 up till 2013. Operators will be obliged

to develop new emergency solutions for example SMS and “e-call”.

In December 2013, BIPT consulted the market about a draft law that will allow public authorities to send a

communication to warn the public of an imminent danger or to reduce the consequences of a disaster. Mobile

24

operators will have to collaborate to allow sending warning messages to the customers present in a specified

area.

Risks relating to media

On 10 July 2013, the Flemish Parliament voted a decree which aims to modify the existing Flemish Media

Decree with regard to “signal integrity”. The text foresees that distributors of TV signals will have to transmit

linear television programmes unshortened, unaltered and in their entirety, and further, that distributors have to

obtain the prior approval from each broadcaster in the Flemish Community in respect of each “functionality”

which allows watching linear TV programmes in a way that is delayed, shortened or altered.

Proximus has concluded agreements with the concerned broadcasters ensuring compliance with the decree

and has decided not to challenge the relevant provisions of the Media Decree before the Constitutional Court

(see “Regulation” below). The risk is that broadcasters will have more leverage on distributors such as

Proximus to claim payments for content. Given that Proximus has always correctly paid the broadcasters for

content, this risk is not huge, but nonetheless is existing and it is likely that broadcasters will claim an

increase of content fees for example with the launch of new watching facilities by Proximus.

On 17 January 2014, the Flemish Parliament voted a decree introducing a regulation related to the stimulation

of the audiovisual sector in the Flemish Community. The “Investment Obligation Decree” modifies the

existing Flemish Media Decree and spells out a new principle for the distributor to participate to the

stimulation of the audiovisual sector by a yearly financial contribution. Contribution is to be paid either via a

coproduction in audiovisual works or via payment to the Flemish Media fund. In addition, the financial

participation represents either a lump sum of EUR 3 million/year or a yearly fee per subscriber in the Flemish

Community of EUR 1.3. The Investment Obligation Decree is also completed by an Executive Act voted on

21 March 2014 containing the various modalities of the investment obligations (eligible projects, deadlines,

approval procedure, etc). So far, Proximus has decided to comply with its obligation through investements in

TV series.

On 21 February 2014, the Flemish Parliament voted a decree modifying the Flemish Media Decree by

amending the provisions related to the remuneration of the regional broadcasters. The Decree spells out

amongst other the principle for the Flemish regional broadcasters to be remunerated by the TV distributors as

follows: each Flemish regional broadcaster will receive from the distributor a yearly remuneration

corresponding to EUR 2.3 (indexed) per subscriber receiving the regional broadcaster. An executive Act with

the various terms and conditions related to this contribution has been voted and a new remuneration system

has entered into force, based on the number of subscribers per region and the average daily reach per channel.

Proximus cannot exclude that other modifications to the Media Decree will not be adopted which could lead

to additional costs for Proximus.

On 6 July 2015, the European Commission started a public consultation (until 30 September) to consider

possible changes to the Audiovisual Media Services Directive (AVMSD), which regulates TV services in

the EU. As part of the Commission's Digital Single Market strategy, the AVMSD will be reviewed in 2016 to

see whether it is working well and if it needs to be changed to take account of new online services offered

across borders. The main questions in the consultation are whether stakeholders think the current directive is

working well or should be improved, what roles and responsibilities should market players (broadcasters, on-

demand service providers, internet services, telecom operators, etc.) have, and how to protect viewers

(particularly children), promote European works and access to information and regulate advertising in the

audiovisual online world. Some of the issues under consideration include expanding the scope of the

directive. It currently applies to linear and on-demand services, but not to internet services hosting user-

generated content (like YouTube, Vimeo, etc.). Broadcasters also face stricter rules in some areas, such as

facilitating access for disabled people, not showing content that could harm children or promoting European

25

cultural works. The Commission will consider whether these elements should also be extended to on-demand

services. In addition, the AVMSD requires companies providing services across the EU to adhere to the rules

only of the country under whose jurisdiction they fall. Given the increasingly cross-border media market, this

system may be up for reform. Additional stronger obligations in terms of minor protection, advertising, quotas

of European works could be imposed

Risks Related to Proximus’ Ownership by the Belgian State

Proximus could be influenced by the Belgian State whose interest may not always be aligned with the

interests of Proximus’ other shareholders.

Following the Initial Public Offering (IPO) in March 2004, the Belgian State held 50% plus one of Proximus’

ordinary shares and voting rights. At 31 July 2015, the Belgian State owned 53.51%.

Accordingly, the Belgian State will continue to have the power to determine matters submitted for a vote of

shareholders, including the ability to control the outcome of certain corporate actions such as dividend policy,

mergers and other extraordinary transactions. The Belgian State has the power to appoint a number of

directors proportionate to the number of voting rights attached to its shareholding, the power to dismiss all the

directors of Proximus including the Chairman of the Board of Directors and the Chief Executive Officer, and

is required by law to retain at least 50% plus one of the ordinary shares of Proximus. The interests of the

Belgian State in deciding these matters and the factors it considers in exercising its votes could be different

from the interests of Proximus’ other shareholders.

As an autonomous public sector enterprise, Proximus is governed by the Law of 21 March 1991 as

amended (the 1991 Law), which differs in certain respects from the laws applicable to other Belgian

commercial companies.

Proximus is an autonomous public sector enterprise that has adopted the legal form of a limited liability

company under Belgian public law and therefore is also governed by certain provisions of Belgian public and

administrative law. The interaction between the laws applicable to all private limited liability companies and

the specific public and administrative law provisions and principles has in the past presented and may

continue to present difficulties of interpretation and may give rise to legal uncertainties for Proximus.

In line with the federal Government Agreement following last year’s elections, the Belgian Government has

decided to modernise the Law of 1991. This modernisation will have an impact on both Proximus’ corporate

governance as well as the Government’s majority stake in the company. In terms of governance, the

Government will from now on work through the corporate bodies of a General Assembly and a Board. As

such, only the General Assembly will be able to appoint board members, the Chief Executive Officer and the

Chairman of the Board. In addition, the modernisation of the Law of 1991 will define a framework for

reducing the Government’s participation of 50% plus one ordinary share to a minimum threshold of 25% + 1

share. No clear timing has been set for reducing this participation. Likewise, the threshold of 25%+1 share is

merely a minimum but not an objective per se. At this stage, the 50% plus one ordinary share stake is thus

maintained

A large number of Proximus’ employees are statutory employees who benefit from substantially higher

protection against dismissal than that applicable to ordinary private sector employees.

Around one-third of Proximus’ employees are employed under an administrative law which only allows

dismissals in limited and exceptional circumstances. This situation may restrict Proximus’ ability to improve

efficiency and increase flexibility to levels comparable to those of its competitors.

26

FACTORS WHICH ARE MATERIAL FOR THE PURPOSE OF ASSESSING THE MARKET

RISKS ASSOCIATED WITH NOTES ISSUED UNDER THE PROGRAMME

Risks related to the structure of a particular issue of Notes

A wide range of Notes may be issued under the Programme. A number of these Notes may have features

which contain particular risks for potential investors. Set out below is a description of the most common such

features:

If the Issuer has the right to redeem any Notes at its option, this may limit the market value of the

Notes concerned and an investor may not be able to reinvest the redemption proceeds in a manner

which achieves a similar effective return

The optional redemption feature of Notes is likely to limit their market value. During any period when the

Issuer may elect to redeem Notes, the market value of those Notes generally will not rise substantially above

the price at which they can be redeemed. This also may be true prior to any redemption period.

The Issuer may be expected to redeem Notes when its cost of borrowing is lower than the interest rate on the

Notes. At those times, an investor generally would not be able to reinvest the redemption proceeds at an

effective interest rate as high as the interest rate on the Notes being redeemed and may only be able to do so at

a significantly lower rate. Potential investors should consider reinvestment risk in light of other investments

available at that time.

If the Issuer has the right to convert the interest rate on any Notes from a fixed rate to a floating rate,

or vice versa, this may affect the secondary market and the market value of the Notes concerned

Fixed/Floating Rate Notes are Notes which may bear interest at a rate that converts from a fixed rate to a

floating rate, or from a floating rate to a fixed rate. Where the Issuer has the right to effect such a conversion,

this will affect the secondary market and the market value of the Notes since the Issuer may be expected to

convert the rate when it is likely to produce a lower overall cost of borrowing. If the Issuer converts from a

fixed rate to a floating rate in such circumstances, the spread on the Fixed/Floating Rate Notes may be less

favourable than then prevailing spreads on comparable Floating Rate Notes tied to the same reference rate. In

addition, the new floating rate at any time may be lower than the rates on other Notes. If the Issuer converts

from a floating rate to a fixed rate in such circumstances, the fixed rate may be lower than then prevailing

market rates.

Notes which are issued at a substantial discount or premium may experience price volatility in response

to changes in market interest rates

The market values of securities issued at a substantial discount (such as Zero Coupon Notes) or a premium to

their principal amount tend to fluctuate more in relation to general changes in interest rates than the prices for

more conventional interest-bearing securities. Generally, the longer the remaining term of such securities, the

greater the price volatility as compared to more conventional interest-bearing securities with comparable

maturities.

Risks related to Notes generally

Set out below is a description of material risks relating to the Notes generally:

Notes issued under this Programme constitute debt instruments of the Issuer

Notes issued under this Programme constitute debt instruments of the Issuer. An investment in such Notes

involves risks. By subscribing to the Notes, investors lend money to the Issuer who undertakes to pay interest

and to reimburse the principal on the Maturity Date or earlier if applicable.

27

The ability of the Issuer to pay principal and interest on the Notes or to refinance such debt depends, amongst

others, on its ability to generate sufficient cashflow from its operational activities or to raise new financing in

the market.

Changing conditions in the credit markets and the level of outstanding debt of the Issuer could make its access

to financing more expensive than anticipated and could increase the Issuer’s financial vulnerability. Potential

investors should be aware that, in case of bankruptcy or default by the Issuer, they may not be able to recover

the amounts they are entitled to and risk losing all or a part of their investment.

The conditions of the Notes contain provisions which may permit their modification without the

consent of all investors

The conditions of the Notes contain provisions for calling meetings of Noteholders to consider matters

affecting their interests generally. These provisions permit defined majorities to bind all Noteholders

including Noteholders who did not attend and vote at the relevant meeting and Noteholders who voted in a

manner contrary to the majority.

The Notes may be subject to withholding taxes in circumstances where the Issuer is not obliged to make

gross up payments and this would result in holders receiving less interest than expected and could

significantly adversely affect their return on the Notes

Belgian withholding tax

- in case of a X/N issuance of the Notes

Belgian withholding tax, currently at a rate of 25%, will in principle apply to the interest on the Notes held in

a non-exempt securities account (a Non-Exempt Account) in the Securities Settlement System. If a payment

were to be made to a Noteholder holding the Notes in a Non-Exempt Account, neither the Issuer nor any

paying agent nor any other person would be obliged to pay additional amounts with respect to these Notes as

a result of a deduction or withholding for the Belgian withholding tax.

Potential investors should be aware that any relevant tax law or practice applicable as at the date of this Base

Prospectus and/or the date of purchase or subscription of the Notes may change at any time (including during

any subscription period or the term of the Notes). Any such change may have an adverse effect on a

Noteholder, including that the liquidity of the Notes may decrease and/or the amounts payable to or receivable

by an affected Noteholder may be less than otherwise expected by such Noteholder.

More in particular, investors should note that the Belgian government has recently announced orally its

intention to increase the general withholding tax rate (which applies, amongst other, to interest payments)

from 25 to 27%.

Potential investors who are in any doubt as to their tax position should consult their own independent tax

advisers.

- in case of a X-only issuance of the Notes

Currently, no Belgian withholding tax will be applicable to the interest on the Notes held by an Eligible

Investor in an exempt securities account (an Exempt Account) in the Securities Settlement System, as further

described in section "Taxation".

If the Issuer, the National Bank of Belgium, a paying agent or any other person is required to make any

withholding or deduction for, or on account of, any present or future taxes, duties or charges of whatever

nature in respect of any payment in respect of the Notes, the Issuer, the National Bank of Belgium, the

28

relevant paying agent or that other person shall make such payment after such withholding or deduction has

been made and will account to the relevant authorities for the amount so required to be withheld or deducted.

Potential investors should be aware that none of the Issuer, the National Bank of Belgium, an agent or any

other person will be liable for or otherwise obliged to pay, and the relevant Noteholders will be liable for

and/or pay, any tax, duty, charge, withholding or other payment whatsoever which may arise as a result of, or

in connection with, the ownership, any transfer and/or any payment in respect of the Notes, except as

provided for in Condition 7 (Taxation). In particular, potential investors should be aware that pursuant to

Condition 7 (Taxation), the Issuer will, among others, not be obliged to pay any additional amounts with

respect to any Note to a Holder, who at the time of issue of the Notes, was not an Eligible Investor or to a

Holder who was such an Eligible Investor at the time of issue of the Notes but, for reasons within the Holder’s

control, either ceased to be an Eligible Investor or, at any relevant time on or after the issue of the Notes,

otherwise failed to meet any other condition for the exemption of Belgian withholding tax pursuant to the

Belgian Law of 6 August 1993 on transactions in certain securities.

Potential investors should be aware that any relevant tax law or practice applicable as at the date of this Base

Prospectus and/or the date of purchase or subscription of the Notes may change at any time (including during

any subscription period or the term of the Notes). Any such change may have an adverse effect on a

Noteholder, including that the liquidity of the Notes may decrease and/or the amounts payable to or receivable

by an affected Noteholder may be less than otherwise expected by such Noteholder.

Potential investors who are in any doubt as to their tax position should consult their own independent tax

advisers.

EU Savings Directive

Under the EC Council Directive 2003/48/EC on the taxation of savings income (the “EU Savings

Directive”), member states of the European Economic Union (the “EU Member States” and each a “EU

Member State”) are required to provide to the tax authorities of another EU Member State details of

payments of interest (or similar income) paid by a person within its jurisdiction to (or secured by such a

person for the benefit of) an individual resident, or to (or secured for) certain other types of entity established,

in that other EU Member State, except that Austria will instead impose a withholding system for a transitional

period (subject to a procedure whereby, on meeting certain conditions, the beneficial owner of the interest or

other income may request that no tax be withheld) unless during such period it elects otherwise. A number of

non-EU countries and territories including Switzerland have adopted similar measures (a withholding system

in the case of Switzerland).

According to the Luxembourg law dated 25 November 2014, the Luxembourg government has abolished the

withholding tax system with effect from 1 January 2015 in favour of the automatic information exchange

mechanism under the EU Savings Directive. Furthermore, in October 2014, Austria reportedly agreed to a

proposal amending Directive 2011/16/EU which aims at reinforcing the current EU legislation in the field of

automatic exchange of information and which may ultimately lead to Austria abolishing the withholding

system provided for in the EU Savings Directive. This proposal was finally adopted on 9 December 2014 as

Directive 2014/107/EU on administrative cooperation in direct taxation which is further described below (see

“Common Reporting Standard” in the section “Taxation” below).

On 24 March 2014, the Council of the European Union adopted a Directive amending the EU Savings

Directive (the “EU Amending Directive”), which, when implemented, will amend and broaden the scope of

the requirements described above. The EU Amending Directive will expand the range of payments covered by

the EU Savings Directive, in particular to include additional types of income payable on securities, and the

circumstances in which payments must be reported or paid subject to withholding. For example, payments

made to (or secured for) (i) an entity or legal arrangement effectively managed in an EU Member State that is

29

not subject to effective taxation, or (ii) a person, entity or legal arrangement established or effectively

managed outside of the EU (and outside any third country or territory that has adopted similar measures to the

EU Savings Directive) which indirectly benefit an individual resident in an EU Member State, may fall within

the scope of the EU Savings Directive, as amended. EU Member States have until 1 January 2016 to adopt

national legislation necessary to comply with this EU Amending Directive, which legislation must apply from

1 January 2017.

On 18 March 2015, the European Commission has however proposed the repeal of the EU Savings Directive

from 1 January 2017 in the case of Austria and from 1 January 2016 in the case of all other EU Member

States (subject to on-going requirements to fulfil administrative obligations such as the reporting and

exchange of information relating to, and accounting for withholding taxes on, payments made before those

dates). This is to prevent overlap between the EU Savings Directive and a new automatic exchange of

information regime to be implemented under Council Directive 2011/16/EU on administrative cooperation in

the field of taxation (as amended by Council Directive 2014/107/EU). The proposal also provides that, if it

proceeds, EU Member States will not be required to apply the new requirements of the EU Amending

Directive.

If a payment were to be made or collected through a EU Member State which at that time applies a

withholding system and an amount of, or in respect of, tax were to be withheld from that payment, pursuant to

the EU Savings Directive or any other Directive implementing the conclusions of the ECOFIN Council

meeting of 26-27 November 2000 on the taxation of savings income or any law implementing or complying

with, or introduced in order to conform to such Directive, neither the Issuer nor the relevant paying agent nor

any other person would be obliged to pay additional amounts to the Holders or to otherwise compensate

Holders for the reductions in the amounts that they will receive as a result of the imposition of such

withholding tax. Furthermore, once the EU Amending Directive is implemented and takes effect in EU

Member States, such withholding may occur in a wider range of circumstances than at present, as explained

above.

FATCA withholding

Whilst the Notes are held within the Securities Settlement System, in all but the most remote circumstances, it

is not expected that the foreign account tax compliance tax provisions of the Hiring Incentives to Restore

Employment Act of 2010, commonly referred to as “FATCA”, will affect the amount of any payment

received by the Securities Settlement System (see Part XIII (Taxation) - FATCA Withholding). However,

FATCA may affect payments made to custodians or intermediaries in the subsequent payment chain leading to

the ultimate investor if any such custodian or intermediary generally is unable to receive payments free of

FATCA withholding. It also may affect payment to any ultimate investor that is a financial institution that is

not entitled to receive payments free of withholding under FATCA, or an ultimate investor that fails to

provide its broker (or other custodian or intermediary from which it receives payment) with any information,

forms, other documentation or consents that may be necessary for the payments to be made free of FATCA

withholding. Investors should choose the custodians or intermediaries with care (to ensure each is compliant

with FATCA or other laws or agreements related to FATCA), provide each custodian or intermediary with any

information, forms, other documentation or consents that may be necessary for such custodian or intermediary

to make a payment free of FATCA withholding. Investors should consult their own tax adviser to obtain a

more detailed explanation of FATCA and how FATCA may affect them. The Issuer’s obligations under the

Notes are discharged once it has paid to or to the order of the Securities Settlement System and the Issuer has

therefore no responsibility for any amount thereafter transmitted through the hands of the Securities

Settlement System and custodians or intermediaries. Further, foreign financial institutions in a jurisdiction

which has entered into an intergovernmental agreement with the Unites States (an “IGA”) are generally not

expected to be required to withhold under FATCA or an IGA (or any law implementing an IGA) from

30

payments they make on securities such as the Notes. Please see Part XIII (Taxation) – “FATCA Withholding”

for more information on this legislation.

The value of the Notes could be adversely affected by a change in Belgian or English law or

administrative practice

The conditions of the Notes issued by Proximus are governed by Belgian law or, as the case may be, English

law, in each case in effect as of the date of this Base Prospectus. No assurance can be given as to the impact of

any possible judicial decision or change to Belgian or English law or administrative practice after the date of

this Base Prospectus and any such change could materially adversely impact the value of any Notes affected

by it.

Risks related to the market generally

Set out below is a description of material market risks, including liquidity risk, exchange rate risk, interest

rate risk and credit risk:

An active secondary market in respect of the Notes may never be established or may be illiquid and this

would adversely affect the value at which an investor could sell his Notes

Notes may have no established trading market when issued, and one may never develop. If a market does

develop, it may not be very liquid. Therefore, investors may not be able to sell their Notes easily or at prices

that will provide them with a yield comparable to similar investments that have a developed secondary

market. This is particularly the case for Notes that are especially sensitive to interest rate, currency or market

risks, are designed for specific investment objectives or strategies or have been structured to meet the

investment requirements of limited categories of investors. These types of Notes generally would have a more

limited secondary market and more price volatility than conventional debt securities.

The Issuer may, but is not obliged to, list an issue of Notes on a stock exchange or regulated market. If Notes

are not listed or traded on any stock exchange or regulated market, pricing information for the relevant Notes

may be more difficult to obtain and the liquidity of such Notes may be adversely affected, and therefore the

price of the Notes could be affected by their limited liquidity.

The Issuer may also issue Notes that are not listed or traded on a stock exchange or regulated market. Such

Notes may be traded on trading systems governed by the laws and regulations in force from time to time (e.g.

multilateral trading systems or “MTF”) or in other trading systems (e.g. bilateral systems, or equivalent

trading systems). In the event that trading in such Notes takes place outside any such stock exchange,

regulated market or trading systems, the manner in which the price of such Notes is determined may be less

transparent and the liquidity of such Notes may be adversely affected. Investors should note that the relevant

Issuer does not grant any warranty to Noteholders as to the methodologies used to determine the price of

Notes which are traded outside a trading system, however, where the relevant Issuer or any of its affiliates

determines the price of such Notes, it will take into account the market parameters applicable at such time in

accordance with applicable provisions of law. Even if Notes are listed and/or admitted to trading, this will not

necessarily result in greater liquidity.

Furthermore, Noteholders should be aware of the prevailing and widely reported global credit market

conditions (which continue at the date of this Base Prospectus), whereby there is a general lack of liquidity in

the secondary market for instruments similar to the Notes. Such lack of liquidity may result in investors

suffering losses on the Notes in secondary resales even if there is no decline in the performance of the assets

of the Issuer. The Issuer cannot predict which of the circumstances will change and whether, if and when they

do change, there will be a more liquid market for the Notes and instruments similar to the Notes at that time.

31

If an investor holds Notes which are not denominated in the investor's home currency, they will be

exposed to movements in exchange rates adversely affecting the value of their holding. In addition, the

imposition of exchange controls in relation to any Notes could result in an investor not receiving

payments on those Notes

The Issuer will pay principal and interest on the Notes in the Specified Currency. This presents certain risks

relating to currency conversions if an investor’s financial activities are denominated principally in a currency

or currency unit (the Investor’s Currency) other than the Specified Currency. These include the risk that

exchange rates may significantly change (including changes due to devaluation of the Specified Currency or

revaluation of the Investor’s Currency) and the risk that authorities with jurisdiction over the Investor’s

Currency may impose or modify exchange controls. An appreciation in the value of the Investor’s Currency

relative to the Specified Currency would decrease (1) the Investor’s Currency-equivalent yield on the Notes,

(2) the Investor’s Currency-equivalent value of the principal payable on the Notes and (3) the Investor’s

Currency-equivalent market value of the Notes.

Government and monetary authorities may impose (as some have done in the past) exchange controls that

could adversely affect an applicable exchange rate or the ability of the Issuer to make payments in respect of

the Notes. As a result, investors may receive less interest or principal than expected, or no interest or

principal.

The value of Fixed Rate Notes may be adversely affected by movements in market interest rates

Investment in Fixed Rate Notes involves the risk that if market interest rates subsequently increase above the

rate paid on the Fixed Rate Notes, this will adversely affect the value of the Fixed Rate Notes.

Credit ratings assigned to the Issuer or any Notes may not reflect all the risks associated with an

investment in those Notes

One or more independent credit rating agencies may assign credit ratings to the Issuer or the Notes. The

ratings may not reflect the potential impact of all risks related to structure, market, additional factors

discussed above, and other factors that may affect the value of the Notes. A credit rating is not a

recommendation to buy, sell or hold securities and may be revised, suspended or withdrawn by its assigning

rating agency at any time. Any negative change in the credit rating of Proximus could adversely affect the

trading price of the Notes.

In general, European regulated investors are restricted under the CRA Regulation from using credit ratings for

regulatory purposes, unless such ratings are issued by a credit rating agency established in the EU and

registered under the CRA Regulation (and such registration has not been withdrawn or suspended), subject to

transitional provisions that apply in certain circumstances whilst the registration application is pending. Such

general restriction will also apply in the case of credit ratings issued by non-EU credit rating agencies, unless

the relevant credit ratings are endorsed by an EU-registered credit rating agency or the relevant non-EU rating

agency is certified in accordance with the CRA Regulation (and such endorsement action or certification, as

the case may be, has not been withdrawn or suspended). The list of registered and certified rating agencies

published by the ESMA on its website (http://www.esma.europa.eu/page/List-registered-and-CRAs) in

accordance with the CRA Regulation is not conclusive evidence of the status of the relevant rating agency

included in such list, as there may be delays between certain supervisory measures being taken against a

relevant rating agency and the publication of the updated ESMA list. Certain information with respect to the

credit rating agencies and ratings is set out on the cover of this Base Prospectus.

32

DOCUMENTS INCORPORATED BY REFERENCE

The following documents which have previously been published and have been filed with the FSMA shall be

incorporated by reference in, and form part of, this Base Prospectus:

(a) the audited consolidated annual financial statements of the Group prepared in accordance with IFRS

for the financial years ended 31 December 2013 (original and restated) and 31 December 2014,

together with the related audit reports thereon; and

(b) the unaudited semi-annual financial statements of the Group prepared in accordance with IFRS for the

interim period ended 30 June 2015, together with the limited review report thereon.

Following the publication of this Base Prospectus a supplement may be prepared by the Issuer and approved

by the FSMA in accordance with Article 16 of the Prospectus Directive. Statements contained in any such

supplement (or contained in any document incorporated by reference therein) shall, to the extent applicable

(whether expressly, by implication or otherwise), be deemed to modify or supersede statements contained in

this Base Prospectus or in a document which is incorporated by reference in this Base Prospectus. Any

statement so modified or superseded shall not, except as so modified or superseded, constitute a part of this

Base Prospectus.

Copies of documents incorporated by reference in this Base Prospectus can be obtained from the registered

office of the Issuer at Boulevard du Roi Albert II - Koning Albert II Laan 27, 1030 Brussels and will also be

published on the website of Euronext Brussels (www.euronext.com) and the website of the Issuer

(www.proximus.com).

Any documents themselves incorporated by reference in the documents incorporated by reference in this Base

Prospectus shall not form part of this Base Prospectus.

Any non-incorporated parts of a document referred to herein are either deemed not relevant for an investor or

are otherwise covered elsewhere in this Base Prospectus.

The Issuer will, in the event of any significant new factor, material mistake or inaccuracy relating to

information included in this Base Prospectus which is capable of affecting the assessment of any Notes,

prepare a supplement to this Base Prospectus or publish a new Prospectus for use in connection with any

subsequent issue of Notes.

Cross Reference List

Audited IFRS consolidated financial statements of the Group for the financial year ended 31 December

2013.

Consolidated balance sheet p. 2

Consolidated income statement p. 3

Cash Flow Statement p. 5

Statement of Changes in equity p. 6

Auditor’s Report p. 58-60

Accounting Policies and Explanatory Notes p. 7-56

33

Audited IFRS consolidated financial statements of the Group for the financial year ended 31 December

2014.



Cash Flow Statement p.5

Statement of Changes in equity p. 6

Auditor’s Report p. 61-78

Accounting Policies and Explanatory Notes p. 7-59

Unaudited IFRS consolidated financial statements of the Group for the interim period ended 30 June

2015.



Cash Flow Statement p. 42

Statement of Changes in equity p.43

Auditor’s limited review Report p. 48

Any other information incorporated by reference that is not included in the cross-reference list above is

considered to be additional information to be disclosed to investors rather than information required by the

relevant Annexes of the Prospectus Regulation.

34

FORM OF THE NOTES

Each Tranche of Notes will be issued in dematerialised form. The Noteholders will not be entitled to

exchange the Notes into definitive notes in bearer form. No certificates representing the Notes will be issued.

35

APPLICABLE FINAL TERMS

Final Terms dated [●]


Issue of [Aggregate Nominal Amount of Tranche] [Title of Notes]

under the EUR 3,500,000,000

Euro Medium Term Note Programme

PART A – CONTRACTUAL TERMS

Terms used herein shall be deemed to be defined as such for the purposes of the Conditions set forth in the

prospectus dated 3 September 2015 [and the supplement[s] to it dated [date] [and [date]]] which [together]

constitute[s] a base prospectus for the purposes of the Prospectus Directive (the “Base Prospectus”). This

document constitutes the Final Terms of the Notes described herein for the purposes of Article 5.4 of the

Prospectus Directive and must be read in conjunction with the Base Prospectus. Full information on the Issuer

and the offer of the Notes is only available on the basis of the combination of these Final Terms and the

Prospectus. The Base Prospectus has been published on the website of the Issuer (www.proximus.com) and

on the website of the FSMA (www.fsma.be).

[Include whichever of the following apply or specify as “Not Applicable”. Note that the numbering should

remain as set out below, even if “Not Applicable” is indicated for individual paragraphs or sub-paragraphs.

Italics denote directions for completing the Final Terms.]

1 (a) Series Number: [ ]

(b) Tranche Number: [ ]

(If fungible with an existing Series, details of that

Series, including the date on which the Notes become

fungible)]

(c) Date on which the Notes will be

consolidated and form a single Series:

[The Notes will be consolidated and form a single

Series with [identify earlier Tranches] on [the Issue

Date][insert other date]][Not Applicable]

2 Specified Currency or Currencies: [ ]

3 Aggregate Nominal Amount:

(a) Series: [ ]

(b) Tranche: [ ]

4 Issue Price: [ ] per cent. of the Aggregate Nominal Amount

[plus accrued interest from [insert date] (if

applicable)]

5 (a) Specified Denominations: [ ]

(N.B. Notes must have a minimum denomination of

EUR 100,000 (or its equivalent in other currencies))

(Note – where multiple denominations above

€100,000 or equivalent are being used the following

sample wording should be followed:

36

“€100,000 and integral multiples of €1,000 in excess

thereof up to and including €199,000”)

(b) Calculation Amount: [ ]

(If only one Specified Denomination, insert the

Specified Denomination. If more than one Specified

Denomination, insert the highest common factor.

Note: There must be a common factor in the case of

two or more Specified Denominations)

6 (a) Issue Date: [ ]

(b) Interest Commencement Date: [specify/Issue Date/Not Applicable]

(N.B. An Interest Commencement Date will not be

relevant for certain Notes, for example Zero Coupon

Notes)

7 Maturity Date: [Fixed rate – specify date/

Floating rate – Interest Payment Date falling in or

nearest to [specify month]]

8 Interest Basis: [[ ] per cent. Fixed Rate]

[[ ] month [LIBOR/EURIBOR] +/– [ ] per

cent. Floating Rate]

[Zero Coupon]

(further particulars specified below)

9 Redemption[/Payment] Basis: Subject to any purchase and cancellation or early

redemption, the Notes will be redeemed on the

Maturity Date at [100/101/102/103/104/105] per

cent. of their nominal amount

10 Change of Interest Basis: [Specify the date when any Fixed to Floating change

occurs or cross-refer paragraphs 13 and 14 below if

details are included there] [Not Applicable]

11 Put/Call Options: [Investor Put]

[Issuer Call]

[Make-Whole Redemption by the Issuer]

[(further particulars specified below)]

12 [Date [Board] approval for issuance of Notes

obtained]:

[ ]

(N.B. Only relevant where Board (or similar)

authorisation is required for the particular tranche of

Notes)

PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE

13 Fixed Rate Note Provisions [Applicable/Not Applicable]

(If not applicable, delete the remaining sub-

paragraphs of this paragraph)

37

(a) Rate(s) of Interest: [ ] per cent. per annum payable in arrear on each

Interest Payment Date

(b) Interest Payment Date(s): [ ] in each year up to and including the Maturity

Date

(Amend appropriately in the case of irregular

coupons)

(c) Day Count Fraction(1): [Actual/Actual (ICMA)] [30/360] [Actual/360]

(d) Determination Date(s): [[ ] in each year] [Not Applicable]

(Only relevant where Day Count Fraction is

Actual/Actual (ICMA). In such a case, insert regular

interest payment dates, ignoring issue date or

maturity date in the case of a long or short first or

last coupon)

(e) Ratings Step-up/Step-down: [Applicable/Not Applicable]

(f) Step Up Margin: [[ ] per cent. per annum/Not Applicable]

14 Floating Rate Note Provisions [Applicable/Not Applicable]

(If not applicable, delete the remaining sub-

paragraphs of this paragraph)

(a) Specified Period(s)/Specified Interest

Payment Dates:

[ ]

(b) Business Day Convention(2): [Following Business Day Convention] [Floating Rate

Convention]

(c) Additional Business Centre(s): [ ]

(d) Manner in which the Rate of Interest and

Interest Amount is to be determined:

[Screen Rate Determination/ISDA Determination]

(e) Party responsible for calculating the Rate

of Interest and Interest Amount (if not the

Domiciliary Agent):

[ ]

(f) Screen Rate Determination:

(i) Reference Rate and Relevant

Financial Centre:

Reference Rate: [ ] month [LIBOR/EURIBOR]

Relevant Financial Centre: [London Brussels]

(ii) Interest Determination Date(s): [ ]

(Second London business day prior to the start of

each Interest Period if LIBOR (other than Sterling or

euro LIBOR), first day of each Interest Period if

Sterling LIBOR and the second day on which the

TARGET 2 System is open prior to the start of each

Interest Period if EURIBOR or euro LIBOR)

1 The applicable Day Count Fraction must comply with the rules from time to time of the Securities Settlement System.2 The applicable Business Day Convention must comply with the rules from time to time of the Securities Settlement System.

38

(iii) Relevant Screen Page: [ ]

(In the case of EURIBOR, if not Reuters EURIBOR

01 ensure it is a page which shows a composite rate)

(g) ISDA Determination:

(i) Floating Rate Option: [ ]

(ii) Designated Maturity: [ ]

(iii) Reset Date: [ ]

(In the case of a LIBOR or EURIBOR based option,

the first day of the Interest Period)

(h) Linear Interpolation: [Not Applicable/Applicable - the Rate of Interest for

the [long/short] [first/last] Interest Period shall be

calculated using Linear Interpolation (specify for

each short or long interest period)]

(i) Margin(s): [+/–] [ ] per cent. per annum

(i) Minimum Rate of Interest: [ ] per cent. per annum

(ii) Maximum Rate of Interest: [ ] per cent. per annum

(iii) Day Count Fraction(3): [Actual/Actual (ISDA)] [Actual/Actual]

[Actual/365 (Fixed)]

[Actual/360]

[30/360] [360/360] [Bond Basis]

[30E/360] [Eurobond Basis]

[30E/360 (ISDA)]

(See Condition 4 for alternatives)

(j) Ratings Step-up/Step-down [Applicable/Not Applicable]

(k) Step Up Margin: [[ ] per cent. per annum/Not Applicable]

15 Zero Coupon Note Provisions [Applicable/Not Applicable]

(If not applicable, delete the remaining

subparagraphs of this paragraph)

(a) Accrual Yield: [ ] per cent. per annum

(b) Reference Price: [ ]

(c) Day Count Fraction in relation to Early

Redemption Amounts: [30/360]

[Actual/360]

[Actual/365]

PROVISIONS RELATING TO REDEMPTION

16 Notice periods for Condition 6.2: Minimum period: [ ] days

Maximum period: [ ] days

3 The applicable Day Count Fraction must comply with the rules from time to time of the Securities Settlement System.

39

17 Issuer Call (pursuant to Condition 6.3): [Applicable/Not Applicable]



(a) Optional Redemption Date(s): [ ]

(b) Optional Redemption Amount of each

Note:

[[ ] per Calculation Amount/specify other/see

Appendix]

(c) if redeemable in part:

(i) Minimum Redemption Amount: [ ] [Not Applicable]

(ii) Maximum Redemption Amount: [ ] [Not Applicable]

(d) Notice periods: Minimum period: [ ] days


(N.B. When setting notice periods, the Issuer is

advised to consider the practicalities of distribution

of information through intermediaries, for example,

clearing systems (which require a minimum of 5

clearing system business days’ notice for a call) and

custodians, as well as any other notice requirements

which may apply)

18 Make-Whole Redemption by the Issuer

(pursuant to Condition 6.4):

[Applicable/Not Applicable]



(a) Make-Whole Redemption Margin: [[ ] basis points / Not Applicable]

(b) Reference Bond: [CA Selected Bond/[ ]]

[CA Selected Bond: Belgian obligations linéaires –

lineaire obligaties (OLOs)/ CA Selected Bond:

German Bundesobligationen/CA Selected

Bond:[●]/[specify non-CA Selected Bond]]

(c) Quotation Time: [[5.00 p.m. [Brussels/London/[ ]]] time/Not

Applicable]

(d) Reference Rate Determination Date: The [ ] Business Day preceding the relevant

Make-Whole Redemption Date

(e) if redeemable in part:

(i) Minimum Redemption Amount: [ ] [Not Applicable]

(ii) Maximum Redemption Amount: [ ] [Not Applicable]

19 Investor Put: [Applicable/Not Applicable]



(a) Optional Redemption Date(s): [ ]

(b) Optional Redemption Amount: [ ] per Calculation Amount

(NB: If the Optional Redemption Amount is other

40

than a specified amount per Calculation Amount, the

Notes will need to be Notes for which no prospectus

is required under the Prospectus Directive)

(c) Notice periods: Minimum period: [ ] days


(N.B. When setting notice periods, the Issuer is

advised to consider the practicalities of distribution

of information through intermediaries for example,

clearing systems (which require a minimum of 15

clearing system business days’ notice for a put) and

custodians, as well as any other notice requirements

which may apply)

20 Final Redemption Amount: [ ] per Calculation Amount

21 Early Redemption Amount payable on

redemption for taxation reasons or on an

event of default:

[ ] per Calculation Amount]

GENERAL PROVISIONS APPLICABLE TO THE NOTES

22 Additional Financial Centre(s): [Not Applicable/give details]

(Note that this item relates to the place of payment

and not Interest Period end dates to which item 14(c)

relates)

23 Governing Law: [Belgian/English] law

[THIRD PARTY INFORMATION

[ ] has been extracted from [ ]. The Issuer confirms that such information has been accurately reproduced

and that, so far as it is aware and is able to ascertain from information published by [ ], no facts have been

omitted which would render the reproduced information inaccurate or misleading.]

Signed on behalf of the Issuer:

By: ____________________________

Duly authorised

41

PART B – OTHER INFORMATION

1 LISTING AND ADMISSION TO TRADING

(i) Application, Listing and Admission to

trading:

[Application has been made by the Issuer (or on its

behalf) for the Notes to be admitted to trading and

listing on the regulated market of Euronext Brussels

with effect from [ ].] [Application is expected to

be made by the Issuer (or on its behalf) for the Notes

to be admitted to trading and listing on the [regulated

market of Euronext Brussels with effect from

[ ].] [Not Applicable.]

(ii) Estimate of total expenses related to

admission to trading:

[ ]

2 RATINGS

Ratings: [The Notes to be issued [have been/are expected to

be] rated]/[The following ratings reflect ratings

assigned to Notes of this type issued under the

Programme generally]:

[insert details]]

[Each of [the rating agencies] is established in the

European Union and is registered under the

Regulation (EC) No. 1060/2009 (as amended) (the

CRA Regulation).] [As such, each of [the rating

agencies] is included in the list of credit rating

agencies published by the European Securities and

Markets Authority (ESMA) on its website (at

http://www.esma.europa.eu/page/List-registered-and-

certified-CRAs) in accordance with the CRA

Regulation. Tranches of Notes issued under the

Programme may be rated or unrated by either of the

rating agencies referred to above.]

(The above disclosure should reflect the rating

allocated to Notes of the type being issued under the

Programme generally or, where the issue has been

specifically rated, that rating.)

3 INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE

[Save for any fees payable to the [Managers/Dealers],][Not applicable;] so far as the Issuer is aware, no

person involved in the issue of the Notes has an interest material to the offer. The [Managers/Dealers]

and their affiliates have engaged, and may in the future engage, in investment banking and/or

commercial banking transactions with, and may perform other services for, the Issuer and its affiliates in

the ordinary course of business - Amend as appropriate if there are other interests]

(When adding any other description, consideration should be given as to whether such matters

described constitute “significant new factors” and consequently trigger the need for a supplement to

the Base Prospectus under Article 16 of the Prospectus Directive.)

42

4 USE OF PROCEEDS, REASONS FOR THE OFFER

[(i)] Use of proceeds, reasons for the offer: [general corporate purposes/ (if there is any

particular identified use of proceeds, specify this

here)]

[in case proceeds are to be allocated to the Green

Project Portfolio with the special purpose to finance,

refinance and/or invest in projects in the field of

renewable energy, energy efficiency, sustainable

waste management, sustainable land use,

biodiversity conservation, clean transportation,

clean water and/or drinking water or any other

project falling within the ICMA Green Bond

Principles, specify these criteria herein]

[(ii)] Estimated net proceeds: [ ]

(If proceeds are intended for more than one use will

need to split out and present in order of priority. If

proceeds insufficient to fund all proposed uses state

amount and sources of other funding.)

5 YIELD (Fixed Rate Notes Only)

Indication of yield: [Not Applicable]

[ ] per cent. per annum

6 OPERATIONAL INFORMATION

(i) ISIN Code: [ ]

(ii) Common Code: [ ]

(iii) Names and addresses of additional paying

agent(s) (if any):

[ ]

(iv) Deemed delivery of clearing system

notices for the purposes of Condition 11:

Any notice delivered to Noteholders through the

clearing systems will be deemed to have been given

on the [second] [business] day after the day on which

it was given to the Securities Settlement System.

7 DISTRIBUTION

(i) Method of distribution: [Syndicated/Non-syndicated]

(ii) If syndicated, names of Managers: [Not Applicable/give names]

(iii) Date of [Subscription] Agreement: [ ]

(iv) Stabilising Manager(s) (if any): [Not Applicable/give name]

(v) If non-syndicated, name of relevant

Dealer:

[Not Applicable/give name]

43

TERMS AND CONDITIONS OF THE NOTES

The following are the Terms and Conditions of the Notes (the Conditions) which will be incorporated by

reference into each Note issued by Proximus, SA de droit public in dematerialised form. The applicable Final

Terms (or the relevant provisions thereof) will be incorporated by reference into each Note. Reference should

be made to “Applicable Final Terms” for a description of the content of Final Terms which will specify which

of such terms are to apply in relation to the relevant Notes.

This Note is one of a Series (as defined below) of Notes issued by Proximus, SA de droit public (a company

having made a public call on savings) (the Issuer) pursuant to the Domiciliary Agency Agreement (as defined

below).

References herein to the Notes shall be references to the Notes of this Series and shall mean any Note in

dematerialised form.

The Notes have the benefit of a Domiciliary and Belgian Paying Agency Agreement (as amended,

supplemented or restated from time to time, the Domiciliary Agency Agreement) dated 3 September 2015

and made among the Issuer and BNP Paribas Securities Services SCA, Brussels Branch as domiciliary agent

(the Domiciliary Agent, which expression shall include any successor domiciliary agent specified in the

applicable Final Terms) and as Belgian paying agent.

The final terms for this Note (or the relevant provisions thereof) are set out in Part A of the Final Terms

incorporated by reference into this Note and complete these Terms and Conditions (the Conditions) and, in

the case of a Note which is neither admitted to trading on a regulated market in the European Economic Area

nor offered in the European Economic Area in circumstances where a prospectus is required to be published

under the Prospectus Directive, may specify other terms and conditions which shall, to the extent so specified

or to the extent inconsistent with the Conditions, replace or modify the Conditions for the purposes of this

Note. References to the applicable Final Terms are, unless otherwise stated, to Part A of the Final Terms (or

the relevant provisions thereof) incorporated by reference into this Note.

The expression Prospectus Directive means Directive 2003/71/EC (as amended, including by the 2010 PD

Amending Directive) and includes any relevant implementing measure in the relevant Member State and the

expression 2010 PD Amending Directive means Directive 2010/73/EU.

As used herein, Tranche means Notes which are identical in all respects (including as to listing and

admission to trading) and Series means a Tranche of Notes together with any further Tranche or Tranches of

Notes which are (i) expressed to be consolidated and form a single series and (ii) identical in all respects

(including as to listing and admission to trading) except for their respective Issue Dates, Interest

Commencement Dates and/or Issue Prices.

In the case of Notes governed by English law, the Noteholders are entitled to the benefit of the Deed of

Covenant (such Deed of Covenant as modified and/or supplemented and/or restated from time to time, the

Deed of Covenant) dated 3 September 2015 and made by the Issuer. The original of the Deed of Covenant is

held by the Domiciliary Agent on behalf of the Securities Settlement System.

The holders of interests in Notes issued in dematerialised form and represented by book entries in the records

of the Securities Settlement System and credited to their accounts with a participant, subparticipant or the

operator of the Securities Settlement System will be entitled to proceed directly against the Issuer in case of

an Event of Default of the Issuer based on statements of accounts provided by the participant, subparticipant

or the operator of the Securities Settlement System.

44

Copies of the Domiciliary Agency Agreement and the Deed of Covenant are available for inspection during

normal business hours at the specified office of the Domiciliary Agent. If the Notes are to be admitted to

trading on the regulated market of Euronext Brussels, the applicable Final Terms will be published on the

website of Euronext Brussels (www.euronext.com). If this Note is neither admitted to trading on a regulated

market in the European Economic Area nor offered in the European Economic Area in circumstances where a

prospectus is required to be published under the European Union Prospectus Directive (Directive

2003/71/EC), the applicable Final Terms will only be obtainable by a Noteholder holding one or more Notes

and such Noteholder must produce evidence satisfactory to the Domiciliary Agent as to its holding of such

Notes and identity. The Noteholders are deemed to have notice of, and are entitled to the benefit of, all the

provisions of the Domiciliary Agency Agreement, the Deed of Covenant and the applicable Final Terms

which is applicable to them.

Words and expressions defined in the Domiciliary Agency Agreement or used in the applicable Final Terms

shall have the same meanings where used in the Conditions unless the context otherwise requires or unless

otherwise stated and provided that, in the event of inconsistency between the Domiciliary Agency Agreement

and the applicable Final Terms, the applicable Final Terms will prevail.

In the Conditions, euro means the currency introduced at the start of the third stage of European economic

and monetary union pursuant to the Treaty on the Functioning of the European Union, as amended.

1 FORM, DENOMINATION AND TITLE

The Notes are in dematerialised book-entry form in the currency (the Specified Currency) and the

denominations (the Specified Denomination(s)) specified in the applicable Final Terms. The Specified

Denomination for each Tranche of Notes will be specified in the applicable Final Terms. The minimum

Specified Denomination of Notes shall be EUR 100,000 (or its equivalent in other currencies). The Notes

have no maximum Specified Denomination. Notes of one Specified Denomination may not be exchanged for

Notes of another Specified Denomination. Noteholders will not be entitled to exchange Notes into bearer

Notes.

This Note may be a Fixed Rate Note, a Floating Rate Note, a Zero Coupon Note or a combination of any of

the foregoing, depending upon the Interest Basis shown in the applicable Final Terms.

Interests in the Notes will be represented by entries in securities accounts maintained with the Securities

Settlement System itself or participants or sub-participants in such system approved by the Belgian Minister

of Finance. Such participants include Euroclear Bank SA/NV (Euroclear) and Clearstream Banking, société

anonyme (Clearstream, Luxembourg). The Securities Settlement System maintains securities accounts in

the name of authorised participants only. Noteholders, unless they are participants, will not hold Notes

directly with the operator of the Securities Settlement System but will hold them in a securities account

through a financial institution which is a participant in the Securities Settlement System or which holds them

through another financial institution which is such a participant.

The operator of the Securities Settlement System will credit the securities account of the Domiciliary Agent

with the aggregate nominal amount of Notes. Such Domiciliary Agent will credit each subscriber which is a

participant in the Securities Settlement System and each other subscriber which has a securities account with

such Domiciliary Agent, with a nominal amount of Notes equal to the nominal amount of Notes to which such

participant or such securities account holders have subscribed and paid for (both acting on their own behalf or

as agent for other subscribers). Any participant in respect of its sub-participants and its account holders and

any sub-participant in respect of its account holders will, upon such Notes being credited as aforesaid, credit

the securities accounts of such account holder or sub-participant, as the case may be. Each person who is for

the time being shown in the records of a participant, a sub-participant or the operator of the Securities

45

Settlement System as the holder of a particular nominal amount of such Notes (in which regard any certificate

or other documents issued by a participant, sub-participant or the operator of Securities Settlement System as

to the nominal amount of such Notes standing to the account of such person shall be conclusive and binding

for all purposes, save in the case of manifest error) shall be treated by the Issuer and the Domiciliary Agent as

the holder of such nominal amount of such Notes for all purposes other than with respect to the payment of

principal or interest on the Notes, which shall be paid through the Domiciliary Agent and the Securities

Settlement System in accordance with the rules of the Securities Settlement System and the expressions

Noteholder and holder of Notes and related expressions shall be construed accordingly. Notes will be

transferable only in accordance with the rules and procedures for the time being of the Securities Settlement

System.

References to the Securities Settlement System shall, whenever the context so permits, be deemed to include a

reference to any additional or alternative clearing system specified in the applicable Final Terms or as may

otherwise be approved by the Issuer and the Domiciliary Agent.

2 STATUS OF THE NOTES

The Notes are direct, unconditional, unsubordinated and (subject to the provisions of Condition 3) unsecured

obligations of the Issuer and rank pari passu among themselves and (save for certain debts required to be

preferred by law) equally with all other unsecured obligations (other than subordinated obligations, if any) of

the Issuer, from time to time outstanding.

3 NEGATIVE PLEDGE

So long as any of the Notes remains outstanding, the Issuer shall not create or permit to exist any Security

Interest upon the whole or any part of its present or future undertakings and assets to secure any indebtedness

now or hereafter represented by, or in the form of, bonds, notes, debentures, commercial paper or other

securities unless the benefit of such Security Interest shall be extended forthwith equally and rateably to the

Notes and all amounts payable in respect thereof. For these purposes. Security Interest means a mortgage,

lien, pledge or other security interest.

The foregoing restriction does not apply to:

(a) Security Interests in existence at 1 September 2008; or

(b) Security Interests arising by operation of law and/or created as a result of the Issuer being required to

do so by a taxing authority which has jurisdiction over the Issuer; or

(c) suppliers’, builders’, mechanics’, warehousemen’s, carriers’ and similar liens and any Security

Interests created by general conditions of business or standard customer agreements of bankers and

brokers of the Issuer; or

(d) purchase money Security Interests resulting from purchases with payment terms or leases in the

ordinary course of business; or

(e) Security Interests attached to property prior to the acquisition of such property by the Issuer; or

(f) collateralisation payments under a 1992, 2002 or 2008 ISDA Master Agreement, as published by the

International Swaps and Derivatives Association, Inc.; or

(g) Security Interests created by the Issuer for obligations not exceeding in the aggregate 10 per cent. of

the consolidated total assets of the Issuer and its subsidiaries taken as a whole as shown in the latest

audited consolidated balance sheet of the Issuer and its subsidiaries; or

46

(h) Security Interests constituting an extension, renewal or replacement (or any successive extension,

renewal or replacements) in whole or in part, of any security permitted under the foregoing clauses (a)

to (g) inclusive, or of any indebtedness secured thereby; provided that the principal amount of

indebtedness secured thereby shall not exceed the principal amount of indebtedness so secured at the

time of such extension, renewal or replacement for reasons other than currency fluctuations.

4 INTEREST

The applicable Final Terms will indicate whether the Notes are Fixed Rate Notes, Floating Rate Notes or Zero

Coupon Notes.

4.1 Interest on Fixed Rate Notes

This Condition 4.1 applies to Fixed Rate Notes only. The applicable Final Terms contains provisions

applicable to the determination of fixed rate interest and must be read in conjunction with this

Condition 4.1 for full information on the manner in which interest is calculated on Fixed Rate Notes.

In particular, the applicable Final Terms will specify the Interest Commencement Date, the Rate(s) of

Interest, the Interest Payment Date(s), the Maturity Date, the Calculation Amount, the Day Count

Fraction and any applicable Determination Date.

Each Fixed Rate Note bears interest from (and including) the Interest Commencement Date at the

rate(s) per annum equal to the Rate(s) of Interest. Interest will be payable in arrear on the Interest

Payment Date(s) in each year up to and including the Maturity Date.

As used in the Conditions Fixed Interest Period means the period from (and including) an Interest

Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first) Interest

Payment Date.

Interest shall be calculated in respect of any period by applying the Rate of Interest to the aggregate

outstanding nominal amount of the Notes, multiplying such sum by the applicable Day Count Fraction,

and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any

such sub-unit being rounded upwards or otherwise in accordance with applicable market convention.

Day Count Fraction means, in respect of the calculation of an amount of interest in accordance with

this Condition 4.1:

(a) if “Actual/Actual (ICMA)” is specified in the applicable Final Terms:

(i) in the case of Notes where the number of days in the relevant period from (and

including) the most recent Interest Payment Date (or, if none, the Interest

Commencement Date) to (but excluding) the relevant payment date (the Accrual

Period) is equal to or shorter than the Determination Period during which the Accrual

Period ends, the number of days in such Accrual Period divided by the product of (1) the

number of days in such Determination Period and (2) the number of Determination

Dates (as specified in the applicable Final Terms) that would occur in one calendar year

assuming interest was to be payable in respect of the whole of that year; or

(ii) in the case of Notes where the Accrual Period is longer than the Determination Period

during which the Accrual Period ends, the sum of:

(A) the number of days in such Accrual Period falling in the Determination Period in

which the Accrual Period begins divided by the product of (x) the number of days

47

in such Determination Period and (y) the number of Determination Dates that

would occur in one calendar year; and

(B) the number of days in such Accrual Period falling in the next Determination

Period divided by the product of (x) the number of days in such Determination

Period and (y) the number of Determination Dates that would occur in one

calendar year; and

(b) if “30/360” is specified in the applicable Final Terms, the number of days in the period from

(and including) the most recent Interest Payment Date (or, if none, the Interest Commencement

Date) to (but excluding) the relevant payment date (such number of days being calculated on

the basis of a year of 360 days with 12 30-day months) divided by 360; and

(c) if “Actual/360” is specified in the applicable Final Terms, the actual number of days in the

Interest Period (as defined in Condition 4.2(a)) divided by 360.

In the Conditions:

Determination Period means each period from (and including) a Determination Date to (but

excluding) the next Determination Date (including where either the Interest Commencement Date or

the Final Interest Payment Date is not a Determination Date, the period commencing on the first

Determination Date prior to, and ending on the first Determination Date falling after, such date); and

sub-unit means, with respect to any currency other than euro, the lowest amount of such currency that

is available as legal tender in the country of such currency and, with respect to euro, means one cent.

4.2 Interest on Floating Rate Notes

This Condition 4.2 applies to Floating Rate Notes only. The applicable Final Terms contains provisions

applicable to the determination of floating rate interest and must be read in conjunction with this

Condition 4.2 for full information on the manner in which interest is calculated on Floating Rate

Notes. In particular, the applicable Final Terms will identify any Specified Interest Payment Dates, any

Specified Period, the Interest Commencement Date, the Business Day Convention, any Additional

Business Centres, whether ISDA Determination or Screen Rate Determination applies to the

calculation of interest, the party who will calculate the amount of interest due if it is not the

Domiciliary Agent, the Margin, any maximum or minimum interest rates and the Day Count Fraction.

Where ISDA Determination applies to the calculation of interest, the applicable Final Terms will also

specify the applicable Floating Rate Option, Designated Maturity and Reset Date. Where Screen Rate

Determination applies to the calculation of interest, the applicable Final Terms will also specify the

applicable Reference Rate, Interest Determination Date(s) and Relevant Screen Page.

(a) Interest Payment Dates

Each Floating Rate Note bears interest from (and including) the Interest Commencement Date

and such interest will be payable in arrear on either:

(i) the Specified Interest Payment Date(s) in each year (each an Interest Payment Date)

specified in the applicable Final Terms; or

(ii) if no Specified Interest Payment Date(s) is/are specified in the applicable Final Terms,

each date (each an Interest Payment Date) which falls the number of months or other

period specified as the Specified Period in the applicable Final Terms after the preceding

Interest Payment Date or, in the case of the first Interest Payment Date, after the Interest

Commencement Date.

48

Such interest will be payable in respect of each Interest Period. In the Conditions, Interest

Period means the period from (and including) an Interest Payment Date (or the Interest

Commencement Date) to (but excluding) the next (or first) Interest Payment Date.

If a Business Day Convention is specified in the applicable Final Terms and (x) if there is no

numerically corresponding day in the calendar month in which an Interest Payment Date should

occur or (y) if any Interest Payment Date would otherwise fall on a day which is not a Business

Day, then if the Business Day Convention specified is:

(A) in any case where Specified Periods are specified in accordance with Condition 4.2(a)(ii)

above, the Floating Rate Convention, such Interest Payment Date (a) in the case of (x)

above, shall be the last day that is a Business Day in the relevant month and the

provisions of (ii) below shall apply mutatis mutandis or (b) in the case of (y) above, shall

be postponed to the next day which is a Business Day unless it would thereby fall into

the next calendar month, in which event (i) such Interest Payment Date shall be brought

forward to the immediately preceding Business Day and (ii) each subsequent Interest

Payment Date shall be the last Business Day in the month which falls the Specified

Period after the preceding applicable Interest Payment Date occurred; or

(B) the Following Business Day Convention, such Interest Payment Date shall be postponed

to the next day which is a Business Day.

In this Condition, Business Day means a day which is:

(a) a day on which commercial banks and foreign exchange markets settle payments and are

open for general business (including dealing in foreign exchange and foreign currency

deposits) in London or Brussels and each Additional Business Centre specified in the

applicable Final Terms;

(b) either (i) in relation to any sum payable in a Specified Currency other than euro, a day

on which commercial banks and foreign exchange markets settle payments and are open

for general business (including dealing in foreign exchange and foreign currency

deposits) in the principal financial centre of the country of the relevant Specified

Currency (which if the Specified Currency is Australian dollars or New Zealand dollars

shall be Sydney and Auckland, respectively) or (ii) in relation to any sum payable in

euro, a day on which the Trans-European Automated Real-time Gross settlement Express

Transfer (TARGET2) system (the TARGET2 System) is open; and

(c) a day on which the Securities Settlement System is operating.

(b) Rate of Interest

The Rate of Interest payable from time to time in respect of Floating Rate Notes will be

determined in the manner specified in the applicable Final Terms.

(i) ISDA Determination for Floating Rate Notes

Where ISDA Determination is specified in the applicable Final Terms as the manner in

which the Rate of Interest is to be determined, the Rate of Interest for each Interest

Period will be the relevant ISDA Rate plus or minus (as indicated in the applicable Final

Terms) the Margin (if any). For the purposes of this sub-paragraph (i), ISDA Rate for an

Interest Period means a rate equal to the Floating Rate that would be determined by the

Domiciliary Agent under an interest rate swap transaction if the Domiciliary Agent were

acting as Calculation Agent for that swap transaction under the terms of an agreement

49

incorporating the 2006 ISDA Definitions, as published by the International Swaps and

Derivatives Association, Inc. as amended and updated as at the Issue Date of the first

Tranche of Notes (the ISDA Definitions) and under which:

(A) the Floating Rate Option is as specified in the applicable Final Terms;

(B) the Designated Maturity is a period specified in the applicable Final Terms; and

(C) the relevant Reset Date is the day specified in the applicable Final Terms.

For the purposes of this sub-paragraph (i), Floating Rate, Calculation Agent, Floating

Rate Option, Designated Maturity, Euro-zone and Reset Date have the meanings

given to those terms in the ISDA Definitions.

Unless otherwise stated in the applicable Final Terms the Minimum Rate of Interest shall

be deemed to be zero.

(ii) Screen Rate Determination for Floating Rate Notes

Where Screen Rate Determination is specified in the applicable Final Terms as the

manner in which the Rate of Interest is to be determined, the Rate of Interest for each

Interest Period will, subject as provided below, be either:

(A) the offered quotation; or

(B) the arithmetic mean (rounded if necessary to the fifth decimal place, with

0.000005 being rounded upwards) of the offered quotations,

(expressed as a percentage rate per annum) for the Reference Rate which appears or

appear, as the case may be, on the Relevant Screen Page (or such replacement page on

that service which displays the information) as at 11.00 a.m. (Relevant Financial Centre

time) on the Interest Determination Date in question plus or minus (as indicated in the

applicable Final Terms) the Margin (if any), all as determined by the Domiciliary Agent.

If five or more of such offered quotations are available on the Relevant Screen Page, the

highest (or, if there is more than one such highest quotation, one only of such quotations)

and the lowest (or, if there is more than one such lowest quotation, one only of such

quotations) shall be disregarded by the Domiciliary Agent for the purpose of determining

the arithmetic mean (rounded as provided above) of such offered quotations.

If the Relevant Screen Page is not available or if, in the case of Condition 4.2(b)(ii)(A),

no offered quotation appears or, in the case of Condition 4.2(b)(ii)(B), fewer than three

offered quotations appear, in each case as at the Specified Time, the Domiciliary Agent

shall request each of the Reference Banks to provide the Domiciliary Agent with its

offered quotation (expressed as a percentage rate per annum) for the Reference Rate at

approximately the Specified Time on the Interest Determination Date in question. If two

or more of the Reference Banks provide the Domiciliary Agent with offered quotations,

the Rate of Interest for the Interest Period shall be the arithmetic mean (rounded if

necessary to the fifth decimal place with 0.000005 being rounded upwards) of the

offered quotations plus or minus (as appropriate) the Margin (if any), all as determined

by the Domiciliary Agent.

(iii) If on any Interest Determination Date one only or none of the Reference Banks provides

the Domiciliary Agent with an offered quotation as provided in the preceding paragraph,

the Rate of Interest for the relevant Interest Period shall be the rate per annum which the

50

Domiciliary Agent determines as being the arithmetic mean (rounded if necessary to the

fifth decimal place, with 0.000005 being rounded upwards) of the rates, as

communicated to (and at the request of) the Domiciliary Agent by the Reference Banks

or any two or more of them, at which such banks were offered, at approximately the

Specified Time on the relevant Interest Determination Date, deposits in the Specified

Currency for a period equal to that which would have been used for the Reference Rate

by leading banks in the London inter-bank market (if the Reference Rate is LIBOR) or

the Euro-zone inter-bank market (if the Reference Rate is EURIBOR) or the inter-bank

market of the Relevant Financial Centre (if any other Reference Rate is used) plus or

minus (as appropriate) the Margin (if any) or, if fewer than two of the Reference Banks

provide the Domiciliary Agent with offered rates, the offered rate for deposits in the

Specified Currency for a period equal to that which would have been used for the

Reference Rate, or the arithmetic mean (rounded as provided above) of the offered rates

for deposits in the Specified Currency for a period equal to that which would have been

used for the Reference Rate, at which, at approximately the Specified Time on the

relevant Interest Determination Date, any one or more banks (which bank or banks is or

are in the opinion of the Issuer suitable for the purpose) informs the Domiciliary Agent it

is quoting to leading banks in the London inter-bank market (if the Reference Rate is

LIBOR) or the Euro-zone inter-bank market (if the Reference Rate is EURIBOR) or the

inter-bank market of the Relevant Financial Centre (if any other Reference Rate is used)

plus or minus (as appropriate) the Margin (if any), provided that, if the Rate of Interest

cannot be determined in accordance with the foregoing provisions of this paragraph, the

Rate of Interest shall be determined as at the last preceding Interest Determination Date

(though substituting, where a different Margin is to be applied to the relevant Interest

Period from that which applied to the last preceding Interest Period, the Margin relating

to the relevant Interest Period in place of the Margin relating to that last preceding

Interest Period).

For the purposes of this sub-paragraph (ii), Reference Banks means, in the case of a

determination of LIBOR, the principal London office of four major banks in the London

inter-bank market, in the case of a determination of EURIBOR, the principal Euro-zone

office of four major banks in the Euro-zone inter-bank market, in each case selected by

the Domiciliary Agent and in the case of a determination of a Reference Rate that is not

LIBOR or EURIBOR, the principal office of four major banks in the inter-bank market

of the Relevant Financial Centre and Specified Time means 11.00 a.m. (London time, in

the case of a determination of LIBOR, or Brussels time, in the case of a determination of

EURIBOR or Relevant Financial Centre time in the case of a determination of any other

Reference Rate).

(c) Minimum Rate of Interest and/or Maximum Rate of Interest

If the applicable Final Terms specifies a Minimum Rate of Interest for any Interest Period, then,

in the event that the Rate of Interest in respect of such Interest Period determined in accordance

with the provisions of paragraph (b) above is less than such Minimum Rate of Interest, the Rate

of Interest for such Interest Period shall be such Minimum Rate of Interest.

If the applicable Final Terms specifies a Maximum Rate of Interest for any Interest Period, then,

in the event that the Rate of Interest in respect of such Interest Period determined in accordance

with the provisions of paragraph (b) above is greater than such Maximum Rate of Interest, the

Rate of Interest for such Interest Period shall be such Maximum Rate of Interest.

51

(d) Determination of Rate of Interest and Calculation of Interest Amounts

The Domiciliary Agent will at or as soon as practicable after each time at which the Rate of

Interest is to be determined, determine the Rate of Interest for the relevant Interest Period.

The Domiciliary Agent will calculate the amount of interest (the Interest Amount) payable on

the Floating Rate Notes for the relevant Interest Period by applying the Rate of Interest to the

aggregate outstanding nominal amount of the Notes and, in each case, multiplying such sum by

the applicable Day Count Fraction. The Interest Amount shall be calculated in accordance with

the rules of the Securities Settlement System.

Day Count Fraction means, in respect of the calculation of an amount of interest in accordance

with this Condition 4.2:

(i) if “Actual/Actual (ISDA)” or “Actual/Actual” is specified in the applicable Final Terms,

the actual number of days in the Interest Period divided by 365 (or, if any portion of that

Interest Period falls in a leap year, the sum of (I) the actual number of days in that

portion of the Interest Period falling in a leap year divided by 366 and (II) the actual

number of days in that portion of the Interest Period falling in a non-leap year divided by

365);

(ii) if “Actual/365 (Fixed)” is specified in the applicable Final Terms, the actual number of

days in the Interest Period divided by 365;

(iii) if “Actual/360” is specified in the applicable Final Terms, the actual number of days in

the Interest Period divided by 360;

(iv) if “30/360”, “360/360” or “Bond Basis” is specified in the applicable Final Terms, the

number of days in the Interest Period divided by 360, calculated on a formula basis as

follows:

Day Count Fraction = 360

)1D2(D)]1M2(M[30)]1Y2(Y[360

where:

“Y1” is the year, expressed as a number, in which the first day of the Interest Period

falls;

“Y2” is the year, expressed as a number, in which the day immediately following the last

day of the Interest Period falls;

“M1” is the calendar month, expressed as a number, in which the first day of the Interest

Period falls;

“M2” is the calendar month, expressed as a number, in which the day immediately

following the last day of the Interest Period falls;

“D1” is the first calendar day, expressed as a number, of the Interest Period, unless such

number is 31, in which case D1 will be 30; and

“D2” is the calendar day, expressed as a number, immediately following the last day

included in the Interest Period, unless such number would be 31 and D1 is greater than

29, in which case D2 will be 30;

52

(v) if “30E/360” or “Eurobond Basis” is specified in the applicable Final Terms, the number

of days in the Interest Period divided by 360, calculated on a formula basis as follows:


)1D2(D)]1M2(M[30)]1Y2(Y[360

where:


falls;




Period falls;



“D1” is the first calendar day, expressed as a number, of the Interest Period, unless such

number would be 31, in which case D1 will be 30; and


included in the Interest Period, unless such number would be 31, in which case D2 will

be 30;

(vi) if “30E/360 (ISDA)” is specified in the applicable Final Terms, the number of days in

the Interest Period divided by 360, calculated on a formula basis as follows:


)1D2(D)]1M2(M[30)]1Y2(Y[360

where:


falls;




Period falls;



“D1” is the first calendar day, expressed as a number, of the Interest Period, unless (i)

that day is the last day of February or (ii) such number would be 31, in which case D1

will be 30; and


included in the Interest Period, unless (i) that day is the last day of February but not the

Maturity Date or (ii) such number would be 31, in which case D2 will be 30.

53

(e) Linear Interpolation

Where Linear Interpolation is specified as applicable in respect of an Interest Period in the

applicable Final Terms, the Rate of Interest for such Interest Period shall be calculated by the

Domiciliary Agent by straight line linear interpolation by reference to two rates based on the

relevant Reference Rate (where Screen Rate Determination is specified as applicable in the

applicable Final Terms) or the relevant Floating Rate Option (where ISDA Determination is

specified as applicable in the applicable Final Terms), one of which shall be determined as if the

Designated Maturity were the period of time for which rates are available next shorter than the

length of the relevant Interest Period and the other of which shall be determined as if the

Designated Maturity were the period of time for which rates are available next longer than the

length of the relevant Interest Period provided however that if there is no rate available for a

period of time next shorter or, as the case may be, next longer, then the Domiciliary Agent shall

determine such rate at such time and by reference to such sources as it determines appropriate.

Designated Maturity means, in relation to Screen Rate Determination, the period of time

designated in the Reference Rate.

(f) Notification of Rate of Interest and Interest Amounts

The Domiciliary Agent will cause the Rate of Interest and each Interest Amount for each

Interest Period and the relevant Interest Payment Date to be notified to the Issuer and any stock

exchange on which the relevant Floating Rate Notes are for the time being listed and notice

thereof to be published in accordance with Condition 11 as soon as possible after their

determination but in no event later than (a) the fourth London Business Day thereafter or (b) the

first day of the relevant Interest Period. Each Interest Amount and Interest Payment Date so

notified may subsequently be amended (or appropriate alternative arrangements made by way

of adjustment) without prior notice in the event of an extension or shortening of the Interest

Period. Any such amendment will promptly be notified to each stock exchange on which the

relevant Floating Rate Notes are for the time being listed and to the Noteholders in accordance

with Condition 11. For the purposes of this paragraph, the expression London Business Day

means a day (other than a Saturday or a Sunday) on which banks and foreign exchange markets

are open for general business in London.

(g) Certificates to be Final

All certificates, communications, opinions, determinations, calculations, quotations and

decisions given, expressed, made or obtained for the purposes of the provisions of this

Condition 4.2, by the Domiciliary Agent shall (in the absence of wilful default, bad faith or

manifest error) be binding on the Issuer, the Domiciliary Agent and all Noteholders and (in the

absence of wilful default or bad faith) no liability to the Issuer or the Noteholders shall attach to

the Domiciliary Agent in connection with the exercise or non-exercise by it of its powers, duties

and discretions pursuant to such provisions.

4.3 Accrual of Interest

Each Note (or in the case of the redemption of part only of a Note, that part only of such Note) will

cease to bear interest (if any) from the date for its redemption unless, upon due presentation thereof,

payment of principal is improperly withheld or refused. In such event, interest will continue to accrue

until whichever is the earlier of:

(a) the date on which all amounts due in respect of such Note have been paid; and

54

(b) five days after the date on which the full amount of the moneys payable has been received by

the Domiciliary Agent and notice to that effect has been given in accordance with Condition 11.

4.4 Adjustment of Rate of Interest for Fixed Rate Notes and Floating Rate Notes

If Ratings Step-up/Step-down is specified as being applicable in the applicable Final Terms, the

following terms relating to the Rate of Interest for the Notes shall apply:

(a) The Rate of Interest payable on the Notes will be subject to adjustment from time to time if

either Moody's Investors Service España, S.A. or any other entity that is part of the group to

which Moody’s Investors Service Inc. or its successor belongs (Moody’s) or any successor

agency thereof or Standard & Poor's Credit Market Services France SAS or any other entity that

is part of the group to which Standard and Poor's Rating Services, a division of The McGraw-

Hill Companies, Inc., or its successor belongs (S&P) or any successor agency thereof

downgrades the rating ascribed to the senior unsecured debt of the Issuer below Baa3 in the

case of Moody’s or below BBB- in the case of S&P (the Applicable Level). In this event, the

Rate of Interest (in the case of Fixed Rate Notes) or the Margin (in the case of Floating Rate

Notes) will be increased by the Step Up Margin for each Rating Notch (defined below) below

the Applicable Level based on the lowest rating assigned by the rating agencies. In addition, if

either Moody’s or S&P subsequently increases the rating ascribed to the senior unsecured debt

of the Issuer, then the Rate of Interest (in the case of Fixed Rate Notes) or the Margin (in the

case of Floating Rate Notes) payable on the Notes will be decreased by the Step Up Margin for

each Rating Notch upgrade based on the lowest rating assigned by the rating agencies, but in no

event will the Rate of Interest (in the case of Fixed Rate Notes) or the Margin (in the case of

Floating Rate Notes) be reduced to below the initial Rate of Interest (in the case of Fixed Rate

Notes) or the Margin (in the case of Floating Rate Notes) that applied at the Issue Date of the

Notes.

(b) Any Rate of Interest or Margin increase or decrease will take effect from the Interest Payment

Date following the related rating downgrade or upgrade, as the case may be. For the avoidance

of doubt if the total number of Rating Notch downgrades and total number of Rating Notch

upgrades within an Interest Period are equal then there will not be any adjustment to the Rate of

Interest for that Interest Period. For this purpose, a Rating Notch is the difference between a

particular rating assigned by either Moody’s or S&P and the next higher or lower rating. For

example, in the case of Moody’s the difference between either Baa3 and Ba1 or Ba1 and Ba2

shall constitute a Rating Notch and in the case of S&P the difference between either BBB- and

BB+ or BB+ and BB shall constitute a Rating Notch, however, if both Moody’s downgraded

from Ba1 to Ba2 and S&P from BB+ to BB this downgrade would in aggregate constitute only

one Rating Notch from the prior rating. For the avoidance of doubt the placing of a rating on

“Creditwatch” or a similar watch list for review for a rating downgrade or upgrade shall not

constitute a Rating Notch.

(c) If either the Moody’s or the S&P ratings are withdrawn for any reason, the Issuer shall use its

best efforts to ensure that another internationally recognised rating agency (the Substitute

Agency) provides a rating for the Notes and references in this Condition to Moody’s or S&P, as

the case may be, or the ratings thereof, shall be to such Substitute Agencies or, as the case may

be, the equivalent ratings thereof.

(d) There is no limit to the number of times the Rate of Interest payable on the Notes can be

adjusted prior to their maturity.

55

(e) In the event the Rate of Interest payable on the Notes is adjusted pursuant to any of the above

paragraphs, the Issuer shall promptly notify the Noteholders, the Domiciliary Agent, the

National Bank of Belgium as operator of the Securities Settlement System and Euronext

Brussels of the new Rate of Interest payable on the Notes in accordance with Condition 11.

(f) Each of Moody’s and S&P is established in the European Union and is registered under the

Regulation (EC) No. 1060/2009 (as amended) (the CRA Regulation). As such, each of

Moody’s and S&P is included in the list of credit rating agencies published by the European

Securities and Markets Authority (ESMA) on its website (at

http://www.esma.europa.eu/page/List-registered-and-certified-CRAs) in accordance with the

CRA Regulation.

5 PAYMENTS

5.1 Method of Payment

Subject as provided below:

(a) payments in a Specified Currency other than euro will be made by credit or transfer to an

account in the relevant Specified Currency maintained by the payee with a bank in the principal

financial centre of the country of such Specified Currency (which, if the Specified Currency is

Australian dollars or New Zealand dollars, shall be Sydney and Auckland, respectively); and

(b) payments in euro will be made by credit or transfer to a euro account (or any other account to

which euro may be credited or transferred) specified by the payee.

Payments will be subject in all cases to (i) any fiscal or other laws and regulations applicable thereto in

the place of payment, but without prejudice to the provisions of Condition 7 and (ii) any withholding

or deduction required pursuant to an agreement described in Section 1471(b) of the U.S. Internal

Revenue Code of 1986 (the Code) or otherwise imposed pursuant to Sections 1471 through 1474 of

the Code, any regulations or agreements thereunder, any official interpretations thereof, or (without

prejudice to the provisions of Condition 7) any law implementing an intergovernmental approach

thereto. References in these Conditions to Specified Currency will include any successor currency

under applicable law.

5.2 Payments

Without prejudice to Article 474 of the Belgian Companies Code, payments of principal and interest in

respect of the Notes shall be made through the Domiciliary Agent and the Securities Settlement

System in accordance with the Domiciliary Agency Agreement and the rules of the Securities

Settlement System.

5.3 General provisions applicable to payments

The Domiciliary Agent shall be the only person entitled to receive payments in respect of Notes and

the Issuer will be discharged by payment to, or to the order of, the Domiciliary Agent in respect of

each amount so paid. Each of the persons shown in the records of a participant, a sub-participant or the

operator of the Securities Settlement System as the beneficial holder of a particular nominal amount of

Notes must look solely to a participant, a sub-participant or the operator of the Securities Settlement

System, as the case may be, for his share of each payment so made by the Issuer to, or to the order of,

the holder of such Note.

56

Notwithstanding the foregoing provisions of this Condition, if any amount of principal and/or interest

in respect of Notes is payable in U.S. dollars, such U.S. dollar payments of principal and/or interest in

respect of such Notes will be made at the specified office of a paying agent in the United States if:

(a) the Issuer has appointed paying agents with specified offices outside the United States with the

reasonable expectation that such paying agents would be able to make payment in U.S. dollars

at such specified offices outside the United States of the full amount of principal and interest on

the Notes in the manner provided above when due;

(b) payment of the full amount of such principal and interest at all such specified offices outside the

United States is illegal or effectively precluded by exchange controls or other similar

restrictions on the full payment or receipt of principal and interest in U.S. dollars; and

(c) such payment is then permitted under United States law without involving, in the opinion of the

Issuer, adverse tax consequences to the Issuer.

5.4 Payment Day

If the date for payment of any amount in respect of any Note is not a Payment Day, the holder thereof

shall not be entitled to payment until the next following Payment Day in the relevant place and shall

not be entitled to further interest or other payment in respect of such delay. For these purposes,

Payment Day means any day which (subject to Condition 8) is:

(a) a day on which commercial banks and foreign exchange markets settle payments and are open

for general business (including dealing in foreign exchange and foreign currency deposits) in:

(i) London or Brussels;

(ii) each Additional Financial Centre specified in the applicable Final Terms;

(b) either (A) in relation to any sum payable in a Specified Currency other than euro, a day on

which commercial banks and foreign exchange markets settle payments and are open for

general business (including dealing in foreign exchange and foreign currency deposits) in the

principal financial centre of the country of the relevant Specified Currency (which if the

Specified Currency is Australian dollars or New Zealand dollars shall be Sydney and Auckland,

respectively) or (B) in relation to any sum payable in euro, a day on which the TARGET2

System is open; and

(c) a day on which the Securities Settlement System is operating.

5.5 Interpretation of Principal and Interest

Any reference in the Conditions to principal in respect of the Notes shall be deemed to include, as

applicable:

(a) any additional amounts which may be payable with respect to principal under Condition 7;

(b) the Final Redemption Amount of the Notes;

(c) the Early Redemption Amount of the Notes;

(d) the Optional Redemption Amount(s) (if any) of the Notes;

(e) the Make-Whole Redemption Amount(s) (if any) of the Notes;

57

(f) in relation to Zero Coupon Notes, the Amortised Face Amount (as defined in Condition 6.6);

and

(g) any premium and any other amounts (other than interest) which may be payable by the Issuer

under or in respect of the Notes.

Any reference in the Conditions to interest in respect of the Notes shall be deemed to include, as

applicable, any additional amounts which may be payable with respect to interest under Condition 7.

6 REDEMPTION AND PURCHASE

6.1 At Maturity

Unless previously redeemed or purchased and cancelled as specified below, each Note will be

redeemed by the Issuer at its Final Redemption Amount specified in the applicable Final Terms in the

relevant Specified Currency on the Maturity Date specified in the applicable Final Terms.

6.2 Redemption for Tax Reasons

Subject to Condition 6.6, the Notes may be redeemed at the option of the Issuer in whole, but not in

part, at any time (if this Note is not a Floating Rate Note) or on any Interest Payment Date (if this Note

is a Floating Rate Note), on giving not less than the minimum period and not more than the maximum

period of notice specified in the applicable Final Terms to the Domiciliary Agent and, in accordance

with Condition 11, the Noteholders (which notice shall be irrevocable), if:

(a) on the occasion of the next payment due under the Notes, the Issuer has or will become obliged

to pay additional amounts as provided or referred to in Condition 7 as a result of any change in,

or amendment to, the laws or regulations of a Tax Jurisdiction (as defined in Condition 7) or

any change in the application or official interpretation of such laws or regulations, which

change or amendment becomes effective on or after the date on which agreement is reached to

issue the first Tranche of the Notes; and

(b) such obligation cannot be avoided by the Issuer taking reasonable measures available to it,

provided that no such notice of redemption shall be given earlier than 90 days prior to the

earliest date on which the Issuer would be obliged to pay such additional amounts were a

payment in respect of the Notes then due.

Prior to the publication of any notice of redemption pursuant to this Condition, the Issuer shall deliver

to the Domiciliary Agent to make available at its specified office to the Noteholders (i) a certificate

signed by two Directors of the Issuer stating that the Issuer is entitled to effect such redemption and

setting forth a statement of facts showing that the conditions precedent to the right of the Issuer so to

redeem have occurred, and (ii) an opinion of independent legal advisers of recognised standing to the

effect that the Issuer has or will become obliged to pay such additional amounts as a result of such

change or amendment.

Notes redeemed pursuant to this Condition 6.2 will be redeemed at their Early Redemption Amount

referred to in Condition 6.6 below together (if appropriate) with interest accrued to (but excluding) the

date of redemption.

58

6.3 Redemption at the Option of the Issuer (Issuer Call (other than Make-Whole Redemption

by the Issuer))

This Condition 6.3 applies to Notes which are subject to redemption prior to the Maturity Date at the

option of the Issuer (other than for taxation reasons or Make-Whole Redemption by the Issuer), such

option being referred to as an Issuer Call. The applicable Final Terms contains provisions applicable

to any Issuer Call and must be read in conjunction with this Condition 6.3 for full information on any

Issuer Call. In particular, the applicable Final Terms will identify the Optional Redemption Date(s), the

Optional Redemption Amount, any minimum or maximum principal amount of Notes which can be

redeemed and the applicable notice periods.

If Issuer Call is specified as being applicable in the applicable Final Terms the Issuer may, subject to

compliance with all relevant laws and regulations, having given not less than the minimum period nor

more than the maximum period of notice specified in the applicable Final Terms to the Noteholders in

accordance with Condition 11 (which notice shall be irrevocable and shall specify the date fixed for

redemption), redeem the Notes in whole or in part on any Optional Redemption Date and at the

Optional Redemption Amount(s) specified in, or determined in the manner specified in, the applicable

Final Terms together with, if appropriate, interest accrued to (but excluding) the relevant Optional

Redemption Date. Any such redemption must be of a nominal amount not less than the Minimum

Redemption Amount or not more than a Maximum Redemption Amount in each case as may be

specified in the applicable Final Terms. In the case of a partial redemption of Notes, the redemption

may be effected by reducing the nominal amount of all such Notes in proportion to the aggregate

nominal amount redeemed.

6.4 Redemption at the option of the Issuer (Make-Whole Redemption by the Issuer)


option of the Issuer (other than for taxation reasons or Issuer Call), such option being referred to as

Make-Whole Redemption by the Issuer.

If Make-Whole Redemption by the Issuer is specified as being applicable in the applicable Final

Terms, the Issuer may, subject to compliance with all relevant laws and regulations, having given not

less than the minimum period nor more than the maximum period of notice specified in the applicable

Final Terms notice to the Noteholders in accordance with Condition 11 (which notice shall be

irrevocable and shall specify the date fixed for redemption (the Make-Whole Redemption Date)),

redeem the Notes in whole or in part on any Make-Whole Redemption Date at the Make-Whole

Redemption Amount(s) together with, if appropriate, interest accrued to (but excluding) the relevant

Make-Whole Redemption Date. Any such redemption must be of a nominal amount not less than the

Minimum Redemption Amount and not more than the Maximum Redemption Amount, in each case as

may be specified in the applicable Final Terms.

In the case of a partial redemption of Notes, the redemption may be effected by reducing the nominal

amount of all such Notes in proportion to the aggregate nominal amount redeemed.

In this Condition:

Make-Whole Redemption Amount means the higher of:

(i) the outstanding nominal amount of the relevant Note; and

(ii) the sum, as determined by the Calculation Agent, of the present values of the remaining

scheduled payments of principal and interest on the Notes to be redeemed (not including any

portion of such payments of interest accrued to the date of redemption) discounted to the

59

relevant make-Whole Redemption Date on an annual basis (assuming a 360-year consisting of

twelve 30-day months) at the Reference Rate plus the Make-Whole Redemption Margin (if any)

specified in the applicable Final Terms.

CA Selected Bond means a government security or securities (which, if the Specified Currency is

euro, will be Belgian obligations linéaires – lineaire obligaties (OLOs) or German Bundesobligationen

traded in the secondary markets, as specified in the relevant Final Terms) selected by the Calculation

Agent as having a maturity comparable to the remaining term of the Notes to be redeemed and that

would be utilised, at the time of selection and in accordance with customary financial practice, in

pricing new issues of corporate debt securities of comparable maturity to the remaining term of such

Notes.

Calculation Agent means a leading investment, merchant or commercial bank appointed by the Issuer

for the purposes of calculating the relevant Make-Whole Redemption Amount, and notified to the

Noteholders in accordance with Condition 11.

Reference Bond means (A) if CA Selected Bond is specified in the applicable Final Terms, the

relevant CA Selected Bond or (B) if CA Selected Bond is not specified in the applicable Final Terms,

the security specified in the applicable Final Terms, provided in each case that if the Calculation Agent

advises the Issuer that, at the time at which the relevant Make-Whole Redemption Amount is to be

determined, for reasons of illiquidity or otherwise, the relevant security specified is not appropriate for

such purpose, such other central bank or government security as the Calculation Agent may, after

consultation with the Issuer and with the advice of Reference Market Makers, determine to be

appropriate.

Reference Bond Price means (i) the average of five Reference Market Maker Quotations for the

relevant Make-Whole Redemption Date, after excluding the highest and lowest of such five Reference

Market Maker Quotations (or, if there are two highest and/or two lowest quotations, excluding just one

of such highest quotations and/or one of such lowest quotations, as the case may be), (ii) if the

Calculation Agent obtains fewer than five, but more than one, such Reference Market Maker

Quotations, the average of all such quotations, or (iii) if only one such Reference Market Maker

Quotation is obtained, the amount of the Reference Market Maker Quotation so obtained.

Reference Market Maker Quotations means, with respect to each Reference Market Maker and any

Make-Whole Redemption Date, the average, as determined by the Calculation Agent, of the bid and

asked prices for the Reference Bond (expressed in each case as a percentage of its nominal amount)

quoted in writing to the Calculation Agent at the Quotation Time specified in the applicable Final

Terms on the Reference Rate Determination Date specified in the applicable Final Terms.

Reference Market Makers means five brokers or market makers of securities such as the Reference

Bond selected by the Calculation Agent or such other five persons operating in the market for

securities such as the Reference Bond as are selected by the Calculation Agent in consultation with the

Issuer.

Reference Rate means, with respect to any Make-Whole Redemption Date, the rate per annum equal

to the equivalent yield to maturity of the Reference Bond, calculated using a price for the Reference

Bond (expressed as a percentage of its nominal amount) equal to the Reference Bond Price for such

Make-Whole Redemption Date. The Reference Rate will be calculated on the Reference Rate

Determination Date specified in the applicable Final Terms.

60

6.5 Redemption at the Option of the Noteholders (Investor Put)


option of the Noteholder, such option being referred to as an Investor Put. The applicable Final Terms

contains provisions applicable to any Investor Put and must be read in conjunction with this Condition

6.5 for full information on any Investor Put. In particular, the applicable Final Terms will identify the

Optional Redemption Date(s), the Optional Redemption Amount and the applicable notice periods.

If Investor Put is specified as being applicable in the applicable Final Terms, upon the holder of any

Note giving to the Issuer in accordance with Condition 11 not less than the minimum period nor more

than the maximum period of notice specified in the applicable Final Terms the Issuer will, upon the

expiry of such notice, redeem such Note on the Optional Redemption Date and at the Optional

Redemption Amount together with, if appropriate, interest accrued to (but excluding) the Optional

Redemption Date.

To exercise the right to require redemption of this Note the holder of this Note must deliver, at the

specified office of the Domiciliary Agent at any time during normal business hours of the Domiciliary

Agent falling within the notice period, a duly completed and signed notice of exercise in the form (for

the time being current) obtainable from the specified office of the Domiciliary Agent (a Put Notice)

and in which the holder must specify a bank account to which payment is to be made under this

Condition.

Any Put Notice or other notice given in accordance with the standard procedures of the Securities

Settlement System given by a holder of any Note pursuant to this Condition 6.5 shall be irrevocable

except where, prior to the due date of redemption, an Event of Default has occurred and is continuing,

in which event such holder, at its option, may elect by notice to the Issuer to withdraw the notice given

pursuant to this Condition 6.5 and instead to declare such Note forthwith due and payable pursuant to

Condition 9.

6.6 Early Redemption Amounts

For the purpose of Condition 6.2 above and Condition 9, each Note will be redeemed at the Early

Redemption Amount calculated as follows:

(a) in the case of a Note with a Final Redemption Amount equal to the Issue Price, at the Final

Redemption Amount thereof;

(b) in the case of a Note (other than a Zero Coupon Note) with a Final Redemption Amount which

is or may be less or greater than the Issue Price, at the amount specified in the applicable Final

Terms or, if no such amount or manner is so specified in the Final Terms, at its nominal amount;

or

(c) in the case of a Zero Coupon Note, at an amount (the Amortised Face Amount) calculated in

accordance with the following formula:

Early Redemption Amount = RP x (1 + AY)y

where:

RP means the Reference Price;

AY means the Accrual Yield expressed as a decimal; and

y is the Day Count Fraction specified in the applicable Final Terms which will be either (i)

30/360 (in which case the numerator will be equal to the number of days (calculated on the

61

basis of a 360-day year consisting of 12 months of 30 days each) from (and including) the Issue

Date of the first Tranche of the Notes to (but excluding) the date fixed for redemption or (as the

case may be) the date upon which such Note becomes due and repayable and the denominator

will be 360) or (ii) Actual/360 (in which case the numerator will be equal to the actual number

of days from (and including) the Issue Date of the first Tranche of the Notes to (but excluding)

the date fixed for redemption or (as the case may be) the date upon which such Note becomes

due and repayable and the denominator will be 360) or (iii) Actual/365 (in which case the

numerator will be equal to the actual number of days from (and including) the Issue Date of the

first Tranche of the Notes to (but excluding) the date fixed for redemption or (as the case may

be) the date upon which such Note becomes due and repayable and the denominator will be

365).

6.7 Purchases

The Issuer or any Subsidiary (as defined below) may at any time purchase Notes at any price in the

open market or otherwise. Such Notes may be held, reissued, resold or, at the option of the Issuer or

the relevant Subsidiary, surrendered to the Domiciliary Agent for cancellation.

Subsidiary means any company of which Proximus has control and control for the purpose hereof

means either (a) the beneficial ownership, whether direct or indirect, of the majority of the issued share

capital of such company, or (b) the right to direct the management and policies, whether by the

ownership of share capital, contract or otherwise of such company.

6.8 Cancellation

All Notes which are redeemed will forthwith be cancelled. All Notes so cancelled and the Notes

purchased and cancelled pursuant to Condition 6.7 above cannot be reissued or resold.

6.9 Late payment on Zero Coupon Notes

If the amount payable in respect of any Zero Coupon Note upon redemption of such Zero Coupon

Note pursuant to Condition 6.1, 6.2, 6.3 or 6.5 above or upon its becoming due and repayable as

provided in Condition 9 is improperly withheld or refused, the amount due and repayable in respect of

such Zero Coupon Note shall be the amount calculated as provided in Condition 6.6(c) above as

though the references therein to the date fixed for the redemption or the date upon which such Zero

Coupon Note becomes due and payable were replaced by references to the date which is the earlier of:

(i) the date on which all amounts due in respect of such Zero Coupon Note have been paid; and

(ii) five days after the date on which the full amount of the moneys payable in respect of such Zero

Coupon Notes has been received by the Domiciliary Agent and notice to that effect has been

given to the Noteholders in accordance with Condition 11.

7 TAXATION

All payments of principal and interest by or on behalf of the Issuer in respect of the Notes will be made free

and clear of, and without withholding or deduction for or on account of any present or future taxes, duties,

assessments or governmental charges of whatever nature (Taxes) imposed, levied, collected, withheld or

assessed by or on behalf of any Tax Jurisdiction unless, in any such case, such withholding or deduction is

required by law. In such event, the Issuer will pay such additional amounts as shall be necessary in order that

the net amounts received by the holders of the Notes after such withholding or deduction shall equal the

respective amounts of principal and interest which would otherwise have been receivable in respect of the

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Notes, in the absence of such withholding or deduction; except that no such additional amounts shall be

payable with respect to any Note:

(a) the holder (or a third party on behalf of the holder) of which is liable for such Taxes in respect of such

Note by reason of his having some connection with a Tax Jurisdiction other than the mere holding of

such Note;

(b) presented for payment, if applicable, more than 30 days after the Relevant Date (as defined below)

except to the extent that the holder thereof would have been entitled to an additional amount on

presenting the same for payment on such thirtieth day assuming that day to have been a Payment Day

(as defined in Condition 5.4);

(c) held by, or by a third party on behalf of, a holder who would not be liable or subject to the withholding

or deduction by making a declaration of non-residence or other similar claim for exemption to the

relevant tax authority (provided that the exemption from Belgian withholding tax under the law of 6

August 1993 relating to certain securities is unavailable for reasons outside the Issuer’s control);

(d) held by or on behalf of a holder who, at any relevant time on or after the issue of the Notes, was not an

Eligible Investor (as defined below) or by or on behalf of a holder who was such an Eligible Investor

at any relevant time on or after the issue of the Notes but, for reasons within such holder’s control,

ceased to be an Eligible Investor or otherwise failed to meet any other condition for exemption from

Belgian withholding tax pursuant to the law of 6 August 1993 relating to certain securities; or

(e) where such withholding or deduction is imposed on a payment to an individual or to a residual entity

and is required to be made pursuant to the Savings Directive, or any law implementing or complying

with, or introduced in order to conform to, such Savings Directive.

As used herein:

(i) Tax Jurisdiction means Belgium and the jurisdiction in which the Domiciliary Agent acts or any

political subdivision or any authority thereof or therein having power to tax;

(ii) Relevant Date means the date on which such payment first becomes due, except that, if the full

amount of the moneys payable has not been duly received by the Domiciliary Agent on or prior to such

due date, it means the date on which, the full amount of such moneys having been so received, notice

to that effect is duly given to the Noteholders in accordance with Condition 11; and

(iii) Eligible Investor means those entities which are referred to in article 4 of the Royal Decree dated 26

May 1994 on the deduction of withholding tax and which hold the Notes in an exempt account in the

Securities Settlement System.

8 PRESCRIPTION

The Notes will become void unless presented for payment within a period of 10 years (in the case of

principal) and five years (in the case of interest) after the Relevant Date (as defined in Condition 7) therefor.

9 EVENTS OF DEFAULT

If any one or more of the following events (each an Event of Default) shall occur:

(a) if default is made in the payment in the Specified Currency of any principal or interest due in respect

of the Notes or any of them and the default continues for a period of 5 days in the case of principal and

10 days in the case of interest; or

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(b) if the Issuer fails to perform or observe any of its other obligations under the Conditions and the failure

continues for the period of 30 days next following the service by a Noteholder on the Issuer of notice

requiring the same to be remedied; or

(c) if any Indebtedness for Borrowed Money of the Issuer becomes due and repayable prematurely by

reason of an event of default (however described) or the Issuer fails to make any payment in respect of

any Indebtedness for Borrowed Money on the due date for payment as extended by any applicable

grace period or any security given by the Issuer for any Indebtedness for Borrowed Money becomes

enforceable or if default is made by the Issuer in making any payment due under any guarantee and/or

indemnity given by it in relation to any Indebtedness for Borrowed Money of any other person,

provided that no such event shall constitute an Event of Default unless the relative Indebtedness for

Borrowed Money either alone or when aggregated with other Indebtedness for Borrowed Money

relative to all (if any) other such events which shall have occurred and remain outstanding shall

amount to at least U.S.$30,000,000 (or its equivalent in any other currency) and provided further that,

for the purposes of this Condition 9(c), the Issuer shall not be deemed to be in default with respect to

such indebtedness, guarantee or indemnity if either (A) it shall be contesting in good faith by

appropriate means its liability to make payment thereunder and has been advised by independent legal

advisers of recognised standing that it is reasonable for it to do so or (B) the default is solely as a result

of the Belgian state ceasing to own more than 50 per cent. of the issued share capital of the Issuer; or

(d) if any order is made by any competent court or resolution passed for the winding up or dissolution of

the Issuer, save for the purposes of reorganisation on terms approved by an Extraordinary Resolution

(as defined in the Domiciliary Agency Agreement) of the Noteholders; or

(e) if (A) the Issuer ceases or threatens to cease to carry on the whole or substantial part of its business,

save for the purposes of reorganisation on terms approved by an Extraordinary Resolution of the

Noteholders, or the Issuer stops or threatens to stop payment of, or is unable to, or admits inability to,

pay, its debts (or any class of its debts) as they fall due, or is deemed unable to pay its debts pursuant to

or for the purposes of any applicable law, or is adjudicated or found bankrupt or insolvent; or (B) the

Issuer applies for a deferral of payments (uitstel van betaling/sursis de paiement), judicial composition

(gerechtelijk akkoord/concordat judiciaire), bankruptcy (faillissement/faillite); or (C) any similar

procedure as described in (A) or (B) above inclusive shall be initiated in respect of the Issuer; or

(f) if (A) proceedings are initiated against the Issuer or under any applicable liquidation

(vereffening/liquidation), insolvency (insolventie/insolvabilité), composition (akkoord/concordat),

reorganisation (reorganisatie/reorganisation) or other similar laws, or an application is made for the

appointment of an administrative or other receiver, manager, administrator or other similar official, or

an administrative or other receiver, manager, administrator or other similar official is appointed, in

relation to the Issuer or, as the case may be, in relation to the whole or a substantial part of the

undertaking or assets of the Issuer or an encumbrancer takes possession of the whole or a substantial

part of the undertaking or assets of the Issuer or a distress, execution, attachment, sequestration or

other process is levied, enforced upon, sued out or put in force against the whole or a substantial part

of the undertaking or assets of the Issuer and (B) in any case (other than the appointment of an

administrator) is not discharged within 30 days; or if the Issuer initiates or consents to judicial

proceedings relating to itself under any applicable liquidation, insolvency, composition, reorganisation

or other similar laws or makes a conveyance or assignment for the benefit of, or enters into any

composition or other arrangement with, its creditors generally or any meeting is convened to consider

a proposal for an arrangement or composition with its creditors generally,

then any Noteholder may while any such Event of Default is continuing, by written notice to the Issuer at the

specified office of the Domiciliary Agent, effective upon the date of receipt thereof by the Domiciliary Agent,

64

declare the Note held by the holder to be forthwith due and payable whereupon the same shall become

forthwith due and payable at the Early Redemption Amount (as described in Condition 6.6), together with

accrued interest (if any) to the date of repayment, without presentment, demand, protest or other notice of any

kind.

For the purposes of this Condition, Indebtedness for Borrowed Money means any present or future

indebtedness (whether being principal, premium, interest or other amounts) for or in respect of (i) money

borrowed, (ii) liabilities under or in respect of any acceptance or acceptance credit or (iii) any notes, bonds,

debentures, debenture stock, loan stock or other securities offered, issued or distributed whether by way of

public offer, private placing, acquisition consideration or otherwise and whether issued for cash or in whole or

in part for a consideration other than cash.

10 DOMICILIARY AGENT

The name of the Domiciliary Agent and its initial specified office is set out below. If any additional paying

agents are appointed in connection with any Series, the names of such paying agents will be specified in Part

B of the applicable Final Terms.

The Issuer is entitled to vary or terminate the appointment of the Domiciliary Agent and/or approve any

change in the specified office through which the Domiciliary Agent acts, provided that at all times there will

be a Domiciliary Agent and the Domiciliary Agent will at all times be a participant in the Securities

Settlement System.

In acting under the Domiciliary Agency Agreement, such agent acts solely as the agent of the Issuer and does

not assume any obligation to, or relationship of agency or trust with, any Noteholders. The Domiciliary

Agency Agreement contains provisions permitting any entity into which any agent is merged or converted or

with which it is consolidated or to which it transfers all or substantially all of its assets to become the

successor paying agent. Notice of any variation, termination, appointment or change in the Domiciliary Agent

will be given to the Noteholders promptly by the Issuer in accordance with Condition 11.

11 NOTICES

11.1 Notices to the Noteholders

Notices to the Noteholders shall be valid if (i) published on the website of the Issuer, (ii) published

through the usual newswires agency (or any of the usual newswires agencies) used by the Issuer to

discharge its ongoing information duties pursuant to the Royal Decree of 14 November 2007 and (iii)

delivered to the National Bank of Belgium for communication to the Noteholders via participants in

the Securities Settlement System. The Issuer shall also ensure that all notices are duly published in a

manner which complies with the rules and regulations of any stock exchange on which the Notes are

listed for the time being. Any notice shall be deemed to have been given on the date of the first

publication.

11.2 Notices by the Noteholders

Notices to be given by any Noteholder shall be in writing and given by lodging the same, together with

the relative Note or Notes, with the Domiciliary Agent.

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12 MEETINGS OF NOTEHOLDERS, MODIFICATION AND WAIVER

12.1 Meetings of Noteholders

The Agency Agreement contains provisions for convening meetings of Noteholders to consider matters

affecting their interests, including the sanctioning by Extraordinary Resolution of a modification of

any of the Conditions applicable to a Series. For the avoidance of doubt, any such modification shall

always be subject to the consent of the Issuer. An Extraordinary Resolution means a resolution passed

at a meeting of Noteholders of a Series duly convened and held in accordance with these Conditions

and the Belgian Companies Code by a majority of at least 75 per cent of the votes cast of the

Noteholders of the relevant Series (or relevant majority on any adjourned meeting) in accordance with

Article 574 of the Belgian Companies Code.

All meetings of holders of a Series will be held in accordance with the Belgian Companies Code with

respect to noteholders meetings. Such a meeting may be convened by the board of directors of the

Issuer or its auditors and shall be convened by the Issuer upon the request in writing of Noteholders of

a Series holding not less than one fifth of the aggregate nominal amount of the outstanding Notes of

that Series. A meeting of Noteholders will be entitled to exercise the powers set out in Article 568 of

the Belgian Companies Code and generally (subject to the consent of the Issuer) to modify or waive

any provision of the Conditions applicable to that Series (including any proposal (i) to modify the

maturity of that Series or the dates on which interest is payable in respect of that Series, (ii) to reduce

or cancel the nominal amount of, or interest on, that Series or (iii) to change the currency of payment

of that Series or (iv) to modify the provisions concerning the quorum required) in accordance with the

quorum and majority requirements set out in Article 574 of the Belgian Companies Code, and if

required thereunder subject to validation by the court of appeal.

Resolutions duly passed by a meeting of Noteholders of a Series in accordance with these provisions

shall be binding on all Noteholders of that Series, whether or not they are present at the meeting and

whether or not they vote in favour of such a resolution.

Convening notices for meetings of Noteholders of a Series shall be made in accordance with Article

570 of the Belgian Companies Code, which currently requires an announcement to be published not

less than fifteen days prior to the meeting in the Belgian Official Gazette (Belgisch

Staatsblad/Moniteur belge) and in a newspaper of national distribution in Belgium. Convening notices

shall also be made in accordance with Condition 11 (Notices).

The Agency Agreement provides that, if authorised by the Issuer and to the extent permitted by

Belgian law, a resolution in writing signed by or on behalf of holders of Notes of a Series of not less

than 75 per cent. of the aggregate nominal amount of the Notes of that Series (or relevant majorities as

specified in the Belgian Companies Code) shall for all purposes be as valid and effective as an

Extraordinary Resolution passed at a meeting of holders of Notes of that Series duly convened and

held, provided that the terms of the proposed resolution shall have been notified in advance to the

Noteholders of that Series through the relevant settlement system(s). Such a resolution in writing may

be contained in one document or several documents in the same form, each signed by or on behalf of

one or more holders of Notes of that Series.

12.2 Modification and Waiver

The Domiciliary Agent and the Issuer may agree, without the consent of the Noteholders to:

(i) any modification of the Domiciliary Agency Agreement which is not prejudicial to the interests

of the Noteholders; or

66

(ii) any modification (except as mentioned herein) of the Notes or the Domiciliary Agency

Agreement which is of a formal, minor or technical nature or is made to correct a manifest error

or to comply with mandatory provisions of applicable law.

Any such modification shall be binding on the Noteholders and any such modification shall be notified

to the Noteholders in accordance with Condition 11 as soon as practicable thereafter.

13 FURTHER ISSUES

The Issuer shall be at liberty from time to time without the consent of the Noteholders to create and issue

further notes having terms and conditions the same as the Notes or the same in all respects save for the

amount and date of the first payment of interest thereon and so that the same shall be consolidated and form a

single Series with the outstanding Notes.

14 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

No person shall have any right to enforce any term or condition of this Note under the Contracts (Rights of

Third Parties) Act 1999, but this does not affect any right or remedy of any person which exists or is available

apart from that Act.

15 GOVERNING LAW AND SUBMISSION TO JURISDICTION

15.1 Governing law

The Domiciliary Agency Agreement is governed by, and shall be construed in accordance with,

Belgian law. The Programme Agreement and the Deed of Covenant, and any non-contractual

obligations arising out of or in connection with the Programme Agreement and Deed of Covenant, are

governed by, and shall be construed in accordance with, English law. The Notes, and any non-

contractual obligations arising out of or in connection with the Notes, are governed by, and shall be

construed in accordance with, Belgian law or English law, as specified in the applicable Final Terms,

except that in all cases the form of the Notes as contemplated in Condition 1 (Form, Denomination and

Title) and Condition 12.1 (Meetings of Noteholders) are governed by, and shall be construed in

accordance with, Belgian law.

15.2 Submission to jurisdiction

(a) Where the applicable Final Terms specify that the Notes are governed by English law, then

subject to Condition 15.2(c) below, the English courts have exclusive jurisdiction to settle any

dispute arising out of or in connection with the Notes, including any dispute as to their

existence, validity, interpretation, performance, breach or termination or the consequences of

their nullity and any dispute relating to any non-contractual obligations arising out of or in

connection with the Notes (a Dispute) and accordingly each of the Issuer and any Noteholders,

in relation to any Dispute submits to the exclusive jurisdiction of the English courts.

(b) For the purposes of this Condition 15.2, the Issuer waives any objection to the English courts on

the grounds that they are an inconvenient or inappropriate forum to settle any Dispute.

(c) To the extent allowed by law, the Noteholders may, in respect of any Dispute or Disputes, take

(i) proceedings in any other court with jurisdiction; and (ii) concurrent proceedings in any

number of jurisdictions.

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(d) The Issuer irrevocably appoints Law Debenture Corporate Services Limited, at Fifth Floor 100,

Wood Street, London EC2V 7EX as its agent for service of process in any proceedings before

the English courts in relation to any Dispute, and agrees that, in the event of Law Debenture

Corporate Services Limited being unable or unwilling for any reason so to act, it will

immediately appoint another person as its agent for service of process in England in respect of

any Dispute. The Issuer agrees that failure by a process agent to notify it of any process will not

invalidate service. Nothing herein shall affect the right to serve proceedings in any other

manner permitted by law.

(e) For the avoidance of doubt, it is expressly stated that the courts of Belgium will have exclusive

jurisdiction to settle disputes which may arise from or in connection with the Domiciliary

Agency Agreement and accordingly any legal action or proceedings arising from or in

connection with the Domiciliary Agency Agreement shall be brought before such courts.

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USE OF PROCEEDS

The net proceeds from the issue of each Tranche of Notes will be applied by the Issuer for general corporate

purposes (which may include, without limitation, (i) the refinancing of outstanding loans and other debt. (ii)

the financing of the Issuer’s investment programmes and/or (iii) the financing of its funding needs that

exceeds the free cash flow generated by its operations).

The applicable Final Terms for each issue will specify whether the proceeds are for general corporate

purposes or otherwise specify any particular identified use of proceeds.

An example of such particular identified use of proceeds may be, if so designated in the relevant Final Terms,

the allocation of net proceeds from the Issue of a certain Tranche of Notes to a sub portfolio (the “Green

Project Portfolio”) with the special purpose to finance, refinance and/or invest in projects in the field of

renewable energy, energy efficiency, sustainable waste management, sustainable land use, biodiversity

conservation, clean transportation, clean water and/or drinking water or any other project falling within the

ICMA Green Bond Principles as set out in the applicable Final Terms.

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DESCRIPTION OF PROXIMUS, SA DE DROIT PUBLIC

GENERAL INFORMATION ON THE CORPORATE STRUCTURE OF PROXIMUS SA

Commercial name: Proximus

Legal name: Proximus, SA de droit public (as of 22 June 2015)

Registered office: Koning Albert II-laan 27, B-1030 Brussels

Telephone number: +32 2 202 46 12

Enterprise number 0202.239.951, Brussels Register of Legal Entities

Year of incorporation: Proximus was established under the name of

Belgacom as an autonomous public-sector company,

governed by the Law of 19 July 1930 establishing the

Belgian National Telegraph and Telephone Company,

the RTT (Régie des Télégraphes et Téléphones et

Télégraphes / Regie van Telegraaf en Telefoon).

The transformation into an SA of public law was

implemented by Royal Decree of 16 December 1994

and Proximus was incorporated on 27 December

1994.

The name change into Proximus SA, de droit public

was implemented by the Royal Decree of 7 May

2015, applicable as of 22 June 2015.

Legislation under which Proximus operates: Proximus is incorporated under and is subject to the

laws of the Kingdom of Belgium

Legal form: Limited liability company under public law (Société

Anonyme (SA) de droit public/Naamloze

Vennootschap (NV) van publiek recht)

Corporate purpose: As described in Article 3 of the Articles of

Association of Proximus, the objects of Proximus

are:

1 to develop services within the field of

telecommunications in Belgium or elsewhere;

2 to perform all actions aimed at promoting,

directly or indirectly, its activities or ensuring

optimal use of its infrastructure;

3 to acquire participating interests in bodies,

companies or associations – whether existing or

to be created, Belgian, foreign or international,

and public or private sector – that may

contribute, directly or indirectly, to the

achievement of its corporate objects; and

4 to provide radio and television broadcasting

services.

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Description of the Group: The Issuer is the ultimate parent company of the

Group. A Group structure chart is set out on page

121.

HISTORY

Proximus’ business was initially operated as a public service called Regie van Telegrafie en Telefonie / Régie

des Télégraphes et des Téléphones (RTT). The RTT, established in 1930, was commissioned to supply

telegraphy and telephony services in Belgium and was supervised by a Belgian government minister.

In 1992, the RTT was reorganised as an autonomous public sector enterprise called “Belgacom”.

In 1994, Belgacom was transformed into a limited liability company under public law and in March 1996, the

Belgian State sold 50% less one share to a private consortium, ADSB Telecommunications BV.

Belgacom launched the Proximus GSM cellular network on 1 January 1994.

Belgacom Mobile S.A. was established on 1 July 1994 by Belgacom (75%) and AirTouch Communications

(which subsequently merged with Vodafone) (25%). In August 2006, Belgacom acquired the remaining 25%

stake in Belgacom Mobile S.A. from Vodafone for a total of EUR 2 billion. Following this operation,

Belgacom Mobile S.A. became a wholly-owned subsidiary of Belgacom. The business relationship between

Proximus and Vodafone is maintained.

On January 1, 1998, the telecom market was fully liberalised and Belgacom took over Skynet, the first

internet access provider in Belgium and one of the largest web portals in the country. Its internet activities are

integrated into the Belgacom brand which launched ADSL on the Belgian market.

In March 2004, ADSB Telecommunications BV sold its participation through a public offering. Since then

Belgacom has been listed on the Euronext Brussels Stock Exchange (ticker BELG and following the name

change into Proximus in June 2015 under the ticker PROX). Following completion of the offering, the

Belgian State owned 51.6% of the ordinary shares of Belgacom.

Belgacom transferred its international carrier branch of activity to its 100% subsidiary Belgacom International

Carrier Services SA (BICS) on 1 January 2005. Effective 1 July 2005, Swisscom Fixnet AG transferred its

international carrier services business to Belgacom’s subsidiary BICS in exchange for a 28% ownership in

BICS and its subsidiaries and Belgacom’s share was diluted to 72%.

In June 2005, Belgacom launched its digital television offering, Belgacom TV, offering to the customer a

range of channels, on demand TV, interactive television services and an electronic program guide. Through a

successful bidding, Belgacom was able to acquire the exclusive broadcasting rights for the Belgian and Italian

Football League championships for a 3 year period. Early June 2008, the Belgian Professional Football

League granted Belgacom the broadcast rights to the Jupiler League for the 2008-2011 seasons.

In September 2005, Belgacom launched a public tender offer to acquire 100% of Telindus shares. This offer

fitted Belgacom’s strategy to grow its IT services business in Belgium and offered additional international

scope. The takeover was finalised early 2006 and the Telindus Group share was delisted from the Brussels

Euronext stock market. In June 2006, the Telindus/Belgacom ICT portfolio was expanded with the new

Telindus/Belgacom brand.

In November 2005, Belgacom implemented a leave program and a career out-phasing program (tutorship).

Under the terms of the plan, Belgacom will pay benefits until the year 2015.

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In 2007, Belgacom signed a new Collective Labour Agreement whereby statutory employees can volunteer

for a definitive transfer to Belgian State services after participation in a selection process and a trial period. At

the end of 2009, 259 of the estimated 310 employees had been transferred to Belgian State Departments.

To fulfill Belgacom’s mission, Belgacom reviewed its entire organisation and in 2007 created a new operating

structure based on five pillars:

- residential clients are taken care of by the Consumer Business Unit (CBU)

- professional clients are entitled to the services of the Enterprise Business Unit (EBU)

- network and IT services are centralised within a single unit: the Technology & Wholesale (TEC&W,

previously Service Delivery Engine & Wholesale)

- international carrier services are managed by Belgacom International Carrier Services (BICS)

- Staff and Support (S&S) brings together all the horizontal functions that support the Group’s activities

Also in 2007, Belgacom and Proximus launched the first bundled offers: the packs. These packs included

fixed/mobile telephony, ADSL and television.

In February 2008, Belgacom announced the acquisition of Scarlet NV, the infrastructure based

communication service provider offering fixed-line and mobile voice, internet and data services for

residential, SME, corporate and wholesale customers in the Netherlands, Belgium and the Dutch Antilles.

This acquisition was closed in November 2008 and allows Belgacom to penetrate a new market segment and

reinforce its multiplay offer in Belgium. In July 2009, in accordance with the requirements from the

Competition Council, the Scarlet network was divested to Synthigo SA.

The Group also acquired Mobile-for, a company specialised in mobile payments for parking and Tango (Tele2

Luxemburg), the second mobile operator in Luxembourg. As part of the latter transaction, Belgacom also

acquired Tele2’s Liechtenstein fixed and mobile operations, which was divested in December 2009 to Unify

Nederland BV.

In December 2009, the transaction that was announced in June 2009 between Belgacom ICS (BICS) and

MTN was closed. This transaction combined the international carrier services of BICS and MTN, the latter

taking an equity stake in BICS. As of 1 December 2009, BICS has been progressively integrating MTN ICS,

MTN’s international wholesale subsidiary, and will act as the official gateway for carrier services of MTN

globally. Belgacom will own 57.6% of BICS’ shares, Swisscom will own 22.4% and MTN will own 20.0% of

BICS’ shares.

On 4 January 2010, the extraordinary general shareholders’ meeting of Belgacom approved the integration of

the Belgian operational subsidiaries of the Belgacom Group into a single limited liability company under

public law, Belgacom SA. This integration thus concerned Belgacom SA, Belgacom Mobile SA, Telindus

Group NV (only the national activities), Telindus NV, Telindus Sourcing SA and Belgacom Skynet activities.

Excluded from this integration were the subsidiaries BICS, BGIS, Skynet iMotion Activities, Tango, Scarlet,

Euremis, ConnectImmo and the international subsidiaries of the Telindus Group.

In June 2010, Belgacom announced setting up of a new company called Belgacom Bridging ICT. This

wholly-owned subsidiary is the basis for a new and exclusive channel with ICT experts throughout Belgium.

In this new subsidiary, Belgacom consolidates the activities taken over from four IT integrators:

ElectroComputer, Interconnect, Jockordy and Softcomputer. In July 2010 Belgacom Bridging ICT also

acquired a 40% interest in ClearMedia.

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On 15 November 2010, Belgacom Invest Sàrl absorbed Tango Fixed SA, Tango Mobile SA and Tango

Services SA. On 23 December 2010, the corporate form of Belgacom Invest Sàrl (private limited liability

company) was changed into a limited liability company (Société anonyme) and its corporate name was

changed into Tango SA with effect from 1 January 2011.

In August 2011, Belgacom incorporated a new re-insurance company in Luxembourg, BGC Re SA.

In November 2011, through the incorporation of a new company Belgacom ICT-expert Community CVBA

Belgacom Bridging ICT NV joined forces with eight new local ICT experts to advise Small and Medium

Enterprises (SME).

In early January 2012, Belgacom acquired Wireless Technologies owning a chain of The Phone House (TPH)

stores in Belgium. The Belgian Competition Council approved the acquisition but included in its approval the

obligation to divest a number of TPH points-of-sale, as well as the activity pertaining to the exploitation of the

shop-in-shops by Wireless Technologies.

On 18 April 2012 at an extraordinary general shareholders’ meeting, Belgacom NV integrated Telindus Group

NV through a merger by takeover.

In September 2012, an agreement was reached under which 25 points-of-sale of TPH and the activity related

to shop-in-shops will be sold to YourCall BVBA (YourCall), subject to the satisfaction of certain conditions

precedent. These conditions were satisfied on 15 November 2012 and the transaction was closed accordingly.

After this transaction, 57 points-of-sale of TPH remained the property of Belgacom. These allow Belgacom to

better meet the expectations of a constantly changing telecom market and the demand for more innovative

products and services such as smartphones, mobile internet and convergent packs.

In November 2013, Proximus and BNP Paribas Fortis set up “Belgian Mobile Wallet SA” (Sixdots) a 50-50

joint venture to support online and mobile trade in Belgium. During 2014 new investors entered the company

capital reducing the Group’s share to 33%.

In 2014, the Group diposed its subsidiary Sahara Network Company Limited registered in Damman,

Kingdom of Saudi Arabia and the business of Scarlet N.V., a telecommunications service provider in the

Netherlands, in the context of its liquidation.

In 2014, the Group also sold 100% of its share in Group Telindus France to Vivendi and the business of

Telindus Limited, a UK subsidiary of Telindus, to Telent Technology Service.

Shareholding

Proximus Ownership

30 June 2015

Shares Shares

(%)

Voting rights

(%)

Dividend Rights

(%)

Belgian State 180,887,569 53.51% 56.21% 55.94%

Proximus own shares 16,213,660 4.80% 0% 0.4%

Free-float 140,923,906 41.69% 43.79% 43.58%

Latest developments

In line with the new Fit for Growth strategy of the Group, Proximus was officially chosen as main

commercial brand. On 29 September 2014, all Belgacom and Proximus solutions were grouped under the

single brand and logo Proximus. As fundamental part of the growth strategy, this change simplifies the public

perception and communicates the desire to put customers at the heart of everything Proximus does.

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On the 15th of April 2015, at the Annual Shareholders Meeting, the shareholders of the company voted in

favour of changing the company name from Belgacom to Proximus. This change became effective as of

22 June 2015. Next to Proximus SA under Belgian Public Law, the Proximus Group encompasses the

affiliates Scarlet, Tango, BICS and Telindus International.

PRODUCTS AND SERVICES

The Group is Belgium’s reference provider of integrated telecommunication services.

Bolstered by its long-standing experience as Belgium’s incumbent operator and its capacity for innovation,

the Group, with its subsidiaries, provides its customers, whether private or professional, company or

institution, with a comprehensive range of offers and solutions in fixed and mobile networks.

The Group offers a complete quadruple-play solution that integrates fixed and mobile telephony, internet and

television. It is committed to meeting the expectations of its professional and residential customers, and

innovates to anticipate future needs drawing on the latest technological developments. With a view to closing

the digital gap, the Group is also committed to promoting electronic services and providing a wide range of

innovative applications.

From 1 January 2008, the Board of Directors, the Chief Executive Officer and the Proximus Management

Committee manage the operations of the Group based on the new client-oriented organisation structured

around the following reportable five operating segments:

1. The Consumer Business Unit (CBU)

The CBU sells voice products and services, internet and television, both on fixed and mobile networks, to

residential clients, mainly on the Belgian market. It does this principally through the Proximus, Scarlet &

Tango brands.

2. The Enterprise Business Unit (EBU)

The EBU sells ICT services and products to professional clients, whether they are independent workers,

smaller firms or major companies. These ICT solutions, including telephone services, are marketed mainly

under the Proximus and Telindus brands, on both Belgian and international markets.

3. The Technology & Wholesale (TEC&W)

The TEC&W centralises all the network and IT services and costs (excluding costs related to customer

operations and to the service delivery of ICT solutions) & provides services to CBU and EBU. Its wholesale

activity offers telecommunications services to other operators and suppliers on the Belgian market.

4. International Carrier Services (BICS)

The international carrier services are provided by Proximus’ subsidiary Belgacom International Carrier

Services, a subsidiary of Proximus (57.6%), Swisscom (22.4%) and MTN (20%). This co-venture is the

preferred supplier of Swisscom, the Proximus Group and MTN as regards international connectivity services.

5. Staff and Support (S&S)

S&S brings together all the horizontal functions (human resources, finance, legal, strategy and corporate

communication), internal services and real estate supporting the Group’s activities.

The Group monitors the operating results of its reportable operating segments separately for the purpose of

making decisions about resource allocation and performance assessment. Segment performance is evaluated

on the following basis:

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- the operating income before depreciation and amortisation and before non-recurring revenue and

expenses; and

- the capital expenditures.

Group financing (including finance costs and finance revenue) and income taxes are managed on a group

basis and are not allocated to operating segments.

For the purpose of allocating resources to reportable operating segments, the Group monitors segment assets

at the level of property, plant and equipment, intangible assets and goodwill. Other non-current assets and

current assets are not allocated to operating segments.

The accounting policies of the operating segments are the same as the significant accounting policies of the

Group. Segment results are therefore measured on a similar basis as the operating result in the consolidated

financial statements.

Inter-company transactions between legal entities of the Group are invoiced on an arm’s length basis.

The following table gives a breakdown of the segment income for each operating segment:

EUR million 2013 2014

Consumer Business Unit 2,226 2,223

Enterprise Business Unit 2,198 2,075

Technology & Wholesale 264 241

Staff & Support 60 86

International Carrier Services 1,666 1,597

Segment eliminations -96 -111

Total 6,318 6,112

Within its “Fit-for-Growth” strategy, aiming for more efficiency and simplification, Proximus updated its

organisation structure at the start of 2015. This also resulted in a new customer segmentation. The main

changes reside in the Small Enterprise customers (‘Small Offices’) being reported within the Consumer

Business Unit an no longer in the Enterprise Business Unit as well a the regrouping of 5,000 employees in a

new Customer Operations Unit.

FULL YEAR 2014 REVENUE EVOLUTION

The Proximus Group ended the year 2014 with total reported revenue of EUR 6,112 million, or -3.3%

versus 2013. The year-on-year variance was, however, significantly influenced by incidentals such as

nonrecurring items, capital gains on building sales and the revenue loss due to divestures.

Adjusted for these incidentals, Proximus Group’s underlying revenue for 2014 totaled EUR 5,864

million, -1.6% or EUR 96 million lower than the previous year. The decrease was for a large part driven

by Proximus’ International Carrier segment, due to a decline in low-margin Voice volumes. The BICS

segment aside, Proximus generated through its core business underlying revenue of EUR 4,287 million,

which was fairly stable (-0.2%) versus the prior year. This results from higher revenue from the retail

Consumer and Enterprise segments, offset by lower Wholesale revenue posted in the Technology and

Wholesale segment.

In 2014, the quarterly Core revenue variance improved from -3.2% for the first quarter, to +3.5% for

the fourth quarter of 2014. The trend improvement showed in both the Consumer and Enterprise segments

and was the result of a significant recovery of the Mobile service revenue, strong sales of Mobile terminals

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and higher revenue from TV and ICT. These sound business trends largely offset the revenue pressure by

regulatory measures, which reduced the 2014 revenue by an estimated amount of EUR 50 million, or –1.2%

of Proximus’ underlying core revenue.

In particular, the Mobile service revenue showed a significant turnaround from the prior year, in spite of a

continued competitive Mobile market. Whereas 2013 showed a -13% Mobile service revenue decline

compared to 2012; the revenue erosion in 2014 was limited to -2.8%. The enhancement shown in the course

of 2014 was the combined result of a growing Mobile postpaid customer base, and Mobile ARPU trends

showing good improvement due to a fading effect from the reduced Mobile pricing plans, a steep increase in

Mobile data usage, and an improving Mobile price tiering of customers.

Furthermore the revenue from Fixed products was up from the prior year, with good revenue growth from

Proximus TV and Fixed Internet, both benefitting from a continuously growing customer base. Within the

Enterprise Business Unit the revenue from ICT in particular showed a solid progression benefitting from a

large outsourcing contract signed end-2013. The growth from TV, Fixed Internet and ICT more than offset the

lower Fixed Voice revenue.

Revenue evolution of the segments and the drivers are described in more detail below:

CBU

For the full-year 2014, CBU’s underlying revenue totaled EUR 2,216 million, +0.5% or EUR 11 million up

from the prior year. After a tough 2013, during which CBU was fully hit by the disruptive change in the

Belgian telecom law and a Mobile price war, 2014 returned to stabilisation. This showed in the improving

Mobile services revenue trend: from a -7.0% year-on-year in the first-quarter 2014 to -1.9% for the last

quarter of the year.

Full-year 2014 Mobile Service revenue decline was limited to -4.8%, improving from a -13.1% decline in

2013. This decline was offset by the good revenue growth for Fixed services, in particular for TV and Fixed

Internet, and by higher revenue from Mobile devices. Regulatory measures reduced the 2014 revenue by an

estimated amount of EUR 23 million (-1.0%). This entails the effect from a further decline of Roaming tariffs

and lower Mobile Termination Rates for Tango in Luxemburg.

The Consumer business unit generated EUR 395 million from Fixed Voice, or 3.9% less compared to 2013.

The revenue pressure was mainly driven by a slowing down, though continued Fixed line erosion. In 2014,

the consumer Fixed Voice customer base decreased by 47,000 lines. This was an improvement versus the

2013 line loss of -84,000, as result of a mitigated churn, good gross customer gain through Packs and targeted

promotions. As a result, the Consumer segment ended 2014 with a total of 1,588,000 lines, 2.9% lower than

the prior year. The ARPU increased slightly to EUR 20.4 (+0.7%), positively impacted by price changes in

2014.

In 2014, CBU’s revenue from Fixed Internet continued to show growth, up 2.5% to EUR 363 million,

driven by a growing customer base for its main brand Proximus, supported by successful Pack offers, and by

a growing customer base for Scarlet. In line with its ‘Fit for Growth’ strategy, Belgacom improved its net

Internet customer growth. In the course of 2014, 59,000 new customers subscribed to either Internet from

Proximus or Scarlet, up from the 42,000 added in 2013. By end 2014, the Consumer segment counted

1,295,000 Internet customers, or up 4.8% from the prior year. With Internet becoming more advantageous in a

Pack, the 2014 ARPU decreased year-on-year by 1.2% to EUR 26.3.

Proximus TV revenue continued to grow in 2014, up by 9.3% to EUR 292 million. This revenue growth

resulted mainly from a growing customer base with Proximus attracting 84,000 new households in 2014 to

Proximus TV, supported by successful convergent Pack sales. By end 2014, Proximus’ TV customer base

counted 1,288,000 TV households, or 1,593,000 subscriptions when including multiple set-top boxes.

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Furthermore, TV-options such as football subscriptions and TV-replay contributed to the success of Proximus

TV. These additional services were supportive for the 4.3% TV ARPU increase to EUR 19.5.

The revenue generated by Proximus’ Consumer segment from Mobile services (i.e. combined revenue from

Mobile Voice, Mobile Data and SMS) totalled EUR 747 million for 2014. The 4.8% decline was a significant

improvement from the 13.1% decline reported for 2013, which showed full impact from the Mobile market

disruption triggered by the new Telecom law adopted on 1 October 2012.

Even though the Belgian Mobile market remained very competitive in 2014, there were also signs of

stabilization. Proximus’ consumer segment solidly grew its Postpaid customer base by 191,000 to reach a total

of 2,117,000 Postpaid subscriptions. This includes 380,000 Internet Everywhere cards. At the same time, the

erosion of prepaid cards slowed down to a decline by 190,000 cards, from a 283,000 loss in 2013.

Overall, the Consumer Mobile customer base totaled end 2014 3,574,000 Mobile cards, i.e. stable compared

to end 2013. The postpaid/prepaid customer mix however improved to 59%/41%, compared to 54%/46%.

With customers’ re-pricing effect fading, and gradual better tiering of customers, the erosion of the blended

Mobile ARPU was mitigated to a -1.2% decline to EUR 19.6 versus –5.7% in 2013.

Tango, Proximus’ Luxembourgish telecom operator, generated for the full-year 2014, revenue of EUR 117

million, a 7.5% decrease from the prior year caused by the regulated decrease of Mobile Termination Rates,

as from 1 February 2014 set at 0.98€ct/min from 8.2 €ct/min before.

This MTR-driven decline was partly offset by the revenue growth coming from the growing postpaid, triple

and quadruple-play customer base. The prepaid customer base declined due to a reduction in the life-time of

prepaid offers. Overall, there was a slight increase in Tango’s mobile customer base, with a positive shift from

prepaid to postpaid.

Scarlet’s positive turnaround continued, backed by Proximus’ multi-brand strategy. Scarlet closed the year

2014 with a 2.7% underlying revenue growth to EUR 50 million. This was driven by a good performance of

Scarlet’s new product portfolio containing a no-frills fixed triple-play offer and Mobile postpaid, and by

marketing efforts driving increased brand awareness.

EBU

For the full-year 2014, EBU’s underlying revenue totaled EUR 1,898 million, remaining stable compared to

the prior year. Over the year, the quarterly revenue trend strongly improved, starting the year with a -3.1%

underlying decline for the first quarter, and ending the year with a +3.6% growth for the last quarter. The

trend improvement in the course of 2014 was mainly driven by the revenue recovery from Mobile services

after a tough 2013 due to a Mobile price war.

Furthermore, underlying ICT revenue was up by 5.6% in 2014, driven by a solid revenue from the Telindus

activities and in particular a large outsourcing contract signed end-2013 and a number of large product deals.

These favorable results more than offset the lower revenue from Fixed Voice and Fixed Data, which showed

similar declines to the prior year.

Regulatory measures lowered EBU’s 2014 revenue by an estimated amount of EUR 26 million or -1.4% of

EBUs underlying revenue.

For 2014, EBU reported EUR 446 million revenue in Fixed Voice, showing an improving decline of -3.1%

versus 2013. The key driver of the revenue decline was a continued Fixed Voice line erosion triggered by

companies rationalizing on Fixed line connections. This effect was only partly compensated for by price

indexations in 2014. In 2014 the Fixed Line erosion totaled -58,000 lines, better than the -64,000 for 2013.

This brought the 2014 EBU total Fixed Voice Line customer base to 1,234,000, or -4.5% on a yearly basis.

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This was partly compensated for by a higher Fixed Voice ARPU of EUR 28.9 up 1.7% year-over-year; as a

result of price changes.

The 2014 revenue from Fixed Data, consisting of Fixed Internet and data connectivity revenue, was EUR 374

million, 1.6% below that of 2013. This was due to a continued migration from older technologies such as

leased lines to the Proximus Explore platform, for which pricing is more favorable for customers. Fixed

Internet revenue remained fairly stable year-on-year, with ARPU staying stable at EUR 39.4 and the EBU

Fixed Internet customer base showing slight growth. End-2014 EBU had 445,000 Fixed Internet customers,

an increase of 4,000 lines or +0.8% year-on-year growth in a saturated and competitive market. EBU reported

EUR 473 million ICT revenue for 2014. Adjusted for the revenue loss from divested companies, this means a

solid 5.6% growth compared to 2013, including the benefit from a large outsourcing contract signed end-

2013.

Mobile service revenue showed a significant improvement over the previous year, with EUR 555 million for

2014, i.e. stable compared to 2013. The revenue trend showed solid improvement throughout the year, a good

recovery from the Belgian Mobile market disruption. The 2014 Mobile service revenue was still impacted by

regulatory price measures for Roaming, though this was fully compensated for by a steep increase in data

roaming volumes, particularly in the summer holiday season. One of the main drivers of the strong trend

improvement in Mobile service revenue was the continuously growing Mobile customer base, and especially

a better price tiering within the Business customer segment, growing its mid- and high end customer base

firmly. This was achieved through an improved retention of high-value customers and successful joint-offer

actions in those price segments. Under the Proximus brand, EBU added 183,000 new Mobile cards, of which

102,000 were Mobile Voice and paying data cards. This was also supported by a low Mobile churn level of

10.7%, down from 11.9% in 2013. In aggregate, EBU ended 2014 with a total of 1,798,000 Mobile cards,

11.3% more than end 2013. Another reason for the improving Mobile Service revenue was the sharp uptake in

Mobile data usage, in part driven by a greater smartphone penetration and a growing number of 4G-users.

Further support came from the fading effect from Mobile customer re-pricing, higher data volumes, and

improved price tiering. These impacts were also reflected in the improving trend for EBU’s blended net

Mobile ARPU, declining 6.8% in 2014 to EUR 32.9, compared to a -14% decline in 2013.

TEC&W

Revenue within the TEC&W segment relates mainly to wholesale activities from Proximus. Over the full-year

2014 the TEC&W revenues amounted to EUR 241 million, or 8.8% below those of 2013. The pressure comes

from eroding Carrier Wholesale Services revenue, which has been seeing a continued decline in wholesale

broadband lines, leased lines and traffic volumes. Moreover, the growth in Roaming volumes only partly

compensated the commercial price reductions. In 2014 the commercial wholesale offer to Base (‘Snow’)

somewhat offset these negative impacts.

S&S

On an underlying basis, i.e. excluding capital gains from building sales, the 2014 revenue of S&S totaled

EUR 30 million, EUR 4 million or 13.5% up compared to the prior year.

BICS

The 2014 underlying revenue from BICS totaled EUR 1,577 million, -5.4% or EUR 89 million lower than for

2013. This resulted from lower Voice revenue, down 7.6% on lower Voice traffic showing effect from the lost

traffic to the Asian region that BICS captured late 2012. In 2014, BICS handled 27,158 million minutes, -

3.4% below the level of the previous year. In contrast, the non-voice revenue continued to grow, up by 10.2%

in 2014. Moreover, BICS’ revenue continued to be impacted by European-wide MTR reductions, only slightly

offset by a favorable dollar effect on Voice selling.

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SECOND QUARTER 2015 – REVENUE EVOLUTION

In the second-quarter of 2015, the Proximus Group generated underlying revenue of EUR 1,505 million, an

increase of 1.5% compared to the second-quarter of 2014. This resulted from a solid Proximus Core

revenue growth, up by 2.4% chiefly driven by a continued solid revenue increase from both Fixed and

Mobile. The growth from the Core business was somewhat offset in the second quarter by lower revenue

from BICS (-0.8%).

More precisely, the second-quarter revenue variance was the result of:

A 3.9% underlying revenue increase for the Consumer segment4, continuing at a similar growth

level as seen for the first quarter, excluding the impact from the more promotion-driven mobile devices

revenue. Through its growing customer base, CBU achieved further improvement in TV and Fixed

Internet revenue and continued to post a positive variance for Mobile services.

A stable year-on-year underlying revenue from the Enterprise Business segment, with the higher

revenue from Mobile services and setup fees for Road User Charging offsetting the lower revenue

from Fixed Voice and ICT.

A 2.4% revenue decline from the Technology & Wholesale Business Unit, as the revenue from

Carrier Wholesale Services continued to be impacted by the decline in traditional Wholesale business,

including the outphasing of SNOW customers following the decision of BASE to stop their Fixed

triple-play offer. However, the larger part of the former Snow customers opted for Scarlet, benefiting

Proximus’ retail offer.

Furthermore, the second quarter 2015 revenue from Belgacom International Carrier Services (BICS) was

0.8% lower year-on-year from a high comparable base. The solid ongoing growth in non-Voice revenue, and

the continued positive impact on revenue from the stronger USD, was more than offset by lower Voice

revenue. Year-to-date June 2015, the Proximus Group underlying revenue totaled EUR 2,984 million, i.e.

3.4% higher compared to the same period of 2014.

Revenue evolution of the segments and the drivers are described in more detail below.

CBU

CBU continued to grow its total revenue in the second quarter 2015, with underlying revenue up by 3.9%

year-on-year to EUR 726 million. Setting aside the more promotion-driven revenue from mobile devices,

CBU’s revenue showed a growth level fairly similar to that of the previous quarter.

The 2015 second-quarter revenue includes an estimated impact from regulatory measures5 of EUR -5 million

(-0.8%).

The solid second-quarter 2015 revenue resulted from a good performance from both fixed and mobile, as well

as from Proximus’ Luxembourg subsidiary Tango.

The revenue trend for Fixed products improved to a 4.1% year-on-year increase, driven by both Proximus and

Scarlet, with products mainly sold through attractive Packs. The total Mobile revenue was up by 2.5%,

including a 0.9% growth from Mobile services. Following the Mobile promotions during the second quarter

2015, the revenue from Mobile devices was up by 14% versus the previous year.

Year-to-Date June 2015, CBU posted EUR 1,437 million revenue, 4.6% higher year-on year. million re

4 As of 2015 also including Small Offices. 2014 figures have been restated.5 Lower Voice, SMS and Data Roaming rates following the reduced regulated tariffs since 1 July 2014.

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During the second quarter 2015, CBU’s Fixed Voice customer base erosion was limited to -5,000 lines,

leading to a total of 2,136,000 Fixed Voice lines end of June 2015. During the second quarter Scarlet

attracted an additional 6,000 former Snow customers to its Scarlet Trio offer, while the Proximus brand

continued to be positively impacted by the increased Sales focus on 3- and 4-play Packs. The Fixed Voice

ARPU for the second quarter 2015 was EUR 21.4, -3.0% lower than that of the prior year due to the

increasing number of Voice customers with a multi-play Pack, benefiting from a discount. The lower year-on-

year Fixed Voice customer base combined with the lower ARPU resulted in a -4.0% year-on-year revenue

decline for Fixed Voice, ending the second quarter of 2015 with EUR 137 million.

The second-quarter 2015 TV revenue totaled EUR 82 million, 18.1% above the same period of 2014.

CBU’s TV revenue continued to do well, driven by the continued subscriber growth, with both the Proximus

and Scarlet brands increasing their customer base. For the second quarter, 35,000 TV subscribers in total

were added, of which 25,000 unique customers. The Scarlet Trio offer saw strong growth by attracting an

additional 6,000 former Snow customers. As a result, CBU ended June 2015 with a total TV customer base of

1,692,000, up by 168,000 customers or +11% from the prior year. The recurring TV ARPU grew 7.6% year-

on-year to EUR 20.2 driven by the increased uptake of TV options.

Driven by the continuously growing Postpaid customer base and higher ARPU, CBU’s revenue from Mobile

services further progressed by 0.9% to EUR 255 million for the second quarter 2015. This included the

impact from regulated roaming rate cuts mid-2014.

In spite of the many mobile promotions on the market from all mobile players, Proximus’ Postpaid churn

level remained low at 13.4% and it grew its Postpaid customer base by 38,000 cards, or +26,000 when

excluding the Internet-Everywhere data cards. On a year-on-year basis, CBU’s postpaid customer base grew

by 192,000 mobile cards or +7.2%.

The Mobile Prepaid park on the other hand further eroded by -40,000 cards in the second quarter 2015, of

which -13,000 due to the discontinuation of Mobisud. This excluded, the loss of Proximus prepaid cards

showed sequential improvement. Combining Prepaid and Postpaid, CBU’s Mobile customer base ended the

second quarter at a total of 4,229,000 cards, 0.8% higher versus one year ago.

CBU’s Mobile Postpaid ARPU for the second quarter 2015 progressed year-on-year by 1.5% to EUR 29.6.

The ARPU trend continued to be positive since the turnaround in the first-quarter 2015, driven by a better

customer tiering versus one year ago, mainly driven by last year’s high-end Joint-Offers, and the increased

smartphone penetration. In the second quarter 2015, the growth in average data usage per customer persisted,

resulting from an increasing number of customers with a 4G-device and increased 4G usage. 4G-users used

851 Mb (on the 4G and 3G networks) per month on average, increasing the blended data usage to 511 Mb, up

65% from one year ago. The average data consumption of 4G users is over 3 times greater than that of non-

4G users.

CBU’s Mobile Prepaid ARPU for the second quarter 2015 was EUR 11.2, down 11.3% year-on-year, though

slightly higher than the first quarter (EUR 10.7).

With the Postpaid/Prepaid customer mix improving to 67%/33% from 63%/36% one year ago, the blended

Mobile ARPU increased by 1.8% to EUR 22.7 and was up versus the prior quarter (EUR 22.0).

Tango’s revenue for the second quarter 2015 fully benefited from its growing customer base for Mobile

Postpaid as well as for 3-play & 4-play and was also strengthened by the volume and average sales price

increase of mobile devices. In the second quarter Tango added net 1,000 mobile customers with Mobile

postpaid growth of 3,000 cards partially offset by 2,000 less prepaid cards.

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EBU

The underlying revenue of the Enterprise segment (EBU) totaled EUR 327 million for the second quarter

2015, i.e. a stable result compared to the same period of 2015. This includes an estimated impact from

regulatory measures of EUR -8 million (-2.4%).

In the second quarter, the higher revenue from Mobile Services and setup fees for Road User Charging

(reported in ‘Other’) offset the lower revenue from Fixed Voice and ICT.

The slow-down versus the favorable revenue variance of the first quarter was mainly driven by lower revenue

from Mobile devices and by lower year-on-year revenue from the ICT business on a tougher comparable base.

Year-to-date June 2015, the underlying revenue from EBU totaled EUR 656 million, 1.0% up from the prior

year.

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Fairly stable second quarter Fixed Data revenue

The second-quarter 2015 revenue from Fixed Data, consisting of Fixed Internet and Data Connectivity

revenue, totaled EUR 62 million. This is 0.7% above that of the same period of 2014 and, as such, a

continuation of the trend improvement seen in previous quarters.

Revenue from Data Connectivity increased year-on-year driven by the roll-out of a number of large customer

projects on the Proximus Explore platform. This while the second-quarter revenue from Fixed Internet

remained fairly stable year-on-year, with ARPU 1.6% up to EUR 43.8 and the Fixed Internet customer base

slightly down (-1,000 in the second quarter). By end-June 2015 EBU counted 138,000 Fixed Internet

customers. Year-to-date June 2015, the revenue from Fixed Data totaled EUR 124 million, -0.7% compared

to the previous year.

ICT revenue 1.2% lower year-on-year

In the second quarter 2015, EBU generated 2015 EUR 107 million revenue from ICT, 1.2% below the same

period of 2014, though remaining stable in absolute amount versus the first quarter of 2015. The second

quarter 2015 shows an impact from the termination of some ICT contracts earlier this year, which reduced the

recurring ICT revenue. This was partly compensated for by higher revenue from ICT products. Year-to-date

June 2015, EBU’s ICT revenue totaled EUR 215 million, i.e. slightly above the comparable period of 2014.

Mobile Service revenue up 1.8% on larger Mobile customer base and higher data usage

In the second quarter 2015, EBU’s Mobile Service revenue of EUR 80 million was up by 1.8% from last year,

continuing the positive variance seen since the first quarter. One of the main drivers of the growing Mobile

Service revenue was the larger Mobile customer base, closing June 2015 with 1,200,000 Mobile cards,

105,000 or 9.6% more versus one year ago. In the second quarter of 2015, EBU added a total of 20,000

mobile cards as Proximus’ high-quality mobile network remains an important driver in attracting and

retaining EBU customers. This includes an increase by 10,000 cards for Mobile Voice and paying data, i.e. a

greater increase versus previous two quarters due to a number of successful acquisitions in the Corporate

segment and the launch of the new Mobile portfolio for Medium Enterprises end-March 2015. Furthermore,

EBU added 10,000 M2M cards in the second quarter. The second quarter Mobile churn remained limited to

10%.

Furthermore, the Mobile service revenue benefited from an improved tiering in the Medium Enterprise

segment and the increased data usage. Whereas Data Roaming volumes are seasonally lower in the second

quarter, EBU saw a good increase in national mobile data usage, resulting from a greater smartphone

penetration and a growing number of 4G-users, up by 2.8-times compared to one year ago. In the second

quarter 2015 EBU customers with a 4G-device had an average monthly data consumption of 752 MB, 17%

more versus the same period of 2014. Customers with a 4G–device use 2.6 times as much data per month than

customers with a non-4G device.

These evolutions have contributed to the ARPU trend, limiting the year-on-year decline since the first quarter

of 2015. With the Business segment still impacted by some year-on-year re-pricing effects, the ARPU22 for

the second quarter 2015 was 2.8% down to EUR 29.7, though higher versus the prior quarter (EUR 29.3).

Year-to-date June 2015, EBU’s revenue from Mobile Services totaled 159 million, i.e. 2.6% more than for the

comparable period of 2014.

Technology & Wholesale (TEC&W, previously Service Delivery Engine & Wholesale (SDE&W))

TEC&W reported EUR 58 million revenue for the second quarter of 2015, or -2.4% year-on-year. The

revenue from Carrier Wholesale Services continued to be impacted by lower volume from traditional

Wholesale business (broadband lines, leased lines and traffic volumes). This also includes the outphasing of

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SNOW customers following the decision of BASE to stop their Fixed triple-play offer. However, the larger

part of the former Snow customers opted for Scarlet. As a result, the reduction in Wholesale lines was largely

compensated for through the Proximus retail offer.

Year-to-date June 2015, the revenue of TEC&W totaled EUR 114 million,-8.3% versus the comparable period

of 2014

S&S

For the second quarter 2015, Staff and Support recorded underlying revenue of EUR 5 million, 3 million

lower compared to the prior year.

BICS

The second-quarter 2015 underlying revenue from BICS totaled EUR 411 million, down by 0.8% from a high

comparable base in 2014. The ongoing growth in non-Voice revenue, and the continued positive impact on

revenue from the stronger USD, was more than offset by lower Voice revenue. Year-to-date June 2015, BICS

generated EUR 811 million revenue, i.e. 5.1% more than for the same period of 2014.

REGULATION

INTRODUCTION

Proximus is active on the Belgian telecommunications market that is regulated through laws adopted by the

Parliament, secondary legislations and regulators’ decisions.

Proximus, as an operator with Significant Market Power (SMP), is subject to a series of obligations which do

not apply to its competitors (except for those that are also designated as an SMP operator in a specific

market). Moreover, Proximus has been required to provide Universal Service 6 and additional services

throughout Belgium between 1998 and August 2013.

THE EUROPEAN AND BELGIAN FRAMEWORK

The law currently in force in Belgium is the law on electronic communications of 13 June 2005 (the 2005

Law) (Wet betreffende de elektronische communicatie/Loi relative aux communications électroniques) that

implemented the 2003 European Framework. The scope of this law is limited to the provision of electronic

communications services and networks. It does not cover the regulation of the content of those

communications.

The 2005 Law was modified in 2012 to implement the revised EU framework (the 2009 Framework). The

modifications put a strong focus on universal service and consumer protection. Some implementation details

are also left for secondary legislation (Royal Decrees, Ministerial decrees, BIPT decisions).

This law was modified again by the law of 27 March 2014 that has still reinforced amongst other things

consumer protection, site sharing rules and sanction power of the Belgian Institute for Postal services and

Telecommunications (BIPT).

At EU level, the European Commission (the Commission) considers that one of the main reasons for lack of

growth in the telecoms sector is the fragmentation of the European single market. had proposed in September

2013 a package to address this fragmentation, the so-called “Telecom Single Market” (TSM) or “Connected

Continent”. Since then, the draft has been submitted to the co-decision procedure between the EU Parliament

6 The designation of Proximus as sole provider for the payphones, the paper /electronic directory, the directory inquiry service and the

geographical element of the universal service ended on 31 August 2013.

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and the EU Council. On 30 June 2015, after 18 months of negotiations, these institutions have reached an

agreement on a new text dealing with roaming and net neutrality only (see below for more details). All the

other topics (i.e. single EU authorisation, changes to market analysis procedure, EU wholesale broadband

products, additional consumer protections measures, spectrum) proposed by the Commission in 2013 have

been discarded during the negotiations. The text will be finalised under Luxembourg presidency. Final

approval by the EU Parliament plenary and EU Council is expected in September/October 2015.

On 6 may 2015, the EC announced its Digital Single Market (DSM) strategy built on 3 pillars: (i) Better

access for consumers and businesses to digital goods and services across Europe (proposals for simple and

effective cross-border contract rules (for e-commerce); legislative proposals to tackle unjustified geo-

blocking; sector inquiry into European e-commerce (online trade of goods and provision of services);

proposals for a reform of the copyright regime ( improve access to cultural content online); proposals to

reduce the administrative burden on businesses arising from different VAT regimes); (ii) Creating the right

conditions and a level playing field for digital networks and innovative services (proposals to reform the

current telecoms rules (more effective spectrum coordination and common EU-wide criteria for spectrum

assignment at national level; creating incentives for investment in high-speed broadband; ensuring a level

playing field for all market players)); review of the Audiovisual Media Services Directive (consider whether

the scope or rules should be broadened to encompass new services and players); comprehensive analysis of

the role of online platforms (search engines, social media, app stores, etc.) in the market including illegal

content on the Internet; review of the e-Privacy Directive) and (iii) Maximising the growth potential of the

digital economy (definition of priorities for standards and interoperability in areas critical to the Digital Single

Market, such as e-health, transport planning or energy (smart metering); new e-Government Action Plan

including an initiative on the ‘Once-Only’ principle (i.e. to ensure businesses and citizens only have to

communicate their data once to public administrations).

On 27 July 2015, the European Commission has started to work the review of the telecom regulatory

framework as part of its Digital Single Market strategy. The Commission’s aim for the review is to look

whether the telecom regulation has met its objectives of enhancing the internal market and promoting

competition and end-user interests. It will then look at designing new rules for 2020 and beyond with as main

goals to ensure competition that drives investment in expanding fixed and wireless connectivity to everyone.

This will include looking at access regulations and connectivity targets, as well as the growing convergence of

fixed and wireless services and how these can address rural connectivity. The review should also address the

issue of a 'level playing field' in terms of regulation of comparable services. The first step is a “Regulatory

Fitness and Performance Programme (REFIT) evaluation” in which the Body of European Regulators

(BEREC) and national telecom regulators can give their views on the need for reform and provide factual data

to the Commission on the application of the current framework. The next step will be a broad public

consultation on the telecom rules (to be launched in September 2015, open for 12 weeks) followed by a series

of meetings and workshops with public and private stakeholders.

COOPERATION AGREEMENT BETWEEN THE FEDERAL STATE AND THE “COMMUNITIES”

Under the Belgian constitutional regime, telecommunications falls within the competency of the Federal State

while matters related to broadcasting are considered cultural matters falling under the competency of the

Flemish, French-speaking and German-speaking communities (the Communities). When a network or

service relates to telecommunications and broadcasting both the federal authorities and the Communities are

competent.

A cooperation agreement was concluded between the Federal Government and the Communities’

Governments to ensure the regulation of the networks used jointly for telecommunications and media

purposes. This agreement entered into force on 19 September 2007.

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Under the cooperation procedure, the draft decisions of the different regulators may have to be submitted to

the Conference of Regulators (CRC) (composed of members of BIPT and of the Communities regulators, i.e.

the Flemish media regulator VRM, the media regulator of the French community CSA and the media

regulator of the German community Medienrat) who should take the decisions by consensus. In case of

disagreement, the decision will be referred to a committee of ministerial representatives.

AUTHORISATION REGIME

The 2005 Law foresees the principle of free provision of e-communications services and networks subject to

certain exceptions. The supply or reselling in own name and for own account of electronic communications

services and networks is only subject to a notification to BIPT. There is no automatic right to use numbers or

radio frequencies. A right of use is required, and this is granted by BIPT under certain conditions.

Proximus is a holder of a public fixed telephony authorisation and a public network authorisation. Proximus

was also granted rights to use 800 MHz, 900 MHz, 1800 MHz, 2.1 GHz and 2.6 GHz spectrum. It has also

notified a series of additional services to BIPT.

SPECTRUM

Belgium has currently four licenced mobile network operators: Proximus (, Mobistar, KPN Group/BASE),

and BUCD bvba (now Voyacom, backed by Asian investors). Telenet/Tecteo Bidco (TTB: a partnership

between the cable operator Telenet and Voo) was granted a 3G license in August 2011 but never deployed a

network. As a consequence, TTB has decided to return this spectrum to the BIPT that finally withdrew it on

24 September 2014. Telenet and Voo currently operate as full Mobile Virtual Network Operator (MVNO).

2G licences (GSM 900 and 1800 MHz) were granted to Proximus and Mobistar in 1995. A third licence was

granted to KPN/BASE in 1998. All licences have been granted for a 15 year period. Proximus paid EUR 223

million for its initial licence.

In accordance with the Royal Decree, 2G licences can be tacitly renewed for a period of five years unless

otherwise decided at least two years before the end date of the licence. On 25 November 2008, BIPT decided

to block the tacit reconduction of the 2G-licences of the three mobile operators and requested additional fees.

Proximus challenged this decision due to a dispute over the two year notification period. On 20 July 2009, the

Brussels Appeal Court annulled the decision. The Court ruled that the Proximus licence had already been

tacitly (and without payment of a fee) renewed until April 2015 under the 1995 conditions. Despite this Court

ruling, a law amendment published on 25 March 2010 required the mobile operators to pay for the tacit

extension of their 2G licences until 2015. Proximus maintained its position that the tacit extension of its 2G

licence (2010-2015) does not imply payment. On 18 August 2010, Proximus filed an annulment procedure

before the Constitutional Court against the Law of 25 March 2010. Both Mobistar and KPN/BASE followed

with similar actions. Besides this annulment procedure, Proximus initiated on 7 October 2010 further action

against the Belgian State and BIPT to ensure recovery of the undue licence fees. In June 2011 the

Constitutional Court submitted a number of questions to the European Court of Justice that issued its

judgment on 21 March 2013 and confirmed that the renewed Belgian law was not contrary to EU law. On 17

October 2013, the Constitutional Court rejected Proximus, Mobistar and KPN/BASE appeals against the law

of 2010. The action before Civil court was withdrawn by Proximus on 9 May 2014 as a consequence of the

Constitutional Court decision of October 2013. The formal judgement was pronounced on 17 December 2014

On 1 July 2013, BIPT confirmed the renewal of KPN/BASE’s 900 MHz license until 2 July 2018.

The amount of EUR 74 million for Proximus for the first period of extension of its licence (until 2015)

corresponds to the original 2G licence fees proportionate to the spectrum quantity and duration. Operators

could choose between a one-time upfront payment or recurrent annual payments. For the extension, Proximus

opted for annual payments. The last payment for this extension was made in December 2014.

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After the first extension covering the period 2010-2015, the 2G license of Proximus has been tacitly renewed

for a second period from 8 April 2015 until 15 March 2021. The unique fee for this second renewal will

cost EUR 75.1 million (2 x 12MHz from 8 April 2015 until 26 November 2015 and 2 x 10MHz from 27

November 2015 until 15 March 2021). The operators have the possibility to pay this fee either in one shot or

by yearly payments (in this case, interests are due). Proximus has decided to pay by yearly payments. First

payment of EUR 11,7 million has been made on 16 April 2015.

Through the acquisition of its 2.1 GHz spectrum in 2011 (see below), TTB obtained rights for

900/1800MHz spectrum. For that purpose existing operators would have had to give back 24 channels in the

900 MHz band and 18 channels in the 1800 MHz band by November 2015. However, on 12 December 2013,

TTB informed BIPT of their decision to renounce these 900/1800 MHz rights and BIPT has taken the

initiative to reallocate it to the existing mobile operators. As a consequence of the procedure held by the BIPT

end 2014, Proximus, Mobistar and KPN/Base have been able to acquire additional spectrum in these bands

effective as from 27 November 2015 (BIPT decision dated 15 December 2014). This spectrum will be

granted until 15 March 2021.

Following to this allocation procedure combined wih the abovementioned renewal of the 900 MHz spectrum,

Proximus will hold 2x12 MHz until 26 November 2015 and 2x12.4 MHz (10+2.4 MHz) as from 27

November 2015 in the 900 MHz band. Mobistar will hold 2x12 MHz until 26 November 2015 and 2x11.6

MHz (10+1.6 MHz) as from 27 November 2015 while KPN/BASE will have 2x10 MHz until 26 November

2015 and 2x10.2 MHz (10+0.2 MHz) as from 27 November 2015. In order to allow each operator to benefit

from a contiguous band, Mobistar and Proximus had to agree on the reshuffling of their 900MHz spectrum

(KPN/BASEe was not concerned as they only acquired one channel). The reshuffling proposal presented by

Proximus and Mobistar was approved by BIPT on 13 May 2015.

Concerning the 1800 MHz band, BIPT decided to proceed with the redistribution of the returned spectrum by

allowing each of the existing operators to increase their 1800 MHz spectrum to 117 channels (2x23,4MHz) at

no additional costs except the usage fee (effective as from the publication of the BIPT decision dated 22 July

2014). Moreover, following the results of the redistribution procedure of TTB spectrum, each operator

acquired additional spectrum in the 1800 MHz up to a total of 124 channels (2x25MHz) effective as from 27

November 2015. This additional spectrum will also be granted until 15 March 2021.

The unique fee for the additional spectrum acquired in the 900 MHz (2x2.4 MHz) will cost EUR 15.8 mio.

For these payments, the operators will have the possibility to opt for a one-shot payment or yearly payment.

The related 1800 MHz spectrum will only generate an usage opex fee as soon as it is put into service.

Proximus, Mobistar and KPN/BASE were awarded 3G/UMTS licences (2.1 GHz) in March 2001 via an

auction process. Four licences were offered but only three bids were received and the concessions were sold

to each operator at the minimum fee of EUR 150 million. On 15 July 2011, BIPT awarded the fourth 3G

licence to the sole candidate, Tecteo Telenet Bidco (TTB) for EUR 71.5 million for the same quantity of

spectrum as the existing operators (2x15 MHz). However, TTB never deployed a network. As a consequence,

it has decided to return this spectrum to BIPT that finally withdrew it on 24 September 2014.

The 4G auction in the 2.6 GHz band held on 28 November 2011 by BIPT was concluded after four rounds

with total bids of EUR 77.79 million. Limits were set at a maximum of 2x20MHz of FDD spectrum or

45MHz TDD spectrum per operator. Proximus acquired 2x20 MHz contiguous in the lowest part of the 2.6

GHz frequencies for EUR 20.22 million. The other licencees are Mobistar (2x20 MHz for EUR 20.02

million), KPN/BASE (2x15 MHz for EUR 15.04 million) and BUCD bvba (now Voyacom) (45 MHz for

EUR 22.51 million). Proximus, Mobistar and KPN/BASE opted for the FDD technology and Voyacom for the

TDD technology. The licences are valid for 15 years, effective as of 1 July 2012. Proximus paid the fee

upfront. No coverage obligations are imposed but there is an obligation to inform the customers in relation to

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the effective coverage. The conditions of the current licenses granted in 2012 foresee that this spectrum must

be put into service as from 1 July 2015. This obligation has become less relevant due to the granting of the

800 MHz band in November 2013 and BIPT has proposed to reassess this obligation early 2016 (e.g. by

extending the obligation until 1 July 2016). During the auction process, one block of 2x15 MHz remained

unsold. This block was reserved for an 800 MHz operator not having 2.6 GHz spectrum yet. During the 800

MHz auction of November 2013, no new entrant acquired a licence and so this block has not been granted so

far.

On 12 November 2013, BIPT proceeded with the auction of the 800 MHz spectrum (resulting from the

digital dividend) for wireless broadband services. This auction was concluded after two rounds and the three

blocks of 2x10 MHz were sold at the minimum price of EUR 120 million each. Each lot entails national

coverage obligations (with a minimum speed of 3Mbps): 30% after 2 years, 70% after 4 years and 98% after 6

years. Proximus acquired Lot 2 which has the ability to facilitate coordination with foreign operators at the

national borders. Lot 3, which has been acquired by Mobistar, includes additional coverage obligations in

rural areas (60 municipalities mainly in Wallonia) that must be reached within three years. KPN/BASE

acquired the third lot. On 30 November 2013, the authorisation was formally notified to Proximus. The

licence is valid until 29 November 2033. Proximus has decided to pay the concession fee in annual

instalments.

The 2005 Law also allows now the operators who opt for an annual payment of the spectrum concession fees

to switch to a one-off fee for the remainder of the payment (also for spectrum granted in the past).The World

Radio Communication Conference 2012 (WRC-12) decided on 17 February 2012 to allocate the 700 MHz

band (694-790 MHz) to mobile services on a “co-primary” basis with other services, mainly broadcasting

services. This allocation will be effective after the World Radio Communication Conference in 2015 (the

WRC-15). “Co-primary allocation” means that services have equal rights to operate in the same band. In

practice, each country will need to decide between these two services taking into account technical constraints

or coordination requirements. If this band is assigned to mobile broadband services, broadcasters will need

alternative spectrum assignments in the remaining band 470-694MHz. Identifying additional spectrum for

allocation to mobile services, with a special focus on the future of the 700 MHz band, is the main EU priority

identified at this stage by the Commission for the WRC-15. BIPT, in a communication published on 20 April

2015, has considered that it seems reasonable to expect that this band would be put in service around 2020. In

such case, an auction could happen in 2018.

To assist mobile operators in their UMTS rollout, a Royal Decree of 28 March 2007 authorised the use of

GSM-900 frequencies for the provision of 3G services from 1 July 2008, without the need to pay

additional fees.

On 16 November 2011 BIPT adopted a decision allowing the mobile operators to deploy UMTS/LTE in the

900MHz, 1800MHz and 2.1 GHz bands.

On 17 January 2012, BIPT published guidelines for infrastructure sharing. In these guidelines, BIPT

investigated all types of infrastructure sharing including RAN sharing and spectrum pooling (where two or

more operators put their spectrum together for a common usage). Up to now only passive site sharing has

been largely developed and is even promoted by law. Concerning a further extension of the infrastructure

sharing in the RAN (partition of Node B and RNC), BIPT is not opposed to it provided that operators keep the

control of their network and services. On the other hand, BIPT does not favour sharing part of the core

network as, in such configuration, little differentiation is possible in terms of coverage and network quality,

which limits competition in the market. Concerning spectrum sharing, BIPT questioned the legality of such

sharing taking into account the 'current legal framework. According to BIPT this question would become

theoretical if operators would transfer their respective spectrum into a third entity. In such case the spectrum

trading (already foreseen by the legal framework) principles would apply. The Law of 27 March 2014

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modifying the 2005 Law was aimed at fostering site sharing as much as possible by indicating a.o. that any

contractual provision excluding site sharing would be forbidden, even in contract with third parties. In case

of disagreement between operators, BIPT would intervene. BIPT will investigate the possibility to review the

Law again so as to allow spectrum sharing. This issue will be debated in the context of a broader revision of

BIPT guidelines concerning infrastructure sharing. Spectrum sharing is considered as an important way to

improve spectrum efficiency and increase mobile coverage and quality in the most rural areas.

The rights of use for radio frequencies used entirely, or in part, for public e-communication services are

transferable subject to notification to the BIPT. A Royal Decree of 2010 as modified on 2 April 2014 sets out

the rules for the transfer (trading or leasing) of rights of use. A transfer can be refused if it would result in

unfair competition or would not fulfil the requirements of effective and efficient use of the radio frequency

spectrum. The concerned operators need to submit a file for approval to BIPT and the taker of the spectrum

will be responsible for fulfilling the obligations (coverage obligations, payment of fee, etc.) that were

imposed on the previous owner.

In accordance with a new provision introduced in the 2005 Law in July 2012, BIPT has to set rules to prevent

spectrum hoarding. In January 2014, BIPT held a consultation aiming to pontentially define rules to be

applied in case of hoarding but concluded in May 2014 that no ex-ante rules are needed for the moment. The

operators are however invited to avoid it at all time.

The norms for electromagnetic fields in Belgium is a regional matter. These norms are different depending

on the region. In the Walloon region, the norm is 3 V/m per operator, per antenna, per technology, in living

places. In Flanders, it is 3 V/m per operator, per antenna, per technology, in living places with a 20.6 V/m

cumulative norm. In the Brussels Capital Region, the norm was 3V/m to be shared between all operators and

all technologies. The mobile operators had repeatedly criticised this norm which was the most stringent in the

world, as it obliged them to deploy additional sites and seriously hindered the possibility to roll out new

mobile technologies in Brussels such as 4G LTE on top of 2G and 3G. Finally, the environmental framework

was modified, imposing a global norm of 6V/m. The modification of the Ordinance was adopted on 24

January 2014 and the executing decree on the 3rd of April 2014. The new legal framework entered into force

on 15 May 2014.

Local authorities, municipalities, provinces and/or regions are taxing mobile infrastructure (pylons, masts

and or antennas) located on their territory. The mobile operators continue to challenge these taxes before the

courts.

SPECIAL STATUS OF OPERATORS WITH SIGNIFICANT MARKET POWER

The regulation process is defined, inter alia, by the results of the analysis of certain markets and by the

definition of “remedies” (obligations) imposed to operators designated as having Significant Market Power

(SMP).

Pursuant to the EU framework and the 2005 Law, the Belgian regulators are required to perform an analysis

of the markets on the basis of the principles set out by the Commission in its Recommendation on relevant

markets and its Guidelines and assess which are competitive and which are not. Based on this analysis, the

regulators are required to impose regulatory obligations and/or amend existing obligations on operators with

SMP or withdraw existing obligations if the market is considered as competitive. The obligations that can be

imposed at wholesale level are access, transparency, non-discrimination, accounting separation, price control,

cost accounting and functional separation. At retail level, the list of “appropriate” remedies contains retail

tariff regulation, no undue preference to specific end-users and not unreasonably bundled services. Under the

2009 EU Framework, power over remedies imposed by regulators is shared by the Commission and the body

of European Regulators (BEREC). In practice, the Commission can propose binding decisions to address

inconsistent regulatory approaches of regulators on market analysis notifications.

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As regulators of the sector, BIPT jointly with the Communities regulators for certain markets is in charge of

the analysis of the markets identified by the Commission as susceptible to be subject to ex ante regulation.

Under the 2005 Law, BIPT must impose only those regulatory obligations that are necessary and

proportionate to solve the competitive problem identified and must only impose regulatory obligations if

general competition law does not suffice to remedy these competitive problems.

The analysis of the markets must in principle be updated every three years or any time after adoption of a new

EC Recommendation, at which time BIPT will need to reassess the regulatory obligations it has imposed.

During the first round analysis of the markets identified in the EC Recommendation of 2003 (the

Recommendation) on relevant markets, a few markets have been identified as competitive (fixed

international retail calls markets, wholesale trunk segments of leased lines, wholesale mobile access and call

origination and the obligations were withdrawn. On the other markets, Proximus was designated as SMP and

a series of obligations were maintained or imposed.

In November 2007, the Commission adopted the second edition of its Recommendation on relevant markets

that resulted in a reduction (from 18 to 7) of the number of markets susceptible to be submitted to ex-ante

regulation, particularly the retail markets. The Commission has however considered that wholesale markets

such as, for example, the ones that oblige Proximus to provide access to its broadband network and the fixed

and mobile call termination markets should in principle continue to be reviewed in view of assessing whether

they must be subject to ex-ante regulation. Remedies that have been imposed on markets that are no longer on

the Commission list should stay in place until a new market analysis is due and undertaken.

At the retail level, the national fixed retail call markets were considered as not effectively competitive in

2008 during the second round analysis but, on 24 September 2014, BIPT decided in the third round analysis

to de-regulate them and therefore to withdraw the obligations imposed previously (in particular, the obligation

to reflect the Mobile Termination Rates (MTR) decreases in retail fixed to mobile tariffs (100% and same day

as MTR decrease)). Proximus was also designated as having SMP during the first round analysis in 2006 on

the fixed retail access markets with an obligation to offer wholesale line rental (WLR) on a retail minus

basis. On 31 January 2013, BIPT took its decision concerning the second round analysis of this access market.

BIPT has mainly kept the obligations imposed in the first round (CSC/CPS, non-discrimination, cost

accounting, prohibition of predatory prices and of price squeeze, information on evolution of network should

be provided 5 years in advance) but has withdrawn the WLR obligation (WLR was never implemented due to

technical, operational and economic reasons). The retail leased lines market up to 2Mbps was regulated as a

result of the first round analysis performed in 2007. On 20 August 2013, BIPT published its decision

concerning the second round analysis in which it decided to deregulate this market and to withdraw all the

former obligations.

At the wholesale level, Proximus was designated in the first round analysis as having SMP on the fixed call

origination market, the fixed call termination market and the transit market in 2006 and on the wholesale

terminating segments of leased lines market in 2007. On 23 October 2009, BIPT submitted to national

consultation its draft decision on the second round analysis of the fixed call origination market and concluded

that this market is still not competitive and proposed to keep the existing regulation imposed to Proximus, i.e.

access and interconnection, transparency, non-discrimination (internal & external), accounting separation,

cost orientation. No final decision has been provided yet. The transit market, no longer included in the EC list

of markets susceptible to ex-ante regulation, was concluded in the second round analysis on 15 March 2011 as

competitive and the obligations previously imposed to Proximus were withdrawn. On 2 March 2012, BIPT

adopted its decision replacing a decision of 11 August 2006 on the fixed call termination market. Proximus

was designated as SMP operator and continues to be subject to a series of obligations incl. price control based

on BU-LRIC model, and transparency with an obligation to publish information about future network

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evolutions five years in advance. The obligations of accounting separation and internal non-discrimination

have been withdrawn. Fifteen alternative operators have also been designated as having SMP on the fixed call

termination market with the same price control obligation as Proximus. As a consequence, the 15% tariff

asymmetry allowed previously was withdrawn from 1 April 2012.

In the market of wholesale terminating segments of leased lines, Proximus was considered to possess SMP

by the first round market analysis in 2007. On 20 August 2013, BIPT published its decision concerning the

second round analysis of this market (BROTSOLL leased lines) imposing the creation of Next Generation

Leased Lines (NGLL) (based on Ethernet MPLS) in addition to the traditional partial circuits and backhauls.

Alongside traditional wholesale obligations of non-discrimination and accounting separation, new access

obligations have been imposed. The decision also implements two types of price control: (i) cost orientation

for classical lines as well as for transport and local copper parts and (ii) price squeeze control for local fiber

parts of NGLL. As requested by this decision, Proximus has submitted to BIPT its adapted BROTSOLL

reference offer for NGLL. The prices of NGLL based on the new NGN cost model have been approved in

March 2015. An appeal has been submitted on 14 October 2013 against the BIPT decision of 20 August 2013.

In 2008, a first round market analysis also designated Proximus SMP on the local loop unbundling (LLU)

and wholesale bitstream markets with an obligation of access to ADSL2+ and VDSL technologies at

regulated prices and conditions. This designation was confirmed in July 2011 by the second round analysis of

the LLU market performed by the Belgian regulators. Proximus was imposed the following obligations:

access to local loops (the sub-loop unbundling obligation was removed where VDSL2 is deployed), non-

discrimination, transparency (with obligation to comply with a five year notice period for network changes

and one year notice period for launch of retail FTTH services) and price control (cost orientation and price

squeeze). Cable and fibre have been excluded from the scope of this market.

On 1 July 2011, the CRC published its decisions on the wholesale broadband (bitstream) market. Proximus’

broadband regulation is based on the finding of sole dominance (cable not included in the market). VDSL

prices must be cost oriented and Proximus has to offer bitstream access for television (multicast). Rules have

also been imposed for the adaptation of wholesale prior to retail. On 4 January 2012, BIPT approved

Proximus’ alternative multicast solution based on shared channels (wholesale customers can use the multicast

channels that are already on the Proximus network if they acquire the corresponding content rights).

Proximus’ reference offer was approved on 4 October 2012 by BIPT. The multicast functionality has been

implemented since April 2013. The prices have been set yet by a BIPT decision of 13 January 2015. The

multicast tariffs are mainly channel driven whatever the number of end-customers. They have been revised in

May 2015 following to the application of the new WACC. BIPT also maintains a strong focus on non-

discrimination and “Operational Excellence” for wholesale services. Proximus launched an appeal against

certain aspects of the broadband decision (non-inclusion of cable and obligations of Operational Excellence

and multicast). On 3 December 2014, the Brussels Appeal Court annulled the CRC decision of 2011,

criticising the approach towards coaxial cable networks. According to the Court, the regulators did not

motivate properly why they did not take account of cable broadband networks in the wholesale market. On 18

December 2014, the CRC adopted a « repair » decision of their decision of 1 July 2011. This decision merely

aims at answering to the criticism of the Court about the lack of motivation. The repair decision does not

modify the conclusion of the market analysis (Proximus as sole dominant) nor the obligations imposed to

Proximus. On 2 February 2015, Proximus has lodged an appeal against this new decision. A new analysis of

the broadband market is being prepared by the regulators (timing still unknown).

On 1 July 2011, the CRC decided to regulate the dominant cable operators in their respective coverage

areas and to require them to resell analogue TV, to open up their digital TV platform and to resell broadband.

At this time, Proximus could obtain access to analogue TV.

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In 2013, the Belgian regulators completed the framework for the opening of the cable on the basis of their

decisions of July 2011. On 9 September 2013, they published their decisions regarding the Telenet, Tecteo,

Brutélé and Coditel (Numéricable) reference offers and, on 12 December 2013, their decisions on the

regulated wholesale prices applicable to these operators. These pricing decisions set the (i) non-recurrent one-

time fees and per-line fees to be paid when a customer leaves a cable operator for an alternative operator

(EUR 2 to EUR 5) and the (ii) monthly rental fees set on a retail minus basis (minus 20 to 30% depending on

the case). End May-early June 2015, the Belgian regulators published draft decisions concerning the review

of these prices (analogue TV, digital TV and broadband). The draft submitted to the public consultation unitl

mid-July proposes important decreases of the prices. The new proposal also includes additional temporary

discounts for new entrants (would be applicable during 2-3 years). The final decision is expected by the end

of 2015. In September 2011, all cable operators filed a procedure for suspension and annulment before the

Appeal Court against the CRC decision of 1 July 2011. After having rejected the suspension requests in

September and November 2012, the Court eventually decided on 12 November 2014 in the case on the merits

to confirm the 2011 decision to open up Telenet’s cable network, rejecting all of Telenet’s arguments. This

means that Telenet should continue to open up its network for wholesale access (analogue/digital TV and

broadband resale). Additionally, in response to Proximus appeal in this case, the Court asserted that, back in

2011, the regulators did erroneously exclude Proximus from wholesale access to digital TV and broadband

resale on Telenet’s cable network. Proximus has therefore currently right to request a full access to the Telenet

network. On 13 May 2015, the Brussels Court of Appeal has taken a similar decision for Nethys/Tecteo,

Brutélé and Numéricable.

Proximus has requested a revision of the market analysis to achieve a full level playing field. This review has

started but the timing is currently unknown.

On 9 October 2014, the European Commission published the third edition of its “Recommendation on

relevant markets” that defines the perimeter of the markets susceptible to be submitted to ex-ante regulation.

The Commission has reduced the number of markets included in the recommendation (from 7 to 5) by

excluding the retail regulations for fixed telephony and the wholesale call origination on the fixed telephone

network (used for carrier selection services). The remaining markets are: (i) Call termination on fixed

networks (FTR); (ii) Call termination on mobile networks (MTR); (iii) a) Wholesale local access (passive or

active access like UK “VULA” approach); b) Wholesale central access for mass market products (more

bitstream like); (iv) Wholesale high-quality market (aimed at providing fast broadband lines to businesses,

including leased line services but also other broadband access products). The new rules recognise that “virtual

access products” can be considered substitutes to physical unbundling when they fulfil certain characteristics

WHOLESALE SERVICES & PRICES

The Proximus fixed interconnection prices (BRIO) were set by BIPT on 26 November 2008 for the period

2008-2010. BIPT has not adopted any new decision for interconnection tariffs beyond this 2008-2010 period.

The tariffs set out in the 2008 decision are therefore de facto still applicable. On 14 July 2015, BIPT has

submitted to a public consultation (until 1 September 2015) a draft decision proposing the fixed termination

rates (FTR) for the period 2016-2019 for all fixed operators holding a significant market power (symmetric

rates). The draft decision foresees sharp decrease as from 1 January 2016.

On 3 February 2015, the Luxembourg regulator, ILR, published a decision on the review of the fixed

terminating market. The text sets the maximum fixed termination rate at 0.14 eurocents/min from 1 March

2015 until 31 December 2016 (from 0.72 eurocents/min previously).

The last monthly rental fee for unbundled copper line (BRUO) has been set at EUR 8.03 since 15 August

2010 following a Court ruling of 30 June 2010. As the BRUO tariffs are a building block for bitstream

(BROBA ADSL) tariffs, these tariffs were adapted accordingly at the same time. Since 2008, Proximus has

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offered wholesale broadband access (WBA) (VDSL2 bitstream). On 2 August 2010, BIPT adopted a decision

on the monthly rental for WBA. The CRC decision of 1 July 2011 concerning the wholesale broadband

market has imposed a strict cost orientation for WBA. On 13 January 2015, BIPT has taken a decision

concerning the wholesale tariffs for Ethernet transport for bitstream services applicable as from March. This

decision is the first applicable result of the modelling exercise started in 2011 and aiming to define new cost

oriented regulated tariffs for Proximus. It had an impact on the BROBA and WBA prices that were modified

again on 1 May 2015 as a consequence of the application of the new WACC. BIPT intends also to review the

BROBA and WBA access prices in the context of its new “NGN cost model”.

By its decision of 19 February 2014, BIPT has formally approved the modalities for the deployment of the

vectoring technology on Proximus’ VDSL2 network as from February 2014. Vectoring is a technology that

allows the boosting of download speeds by reducing interference between the copper loops in the same

bundle.

Fiber to the home (FTTH) technologies are currently not included in the scope of the Belgian regulation. The

BIPT will address the question regarding the regulatory treatment of FTTH in the context of its review of the

market analysis for broadband (timing unknown).

On 11 September 2013, the Commission adopted its Recommendation on “consistent non-discrimination

obligations and costing methodologies to promote competition and enhance the broadband investment

environment”. This Recommendation provides guidelines on how costing of copper assets should be done and

under which circumstance price regulation on new network investments can be lifted. Proximus prices for

unbundled services are at the low end of this Recommendation.

On 23 May 2014, the directive aiming at a reduction of the cost of roll-out of broadband networks was

published. The text aims to achieve this by measures such as promoting sharing of infrastructure, better

coordination of civil works, better information about the infrastructure, etc. Civil engineering, such as digging

up roads to lay fibre, can account for up to 80% of the costs of deploying high-speed networks and the

Commission claims that these measures can save as much as 30% on the cost of rolling out a fibre network.

Member States have to transpose the Directive into their national legislations by 1 January 2016 and must

apply the new measures by 1 July 2016. As the directive only sets minimum requirements, Member States

may adopt additional measures in this area.

Proximus is currently moving to a next generation network based on IP and new technologies. Certain

elements of Proximus plans in this respect (outphasing and migration of legacy technologies such as ATM and

SDH, migration from PSTN to IP solutions, building outphasing) affect existing wholesale product services.

These are subject to regulatory analysis and/or approval by BIPT. The measures were defined in the CRC

decision of 1 July 2011 and include: (i) an obligation to provide information to alternative operators on

network changes for the next five years on a “high” level; (ii) the modalities to keep buildings open (five

years except for building without OLO presence); (iii) measures to oblige continuation of LLU services.

Proximus made a formal request to shorten the delay to two years.

The improvement of the quality of the wholesale operational services of Proximus is one of BIPT’s

priorities and it has undertaken several actions in this respect: (i) an audit of the operational processes in 2009

focused on non-discrimination between retail and wholesale with regard to the delivery of broadband lines,

the efficiency of the operational processes and proposals for improvements and the implementation of IT

adaptations, (ii) a decision of August 2011 imposed additional operational obligations; (iii) organisation of

operational workgroups with Proximus and the alternative operators with the aim to reach a consensus on

required changes on wholesale processes. In its decision on the analysis of the LLU and wholesale broadband

markets of 1 July 2011, BIPT maintained a strong focus on operational excellence for wholesale services. In

December 2013, BIPT published a decision on operational aspects of the unbundling and bitstream which

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covers, inter alia, a series of modifications to improve the readability and transparency of Proximus’ reference

offers and re-evaluates the objectives and compensations of some SLAs (Service Level Agreements) (mainly

repair) which are made stricter than the former levels. BIPT clearly states in its decision that a breach by

Proximus of its quality of service obligations can lead to the imposition of a fine. On 17 February 2014,

Proximus lodged an appeal against the BIPT decision of December 2013 as far as the obligations regarding

the SLA objectives and compensations are concerned. New draft decisions imposing detailed obligations on

operational aspects were submitted to consultation in March and June 2015. On its side, the Commission,

with its Recommendation of 11 September 2013 on “consistent non-discrimination obligations and costing

methodologies to promote competition and enhance the broadband investment environment” aims to ensure a

level playing field through the application of strict non-discrimination rules.

On 20 May 2014, BIPT has fined Proximus EUR 403.000 for alleged errors in the technical specifications

of its wholesale VDSL reference offer "WBA" (limitations of certain features not accurately described). BIPT

considers that Proximus was in breach of its "transparency obligation" regarding its regulated reference offers.

The reference offer was updated in November 2012. This follows a complaint lodged by an alternative

operator that claimed that the errors affected their ability to develop services to compete with Proximus.

Proximus has appealed this decision. Proximus, Mobistar and KPN/BASE have been designated as a SMP on

the mobile terminating market. All operators have an obligation regarding cost orientation. A first glide path

for the mobile termination rates (MTR) was imposed in August 2006 in the first round market analysis for the

period 2006 - 2008. During the period 2008 - 2010, the MTR remained unchanged pending the adoption of

the second round market analysis decision. In application of the BIPT decision of 29 June 2010 setting a new

glide path for the period 2010-2013, MTR in Belgium have been set at a rate of 1.18 eurocents/min (incl.

inflation). for the three mobile operators since 1 January 2013. This last step of the glide path imposed in

2010 has therefore finally established fully symmetric MTR in Belgium bringing Belgium in line with the

Commission Recommendation and the European practices in other Member States.

BIPT is currently developing a new cost model to determine MTR tariffs as from 2016. On 21 November

2013, BIPT communicated the preliminary version of this MTR cost model to the mobile operators.

On 14 July 2010, Mobistar and KPN/BASE each filed a separate appeal against the BIPT decision of 29

June before the Brussels Appeal Court. After rejecting the request for suspension on 15 February 2011, the

Appeal Court eventually decided on 24 September 2014 to annul the decision while maintaining its effects

until 30 June 2015. The Court annulled the BIPT decision because BIPT did not consult the regional

regulators in the decision process. Mobistar and KPN/BASE lost the appeal on all other arguments. After

consultation of the regional regulators, BIPT adopted on 6 May 2015 a “repair” decision that confirmed the

glide path set by the former decision and maintained it until the entry into force of a new one expected by the

end of 2015. So there is no impact.

In Luxembourg, final MTR have been set by the regulator, ILR, at 0.97 eurocent/min as from 1 April 2015.

Tango has decided to appeal this decision. The MTR had already been set provisionally at 0.98 eurocent/min

by a decision of ILR of 6 January 2014. In the meantime this decision has been annulled by the Luxembourg

Administrative Court following to an appeal launched by Tango. ILR has appealed this ruling on 23 April

2015.

NUMBERING

From 1 April 2010, Proximus implemented, where appropriate, a new collection model for Premium Rate

Services on behalf of third-party content provider. This is a consequence of the Circular Letter issued at the

end of 2009 by the Belgian Ministry of Finance concerning the application of VAT on Premium Rate Services

and Tax on Chance Games. As a result, the relevant collected revenues are no longer considered as full

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Proximus revenues. This is also in conformity with the European VAT changes to the place of supply of

telecommunication and electronic services that have entered into force in 2015.

The Royal Decree of 24 March 2009 modifying the Royal Decree on Numbering of 2007 aligned the

maximum retail pricing to Premium Rate Services from mobile networks to the level of calls from fixed

networks. This decision undermined the retention of the mobile operators when the other elements of the

value chain remain unchanged. Agreements to launch a reasonable wholesale tariff for VAS calls from its

mobile network were possible as from 1 March 2012 via a reconciliation procedure with BIPT.

On 2 July 2013, a Royal Decree speeding up the process to switch operator with number portability (NP)

was published. The shortest delay is applicable for simple mobile installations (one mobile number) for which

the text imposes a one working day delay between the NP request sent to the CRDC (central reference

database center for NP) and the effective porting of the number. If the NP process is delayed, the customer

can request his or her new operator to be compensated for EUR 3 to EUR 5 per day of delay and per number.

The Royal decree also imposes a simplification of the validation process for both fixed and mobile NP and the

possibility for NP of simple installations on Saturday. The implementation due by 1 October 2013 has been

completed.

As the IP addresses used in the internet (IPv4) are nearly exhausted, the internet world prepares the migration

to IPv6 addresses offering a huge amount of addresses. Several projects are running at Proximus to gradually

introduce IPv6 for its customers. During the EU council of 5 December 2013, the Telecom Minister stressed

the need of an EU recommendation on IPv6.

End 2014, BIPT consulted the market on possible changes of some principles related to the management of

the national numbering plan taking into account the evolution of the market since the publication of the

related Royal Decree in 2007. Based on this first consultation, BIPT will issue a second consultation -

expected by the end of 2015 - related to the detailed changes in the Royal Decree.

USE OF PUBLIC DOMAIN

Based on Article 98 § 2 of the Law of 21 March 1991, use of the public domain by telecommunication

operators cannot be taxed or otherwise encumbered. However, as the Regions have competence regarding the

legal regime of their own road infrastructure and that of the municipalities, they can impose (or authorise the

municipalities to) an authorisation system and retributions for the private use of their public domain.

According to article 173 of the Constitution, this retribution must be a fee asked for an individual service

rendered by the public authority and proportioned with the cost linked to the service.

INTERNATIONAL ROAMING

The first Regulation (limited to voice calls) that entered into force in June 2007 imposed price caps on

wholesale and retail tariffs in mid-2007, mid-2008 and mid-2009. On 1 July 2009, the European Roaming II

Regulation amending the first Regulation entered into force. Additional reductions in voice roaming charges

(retail and wholesale prices) were introduced for 2010 and 2011. A retail cap combined with a wholesale cap

was set for SMS roaming as from 1 July 2009 for outgoing SMS. Data roaming services have also been

regulated at wholesale level based on a price cap (calculated on a kilobyte basis). The Roaming II Regulation

expired on 30 June 2012 and the Roaming III Regulation entered into force on 1 July 2012. The new

Regulation has imposed a further lowering of the existing regulated retail and wholesale price caps (from 35

eurocents to 19 eurocents for retail outgoing calls and from 11 eurocents to 6 eurocents for retail SMS by 1

July 2014) and has extended the roaming regulation to retail data as from July 2012 (70 eurocents per

megabyte on 1 July 2012 decreasing to 20 eurocents per megabyte as from 1 July 2014). In addition, two

structural measures to encourage competition have been introduced: (i) MVNO wholesale access from 1 July

2012 and (ii) de-coupling, i.e. separate selling of roaming services from domestic mobile services, from 1 July

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2014. The regulation also lays down rules aimed at increasing price transparency and improving the provision

of information on charges to roaming customers.

The Roaming III Regulation should have expired in principle on 30 June 2022. However, in the meantime, the

EU Council and Parliament have, on 30 June 2015, reached an agreement on the future of the roaming

charges. As from 15 June 2017, provided that the legislative act on the wholesale roaming review is

applicable on this date, ‘Roam-Like-At-Home’ will be implemented in the EU zone with the obligation to

charge retail roaming within the EU at domestic retail price, except for the consumption beyond the Fair Use

Policy (to prevent abusive use of roaming). For roaming that goes beyond fair use, a small fee may be

charged. This fee cannot be higher than the maximum wholesale rate that operators pay for using the

networks of other EU countries. The limit for Fair Use will be defined by the Commission by 15 December

2016. To make the end of roaming charges sustainable throughout the EU, the current wholesale rates need to

be brought down. To achieve this, the Commission will be mandated to review the wholesale roaming market

and propose a new law by 15 June 2016. In addition, safeguards will be introduced to address the recovery of

costs by operators. This will apply to all existing and new customers automatically (opt out possibility).

During the transitory period from April 2016 until June 2017, operators will be able to apply a surcharge not

exceeding the current regulated wholesale rates 5 eurocents/ minute for calls, 2 eurocents for texts and 5

eurocents per megabyte for data). For calls received, the maximum surcharge will be the weighted average of

maximum mobile termination rates across the EU, to be set out by the Commission by the end of 2015. The

sum of the domestic price and any surcharge cannot in any case be higher than the current retail caps 19

eurocents/ minute for calls, 6 eurocents for texts and 20 eurocents per megabyte of data). This will apply to all

existing and new customers automatically (opt out possibility). The TSM text will be finalised under

Luxembourg presidency. Final approval by the EU Parliament plenary and EU Council is expected in

September/October 2015.

PROTECTION OF END USERS

Consumer protection is subject to special scrutiny by the Belgian and European authorities.

The 2005 Law contains a number of rules aimed at protecting end-users mainly by ensuring more

transparency, for example an obligation to inform the customers on tariff modifications or an obligation to

mention once per year the most interesting tariff plan on the invoices.

The law modifying the 2005 Law to transpose the 2009 EU framework was adopted on 10 July 2012. This

law has strengthened the consumer protection rules and introduced new measures related to contract

regulation imposing: (i) contract duration of 24 months maximum for consumers and obligation to propose a

12 month maximum contract to all customers, (ii) possibility of early termination of fixed term contracts after

6 months (without any penalty except potential reimbursement of residual value of a free device) for

consumers and small enterprises; and (iii) specific conditions applicable to the replacement of an existing

contract by a new fixed term contract.

In 2013, several decrees have pursued the implementation of the law of 10 July 2012, amongst other

things, (i) the Royal Decree implementing the one day delay for number portability entered into force on 1

October 2013, (ii) the Royal Decree defining the modalities to be applied to send free-of-charge alerts to the

customers in case of abnormal or excessive consumption to avoid bill shocks has been applicable since 1

February 2014, (iii) the Royal Decree defining the content of the standard information sheets that the

operators will have to prepare for each price plan in order to allow a comparison between the offers entered

into force on 1 July 2014. In addition, the operators have been obliged since 1 November 2013 to publish a

series of information in favour of disabled people and since 1 July 2013, all fixed broadband operators need to

inform new customers about the internet speed (download and upload) they can expect. On 15 October 2013,

a Ministerial Decree defining new requirements regarding the specifications on the basic invoice was

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published. Since 1 February 2014, the basic invoice has to mention the volume of data used for internet. The

law of 27 March 2014 modifying the telecom law of June 2005 has been published in the Official Journal on

28 April. The text foresees additional consumer protection obligations (best tariff plan regulation extended to

internet and packs, modification of tariff plan is possible once per year for free and without any penalty within

the same operator, e-mail portability extended from 6 months previously to 18 months). The law entered into

force on 8 May 2014 except the new provisions about the best tariff plan that will enter into force six months

after the BIPT decision setting the modalities of these obligations. Concerning the extension of the best tariff

plan, BIPT informally asked the sector to communicate their vision and considerations as to the

implementation of this obligation. BIPT should submit a draft decision for consultation by end 2015

BIPT monitors the application of the law by the operators. On 28 June 2010, BIPT imposed a fine of EUR

800,000 on Proximus for the incomplete information of its retail customers when it reviewed its broadband

offers in March 2010. Proximus has challenged this decision but the appeal did not suspend payment of the

fine. On 23 September 2011, the Appeal Court confirmed the shortcomings in Proximus’ communication but

stated that the intentional nature of the errors was not established and decreased the fine to EUR 500,000. A

fine of EUR 250,000 was also imposed to Telenet in November 2011 for a similar infringement. On 5

December 2012, BIPT published the results of the first controls it has performed in October about the

application of the new provisions of the new law of 10 July 2012 relating to contractual obligations (contract

duration, early termination of fixed term contracts including notice period, indemnities to be paid and

presentation of table with residual value of free devices). The first controls focused on mobile services and

were performed via the call centers and the points of sales of Proximus, Mobistar, KPN/BASE and Telenet.

The results of these controls were considered as globally satisfactory for the four operators but BIPT will

continue to monitor the situation to check if the quality of the responses persists over time. In February 2013,

BIPT imposed a fine of EUR 30,000 to Telenet and Mobistar and of EUR 10,000 to Scarlet for incomplete

information on customers’ invoices. On 8 April 2014, the BIPT published a decision imposing a fine of EUR

5,000 to Schedom for non-compliance with the telecom law, in particular (i) the obligations related to the

notification of tariff increases and the possibility of free exit after such increase; (ii) the conditions imposed

by Schedom for early termination of fixed term contracts and (iii) the lack of certain information in the

general conditions. In 2013 and early 2014, BIPT performed a control of the information provided by 13

Belgian operators in their general conditions in compliance with the telecom law (access to emergency

services, right to cancel contract in case of change of contractual conditions, interests rates contract

termination after 6 months, terms of compensation and reimbursement in case of failure). On 3 October 2014,

BIPT has published the results of this control. BIPT general conclusion is that almost no operator was

compliant at the start of the control. BIPT had then sent a letter to the operators (for Proximus this concerned

only the lack of information about the access to emergency services) asking them to adapt their general

conditions. No sanction has been imposed but BIPT considers this control as a warning to the operators. On 8

January 2015, BIPT published the results of the control performed for several operators concerning the

transparency obligation towards disabled people. In its communication, BIPT concludes that Proximus and

Scarlet, as well as the other controlled operators comply with the transparency obligations. In its

communication, the BIPT also provides the results of an inquiry performed on the accessibility of the web

pages of the different operators. The main conclusions are that (i) the operators do not communicate

sufficiently or efficiently with the disabled persons or their associations; (ii) the accessibility of the web pages

is too low (both from a technical point a view and for the content); (iii) the wording used is not uniform and

not always easy to understand. BIPT will consult all the stakeholders on how to improve the equality of

access for disabled users. This should be made ideally on a voluntary basis (through a Chart as in France). On

18 November 2014, BIPT informally interrogated Proximus on its compliance with the Royal decree of 9 July

2013 regarding the mobile cost control. BIPT (i) established that Proximus does not in all cases sent a 0€

warning and (ii) asked Proximus to correct certain erroneous information regarding consumption warnings on

its website. The information was corrected and an audit was organised to check on failures. However no

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failures regarding the 0€ could be found and the BIPT was informed of this. The BIPT did not question

Proximus any further on this issue.

A new consumer protection law has been published in the Official Journal of 30 December 2013. This law is

mainly a codification of the current law (inclusion in the new “Code de droit Economique/Wetboek van

economisch recht”) and contains also new articles related to the transposition of the European Consumer

Rights Directive of 10 October 2011 that aims to strengthen consumers' rights in EU countries, particularly

when shopping online. The new legislation on market practices foresees a stricter regulation concerning

distance selling (including wider pre-contractual information, reimbursement of the consumer within 14 days

in case of renunciation and the requirement to mention ‘obligation to pay’ near the ordering button on the

website). Additionally some modifications are foreseen concerning the sale at loss, delivery term and default

options.

There is currently no specific net neutrality legislation in Belgium but new rules will be imposed at EU level

in the context of the Telecom Single Regulation on which the EU Council and Parliamment reached an

agreement in June 2015 and that introduces for the first time this principle in the EU law. The new rules

foresee in particular that all traffic must be treated equally and prohibit blocking or throttiling of traffic.

Reasonable traffic management will be allowed based on justified technical requirements. Offer of

“Specialised services” of higher quality will still be allowed if they are not supplied at the expense of the

quality of the open Internet. “Zero rating” (also called “sponsored connectivity” i.e. a commercial practice

used by some providers of Internet access, especially mobile operators, not to count the data volume of

particular applications or services against the user's limited monthly data volume) will be allowed but will be

monitored by regulators. Regulators will receive powers to monitor and enforce the new rules and set

minimum quality of service requirements. Effective, proportionate and dissuasive penalties will be imposed in

case of infringement. The new rules will officially apply as of 30 April 2016.

In Belgium, the 2005 Law as revised by the law of July 2012 contains transparency obligations regarding

traffic management and impact on quality of service. The law also gives BIPT the possibility to impose

minimum quality of service requirements to prevent the degradation of service and the hindering or slowing

down of traffic over networks. Legislative proposals have been made in 2011 with a view either to create a

specific ‘net neutrality Act’ or even to enshrine the net neutrality principle in the Belgian. In January 2014, the

Belgian law was suspended awaiting the definition of new net neutrality rules at EU level in the context of the

abovementioned “Telecom Single Market” package but following the elections of May 2014, new legislative

initiatives on net neutrality have been submitted in the Parliament and are following the legislative process. In

the past, both BIPT and the Council of State had released negative advice as to the appropriateness and

reasonability of the proposals.

BIPT also puts a strong focus on transparency about the availability of networks in Belgium. On 15 July

2015, BIPT published on its website an “Atlas” of the mobile internet coverage in Belgium (data from 15

April 2015). This atlas enables the consumers to verify the coverage of each of the three mobile operators

(BASE Company, Mobistar and Proximus) individually or together, on the map of Belgium. The map also

distinguishes between 2G, 3G and 4G. Since the accuracy differs from operator to operator it is not possible

to compare the national or municipal coverage of different operators displayed at the maps. The maps will be

renewed and published every 3 months, following inspections and random checks by BIPT. In the near future,

BIPT will also launch a measuring campaign mapping the typical user experience of the operators (such as the

possibility to successfully upload or download a file of a given size). In a second phase the coverage of the

fixed networks will be represented in the Atlas. BIPT has not yet communicated on a possible publication date

or on the progress of this part of the project.

BIPT has consulted the market until 1 July 2015 about concrete modalities aimed at facilitating migration for

the consumers (residential clients) of fixed services (telephony, internet, TV and packs) (so-called “Easy

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Switch project”). The draft foresees in particular a “One stop shopping” procedure (inspired by the current

number portability process), the obligation for the operators to establish a signed visit report describing the

field intervention or to prove the absence of customer and compensations for the customers in case of delay in

the execution of the migration.

RETAIL SERVICES AND PRICES

Proximus’ fixed retail access and national call prices are subject to certain restrictions such as prohibitions

on excessive pricing, predatory pricing and margin squeeze. Proximus is also subject to certain transparency

obligations. Since September 2014 however the obligation to pass reductions in mobile wholesale termination

tariffs on to its fixed telephony customers has been removed by the decision concerning the third round

analysis of the national retail fixed voice traffic markets (residential and business) that decided to de-regulate

these markets. Following a notice served on Proximus for failure to fully reflect a MTR reduction in the fixed

telephony tariffs, BIPT imposed a fine on Proximus on 25 July 2008 (Proximus’ appeal is still pending).

National mobile and broadband retail tariffs are not subject to ex-ante price controls but competition law

remains applicable ex-post for these services. Prices of retail leased lines were submitted to a cost

orientation obligation but a BIPT decision of 20 August 2013 has deregulated this market and thus removed

this obligation.

In the context of the universal service obligation, (see below), the price cap mechanism (not applied

previously as value has never been set) has been replaced by an obligation to apply uniform tariffs across

Belgium. These tariffs should not be higher than the cheaper standard tariff for services of equivalent quality.

In addition, Proximus as well as the other operators with a turnover exceeding EUR 50 million must offer

special tariffs for end users with special social needs (so-called “social tariffs” ).

A new law implementing a significant reform of the Belgian competition and price control law entered into

force on 6 September 2013. This law introduces a special price control mechanism, allowing the Competition

College of the Competition authority to easily intervene in a certain sector if analyses of the ‘Price

Observatory’ show that companies in such sector apply higher prices or have higher margins than what is

“normal”, or if the price evolution in such sector deviates from what is “normal”. Measures thus adopted by

the Competition College need to be confirmed/rejected by the Appeal Court which in principle needs to adopt

a position within six months.

Since 2012, the Telecom Minister has commissioned several benchmarks (both international and national). In

addition, there has been increased attention from BIPT and the competition authority on price squeeze tests

(verification of margin between wholesale and retail prices) and discount policy.

UNIVERSAL SERVICE AND ADDITIONAL SERVICES

Since the liberalisation of the telecoms market in 1998, the Belgian scope of the Universal service (“USO”)

has been quite extensive. The basket of services comprised in particular (i) the provision of access to the

public network, basic fixed telephony services and “functional internet” at specified quality levels, across the

entire Belgian territory to any person requesting such service, (ii) the obligation to maintain a number of

public payphones (2000 in 2012), (iii) a universal enquiry service (iv) a universal telephone directory, (v)

continuous delivery of voice telephony service in the event of non-payment of bills (lifeline services) and (vi)

social tariffs. Proximus was designated as “default provider” for all these elements of the USO, except for the

social tariffs where the obligation concerned all fixed and mobile operators.

The law of 10 July 2012 amending the 2005 Law has opted for a new organisation of the USO by foreseeing

that BIPT or the government can decide or advise to abolish certain obligations depending on market offer

conditions. BIPT decided on 6 May 2013 to lift the universal payphone obligation for Proximus or any other

provider, with immediate effect. Likewise the Government, on advice of BIPT, decided by Royal Decree of

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15 December 2013 that no new obligations must be imposed for the directory enquiry information services

as well as for the paper and electronic directories. BIPT has to monitor the quality and (financial)

availability of these services that will continue to be provided on a commercial basis. In case they would state

a negative impact on the level of consumer protection, new obligations might be imposed.

The law formerly limited functional access to narrowband. However the notion of functional internet access

has been extended by the law of July 2012 to include broadband provisioning. A Royal Decree will have to

determine the required minimum speed that Belgian citizens are entitled to. The Royal Decree of 2 April 2014

has set the required minimum speed that Belgian citizens are entitled to at 1 Mbps (100% coverage for

reasonable requests) all the time except one hour/day maximum. Once the minimum speed will have been

formally set, the provision of internet access with this minimum speed will have to be guaranteed to all. BIPT

proposes an open procedure and will make sure that this procedure will allow application by consortiums of

operators using different technologies. Proximus may submit an application or, in absence of a successful

open procedure, BIPT might decide to assign Proximus or any operator as default broadband USO provider.

The current law restricts the obligation to offer the legal social tariffs to the fixed and mobile operators with a

turnover exceeding EUR 50 million. Smaller operators can provide these tariffs on a voluntary basis, provided

that they are willing to commit for five years. In addition to the reductions offered on fixed and mobile voice,

the beneficiaries can also spend their legal reduction on all tariff plans (fixed and mobile voice, internet,

packs).

So far, Proximus has never been compensated for providing the Universal Service. The former funding

system set up in 2005 for the social tariffs was withdrawn following appeals introduced by competitors before

the Belgian and EU Courts. The law of 10 July 2012 has modified the financing system of social tariffs and

has foreseen calculation of the net cost and a potential financing as from mid-2005. Proximus renewed its

request for compensation immediately after the entering into force of this law. Mobistar and KPN/BASE

jointly filed a request for annulment of the new legal provisions before the Belgian Constitutional Court

regarding the inclusion of the social tariffs for mobile voice and internet subscriptions in the Universal

Service obligations compensation system and the retro-activity of the right to ask for compensation for the net

costs related to the offer of social tariffs. On 19 December 2013, the Constitutional Court rejected the appeal

of KPN/BASE and confirmed the possibility of retroactive funding since 2005. However BIPT still has to

determine if there was a net cost and an unfair burden. The Court also decided to submit a prejudicial question

to the EU Court of Justice regarding the compatibility with the Universal Service directive of social tariffs

related to internet and mobile voice. On 11 June 2015, the EU Court issued its final ruling indicating that the

inclusion of mobile telephony in the social tariffs is not compatible with the EU directive. The Court does not

oppose to social tariffs for internet subscription via a connection at a fixed position (without clarifying this

concept or its implications in terms of universal service speeds that may be imposed). The Court stated that if

Belgium wishes to impose “additional mandatory services” for mobile telephony, the funding of these

services cannot be made through the sectorial universal service fund. The case will now go back to the

Belgian court that will have to take the final decision. In the meantime the Telecom Minister has announced a

modification of the law to modernise the social tariffs.

The Belgian law instructs BIPT to operate a database containing who can benefit from social tariffs.

Operators consult this database to verify if customers are effectively entitled to receive social discounts. 90%

of the investment and 100% of the maintenance costs have to be shared by the industry based on allocation

keys defined by law. Proximus bears approximately three quarters of the total costs of the database. In

December 2011, the costs were set at EUR 726,000 for the year 2006. In April 2013, two Royal Decrees set

these costs at EUR 1.2 million and 1.23 million for the periods 2007 to 2011 and 2012 to 2013 respectively.

On 22 July 2013, Proximus together with Mobistar and Telenet initiated proceedings against both Royal

Decrees. On 30 June 2015, the Council of State annulled the possibility for the BIPT to turn to the sector for

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investment and maintenance costs of the social database from 2007 until 13 April 2013 (date of the Royal

Decrees). Such sector financing requires an a priori approval by the government and since such approval was

only given on 13 April 2013, it can only support sector financing for the period between April 2013 and end

of 2013.

Under the 1991 law, Proximus was obliged to provide mandatory services such as leased lines, public

switched data services, ISDN, telex and telegraph. Under the 2005 Law, these obligations may be imposed

on at least one operator. Until the appointment of another operator, Proximus remained obliged to provide

these services (under the exception of the telex that was stopped). This designation of Proximus as sole

provider ended on 1 August 2013.

Proximus is also obliged, pursuant to the terms of the Management Contract that it concluded with the

Belgian State, to provide certain “missions of general interest” to the Belgian public. Under this provision,

Proximus must provide limited services for civil defence and was also responsible for ensuring Internet

connectivity to hospitals, schools and libraries in Belgium. This latter obligation has been withdrawn by a

Royal Decree of 16 June 2015.

In addition, the 2005 Law imposes an obligation to provide special telephone rates to Belgian press agencies

as well as national newspapers and certain weekly magazines. The 2005 Law has foreseen that a Royal

Decree has to appoint the operators in charge of these services. No funding is foreseen for the provision of

these services. Such decree has never been adopted.

MEDIA/CONTENT

In 2005, Proximus launched an IPTV offer based on xDSL technologies. In this respect, Proximus Skynet has

set up a specific subsidiary, Skynet iMotion Activities (SiA), that is in charge of broadcasting the content of

the programmes (football and VoD offer). Proximus itself is network operator and distributor of TV services

through its “Proximus TV” platform service. For these activities, Proximus and SiA are subject to a series of

obligations imposed by the media legislations of the different Communities. In 2009, the media decrees of the

French and Flemish speaking communities were modified to implement the EU directive on Audiovisual

media services of 2007. In particular they have put an end to the strict obligations in terms of quota for the

VOD activity (broadcasting of minimum percentages of certain programmes). The quotas have been replaced

by an obligation of promotion of these programmes.

On 10 July 2013, the Flemish Parliament voted a decree modifying the existing Flemish Media Decree with

regard to “signal integrity”. The text foresees that distributors of TV signals will have to transmit linear

television programmes unshortened, unaltered and in their entirety, and further, that distributors have to obtain

the prior approval from each broadcaster in the Flemish Community in respect of each “functionality” which

allows watching linear TV programmes in a way that is delayed, shortened or altered. The explanatory

statement to a previous version of the draft decree referred explicitly to functionalities as, inter alia, overlays,

search engines, EPG and time shifted TV. Proximus has concluded agreements with the concerned

broadcasters ensuring compliance with the decree and has decided not to challenge the relevant provisions of

the Media Decree before the Constitutional Court.

On 17 January 2014, the Flemish Parliament voted a decree introducing a regulation related to the stimulation

of the audiovisual sector in the Flemish Community. The “Investment Obligation Decree” modifies the

existing Flemish Media Decree and spells out a new principle for the distributor to participate to the

stimulation of the audiovisual sector by a yearly financial contribution. Contribution is to be paid either via a

coproduction in audiovisual works or via payment to the Flemish Media fund. In addition, the financial

participation represents either a lump sum of EUR 3 million/year or a yearly fee per subscriber in the Flemish

Community of EUR 1.3. The Investment Obligation Decree is also completed by an Executive Act voted on

21 March 2014 containing the various modalities of the investment obligations (eligible projects, deadlines,

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approval procedure, etc). So far, Proximus has decided to comply with its obligation through investements in

TV series.

On 21 February 2014, the Flemish Parliament voted a decree modifying the Flemish Media Decree by

amending the provisions related to the remuneration of the regional broadcasters. The Decree spells out

amongst other the principle for the Flemish regional broadcasters to be remunerated by the TV distributors as

follows: each Flemish regional broadcaster will receive from the distributor a yearly remuneration

corresponding to EUR 2.3 (indexed) per subscriber receiving the regional broadcaster. An executive Act with

the various terms and conditions related to this contribution has been voted and a new remuneration system

entered into force, based on the number of subscribers per region.

On 6 July 2015, the European Commission started a public consultation (until 30 September) to consider

possible changes to the Audiovisual Media Services Directive (AVMSD), which regulates TV services in

the EU. As part of the Commission's Digital Single Market strategy, the AVMSD will be reviewed in 2016 to

see whether it is working well and if it needs to be changed to take account of new online services offered

across borders. The main questions in the consultation are whether stakeholders think the current directive is

working well or should be improved, what roles and responsibilities should market players (broadcasters, on-

demand service providers, internet services, telecom operators, etc.) have, and how to protect viewers

(particularly children), promote European works and access to information and regulate advertising in the

audiovisual online world. Some of the issues under consideration include expanding the scope of the

directive. It currently applies to linear and on-demand services, but not to internet services hosting user-

generated content (like YouTube, Vimeo, etc.). Broadcasters also face stricter rules in some areas, such as

facilitating access for disabled people, not showing content that could harm children or promoting European

cultural works. The Commission will consider whether these elements should also be extended to on-demand

services. In addition, the AVMSD requires companies providing services across the EU to adhere to the rules

only of the country under whose jurisdiction they fall. Given the increasingly cross-border media market, this

system may be up for reform.

ROLE AND AUTHORITY OF THE NATIONAL REGULATOR (BIPT)

The Belgian Institute for Postal services and Telecommunications, commonly referred to as the ‘BIPT’,

operates in Belgium as a federal sector-specific regulator for both the post and the telecoms sector.

Its missions are primarily defined in the law of 17 January 2003 on the BIPT status and in the law of 13 June

2005 on electronic communications. BIPT has a mandate to monitor markets, tariffs and the implementation

of cost orientation, as well as interconnection and access obligations. BIPT controls the compliance with the

user protection rules. In March 2014. BIPT also got a new arbitration power through a binding decision upon

request of all parties.

In addition, BIPT must perform the market analysis on a regular basis. It has also the authority to grant

authorisations and the final authority to approve reference offers.

In case of infringement, BIPT may impose to remedy (immediately or within its own set timing). The

obligation to remedy can be accompanied by (i) measures to remedy and/or (ii) administrative fine (max. 5%

of annual turnover). If remedies are not sufficient, a new fine can be imposed (up to a maximum of 10% of

annual turnover). BIPT can also make retroactive decisions to correct decisions annulled by a court. In

addition, the BIPT has since March 2014, the power to impose fines without prior formal notice (even for past

infringements).

The BIPT Council is the head of BIPT and is responsible for overseeing the day-to-day operations of BIPT. It

also has the power to represent BIPT before the courts and to perform all actions required for carrying out the

missions of BIPT. BIPT must fund its operations from the proceeds received from licensing and other fees

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paid by all licenced operators, with the exception of concession fees paid by the mobile operators. On 1

September 2013, a new Chairman of BIPT was appointed following the annulment of the nomination of his

predecessor by the Council of State. In April, BIPT published its draft second Strategic Plan. BIPT intends to

focus on seven priorities including consumer protection and promotion of innovation, competition and

investments. This plan contains some positive signals on investments and proposes a more proportional

approach on regulation. The mandate of the current BIPT Council ends in November 2015.

Another law adopted on 17 January 2003 as modified by a law of 31 May 2009 provides for an appeal

procedure against BIPT decisions. Third parties, including the Minister of Telecommunications, may appeal

against BIPT decisions to the Brussels Appeal Court pursuant to a summary procedure that is normally

applied to matters of special urgency. These appeals do not have a suspensive effect, unless the Court grants

suspensive effect to the appeal.This law also gives the Belgian Competition College authority to resolve

disputes regarding, among others, interconnection, special access and unbundling of the local loop. In

addition, on the basis of its competence to monitor compliance with the 1991 Law, BIPT still intervenes in

these disputes between operators, in particular through conducting its own proceedings. BIPT also has now an

arbitration power in case of disputes between operators (operators asking arbitration by BIPT should however

renounce to proceedings before the Competition Authority).

Under Belgian’s institutional system, radio and television broadcasting fall within the competences of the

regional authorities (the Communities). Specific regulators have been created: CSA (Conseil Supérieur de

l’Audiovisuel) in the French-speaking community: VRM (Vlaamse Regulator voor de Media) in the Flemish

community and Medienrat in the German-speaking community. For Brussels, the Federal State is competent

and BIPT has been designated as the regulator for the media sector.

The increased convergence has in recent years led the Belgian telecoms and media authorities to intensify

their collaboration in particular when regulating broadcasting and broadband markets (in application of the

cooperation agreement concluded in 2007).

COOPERATION WITH JUSTICE, SECURITY AND EMERGENCY SERVICES

Pursuant to the Code on Criminal Procedure, the judicial authorities can order telecoms network operators and

telecoms service providers amongst others to identify a subscriber of a telecoms service or to tap or record

private communications. A Royal Decree was published on 4 March 2013 to reduce the compensation of

telecoms network operators and telecoms service providers for the collaboration with judicial authorities. A

consultation with the sector took place to further reduce the compensation for this collaboration in line with

the cost model determined by BIPT.

The Data Retention Directive 2006/24 of 15 March 2006 introduced new obligations on data retention notably

in relation to internet services. A new data retention law was published on 23 August 2013 and a Royal decree

describing the modalities was published in the Official Journal on 8 October 2013. On 11 June 2015, the

Constitutional Court has declared the Belgian law invalid. The Constitutional Court follows the ruling of the

European Court of Justice that, on 8 April 2014, invalidated the Data Retention Directive of 2006 since the

day it was adopted, on the grounds that it constitutes a “serious interference” with fundamental privacy rights

which goes beyond “what it is strictly necessary” to fight against serious crime (disproportionality). A draft

new law repairing this situation has been submitted to the sector for consultation.

The 2005 Law obliges the telecoms operators to contribute to the costs of the emergency services centers. If

operators deploy new technologies, they should contribute to the costs for changing the interfaces to the

emergency services (e.g. introduction of emergency calls via SMS or localisation of mobile caller). The costs

will be shared between all operators based on the number of active fixed lines and active mobile users. A fund

for the emergency services was created and is managed by BIPT. A first decision was made by the Fund

requesting the mobile operators to contribute for the period from 2009 until 2013.

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In December 2013, BIPT consulted the market about a draft law that will allow public authorities at different

levels to send a communication to warn the public of an imminent danger or to reduce the consequences of a

disaster. Mobile operators will have to send these messages to the customers present in a specified area.

Further consultations are expected to stipulate the modalities before being imposed by Royal Decree.

To reduce the intervention time of the emergency services on-site in case of traffic accidents, the “e-call”

system was introduced in Europe. E-call is a harmonised intellige7nt traffic system for alerting the emergency

services from a car. The implementation is foreseen for 2018.

In the application of the law of 1 July 2011 concerning the critical infrastructure, telecoms operators operating

such infrastructure must adopt internal security measures and appoint a contact person in this matter. BIPT is

in charge of making an inventory of such telecoms infrastructure in Belgium.

On 7 May 2013, BIPT launched a public consultation on the notification modalities for telecom operators

towards BIPT in case of network/service security incidents, loss of network integrity or breaches of personal

data in accordance with the 2005 Law. The final decision of 1 April 2014 is based on the Technical Guidelines

on Incident Reporting issued by ENISA (European Network and Information Security Agency). The decision

contains the thresholds requiring a notification to BIPT, the timeframe in which the notifications must be

made, the method and content of the notification.

LITIGATION

From time to time, Proximus has been subject to legal, regulatory and tax proceedings and claims arising in

the ordinary course of its business. Proximus is currently involved in various judicial and regulatory

proceedings, including those for which a provision has been made and those described below for which no or

limited provisions have been accrued, in the jurisdictions in which it operates concerning matters arising in

connection with the conduct of its business. These include also proceedings before the Belgian Institute for

Postal services and Telecommunications (‘BIPT’), appeals against decisions taken by BIPT, and proceedings

with the Belgian tax administrations with respect to corporate income taxes and local taxes.

1. Between 12 and 14 October 2010, the Belgian Directorate General of Competition started a dawn raid in

Proximus’ offices in Brussels. This investigation concerns allegations by Mobistar and KPN regarding

the wholesale DSL services of which Belgacom (now Proximus) would have engaged in obstruction

practices. This measure is without prejudice to the final outcome of the full investigation. Following the

inspection, the Directorate General of Competition is to examine all the relevant elements of the case.

Eventually the College of Competition Prosecutors may propose a decision to be adopted by the

Competition Council. During this procedure, Proximus will be in a position to make its views heard.

(This procedure may last several years). During the investigation of October 2010, a large number of

documents were seized (electronic data such as a full copy of mail boxes and archives and other files).

Proximus and the prosecutor of the Competition authority exchanged extensive views on the way to

handle the seized data. Proximus wanted to be sure that the lawyers “legal privilege” (LPP) and the

confidentiality of in house counsel advice were guaranteed. Moreover, Proximus sought to prevent the

Competition Authority from having access to (sensitive) data that were out of scope. Not being able to

convince the prosecutor of its position, Proximus started two proceedings, one before the Brussels Appeal

Court and one before the President of the Competition Council, in order to have the communication of

LPP data and data out of scope to the investigation teams suspended. On 5 March 2013, the Appeal Court

issued a positive judgment in this appeal procedure by which it ruled that investigators had no authority

to seize documents containing adviceof company lawyers and documents that are out of scope and that

these documents should be removed/destroyed. To be noted that this is a decision on the procedure itself

and not on the merits of the case. On 14 October 2013, the Competition authority launched a request for

cassation against this decision. Proximus has joined this cassation procedure.

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In March 2014, KPN has withdrawn its complaint; Mobistar remaining the sole complainant.

On 3 May 2013 Mobistar launched a claim for damages against Proximus before the commercial court of

Brussels for allegedly wrongful and/or abusive termination by Belgacom (now Proximus) of negotiations

with Mobistar on the conclusion of a commercial agreement on DSL-based services. Proximus contests

Mobistar’s claims entirely, particularly as Mobistar has publicly expressed at several occasions its interest

for and its intention to obtain wholesale access from the cable operators. A hearing before the

Commercial Court is set for May 2016.

2. In June 2003, KPN Group Belgium (operating under the brand name BASE) filed an action for damages

against Proximus (former Proximus Mobile – operating under the brand name Proximus) before the

Commercial Court of Brussels, with Mobistar joining this action with an own claim in March 2004. KPN

and Mobistar claimed that Proximus had abused its dominant position by applying inappropriately low

prices for on-net calls (calls from Proximus to Proximus) with KPN also claiming that Proximus had

applied mobile termination rates (MTR) that were too high. Both operators claimed for compensation.

On 29 May 2007, an interim decision of the Commercial Court of Brussels found Proximus to be

dominant between 1999 and 2004, rejected several claims and appointed two experts to examine

questions related ot the allegations concerning price squeeze and anti-competitive network effects, and to

assess whether damage was caused, and -if so- to attempt evaluating the damage. On 2 October 2009,

these experts filed a (first) preliminary report that concluded to the existence of the alleged competition

law infringements and in particular, on the basis of an unprecedented and prospective method, that it

could be considered that the alleged impact on Mobistar and KPN Group Belgium of the Proximus on-net

tariffs during the years 1999-2004 amounted to EUR 1.182 million. On 10 December 2010, the two

experts filed another (second) preliminary report.

Notwithstanding the detailed critical observations that had been submitted to the experts by Proximus on

all aspects ot their first report, this second report basically reiterated the findings of the first report, but

found the alleged impact amounted to EUR 1.840 million. According to Proximus, this second report did

not provide any demonstration of the alleged infringements of the competition rules. Proximus also noted

that the vast majority of its observations remained unanswered and that moreover Proximus’ own expert

reports were largely disregarded. For this and a number of other reasons, Proximus introduced on 21

January 2011 a motion with the court in respect of the expert panel, requesting their recusal/replacement.

Following the dismissal by the Commercial Court on 17 March 2011 of Proximus’ motion, an appeal

procedure was initiated by Proximus. The Court of Appeal decided on 6 March 2012 that the experts

indeed committed several errors and refrained systematically from replying appropriately to Proximus’

observations, thus affecting the rights of defense and failed to respect several other principles governing

judicial expert proceedings. The Court consequently decided that the experts had to be replaced and that

the judicial expert proceedings should be restarted by new experts.

Upon a joint proposal by the parties, the Court of Appeal of Brussels appointed on 1 October 2012 such

new experts. Both KPN Group Belgium and Mobistar continue to contest the replacement of the former

court experts through actions with the Court of Cassation. These former court experts also started a

procedure against the judgment of 6 March 2012 (“tierce opposition”) replacing them. On 31 December

2012, the newly appointed court experts informed the Court of Appeal and the Commercial Court of their

decision that, for various reasons, they would not pursue their assignment.

On 14 October 2013, the Cassation Court rejected the appeal of KPN Group Belgium and Mobistar

against the replacement of the court experts. Following this ruling, Mobistar and KPN Group Belgium

relaunched the designation procedure, which led to a joint proposal of all the parties to designate two new

experts. Meetings between the experts and parties took place in the second quarter of 2014 (including an

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initial exchange of documents as requested by the experts). After the communication of a first document

established by the experts Mobistar and KPN Group Belgium have strongly criticised the work

performed by the experts.

In the meantime, Proximus lodged an appeal against the initial decision of 29 May 2007 of the

Commercial Court and this was followed by the filing of cross-appeals against the said judgement by

both KPN and Mobistar. The Court will ultimately determine (i) whether anti-competitive practices have

been committed and whether Proximus’ MTR failed to respect its regulatory obligations, (ii) whether

Proximus is liable for such practices, and (iii) whether damages are to be paid and the amount of such

damages. Proximus continues to submit at the required stages of the proceedings its detailed observations

and criticisms that cover all aspects of the pending matter. Indeed, this matter does not only involve a

debate on the possible damages that would have been caused, but first the existence of the alleged

infringements is to be demonstrated. Proximus continues to contest the claims of both KPN Group

Belgium and Mobistar.

On 26 February 2015, the Court of Appeal of Brussels gave an interlocutory judgement in which it

modified the decision of the first judge of 2007. The Court first confirmed that there was no reason for

examining further the allegations related to the alleged absence of cost orientation of the termination rates

that had already been rejected by the first judge. However, with respect to the alleged abuses of

dominant position, the Court considered that there were sufficient indications to extend the court expert

proceedings to all the alleged abuses as well as with respect tot the reference period for Mobistar, an

extension to 2005. On 8 June 2015, Proximus lodged an appeal with the Supreme Court against the

judgment of 26 February 2015, which it contests heavily. Given the complexity of the case and the

number of arguments raised by Proximus, the procedure before the Supreme Court may take some time.

Following the interlocutory judgment on 26 February 2015, Base and Mobistar have requested the

replacement of the current experts. On 14 July 2015, the Court of Appeal of Brussels has rejected this

request of replacement. Consequently, the experts, now confirmed, have resumed their work as of July

2015.

3. In the proceedings following a complaint by KPN Group Belgium in 2005 with the Belgian Competition

Authority the latter confirmed on 26 May 2009 one of the five charges of abuse of dominant position put

forward by the Prosecutor on 22 April 2008, i.e. engaging in 2004-2005 in a “price-squeeze” on the

professional market. The Belgian Competition Authortiy considered that the rates for calls between

Proximus customers (“on-net rates”) were lower than the rates it charged competitors for routing a call

from their own networks to that of Proximus (= termination rates), increased with a number of other costs

deemed relevant. All other charges of the Prosecutor were rejected. The Competition Authority also

imposed a fine of EUR 66.3 million on Proximus (former Belgacom Mobile) for abuse of a dominant

position during the years 2004 a,d 2005. Proximus was obliged to pay the fine prior to 30 June 2009 and

recognised this charge (net of existing provisions) as a non-recurring expense in the income statement of

the second quarter 2009. Proximus filed an appeal against the ruling of the Competition Authority with

the Court of Appeal of Brussels, contesting a large number of elements of the ruling: amongst other the

fact that the market impact was not examined. Also KPN Group Belgium and Mobistar filed an appeal

against said ruling. The parties are exchanging briefs to organise the access to the file.

4. The Belgian tax authorities notified a foreign subsidiary of the Group in 2007 to be considered as a tax

resident of Belgium rather than of Luxembourg and therefore to be subject to Belgian corporate income

tax for the year 2004. In 2008, the Belgian tax authorities maintained their 2004 assessment and assessed

the Belgian corporate income tax for the subsequent years 2005 and 2006 for a total amount of EUR 69

million excluding interest. The Court of Brussels decided in June 2014 in favour of Proximus. The tax

authorities filed an appeal against this decision.

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5. On June 16, 2015 the Constitutional Court annulled the Walloon decree which introduced for 2014 a

regional tax on GSM infrastructure of 8,000 euro per site and which gave the Walloon municipalities the

possibility to impose an additional surtax for an equivalent amount. Nevertheless, the Constitutional

Court deemed that the tax could be upheld for the previous years, "given the financial problems that the

annulment decision would entail”. Proximus continues to appeal all pending cases.

MANAGEMENT

Proximus Governance Model

At Proximus, the Articles of Association are strongly influenced by the specific legal status of the company.

As a limited liability company under public law, Proximus is in the first instance governed by the Law of 21

March 1991 on autonomous public sector enterprises (the 1991 Law). For matters not explicitly regulated

otherwise by the 1991 Law, Proximus is governed by Belgian corporate law. The key features of Proximus’

Governance model are:

a Board of Directors, which defines Proximus’ general policy and strategy and supervises operational

management;

the creation by the Board of Directors within its structure of an Audit and Compliance Committee, a

Nomination and Remuneration Committee and a Strategic and Business Development Committee;

a Chief Executive Officer, who takes primary responsibility and ownership for operational

management (including, but not limited to, day-to-day management);

a Management Committee, which assists the Chief Executive Officer in the exercise of her duties.

Designation applicable Code on Corporate Governance

Proximus designates the 2009 Belgian Code on Corporate Governance as the applicable Code.

Departure from the 2009 Belgian Corporate Governance Code

Proximus complies with the principles and provisions of the 2009 Belgian Corporate Governance Code,

except provisions 4.6 and 4.7. Although provision 4.6 stipulates that mandates of Directors should not exceed

four years, the mandates of Proximus Directors are for six years as prescribed by article 18 of the 1991 Law.

Where provision 4.7 states that the Board appoints its Chairman, article 18§5 of the 1991 Law foresees that

the Chairman is appointed by the Belgian State by Royal Decree deliberated in the Council of Ministers.

Board of Directors

As provided for in the 1991 Law, the Board of Directors is composed of:

- Directors appointed by the Belgian State in proportion to its shareholding;

- Directors appointed by a separate vote among the other shareholders, for the remaining seats. These

directors are independent according to the criteria of article 526ter of the Belgian Company Code and the

criteria of the Belgian Corporate Governance Code. The Board of Directors is composed of maximum 16

members, including the person appointed as Chief Executive Officer.

The Board of Directors meets whenever the interests of Proximus so require or at the request of at least two

directors. In principle, the Board of Directors meets every year in four regularly scheduled meetings. The

Board of Directors must also evaluate the strategic long-term plan in an extra meeting each year.

In general, the Board’s decisions are made by a simple majority of the Directors present or represented,

although for certain issues, a special majority is required.

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The Board of Directors has adopted a Board Charter which, together with the charters of the Board

Committees, reflects the principles by which the Board of Directors and its Committees operate.

The Board Charter provides, among other things, that important decisions should have broad support,

understood as a qualitative concept indicating effective decision-making within the Board of Directors

following a constructive dialogue between Directors. They should be prepared by standing or ad hoc Board

Committees having significant representation of non-executive, independent Directors within the meaning of

Article 526ter of the Belgian Company Code.

The members of the current Board of Directors of Proximus are as follows:

Name Age Position Director since Term Expires

Dominique Leroy(1) 50 CEO 2014 2020

Stefaan De Clerck(1) 63 Chairman 2013 2019

Theo Dilissen(1)(3) 61 Director 2004 2015

Martin De Prycker(2) 50 Director 2015 2019

Martine Durez(1) 65 Director 1994 2019

Laurent Levaux(1) 59 Director 2013 2019

Isabelle Santens(1) 55 Director 2013 2019

Paul Van de Perre(1) 61 Director 1994 2019

Guido J.M. Demuynck(2) 64 Director 2007 2019

Carine Doutrelepont(2) 55 Director 2004 2016

Pierre Demuelenaere(2) 56 Director 2011 2017

Agnès Touraine(2) 60 Director 2014 2018

Lutgart Van den Berghe(2) 63 Director 2004 2016

Catherine Vandenborre(2) 45 Director 2014 2018

(1) Appointed by the Belgian State

(2) Appointed by the shareholders’ meeting and independent

(3) The mandate of Theo Dilissen would normally have taken an end on 28 February 2015. According to the by-laws of the company, it

is up to the Belgian State to renew this mandate or to replace this member. Awaiting a decision of the Belgian State on this matter, the

Board of Directors has, based on the principle of continuity, tacitly extended the mandate.

Dominique LEROY

Since January 2014, Dominique Leroy is the Chief Executive Officer and presides the Executive Committee

of Proximus. She joined Proximus as Vice President Sales for the Consumer Business Unit in October 2011

and was nominated Executive Vice President of the Consumer Business Unit of Proximus in June 2012.

Prior to Proximus Mrs Leroy worked for 24 years at Unilever. She was Managing Director of Unilever Belux

and member of Unilever’s Benelux Management Committee. She previously held various positions in

marketing, finance and customer development.

Mrs Leroy is member of the Boards of Tango, Telindus Luxembourg and BICS and is an independent Board

Member at Lotus Bakeries and Delhaize. Mrs Leroy holds a master in Business Engineering from the Solvay

Business School.

Stefaan DE CLERCK

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Mr Stefaan De Clerck is the Chairman of the Proximus Board of Directors since September 20, 2013. He has

been Member of Belgian Parliament from October 1990 until October 2013. From June 1995 until April 1998

and from December 2008 until December 2011 he was the Belgian Minister of Justice. He has been the

Mayor of the city of Kortrijk (Belgium) from January 2001 until end of December 2012. Mr De Clerck holds

a Master’s Degree in Law from the Catholic University of Leuven.

Theo DILISSEN

Since January 2014, Mr Dilissen is Chairman of the Board of Directors of Swissport Belgium (Swissport is an

international ground handler at airports). Since January 2011 Mr Dilissen is member of the Board of Directors

of Eurostar.

Mr Dilissen was Chairman of the Board of Directors of Belgacom (now Proximus) from October 2004 until

March 2012. From June 2010 until March 2012, he was CEO of Arcadis Belgium. From September 2005 until

the end of March 2009 he was CEO and afterwards Chairman of Aviapartner. Previously Mr Dilissen was

CEO, Managing Director and Vice-Chairman of Real Software and from 1989 to 2000 he was COO and

member of the Board of ISS (a Danish publicly listed company). He studied Sociology and holds a Master in

Business Administration.

Martin DE PRYCKER

Mr. Martin De Prycker is Managing Partner at Qbic Fund, an interuniversity fund of 41MEuro, supporting

spin-off companies in Belgium. He is also managing Director at InnoConsult, consultancy firm specialised in

Innovation Management and ICT solutions.

Mr. De Prycker was CEO of Barco between 2002 and 2009. Under his leadership he focused and made the

company grow in markets using displays such as medical, digital cinema, control and airline industry, and

spinning off the non-core product lines such as graphics, textile and subcontracting.

Prior to that, he was CTO and member of the Executive Committee of Alcatel-Lucent. Before becoming CTO

of Alcatel-Lucent, Mr. De Prycker was responsible for establishing Alcatel-Lucent’s worldwide market

leadership in the broadband access market. Under his leadership, ADSL was transformed from a research

project into a multi-billion dollar business for Alcatel-Lucent.

Between 2009 and 2013 Mr. De Prycker was CEO of Caliopa, a startup in silicon photonics, allowing the

transport of hundreds of Gbps on optical fibre.

He is a member of the Board of Directors of several companies, including Newtec, Anteryon, Track4C and

Venture Spirit.

Mr. De Prycker holds a Ph.D. in Computer Sciences, a M.Sc. in Electronics from the University of Ghent, as

well as a MBA from the University of Antwerp.

Martine DUREZ

Mrs Durez was the Chief Financial and Accounting Officer at bpost until January 2006, when she became

Chairman of the Board of bpost until June 2014. Mrs Durez was also Professor of Financial Management and

Analysis at the University of Mons-Hainaut until 2000. She has also served as a member of the High Council

of Corporate Auditors and the Committee of Accounting Standards and as a special emissary at the Cabinet

for Communication and State Companies. Since 2010, she is a member of the Royal Academy of Belgium

(Technology and Society Action). She served as a regent of the National Bank of Belgium. Mrs Durez

graduated as a Commercial Engineer and holds a PhD in Applied Economics from the University of Brussels

(ULB).

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Laurent LEVAUX

A 'magna cum laude' graduate in economics at UCL (Brussels, Belgium), Laurent Levaux began his career at

the age of 22 at the head of a small struggling company in Liège, at the time employing some 100 people.

Four years later the company was turned round, developed, and was merged with a large international group.

He next obtained an MBA from the University of Chicago (1985) before going to work for McKinsey & Co,

where he spent some 10 years, the last 4 as a partner, undertaking strategic and restructuring assignments

throughout Europe.

In 1995 he joined the Executive Committee of Belgian steel group Cockerill-Sambre as head of its non-steel

subsidiaries, in particular CMI, a loss-making company, where he was CEO. When he left CMI in February

2003, it was a debt-free, growing and profitable engineering and maintenance Group.

In March 2003, Laurent Levaux became CEO of ABX LOGISTICS, a multinational logistics group,

headquartered in Belgium, a company which suffered heavy losses since its creation in 1998.

From 2003, the results have been constantly improved to reach a level amongst the best of the industry. In

October 2008, ABX LOGISTICS merged with the Danish Group DSV, quoted in Copenhagen.

Since October 2008, Laurent Levaux is Chairman and CEO of Aviapartner.

Aviapartner, which is headquartered in Brussels, is a leading player in ground-handling services to passengers

on the European continent.

Isabelle SANTENS

Isabelle Santens is President and CEO of Andres NV, a Belgian fashion company that designs, produces and

distributes the ladies clothing brands XANDRES, XANDRESXLINE and HAMPTON BAYS. After studies at

the KUL of geography and economics she joined Andres in 1985, became Director of Design and turned CEO

in 2000. She turned the company from a mere production orientated facility to a sales & marketing driven

company with focus on building strong brands and opening pilot stores. She is also a board member in several

cultural institutions.

Paul VAN de PERRE

Mr Van de Perre is the co-founder of GIMV (Venture Capital Firm and listed on Euronext) and was formerly a

director of Sidmar (Arcelor-Mittal), Thomassen Drijver Verblifa Belgium, Sunparks (division of Sunair) and

other companies. He is currently director of Greenbridge Incubator (University of Ghent), Scientific

Investment Board (Universitry of Brussels), president of the Board of Director of Thenergo (listed on

Euronext), member of the Investment Committee of ParticipatieMaatschappij Vlaanderen (PMV). Mr Van de

Perre is CEO of Five Financial Solutions (corporate finance) and CEO of Caesar Real Estate Fund (real estate

finance). Mr Van de Perre holds an MBA in Economics and is a certified accountant (IAB).

Guido J.M. DEMUYNCK

Until December 2010, Mr Demuynck was CEO of Liquavista. Before that he held various positions within

Royal Philips Electronics NV from 1976 until 2002. Amongst others, he was Vice President Marketing Audio

in the USA, CEO of Philips in South Korea, General Manager Line of Business Portable Audio in Hong

Kong, CEO Group Audio in Hong Kong. In 2000, he became CEO Product Division Consumer Electronics in

Amsterdam and member of the Group Management Committee of Philips. In 2003, Mr Demuynck joined

Royal KPN where he became member of the Board of Management and CEO of the Mobile Division (KPN

Mobiel Netherlands; Base Belgium, E-Plus Germany). Until July 2008, he was the CEO of Kroymans

Corporation BV in the Netherlands. Mr Demuynck is also member of the Supervisory Board of Tom Tom

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since June 2005. As from May 2011, he is also a Board member of Teleplan International N.V. As from

January 2012 he is also board member of Divitel BV and Aito BV. As from March 2014 he is a board member

of WIZZ AIR Holding Plc. He holds a degree in applied economics from the university of Antwerp (UFSIA)

and a degree in marketing from the University of Ghent (R.U.G).

Carine DOUTRELEPONT

Mrs Doutrelepont is a lawyer at the Brussels’ Bar and member of the Bar of Paris. She is the founding partner

of the Belgian law firm Doutrelepont & Partners, which specialises in Information and Communication

Technologies, Intellectual property, Media law, Competition matters and European law. She holds a State PhD

in European law from the University of Brussels (ULB). She is a Professor of Media Law, Intellectual

Property Law, and European Law at the ULB Faculty of law, at the Institute for European Studies, as well as

in universities in other countries. For years, she worked as an Expert for the European Commission, at the

Belgian Senate and at the Belgian Competition Council. Since 2008, she is a Member of the Royal Academy

of Belgium (Technology and Society Section). She is the author of several books and publications. Ms.

Doutrelepont is also member of the Board of King Baudouin Foundation and of Belfius Bank.

Pierre DEMUELENAERE

Mr Pierre Demuelenaere is the co-founder, President & CEO of I.R.I.S. (Image Recognition Integrated

Systems), a company created in 1987 to commercialise the results of his PhD.

Mr Demuelenaere has more than 30 years of experience in Imaging and Artificial Intelligence. He has

accumulated a solid experience in technology company management, R&D management and setting up of

international partnerships with US and Asian companies (HP, Kodak, Adobe, Fujitsu, Samsung, Canon…).

Throughout the years, he has remained very involved in defining the R&D vision of I.R.I.S and has

contributed to the development of new technologies, new products and the filing of a number of patents.

Pierre Demuelenaere received the “2001 Manager of the Year” award and I.R.I.S. the "2002 Company of the

year" award. In 2008 Data News elected him as ICT personality of the year. He is also member of the board

of directors of Pairi Daiza, BSB and Guberna and was a director of the Board of BSB, insurance and banking

software company during 7 years.

In 2013, Pierre Demuelenaere has successfully negotiated the acquisition of I.R.I.S. Group by Canon. The

company has now become member of Canon Group.

Mr Demuelenaere is a civil engineer in Microelectronics from the Université Catholique de Louvain (UCL)

and received his PhD in applied sciences in 1987.

Agnès TOURAINE

Agnès Touraine is CEO of Act III Consultants, a management consulting firm dedicated to digital

transformation. Previously, Mrs Touraine was Chairman and CEO of Vivendi-Universal Publishing, a $4.7

billion company after having spent 10 years with the Lagardère Group as head of strategy and CEO of the

mass market division and 5 years with McKinsey. She is graduated from Sciences-Po Paris and Columbia

University (MBA). She sits on the Boards of Darty Plc and Neopost SA, as well as non-for-profit

organisations such as The French-American Foundation, The Women’s Forum and IDATE. Since May 2014

she is Chairwoman of the Board of Directors of IFA (French Governance Institute).

Lutgart VAN den BERGHE

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Mrs Lutgart Van den Berghe is Executive Director of GUBERNA (Belgian Governance Institute) and Extra-

Ordinary Professor at the University of Ghent (B). She is a Partner of the Vlerick Business School where she

served for many years as Chairman of the Competence Center "Entrepreneurship, Governance and Strategy”.

She is a Member of the Belgian Commission for Corporate Governance and Non-Executive Director in

several companies, such as ELECTRABEL (B) and BELFIUS (B). At EcoDA (European Confederation of

Directors’ Association), she is a member of the Board and chairwoman of its policy committee. Mrs Lutgart

Van den Berghe is doctor in Business Economics of the University of Ghent (B).

Catherine VANDENBORRE

Catherine Vandenborre is Chief Financial Officer at Elia. Previously, she has been member of the executive

committee of APX-ENDEX, an Anglo-Dutch gas and electricity exchange based in Amsterdam and CEO of

Belpex. She began her career at Coopers & Lybrand as an auditor.

Mrs Catherine Vandenborre is member of various Boards among which Contassur, an insurance company, and

Powernext, a French power exchange.

She holds a degree in Business Economics from the UCL as well as degrees in tax law and management of

financial risks. She attended the International Executive Program at Insead.

The business address of each of the members of the Board of Directors is the registered office of Proximus

SA, Boulevard du Roi Albert II- Koning Albert II-laan 27, B-1030 Brussels.

The Issuer is not aware of any potential conflicts of interest between the duties of the members of the Board

of Directors of the Issuer and their private interests or others duties.

Committees of the Board of Directors

In accordance with the bylaws, Proximus has:

An audit and Compliance Committee (the ACC) consisting of five non-executive Directors, the

majority of whom must be independent. The ACC meets at least once every quarter. Mr. Guido J.M.

Demuynck (Chairman), Ms. Catherine Vandenborre, Messrs. Stefaan De Clerck, Pierre Demuelenaere

and Paul Van de Perre are the current members of the ACC. In line with its charter, the ACC is chaired

by an independent Director. The ACC’s role is to assist and advise the Board of Directors in its

oversight of:

the financial reporting process;

the efficiency of the systems for internal control and risk management;

Proximus’ internal audit function and its efficiency;

the quality, integrity and legal control of the statutory and consolidated accounts and the

financial statements of Proximus, including follow up of questions and recommendations made

by the auditors;

the relationship with Proximus’ auditors and the assessment and monitoring of the

independence of the auditors,

Proximus’ compliance with legal and regulatory requirements and the compliance within

Proximus with Company’s Code of Conduct and the Dealing Code.

A Nomination and Remuneration Committee (the NRC) consisting of at least three and a maximum

of five Directors. The current members are Messrs. Stefaan De Clerck (Chairman), Martin De Prycker

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and Pierre Demuelenaere, Ms. Martine Durez and Ms. Lutgart Van den Berghe. In line with its charter,

this committee is chaired by the Chairman of the Board of Directors, who is an ex-officio member.

One member is chosen among the Directors appointed by the Belgian State. Two members must be

appointed among the independent Directors. The NRC meets at least four times a year and assists and

advises the Board of Directors regarding:

the nomination of candidates for appointment to the Board of Directors and the Board

Committees;

the appointment of the Chief Executive Officer and of the members of the Management

Committee on proposal of the CEO;

the appointment of the Secretary General;

the remuneration of the members of the Board of Directors and the Board Committees;

the remuneration of CEO and the members of the Management Committee;

the review on an annual basis of the remuneration philosophy and strategy for all personnel, and

specifically the compensation packages of top senior management;

the oversight of the decisions of the CEO with respect to the appointment, the dismissal and the

compensation of management;

the preparation of the remuneration report and the presentation of that report at the annual

shareholders’ meeting;

Corporate Governance issues.

A Strategic and Business Development Committee (the SBDC) consisting of six Directors. In line

with it charter, the Chief Executive Officer and the Chairman of the Board of Directors are ex-officio

members, and the Committee is chaired by the Chairman of the Board of Directors. One additional

member is chosen among the Directors appointed by the Belgian State. Three members must be

appointed among the independent Directors. The current members are Mr. Stefaan De Clerck

(Chairman), Ms. Dominique Leroy, Mr. Martin De Prycker, Mr. Theo Dilissen, Ms. Agnès Touraine

and Ms. Carine Doutrelepont.

The SBDC’s role is to review envisaged acquisitions, mergers and divestments over EUR 100 million

and to review large corporate restructuring programs. If appropriate, the Board of Directors can decide

on establishing a special ad hoc Committee, dealing with a specific subject, and composed of members

with the appropriate experience.

Chief Executive Officer

The Chief Executive Officer is appointed by the Belgian State by Royal Decree deliberated in the Council.

Appointments are for a renewable six-year term, and can be terminated only by Royal Decree deliberated

after discussion in the Council of Ministers. In line with the 1991 Law and Proximus’ Articles of Association,

the Chief Executive Officer is a member of the Board of Directors. The President and Chief Executive Officer

and the Chairman of the Board of Directors must come from different language groups.

The Chief Executive Officer is entrusted with day-to-day management, and reports to the Board of Directors.

In addition, in line with the 1991 Law and the company’s Articles of Association, the Board of Directors may,

deciding by a majority of two thirds of its members present or represented, delegate all or part of its powers to

the Chief Executive Officer, with the exception of:

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the approval of the Management Contract with the Belgian State and changes to it;

the establishment of the business plan and general policy of the company;

the supervision of the Chief Executive Officer;

the other powers explicitly reserved by law to the Board of Directors which include, for example, the

establishment of the annual accounts for submission to the General Shareholders Meeting and the

preparation of merger proposals.

The Board of Directors has delegated broad powers to the Chief Executive Officers.

The current Chief Executive Officer is Ms. Dominique Leroy. Ms. Dominique Leroy’s six-year fixed-term

contract started as from 13 January 2014 and will end on 13 January 2020.

Executive Committee

The members of the Executive Committee are appointed and dismissed by the Board of Directors on proposal

of the Chief Executive Officer, after consultation of the Nomination and Remuneration Committee. The

powers of the Executive Committee are determined by the Chief Executive Officer.

The Executive Committee’s role, apart from exercising the specific powers entrusted by the 1991 Law to the

Executive Committee, is to assist the CEO in the exercise of her duties.

The Executive Committee aims to decide by consensus, but in the event of disagreement, the view of the CEO

will prevail. The Executive Committee generally meets on a weekly basis. Pursuant to the 1991 Law and the

Articles of Association, the CEO serves as a member of the Executive Committee, which he chairs.

The current members of the Executive Committee, in addition to the CEO, are as follows:

Name Age Position

Sandrine Dufour 49 Chief Financial Officer

Michel Georgis 62 Chief Human Resources Officer

Philippe Vandervoort 53 Chief Consumer Market

Geert Standaert 45 Chief Technology Officer

Bart Van Den Meersche 58 Chief Enterprise Market Officer

Dirk Lybaert 54 Chief Corporate Affairs Officer

Renaud Tilmans 47 Chief Customer Operation Officer

Sandrine DUFOUR

Sandrine Dufour has been a member of the Executive Committee since January 2015 and took up the function

of Chief Financial Officer in April 2015. Prior to Proximus, Sandrine Dufour worked for 15 years at Vivendi.

From May 2013 until the end of 2014 she was Executive Vice President Finance & Strategy of the SFR

group. Before that, Sandrine Dufour was Deputy Chief Financial Officer and Director of Innovation of the

Vivendi group. She previously held various positions in Finance in France and the US. Before joining Vivendi

in 1999, Sandrine Dufour worked as a financial analyst at BNP and then at the brokerage firm CAI

Cheuvreux. She holds degrees from the ESSEC business school (École supérieure des sciences économiques

et commerciales), SFAF (French Society of Financial Analysts) and the CFA (Chartered Financial Analyst).

Michel GEORGIS

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From June 2007 until December 2011, Michel Georgis was the Executive Vice President of the Consumer

Business Unit Proximus. Since 1 January 2012 he is the Chief Human Resources Officer. He is member of the

Boards of Tango in Luxembourg, Scarlet Belgium, Wireless Technologies (The Phone House), Pension Fund

and Proximus Foundation. As of May 2005 and until the integration in January 2010, he was the CEO of

Proximus (Belgacom Mobile). Prior to this position he was as of January 2004 the Chief Operations Officer at

Proximus. He joined Proximus in January 2000 as Executive Vice President Sales, Marketing & Customer

Operations. Michel Georgis started his career in 1977 at Coca-Cola Belgium. In 1991 he joined Interbrew,

where he filled different positions before becoming Sales & Marketing Director Central & Eastern Europe.

Michel Georgis holds a Master’s degree in Applied Economics from the Catholic University of Leuven.

Dirk LYBAERT

Dirk Lybaert is Chief Corporate Affairs Officer, regrouping the following areas of responsibilities: Group

Communications, Legal, Public Affairs, Regulatory, Security Governance & Investigations, Risk Management

and Internal Audit.

He is also member of the Board of Belgacom International Carrier Services (BICS) and of Proximus Opal.

Mr Lybaert was since 2005 Secretary General of Proximus. From 1995 until 2007 he was an assistant at the

Law Faculty at the University of Brussels for the course “Named Contracts”. From 2000 to 2005 he held

different positions within the Legal department of Proximus. Prior to Proximus, he was an officer at the

Federal Police, where he reached the position of Lieutenant-Colonel, director of the Anti-Terrorism Program.

Mr Lybaert has Master’s degrees in Law, Business Law and Criminology as well as degrees in Advanced

Management and Social and Military Sciences.

Geert STANDAERT

Geert Standaert is Chief Technology Officer. He is part of the Executive Committee since March 2012. In this

function, he oversees all IT development, service engineering, technical infrastructure and operations for the

Group as well as the wholesale activities.

Mr Standaert joined the Group in 1994 and held Director positions in various disciplines, including IT,

Infrastructure Operations and Data operations before becoming Vice President Customer Operations in 2007.

Mr. Standaert holds a Master’s degree in Civil Engineering from the University of Ghent (RUG).

Renaud TILMANS

Renaud Tilmans joined the Executive Committee as Chief Customer Operations Officer in May 2014. In this

function, he works with his teams to align procedures and create synergies between the operational after-sales

activities of the different Business Units. He joined the Group in 1993 and occupied different Director

positions in the ICT and network fields before becoming Vice President Customer Operations of the

Technology & Wholesale Business Unit (previously Service Delivery Engine & Wholesale) in 2012. Renaud

Tilmans is a civil engineer and holds degrees in IT and management.

Bart VAN DEN MEERSCHE

Bart Van Den Meersche is Chief Enterprise Market Officer.

Mr Van Den Meersche joined Proximus in January 2011 after 28 years of experience in the ICT sector

through a professional career with IBM, of which 16 years in different Management positions, including 8

years as Country General Manager of IBM Belgium/Luxembourg. In his last year at IBM, he was Vice

President Industries & Business Development IBM South-West Europe and a member of the IBM South-West

Europe Executive Management Team.

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Bart Van Den Meersche holds a master in Mathematics from the Catholic University of Leuven.

Bart Van Den Meersche was during 6 years President of Agoria ICT and was also a member of the Board of

Agoria, VOKA and VBO/FEB. He is currently member of the boards of Telindus Luxembourg, Proximus

Spear IT and Belgian Mobile Wallet (Sixdots).

Phillip VANDERVOORT

Phillip Vandervoort has joined the Belgacom Group in April 2014 as Chief Consumer Market Officer. Before

he has worked with several important companies, such as Dupont de Nemours International, Union Minière,

Interbrew/Inbev and, since 2007, Microsoft Corporation. Phillip Vandervoort is industrial engineer and is a

bachelor in business administration. He is also member of the boards of Tango and Scarlet Belgium.

The business address of each of the members of the Executive Committee is the registered office of Proximus

S.A., Boulevard du Roi Albert II- Koning Albert II-laan 27, B-1030 Brussels, Belgium.

The Issuer is not aware of any potential conflicts of interest between the duties of the members of the

Executive Committee of the Issuer and their private interests or others duties.

INFORMATION ABOUT THE CAPITAL OF PROXIMUS

As at the date of this Base Prospectus, the share capital of Proximus amounts to EUR 1 billion (fully paid up),

represented by 338,025,135 shares, with no par value and all having the same rights, provided such rights are

not suspended or cancelled in the case of treasury shares.

Distribution of retained earnings of Proximus, the parent company, is limited by a restricted reserve built up

in prior years in accordance with Belgian Company Code up to 10% of Proximus’ issued capital.

Proximus has a statutory obligation to distribute 5% of the parent company income before taxes to its

employees. In the accompanying consolidated financial statements, this profit distribution is accounted for as

personnel expenses.

On 24 February 2005, the Board of Directors decided to conduct a share buy-back for a maximum amount of

EUR 300 million and for a share price that must not be more than 5% above the highest and 10% below the

lowest closing price in the thirty-day trading period preceding the transaction. The program was launched in

May 2005 and completed on 17 August 2005. In total, Proximus bought 10,613,234 shares on the stock

exchange at an average price per share of EUR 28.27.

On 25 August 2006, the Board of Directors decided to conduct a share buy-back for a maximum amount of

EUR 200 million that started on 28 August 2006 and was completed on 11 October 2006. In total, 6,782,656

shares were bought on the stock exchange at an average price per share of EUR 29.49.

On 11 April 2007, the Extraordinary General Meeting of Shareholders approved the cancellation of

23,750,000 treasury shares with a value of EUR 644 million, of which 7,450,000 with dividend rights and

16,300,000 without dividend rights.

On 18 October 2007, the Board of Directors decided to conduct a share buy-back for a maximum amount of

EUR 230 million that started on 13 November 2007 and was completed on 3 March 2008. In total, 7,038,765

shares were bought on the stock exchange at an average price per share of EUR 32.68.

On 24 July 2008, the Group decided to conduct a share buyback for a maximum amount of EUR 200 million.

The program was launched on 4 August 2008 and finalised on 26 November 2008. The Group bought back

7,379,925 shares at an average price of EUR 27.10.

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In 2011, Proximus performed a share buyback of EUR 100 million split over 2 tranches of EUR 50 million

each. In total, 4,300,975 shares were bought on the stock exchange at an average price of EUR 23.25.

On 23 October 2011, the Board of Directors approved the conversion of 2,025,774 treasury shares without

dividend rights into treasury shares entitled to dividend rights.

The voting and dividend rights in respect of shares acquired in 2003 and 2004 owned by Proximus itself are

suspended while the voting and dividend rights in respect of shares acquired by Proximus in 2005 to 2011

have been cancelled.

As a result of the buy-backs, Proximus holds 16,794,583 or 4.97% of the total shares on 31 December 2014,

of which 2,132,043 with suspended dividend rights and 14,662,495 without dividend rights. These treasury

shares will be kept by Proximus to cover existing and future employee incentive plans. Belgian law prohibits

a company to own more than 20% of its outstanding share capital.

Dividends allocated to treasury shares entitled to dividend rights are accounted for under the caption

“Reserves not available for distribution” in the statutory financial statements of Proximus SA.

Discounted Share Purchase plans

In 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013 and 2014 the Group launched Discounted

Share Purchase Plans (hereafter DSPP). Under the 2004 plan, Proximus sold 1,842,026 shares to all

employees with a discount of 16.67% compared to the issuance price of the initial public offering (EUR 24.50

per share). Under the 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013 and 2014 plans, Proximus sold

respectively 139,198, 138,549, 134,649, 125,143, 221,238, 294,304, 277,474, 208,433, 219,935 and 1,321

shares to the senior management of the Group at a discount of 16.67% compared to the market price

(respectively EUR 29.92, EUR 25.95, EUR 32.71, EUR 29.14, EUR 22.71, EUR 22.04, EUR 20.85, EUR

18.56, EUR 14.51 and EUR 19.91 per share). The cost of the discount amounted to EUR 8 million in 2004,

EUR 0.7 million in 2005, EUR 0.6 million in 2006, EUR 0.7 million in 2007, EUR 0.6 million in 2008, EUR

0.8 million in 2009, EUR 0.9 million in 2010, EUR 1.2 million in 2011, EUR 0.6 million in 2012,EUR 0.7

million in 2013 and EUR 0 million in 2014 and was recorded in the income statement as personnel expenses.

Stock Option Plan

In 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011 and 2012 Proximus launched Employee Stock Option

Plans (hereafter ESOP) whereby respectively 1,128,500, 538,541, 608,928, 475,516, 796,197, 1,008,021,

1,023,210, 1,036,061 and 840,732 share options were granted to the key management and senior management

of the Group. The Plan rules were adapted in early 2011 according to Belgian legislation.

In 2009, the Group gave the opportunity to its option holders to voluntary extend the exercise period of all the

plans (except the plan 2009) with 5 years, within the guidelines as established by the law.

The evolution of the stock plan is as follows:

Number of stock options - Plan

2004 2005 2006 2007 2008 2009 2010 2011 2012

Outstanding as at

31 December 2013

17.359 41.318 44.012 291.681 514.984 253.207 877.415 883.180 703.292

Exercisable at 31

December 2013

17.359 41.318 44.012 291.681 514.984 253.207 877.415 449.984 192.802

Movements during

the year 2014

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Number of stock options - Plan

Forfeited 0 0 0 -3.601 -1.849 -5.457 -22.208 -15.688 -13.164

Exercised -8.660 30.946 -18.522 -185.812 -398.527 -211.747 -676.896 -345.681 -148.304

Expired 0 0 0 -36.281 0 0 0 0 0

Total -8.660 -30.946 -18.522 -225.694 -400.376 -217.204 -669.104 -361.369 -161.468

Outstanding at 31

December 20148.699 10.372 25.490 65.987 114.608 36.003 178.311 521.811 541.824

Exercisable at 31

December 20148.699 10.372 25.490 65.987 114.608 36.003 178.311 521.811 296.468

Performance Value Plan

In 2013 and 2014, Proximus launched different tranches of the “Performance Value Plan” for its senior

management. Under this Long-Term Performance Value Plan, the awards granted are conditional upon a

blocked period of 3 years after which the Performance Values vest. The rights potentially exercised are

dependent on the achievement of market conditions based on Proximus’ Total Shareholder Return compared

to a group of peer companies.

After the vesting the period rights can be exercised for four years. The settlement method in equity or cash is

defined at grant date. In case of voluntary leave during the vesting period, all the non-vested rights and the

vested rights not exercised are forfeited. In case of involuntary leave or retirement, except for serious cause,

the rights continue to vest during the normal 3 year vesting period.

The group determines the fair value of the arrangement at the inception date and the cost is linearly spread

over the vesting period with corresponding increase in equity for equity settled and liability for cash settled

shared based payments.

For cash settled share-based payment the liability is periodically re-measured.

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The fair value as per 31 December 2014 amounts to EUR 10 million for 2013 tranches and EUR 7 million for

2014 tranches respectively. The annual charge for the tranches 2013 and 2014 amounts respectively to EUR 4

million and EUR 2 million. The calculation of simulated total shareholder return under the Monte Carlo

model for the remaining time in the performance period for awards with market conditions included the

following assumptions as of and 31 December 2014:

As of

31 December 31 December

2013 2014

Weighed average risk free of return 0,18% 0,23%

Expected volatility – company 19.54% 19.99%

Expected volatility – peer companies 17% – 69% 17% – 69%

Weighted average remaining measurement period 1.5 2.5

Authorised capital and acquisition of own shares

The Board of Directors of Proximus is authorised to increase the capital in one or more steps by a maximum

amount of EUR 200,000,000. This authorisation is valid for 5 years after the publication in the Belgian

Official Gazette (which took place on 27 February 2015). When deciding to increase the capital within the

framework of the authorised capital, the Board of Directors of Proximus is authorised to cancel or restrict the

preferential subscription rights of existing shareholders. All such resolutions of the Board of Directors of

Proximus require a two-thirds majority of the members present or represented.

The Board of Directors of Proximus is also authorised to increase the capital in one or more steps as from the

date of notification to Proximus by the Belgian Financial Services and Markets Authority (FSMA) of a public

takeover bid on the shares of Proximus. This authorisation is valid for 3 years from 27 February 2015 (being

the date of publication in the Belgian State Gazette).

All issues of shares, convertible bonds or warrants are subject to prior approval by the Belgian State (by

Royal Decree deliberated in the Council of Ministers). No such issues may be made to persons other than

public authorities if, as a result of the issue, the public authorities’ direct participation in the share capital at

the time of the issue would no longer exceed 50% of the share capital.

The Extraordinary Shareholders’ Meeting of Proximus of 16 April 2014 decided to authorise the Board of

Directors of Proximus to acquire shares of Proximus, provided that the fractional value of the Proximus

shares held does not exceed the legally allowed maximum of number of shares of Proximus’ capital and

subject to a price range of a minimum of 10% below and a maximum of 5% above the closing price for an

Proximus share on Euronext Brussels in a 30-day period prior to the purchase. This authorisation is valid until

16 April 2019 (i.e., for a period of 5 years as from 16 April 2014). Moreover, the Board of Directors of

Proximus is authorised to purchase or sell Proximus shares whenever the purchase or sale thereof is necessary

to prevent the company from suffering an imminent serious harm. This authorisation is granted for a period of

three years from the publication in the Belgian Official Gazette (which took place on 27 February 2015).

According to Article 13 of Proximus’ Articles of Association, the Board of Directors of Proximus is

authorised, without the prior agreement of Proximus’ Shareholders’ Meeting, to sell the Proximus shares

which Proximus has in its possession on the stock exchange.

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INFORMATION ABOUT THE DEBT INSTRUMENTS OF PROXIMUS

In November 2006, taking advantage of the favourable conditions in the bond market at that time, Proximus

successfully issued a EUR 1.65 billion inaugural bond. Proximus used the proceeds to refinance the bridge

credit facility for the acquisition of the remaining 25% stake in Proximus Mobile as well as for general

corporate purposes.

In order to finance the acquisition of the Tango Group and the Scarlet Group, Proximus increased its

debentures by EUR 375 million in November 2008 and issued a non-current unsubordinated debenture for a

nominal amount of EUR 125 million in December 2008.

All long term debt is unsecured.

This results in the situation as described below:

The 2006 bond is denominated in EUR and comprises three tranches:

- EUR 300 million with a maturity of 3 years at a variable rate with a spread of 13 bps over Euribor 3M.

This tranche matured in November 2009 and is already redeemed.

- EUR 600 million with a maturity of 5 years at a fixed rate with a coupon of 4.125%, corresponding to

a spread of 28 bps over the mid-swap rate. This tranche has been increased with EUR 175 million in

November 2008 and is already redeemed.

- EUR 750 million with a maturity of 10 years at a fixed rate with a coupon of 4.375%, corresponding to

a spread of 45 bps over the mid-swap rate. This tranche has been increased with EUR 200 million in

November 2008.

In January 2011 an institutional bond for a nominal amount of EUR 500 million was issued with a maturity of

7 years at a fixed rate with a coupon of 3,875%.

In 2013, Proximus issued 2 privately placed bonds denominated in EUR:

In March 2013, a EUR 150 million with a maturity of 15 years at a fixed rate of 3.19%

In May 2013, a EUR 100 million with a maturity of 10 years at a fixed rate of 2.256%

In March 2014, an institutional bond for a nominal amount of EUR 600 million was issued with a maturity of

10 years at a fixed rate with a coupon of 2.375%.

Additional Information

Registered Office: Boulevard du Roi Albert II/Koning Albert II-laan, 27

1030 Brussels, Belgium

VAT BE 0202.239.951, Brussels Register of Legal Entities

For Financial Information: Investor Relations

Boulevard du Roi Albert II/Koning Albert II-laan, 27

1030 Brussels, Belgium

Tel: + 32 2 202 82 41

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SELECTED FINANCIAL INFORMATION

Selected Consolidated Financial Information of the Proximus Group

BALANCE SHEET under IFRS (in EUR millions)

31 December

2013

31 December

2014

30 June 2015

ASSETS.................................................................................... 8.417 8.522 8.402

NON-CURRENT ASSETS .................................................... 6.254 6.339 6.354

CURRENT ASSETS .............................................................. 2.163 2.183 2.048

LIABILITIES AND EQUITY ................................................ 8.417 8.522 8.402

EQUITY ................................................................................. 3.042 2.969 2.913

Shareholders’ equity ............................................................ 2.846 2.779 2.746

Minority interests................................................................ 196 189 167

NON-CURRENT LIABILITIES............................................ 2.865 3.332 3.265

CURRENT LIABILITIES...................................................... 2.511 2.221 2.223

INCOME STATEMENT under IFRS (in EUR millions)

31 December

2013

31 December

2014

30 June 2015

TOTAL INCOME ................................................................ 6.318 6.112 2.994

Net revenue............................................................................. 6.239 5.961 2.961

Other operating income .......................................................... 79 89 33

Non-recurring income ............................................................ 0 62 0

TOTAL OPERATING CHARGES, excl.deprec.&

amortization............................................................................. -4.619 -4.358 -2.113

Costs of materials and charges to revenue.............................. -2.561 -2.420 -1.179

Personnel expenses and pensions ........................................... -1.142 -1.041 -505

Other operating expenses........................................................ -903 -869 -428

Non-recurring expenses.......................................................... -14 -27 -1

OPERATING INCOME before depreciation &

amortisation ............................................................................. 1.699 1.755 881

Depreciation and amortisation................................................ -782 -821 -432

120

OPERATING INCOME ......................................................... 917 933 449

Finance revenue................................................................ 17 33 15

Finance costs .......................................................................... -113 -129 -63

NET FINANCE COSTS ......................................................... -96 -96 -48

SHARE OF LOSS ON ASSOCIATES & JOINT

VENTURES ............................................................................. 0 -2 -2

INCOME BEFORE TAXES................................................... 822 835 399

Tax expense ............................................................................ -170 -154 -111

NET INCOME......................................................................... 652 682 288

Non-controlling interests ........................................................ 22 27 14

Net income (Group share) ...................................................... 630 654 274

CASH FLOW STATEMENT under IFRS (in EUR millions)

31 December

2013

31 December

2014

30 June 2015

Cash flow from operating activities ................................

Net income ............................................................................... 652 682 288

Operating cash flow before working capital changes........... 1.447 1.410 710

(Increase) / decrease in working capital, net of

acquisitions and disposals of subsidiaries ................................ -128 72 6

Net cash flow provided by operating activities ..................... 1.319 1.482 716

Net cash (used in) / provided by investing activities................. -814 -771 -501

Cash flow before financing activities ................................ 505 711 215

Net cash (used in) / provided by financing activities ................ -353 -364 -407

Net increase / (decrease) of cash and cash equivalents......... 152 347 -192

Cash and cash equivalents at 1 January................................ 202 355 702

Cash and cash equivalents at end of the period......................... 355 702 510

121

STRUCTURE OF THE GROUP

A20185750/9.1a/02 Sep 2015 122

TAXATION

The comments below are of a general nature only and are not exclusive. Prospective Noteholders who are in

any doubt as to their tax position should consult their own professional advisers.

EU Savings Directive

Under the EC Council Directive 2003/48/EC on the taxation of savings income (the EU Savings Directive),

member states of the European Economic Union (the EU Member States and each a EU Member State) are

required to provide to the tax authorities of another EU Member State details of payments of interest (or

similar income) paid by a person within its jurisdiction to (or secured by such a person for the benefit of) an

individual resident, or to (or secured for) certain other types of entity established, in that other EU Member

State, except that Austria will instead impose a withholding system for a transitional period (subject to a

procedure whereby, on meeting certain conditions, the beneficial owner of the interest or other income may

request that no tax be withheld) unless during such period it elects otherwise. A number of non-EU countries

and territories including Switzerland have adopted similar measures (a withholding system in the case of

Switzerland).

According to the Luxembourg law dated 25 November 2014, the Luxembourg government has abolished the

withholding tax system with effect from 1 January 2015 in favour of the automatic information exchange

mechanism under the EU Savings Directive. Furthermore, in October 2014, Austria reportedly agreed to a

proposal amending Directive 2011/16/EU which aims at reinforcing the current EU legislation in the field of

automatic exchange of information and which may ultimately lead to Austria abolishing the withholding

system provided for in the EU Savings Directive. This proposal was finally adopted on 9 December 2014 as

Directive 2014/107/EU on administrative cooperation in direct taxation which is further described below (see

Common Reporting Standard).

On 24 March 2014, the Council of the European Union adopted a Directive amending the EU Savings

Directive (the EU Amending Directive), which, when implemented, will amend and broaden the scope of the

requirements described above. The EU Amending Directive will expand the range of payments covered by the

EU Savings Directive, in particular to include additional types of income payable on securities, and the

circumstances in which payments must be reported or paid subject to withholding. For example, payments

made to (or secured for) (i) an entity or legal arrangement effectively managed in an EU Member State that is

not subject to effective taxation, or (ii) a person, entity or legal arrangement established or effectively

managed outside of the EU (and outside any third country or territory that has adopted similar measures to the

EU Savings Directive) which indirectly benefit an individual resident in an EU Member State, may fall within

the scope of the EU Savings Directive, as amended. EU Member States have until 1 January 2016 to adopt

national legislation necessary to comply with this EU Amending Directive, which legislation must apply from

1 January 2017.

On 18 March 2015, the European Commission has however proposed the repeal of the EU Savings Directive

from 1 January 2017 in the case of Austria and from 1 January 2016 in the case of all other EU Member

States (subject to on-going requirements to fulfil administrative obligations such as the reporting and

exchange of information relating to, and accounting for withholding taxes on, payments made before those

dates). This is to prevent overlap between the EU Savings Directive and a new automatic exchange of

information regime to be implemented under Council Directive 2011/16/EU on administrative cooperation in

the field of taxation (as amended by Council Directive 2014/107/EU). The proposal also provides that, if it

proceeds, EU Member States will not be required to apply the new requirements of the EU Amending

Directive.

123

Common Reporting Standard

The exchange of information is, in the near future, expected to be governed by the broader Common

Reporting Standard (CRS).

On 29 October 2014, 51 jurisdictions signed the multilateral competent authority agreement (MCAA), which

is a multilateral framework agreement to automatically exchange financial and personal information, with the

subsequent bilateral exchanges coming into effect between those signatories that file the subsequent

notifications.

More than 40 jurisdictions have committed to a specific and ambitious timetable leading to the first automatic

information exchanges in 2017 (early adopters).

Under CRS, financial institutions resident in a CRS country would be required to report, according to a due

diligence standard, financial information with respect to reportable accounts, which includes interest,

dividends, account balance or value, income from certain insurance products, sales proceeds from financial

assets and other income generated with respect to assets held in the account or payments made with respect to

the account. Reportable accounts include accounts held by individuals and entities (which includes trusts and

foundations) with fiscal residence in another CRS country. The standard includes a requirement to look

through passive entities to report on the relevant controlling persons.

On 9 December 2014, EU Member States adopted Directive 2014/107/EU on administrative cooperation in

direct taxation (DAC), which provides for mandatory automatic exchange of financial information as foreseen

in CRS. DAC amends the previous Directive on administrative cooperation in direct taxation, Directive

2011/16/EU.

Investors who are in any doubt as to their position should consult their professional advisers.

Belgium

The following is a general description of the main Belgian tax consequences of acquiring, holding, redeeming

and/or disposing of the Notes. It is restricted to the matters of Belgian taxation stated herein and is intended

neither as tax advice nor as a comprehensive description of all Belgian tax consequences associated with or

resulting from any of the aforementioned transactions.

Prospective investors are urged to consult their own tax advisors concerning the detailed and overall tax

consequences of acquiring, holding, redeeming and/or disposing of the Notes.

The summary provided below is based on the information provided elsewhere in this Base Prospectus and on

Belgium's tax laws, regulations, resolutions and other public rules with legal effect, and the interpretation

thereof under published case law, all as in effect on the date of this Base Prospectus and with the exception of

subsequent amendments with retroactive effect.

Applicable tax section in case of a X/N issuance of the Notes


Interest payments in respect of the Notes will be subject to Belgian withholding tax, currently at a rate of 25%

on the gross amount of the interest, subject to such relief as may be available under applicable domestic law

or applicable tax treaties.

Investors should note that the Belgian government has recently announced orally its intention to increase the

general withholding tax rate (which applies, amongst other, to interest payments) from 25 to 27%.

124

In this regard, interest includes (i) periodic interest income, (ii) any amounts paid by the Issuer in excess of

the issue price (upon full or partial redemption whether or not at maturity, or upon purchase by the Issuer) and

(iii) in case of a disposal of the Notes between two interest payment dates to any third party, excluding the

Issuer, the pro rata of accrued interest corresponding to the holding period.

Under Belgian domestic law, however, payments of interest in respect of the Notes may normally be made

without deduction of withholding tax in respect of the Notes if and as long as at the moment of payment or

attribution of interest they are held by certain eligible investors (the Eligible Investors) in an exempt

securities account (an Exempt Account) that has been opened with a financial institution that is a direct or

indirect participant (a Participant) in the Securities Settlement System. Euroclear and Clearstream,

Luxembourg are directly or indirectly Participants for this purpose.

Holding the notes through the Securities Settlement System enables Eligible Investors to receive gross interest

income on their Notes and to transfer Notes on a gross basis.

Participants to the Securities Settlement System must enter the Notes which they hold on behalf of Eligible

Investors in an Exempt Account.

Eligible Investors are those entities referred to in article 4 of the Belgian Royal decree of 26 May 1994 on the

deduction of withholding tax (koninklijk besluit van 26 mei 1994 over de inhouding en de vergoeding van de

roerende voorheffing/arrête royal du 26 mai 1994 relatif à la perception et à la bonification du précompte

mobilier) and include, inter alia:

1. Belgian companies as referred to in article 2, §1, 5°, b) of the Income Tax Code of 1992 (the Tax

Code);

2. institutions, associations or companies specified in article 2, §3 of the law of 9 July 1975 on the control

of insurance companies other than those referred to in 1° and 3°, and without prejudice to the

application of article 262, 1° and 5° of the Tax Code;

3. state-linked social security organisations and institutions assimilated thereto specified in article 105, 2°

of the Royal Decree of 27 August 1993 implementing the Tax Code;

4. non-resident investors as specified in article 105, 5° of the same Decree;

5. investment funds, recognised in the framework of pension savings, provided for in article 115 of the

same Decree;

6. companies, associations and other taxpayers within the meaning of article 227, 2° of the Tax Code,

having invested the Notes in the exercise of their professional activities in Belgium and being subject

to non-resident income tax in accordance with article 233 of the same Code;

7. the Belgian State, in respect of investments which are exempt from withholding tax in accordance with

article 265 of the Tax Code;

8. investment funds governed by foreign law being an indivisible estate managed by a management

company for the account of the participants provided that the fund units are not publicly issued in

Belgium or traded in Belgium;

9. Belgian resident companies not referred to under 1° above, when their activities exclusively or

principally consist of the granting of credits and loans.

Eligible Investors do not include, inter alia, Belgian resident investors who are individuals or non-profit

making organisations, other than those mentioned under 2° and 3° above.

125

Upon opening of an Exempt Account with the Securities Settlement System or with a Participant, an Eligible

Investor is required to provide a statement of its eligible status on a form approved by the Belgian Minister of

Finance. There are no ongoing declaration requirements for Eligible Investors, save that they need to inform

the Participants of any changes to the information contained in the statement of their eligible status. However,

Participants are required to annually provide the National Bank of Belgium with listings of investors who

have held an Exempt Account during the preceding calendar year.

These identification requirements do not apply in respect of Notes held in Euroclear or Clearstream,

Luxembourg as Participants to the Securities Settlement System, provided that Euroclear or Clearstream,

Luxembourg only hold Exempt Accounts and are able to identify each holder for whom they hold notes in

such an account.

An Exempt Account may be opened with a Participant by an intermediary (an Intermediary) in respect of

Notes that the Intermediary holds for the account of its clients (the Beneficial Owners), provided that each

Beneficial Owner is an Eligible Investor. In such a case, the Intermediary must deliver to the Participant a

statement on a form approved by the Minister of Finance confirming that (i) the Intermediary is itself an

Eligible Investor, and (ii) the Beneficial Owners holding their Notes through it are also Eligible

Investors.Participants must keep the Notes which they hold on behalf of non-Eligible Investors in a non-

exempt account (a Non Exempt Account). In such instance all payments of interest are subject to

withholding tax (currently at the rate of 25 per cent.), which is withheld by the National Bank of Belgium

from the interest payment and remitted to the Belgian Treasury.

Transfers of Notes between an Exempt Account and a Non Exempt Account may give rise to certain

adjustment payments on account of withholding tax:

• in case of a transfer from a Non Exempt Account to an Exempt Account or a Non Exempt Account,

the transferring non-Eligible Investor must remit to the National Bank of Belgium withholding tax

calculated on the pro rata of accrued interest from the last interest payment date up to the transfer date;

• in case of a transfer from an Exempt Account or a Non Exempt Account to an Non Exempt Account,

the National Bank of Belgium must refund to the acquiring non-Eligible Investor an amount equal to

withholding tax calculated on the pro rata of accrued interest from the last interest payment date up to

the transfer date; and

• in case of a transfer between two Exempt Accounts, no adjustment on account of withholding tax

applies.

Belgian tax on income and capital gains

Belgian resident individuals

Belgian resident individuals subject to Belgian personal income tax (personenbelasting/impôt des personnes

physiques) and holding Notes as a private investment, do not have to declare interest in respect of the Notes in

their personal income tax return, provided that Belgian withholding tax has effectively been levied on the

interest.

Nevertheless, Belgian resident individuals may elect to declare interest in respect of the Notes in their

personal income tax return. Interest income which is declared this way will in principle be taxed at a flat rate

of 25% (or at the relevant progressive personal income tax rate(s), taking into account the taxpayer's other

declared income, whichever is more beneficial) and no local surcharges will be due. The Belgian withholding

tax levied may be credited against the taxpayer’s personal income tax liability.

Any capital gain upon a transfer of Notes to a party other than the Issuer will in principle be tax exempt

(except to the extent the tax authorities can prove that the capital gain does not result from the normal

126

management of the individual's private estate and without prejudice to withholding tax on the interest

component if any). Capital losses on Notes are in principle not deductible.

Different rules apply for Belgian resident individuals holding Notes as a professional investment.

Belgian resident companies

For a Belgian company subject to Belgian corporate income tax (vennootschapsbelasting/impôt des sociétés),

all interest derived from the Notes and any capital gain on a transfer of Notes will form part of its taxable

basis. The standard corporate income tax rate in Belgium is 33.99%, but lower rates apply to small income

companies under certain conditions. Any retained Belgian interest withholding tax will generally, subject to

certain conditions, be creditable against any corporate income tax due and the excess amount will in principle

be refundable. Capital losses on Notes are, in principle, tax deductible.

Belgian resident legal entities

For a Belgian resident legal entity subject to legal entities income tax (rechtspersonenbelasting/impôt des

personnes morales), the withholding tax on interest will constitute the final tax in respect of such income.

It should be noted that a Belgian legal entity which qualifies as an Eligible Investor and which has received

interest free of withholding tax due to the fact that it holds the Notes through an Exempt Account with the

Securities Settlement System, will have to declare the interest and pay the applicable withholding tax to the

Belgian Treasury itself.

Any capital gain upon a transfer of Notes to a party other than the Issuer will in principle be tax exempt

(without prejudice to withholding tax on the interest component if any). Capital losses are in principle not tax

deductible.

Organisations for Financing Pensions

Interest and capital gains derived by Organisations for Financing Pensions in the meaning of the Law of 27

October 2006 on the activities and supervision for occupational retirement provision, are in principle exempt

from Belgian corporate income tax. Capital losses are in principle not tax deductible. Subject to certain

conditions, any Belgian withholding tax that has been levied can be credited against any corporate income tax

due and any excess amount is in principle refundable.

Non-residents of Belgium

For a non-resident of Belgium for Belgian tax purposes which is not holding the Notes through a Belgian

establishment or investing in the Notes in the course of a Belgian professional activity, the mere acquisition,

ownership or disposal of the Notes will not give rise to any Belgian tax liability in respect of income or

capital gains (without prejudice to withholding tax if applicable).

A non-resident company having allocated the Notes to the exercise of a professional activity in Belgium

through a Belgian establishment is subject to practically the same rules as a Belgian resident company (see

above).

Applicable tax section in case of a X-only issuance of the Notes


Payments of interest and principal under the Notes by or on behalf of the Issuer may be made without

deduction of withholding tax in respect of the Notes if and as long as at the moment of payment or attribution

of interest they are held by certain eligible investors (the Eligible Investors, see hereinafter) in an exempt

securities account (an Exempt Account) that has been opened with a financial institution that is a direct or

127

indirect participant (a Participant) in the Securities Settlement System. Euroclear and Clearstream

Luxembourg are directly or indirectly participants for this purpose.

In this regard, “interest” means (i) the periodic interest income, (ii) any amount paid by or on behalf of the

Issuer in excess of the issue price in respect of the relevant Notes (upon full or partial redemption whether or

not at maturity, or upon purchase by the Issuer) and, (iii) in case of a disposal of the Notes between two

interest payment dates, the pro rata part of accrued interest corresponding to the holding period.

Holding the Notes through the Securities Settlement System enables Eligible Investors to receive the gross

interest income on their Notes and to transfer the Notes on a gross basis.

Participants to the Securities Settlement System must enter the Notes which they hold on behalf of Eligible

Investors in an X Account.

Eligible Investors are those entities referred to in article 4 of the Belgian Royal decree of 26 May 1994 on the

deduction of withholding tax (koninklijk besluit van 26 mei 1994 over de inhouding en de vergoeding van de

roerende voorheffing/arête royal du 26 mai 1994 relatif à la perception et à la bonification du précompte

mobilier) and include, inter alia:

1. Belgian companies as referred to in article 2, §1, 5°, b) of the Income Tax Code of 1992 (the Tax

Code);

2. institutions, associations or companies specified in article 2, §3 of the law of 9 July 1975 on the control

of insurance companies other than those referred to in 1° and 3°, and without prejudice to the

application of article 262, 1° and 5° of the Tax Code;

3. state-linked social security organisations and institutions assimilated thereto specified in article 105, 2°

of the Royal Decree of 27 August 1993 implementing the Tax Code;

4. non-resident investors as specified in article 105, 5° of the same Decree;

5. investment funds, recognised in the framework of pension savings, provided for in article 115 of the

same Decree;

6. companies, associations and other taxpayers within the meaning of article 227, 2° of the Tax Code,

having invested the Notes in the exercise of their professional activities in Belgium and being subject

to non-resident income tax in accordance with article 233 of the same Code;

7. the Belgian State, in respect of investments which are exempt from withholding tax in accordance with

article 265 of the Tax Code;

8. investment funds governed by foreign law being an indivisible estate managed by a management

company for the account of the participants provided that the fund units are not publicly issued in

Belgium or traded in Belgium;

9. Belgian resident companies not referred to under 1° above, when their activities exclusively or

principally consist of the granting of credits and loans.

Eligible Investors do not include, inter alia, Belgian resident investors who are individuals or non-profit

making organisations, other than those mentioned under 2° and 3° above.

Upon opening of an Exempt Account with the Securities Settlement System or with a Participant, an Eligible

Investor is required to provide a statement of its eligible status on a form approved by the Belgian Minister of

Finance. There are no ongoing declaration requirements for Eligible Investors, save that they need to inform

the Participants of any changes to the information contained in the statement of their eligible status. However,

128

Participants are required to annually provide the National Bank of Belgium with listings of investors who

have held an Exempt Account during the preceding calendar year.

These identification requirements do not apply in respect of Notes held in Euroclear or Clearstream,

Luxembourg as Participants to the Securities Settlement System, provided that Euroclear or Clearstream,

Luxembourg only hold Exempt Accounts and are able to identify each holder for whom they hold notes in

such an account.

An Exempt Account may be opened with a Participant by an intermediary (an Intermediary) in respect of

Notes that the Intermediary holds for the account of its clients (the Beneficial Owners), provided that each

Beneficial Owner is an Eligible Investor. In such a case, the Intermediary must deliver to the Participant a

statement on a form approved by the Minister of Finance confirming that (i) the Intermediary is itself an

Eligible Investor, and (ii) the Beneficial Owners holding their Notes through it are also Eligible Investors.

Belgian tax on income and capital gains

Belgian resident individuals

The Notes may only be held by Eligible Investors. Consequently, the Notes may not be held by Belgian

resident individuals as they do not qualify as Eligible Investors.

Belgian resident companies

For a Belgian company subject to Belgian corporate income tax (vennootschapsbelasting/impôt des sociétés),

all interest derived from the Notes and any capital gain on a transfer of Notes will form part of its taxable

basis. The standard corporate income tax rate in Belgium is 33.99%, but lower rates apply to small income

companies under certain conditions. Capital losses on Notes are, in principle, tax deductible.

Belgian resident legal entities

Belgian legal entities subject to Belgian legal entities tax (rechtspersonenbelasting/ impôts des personnes

morales) and which qualify as Eligible Investors and which consequently have received gross interest income

are required to declare and pay the 25% withholding tax to the Belgian tax authorities themselves (which

withholding tax then generally also constitutes the final taxation in the hands of the relevant investors).

Capital gains realised on the sale of the Notes are in principle tax exempt, unless the capital gains qualify as

interest (as defined in the section “Belgian withholding tax”). Capital losses are in principle not tax

deductible.

Non-residents

Noteholders who are non-residents of Belgium for Belgian tax purposes and who are not holding the Notes

through a permanent establishment in Belgium will not incur or become liable for any Belgian tax on interest

income or capital gains by reason only of the acquisition or disposal of the Notes provided that they qualify as

Eligible Investors and that they hold their Notes in an Exempt Account].

Tax on stock exchange transactions

A tax on stock exchange transactions (taks op de beursverrichtingen/taxe sur les opérations de bourse) will be

levied upon the sale and purchase in Belgium of the Notes on a secondary market through a professional

intermediary. The rate applicable for secondary sales and purchases in Belgium through a professional

intermediary is 0.09% with a maximum amount of € 650 per transaction and per party. The tax is due

separately from each party to any such transaction, i.e. the seller (transferor) and the purchaser (transferee),

both collected by the professional intermediary.

129

A tax on repurchase transactions (taks op de reporten/taxe sur les reports) at the rate of 0.085% will be due

from each party to any such transaction in which a stockbroker acts for either party (subject to a maximum of

€ 650 per party and per transaction).

However, neither of the taxes referred to above will be payable by exempt persons acting for their own

account, including investors who are not Belgian residents, provided they deliver an affidavit to the financial

intermediary in Belgium confirming their non-resident status, and certain Belgian institutional investors as

defined in article 126.1,2° of the Code of miscellaneous duties and taxes (Wetboek diverse rechten en

taksen/Code des droits et taxes divers) for the tax on stock exchange transactions and article 139, §2 of the

same code for the tax on repurchase transactions.

As stated below, the European Commission has published a proposal for a Directive for a common financial

transactions tax (the “FTT”). The proposal currently stipulates that once the FTT enters into force, the

participating Member States shall not maintain or introduce taxes on financial transactions other than the FTT

(or VAT as provided in the Council Directive 2006/112/EC of November 28, 2006 on the common system of

value added tax). For Belgium, the tax on stock exchange transactions and the tax on repurchase transactions

should thus be abolished once the FTT enters into force.

The proposal is still subject to negotiation between the participating Member States and therefore may be

changed at any time.

The proposed financial transactions tax

On 14 February 2013, the EU Commission published a proposal for a Council Directive (the Draft Directive)

on a common financial transaction tax (the FTT). Pursuant to the Draft Directive, the FTT shall be

implemented and enter into effect in eleven EU Member States (Austria, Belgium, Estonia, France, Germany,

Greece, Italy, Portugal, Slovakia, Slovenia and Spain; the Participating Member States).

The Draft Directive has a very broad scope and could, if introduced, apply to certain dealings in the Notes

(including secondary market transactions) in certain circumstances.

Under the Draft Directive, the FTT could apply in certain circumstances to persons both within and outside of

the Participating Member States. Generally, it would apply to certain dealings in the Notes where at least one

party is a financial institution, and at least one party is established in a Participating Member State. A financial

institution may be, or be deemed to be, "established" in a Participating Member State in a broad range of

circumstances, including (a) by transacting with a person established in a Participating Member State or (b)

where the financial instrument which is subject to the dealings is issued in a Participating Member State.

Joint statements issued by participating Member States indicate an intention to implement the FTT by 1

January 2016.

However, the FTT proposal remains subject to negotiation between the Participating Member States, and the

scope of any such tax is uncertain. Additional EU Member States may decide to participate.

Prospective Holders of the Notes should consult their own tax advisers in relation to the consequences of the

FTT associated with the subscription, purchase, holding or disposal of the Notes.

Foreign Account Tax Compliance Act

Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986 (FATCA) impose a new reporting

regime and potentially a 30% withholding tax with respect to certain payments to (i) any non-U.S. financial

institution (a "foreign financial institution", or FFI (as defined by FATCA)) that does not become a

130

Participating FFI by entering into an agreement with the U.S. Internal Revenue Service (IRS) to provide the

IRS with certain information in respect of its account holders and investors or is not otherwise exempt from or

in deemed compliance with FATCA and (ii) any investor (unless otherwise exempt from FATCA) that does

not provide information sufficient to determine whether the investor is a U.S. person or should otherwise be

treated as holding a "United States account" of the Issuer (a Recalcitrant Holder). The Issuer may be

classified as an FFI.

The new withholding regime will be phased in beginning 1 July 2014 for payments from sources within the

United States and will apply to foreign passthru payments (a term not yet defined) no earlier than 1 January

2017. This withholding would potentially apply to payments in respect of (i) any Notes characterised as debt

(or which are not otherwise characterised as equity and have a fixed term) for U.S. federal tax purposes that

are issued after the grandfathering date, which the date that is six months after the date on which final U.S.

Treasury regulations defining the term foreign passthru payment are filed with the Federal Register, or which

are materially modified after the grandfathering date and (ii) any Notes characterised as equity or which do

not have a fixed term for U.S. federal tax purposes, whenever issued. If Notes are issued on or before the

grandfathering date, and additional Notes of the same series are issued after that date, the additional Notes

may not be treated as grandfathered, which may have negative consequences for the existing Notes, including

a negative impact on market price.

The United States and a number of other jurisdictions have announced their intention to negotiate

intergovernmental agreements to facilitate the implementation of FATCA (each, an IGA). Pursuant to FATCA

and the "Model 1" and "Model 2" IGAs released by the United States, an FFI in an IGA signatory country

could be treated as a Reporting FI not subject to withholding under FATCA on any payments it receives.

Further, an FFI in a Model 1 IGA jurisdiction would generally not be required to withhold under FATCA or an

IGA (or any law implementing an IGA) (any such withholding being FATCA Withholding) from payments it

makes. The Model 2 IGA leaves open the possibility that a Reporting FI might in the future be required to

withhold as a Participating FFI on foreign passthru payments. Under each Model IGA, a Reporting FI would

still be required to report certain information in respect of its account holders and investors to its home

government or to the IRS.

If the Issuer becomes a Participating FFI under FATCA the Issuer and financial institutions through which

payments on the Notes are made may be required to withhold FATCA Withholding if (i) any FFI through or to

which payment on such Notes is made is not a Participating FFI, a Reporting FI, or otherwise exempt from or

in deemed compliance with FATCA or (ii) an investor is a Recalcitrant Holder.

Whilst the Notes are held within the Securities Settlement System, it is expected that FATCA will not affect

the amount of any payments made under, or in respect of, the Notes by the Issuer, any paying agent and the

Securities Settlement System, given that each of the entities in the payment chain beginning with the paying

agent and ending with the Securities Settlement System is a major financial institution whose business is

dependent on compliance with FATCA and that any alternative approach introduced under an IGA will be

unlikely to affect the Notes.

FATCA is particularly complex and its application is uncertain at this time. The above description is

based in part on regulations, official guidance and model IGAs, all of which are subject to change or

may be implemented in a materially different form. Prospective investors should consult their tax

advisers on how these rules may apply to the Issuer and to payments they may receive in connection

with the Notes.

TO ENSURE COMPLIANCE WITH IRS CIRCULAR 230, EACH TAXPAYER IS HEREBY

NOTIFIED THAT: (A) ANY TAX DISCUSSION HEREIN IS NOT INTENDED OR WRITTEN TO BE

USED, AND CANNOT BE USED BY THE TAXPAYER FOR THE PURPOSE OF AVOIDING U.S.

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FEDERAL INCOME TAX PENALTIES THAT MAY BE IMPOSED ON THE TAXPAYER; (B) ANY

SUCH TAX DISCUSSION WAS WRITTEN TO SUPPORT THE PROMOTION OR MARKETING

OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) THE TAXPAYER

SHOULD SEEK ADVICE BASED ON THE TAXPAYER'S PARTICULAR CIRCUMSTANCES

FROM AN INDEPENDENT TAX ADVISER.

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SUBSCRIPTION AND SALE

Summary of Programme Agreement

The Dealers have in an amended and restated Programme Agreement (such Programme Agreement as

modified and/or supplemented and/or restated from time to time, the Programme Agreement) dated

3 September 2015, agreed with the Issuer a basis upon which they or any of them may from time to time

agree to purchase Notes. Any such agreement will extend to those matters stated under “Form of the Notes”

and “Terms and Conditions of the Notes”. In the Programme Agreement, the Issuer has agreed to reimburse

the Dealers for certain of their expenses in connection with any update of the Programme and the issue of

Notes under the Programme and to indemnify the Dealers against certain liabilities incurred by them in

connection therewith.

Selling Restrictions

United States

The Notes have not been and will not be registered under the Securities Act and may not be offered or sold

within the United States or to, or for the account or benefit of, U.S. persons except in certain transactions

exempt from the registration requirements of the Securities Act. Terms used in this paragraph have the

meanings given to them by Regulation S under the Securities Act.

Each Dealer has represented and agreed; and each further Dealer appointed under the Programme will be

required to represent and agree that, it will not offer, sell or deliver Notes (i) as part of their distribution at any

time and (ii) otherwise until 40 days after the completion of the distribution, as determined and certified by

the relevant Dealer or, in the case of an issue of Notes on a syndicated basis, the relevant lead manager of all

Notes of the Tranche of which such Notes are a part, within the United States or to, or for the account or

benefit of, U.S. persons. Each Dealer has further agreed, and each further Dealer appointed under the

Programme will be required to agree, that it will send to each dealer to which it sells Notes during the

distribution compliance period a confirmation or other notice setting forth the restrictions on offers and sales

of the Notes within the United States or to, or for the account or benefit of, U.S. persons. Terms used in the

preceding paragraph and in this paragraph have the meanings given to them by Regulation S under the

Securities Act.

Until 40 days after the commencement of the offering of any Series of Notes, an offer or sale of such Notes

within the United States by any dealer (whether or not participating in the offering) may violate the

registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with

an available exemption from registration under the Securities Act.

Public Offer Selling Restrictions under the Prospectus Directive

In relation to each Member State of the European Economic Area which has implemented the Prospectus

Directive (each, a Relevant Member State), each Dealer has represented and agreed, and each further Dealer

appointed under the Programme will be required to represent and agree, that with effect from and including

the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant

Implementation Date) it has not made and will not make an offer of Notes which are the subject of the

offering contemplated by this Base Prospectus as completed by the final terms in relation thereto to the public

in that Relevant Member State, except that it may, with effect from and including the Relevant

Implementation Date, make an offer of Notes to the public in that Relevant Member State:

(a) at any time to any legal entity which is a qualified investor as defined in the Prospectus Directive;

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(b) at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of Notes referred to in (a) and (b) above shall require the Issuer or any Dealer to

publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to

Article 16 of the Prospectus Directive.

For the purposes of this provision, the expression an offer of Notes to the public in relation to any Notes in

any Relevant Member State means the communication in any form and by any means of sufficient

information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to

purchase or subscribe the Notes, as the same may be varied in that Member State by any measure

implementing the Prospectus Directive in that Member State; the expression Prospectus Directive means

Directive 2003/71/EC (as amended, including by the 2010 PD Amending Directive) and any relevant

implementing measure in each Relevant Member State; and the expression 2010 PD Amending Directive

means Directive 2010/73/EU.

United Kingdom

Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be

required to represent and agree, that:

(a) in relation to any Notes which have a maturity of less than one year, (i) it is a person whose ordinary

activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the

purposes of its business and (ii) it has not offered or sold and will not offer or sell any Notes other than to

persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments

(as principal or as agent) for the purposes of their businesses or who it is reasonable to expect will acquire,

hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses where the

issue of the Notes would otherwise constitute a contravention of Section 19 of the Financial Services and

Markets Act 2000 (the FSMA 2000) by the Issuer;

(b) it has only communicated or caused to be communicated and will only communicate or cause to be

communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21

of the FSMA 2000) received by it in connection with the issue or sale of any Notes in circumstances in which

Section 21(1) of the FSMA 2000 does not apply to the Issuer; and

(c) it has complied and will comply with all applicable provisions of the FSMA 2000 with respect to

anything done by it in relation to any Notes in, from or otherwise involving the United Kingdom.

Japan

The Notes have not been and will not be registered under the Financial Instruments and Exchange Act of

Japan (Act No. 25 of 1948, as amended; the FIEA) and each Dealer has represented and agreed, and each

further Dealer appointed under the Programme will be required to represent and agree, that it will not offer or

sell any Notes, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (as defined

under Item 5, Paragraph 1, Article 6 of the Foreign Exchange and Foreign Trade Act (Act No. 228 of 1949, as

amended)), or to others for re-offering or resale, directly or indirectly, in Japan or to, or for the benefit of, a

resident of Japan except pursuant to an exemption from the registration requirements of, and otherwise in

compliance with, the FIEA and any other applicable laws, regulations and ministerial guidelines of Japan.

General

Each Dealer has agreed, and each further Dealer appointed under the Programme will be required to agree,

that it will (to the best of its knowledge and belief) comply with all applicable securities laws and regulations

in force in any jurisdiction in which it purchases, offers, sells or delivers Notes or possesses or distributes this

Base Prospectus and will obtain any consent, approval or permission required by it for the purchase, offer,

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sale or delivery by it of Notes under the laws and regulations in force in any jurisdiction to which it is subject

or in which it makes such purchases, offers, sales or deliveries and neither the Issuer nor any of the other

Dealers shall have any responsibility therefore.

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GENERAL INFORMATION

Authorisation

The update of the programme and the issue of Notes by Proximus has been duly authorised by a resolution of

the Board of Directors of Proximus dated 28 October 1999 which was confirmed and extended on 25 April

2001, 24 July 2008, 6 May 2010, 15 December 2012, 12 December 2013, 18 December 2014 and

30 July 2015.

Approval of Notes, Listing and admission to trading

This Base Prospectus has been approved as a base prospectus on 3 September 2015 by the FSMA in its

capacity as competent authority under the Prospectus Law, which implemented the Prospectus Directive.

Application has also been made to Euronext Brussels for Notes issued under the Programme to be admitted to

trading and listing on the regulated market of Euronext Brussels. The regulated market of Euronext Brussels

is a regulated market for the purposes of the Markets in Financial Instruments Directive.

Documents Available

For as long as the Programme remains valid with Euronext Brussels, copies of the following documents will,

when published, be available for inspection from the registered offices of the Issuer and from the specified

office of the Domiciliary Agent:

(a) the constitutional documents (with an English translation thereof) of the Issuer;

(b) the audited consolidated financial statements of the Group in respect of the financial years ended 31

December 2013 and 31 December 2014 (with an English translation thereof);

(c) the unaudited consolidated financial statements of the Group in respect of the interim period ended 30

June 2015 (with an English translation thereof);

(d) the most recently published audited consolidated annual financial statements of the Group (with an

English translation thereof) and the most recently published unaudited consolidated semi-annual

interim financial statements of the Group (with an English translation thereof);

(e) the Deed of Covenant and the Domiciliary Agency Agreement;

(f) a copy of this Base Prospectus; and

(g) any future offering circulars, prospectuses, supplements and Final Terms (save that Final Terms

relating to a Note which is neither admitted to trading on a regulated market in the European Economic

Area nor offered in the European Economic Area in circumstances where a prospectus is required to be

published under the Prospectus Directive will only be available for inspection by a holder of such Note

and such holder must produce evidence satisfactory to the Issuer as to its holding and identity) to this

Base Prospectus and any other documents incorporated herein or therein by reference.

Clearing System

Interests in the Notes will be represented by entries in securities accounts maintained with the Securities

Settlement System itself or participants or sub-participants in such system approved by the Belgian Minister

of Finance. Such participants include Euroclear and Clearstream, Luxembourg. The Securities Settlement

System maintains securities accounts in the name of authorised participants only. Noteholders, unless they are

participants, will not hold Notes directly with the operator of the Securities Settlement System but will hold

them in a securities account through a financial institution which is a participant in the Securities Settlement

System or which holds them through another financial institution which is such a participant.

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The Notes have been accepted for clearance through the Securities Settlement System. The appropriate

Common Code and identification number will be specified in the relevant Final Terms.

The address of the Securities Settlement System is SA Banque Nationale de Belgique, boulevard de

Berlaimont 14, B-1000 Bruxelles, Belgium.

Conditions for determining price

The price and amount of Notes to be issued under the Programme will be determined by the Issuer and the

relevant Dealer at the time of issue in accordance with prevailing market conditions and will be disclosed in

the applicable Final Terms.

Yield

In relation to any Tranche of Fixed Rate Notes, an indication of the yield in respect of such Notes will be

specified in the applicable Final Terms. The yield is calculated on the Issue Date of the Notes on the basis of

the relevant Issue Price. The yield indicated will be calculated as the yield to maturity as at the Issue Date of

the Notes and will not be an indication of future yield.

Significant or Material Change

There has been no significant change in the financial or trading position of the Issuer or its subsidiaries since

31 December 2014 and there has been no material adverse change in the financial position or prospects of the

Issuer or its subsidiaries as a whole since 31 December 2014.

Litigation

Save as set out on pages 102 to 105 of this Base Prospectus in relation to the Group, neither the Issuer nor any

of its subsidiaries (whether as defendant or otherwise) is or has been involved in any governmental, legal or

arbitration proceedings (including any such proceedings which are pending or threatened of which the Issuer

and its subsidiaries are aware) in the 12 months preceding the date of this document the results of which have

or have in such period had a significant effect on the financial position or profitability of the Issuer and its

subsidiaries.

Auditors

Deloitte Bedrijfsrevisoren BV ovve CVBA (represented by Geert Verstraeten and Nico Houthaeve, both

members of the IBR (the “Institut des Réviseurs d’Entreprises/ Instituut van de Bedrijfsrevisoren”)) (Deloitte)

have audited the consolidated financial statements of the Group in accordance with generally accepted

auditing standards in Belgium for each of the two financial years ended 31 December 2013 and 31 December

2014. In accordance with generally accepted auditing standards in Belgium, the auditors have issued an audit

opinion without qualification, but with an emphasis of matter in the audit report for the financial year 2014 in

relation to important events that have occurred after the end of the period regarding particular disclosure

relating to the KPN/Mobistar litigation (see “Litigation” on pages 102 to 105 of this Base Prospectus for

further information).

Dealers transacting with the Issuer

Certain of the Dealers and their affiliates have engaged, and may in the future engage, in investment banking

and/or commercial banking transactions with, and may perform services for the Issuer and its affiliates in the

ordinary course of business. Certain of the Dealers and their affiliates may have positions, deal or make

markets in the Notes issued under the Programme, related derivatives and reference obligations, including

(but not limited to) entering into hedging strategies on behalf of the Issuer and its affiliates, investor clients, or

as principal in order to manage their exposure, their general market risk, or other trading activities.

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In addition, in the ordinary course of their business activities, the Dealers and their affiliates may make or

hold a broad array of investments and actively trade debt and equity securities (or related derivative

securities) and financial instruments (including bank loans) for their own account and for the accounts of their

customers. Such investments and securities activities may involve securities and/or instruments of the Issuer

or the Issuer’s affiliates. Certain of the Dealers or their affiliates that have a lending relationship with the

Issuer routinely hedge their credit exposure to the Issuer consistent with their customary risk management

policies. Typically, such Dealers and their affiliates would hedge such exposure by entering into transactions

which consist of either the purchase of credit default swaps or the creation of short positions in securities,

including potentially the Notes issued under the Programme. Any such positions could adversely affect future

trading prices of Notes issued under the Programme. The Dealers and their affiliates may also make

investment recommendations and/or publish or express independent research views in respect of such

securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short

positions in such securities and instruments.

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27 Boulevard Roi Albert II

B-1030 Brussels

Belgium

DOMICILIARY AGENT

BNP Paribas Securities Services SCA, Brussels Branch

Boulevard Louis Schmidt 2

1040 Brussels

Belgium

LEGAL ADVISERS

To Proximus as to Belgian law

Stibbe cvba/scrl

Central Plaza - Loksumstraat 25 rue de Loxum

BE – 1000 Brussels

Belgium

To the Dealers as to Belgian and English law

Linklaters LLP

Rue Brederodestraat 13

1000 Brussels

Belgium

AUDITORS

Deloitte Bedrijfsrevisoren BV ovve CVBA

Berkenlaan 8B

B-1831 Diegem

Belgium

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DEALERS

Barclays Bank PLC

5 The North Colonnade

Canary Wharf

London E14 4BB

United Kingdom

BNP PARIBAS

10 Harewood Avenue

London NW1 6AA

United Kingdom

Crédit Agricole Corporate and Investment Bank

9, quai du Président Paul Doumer

92920 Paris La Défense

France

ING Bank N.V., Belgian Bank

Avenue Marnix 24,

1000 Brussels

Belgium

J.P. Morgan Securities plc

25 Bank Street

Canary Wharf

London E14 5JP

United Kingdom

KBC Bank NV

Havenlaan 2

B-1080 Brussels

Belgium

Lloyds Bank plc

10 Gresham Street

London EC2V 7AE

United Kingdom

The Royal Bank of Scotland plc

135 Bishopsgate

London EC2M 3UR

United Kingdom

BELGIUM LISTING AGENT

BNP Paribas Securities Services, SCA, Brussels Branch

Boulevard Louis Schmidt 2

1040 Brussels

Belgium