GO plc - Interim Directors’ Statement

Thursday, April 30th, 2015

On 29 April, GO plc issued its Interim Directors’ Statement updating the market on its performance since the start of the current financial year.

The Directors explained that during the period under review, the Group continued to face a challenging competitive environment as operators target customers aggressively with value propositions. This continued to lead to significant price erosion resulting in lower average revenue per unit (ARPU) for all operators but fairly stable market shares. Despite the challenges at the revenue level caused by retail pressure and adverse regulatory intervention, GO continues to maintain healthy profitability levels given the offsetting impact of on-going efforts to reduce costs and improve processes. Furthermore, GO not only retained its client base with respect to traditional fixed line telephony but also increased its market share in other product areas. The Directors further noted that the positive momentum experienced throughout most of 2014 has been sustained in the first quarter of 2015.

Against this backdrop, GO leverages its robust financial position to invest in future technologies that will allow it to differentiate its retail offerings through innovative services, superior quality and an enhanced customer experience. The new investments will also eventually lead to new networks and further improved processes which will in turn deliver further reductions in operating costs and increase GO’s ability to upsell clients to improved broadband speeds, an enhanced TV experience and richer content. This should enable GO to retain its position as the leading provider of telecommunication services in Malta. In this respect, GO recently announced two strategic investments over the medium term, namely in fourth generation (4G) technology and a €50 million fibre-to-the-home network.

GO also remains focused on its international investment initiatives. In this respect, the Directors noted that they are monitoring developments in Greece, especially at Forthnet, and will evaluate any potential binding offers. Meanwhile, Cablenet, a Cypriot cable company in which GO recently acquired a 25% shareholding, continued to achieve growth in terms of subscribers and profitability in line with projections. The Directors also believe that as the economic environment in Cyprus continues to improve, this investment should continue to perform in terms of both market share and levels of profitability.

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