Report on ONO Midco, SAU and its subsidiaries as of December 31 ...

We offer all our broadband customers “Centinela”, a security program for internet navigation including antivirus and
firewall software as well as other value-added services such as electronic mail, with an unlimited number of email accounts, and
anti-spam services. We also offer other value-added services for an additional fee, including “Easy Broadband Internet”, which
facilitates internet access configuration, a comprehensive security software package and remote assistance for problems and
questions about computing and internet browsing.
Fiber television
We provide our television customers with a multi-channel pay television ranging from basic to premium packages. In
addition, we offer all our television customers pay-per-view and VoD service, broadcasting movie premieres and live football
programming. To avoid piracy, we provide the television content encrypted. Therefore, a decoder is required to receive the
service, which is rented to customers for a rental fee that is usually included in the monthly fee of the respective customers bundle
services. As with our other services, customers can subscribe to our television services as part of a bundled package.
Following the launch of digital television services in 2003, we discontinued the marketing of analog services to new
customers despite continuing to provide analog services to existing customers. Currently over 92% of our fiber television
customers enjoyed our digital offering. The introduction of digital television has allowed us to increase our channel line-up as well
as the ratio of use of our pay-per-view and VoD services. We provide customers with more than 125 digital channels, as well as
an electronic programming guide. From our digital television centers in Madrid, we broadcast to all of our customers using our
national network.
In December 2005, we launched a full VoD service, named “Videoclub”. As of December 31, 2011, “Videoclub” had
almost 714 thousand active customers. Using this service, our customers viewed more than 76 million events in 2011 (including
both paid and free events).
We are currently developing a set of innovative solutions that we believe will help us increase TV customers and
revenues. In June 2010, we established an alliance with U.S. digital video company TIVO in order to offer a next generation TV
service, using set-top boxes manufactured by Cisco, which we believe provides a seamless convergence between internet and
traditional television content. Under the contract, we are the exclusive distributor in Spain of advanced television services from
TIVO. In October 2011, we officially launched our next generation TV service (TIVO) to customers within Madrid and Barcelona
and in February 2012 we made this service available in Murcia, Valencia and Santander; we expect to start offering this
innovative product on a broader scale in the coming quarters. Although to date this product has only been launched on a limited
basis, we believe there are positive signs of market acceptance of the TIVO product at this early stage, with over 8 thousand
customers as of December 31, 2011. We believe this innovative TV product in the Spanish television market will help us to grow
our TV customer base, strengthen customer loyalty and increase revenues. We also believe it differentiates and significantly
upgrades our television offerings compared to others in the market by providing users with a “best-in-class” experience and a wide
variety of content that integrates broadcast and broadband television in a way that goes beyond the confines of traditional pay
television.
We offer our television services in a range of packages at different price levels in order to address the broadest possible
television audience. The programming offered to our customers contains a wide selection of television series, movies, sports,
news, music, documentaries and children’s channels, including, among others, the following: AXN, Discovery channel, Disney
channels, Eurosport, Fox, MTV and Paramount Comedy. We also offer VoD movies from Hollywood studios, U.S. independent
producers, and Spanish and other European producers. In July 2009, we signed a contract with Mediapro, the new owner of the
Spanish football league content, to provide us with a premier football channel (Gol TV) with matches from the Spanish football
league, the European Champions League and the main leagues in Europe and South America. As of December 31, 2011, we
reached almost 104 thousand customers with the Gol TV channel. Mediapro also provides additional content that is not included
in the Gol TV channel on a pay-per-view basis, including Spanish league and King’s Cup football matches. Unless extended or
renewed, the Mediapro contract will expire after the 2011-2012 football season because Mediapro does not yet own the rights for
subsequent seasons. However, due to the substantial size of our customer base, we expect to be able to negotiate access to
premium football with the future owners after the 2011-2012 season. In November 2010, we signed a contract with DTS to
provide us with Canal+ channel. We believe that this premium channel, which is included in all of our television packages on a
pay-per-view basis, offers some of the best sports and cinema content available in the Spanish market.
The table below shows the number and type of channels currently available to subscribers of our digital television
service packages:
Digital offer TV Esencial TV Extra TV Total
Standard channels 62 98 118
Pay-per-view channel (1) 7 7 7
VoD service (Videoclub) (2) Included Included Included
(1) Includes seven thematic channels (Baby, Barça, Canal+, Cazavisión, Cinepremier, Gol TV and Playboy)..
(2) VoD services are provided on a free and pay basis. Programming includes music, feature films, TV series and adult content.
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