Exhibit (a)(5)(i)
* * * *
This communication does not constitute an offer or invitation to purchase any securities or a solicitation of an offer to buy any securities, pursuant to the proposed offer (the “Offer”) for the shares of Portugal Telecom, SGPS, S.A. (“PT”), or otherwise. The Offer will be made solely by an offer document containing and setting out the terms and conditions of the Offer (the “Offer Document”) and the letter of transmittal and form of acceptance (the “Acceptance Forms”), which will contain details of how the Offer may be accepted. In the United States, Sonae, SGPS, S.A. (“Sonae”), and Sonaecom, SGPS, S.A. (“Sonaecom”), will be filing a Tender Offer Statement containing the Offer Document, the Acceptance Forms and other related documentation with the US Securities and Exchange Commission (the “SEC���) on Schedule TO (the “Tender Offer Statement”) and PT is expected to file a Solicitation/ Recommendation Statement on Schedule 14D-9 (the “Solicitation/Recommendation Statement”) with the SEC after the Offer Document is made available to PT shareholders. Free copies of the Schedule TO, the Schedule 14D-9 and the other related documents to be filed by Sonae or Sonaecom and PT in connection with the Offer will be available from the date the Offer Document is made available to PT shareholders on the SEC’s website at http://www.sec.gov. The Offer Document and the Acceptance Forms will be made available by Sonaecom or its duly designated agent to all PT shareholders at no charge to them. PT shareholders are strongly advised to read the Offer Document and the Acceptance Forms, and any other relevant documents filed with the SEC, as well as amendments and supplements to those documents because they will contain important information. PT shareholders in the United States are also advised to read the Tender Offer Statement and the Solicitation/Recommendation Statement because they will contain important information.
Unless otherwise determined by Sonae and/or Sonaecom and permitted by applicable law and regulation, the Offer will not be made, directly or indirectly, in or into, or by use of the mails of, or by any other means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of, or of any facility of a national securities exchange of Canada, nor will it be made in or into Australia or Japan and the Offer will not be capable of acceptance by any such use, means, instrumentality or facilities or from within Australia, Canada or Japan. Accordingly, unless otherwise determined by Sonae and/or Sonaecom and permitted by applicable law and regulation, neither copies of this announcement nor any other documents relating to the Offer are being, or may be, mailed or otherwise forwarded, distributed or sent in or into Australia, Canada or Japan and persons receiving such documents (including custodians, nominees and trustees) must not distribute or send them in, into or from such jurisdictions.
Notwithstanding the foregoing, Sonae and/or Sonaecom retains the right to permit the Offer to be accepted and any sale of securities pursuant to the Offer to be completed if, in its sole discretion, it is satisfied that the transaction in question can be undertaken in compliance with applicable law and regulation. The availability of the Offer to persons not resident in Portugal or the United States may be affected by the laws of the relevant jurisdiction. Persons who are not resident in Portugal or the United States should inform themselves about and observe any applicable requirements.
The Offer will be made by Sonae and/or Sonaecom and (outside the United States) by Banco Santander de Negócios Portugal, S.A., on its or their behalf.
* * * *
MAY 2006
1
Disclaimer
This presentation is provided for information purposes only and does not constitute, nor must it be interpreted as, a
solicitation or recommendation to acquire or dispose of any investment or to engage in any other transaction. Any
decision to buy or sell securities is the exclusive responsibility of the user. The presentation contains some
statements which constitute forward-looking statements which are based on the beliefs and assumptions of our
management and on information available to management at the time such statements were made.
These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to
predict. Further, certain forward-looking statements are based upon assumptions as to future events that may not
prove to be accurate. Therefore, actual developments and results may differ materially from the information,
opinions or intentions reflected in this presentation.
Forward-looking statements speak only as of the date they are made, and Sonaecom does not undertake any
obligation to publicly update them in light of new information or future developments or to provide reasons why
actual results may differ. Recipients are invited to consult the documentation and public information filed by
Sonaecom with the Portuguese Securities Exchange Commission (CMVM).
DISCLAIMER
2
INDEX
1. ABOUT SONAECOM
2. BUSINESS UNITS – 1Q06 HIGHLIGHTS
3. CONSOLIDATED 1Q06 RESULTS
4. CHALLENGES GOING FORWARD
5. CORPORATE DEVELOPMENT
6. MORE ON SONAECOM
3
ABOUT
SONAECOM
ABOUT SONAECOM
MISSION STATEMENT
Sonaecom is an entrepreneurial growth company whose ambition is to be the best Portuguese
communication services provider and the company of choice for exceptional people to work and
discover their full potential.
Sonaecom relentlessly pursues the creation of innovative products, services and solutions that
fulfil the needs of its markets and generate superior economic value
5
ABOUT SONAECOM
FINANCIAL HIGHLIGHTS
2005
1Q05
€ Millions
Turnover
EBITDA
Margin
Net Profit (1)
CAPEX
EBITDA-CAPEX
(1) Net Profit after Minority Interest
843
157
19%
2
197
44
22%
4.6
35
2.6
1Q06 RESULTS BETTER THAN EXPECTED, DUE TO BENEFITS OF OUR GROWTH ORIENTED INVESTMENT STRATEGY
1Q06
197
39
20%
0.1
3.0
y.o.y.
0.0%
-11.3%
-2.5pp
-96.8%
14.2%
Free Cash Flow
12
-17.8
-19.5
-9.6%
122
41.4
36.1
-12.9%
6
ABOUT SONAECOM
OPERATIONAL HIGHLIGHTS
POSITIVE OPERATIONAL DEVELOPMENTS AT THE TELECOMS BUSINESSES IN CUSTOMER BASE, CUSTOMER
REVENUES AND LEADING INDICATORS IN 1Q06
1Q05
€ Millions
Customers (EOP) (000)
Data as % Service Rev.
Minutes of Use
ARPU (euros)
Total Services (EOP)
Direct Services (EOP)
2,135
9.9%
108.7
22.2
Direct access as % Customer Rev.
Optimus
Sonaecom Fixed
268,840
11,343
27.3%
1Q06
2,383
13.4%
113.7
19.3
309,735
154,262
56.9%
2005
2,353
11.2%
114.4
21.9
93,861
271,463
48.5%
y.o.y.
11.6%
3.5pp
4.6%
-12.9%
29.6pp
15.2%
1,260%
7
ABOUT SONAECOM
OPERATING MILESTONES
Beginning 2005: implementation of growth investment strategy, through innovation and
redefinition of markets and business models;
Success of strategy delivering growth: visible in main operational indicators and
quarterly results.
INVESTMENT
STRATEGY
TRANSFORMATION
OF SONAECOM
FIXED
UMTS/HSDPA
DEPLOYMENT
3G NETWORK
RENEGOTIATION
INTEGRATING
NETWORK
Sonaecom Fixed Strategy: refocus to a direct access business, through expansion of
ADSL broadband services over ULL;
1Q06 results reflect implemented strategy: direct access business with 75% of the ULL
market growth; 50% of total Broadband customer net additions in coverage areas.
UMTS network: 50% of the population coverage by end 1Q06; expected 80% of
population coverage by the end of 2006;
HSDPA network: Optimus - first Operator with commercially available HSDPA network;
increase of UMTS bandwidth up to 1.8 Mbps;; more than 40% of population coverage by
end 1Q06.
Optimus 1Q06: completion of RFP process to improve prices and conditions of supply of
UMTS/HSDPA network elements;
Huawei, Ericsson and Motorola as the main backbone and access network providers;
CAPEX savings of up to 100 million euros in the next 2 years.
Sonaecom 1Q06: extension of strategy of telecom integration in the pursuit of
operating efficiencies and cost synergies;
Full integration of both Optimus and Sonaecom Fixed technical teams, being managed
under an unified organizational team structure.
8
BUSINESS UNITS
1Q06 HIGHLIGHTS
BUSINESS UNITS
OPTIMUS-STRATEGY
STRATEGY AIMED AT INCREASE REVENUE PER CLIENT, MARKET SHARE GROWTH AND EXTENSION OF
ADDRESSABLE MARKET, BASED ON FOUR KEY CORNERSTONES`
MIGRATION TO 3G
SEGMENTATION
INNOVATION AND
LAUNCH OF NEW
DATA SERVICES
FIXED-MOBILE
CONVERGENCE
Decision Leadership in
3G handsets and
multimedia services
Considerable
extension of the UMTS
network, reaching
more than 50%
population coverage
and deployment of
HSDPA technology
(First operator in
Portugal)
Reformulation of all
tariff plans
Launch of
revolutionary tariffs,
such as Chat
Launch of Rede4, the
discount mobile
service with an
“internet” cost
structure
Launch of innovative
data services:
Push E-mail
Push-to-talk
Instant Messaging
Launch of Kanguru, a
portable broadband
internet offer over
UMTS technology
Launch of Kanguru
Xpress, a broadband
internet offer over
HSDPA technology
Launch of Optimus
Home, pioneer world
hybrid product, with
fixed dial numbers,
fixed network costs
and GSM access.
10
BUSINESS UNITS
OPTIMUS-PERFORMANCE
INVESTMENT STRATEGY AND NEW PRODUCTS AND SERVICES LAUNCHED HAVE DELIVERED GROWTH IN 1Q06
COMPARED TO 1Q05
Customer base increased significantly:
Customers grew 11.6%;
Net Additions of 30.2 thousand;
ARPU decrease explained by MTR’s impact and price cuts in Roaming in;
New products (Home, Kanguru, Rede4) the main drivers of Customer growth.
Data usage growth reflected investment in GPRS ad 3G data:
Data revenues represented 13.4% of service Revenues;
Approximately 9% of customer base was 3G enabled.
Traffic growth:
Mobile traffic 15.8% higher and MOU increasing 4.6%;
Continued reduction of incoming fixed traffic.
Growth initiatives continued to be implemented:
Optimus being first operator in Europe offering Push email in PDA windows mobile handsets.
11
BUSINESS UNITS
OPTIMUS-FINANCIALS
SUCCESS OF GROWTH STRATEGY VISIBLE IN 1Q06 RESULTS
2005
1Q05
€ Millions
Turnover
EBITDA
Margin
Net Profit
EBITDA -CAPEX
627.4
167.1
26.6%
45.1
146.8
43.5
29.6%
11.5
79.9
26.8
1Q06
141.2
44.4
31.4%
15.8
18.1
Free Cash Flow
75.5
9.5
2.2
CAPEX
87.2
16.7
26.3
2004
659.6
190.2
28.8%
50.5
54.5
103.6
86.6
12
BUSINESS UNITS
SONAECOM FIXED-STRATEGY
STRATEGY AIMED AT BOTH TRANSFORMING THE BUSINESS TO A DIRECT ACCESS MODEL AND AT GROWING THE
WHOLESALE BUSINESS, BASED ON FOUR KEY CORNERSTONES
DIRECT ACCESS
FOCUS ON SME AND
CORPORATE
SEGMENTS
WHOLESALE
GROWTH
INNOVATION ON
BROADBAND
Increase of the local
access capillarity
through local loop
unbundling;
Continuous
investment in superior
technology (VOIP,
GiGabit Ethernet,
ADSL 2+, IP);
Increase of direct
access customers
based on direct voice
and ADSL services
Focus on acquiring
national and
international clients.
Launch of the 16MG
ADSL offer for bundle
voice and internet
Commercial pilot test
of Triple Play bundled
offer of voice, internet
and TV over IP, at the
end of November
2005. Commercial
launch planned for
2H06.
Development of new
services and
functionalities for SME
and corporate
segments:
Web conference
File sharing
13
BUSINESS UNITS
SONAECOM FIXED-PERFORMANCE
REAL PROGRESS WAS MADE DURING 1Q06 IN THE TRANSFORMATION OF SONAECOM FIXED TO A DIRECT ACCESS BUSINESS
Customer Base increased:
Total services reached 309 thousand, increasing 15%;
Acquisition of direct access services more than compensated decline of indirect access customers;
Total Direct Services representing almost 50% of Customer base;
… and accounted for 57% of Customer Revenues.
Traffic growth:
Traffic increased 35%;
wholesale traffic growth by 62.1%;
increase of Direct voice traffic by 168%, partially compensating decrease of indirect voice traffic.
Growth initiatives in place:
Continued with pilot test of triple play offer, developing commercial and communication strategy;
All essential content negotiations, including PT’s controlled content, successfully completed
14
BUSINESS UNITS
SONAECOM FIXED-FINANCIALS
INVESTMENT IN ADSL2+ BROADBAND SERVICES OVER ULL, BEGAN TO SHOW TANGIBLE RESULTS, STIMULATED
BY A GOOD PRODUCT MIX, IMPROVED PRICING AND IMPROVED PROCESSES AND SYSTEMS
2005
1Q05
€ Millions
Turnover
EBITDA
Margin
Net Profit
EBITDA-CAPEX
158.4
-14.7
-9.2%
-34.5
36.6
-1.3
-3.5%
-4.3
-41.6
-5.8
1Q06
44.5
-4.5
-10.1%
-8.8
-13.2
Free Cash Flow
-34.7
-8.8
-18.7
CAPEX
26.9
4.5
8.7
2004
150.1
3.7
2.5%
-14.5
-6
26.2
-22.5
15
BUSINESS UNITS
SONAECOM FIXED-SERVICES
SONAECOM FIXED SAW A SIGNIFICANT INCREASE IN ITS DIRECT ACCESS BUSINESS, WHICH NOW ACCOUNTS FOR
APPROXIMATELY 50% OF TOTAL SERVICES
16
BUSINESS UNITS
PÚBLICO-HIGHLIGHTS
Third daily newspaper in paid circulation;
Pioneer in the development of Associated Products;
Strategic content provider;
Protection against increased sector concentration.
MARKET SHARE OF PAID CIRCULATION JAN/DEC 05
MARKET SHARE OF ADVERTISING 1Q06
SOURCE: APCT latest available data
Jornal de Notícias
26.5%
Correio da Manhã
31.7%
Público
13.6%
Jornal de Negócios
2%
Diário Económico
3.3%
24 Horas
13.6%
Diário de Notícias
9.3%
Jornal de Notícias
26%
Correio da Manhã
26.9%
Público
15.6%
Jornal de Negócios
3.4%
Diário Económico
6.4%
24 Horas
4.5%
Diário de Notícias
16.3%
SOURCE: Marktest/MediaMonitor
17
BUSINESS UNITS
PÚBLICO-PERFORMANCE
PÚBLICO HAD ANOTHER CHALLENGING 1Q06 AND FACED PRESSURE ON ALL 3 OF ITS REVENUE LINES
Average Paid circulation decreased by 8.1% (average of 44,256 units);
Advertising sales were down 11.6%;
Market share was not impacted by circulation performance, reaching 15.7%;
Associated Products sales were down 22%;
Strategy has been established to address difficulties:
Redesign the newspaper introducing more colour;
Seeking new sales and distribution channels;
Improving POS quality and control;
Step-up Advertising commercial activity by strengthening relationship with top brands and establishing
partnerships.
18
BUSINESS UNITS
PÚBLICO-FINANCIALS
EFFORTS WILL CONTINUE TO TURN-AROUND THE CURRENT PERFORMANCE AND ACHIEVE AN ACCEPTABLE LEVEL OF
PROFITABILITY
2005
1Q05
€ Millions
Turnover
EBITDA
Margin
Net Profit
EBITDA-CAPEX
44.1
-1.7
-3.9%
-3.2
10
-0.4
-4.3%
-0.5
-2.6
-0.5
1Q06
8.7
-1.9
-22%
-2.2
-2.0
Free Cash Flow
-3.9
-2.5
-2.2
CAPEX
0.9
0.1
0.1
2004
55.5
2.1
3.7%
0.0
1.1
0.8
1.3
19
BUSINESS UNITS
SSI-HIGHLIGHTS
Sixth largest IT/IS group in Portugal;
International presence through Enabler (Retail IS) and Wedo (Telco IS);
Major accounts in UK, Germany, Spain, Brazil, Italy and France;
Strong organic growth.
SOFTWARE AND SYSTEMS INTEGRATION UNITS AND TARGET MARKETS
20
BUSINESS UNITS
SSI-PERFORMANCE
SSI CONTINUED TO PROMOTE AND EXPLORE INTERNATIONAL GROWTH OPPORTUNITIES
Turnover increased by 10.4%;
Lower margins due to higher volume of Equipment sales (30% of Turnover) that generate lower margins;
EBITDA decreased by 35.6%, mainly explained by lower margins of Equipment sales and weaker contribution from
Enabler.
Despite Enabler’s weaker project base in 1Q06, it has acquired new customers during the quarter:
Tesco UK, Tesco Ireland;
Tesco Check Republic;
Gallery Lafayette;
Dubai duty Free;
…impacting 2Q06 results performance.
WeDo had a good quarter, with a Turnover increasing by 10% and EBITDA growing by 18%
21
BUSINESS UNITS
SSI-FINANCIALS
SSI HAD A POSITIVE 1Q06, ALTHOUGH EBITDA WAS LOWER THAN IN 1Q05 DUE TO WEAKER PERFORMANCE AT ENABLER
2004
2005
1Q05
€ Millions
Turnover
EBITDA
Margin
Net Profit
EBITDA-CAPEX
82.0
8.4
10.2%
4.0
86.0
9.5
11.1%
5.2
20.0
3.0
14.8%
1.9
6.2
8.8
2.8
1Q06
22.1
1.9
8.6%
1.1
1.7
Free Cash Flow
7.3
7.1
-1.8
-1.1
CAPEX
2.2
0.7
0.2
0.2
22
CONSOLIDATED
1Q06 RESULTS
CONSOLIDATED 1Q06 RESULTS
OVERVIEW
EXCELLENT OPERATIONAL PERFORMANCE, COMPARED TO LAST YEAR, DESPITE REGULATORY CONDITIONS
POSITIVE
EFFECTS
(compared to 1Q05)
NEGATIVE
EFFECTS
(compared to 1Q05)
Optimus Customer base growing;
Optimus Data Revenues with higher weight;
Continued growth of Optimus new services, in particular Optimus Home and Kanguru;
Customer Revenues growth at Optimus;
Sonaecom Fixed significant increase of direct access services;
Customer and Wholesale Revenues increase at Sonaecom Fixed;
Lower Mobile Termination Rates;
Lower Fixed incoming traffic;
Accelerated reduction of indirect access voice and narrowband internet;
Higher Network Costs, due to the 3G/HSDPA deployment;
Higher Servicing Costs associated with ULL double play activation process (customer
services; IT/IS);
Higher Marketing & Sales Costs (advertising; commissions).
24
Turnover similar to 1Q05, for the first
time since 2004
Optimus
Higher Customer Revenues (+4.8%):
performance of new products;
Lower Service Revenues (-3.5%): MTR
cuts, lower Roaming In.
Sonaecom Fixed
Higher Turnover (+21.5%): strong growth
in Operator Revenues (+30.6%) and in
Customer Revenues (+13.5%);
Positive performance of ULL direct access
business: direct access revenues
increased (+136.5%).
SSI
Turnover up 10.4%.
Público
Lower Turnover by 12.5%.
-4.2%
TURNOVER
(MILLION EUROS)
CONSOLIDATED 1Q06 RESULTS
TURNOVER
25
Total Operating Costs increased 3.2% on
1Q05, due to growth related costs
Outsourcing costs up 24.7%: growth of
Sonaecom Fixed ULL direct access
services requiring more customer
activation support services;
Marketing & Sales up 7.2%: aggressive
sales of Sonaecom Fixed direct broadband
double play offers;
Network costs up 1.6%: extension of 3G
network and number of central offices
unbundled (energy and rental).
Non-related growth costs decreased
compared to last year
COGS decreased 9.6%: expected one-off
discount from equipment suppliers;
Interconnection costs fell 9.6%: MTR’s
reduction;
Leased Lines decreased 2%: Optimization
of fixed network.
+2.1%
+3.2%
TOTAL OPEX
(MILLION EUROS)
CONSOLIDATED 1Q06 RESULTS
OPEX
26
Consolidated EBITDA better than expected
Optimus
EBITDA up 2%: higher Customer Revenues
and lower Total OPEX and despite MTR
reductions;
Sonaecom Fixed
Negative EBITDA: higher investment in
customer acquisition and other ULL
related costs-
Público
Negative EBITDA: lower sales of three
revenue lines; lower margins of
Associated Products.
SSI
Lower EBITDA by 35.6%: lower Service
Revenues at Enabler.
-11.3%
-21.8%
EBITDA & EBITDA MARGIN
(MILLION EUROS)
CONSOLIDATED 1Q06 RESULTS
EBITDA
27
NET PROFIT AFTER MINORITIES
(MILLION EUROS)
Net Results Group share positive 0.1
million euros
Depreciation & Amortization up 2.6%:
extension of 3G network;
Net Financial charges increased 0.7
million euros: higher Gross debt due to
150 million euros bond issue; increase of
Euribor rates by 25 basis points;
Tax line with benefit of 2.2 million euros
Minority Interest impact: since
December05, Consolidated Results
include 100% of Sonaecom Fixed and
69.2% of Optimus (versus 56.7% and 49%)
with Roll-up of FT.
-96.8%
-88.8%
CONSOLIDATED 1Q06 RESULTS
NET PROFIT
28
FREE CASH FLOW
(MILLION EUROS)
CAPEX lower by 12.9% vs 1Q05 and
representing 18.3% Turnover
Consistent with strategy of investment in
UMTS/HSDPA (41% of CAPEX) and in ULL
broadband business (16% of CAPEX);
1Q05 CAPEX includes financial investment
of acquisition of minority position by 18.8
million euros.
FCF down 9.6% vs 1Q05
Higher investment in working capital
(+6.6 million euros): increased stock
levels at Optimus; higher payments to
trade creditors at telecom businesses.
EBITDA – CAPEX 14% up on 1Q05
-80.6%
-9.6%
CONSOLIDATED 1Q06 RESULTS
CAPEX & FCF
29
NET DEBT & DEBT:EQUITY
(MILLION EUROS)
INTEREST
COVER
NET DEBT:
EBITDA
12.9X
12.4X
1.3X
1.6X
16.6X
8.9X
10.0X
1.8X
1.6X
1.4X
Stable Capital Structure
Consolidated Gross Debt stood at 457
million euros (+149 million euros): 150
million euros bond issue in June 2005;
Liquidity increased by 156 million euros
(+156 million euros): bond issue proceeds
invested as treasury application and FCF
performance at Optimus and SSI;
Leverage increased: Net Debt to
annualized EBITDA at 1.8x;
Gearing remained at 40%
Interest cover improved vs 4Q05
-3.9%
-2.8%
256
246
275
247
267
39.8%
39.9%
41.2%
39.9%
41.2%
FY04
FY05
1Q05
4Q05
1Q06
CONSOLIDATED 1Q06 RESULTS
CAPITAL STRUCTURE
30
CHALLENGES
GOING FORWARD
GOING FORWARD
GUIDANCE 2006
Build on new services launched;
Promote enhanced 3G services (HSDPA).
OPTIMUS
Turnover: marginal decrease
EBITDA: marginal decrease
EBT:30% decrease
EBITDA – CAPEX: approximately 30% decrease
Continue to grow Direct Access broadband
business: double play and future triple play
offers
SONAECOM
FIXED
Assuming 215 thousand BB direct access services
Turnover: approximately 20% growth
EBITDA: marginal improvement in margin
EBT/CAPEX: Flat
Efforts to achieve acceptable level of
profitability
PÚBLICO
EBITDA: marginal improvement
Promote and explore international growth
opportunities
SSI
Turnover/EBITDA: 5%-10% growth
CONTINUE TO BUILD ON ESTABLISHED GROWTH STRATEGY FOR TELECOMS BUSINESSES
Benefit from Customer Revenues growth
both at Optimus and Sonaecom Fixed
SONAECOM
Turnover: Flat to marginal growth, despite MTR
reductions
EBITDA/CAPEX: Flat
EBT/FCF: Positive
32
CORPORATE
DEVELOPMENT
CORPORATE DEVELOPMENT
PUBLIC TENDER OFFER
WE REITERATE OUR STATED POSITION REGARDING OUR PUBLIC TENDER OFFER FOR PORTUGAL TELECOM
Offer of 9.5 euros per share plus dividend of 0.385 euros per share reflects a full and fair value.
Offer driven by estimated 2 billion euros of mobile synergies from the combination of TMN and Optimus’
operations, expected to generate OPEX and CAPEX savings.
Offer implies an EV/EBITDA (2005) of 7.5x, significant premium to comparable incumbent transactions (adjusted
for information released by PT in its FY05 accounts);
A WELL AND
BALANCED OFFER
THAT ADDRESSES THE
OBJECTIVES OF ALL
CONSTITUENTS
PT INVESTORS
COMPETITION
AUTHORITY AND
CONSUMERS
PORTUGUESE
STATE
EMPLOYEES
Proposes a full and fair all cash offer
Transforms overnight the competitive landscape of the wireline and
content markets, where PT currently has market shares of between
80% to 90%;
Offers to act as a strong Portuguese controlling shareholder in a
strategic national asset, providing a solution for the existing ‘golden
share
Offers long term employment opportunities and career development
through clear leadership and a focused growth strategy
34
SONAECOM’S STRATEGY FOR NEW SONAECOM/PT GROUP IS CLEAR AND BASED ON FIVE MAIN STRATEGIC PILLARS
Integration of Sonaecom Group’s businesses with PT;
Merger of Optimus and TMN;
Sale of one of the Fixed networks (copper or cable);
Launch of Triple Play;
Increase investment in technology and innovation.
Readjust portfolio based on control;
Negotiate with Telefonica;
Reallocate resources towards controlled assets (existing/new).
European mobile partnerships;
Preservation of independence;
Protection of brands;
Technological partnerships.
Committed majority shareholding with vision and necessary skills for
implementation and execution;
Sonae Group culture and corporate values;
Able to live with “Golden Share” or other mechanism to safeguard
strategic interests of the Portuguese State;
Intention to keep Sonaecom and PT (or merged entity) quoted on
Euronext Lisbon.
Board composition;
Quality and transparency of financial information;
Best practices (reporting, internal controls, managing conflicts, etc.);
Human resources.
Strengthen PT’s competitiveness within a
much more competitive Portuguese telecoms
market
Reorient PT’s international strategy into a
more cohesive portfolio of “controlled”
mobile investments
Implement a clear commercial, technological
and international partnership strategy
Establish strong and stable shareholder
leadership
Adopt “best practice” in Corporate
Governance
CORPORATE DEVELOPMENT
PUBLIC TENDER OFFER
35
MORE ON
SONAECOM
MORE ON SONAECOM
GROUP STRUCTURE
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LEADING REFERENCE
DAILY PAPER
S
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N
A
E
S
G
P
S
F
R
E
E
F
L
O
A
T
F
R
A
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C
E
T
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L
E
C
O
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2
3
.
7
%
S
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A
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C
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6
9
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2
4
%
(
1
)
1
0
0
%
1
0
0
%
1
0
0
%
(2)
S
S
I
(2) Minority Shareholders: EDP – 25.7%; Parpública-5.04%
(1) 65.2% of voting rights
(3) Software and Systems Integration
(3)
61.79%
14.51%
37
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ORGANIZATION
T
O
T
A
L
S
O
N
A
E
C
O
M
G
R
O
U
P
S
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2
6
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B
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3
5
4
S
S
I
1
7
0
2,165 (1)
(1) As at 30 March 2006
Senior Management
PCG
IR
PR
Legal
IA
532
263
790
38
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EXECUTIVE COMMITTEE
SONAECOM EXECUTIVE TEAM
CEO
Mobile &
Fixed
CFO
Mobile
Group CEO
SSI
Media
CFO
M&A
Planning and
Control
Internal Audit
Accounting
Finance
Treasury
Investor
Relations
COO
CEO
Fixed/Mobile
Human
Resources
IT/IS
Technical
Internal
Communication
Mobile
Customer
Service
Paulo Azevedo
Luis Reis
Miguel Almeida
Chris Lawrie
Legal &
Regulation
Legal
Regulation
Public
Relations
Fiscal Planning
António Lobo
Xavier
COO Fixed
Pedro Carlos
COO SSI
COO Media
COO Miau
Cláudia Azevedo
Fixed
Media/SSI
39
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BOARD & COMMITTEES
BOARD OF DIRECTORS
EXECUTIVE
NON-EXECUTIVE
AUDIT AND FINANCE
COMMITTEE
NOMINATION AND
REMUNERATION
COMMITTEE
NON-INDEPENDENT
INDEPENDENT
Belmiro de Azevedo
David Charles Hobley
Jean-François Pontal
Michel Marie Combes
Paulo Azevedo
Luis Filipe Reis
Christopher Lawrie
Miguel Almeida
Cláudia Azevedo
CHAIRMAN
DIRECTORS
x
x
x
x
x
x
x
x
x
x
David Bain
x
x
x
x
x
40
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MOBILE SECTOR OVERVIEW
Source: Companies’ Report & Accounts
MARKET SHARE EVOLUTION - SUBSCRIBERS EOP
20.3%
20.3%
20.1%
19.7%
19.8%
19.9%
19.9%
20.0%
31.7%
32.3%
33.1%
33.6%
33.2%
33.5%
34.3%
35.0%
48.0%
47.4%
46.9%
46.7%
47.1%
46.6%
45.7%
45.1%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
41