BRUSSELS, Belgium --

Fixed Line Services (Belgacom FLS)

Financial results show that traditional voice is still dominant, representing about 48.5% of theFLS core revenue. The launch of innovative price packages (flat rates and unlimited calling) hasdelivered in terms of customer retention and volume evolutions, but with the inevitable reductionof ARPU.

During the first half of 2006, FLS total revenue before non-recurring items increased 21.1% (EUR316 million), compared to the same period last year. Over the first half of 2006, FLS core businessrevenue (excluding disposed companies, Telindus and Belgacom TV) decreased 1.4%. The revenuegrowth in Internet, Network Integration Services and National Wholesale was able to partly offsetthe decline of traditional voice products.

The partnership between Telindus and Belgacom is now a fact. As a full member of the BelgacomGroup, Telindus became the ICT entity. In addition to the existing offering, four new end-to-endICT propositions were defined and launched over the summer. These four, unique sellingpropositions, branded Telindus with an updated logo and style, include a secure and well managedinfrastructure, risk management, collaboration, and business application integration.

The number of Belgacom TV customers has continued to grow. At the end of June, 73,653customers had subscribed to Belgacom TV, and the number keeps on rising. Belgacom is confidentof achieving more than the 100,000 customer mark. But Belgacom is not resting on its laurels.

True to its announcement a year ago, Belgacom TV has expanded its offering to keep up with anincreasingly demanding market: an interactive TV guide, an extensive array of channels, easynavigation, parental control, and programs and videos on demand have now become a customarypart of watching TV. As of 1 July 2006, Belgacom TV also includes a two-stream offer, enabling theconnection of two television sets.

Mobile Communication Services (Proximus)

Thanks to targeted acquisition initiatives, 39,000 new active customers were added year-overyear,bringing the total number of customers to 4.253 million. This was also made possible by thelaunch of segmented rate plans, such as Pay&Go Classic and Pay&Go Generation or by theextension of the postpaid offer (Smile 60, SME Packages, etc.).Thanks to strict cost control through the operational excellence program, Proximus has maintainedthe highest profitability on the mobile market in Belgium, with an EBITDA margin of 49.5%.

Proximus achieved an outstanding result in terms of customer churn rate, which fell to 15.4%,compared to 17.0% for the same period last year. The number of postpaid customers increased124,000 year-over-year, resulting in a postpaid/prepaid ratio of 43/57 at the end of June 2006,compared to 41/59 a year ago.

At the end of June 2006, the blended ARPU was EUR 40.7 for the active customer base, comparedto EUR 41.1 at the end of June 2005.

During the first half of 2006, Proximus revenue decreased 1.5% to EUR 1,069 million compared tothe first half of 2005. Service revenue remained fairly stable, dropping slightly by 0.3%. The 6.5%growth of data services compared to the first six months of 2005 (including a strong 24% growthfor advanced data services such as mobile office applications) nearly offsets the 1.6% decrease ofvoice services revenue caused by the success of new bundled pricing plans (such as Smile,Business and SME Packages).

Group Financials

During the first half of 2006, the total revenue of the Belgacom Group increased 2.9% to EUR3,032 million. Excluding non-recurring revenue and adjusted for the contribution of entitiesdisposed of in 2005 and new entities acquired in 2006, the revenue of the Group slightly decreased0.3% (EUR 9 million) to EUR 2,692 million and was with EUR 1,364 million even nearly flat duringthe second quarter of the year.

The Groups’ EBITDA decreased to EUR 1,110 million. Excluding non-recurring items and adjustedfor the contribution of disposed or new entities, the Group’s EBITDA decreased 4.9% (EUR 56million) to EUR 1,092 million.

In a separate release:

On 25 August, the Board of Directors of Belgacom unanimously decided to approve a share buyback for a maximum amount of EUR 200 million. This share buyback will be conducted within the limitations as decided in the General Assembly of April 13, 2005, i.e. “the price paid for these shares must not be more than 5% above the highest closing price in the thirty-day trading period preceding the transaction and no more than 10% below the lowest closing price in that same thirty-day period”. In accordance with this mandate, the share buyback must be conducted before October 14, 2006. There will be no dividend rights for the shares thus purchased, for as long as these shares are in possession of Belgacom.

The Board also decided to approve an interim dividend over the 2006 accounting year in an amount of EUR 100 million to be paid before the end of the year.

Belgacom SA (Euronext: BELG)