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DSL/vectoring/G.fast

Iliad Reports Subs Growth

PARIS -- Iliad reinforced its leading alternative position in the French broadband market during the 4th quarter 2006 by increasing its ADSL subscriber base from 2,076,000 as of September 30, 2006 to 2,278,000 as of December 31, 2006. For the first time in its history, Free added more than 200,000 subscribers in a single quarter with 202,000 net adds during the 4th quarter 2006 vs. 149,000 during the 4th quarter 2005, ie a 35.6% increase. This performance is all the more impressive as the 4th quarter is generally a weak quarter for Free in a context of heavy marketing campaigns by Free’s competition around the Christmas period.

These statistics confirm the power of Free ADSL offering and in particular of the Freebox services. Free’s subscriber acquisition cost2 remained below € 50 per subscriber throughout 2006, the lowest amongst French ADSL operators. The churn was below 1% per month in 2006, the lowest of the industry to the Company’s knowledge. Free boasts the only homogeneous, organically-built subscriber base with every one of its approximately 2.3 million subscribers having opted for the Free brand and an identical € 29.99 package.

In addition, Free maintained its focus on unbundling of the local loop. On December 31, 2006, 75.9% of its subscribers were unbundled (partially or fully unbundled) and 908 local exchanges were connected to Free’s fiber network. As of December 31, 2006, nearly all users were equipped with a Freebox.

In 2006, optional value-added services generated revenues of approximately € 163.4 million, vs. € 74.8 million in 2005. Broadband ARPU was € 34.5 per month (excl. VAT) during the 4th quarter 2006, vs. € 32.2 per month in the 4th quarter 2005.

Broadband ARPU only includes revenues from the flat-rate package and optional value-added services. One-time revenues (e.g. migration from one offer to the other, unsubscription fee or sale of accessories), portal revenues, revenues generated from calls to the hotline are not included in Broadband ARPU.

Iliad (Euronext: ILD)

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