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FastWeb Reports Q3

Company announces revenues to €1,068M in the first nine months of 2007

October 31, 2007

2 Min Read

MILAN, Italy -- At a meeting today, the Board of Directors of FASTWEB S.p.A. (Milan, MTAX: FWB), Italy’s second-largest fixed telecommunications services provider, approved the results for the first nine months to 30 September 2007.

FASTWEB reported a net increase of 55,800 in the number of clients in the third quarter, with an estimated share of approximately 20% of total new broadband clients on the Italian market, a result in line with 2006 performance.

Customer base growth in September was one of the highest ever reported, driven by new commercial offers and new services for residential users.

More specifically, FASTWEB re-shaped its commercial offer, simplifying and updating its tariffs and making FASTWEB TV available also on a stand-alone basis. The introduction of the new residential offer produced an improvement in a number of key parameters, including the adoption of flat-rate services by 90% of clients acquired in the third quarter and the penetration of FASTWEB TV (25% of clients acquired in September, compared with an average 20% in the previous 12 months).

The overall number of clients at 30 September 2007 was 1,251,400, compared to 1,195,600 at 30 June. The residential vs business client mix was unchanged (82% and 18% respectively).

The number of clients acquired in the third quarter was affected by Telecom Italia win-back activities that FASTWEB considers illegal. The incumbent carried out selective sale activities on FASTWEB customer base during 2007, using confidential information not available for commercial purposes, despite the sentence issued by the Milan Court of Appeal in May 2006 ordered Telecom Italia to abstain from this type of abusive practices. Given these activities, which led to an increase in the number of cancellations by FASTWEB clients, the Italian Antitrust Authority began an investigation into alleged abuse of dominant position by the incumbent on 24 October. Moreover, FASTWEB filed a suit requesting Telecom Italia the payment of 500 euro for each attempted abuse of the above mentioned sentence and for damage compensation.

FASTWEB residential ARPU (Average Revenue Per User) was 733 euro in September, compared with 747 euro in June, a decrease of less than 2%. This result confirms that the ARPU trend is in line with the Company expectations and that the price reductions introduced in September have not generated a significant migration in the customer base.

Consolidated revenues for the first nine months 2007 amounted to 1,068.2 million euro, rising 19% from 897.4 million euro in the equivalent period 2006.

Third-quarter revenues were 353.8 million euro, up 11% from 319.1 million euro in the third quarter 2006.

Significant revenue contribution in the first nine months came from both business (58% of total revenues) and residential clients (42%). Important corporate contracts were acquired during the third quarter, among others with Bluvacanze, Sigma Tau and Banca delle Marche, confirming that this market segment continues to offer significant growth opportunities.

Fastweb SpA (Milan: FWB)

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