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

As holders of spectrum concessions we are mainly subject to specific obligations set forth in the General Law on
Telecommunications, the regulation of the use of the radio spectrum and the relevant concession documents. Among others, we
are subject to the following obligations:
(i)
(ii)
(iii)
(iv)
(v)
to obtain the relevant functioning authorization for each of the radio stations installed prior to operating the
spectrum network;
to use the frequency right in the terms set forth in the concession documents and for the purpose identified
in the same;
not to cause interferences that would be considered harmful;
not to exceed the radioelectrical emission levels set forth in the relevant laws and regulations and the
concession document; and
use the spectrum effectively and efficiently.
Our spectrum concessions expire on December 31, 2030.
Spectrum concession are extinguished upon occurrence, amongst others, of any of the following circumstances:
(i)
(ii)
(iii)
(iv)
extinction of the legal personality of the operator;
disqualification as electronic communications operator;
lack of concession renewal; and
revocation by the granting authority, which will occur, amongst others, in the following circumstances:
breach of technical terms and conditions established for the use of the spectrum; failure to pay the stamp
duty; inefficient or ineffective use of the spectrum; and unauthorized use of the spectrum.
Our spectrum concessions may be transferred or assigned in the terms of the General Law on Telecommunications, the
regulation of the use of the radio spectrum and the corresponding concession document.
Wholesale Services
ONO is also a provider of wholesale terminating segments of leased lines and wholesale trunk segments of leased lines.
Through these wholesale services, ONO provides telecommunication services to fixed and mobile carriers, traffic resellers and
premium rate services providers. Telefónica is the current operator with SMP in both markets, as per resolutions dated July 23,
2009 and July 2, 2009. According to the same, Telefónica is obligated to publish a reference offer for the provision of these
wholesale services, on terms established by the CMT. This offer is known as ORLA. In December 2010, the CMT approved the
new ORLA regulating the wholesale terminating segments of leased lines.
Numbering and Operator Selection
In order to provide telecommunications services, operators need to be furnished with public numbering resources, i.e.,
the ability to allocate phone numbers among subscribers or users of telephony services in accordance with the applicable,
government-approved, National Numbering Plan. The CMT has the authority to allocate numbers and is generally obliged to issue
the relevant resolution allocating the numbers within a maximum period of three weeks from the date of the relevant application.
The General Law on Telecommunications and the Markets and Access Regulation address operator selection.
“Operator Selection” is the ability of the subscriber or user to select a given operator for all or certain calls and to access the
services of any operator interconnected with the user’s operator that provides access to the public telephony network. The operator
can be chosen ahead of time or on a call-by-call basis. Operators with SMP in the provision of connection to and use of the public
telephony network at fixed locations (currently Telefónica) are obliged to provide Operator Selection to operators of fixed
telephony services to the public interconnected with them. The Government is allowed to impose Operator Selection obligations
on other types of networks.
Circular 2/2009, approved on June 18 by the CMT, implements the General Law on Telecommunications and the
Markets and Access Regulation with respect to Operator Selection, superseding past Circulars issued by the CMT on this matter.
It sets forth the instructions to implement the mechanisms necessary to provide Operator Selection in the fixed-line public
telephony networks.
Number Portability
Under the General Law on Telecommunications and the Markets and Access Regulation, users or subscribers to
telephony service to the public have the right to keep their existing telephone numbers when changing operators, service or
physical location, or when any of these circumstances occur simultaneously. Operators of public telephony networks and those
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