Annual Report 2012 - Ono

Annual Report 2012

Annual Report 2012 

Welcome to ONO’s 

Annual Report 2012. 

Come and discover why 

fibre optic cable gives 

you so much more... 

ONO in 2012 

Who is ONO? 

What does ONO do? 

ONO’s 

Responsibility 

Financial analysis 

Corporate 

Governance Report 

The Figures 

Annexes 

Contact 

Information 

Print 

Report 

The Figures 

2

ONO’s Annual Report 2012 

ONO, fibre optic cable gives you more 

ONO, fibre optic cable gives you more: 


Who is ONO? 


ONO’s 


More than 7 million 

Homes released to marketing (HRTM) 

More than 4.7 million 

Services (1) 

€1,573 million 

Revenues 

€752 million 

EBITDA 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Thanks to 2,778 people who 

work at the Company (2) 

(1) 

Including fixed and mobile services 

(2) 

As of 31 December 2012 

Print 


The Figures 

3

ONO’s Annual Report 2012 

Data in thousands 

North 

East 

Homes in Spain (1) 17,545 

Homes in ONO franchises (1) 14,741 

Coverage 84.0% 

Homes released to marketing 7,063 


Who is ONO? 


Coverage 47.9% 

ONO’s 


Central 

Services 

Fixed services 4,308 

Residential (2) 4,102 


Corporate 


South 

SMEs (2) 206 

Mobile services (3) 417 

Total 4,725 

The Figures 

Annexes 

Contact 

Information 

In addition, ONO provides a 

complementary ADSL service in 

some areas 

(1) 

Source: INE Population and household census 2001 

(2) 

Include fibre, ADSL y indirect access 

(3) 

Include voice and mobile broadband (BAM) of Residential and SMEs 

• More than 7 million homes covered by a 45,000 km proprietary network 

• Present in more than 300 municipalities, including the 9 largest cities in Spain 

• Around five million service subscriptions 

• Triple play leader in Spain 

• Around 700,000 customers with high-speed services (≥30 Mb) 

• Marketing TiVo®, ONO’s exclusive intelligent television service in Spain, with around 100,000 subscribers at year end 

• Major growth in mobile, with more than 400,000 services 

• 1,573 million euros in revenues 

• 752 million euros in operating profit before depreciation and amortization (EBITDA) 

• Net profit of 52 million euros 

• Solid and stable capital structure 

Print 


The Figures 

4


With fibre, 

we can provide 

new services and also 

traditional services… 

in a totally new way. 

100,000 homes 

now use TiVo, 

ONO’s intelligent 

television service. 


Who is ONO? 


ONO’s 



Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

5


Products and Services 

ONO is the leading alternative provider of telecommunications services in Spain (Fixed Telephony, Broadband and 

Pay Television) and is a major provider of mobile telecoms services. 

It is the only fibre operator with nationwide coverage that provides services to both households and businesses. 


Products and services / 

Position in the market 

Key figures 

Chairman’s statement 

CEO’s statement 

Who is ONO? 


ONO’s 




Fixed Telephony Internet Television Mobile 

Corporate 


The Figures 

Annexes 

14% 

31% 

16% 

14% 

27% 

40% 

21% 

17% 

21% 

8% 9% 

36% 

Contact 

Information 

55% 

43% 

19% 

26% 

ONO 

Movistar Spain 

Others 

ONO 


Orange 

Others 

ONO 


Sogecable 

Others 

MVNO 


Vodafone 

Orange 

Yoigo 

Print 


The Figures 

6


Key figures 

Operating 


Homes released to 

marketing (‘000) (Fibre) 

Services (‘000) 

4,464 4,623 4,725 

121 

140 

192 

179 

417 

206 

Residential Fixed Fibre 

Customer split per bundle (%) 

38.6% 39.9% 39.9% 

Residential Fixed Fibre ARPU 

breakdown (€) 

51.5 

3.1 

4.6 

52.4 

3.4 

4.0 

52.4 

5.5 

3.1 



Key figures 



Who is ONO? 


7,030 7,043 7,063 

4,203 4,252 4,102 

44.3% 44.8% 45.7% 

43.7 45.0 43.8 

ONO’s 


17.1% 15.3% 14.4% 


2010 2011 2012 

2010 2011 2012 

2010 2011 2012 

2010 2011 2012 

Corporate 


Financial 

Fixed residential 

Fixed SMEs 

Mobile 

Single play 

Double play 

Triple play 

Monthly fee 

Variable TLF+TV 

Other value-added services 

Fixed fibre ARPU 

The Figures 

Annexes 

Contact 

Information 

Revenues (€m) 

EBITDA (€m) / EBITDA margin 

Net profit (€m) 

Operating free cash flow (€m) 

1,472 1,485 1,573 

3 3 

3 

306 310 425 

49.2% 50.4% 47.8% 

1,163 1,172 1,145 

725 748 752 

47 50 52 

480 456 453 

2010 2011 2012 

Residential 

Business 

Others 

2010 2011 2012 

2010 2011 2012 

2010 2011 2012 

Print 


The Figures 

7



José María Castellano 

President, ONO 

‘We are committed to contributing 

better services to today’s digital 

society, which is continuously 

evolving and which demands 

high quality products that 

enable and enrich their everyday 

communications and leisure’ 

2012 was an intense year for ONO, full of 

major corporate and business milestones 

that have strengthened us a Company 

and as a significant player in the Spanish 

telecoms market. ONO has always been 

able to differentiate itself from its 

competitors because of its proprietary 

and independent fibre optic network, 

and in 2012 this alternative approach 

to telecoms in Spain became even 

more important. 

The year was also characterized by the 

continued impact of the economic crisis 

on Spanish society, which has resulted 

in a lack of employment and a loss of 

household purchasing power. In addition to 

these difficult and painful conditions, there 

has been a general loss of confidence in 

the Spanish economy and in our brand as a 

country. All companies and institutions in 

the country need to focus their efforts on 

restoring this lost credibility. 

A company such as ONO is immersed 

in this reality. We are committed to 

contributing better services to today’s 

digital society, which is continuously 

evolving and which demands high quality 

products that enable and enrich their 

everyday communications and leisure. 

This is our focus: to satisfy that need and 

to transform it into technological and 

social wealth. 

Today we cannot imagine what it is like 

not to be connected. For another year, 

ONO has led the high-speed connectivity 

market in Spain. We also made intelligent 

television a reality, with TiVo®. We 

launched the new ONO Móvil calling 

plans, which have been a major success 

for us. Our professional success is based 

on our high quality services. At ONO, we 

have made it possible for thousands of 

SMEs to connect to the best broadband 

service in Spain. We have also been 

pioneers in providing access to the very 

highest Internet browsing speeds, with 

real speeds of 200 Mb. 

In the financial area, our business also 

made major progress in 2012. Following 

a series of successful bond issues that 

have made our debt more manageable, 

in June we completed the refinancing of 

the Company, significantly reducing the 

number of financial institutions involved 

and improving financial conditions, with 

no major maturities until 2017. This major 

achievement reflects the confidence of 

the markets and the solid operational and 

financial progress that we have made in 

recent years. 

This progress depends on the work of 

each and every employee at ONO. We 

have again been able to show the 

market that we are a flexible company 

that can adapt to change, and that we 

are in the best position for offering 

society what it needs. This is only 

possible because we have a committed 

team which every day works hard to 

maintain ONO in its leading position in the 

telecommunications market. 




Key figures 



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The Figures 

8



In 2012, the Company remained 

committed to its main corporate social 

responsibility agreements. It renewed its 

adherence to the Spanish Network of the 

Global Compact and its support for the ten 

principles of the Compact. For the third 

consecutive year, the Company’s annual 

report follows the standards of the GRI 

(the Global Reporting Initiative). This has 

been essential to ONO as an agent and 

a contributor to social development and 

well-being. 

In 2012, ONO also approved its Code of 

Ethics, which represents a new phase for 

the culture of the Company. This important 

document provides guidance to ONO’s 

employees, managers and members of 

governing bodies in all of their actions. 

Our commitment to improve and to 

outperform reflects our understanding 

of our market, our customers and 

our people. For 2013, we will remain 

focused on society, as we set the pace in 

innovation, help companies to improve 

their businesses, consolidate our cultural 

values as a company, lead the way towards 

technological change, and contribute to 

a more advanced and more competitive 

society. In 2012, we were able to point 

ONO the right way. In the years to come, we 

will continue to progress in this direction. 




Key figures 



Who is ONO? 


ONO’s 



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‘Our commitment to improve 

and to outperform reflects our 

understanding of our market, 

our customers and our people’ 

Print 


The Figures 

9



Rosalía Portela 

CEO’s, ONO 

‘At ONO we know that we are 

ready to satisfy all the demands of 

the market, thanks to our range of 

superior products and the high 

level of quality that we provide to 

our customers’ 

We have completed what has been a very 

significant year for ONO, a year in which 

we have consolidated our strategy and 

strengthened our operations and our 

finances, despite the continued challenges 

of a market where consumer demand is 

falling and where there is intense downside 

pressure on prices. 

2012 was characterised by two clear 

dynamics in the market. Firstly, there 

was an increase in competition in the 

sector and, secondly, an acceleration in 

convergence. The increased level of price 

competition has forced the entire sector 

to rethink the design and marketing of its 

products and services. In this context, it is 

essential that we continue to improve our 

cost structure to remain competitive. 

Convergence is a trend that has been 

developing for some time. We made our 

commitment to convergence at the start 

of the year, when we launched new rates 

for ONO Móvil and offered very attractive 

bundles for our customers, including 

Broadband, Television, Fixed Telephony and 

Mobile. This strategy enabled us to end the 

year as leaders in triple play and in bundled 

services. This was the key to increasing the 

loyalty of our clients and to maintaining 

our ARPU. 

At ONO we know that we are ready to 

satisfy all the demands of the market, 

thanks to our range of superior products 

and the high level of quality that we 

provide to our customers. This is possible 

thanks above all to the capacity and the 

quality of our network: 45,000 kilometres 

of fibre optic cable, which differentiates 

us from the rest of the market. In 2012 

we increased revenues by 5.9% to 

1,573 million euros, while EBITDA rose 

by 0.5% to 752 million euros. At the 

same time, we increased the number 

of service subscriptions by 2.2%. We 

obtained 45 million euros of free cash 

flow after interest payments on debt and 

after expenses associated with the debt 

refinancing process that we completed in 

June, thanks to which we now have a stable 

and mature capital structure. 

For ONO, innovation and the identification 

of new business opportunities will always 

be a priority. We have been able to 

reinforce our growth drivers and we are 

certain that we have high potential and 

upside for the future. We continue to lead 

the ultra-fast broadband market, with 

almost 700,000 customers at the end of 

the year. ONO is the only telecoms operator 

that can market these products to seven 

million homes. 

Our TiVo® product has positioned ONO as 

a pioneer in the Spanish television market. 

Almost 100,000 customers, or 11% of our 

customer base, are now enjoying a unique 

television experience which includes real 

HD and 3D content, the ability to record 

various channels at the same time and 

an intelligent content browser, just some 

of the characteristics that make TiVo® a 

unique product in the Spanish market. 




Key figures 



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10



ONO Móvil has represented a revolution for 

the sector, leading net adds month after 

month, and for our clients, who enjoy very 

attractive convergent tariffs that meet all 

their requirements. We are certain that our 

mobile service will lead to major business 

opportunities for ONO, not only in terms of 

growing the business but also in increasing 

customer loyalty and satisfaction. 

Finally, our services for SMEs are becoming 

an important growth lever that are 

consolidating ONO as a major player in the 

small and medium enterprise sector, thanks 

to our competitive and innovative offering, 

which includes unique and exclusive 

products. The SME and independent 

professional segment is performing very 

well, with revenue growth of 11.5% and 

206,000 services sold in 2012. In the 

operator sector, we also made major 

progress in 2012, with an increase of 

110%, consolidating the business as a 

new growth driver that will be continue to 

perform strongly in 2013. 

All of these innovative services have helped 

sustain our growth and our success in a very 

negative economic environment. But they 

are not the only factors. At ONO, we believe 

that our people, technology and leadership 

are the main values that make it possible 

for us to retain our strong market position. 

‘The quality of our organisation 

will continue to be a priority and 

a source of competitive advantage 

in the future’ 

To reflect this, in 2012 we also focused 

on improving the satisfaction of our 

employees. Their level of commitment to 

the company’s success is at record highs, 

as shown by the 2012 Working Climate 

Survey. This demonstrates the efforts 

and dedication of each and every one of 

ONO’s employees, who in a difficult year 

have again proved their professionalism 

and commitment to a company that is 

leading innovation in the Spanish telecoms 

market. The quality of our organisation will 

continue to be a priority and a source of 

competitive advantage in the future. 

We are now embarking on a year full of 

new challenges and ambitious projects, 

a year which will again be difficult but 

which will also be full of opportunities 

for ONO to deliver our entertainment and 

communications solutions to new and 

existing customers, and to continue to 

contribute to a more global and better 

informed world. 




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11

Who is ONO? 

Fibre is always the 

fastest option, and our 

customers know this... 

almost 700,000 people 

enjoy our high speed 

services. 


Who is ONO? 


ONO’s 



Corporate 


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700,000 

Print 


The Figures 

12

Who is ONO? 

Corporate profile 

ONO is the leading alternative provider 

of telecommunications services in Spain 

(fixed telephony, broadband and paytelevision) 

and is a major provider of 

mobile telecoms services. ONO is the only 

fibre operator with nationwide coverage 

that provides services to both households 

and businesses. 

North 

East 


Who is ONO? 


The history of ONO 

The shareholders 

Organisational 

structure 

Management team 

As of 31 December 2012, ONO delivers 

more than 4.7 million fixed and mobile 

services to 1.8 million residential clients 

and 105 SMEs, using its own high capacity 

fibre optic digital networks, which provide 

direct access to more than seven million 

homes across most of Spain, including the 

nine largest cities. 

South 

Central 


ONO’s 



Corporate 


In 2012, the Company generated revenues 

of 1,573 million euros, EBITDA of 752 

million euros and net profit of 52 million 

euros. 

In addition, ONO provides a complementary ADSL 

services in some areas. 

The Figures 

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Contact 

Information 

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The Figures 

13

Who is ONO? 


Mission, vision, objectives and corporate values of ONO 


Who is ONO? 

Mission 

Provide society with the best 

telecommunications products and 

services available, based on the daily 

efforts of a group of professionals 

that are committed to innovation, 

to excellence and to guaranteeing 

continued improvements in customer 

satisfaction. 

Vision 

Become the best telecommunications 

company for households and 

companies, positioning itself as a 

leader in the development of the 

digital society. ONO’s aspiration is to 

be a company with a high level of 

satisfaction with all its stakeholders 

and to remain committed to 

competitiveness and sustainability as 

the foundations for continued strong 

growth into the future. 

Strategic objectives 

• Pursuing leadership as the only 

cable company with nationwide 

coverage: 

- Positioning ONO as a leader in the 

telecommunications sector. 

- Investing selectively to provide a 

diversified, differentiated and high 

quality portfolio of products at 

competitive prices. 

- Continuously improving the 

standards of quality, security and 

reliability of the services provided. 

- Improving competitiveness, 

maximising value creation for 

clients and attracting talent into 

the organisation. 

• Optimising the return on resources: 

- Increasing operating and financial 

efficiency. 

- Applying rigorous criteria for 

investment that are appropriate for 

the growth and expansion strategy. 

- Maintaining a solid financial 

structure. 

• Promoting sustainable growth: 

- Respecting the social, 

environmental and economic 

context by following the 

recommendations of the major 

institutions that research this area. 

- Improving the society in which it 

lives, guaranteeing the wellbeing 

of citizens. 





structure 



ONO’s 



Corporate 


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Who is ONO? 


All of this can be possible because of a 

defined corporate culture, determined by 

a series of values that are present in all of 

ONO’s actions and all its behaviour. 

These values, which since 2010 have been 

the formal foundations for the Company’s 

culture, have reinforced the main 

competitive advantages of ONO, which 

are the main reasons for its growth. 

Efficiency 

Customer 


Who is ONO? 





structure 



At the end of 2012, the Board of Directors 

of ONO approved a Code of Ethics which is 

more than just another book of rules. The 

Code represents a mutual agreement by 

all the Company to encourage positive 

values and behaviour that can add value 

to the business and guarantee the highest 

levels of integrity. 

(For more information see 

ONO’s Responsability_Corporate 

Responsibility Focus) 

Leadership 

Innovation 

Teamwork 

ONO’s 



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15

Who is ONO? 


• ONO won 11 

cable franchises 

areas around 

Spain and starts 

construction of 

the network 

• 168,000 

residential fibre 

customers 

• 1st Internet flat 

rate 

• 480,000 residential 

fibre customers 

• Milestone of 1million 

home passed 

• Over 330,000 residential 

and 4,800 SMEs 

• ONO launched new TV 

packages: “Esencial”, ”Extra 

“and “Total” 

• Several iniciatives for 

reduce churn 

• ONO offered 4Mb to 

all its customers 

• 1.7m residential 

customers and 5.7m 

HRTM 

• Launch of Ojo 

• GOL TV added to TV 

offering 

• ONO launched 

50Mb in Madrid 

50Mb 

• Completed the 

deployment of 

DOCSIS 3.0 

• TiVo®: available for all 

of our customers 

• Further advances in 

mobile 

• New convergent offers 

• Successful completion 

of the refinancing 

process 


50Mb in all 

Spanish regions 

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 


Who is ONO? 





structure 



ONO’s 



Corporate 


The Figures 

• Launch of 

ONO brand 

• 1st full year of 

• ONO’s granted the license 

to offer fibre services in 

Castilla-La Mancha 

• Over 780,000 residential fibre customers 

• ONO started to offer free calls for life 

between its customers 

• Purchased of Retecal extending its coverage 

to Castilla y León 

• ONO acquired Auna 

widening its coverage to 

other Spanish’s regions 

• Jose María Castellano 

appointed Chairman 

• Transformation process to 

turnaround the Company: 

improve profitability and 

preserve liquidity 

• Rosalía Portela 

oppointed CEO 

• Net profit 


100Mb 


TIVo 

• 2.6Ghz mobile 

spectrum licence 

acquired for 9 

Spanish regions 

including Madrid, 

Valencia and 

Cataluña 

100Mb 

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16

Who is ONO? 


This new vision of communications began 

over twelve years ago, with the rollout 

into the first regions of a powerful, 

modern network that ONO has constructed 

kilometre by kilometre until it now covers 

45,000 km across all the geography of 

Spain. 

In 1998, the Spanish telecommunications 

market was liberalised, and following the 

entry into force of the General Law on 

Cable Telecommunications 42/95, ONO 

was able to compete in the tenders that 

were called. As a result, the Company 

obtained the licenses needed to roll out 

its network, and began to provide cable 

telecommunications services in Valencia, 

Castellón, Alicante, Murcia, Cádiz, Huelva, 

Cantabria, Mallorca and Albacete using 

its own network, becoming the main 

alternative to the dominant operator. 

As the company deployed its state-of-theart 

network in its regions, consumers began 

to realise the advantages of the Triple Play 

services it provided. 

At the end of 2002, ONO was already 

present in about one third of all homes that 

could receive its services. One year later, 

ONO won the license to operate in Castilla 

-La Mancha, and in 2004 it acquired the 

telecommunications operator Retecal in 

Castilla y León. 

In 2005, ONO made the definitive step that 

gave it the national scale that it currently 

enjoys, by buying Auna, the cable company 

with the largest proprietary network in the 

regions where ONO was not present. As 

a result of this acquisition, ONO merged 

its services with those of another leading 

company to create the business that is now 

Grupo Corporativo ONO, which has high 

capacity for providing advanced telecoms 

services, benefiting its customers and 

responding to their needs with reliable and 

highly useful communications solutions. 

In 2008, ONO launched high-speed 

Internet in various regions and in 2010 

became the only operator that was able to 

offer these speeds to millions of customers. 

At the end of 2011, ONO launched in 

some regions in Spain its next generation 

television service TiVo®, which in 2012 

consolidated its position as the most 

sophisticated service currently available in 

the pay-TV market in Spain, available for all 

ONO’s customers. 

In early 2012, ONO completed the roll-out 

of DOCSIS 3.0, one of the most modern 

and advanced technologies in the market, 

enabling it to offer ultra-fast Internet 

speeds over its fibre optic network. The 

implementation of this technology makes 

it possible to offer real browsing speeds of 

50, 100 and 200 Mb. This major investment 

in infrastructure has allowed ONO to 

position itself as the only company in 

Spain with its own fibre network covering 

practically the entire country. 

In addition, 2012 saw the consolidation of 

the Company’s mobile telecoms service. 

A leader in high-speed connections, ONO 

was able to adapt to the requirements of 

the market and upgrade its mobile offering, 

with very competitive plans that have been 

a major commercial success. 

In the year, ONO also successfully 

completed its refinancing. In October 

2010, ONO began this process, which 

ended in June 2012. Following a number 

of bond issues and the renegotiation of 

its bank debt, ONO was able to establish a 

solid and stable capital structure. 

The financial transactions completed 

over the course of the last two years 

demonstrate the confidence of investors 

in the Company, in a challenging economic 

and competitive environment, and allow 

ONO to embark on a new stage of flexibility 

and stability. 

ONO continues to move forward under the 

vision of offering its customers innovative 

and high quality services. 


Who is ONO? 





structure 



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17

Who is ONO? 


Shareholder data following the capital increase carried out in early 2013 

Providence Equity Partners, Inc. 

15.2% 

CCMP Capital Advisors, LLC 

15.2% 

Thomas H. Lee Partners, L.L.P. 

15.0% 

General Electric Structured Finance, Inc 

9.0% 

Quadrangle Capital Partners 

9.0% 

Caisse de Dépôt et 

Placement du Québec 

6.8% 


Who is ONO? 





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Acciones propias y otros 

1.6% 

Bregal Co-Invest 

1.4% 

Nortwestern Insurance 

Mutual Life Company 

2.3% 

Sodinteleco, S.L. 

3.9% 

Grupo Santander 

4.4% 

Val Telecomunicaciones, S.L. 

5.4% 

Ontario Teachers Pension Plan 

4.8% 

Grupo Multitel, S.A. 

6.1% 

Print 


The Figures 

18

Who is ONO? 


The following is a brief description of each 

shareholder in Grupo Corporativo ONO 

(“GCO): 

CCMP Capital, LLC (“CCMP”) –15.2% 

of capital– is a private equity company 

created out of the JP Morgan Chase & Co. 

split. Since 1984, it has invested over 13 

billion dollars in more than 380 companies 

across the world within the consumer, 

media, telecommunications, energy, 

industry, finance, health, hardware and 

software sectors. 

Providence Equity Partners, Inc. 

(“Providence”) –15.2% of capital– 

is a private equity company from 

the United States specialized in the 

telecommunications and media sector. 

Providence currently manages investments 

of around 22 billion dollars. Since its 

establishment in 1989 it has invested in 

over 100 companies. 

Thomas H. Lee Partners, L.P. 

(“Thomas H. Lee”) –15.0% of capital– is one 

of the oldest private equity companies in 

the United States. Since its establishment 

in 1974, Thomas H. Lee has invested 

over 12 billion dollars in more than 100 

operations across the world. 

General Electric Structured Finance, 

Inc. –9.0% of capital– is a division of GE 

Commercial Finance, General Electric’s 

financial services company and holds 

an equity stake in ONO through Global 

Telecom Investments, L.C.C., a major 

investor, in both debt and equity, and 

a supplier of structured finance, for 

companies in the telecommunications, 

energy, industry and transport sectors. 

Quadrangle Capital Partners (“Quadrangle”) 

–9.0% of capital– based in New York, is 

the private equity division of Quadrangle 

Group and manages over 3 billion dollars 

in assets. The company, established in 

2000, invests equity in companies from the 

telecommunications and media sectors. 

Caisse de Dépôt et Placement du Québec 

(“CDPQ”) –6.8% of capital– is one of 

the largest financial institutions in North 

America and manages public and private 

pensions and insurance funds. Through 

its subsidiaries, CDPQ offers private 

mutual funds and real estate management 

services to institutional investors. CDPQ is 

the leading fund manager in Canada and 

invests in private equity, real estate and the 

stock market. CDPQ holds an equity stake 

in ONO via Participel International Limited 

Partnership. 


Who is ONO? 





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Who is ONO? 


Grupo Multitel –6.1% of capital– is a holding 

company founded by Eugenio Galdón to 

promote and manage telecommunications 

and media projects in Spain and holds 

equity stakes in ONO via Telco Investment 

Europe S.á.r.l y Multitel Alfa, S.L.U. In 1992, 

Grupo Multitel was the first company to 

launch cable services in the liberalised 

telecommunications market in Spain. 

VAL Telecomunicaciones, S.L –5.4% of 

capital– is the holding company that 

groups most of the local shareholders of 

the companies acquired by Cableuropa. 

OTPP Power Luxembourg, S.à.r.l. –4.8% 

of capital– Ontario Teachers’ Pension Plan 

is the largest pension plan in Canada. An 

independent organisation, it invests the 

pension fund’s assets and administers the 

pensions of 284,000 active and retired 

teachers in Ontario. 

Grupo Santander –4.4% of capital– is 

the largest Spanish bank and the biggest 

provider of financial services in Latin 

America. Grupo Santander is one of the five 

largest financial institutions in the world in 

terms of market capitalisation. The Group’s 

main business areas include: Commercial 

Banking, Global Wholesale Banking, and 

Asset Management and Insurance. It has 

been an ONO shareholder since 1995 via 

Capital Riesgo Global, SCR S.A. 

Sodinteleco, S.L. –3.9% of capital– is a 

holding company which groups Retecal’s 

former shareholders, including: Caja 

España, Grupo Begar, Caja Segovia and 

Caja Ávila. Sodinteleco became an ONO 

shareholder after Retecal’s acquisition in 

2004. 

Northwestern Insurance Mutual Life 

Company –2.3% of capital– an insurance 

company founded in 1857, has lived 

through the Civil War, the Crash of 1929, 

the Great Depression, two world wars, and 

numerous recessions. 

Bregal Co-Invests, S.à.r.l., –1.4% of capital– 

is an active co-investor in amounts of 

between 10 and 50 million euros, with 

a presence in various sectors, including 

education, information services, cable, and 

aviation. 


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structure 



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Who is ONO? 

Organisational structure 


Who is ONO? 

Internal Audit 

Chairman 

General Counsel and 

Secretary of the Board 





structure 



Chief Execitive 

Officer 

ONO’s 



Corporate 


The Figures 

Annexes 

On-line Negocio business On-line Desarrollo Business 

Finance Residential 

Redes y 

Residencial Business 

Network and 

Empresas Sistemas IT 

and e Innovación Innovation Development 

de Negocio Tecnología Technology 

Personas, People, equipos Teams 

y recursos and Resources 

Contact 

Information 

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21

Who is ONO? 



Who is ONO? 





structure 



Chairman 


Chief Executive Officer 

Carlos Sagasta 

Chief Financial Officer 


ONO’s 



Corporate 


The Figures 

Annexes 

Guillermo Mercader 

General Director of 

Residential Services 

Víctor Guerrero 

Director of Business 

Rafael Brull 

Director of the 

On-line Channel 

Pablo Freire 

Director of Business 

Development 

Contact 

Information 

Paul Kearney 

Director of Network 

and Technology 

Carlos Moreno 

Director of Systems 

Antonio de la Fuente 

Director of People, Teams 

and Resources 

Juan Luis Delgado 

General Secretary and 

Secretary of the Board 

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Who is ONO? 



José María Castellano has been Chairman 

since November 2008 and an executive 

director of Banco Novacaixagalicia (NCG) 

since June 2011. 

Mr. Castellano was a member of the Board 

of Directors of Inditex from 1985 to 2005, 

and was appointed Deputy Chairman and 

Chief Executive Officer. Previously, he was 

Director of Information Systems at Aegon 

España, S.A. and General Manager and 

Chief Financial Officer of Conagra España, 

S.A. From 2002 to 2005 he was a member 

of the Board of Directors of Fadesa, S.A. 

and from 2005 to 2008 he served as a 

director at various companies, including 

ONO, Tous and Rothschild. He is currently 

Chairman of NCG Banco. He is currently 

Chairman of NCG Banco. 

Mr. Castellano is a Doctor of Economics 

and Business Studies and a Professor in 

Financial Economy and Accounting at 

the University of La Coruña. He is also a 

member of the Academy of Economics and 

Financial Studies. 


Rosalía Portela has been Chief Executive 

Officer since May 2009 and a member of 

the Board of Directors of DIA Discounts S.A. 

since July 2011. 

Ms. Portela has extensive experience in 

the telecommunications sector and was 

the Managing Director for the residential 

segment at Telefónica España for six years. 

Previously, she worked for the American 

multinational Kimberly Clark, first as 

head of the retail market area for Spain 

and Portugal and later as European Vice- 

President. Ms. Portela has also held senior 

positions in marketing in companies such 

as Repsol and Procter & Gamble, where she 

worked for over 14 years. 

She holds a bachelor’s degree in Economics 

from the Universidad Complutense of 

Madrid and a Master’s in Economics from 

the University of Memphis. 


Who is ONO? 





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Who is ONO? 


Carlos Sagasta 

Guillermo Mercader 

Víctor Guerrero 


Carlos Sagasta became Chief Financial 

Officer of ONO in April 2010. Before joining 

the Company, he was Financial Director and 

Controller of Abertis Telecom for five years. 

In 2003, he assumed the role of Director 

of Planning and Control at Retevisión 

Audiovisual, the main business unit 

of Abertis Telecom. Previously, Carlos 

worked for several years at Salomon Smith 

Barney and Gramercy Communications 

Partners in New York and then at E-laCaixa 

(Barcelona), the on-line subsidiary of la 

Caixa, the leading shareholder in Grupo 

Abertis. 

Guillermo Mercader has been Director 

General of Residential Services since 

January 2010. Mr Mercader has extensive 

experience in companies in this sector. 

He has been CEO of Ya.com, where he 

worked for seven years. Subsequently, he 

was Director General of Home for Orange, 

a company he joined when it acquired 

Ya.com. He has also held management 

positions at companies such as Wella and 

Coopers & Lybrand. 

He holds a degree in Business and Law and 

a Master’s in Financial Markets from the 

Universidad Autónoma of Madrid. 

Víctor Guerrero is Director of the Business 

Unit. From July 2006 to January 2009, 

he was ONO’s Regional Director for 

Eastern Andalusia. Previously, he held 

senior positions at Telepizza, including 

Director General of Portugal and the 

United Kingdom, Chief Financial Officer 

and International Director General New 

Business. He is a graduate in Business 

Administration and Financing from ETEA 

(Universidad de Córdoba), and holds an 

MBA from the Instituto de Empresa and a 

PDG from IESE. 

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structure 



ONO’s 



Corporate 


Carlos Sagasta has been a director of 

Eutelsat Communications, Hispasat 

and chairman of the Board of Overon, 

representing Abertis. 

He holds a degree in Business 

Administration and Finances from the 

University of Saint Louis (Missouri) and an 

MBA in Finances and Strategy from The 

Anderson School of UCLA (California). 

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Who is ONO? 


Rafael Brull 

Pablo Freire 

Paul Kearney 


Rafael Brull es el Director de Unidad de 

Rafael Brull has been the Director of the 

On-line Business Unit since January 2010. 

He has been in the on-line sector since 

2001, when he was appointed content 

manager at Universia. In 2003 he joined 

Ya.Com as manager of e-commerce and 

then director of content in 2004 and 

director of Internet in 2006, when he also 

joined the Management Committee of 

the company. From 2007 until 2010 (the 

year in which Orange bought Ya.com) he 

was the director of Portals, Services and 

Operations of Orange in Spain. 

His experience of on-line portals and 

e-commerce is complemented by his 

professional development at various 

Internet companies and a Master’s in 

e-business, in addition to his degree 

in Philosophy from the Universidad 

Complutense of Madrid. 

Pablo Freire has been Business 

Development Director since October 

2012. Pablo has held various positions 

since joining ONO following the acquisition 

of Auna in 2005. He has been Director 

of the Shareholder’s Office, Director of 

Strategic Planning and Control and of the 

Business and Operator unit for the last 

three years, where was in charge of the 

Company’s wholesale business as Director 

of Operators and Interconnection. Before 

joining ONO, Pablo worked in the Planning 

and Control area of AUNA and as an auditor 

and consultant in the Telecommunications, 

Media and Technology division of Arthur 

Andersen (now Deloitte). 

He holds a degree in Business 

Administration and a management 

development certificate from IESE. 

Paul Kearney is Director of Networks and 

Technology. Mr. Kearney joined ONO in 

June 2007 from Netia (a fixed telephony 

operator in Poland), where he was Chief 

Technology Officer. Previously, he had 

held various management positions in the 

telecommunications sector in the United 

Kingdom and Spain. 

He holds a degree in Engineering from 

the Dundalk Institute of Technology and 

a Master’s in Telecommunications from 

University College London. 

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Who is ONO? 


Carlos Moreno 

Antonio de la Fuente 

Juan Luis Delgado 


Carlos Moreno has been Director of 

Systems since 2000. Before joining ONO 

he worked as Director within the IP 

consultancy area and as project advisor at 

Thomson-CSF. Previously, he worked as a 

consultant in Spain and Portugal and as a 

project development engineer in Paris for 

Marben (ATOS Group). 

He is an industrial engineer from ICAI and 

holds a PDG from IESE and a Master’s of 

Science in Communication systems (MSc.) 

from the University of Wales. 

Antonio de la Fuente is Director of People, 

Teams and Resources. He joined ONO 

in 2004 as Director of Labour Relations 

and Risks Prevention. Previously, de la 

Fuente worked in the Legal Department of 

Vodafone Spain. He also worked as Labour 

Advisor in the Law Firm DLF Consultants 

and at FEDETT. 

He is a Law graduate from the Universidad 

Complutense of Madrid, holds a diploma 

in Labour Law and Social Security Law, is 

a Higher Graduate in Prevention of Risks 

in the Workplace, and is a member of the 

Royal Academy of Law and Legislation. 

Juan Luis Delgado is the General Secretary 

and Secretary of the Board of Directors of 

ONO. He has spent most of his career at the 

Company, with five years as deputy General 

Secretary, prior to which he was Manager 

of Corporate Development of the General 

Secretariat and of the Legal Department 

of the Company. Previously, he worked 

for a law firm in Madrid that specialises in 

company law. 

He holds a law degree from the University 

of Salamanca and a Master’s in Legal 

Advice from the I.E. Business School. 

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26


Fibre is a great 

facilitator, but it 

hasn’t been easy to 

achieve all of this… 

14 years of hard work 

and 8,000 million 

euros of investments. 


Who is ONO? 


ONO’s 



Corporate 


The Figures 

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Contact 

Information 

8,000,000,000 

Print 


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27


Products and services | Services to the residential sector 

ONO provides a wide range 

of telephony and personal 

communications services, and 

entertainment, data transmission 

and Internet access. These services 

have continued to develop, 

incorporating new technologies 

and increasing their functionalities, 

reflecting the Company’s permanent 

commitment to innovation 

Experience has shown that 

the success of ONO’s services 

offering is based on the simple 

and straightforward bundling of 

products: the ONO bundles, which 

deliver various services in one single 

product, and provide a solution that 

meets the needs of each customer. 

These bundles are available to both 

homes and businesses. ONO provides 

the most innovative solutions in the 

market, each adapted to the needs 

of every customer regardless of 

their size, from individuals to SMEs, 

large corporations and the Public 

Administration. 

Bundles 

Over the course of 2012, ONO’s strategy 

for marketing its products to new 

residential clients continued to be focused 

on the sales of bundles of two or more 

services. The Internet service was the 

growth driver, as this is the fastest growing 

market and the sector where the Company 

has the greatest competitive advantage. 

At the end of 2012, 86% of fixed fibre 

residential customers subscribed to 

a bundle of services. Of these, 46% 

subscribed to two services and 40% had 

a 3P bundle (Telephone, Internet and 

Television). In addition, at the end of 2012, 

more than 11% of ONO’s customer base 

subscribed to a mobile telephony service. 

Despite difficult economic conditions, 

this focus on sales has enabled ONO 

to consolidate the ratio of fixed fibre 

residential services subscribed to 

customers at a level of 2.25 per subscriber, 

or 2.47 if mobile services are included. 

(For more information about ONO’s 

bundles, please see: http://www.ono.es/ 

productos/combinados/) 


Who is ONO? 


Products and services 

ONO’s network 

Investment 

Innovation 

ONO’s 



Corporate 


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Products and services | Services to the Residential sector 

In October 2012, for the second 

consecutive year, ONO received the 

award for the fastest broadband 

operator in Spain. 

Broadband 

ONO is the leader of the high-speed 

broadband sector in Spain, thanks to its 

DOCSIS 3.0 technology, which provides 

high Internet access speeds using the 

hybrid HFC network. 

2012 was the year of the definitive 

consolidation of high-speeds. More 

than seven million homes can enjoy an 

unrivalled experience of browsing with 

ultra-fast connections of up to 100 

Mbps, opening up the full power and 

opportunities of the Internet and enabling 

customers to connect from multiple 

devices simultaneously. 

The customer base for high-speed services 

(of more than 30 Mb) increased from 30% 

to 50%, or around 700,000 customers in 

2012, reflecting the very positive reaction 

from the market to the Company’s highspeed 

offering. 

ONO adapts to all the requirements of 

the market and knows that there is an 

increasingly large and varied range of 

devices that connect wirelessly to the 

Internet in households. To respond to this, 

ONO has begun to offer a new process for 

installing devices and providing advice to 

its 50 and 100 Mb clients, to provide them 

with the best wireless browsing experience 

possible. 

In addition, ONO provides added value 

services such as Total Security Pack, PC 

Help and the new Virtual Hard Drive, 

which was launched in 2012 as part of the 

added value package. These services are 

the perfect complement for the Internet 

access offering, as they enable customers 

to enjoy a complete security package, 

remote assistance for solving any problem 

or doubt that could arise about their PC or 

the Internet, as well as helping them store, 

manage, synchronise and share all their 

information over the Cloud and on multiple 

devices. 


Who is ONO? 




Investment 

Innovation 

ONO’s 



Corporate 


The Figures 

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Contact 

Information 

In October 2012, for the second 

consecutive year, ONO received the 

award for the fastest broadband operator 

in Spain. 

(For more information please go to the 

ONO’s website: http://www.ono.es/ 

productos/internet/) 

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Television 

ONO provides its customers with a 

multichannel television service, with 

packages of thematic channels that 

range from basic to premium offers 

and including a pay per view service for 

new movie releases and live football. 

Programming includes a wide selection of 

television series, films, sport, news, music, 

documentaries and children’s channels. 

In November 2011, ONO launched Next 

Generation Television, TiVo® intelligent 

television, and in 2012 it completed 

the roll-out of the service, making it 

accessible in almost all areas covered by 

the Company. This ONO service, which 

is exclusive in Spain and is breaking new 

ground in European pay television, is only 

possible because of the capabilities of the 

Company’s fibre optic network. 

One of the main competitive advantages is 

that it allows Internet connections from 

any television sets, with users able to 

enjoy video and audio downloads without 

affecting browsing speeds. 

In 2012, ONO implemented new 

functionalities which have improved the 

TiVo® service: 

- the customer can now record three 

rather than two programmes at the same 

time, while viewing a fourth channel, and 

- the high definition offering has been 

improved, with a total of 24 linear channels in HD. 

At the end of 2012, ONO had around 

100,000 TiVo® customers, representing 

11% of its customer base for television, 

showing that this new form of viewing 

television is gradually being implemented 

across the Spanish market. 

ONO remains committed to offering the 

best television service in Spain, and in the 

first quarter of 2013 it rolled out TiVo® in 

its analogue regions. 

(For more information about TiVo, please 

go to ONO’s website: http://www.ono.es/ 

productos/television/tivo/). 


Who is ONO? 




Investment 

Innovation 

ONO’s 



Corporate 


The Figures 

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Contact 

Information 

Next Generation Television is a leap towards 

real high definition and 3D, both on ordinary 

channels and on the Videoclub service, as 

well as enabling the recording of several 

programmes at the same time. Customers can 

control live broadcasts, pausing and rewarding 

television programmes as they desire. 

TiVo® is considered to be ‘intelligent 

television’ because customers are able to 

teach the service about their habits and 

tastes. Over time, the service recognises 

what content may interest customers and 

makes suggestions about what to watch. 

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Fixed Telephony 


ONO ofrece distintos tipos de servicios de 

tONO offers various types of telephony 

service that adapt to the needs of its 

customers. These include: 

- A direct access “All inclusive” service, 

with a flat rate for national calls without 

restrictions, including line rental and 

maintenance, with various optional added 

value services such as voicemail, caller 

identification, speed dialling, call waiting, 

conference calling, withholding identification 

of calling number, restrictions on outgoing 

calls, and three call forwarding options. 

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Innovation 

ONO’s 



Corporate 


The Figures 

- An “Additional All inclusive” service, 

with the same advantages as “All Inclusive” 

but with a lower monthly fee. 

- Second home lines, with different 

monthly fees and calling plans, for second 

homes and elevators. 

ONO also provides a wide range of calling 

plans: 

- International calling plans for the 

countries most in demand with customers, 

enabling them to call certain countries at a 

competitive price, reducing their bills. 

- A wide and updated offering of fixedmobile 

plans that adapt to the needs of 

customers. 

In addition, the Company launched various 

promotions for both the individual telephony 

product and for bundles, and about 43% of 

customers now take advantage of a fixed to 

mobile plans, with the volume of these calls 

doubling since 2011. 

ONO also has a directory enquiries 

number, 11828. 

To complete the company’s offering, ONO 

also offers an extensive range of handsets 

(desk phones or wireless) that customers 

can either buy or lease, depending on their 

needs and preferences. 

In 2012, ONO completed the migration 

of its switching exchanges, evolving its 

network to a next generation network 

(NGN) voice platform using technology 

from Huawei. This enables it to manage 

electricity more efficiently and gives it 

the possibility of developing advanced 

multimedia services over IP in the future. 

By the end of 2012, nearly all ONO’s 

exchanges had completed the migration 

process. 

(See section: 

ONO’s network_Voice Switched Network) 

Annexes 

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Information 

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Mobile 

2012 was the year of fixed-mobile 

convergence and the take-off of mobile 

telephony at ONO. Reflecting this, 

ONO won the award for technological 

excellence as the best Mobile Virtual 

Network Operator (MVNO) in October at 

the II edition of the ADSLzone awards. In 

2012, ONO outperformed its competitors 

in terms of net adds, with very positive 

results: with around 417,000 mobile 

subscribers (voice and data), ONO is the 

fastest growing MVNO in Spain. 

Much of this success is due to the launch 

of convergent tariffs and the “Todo en 

ONO” rates, which are very competitive 

plans that include calls to any destination 

24 hours a day and data for browsing the 

Internet. 

Over the course of 2012, ONO moved 

away from the handset subsidy model 

and towards a financing model which 

enables customers to combine the tariff 

plan and the handset that best meet 

their requirements. Furthermore, the 

introduction of the microSIM enabled an 

increase in the smartphone portfolio and 

a more efficient management of SIM cards 

for ONO Móvil, as the two formats (SIM and 

microSIM) can be integrated on the same 

device. 

In addition, in 2012, ONO improved its 

Mobile Broadband offering with data 

plans for USB modems and new tariffs for 

tablets and HSUPA speeds which meet 

the requirements of customers for the 

best mobile Internet experience, enabling 

customers enjoy multimedia, social 

networks, streaming music and video, online 

chat, email, etc. 

Other Direct Access services (ADSL) 

ONO also offers telephony and broadband 

services to those customers who do not 

have direct access to its fibre network. 

The Company uses an infrastructure base 

that combines ADSL technology with the 

proprietary network of ONO. 


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Innovation 

ONO’s 



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Products and services | Services to the Business sector 

Small and Medium Enterprise (SME) 

In 2012, ONO continued to renew its value 

proposal for the SME and independent 

professional market in Spain, upgrading 

its commercial offering, increasing 

and extending its sales channels, and 

reinforcing the quality and dedication of its 

specialised Customer Care unit. 

ONO’s offer is founded on the delivery of the 

complete communications solutions that an 

SME or independent professional needs: 

- Broadband Internet with the launch 

of a pioneering product in Spain: 200 Mb 

for businesses, which has strengthened 

marketing of 50 and 100 Mb. 

- The launch of Nubo, the portal for cloudbased 

applications for SMEs, with a very 

extensive offering that enables users to save 

costs while facilitating everyday management. 

- Advanced services which enhance 

ONO’s value proposition, as part of the 

Nubo Virtual Exchange platform, managing 

campaigns, creating websites, etc 

- Flat rates for voice and additional 

telephony lines for larger SMEs. 

- The launch of the “Symmetric Fibre 

Internet product” for businesses with 

specific requirements, including 5Mb/5Mb 

or 10Mb/10Mb packages with 4 or 8 lines 

for calls. 

- Mobile telephony with flat rate plans 

of up 1,000 minutes, various ranges of 

handsets and tablets for professional use. 

- Mobile broadband (BAM). 

- Additional services such as TiVo®, 

the television offering for Horeca, email 

accounts, domains, intelligent network 

services, handsets, etc. The combination 

of these services in integrated bundles 

and with mobile offers has helped win new 

customers. 

- Personalised “multi-site” services for 

SMEs which operate in various locations 

To meet demand from this market, 

ONO has used both exclusive telephony 

platforms and indirect external channels 

with a presence in all regions covered by 

the Company and including professional 

services sectors, software, hardware 

and services providers, and independent 

professionals. 


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In addition, during 2012, there was an 

increase in on-line sales and marketing 

and in the proportion of customers 

generated from this channel, using the 

exclusive on-line store for Businesses and 

other new ways of generating sales from 

on-line channels. 

The progress made in bundling and new 

products, and the increase of marketing 

channels, were supported by: 

• organised events (e.g. Meeting Point 

by ONO) que contribuyen a que Pymes 

y autónomwhich helped SMEs and 

independent professionals to understand 

how technologies can help them be 

more efficient and productive; 

• worked with the Association of 

Young Businesspeople (AJE) in 

various initiatives: awards, education, 

commercial meetings, etc.; and 

• sponsored forums: the Network 

Congress, Web Congress, Supporting 

SMEs, Cloud Computing Professional 

Forum, Social Networking forums for 

professionals, etc. 

- Negotiation of agreements and 

promotions with companies and associations 

of SMEs to share joint benefits for the 

business sector, including agreements with 

ATA, the sponsorship of Fundetec, and others 


Who is ONO? 




Investment 

Innovation 

ONO’s 


- A Customer Care Service with a 

dedicated number, specialising in the 

professional segments and focused on 

customer satisfaction 

• participated in trade fairs: the 

Entrepreneur Fair, National SME 

Congress, OMEXPO, etc.; and 

- Specialised marketing, operations and 

Customer Care functions, to respond to the 

sustained growth of the portfolio of customers. 


Corporate 


The Figures 

- Use of the DOCSIS 3.0 network for 

both high-speed downloads and uploading 

content to the Internet. 

- Efforts to segment customers and 

potential customers, and continuous 

monitoring of their levels of satisfaction. 

Annexes 

Contact 

Information 

- Actions to position the brand, including 

a major presence at specialist fairs and 

events dedicated to SMEs and independent 

professionals. ONO 

Meeting Point by ONO event 

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34



Large Accounts and Corporations 

The capacity to provide state-of-theart 

telecommunications services over 

a proprietary high-speed network has 

positioned ONO as the best alternative for 

numerous companies located in Spain. 

Corporate customers demand sophisticated 

and specific services and ONO has 

responded to this by establishing a 

dedicated business unit for offering value 

added solutions for the communications 

needs of companies and the public 

administration. 

Excellence when supplying and 

delivering the service is a key factor, 

as communications are increasingly 

integrated in the business processes of all 

companies. ONO’s commitment is to offer 

customers efficient, reliable, and secure 

communications that represent a significant 

competitive advantage for their businesses 

Complete voice solutions 

ONO’s network allows it to offer customers 

the most advanced corporate voice 

solutions, configuring traditional or 

IP telephony and providing Intelligent 

Network (IN) solutions. . 

- Traditional voice services. Any 

infrastructure solution which includes 

analogue lines and digital lines, with a 

wide range of customer equipment and 

exchanges that are either sold or leased. 

These services can be financed, facilitating the 

technological upgrade process for customers. 

This solution is combined with competitive 

tariff plans and savings for all kinds of 

calls, designed on a bespoke basis for each 

customer, and includes the possibility of 

easy to bill services that enable companies 

to set aside fixed costs for the service. 

- Advanced IN services. The IN Platform 

enables customers to establish a professional 

image and be accessible to customers by 

using 900, 901 and 902 commercial prefixes, 

providing intuitive access to the most 

innovative functionalities for managing 

and controlling services, including: call 

recording, IVR services, receiving faxes 

on email, virtual operator, virtual ACD, 

conference calling and intelligent routing, 

among others. All these functionalities can 

be managed over the Internet. 

IP Telephony Solutions 

ONO offers a wide range of data services 

(MPLS and VPLS virtual private networks, 

guaranteed access to the Internet, pointto-point 

connections) and manages the 

data networks of some of the largest 

companies in Spain. ONO is leading the 

way in implementing unified corporate 

telephony and communication services 

using these data networks, with various 

solutions available: 

- IP Extensions. This service proposes 

an evolution to IP telephony and enables 

companies to overcome the technological 

barriers inherent to IP solutions, while also 

using a cost model that does not require 

large initial spending. 

The model is based on a completely 

personalised and managed unified suite of 

communications infrastructure, connected 

to the public network for call management 

and based in the ONO Data Centres. This 

means that ONO can provide corporate 

customers with the most powerful unified 

communications and collaborative tools in 

the market. 


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- ONO IP Trunking. This service 

represents an evolution in the management 

of telephony traffic, using secure IP access 

from the customer exchange to the public 

network, with the highest quality of 

service and cost reductions thanks to the 

convergence of voice and data services. 

Virtual private networks 

ONO’s sophisticated network enables 

it to offer its clients advanced services 

such as private interconnection between 

corporate sites, using Ethernet technology. 

Different metropolitan networks (MAN) 

can be interconnected with high capacity 

links with high Quality of Service, allowing 

multi-technology access solutions at the 

highest standards of quality and availability, 

IP MPLS solutions and native Ethernet 

interconnections (VPLS). 

- MPLS Virtual Private Networks. The 

MPLS service provides IP connectivity 

between corporate sites. It also enables 

the integration of different access 

technologies, for both main access and for 

back-up access, providing an alternative 

back-up which guarantees availability at all 

times. 

- ONO LAN VPLS. This service offers 

high-speed interconnection between local 

corporate networks, at the metropolitan 

level and nationwide. It is an Ethernetbased 

network that enables transparent 

communications between the various LANs 

of the client. 

It also enables the integration of different 

access technologies, for both main access 

and for back-up access, providing an 

alternative back-up which guarantees 

availability at all times. 

Internet Access and connections between 

corporate sites 

ONO’s Internet Access services for 

Corporations enable customers to access 

all the information and services of the 

Internet services using the ONO network, 

managed from end to end with a very 

high quality of service delivery. The 

Corporations portfolio has two offerings 

that are adapted to the requirements of 

each company: 

- Guaranteed Internet services for 

medium and large companies, and 

for suppliers of Internet content, is a 

symmetrical service which guarantees 

100% of the flow of traffic and the highest 

level of reliability of service, allowing 

customers to define the service as suits their 

requirements. The service includes a wide 

range of possibilities in terms of agreed 

bandwidth, access technologies, customer 

equipment, IP addressing, backup, DNS 

service, domain management, etc. 

- The Broadband Internet service 

for small and medium enterprises and 

offices of large companies offers a series 

of asymmetric and symmetric forms of 

Internet connection using different access 

technologies. Depending on the location 

of the site, the customer can choose either 

fibre access or ADSL. 

The Dedicated Line service provides 

customers with a point-to-point 

connection between corporate locations, 

so that they can transmit any kind of 

information on a dedicated and secure line. 

The service is aimed for other operators 

without their own infrastructure and for 

companies who want to connect their main 

offices and their data centres. The service 

offers a wide range of transmission speeds 

and customer interfaces. 


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ONO Cloud Services 

ONO Cloud Services are virtual 

infrastructure services that use the cloud: 

virtual servers (VPS), mass storage, on-line 

backup, etc. It enables the highest level of 

reliability and confidence for a company’s 

Internet presence. 

To offer this service, ONO has 25,000 m2 

for locating client equipment, saving them 

costs and providing the best conditions of 

security and connectivity. 

exchange, streaming video distribution, 

virtual PCs, remote office, etc. These enjoy 

the Company’s guarantee and the best 

suppliers, including Microsoft, HP, Dell, 

Cisco, VMware and Hyper-V. 

Actions and Sponsorship 

The Large Accounts area has also paid 

special attention to positioning the brand 

by supporting events, trade fairs and 

conferences, with three main areas of action: 

various events such as Telecommunications 

Evenings and Awards in various regions 

(Aragón, Valencia, Castilla la Mancha,…), 

ANDITEL events, the ACUTEL Fair, etc. 

- The business world, via Andalucía 

Management, Málaga Valley, Vertice 

Business CUP, Contact Center Awards… 

- Corporate Social Responsibility (CSR) 

in events such as Esesa, C2T, Ciudades 

Abiertas (Smart cities), EDU+ITC, etc. 


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ONO Cloud Services also include email 

- Telecommunications, including 

(For more information please see the 

website for ONO corporate customers and 

professionals: http://www.ono.es/empresas/) 

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Large accounts and Corporation event 

Wholesale 

ONO also provides wholesale services to 

other telecoms carriers, leveraging the 

reach of its national access network, high 

capacity and long distance trunk services 

and its infrastructure and interconnection 

agreements. 

- Infrastructure. ONO provides other 

telecoms carriers who operate in Spain 

with services to lease its network capacity, 

such as leased lines managed on its 

network, providing guaranteed broadband 

services for all capacities using different 

access technologies, including PDH, SDH, 

Ethernet and Lambdas 

- IP connectivity services (MPLS, VPLS). 

These guarantee different levels of services, 

and enable operators to provide virtual 

private networks for voice over IP and the 

transmission of different types of data (from 

various protocols for IT applications to high 

definition video content). 

- Traffic management services for 

fixed and mobile voice. These provide 

national and international transit services 

for termination and pick up of the traffic of 

other carriers, and also provide services to 

resell prepaid traffic, premium rate services 

and all types of intelligent network services. 


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ONO has its own nationwide next 

generation network. This network 

consists of access networks (mainly 

fibre optic cable, complemented 

by ADSL and radio access), voice 

and data switching networks, the 

transmission network, and mobile 

and the audiovisual and mobile 

services networks. 

Architecture of the ONO network 

The ONO network is composed of 45,000 

km of fibre optic cable, of which about 

19,000 km is in the regional and trunk 

transmission network. About 85% of the 

fibre optic network in this segment is 

leased from electricity, gas and railway 

companies, while in the metropolitan area 

most of the network is owned by ONO. 

95% of the ONO network consists of fibre 

optic cable. 


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Fibra 

Coaxial 

Copper pairs 

Fibre Network up to Final Node 

Coaxial Access Network 

Home Network 

The Figures 

Annexes 

Headend TV 

Internet 

PSTN 

Network 

Backbone 

DVB-C 

DOCSIS 1.1/3.0 

CMTS 

Primary Node 

SDH 

DVB-C & 

DOCSIS 

Telefonía 

MUX 

Final Node 

Amplifier 

Tap 

STB 

Cable 

Módem 

Wi-fi 

Contact 

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Base and 

telephony 

Ovarlay Access Network (pairs) 

Print 


The Figures 

39



Access Networks 

The access networks are characterised by 

their extensive coverage and high level of 

reach. The Hybrid Fibre-Cable FTTN (Fibre 

to the Node) access network covers all 

the main Spanish cities, a total of over 

300 municipalities, with access to over 7 

million homes. 

The primary node is the main node from 

which the network is distributed over a 

specific urban area or region, covering 

between 10,000 and 60,000 homes. 

This node houses the head end for the 

data services that establish bidirectional 

communication sessions with the cable 

modems of users, using the DOCSIS 1.1 or 

3.0 protocols, and is where the aggregation 

is made of data services with audiovisual 

services (digital TV, PPV and VoD) over 

fibre. Telephony services can be delivered 

in the traditional manner, from a POTS and 

ISDN services multiplexer using a copper 

pair network, or using IP over coaxial fibre, 

using the Packetcable protocol. 

(Multimedia Terminal Adapter) which 

serves as a converter for VoIP-traditional 

telephony. 

The high capacity of the HFC access network, 

based on the roll-out of fibre optic cable to 

very close to the home, enables a wide range 

of digital communication and entertainment 

services, including both Triple Play services 

(Voice, Television and high capacity Internet) 

to residential customers, and advanced ASP 

and end-to-end connectivity services for 

business customers and other operators. 

ONO has successfully implemented the 

DOCSIS 3.0 standard in all the head ends of 

its access network, completing the rollout 

to 100% of the network, including the 

Canary Islands, in 2012. The technology 

is compatible with previous versions of 

the DOCSIS protocol and eliminates the 

traditional speed limits of capacity on 

just one carrier. This new standard has 

facilitated a new universe of services with 

speeds of 30, 50 and 100 Mbps, which has 

enabled a rise in the number of subscribers 

to these speeds to now represent 50% of 

ONO’s total broadband customer base. It 

has also allowed ONO to launch a premium 

200 Mb service for SMEs. 

As a complement to the FTTN-HFC network, 

and in order to increase the reach of its 

access network, ONO has unbundled the 

local loop in 132 telephone exchanges to 

provide services based on xDSL technology. 

Using this xDSL access network, ONO 

provides connectivity with the ONO network 

to 134,000 lines, mainly in Madrid and 

Barcelona. 


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In the final node (FN) the optical signals are 

converted into electronic signals that are 

distributed along coaxial cable buses which 

connect various homes. 

In the client’s home, Internet services, 

which terminate on the cable modem, 

are separated from TV and VoD services, 

which terminate on a set top box 

decoder. Voice services are obtained 

from the copper pair or from an MTA 

Fibre 

ADSL 

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The Figures 

40



High capacity access networks 


In addition, to provide high capacity 

connections to business customers, ONO 

has rolled out various technologies: 

- Point to point radio access network 

(around 3,400 radio links, of which 

around 300 are high capacity). In 2012, 

a major roll-out of equipment increased 

connectivity for operator clients. 

MADRID 

VALENCIA 

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- Roll-out of FTTB (Fibre to the 

building), mainly in Madrid, Barcelona, 

Valencia and Seville 

- ADSL equipment in various industrial 

parks. 

IMS 

Softswitch 

Media Getaway 

Toll 5ESS ALU (8) National transit 

Internat. 5ESS ALU (2) International transit 

Local S12 ALU (8) 

CS2K Nortel (1) 


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Voice Switched Network 

ONO has a Next Generation voice 

communications network which it uses for 

most of its analogue, ISDN and IP telephony 

services. This network is complemented 

by a series of platforms which enable 

value added services, such as voice mail, 

premium services, VPN and others. 

ONO has also a network of TDM exchanges, 

which it is migrating to the NGN platform. 

During 2012, ONO continued to migrate 

customers from the TDM voice platform 

to the NGN platform, enabling ONO to 

efficiently deliver new Voice/Data and 

Fixed/Mobile convergent services using IP. 

By December 2012, nearly all the exchanges 

had migrated to the new technology. 

Also in 2012, ONO completed the 

replacement of its intelligent network 

platform with a new platform that will 

enable it to deliver the current portfolio 

of services (portability, 90X/80X 

numbers, virtual private networks, and 

indirect access) and to introduce new 

functionalities. 

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Mobile Network 

In 2007, ONO began to operate as a 

Mobile Virtual Network Operator, offering 

its subscribers an integrated telephony 

service. The ONO network since then has 

included mobile switching and mobile 

services nodes needed for this service. 

ONO has continued to develop in its 

mobile network to allow it to offer mobile 

broadband services using 3.5G+ standards 

(HSDPA, HSUPA and HSPA+) with access 

speeds of up to 16 Mb. 

In 2012, the capacity of the platform 

for data services was increased, and the 

portfolio of mobile broadband services was 

extended with new flat rate plans. ONO 

also continued to commercialise a wide 

selection of handsets with its logistics 

partner. 

At the end of July 2011, ONO was 

awarded LTE licenses in the 2.6 GHz 

band in Madrid, Cataluña, the Comunidad 

Valenciana, Cantabria, Murcia and La Rioja, 

reflecting the company’s commitment 

to using new standards in its mobile 

network. In early 2012, a pilot test of this 

technology was carried out. 

MMSC 

GGSN 

MAD-MSC 

WAP GW 

SASN 

TME-SG SN INS Prepaid 

MADRID 

Internet 

MMS 

Interconnection 

BBS 

Charging 

DB 

Provisioning 

Charging 

IP 

BACKBONE 

INS IN 

SAPC 

Voice 

MAD-CT 

VLC-CT 

SMCS 

HLR MAD 

TME-STP 1 

TME-STP 2 

BCN-MSC Voice 

TME-B MSC 2 

TME-B MSC 1 

SS 7 

BCN-CT TME-S TP 1 

HLR BCN 

Voice Mail 

TME-M MSC 1 

TME-M MSC 2 

VLC-CT 

Transit MMS s 

International 

Roaming 

TME-S TP 2 

BARCELONA 


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Transmission Network 

The Transmission Network is responsible 

for connecting ONO’s multiple nodes and 

service centres across Spain. The network 

is composed of a very large amount of 

transmission equipment that is connected 

with each other by various technologies 

(mainly fibre, complemented by radio). 

The equipment of the Transmission 

Network uses various standards (SDH, 

WDM, Ethernet) which are designed to 

transmit large volumes of information for 

long distances (hundreds or thousands of 

Km). The Transmission Network transports 

traffic of any kind – data, voice, or 

audiovisual services – in a transparent way 

to comply with the quality requirements 

for each kind of traffic (error rate, margins 

for round trip delay times and jitter, % of 

service availability, etc.). The architecture 

of the Transmission Network is generally 

adapted to the geography of the service 

nodes whose traffic it carries. The nodes 

tend to be organised into various basic 

sub-networks that use different forms 

(ring, point to point, bus, point to multipoint, 

mesh). Ring or mesh networks are 

able to create redundancy using specific 

mechanisms, so that multiple paths are 

available to transport the traffic in the 

event of failures. 

The Transmission Network is also 

segmented by geographic level. Depending 

on the location of the nodes and 

connections, the network is categorised 

into Backbone, Regional and Metropolitan. 

- The Trunk Network is formed of high 

capacity long distance links that connect 

the main nodes, mainly located in large 

cities. These links connect the main 

nodes and aggregate traffic from their 

geographies to exchange this traffic with 

other regions and/or metropolitan areas, 

at transmissions rates of up to Tb/s. The 

Backbone Network of ONO can provide 

connections of up to 10 Gbps and new 

capacities of 40 Gbps and 100 Gbps are 

planned for the coming years, as well as 

the possibility of restoration at the optical 

level from 2013. 

The following is a map of the Trunk and 

Regional connections of the Ono network 

across Spain 


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Data Network 

ONO’s data network is based on a double 

backbone architecture. 

Regional Architecture of the IP MPLS Backbone 

Higher hierarchy element. 

CORE 


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ONO has an IP MPLS Backbone which it 

uses to deliver all its data services, for both 

businesses and residential customers, and 

to provide connectivity to other networks. 

The ONO Data Network is an integral part 

of the global Internet and has various IP 

interconnection points for exchanging 

data nationally and internationally. Its 

architecture consists of multiple nodes 

and uses a functional hierarchical network 

design with different levels of aggregation 

and an extensive reach, enabling the pickup/distribution 

of residential services, fixed 

and mobile services for SMEs and large 

accounts, and metropolitan IP/Ethernet. 

ONO also has an Independent IP Backbone 

dedicated entirely to transmitting the TV 

Service. In 2012, this backbone network 

was extended to the area previously 

covered by AUNA and used for transmitting 

the advanced TiVo® service, with next 

generation equipment based on VPN 

Multicast. In the coming years, this will be 

extended to the entire ONO network. 

AG-N1 

Tenerife 

Las Palmas 

Lanzarote 

Santander 

Coruña Oviedo 

Pamplona 

Léon Burgos 

Vigo 

Logroño 

Lérida Gerona 

Valladolid 

Zaragoza 

Barna 

Tarragona 

Salamanca 

Castellón 

Madrid 

Espanix 

Valencia 

Palma 

Albacete 

Cordoba 

Alicante 

Jaén 

Huelva Sevilla 

Granada 

Málaga 

Cádiz 

Murcia 

Almería 



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Finally, ONO retains an ATM Backbone 

with has been reduced in size but which is 

still used for a certain volume of business 

services that have not still migrated to 

MPLS solutions. 

Print 


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Audiovisual Services Network 

ONO’s Audiovisual Services Network is 

composed by a head end infrastructure 

which receives channels from various 

content suppliers, adapts them and 

distributes them to the network; a 

conditional access system that manages 

encryption and access rights to content; 

a signalling system that allows STBs 

to pick up the channels, access EPG 

information and update the STB software 

and a customer terminal (STB) which 

allows customers to access the content in 

accordance with their subscription as well 

as to access high value audiovisual services 

such as VoD, audiovisual services over IP, 

meta data, search, recommendations, etc. 

ONO also uses a programming and playout 

system for promotional channels and 

in-house PPV. 

Access to channels is controlled by 

the conditional access system that 

is responsible for encrypting channels 

and providing users with access rights in 

accordance with their service bundle. It is this 

system that ensures the security of the TV 

platform. 

In addition, ONO has a video on demand 

service (VoD), which is an on demand 

system for viewing high quality video 

and audio content, in which the user can 

browse through an extensive catalogue, 

select content, establish a connection 

between the VoD platform and the user 

terminal (STB), and then view the content 

selected, all while maintaining full control 

over the system by the use of special 

functionalities (pause, stop, fast forward, 

rewind, bookmarks, etc. ) that are similar to 

those on other household video devices. 


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National headend Regional headend User Terminals 

TV SAT 

DTT 

OWN 

CHANNELS 

VoD 

Encoding 

Multiplexing 

Encriptyon 

NDS 

NGTV Platform 

TiVo 

NAGRA 

Fibre Optic 

Transmision 

Network 

Regional DTT 

TV Distribution 

DVB-C 

Local 

storage 

Encriptyon 

NAGRA 

Interactive Apps 

TiVo 

FTTN 

Access 

Network 

TiVo 

STBs 

Print 


The Figures 

Storage 

ARRIS 

VoD Distribution 

DVB-C 

NDS 

45



All of this network infrastructure, combined 

with the software provided by the 

exclusive agreement with TiVo®, provides 

the most advanced pay-TV service in Spain, 

or Next Generation Television Services 

(NGTV). 

NGTV is focused on providing customers 

with the best user experience available 

and is based on a combination of current 

high functionality TV (such as a PVR 

service that can record three channels 

at the same time, HD channels, VoD, 

search and recommendation services, 

a high quality HD graphical interface, 

remote programming, interactive services, 

audiovisual services over IP, a Zapper 

service that is adapted to the sale strategy, 

etc.) with the next generation of TV (3D, 

broadband connected TV, hybrid devices, 

access to on-line content, etc.). The 

NGTV platform has required the complete 

overhaul of the architecture of ONO’s TV 

platform, with the incorporation of a new 

conditional access system, a new head 

end infrastructure and a new STB that is 

integrated with TiVo® services, while at the 

same time integrating these new platforms 

with the existing VoD platform and with 

ONO’s business systems. 

By implementing this new TV network, ONO 

is now able to provide its customers with 

advanced functionalities that no other 

competitor has in Spain, such as a search 

engine with personalised recommendations 

that reflect the habits of the user, multiscreen 

capability, remote recording, home 

media sharing, etc. 

In 2012, ONO continued to roll out NGTV 

to nearly all its network and updated 

the service with new functionalities 

and improvements, and in early 2013 

it completed its commercial offering in 

Navarra and La Rioja. 

Over the course of 2013, ONO’s NGTV platform 

will continue to evolve, in order to offer 

more functionalities with the PVR service, 

improving the user experience even more. 

Operations Support System 

All the technologies that form part of the 

ONO network also have a management layer 

(OSS, Operations Support System) which 

automates critical tasks in the network, such 

as service delivery and continuity, network 

monitoring and configuration and obtaining 

information about usage and performance. 


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ONO’s network evolution 

ONO, as part of its process to continuously 

improve the customer experience, is 

analysing the evolution of different 

technologies for their possible introduction 

in the network. 

The main technology pilot tests carried out 

in 2012 are listed below. 

1. RFoG pilot 

Thanks to RFoG (RF over Glass) technology, 

it is possible to roll out FTTH (Fibre to the 

Home) access, delivering all the same 

services with the same network and 

customer equipment. The technology 

represents an evolution of the access 

network in which the head end equipment 

and the business and provisioning systems 

are 100% compatible with those used in 

FTTN-HFC roll-outs. The basic difference 

with the current network is that the 

Optical Terminal Node (ONU), in the 

residence of the customer, is only used in 

the upload direction when there is a signal 

to transmit, so that there are no collisions 

with signals from other customers. In the 

download direction the ONU is just the 

same as only other Conventional Optical 

Node. As a result, the customer premises 

equipment (CM and STB) is the same, with 

the same services as in the FTTN-HFC 

network. 

This roll-out technology leads to helpful 

simplifications of specific network roll-out 

and maintenance scenarios. 


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Diagram of RFoG Architecture 

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DIGITAL 

TV 

Optical 

transmitter 

1550nm 

Optical amplifier 

(EDFA) 

Contact 

Information 

e 

1550nm 

o 

CMTS 

e 

o 

Ultra low noise 

optical return path 

receiver 

WDM 

1610nm 

1550nm 

(DS) 

+ 

1610nm 

(US) 

1:32 

... 

1:64 

Optical 

splitter 

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The Figures 

47



2. Public WiFi network pilot 

In 2012, ONO launched a pilot for public 

WiFi services (in unlicensed frequencies) in 

the city of Alicante, in order to confirm the 

viability of the technology, identify impacts 

on the ONO network and integrate both 

networks, assess the possibility of using 

public WiFi for off-loading traffic from 

ONO’s mobile network and to evaluate its 

acceptance by customers. 

Once again, thanks to the flexibility and 

quality of its fibre network, ONO was 

able to quickly roll out a new public WiFi 

network with extensive coverage. 

The pilot WiFi network consists of a 

dedicated core platform, connected to 

ONO’s Data Network, with all the elements 

needed to control and ensure Internet 

access from different client devices (PCs, 

tablets, smartphones) and from different 

access points in the public WiFi network. 

Three types of public WiFi Access points 

have been rolled out, in the free frequency 

bands of 2.4 Ghz and 5 GHz: 

- A network of DOCSIS 3.0 cable 

modems of ONO clients in Alicante, 

providing a so-called Community WiFi 

network. Using these modems, a second 

WiFi network, separate from the client’s 

private WiFi network, is established, with 

dedicated bandwidth for connecting 

to the ONO network. Because of this 

innovative design, the residential 

customer service is not compromised, in 

terms either of performance or security. 

Architecture of the Pilot WiFi network 

INTERNET 

Backbone 

Network 

ISG 

Thanks to these different types of Access 

Points, a high level of coverage has been 

achieved in Alicante, especially in popular 

public areas (the beach, harbour, squares, 

shopping centres, bus station, etc.). 

The WiFi network based on external and 

internal Access Points enables ONO clients 

to access the Internet, as well as non-ONO 

clients who want to make occasional use of 

the service. However, the Community WiFi 

network is restricted to ONO clients only. 

Cable 

Network Core 

Subscriber & 

Policy Manager 

TPV - PAYPAL 

€ 

Portal cautivo 


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- External access points in areas with 

high density of customers (hotspots). 

- Interior access points in shops and 

restaurants. 

Antenna 

Management 

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48


ONO’s network | Management of the environmental footprint of the roll-out and maintenance of ONO’s network 

Article 45 of the Spanish Constitution 

recognises the right of citizens to enjoy an 

adequate environment as an indispensable 

condition for personal development. 

The environmental responsibility 

that guarantees this right falls both on 

individuals and companies. 

At ONO, respecting the environment and 

contributing to sustainable development 

are key principles, with environmental 

responsibility taking the lead. In its 

programmes the Company includes 

strategies to minimize environmental 

impacts, for example by implementing 

technologies that when deployed to do not 

have secondary effects or negative impacts 

on the environmental balance. 

ONO is also committed to the continuous 

improvement of its processes, at all 

times maintaining the satisfaction of its 

customers, the desired level of quality 

for its products and services, as well as 

to compliance with legal requirements 

and environmental regulations, and the 

application of a series of additional 

internal principles in the environmental 

protection area, which include: 

- Continuous monitoring of the compliance 

of its facilities, activities, products and services 

with all legal requirements and regulations 

for the environment, especially for electric 

and electronic equipment. 

- Identifying the aspects and 

environmental impacts that are associated 

with its activities and processes, and 

applying the operational controls needed 

to minimize those deemed significant. 

- Assuming the commitment to prevent 

and minimise contamination. 

- Efficiently using resources in the 

roll-out, upgrading and maintenance of 

its communications network, offices and 

technical centres, as well as in service 

delivery. 

- Training and raising the awareness 

of its employees about environmental 

issues, in order to ensure that their tasks 

are carried with the highest respect for this 

model. 

- Controlling and reducing as much as 

possible the consumption of resources, in 

particular electricity, water and paper. 

- Controlling the CO 2 

emissions 

associated with its activities, measuring 

its carbon footprint to prioritize actions to 

minimize emissions. 

- Optimizing the management of the 

waste, both hazardous and non-hazardous, 

that is generated in its centres and 

achieving the highest level of recycling 

possible. 


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- Establishing the communications 

channels needed for the model to be 

disclosed and understood by all levels of 

the organisation and to be available to 

suppliers. 

- Ensure the best landscaping of its 

facilities, minimising their impact and 

contributing to preserve the flora and 

fauna of the neighbourhood. 

- Integrating the environmental 

requirements of the purchasing 

processes, requiring a commitment from 

suppliers to respect the environment. 

- Cooperating with the public 

administration and users, and with 

other stakeholders who help to maintain 

satisfactory relations. 

- Raising the awareness of employees 

about the importance of complying 

with the Model, as they can exercise 

an important role in environmental 

preservation. 

ONO understands that every decision 

has an ecological impact with either a 

negative or a positive result. In 2012, it 

continued to implement strategies and 

actions which contribute to reducing its 

environmental footprint. The main actions 

carried out during 2012 include: 

1. Implementation of a Waste Management 

Model 

In recent decades, there has been 

increased concern about the 

environmental and health problems caused 

by waste. Experience has shown that to 

achieve the right control of waste, an 

appropriate waste management policy is 

essential. 

The proper control of waste includes the 

correct management of processes of 

waste generation, handling, conditioning, 

storage, transport and final destination, 

all without causing negative impacts on 

the environment or on living beings, and if 

possible at a low cost. 

As a result, ONO has developed and 

implemented a Waste Management Model 

which controls all environmental aspects 

derived from delivering its services, in 

particular waste management, in order to 

minimize its impact on the environment. 

ONO understands that the prevention 

and reduction of the environmental 

impact of its activities and facilities is the 

responsibility of all its team. Consequently, 

the Company strives to provide them 

with the means, the training and the 

information that they need to act in 

accordance with this Model. 


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To support the Model, internal 

communications have been used to publish 

the documents that are included in the 

Model: 

- Guide of Good Environmental 

Practices, which includes the good 

environmental intentions from the 

Company at all levels, for their 

understanding and application. 

- Manual for storing, labelling and 

packaging for suppliers to comply with 

legislation. 

- Basic Environmental Principles to 

be followed by suppliers, which includes 

the principles that suppliers must 

comply with. 

- Environmental Addenda to include in 

contracts with suppliers, including in the 

contracts the environmental requirements 

to be complied with. 

- Guide for environmental assessment 

for suppliers, which helps to assess their 

suitability in terms of their environmental 

approach to the services requested by any 

area of the Company. 

- Plan for Management of Waste at 

Building Sites, which aims to contribute to 

reducing the number of tips and reducing 

soil contamination. 

Compliance with the legal and regulatory 

framework applicable (international, 

European, national, regional and local), 

and the willingness to adapt to any 

future norms and social requirements is 

a commitment and a responsibility for 

ONO. This model monitors and assesses its 

compliance and extends it to its suppliers. 

The correct management of waste also 

involves those suppliers who carry out 

activities that can generate any type of waste. 

Reflecting this, the Model includes a series of 

Environmental Requirements for Suppliers 

who provide their services at ONO sites or 

who distribute their products to or for ONO. 

All suppliers must be aware of and comply 

with the environmental principles of the 

Company, which are included in their 

contracts. To ensure this point, a Plan for 

supplier awareness has been developed 

which covers 80 companies and which 

aims to inform, assess, and ensure the 

suitability of these companies under the 

Waste Management Plan 

Any deficiencies found in terms of 

compliance with these requirements by 

suppliers have been eliminated, ensuring 

compliance with all environmental laws 

that are in force at the time. The Model 

also includes certain rules and voluntary 

commitments that are not a legal 

requirement. 

One of the environmental requirements 

is that suppliers can provide traceability 

of their waste management from its 

generation to the final destination. This 

record enables monitoring of waste 

generated by each centre, and allows 

the waste to be traced and any relevant 

certificates to be provided. 

At the end of the fourth quarter of 2012, 

ONO made available the on-line tool 

JUNO, which enables and facilitates 

communication, monitoring and control 

over traceability, as well as supporting 

the other processes involved in the Waste 

Management Model: 

- Maintenance of data and associated 

documentation. 

- Waste management, enabling the 

different phases of waste to be recorded, 

from generation to final treatment in 

the recycling plant, with the associated 

documentation. 

- Assessment of suppliers. ONO users 

responsible for assessing suppliers can 

do so and can also record any incident 

detected in the process. 

- Auditing of the documentation 

associated with waste. Any document 

associated with waste can be audited and 

any incident recorded. 


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At the end of 2012, the Health and Safety 

company that ONO employs to prevent 

risks in the workplace was given another 

activity: to monitor compliance with the 

requirements of suppliers that concern 

Waste Management. 

- On-site inspections. Checks are 

made of waste management during visits 

to coordinate and inspect suppliers, in 

order to ensure the correct and immediate 

disposal of the waste generated. 

- Monthly meetings and reports where 

the person responsible for ONO will report 

to the designed health and safety person 

about the activities of suppliers who 

generate waste during the month, and 

confirm their activities in the month. 

- Control of the traceability of waste, 

using ONO’s tools for this purpose (JUNO), 

with confirmation that the tool is being 

updated appropriately. 

- Regular re-assessments to: 

• verify the suitability of suppliers, in 

accordance with the environmental 

requirements of the Model, 

• request and check the documentation 

needed, and 

• carry out monitoring until it has 

been confirmed that information has 

been delivered/uploaded to the ONO 

mechanism. 


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ONO is committed to the 

environment by buying electricity 

with zero CO 2 

impact. 

2. Minimising the environmental impact 

Communication technologies allow 

information to be exchanged without 

transport and they minimise the 

consumption of paper and office materials. 

As a result, services are more efficiently 

delivered, optimizing routes and reducing 

the impact on the environment. 

ONO is committed to minimising the 

environmental impact, and to this end it: 

- Offers the possibility of working 

without needing to move location. 

- Supports local development thanks to 

its broadband activity. 

- Reduces the consumption of resources, 

especially paper, office materials and 

energy, by using e-billing. 

- Supports e-learning, providing users 

with access to distance training without 

using transport. 

- Organises Video Conferences, or 

meetings without the need for transport, 

reducing the consumption of resources and 

the impact on the environment. 

2012, ONO assigned increasing importance 

to initiatives that contribute to reducing 

the environmental impact, in particular by 

optimizing electricity consumption of both 

equipment and offices. These include: 

- Reduction of electricity consumption 

and emissions of CO 2 

ONO is committed to the environment 

and in 2012 it carried out a series of 

actions known as “Green-line” which 

were designed to reduce electricity 

consumption and emissions of CO 2 

. 

Thanks to these actions, the Company was 

able to reduce its electricity consumption 

by 10.35 Gwh (3,73x1013 joules) in 2012, 

reducing the impact of its CO2 footprint 

by 6,340 tons. 


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2010 2011 (*) 2012 

Consumption evolution 

Total consumption (Gwh) 248.35 228.44 218.09 

Variation (Gwh) (14.03) (19.91) (10.35) 

(*) 

Until 2012, the electricity consumption data were approximate. 

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53



“In the last 3 years, the savings of 

ONO’s electricity consumption is 

equivalent to planting 115,580 trees” 

The main initiatives that have contributed 

to this reduction include: 

- VPE Project (Voice Platform 

Evolution). Decommissioning switching 

centres and migrating to a new technology. 

- Adjusting the reference temperature 

for offices and technical rooms according 

to the procedure established in the previous 

year which defines the process for reducing 

as much as possible the activation and 

deactivation of air conditioning equipment, 

without damaging telecoms equipment 

prematurely because of a high temperature. 

- Good Practices. Minor improvements 

to optimise air conditioning (cabling, 

segregating unused spaces, re-ordering 

grilles, optimization of warm air corridors, 

forced ventilation projects in cabinets and 

exchanges, etc. 

- Optimisation of network centres 

and equipment, leaving some sites, 

concentrating network equipment, 

decommissioning equipment without 

service, etc. 

- Improvements following 

decommissioning of switching centres. 

Improving sites to optimize the temperature 

following the disassembly of the exchanges. 

- Freecooling. ONO has installed a 

system in 62 of its centres which uses 

outside air to cool technical rooms. The 

system is innovative and effective. 

- R22. Replacement of underperforming 

air conditioning equipment with R22 gas 

for efficient equipment. 

- Turning off air conditioning in nodes 

of the access network where it is not 

necessary, and optimising AC equipment 

when there are several sets in one centre. 

- Adjustments and controls that reduce 

reactive power consumption in 75 actions. 

Aware of the environmental situation and 

of its important role in society, on March 

5th 2013, World Energy Efficiency Day, 

ONO launched a campaign to raise the 

awareness of everyone at the Company 

about the importance of only using the 

electricity they really need. The plan is 

based on two main elements: supporting 

efficient habits by using Intranet 

communications, and providing courses 

in good practices to the areas with the 

greatest consumption of electricity. 


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- Reduction of the Visual Impact 

In 2012, ONO carried out and executed 

studies on how to optimize its equipment 

and reduce the visual impact of its 

network. 

These actions included: 

- Elimination of cabinets in public 

highways, and replacing unsightly 

cabinets. 

- Migration of customers and dismantling 

of radio sites. 

- Dismantling platforms and ONO 

telecom antennas thanks to the 

optimisation of equipment, in Valencia, 

the Canaries Islands, Andalusia and 

Catalonia. 

- Prevention and reduction of noise 

pollution 

In 2012, ONO made improvements to its sites 

and to its equipment in order to reduce noise 

pollution, including: 

- Improvements to soundproofing 

- Insulation around equipment 

- Installation of silent blocks to minimise 

vibrations 

- Replacement of noisy air conditioning 

- Measurements of noise to confirm 

compliance with regulations. 

Examples of the installation of acoustic 

cabinets with sound-absorbing panels on 

the inside: 

- Reduction of radio-electric emissions 

ONO’s efforts to optimise its radio 

infrastructure have helped reduce its radioelectric 

emissions. The following actions 

have been carried out: 

- Decommissioning of BTS sites 

- Migration of 7 high capacity 

transmitters to fibre optic cable 

- Implementation of new spectrum 

efficient technologies 


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Investment 

Since the start of its operations, 

ONO has invested significantly in the 

telecommunications sector in Spain. These 

investments have been focused mainly on 

rolling out its fibre optic network, acquiring 

equipment, continuously improving 

services, installing products in customer 

premises as well as investing in systems 

and other smaller investments. 

Until 2008, investments were focused 

mainly on rolling out the next generation 

fibre optic network. Thanks to this, ONO 

now has the largest next generation fibre 

optic network in Spain, reaching more than 

7 million households in the main provinces, 

or about 48% of the total number of 

households in the country. 

Now that ONO has achieved a high level 

of coverage with its network, the focus of 

its investments is on modernising systems 

and equipment to be able to offer the most 

advanced services in the Spanish market, 

such as ultra-fast Internet speeds, next 

generation television and voice over IP and 

mobile telephony services. 

2012 was a year of significant investments 

by ONO in continued enhancement of the 

network, updating systems to offer the 

best products and services in the market to 

customers. Total investments in 2012 were 

299 million euros. 


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Homes released to marketing (‘000) (Fibre) 

Capex (€m) 

7,030 7,043 7,063 

244 292 299 

2010 2011 2012 

2010 2011 2012 

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56


Investment 

In addition to the recurring investments 

that ONO makes to provide its customers 

with telecoms services, the main 

investment projects in 2012 included: 

- Development and commercialisation of 

high speeds Internet in Spain 

In 2012, ONO completed the roll-out 

of DOCSIS 3.0 technology in its entire 

network. This state-of-the-art technology 

enables ultra-fast Internet speeds of up 

to 200 Mb to the entire customer base, 

making ONO the only operator that can 

offer these speeds to millions of Spaniards. 

At the end of 2012 around 700,000 

customers (c. 50% of the customer 

base) already enjoyed 30, 50 and 100 

Mb products, proving that there is real 

demand for these high-speeds in Spain 

and that ONO is in a privileged position 

for responding to this demand from the 

market. 

High-speed Internet customers (‘000) 

9.2% 

127 

29.7% 

424 

49.2% 

698 

2010 2011 2012 

Customers ≥30Mb 

Customers with 

high-speed Internet 


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(See sections: Products and Services _ 

Broadband and ONO’s network_ 

Access network) 

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Investment 

- Development of next generation 

television (TiVo®) 

Another priority area for investment for 

the Company was the development of next 

generation television in partnership with 

US company TiVo®. 

This innovative product has functionalities 

never before seen in the Spanish market. 

TiVo® is a decoder with a hard disk system 

that can record up to three channels at 

the same time while watching a fourth 

channel; it has an intelligent browser that 

memorises the tastes of users and offers 

viewing suggestions depending on their 

consumption habits; the quality of the 

product is optimal, as it incorporates HD 

and 3D channels, etc. In addition, TiVo® 

also enables other Internet functionalities 

such as search engines and social networks 

but in a ground-breaking and innovative 

way. 

In October 2011, ONO launched the TiVo® 

services in the regions of Madrid and 

Barcelona and in 2012 it extended the 

service nationwide 

1% 

TiVo® customers (‘000) 

2% 

4% 

TiVo® Customers 

% of TV customer base 

6% 

11% 

95 

56 

34 

8 

16 

T4 11 T1 12 T2 12 T3 12 T4 12 

Although this innovative product was only 

launched one year ago, it has received an 

extremely positive response in the market, 

with around 100,000 customers (11% of 

television clients) now subscribing to TiVo®. 

In addition, satisfaction surveys indicate 

an excellent level of satisfaction with this 

innovative service. 

(See sections: Products and Services_ 

Television and ONO’s network_Audiovisual 

Services Network) 

- Upgrading the voice network (Huawei) 

ONO also invested significantly in updating 

its voice network in partnership with 

Huawei, which in 2012 completed the 

migration of all switching equipment, with 

no service disruption to customers. 

This means that the Company can not 

only improve its voice services but also 

significantly reduce its operating expenses, 

in particular the costs of electricity, leases 

and maintenance 

(See section: ONO’s network_ Voice 

Switched Network) 


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Innovation 

La innovación es uno de los principales 

Innovation is one of the main drivers of 

ONO’s progress and growth. It is one of the 

five Group values and is also a major source 

of competitive advantage. Innovation 

has helped the Company’s technological 

solutions lead it to a very competitive 

market position, making it the only fibre 

operator with nationwide coverage. 

ONO aspires to offer continuous benefits 

to its customers and the sector, based 

on permanent technological innovation. 

It encourages the creation of new ideas, 

products, services and practices that add 

value to the Company and to society. In 

April 2012, ONO began to roll out a new 

innovation model, with two objectives 

(See section: ONO’s network_ONO’s 

network evolution) 

1º Developing the innovation culture 

at the Company 

In general, both worldwide and in 

the market in which ONO operates, 

it is essential to offer customers the 

best know-how possible. As a result, 

innovation needs to permeate all 

levels of the organisation, helping it 

to offer customers the best service 

there is. 

2º Steering innovation 

Innovation does not end when the idea 

is born. It needs to be developed. The 

development process can guarantee 

that the idea is supported by financial, 

technological and market analysis, 

and by a proof of concept that helps 

understands its pros and cons. 

It is the innovation area of ONO 

that is in charge of this model, 

supporting all the other departments 

who are involved. 

The model is based on the participation 

of all employees and the definition 

of a life cycle for ideas. The following 

diagram illustrates all these phases: 


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Innovation 

Existing 

projects 


Who is ONO? 

Innovators 

Committee 

Crowdsourcing 

Permanent 

Innovation 

Committee 

IDEA 

Permanent 

Innovation 

Committee 

Analysis of 

decisions 

Pilot 

PROJECT 




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Technology 

monitoring/ Research 

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The first filter is represented by the 

Innovation Committee, which has a 

rotating membership that is made up of 

employees who join on a voluntary basis. 

The Committee is responsible for the 

first filtering of ideas that arrive in the 

innovation mailbox. This results in ideas 

moving to the next filter. 

The second filter is supported by the 

Permanent Innovation Committee, which 

comprises of directors from the Residential, 

Business, Technology, Finance, Systems and 

On-line Channel areas. This Committee is 

responsible for prioritising the ideas and 

beginning the life cycle of the ideas, first 

by analysing them from the perspective of 

innovation, and if this result is favourable, 

then organising a pilot or proof of concept 

that will be assessed by the Committee. 

If a pilot is successful, all the information is 

provided to the corresponding area, for the 

idea to be implemented as a project. 

This model reflects ONO’s interest in 

ensuring that the talent of its employees 

can lead to innovation and to new 

possibilities for themselves, the Company 

and its customers. 

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We were voted Best 

Mobile Virtual Network 

Operator in Spain at the 

2012 ADSLzone Awards, 

because of our service, 

the competitiveness of 

our calling plans and the 

growth we recorded. 

ONO’s Responsibility 

Fibre is our growth 

driver, but our most 

recent source of 

satisfaction is our 

mobile telecoms service… 

more than 400,000 

mobile subscriptions 

in 2012. 

400,000 


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Corporate Responsibility Focus 

Development of ONO’s Corporate Responsibility 

• Cooperation with the Juan XXIII Foundation to 

create courses for the integration of the mentally 

handicapped in the workplace, using new 

technologies 

• Support to the Adelias Foundation project in 

Nador (Morocco) 

• Cooperation with the Red Cross, Entreculturas 

Foundation and Médicos del Mundo 

• Implementation of ONO’s corporate values 

• Signing the UN Global Compact 

• Creation of the Corporate Responsibility website 

• New model for Purchasing becomes operational 

• Cooperation with the Bip-Bip Foundation and Germán Sánchez 

Ruipérez Foundation, with ONO becoming the technological partner 

for the Casa del Lector project in Madrid-Río… 

• Signing of the II Cooperation agreement with the Public Entity Red. 

es to participate in campaigns to encourage the use of electronic 

invoices and bills 

• Sponsors of the Global Education Forum (GEF), the XVII 

Telecommunications Sector and Information Society Meeting at IESE- 

Madrid, of the Prizes for best Doctoral Theses and best End of Course 

Projects at the Official College of Telecommunications Engineers 

• Christmas Campaign: cooperation with UNICEF 

• Preparation of the 1st Management 

Plan for Corporate Responsibility 

• Increased participation in CR events 


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Corporate 

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Commitment to 

stakeholders: 

1. Shareholders 

and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


2006 - 2009 

2010 2011 

2012 

2013 

Corporate 


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• Approval of the corporate values of ONO 

• First Integrated Annual Report 

• Implementation of G3 standard from the GRI 

• Support for the Sponsor a Tree Foundation – 

ONO Wood 

• Christmas Campaign: collecting toys for the 

YMCA Foundation and Adelias Foundation 

• Preparation and approval of the Code of Ethics 

• CR actions and sponsorship in the business 

community 

• Working with special employment centres for 

the disabled 

• Commitment to the ONO Wood 

• Christmas Campaign: cooperation with Cáritas 

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The starting point for rising to a challenge 

such as a commitment to sustainability 

has to be to understand one’s own 

opportunities, strengths, weaknesses 

and barriers to success. For this reason, 

ONO has been implementing a Corporate 

Responsibility (CR) project. 

Over the course of recent years, ONO 

has established the foundations for this 

project, based on the three main elements 

of sustainability - economic, social and 

environmental – and establishing a series 

of values and Code of Ethics that are 

key mechanisms for guiding the Group’s 

employees, managers and the members of 

its governance bodies in all their actions. 

In 2010, ONO developed and established 

five corporate values, which were 

implemented in 2011 based on an 

ambitious plan of internal communications: 

a newsletter, open sessions, e-learning 

(ONO CAMPUS), etc. 

The results of this effort were positive, as 

in 2012 these values were reflected in the 

day-to-day life of all employees. 

In order to reinforce these values, at 

the end of 2012 the Board of Directors 

approved a Code of Ethics that is more 

than just another book of rules. The Code 

represents a mutual agreement by the 

entire Company that aims to support 

positive values and behaviour that can 

add value to the business and guarantee 

the highest levels of integrity in the actions 

of every employee. 

The Code provides guidance about the 

behaviour that is expected by everyone 

at ONO, based on the assumption that 

everyone is responsible for acting as is 

expected and that under no circumstances 

should any employee put the Company 

in risk by acting unduly. It aims to be an 

instrument for support and guidance. 

To ensure the proper use of the Code 

of Ethics, ONO has made available to all 

employees various channels for making 

and managing complaints (e.g. the 

whistleblowing channel on the portal 

www.enonono.com, managed by Internal 

Audit). This means that those people who 

believe it appropriate can disclose in good 

faith any irregular practices that may 

breach the Code. 

In addition, an Ethics Committee has 

been established which, among other 

powers, can guide anyone at ONO about 

any uncertainties in the interpretation of 

the Code of Ethics, and where anyone can 

disclose possible breaches. 

This Committee comprises of the Secretary to 

the Board of Directors, the Director of Human 

Resources, the Internal Auditor, the Manager 

of Compliance and a member of senior 

management, who rotates every 12 months. 


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The purpose of the Ethics Committee is to: 

- Support the distribution, awareness 

and compliance with the Code of Ethics in 

the organization. 

- Interpret the Code of Ethics and 

provide guidance during uncertainties. 

- Facilitate the resolution of any disputes 

concerning the application of the Code of 

Ethics. 

- Provide reports directly to the Board of 

Directors or, if applicable to the Audit and 

Compliance Committee. 

- Report on its activity to the Chairman 

of the Board of Directors and the Chief 

Executive Officer. 

- Regularly report to the Organisation 

about those aspects of the Code which are 

most relevant to the different areas. 

- Supervise the procedure that has been 

established for handling complaints and 

processing any information and queries 

received about the issues covered by the 

Code, in general making sure that these are 

appropriately managed and resolved. 

The Ethics Committee may act on its 

own initiative or on the instigation of any 

employee who makes a complaint in good 

faith using whatever channel is available. 

The aim of creating a culture of corporate 

responsibility is a challenge that requires 

long term management, as it implies: 

reinforcing the values of the Company so 

that they are understood and assumed, 

creating an appropriate framework for 

actions, training employees and raising 

awareness, and establishing mechanisms 

that serve to establish, measure and 

manage progress. 

In 2012, the Company remained 

committed to the main agreements about 

corporate social responsibility, including 

the Principles of the United Nations 

Global Compact and the compliance of its 

Annual Report with the standards of the 

GRI (Global Reporting Initiative). 

As part of its global approach to corporate 

responsibility, ONO continues to focus on 

both social and environmental actions: 


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Social action: 

ONO complies with the requirements 

of Spain’s legislation on integrating 

disabled people in the workplace, both by 

providing direct employment and also by 

using alternative measures such as using 

organisations which support the training 

and integration of disabled people. The 

Company is aware of the importance 

of integrating disabled people into the 

workplace and in 2012 it hired various 

services from companies whose mission 

it is to provide disabled people with 

employment, replacing cleaning contracts 

by contracts with Special Employment 

Centres. 

The Company has also been involved in 

other corporate responsibility actions 

and sponsorship, in order to support 

local businesses with strategies and 

services that improve competitiveness and 

help restart commercial activity and, in 

consequence, the Spanish economy. 

In 2012, the business area of the company 

organised various programmes aimed 

at reactivating economic growth and 

supporting entrepreneurs, especially 

women entrepreneurs. ONO worked jointly 

with various associations to achieve this. 

The most significant events in 2012 were: 

- Supporting SMEs, with the aim of 

supporting Spanish SMEs in events across 

the country and using an on-line platform 

that allows any company that registers to 

have free and easy access to the knowledge 

(legal, technological, commercial, 

communications) it needs to grow. 

- Meeting point by ONO, a programme of 

events and communications established by 

ONO for SMEs to discuss new technologies. 

- Cooperation with the AJE Association 

to support and promote companies and 

support the entrepreneurial spirit of its 

young members. 

- Cooperation with Fundetec to support 

the use of Information and Communication 

Technologies (ICT) to reduce the digital 

divide, focused in particular on efforts with 

groups at risk of digital exclusion and with 

SMEs, micro-companies and independent 

professionals, with the aim of improving 

their productivity and competitiveness. 

- Cooperation with Womenalia to 

support and promote the incorporation of 

women into the business world. 

- Cooperation with ESESA “with eyes 

of women”, which aims to help bring 

together all participants, men and women, 

through a professional event discussing 

the experiences and main management 

tools used in companies managed by 

women. 

ONO has assumed the commitment of 

promoting the benefits of ITC and is 

trying to bring them to children and young 

people. Today, new technologies are an 

essential tool for teachers and students. 

Incorporating them in the classroom 

is not only a challenge but a reality. In 

2012, ONO has rolled out a programme, 

EDU+ITC, which consists of holding 

events at schools and colleges in which 

qualified experts in education and new 

technologies participate, many of whom 

have the advantage of being teachers with 

a vision of this issue that is based on daily 

experience. In addition, at these events the 

schools can share their experiences and 

practices. 

In December 2012, in response to the 

financial situation of many Spanish families, 

ONO decided to help the neediest by 

establishing an agreement with Cáritas. 

The amount set aside for commemorating 

Christmas was given to this Association 

and used to help mitigate the effects of 

the recessions. This initiative also gave 

employees the opportunity to participate 

as individuals by contributing on a 

personalized microsite. 


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Environmental action: 

Respecting the environment and 

contributing to sustainable development 

are basic principles for ONO. As a result, 

the Company strives to be involved in 

activities and programmes that support the 

environment. In 2012, ONO: 

- continued to work as a sponsor of the 

Tree Foundation with the commitment 

to work to reforest the zone and create 

the ONO Forest. 

- participated in the “Ciudades 

Abiertas” (“Open Cities”) Event 

organized by the council of Rivas 

Vaciamadrid, which is a leading 

national and international event 

for organisations, institutions and 

companies concerned with ways to 

improve efficiency, sustainability and the 

quality of life in cities. 

- included within its programmes 

strategies to minimize its environmental 

impact and made a commitment to 

continuously improve its processes, 

maintaining customer satisfaction, the 

quality of its products and services, 

compliance with legal requirements 

and environmental regulations, while 

applying a series of additional internal 

principles in the area of environmental 

protection. 

In recent decades, there has been 

increased concern about the 

environmental and health problems caused 

by waste. Experience has shown that to 

achieve the right control of waste, an 

appropriate waste management policy is 

essential. As a result, in 2011 and 2012 

ONO developed and implemented a Waste 

Management Model which controls all 

the environmental issues derived from 

delivering its services, in particular waste 

management, in order to minimize the 

impact on the environment. 

In 2012, ONO published on its Intranet 

a series of documents about the new 

model, to raise the awareness of all 

employees, including: the Guide of 

Good Environmental Practices, Manual 

for storing, labelling and packaging for 

suppliers to comply with legislation, basic 

Environmental Principles to be followed by 

suppliers, Environmental Addenda, Guide 

for environmental assessment for suppliers, 

Plan for Management of Waste at Building 

Sites, etc. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

(See section: Management of the 

environmental footprint of the roll-out and 

maintenance of ONO’s network) 

Print 


The Figures 

66



2013 will be a year of consolidation for 

Corporate Responsibility at ONO, with the 

roll-out of the first Management Plan for 

Corporate Responsibility at the Group. 

This plan, developed by the Corporate 

Responsibility department, will have a 

long term focus and will aim to provide 

the management elements needed to 

guarantee its successful implementation in 

the Company. 

The Management Plan will focus on: 

- Reinforcing corporate values and 

complying with the Code of Ethics. 

- Establishing an organisational model 

for Corporate Responsibility which can 

involve all departments of the company at 

all levels, and other stakeholders. The main 

aim will be to transmit to all levels of the 

organisation the importance of responsible 

management and a working philosophy 

that is committed to the environment. 

- Training and awareness-raising for ONO 

employees. 

- Making Company Governance more 

transparent. 

- Broadening the commitment with 

society, including social and environmental 

criteria. 

ONO aspires to reach a point at which 

corporate responsibility is fully integrated 

into its strategy and in its daily business, 

forming part of its culture as a business. 

There is still much to be done. ONO faces 

many difficulties, but it is establishing the 

foundations for this and consolidating them 

within its corporate structure. 

ONO continues to rely on the effort of 

each and every one of its departments 

and employees to rise to this significant 

challenge. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

67


Commitment to stakeholders 

ONO recognises that all the stakeholders in 

its activity have a legitimate interest in the 

various aspects of the daily business of the 

company. The company is fully aware that 

it plays a major role in economic, social, 

and environmental development. 

In 2010, ONO started on a new stage of 

direct relationships with its stakeholders 

and in recent years this has begun to yield 

results. 

ONO’s commitment is to create value 

for shareholders and investors, for 

customers, employees, and suppliers, and 

for the media and society as a whole. To 

maintain this commitment, the Company 

is continuing to analyse how corporate 

responsibility issues impact its various 

stakeholders. 

For ONO, corporate responsibility is a 

process of continuous improvement. It is 

highly focused on maintaining open and 

constructive relations with all stakeholders 

and it sees dialogue and participation 

as key elements for earning the trust of 

its stakeholders. ONO has a number of 

communication channels for channelling 

the expectations and opinions of its 

stakeholders and for providing responses 

that create value for the business and for 

stakeholders. 

Media 

Society 

Suppliers 

Shareholders 

and Investors 

Customers 

Employees 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

68


Commitment to stakeholders 

Communication channels 

Stakeholder 

Shareholders and Investors 

Customers 

Employees 

Suppliers 

Media 

Society 

Communication channel 

Company website: https://www.ono.es/sobreono/ 

Shareholders and Investors e-mail: investor.relations@ono.es 

Company website: www.ono.es 

Customer area: 

- Residential: https://www.ono.es/clientes/registro/login/ 

Number for acquiring services: 1400 

- Business: https://www.ono.es/empresas/ 

Number for acquiring services: 1403 

Customer care line: 902 929 000 

Directory enquiries: 11828 

Corporate Intranet 

Employee Portal 

HR department 

Purchasing area: consultacompras@ono.es 

Communication area: comunicación.ono@ono.es 

Company website: www.ono.es 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

69


Commitment to stakeholders | Shareholders and Investors 

“The foundations of confidence 

that ONO aims for in its relations 

with the financial community are 

based on the continuous search for a 

transparent, fluid and close dialogue 

and on the application of the values 

of credibility, value and guidance to 

the market.” 

1. Shareholders and Investors 

To manage these relations, ONO has a 

Shareholder Relations department, which 

is integrated into the Chairman’s office, 

and an Investor Relations department, 

integrated into the Financial Department. 

The tasks of both departments include 

identifying and resolving any concerns and 

requests for information from shareholders, 

analysts, current and potential investors, 

bondholders, credit rating agencies 

and other players in the market, using 

a combination of different media and 

communication channels to facilitate these 

relationships. 

The Shareholder Relations office responds 

to all requests with a personalised service 

and enables shareholders to participate 

in General Shareholder Meetings 

electronically. 

The Investor Relations department, as well 

as publishing financial information on the 

web site (http://www.ono.es/sobreono/ 

inversores/key-stats/), regularly sends 

e-mails disclosing all relevant financial 

events to investors interested in improving 

their understanding of the company. The 

IR department also talks by telephone 

to investors who want to deepen their 

knowledge or who have specific questions 

about the Company. 

In order to achieve these goals and to 

improve transparency and relations, in 2012 

the Investor Relations team carried out 

an intensive series of activities, including 

organizing road shows in Europe and the 

US, attending many sector conferences 

and one-on-one meetings, and welcoming 

investors to the company to improve their 

understanding of the Company, its business 

model and its strategy. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

(See sections: B.1.42 and E3 of Corporate 

Governance Report) 

In addition, in early 2013 the Corporate 

Responsibility area joined the Investor 

Relations department. The concepts of 

sustainability and corporate governance 

are increasingly important and there are 

an increasing number of investors who are 

looking not only at financial performance 

but also at other factors, including 

governance and social and environmental 

issues. In the long term these factors have 

a major influence on financial performance 

and contribute to value creation. 

Annexes 

Contact 

Information 

Print 


The Figures 

70


Commitment to stakeholders | Customers 

“The satisfaction of customers 

is essential, both to maintain the 

current customer base and to 

ensure a long lasting relationship 

with clients. ONO believes that this 

satisfaction depends on the value 

and quality of the services that it 

provides to its customers.” 

2. Customers 

ONO is completely committed to improving 

the satisfaction of its customers. It has 

invested continually in improving customer 

service and in optimising all processes in 

this area. The Company has focused on 

identifying possible anomalies, needs and 

requirements so that it can contribute to 

improving the efficiency of processes and 

the quality of the services it delivers. 

For some time, ONO has been using the 

Net Promoter Score (NPS), a synthetic 

indicator that represents the proportion 

of clients who are “promoters,” in other 

words those clients who are loyal to the 

brand and who are its best ambassadors. 

The indicator also connects the loyalty of 

clients to the growth and profitability of 

the Company. 

For yet another year, ONO rose to this 

challenge, reflecting its continued 

investment in its customers, which ONO 

believes is the only way of prospering in 

the market. 

Installations and Provisioning 

In 2012, ONO was focused on customer 

satisfaction and implemented an 

installation and provisioning process for 

new services, aiming to carry out these 

processes more efficiently. 

The Company did not only improve its 

installation processes with technicians, 

but also launched a project for selfinstallation 

of high-speed Internet orders, 

leading to a rise in the proportion of new 

clients installing their own services. 

These are some of the reasons why ONO’s 

installation service receives the best score 

from its clients. The average satisfaction of 

clients remained at a score of near to 9 in 

surveys carried out in the year. The average 

level of recommendation for this process, 

the so-called net promoter score, was 

higher than 73% in the year. 

In 2012, it was especially important to 

support the campaigns launched by 

ONO to retain clients and improve the 

penetration of new services: increasing 

speeds by 15Mb for Internet clients, 

installing TiVo® services, increasing the 

customer base for mobile services, the 

successful convergent plans, etc. 

In addition, in accordance with European 

legislation, in June 2012 there was a 

significant change in regulation in Spain 

in the mobile number portability process, 

with the time for change of operator being 

cut from 4 days to 24 hours. In 2013 there 

will be the same change in the processes 

for fixed number portability, which will 

require ONO to implement the new process 

from July. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

71



Billing 

- Reduced cost of billing. 

Management of service failures 


One of the demands of customers is for 

bills to be transparent, accurate, and 

punctual. To meet this demand, ONO has 

installed a flexible and advanced corporate 

system for billing, Infinys Rating and Billing. 

Operators on the customer care helpline 

use a system that provides them with online 

information, so that they can resolve in 

real time any doubts or complaints that a 

client may have about their bill. 

In addition, ONO provides its customers 

with the possibility of receiving electronic 

bills, in accordance with current legislation. 

Users that opt for this system have itemized 

bills available on the Internet, with a 

breakdown of the bill and itemised details 

of their consumption, and the possibility 

of consulting what has been consumed to 

date and is still pending billing. 

The greater flexibility and optimisation 

of commercial processes is essential, 

and leveraging technology has helped to 

increase productivity and create value. In 

December 2012, 79.1% of bills issued were 

electronic, up from 64.8% in December 

2011, with the following positive 

consequences for ONO: 

- Security and speed in the issue of bills. 

- Simplified administrative procedures. 

- Reduced paper use, contributing to the 

preservation of the environment 

(See: Environmental Footprint section in 

the roll-out and maintenance of the ONO 

Network) 

- Improved customer service. 

- Greater control over documents. 

The service failure management process 

is a key part of customer satisfaction. 

In 2012, ONO continued to work in its 

Operations, Networks and Technology areas 

to reduce the level of service incidents. 

As a result, the number of faults fell, 

while diagnostics improved and the time 

taken for technicians to go to customer 

households was reduced. 

Customer satisfaction with service failure 

management remained at very high 

levels, with a Net Promoter Score, or 

level of recommendation, of above 25% 

for customer care by telephone and of 

over 50% when for technician visits to a 

customer’s home. 

ONO aims to act in advance of any 

problems that could affect customer 

satisfaction. In 2012 it launched a 

preventive programme under which it acts 

even before clients report deterioration 

in service. This plan, which is continuing 

in 2013, is designed to improve the image 

of ONO’s service and aims to act before 

clients have expressed their dissatisfaction 

with the service. 

Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

72



Customer care 

In 2012, the Company also implemented: 


The Customer Care Service continues 

to play an important part in maintaining 

ONO’s reputation, not only because of the 

commercial activity it undertakes but also 

because of the understanding it generates 

about the customer and its contribution to 

customer satisfaction. 

From its platforms in Spain, Colombia 

and Peru, ONO delivers a stable customer 

service, following the process of 

transformation undertaken two years ago. 

Bogota 2 

Manizales 

Lima 2 

Colombia 

Peru 

Spain 

Barcelona 

Valencia 

In the second and third quarter of 2012, 

ONO rolled out to all its Call Centres a new 

Smart Client management system, which 

will provide its agents with: 

- better access to client information 

during a call 

- simplified execution of some actions, 

and 

-higher call quality. 

These improvements will help ONO 

continue to improve customer satisfaction 

and the to increase the efficiency of its 

customer attention services. 

- a new recording system which 

enables the recording of all commercial 

transactions made, giving clients peace 

of mind, and 

- a new complaints management 

process that aims to improve customer 

satisfaction with calls. 

Thanks to these measures and the action 

taken with information from the system 

for automatic surveys, the satisfaction 

of customers after calling customer care 

improved by 4 points from 2011, while 

customer satisfaction after making a 

complaint improved by 7 points. 

The maturity of the supplier relations 

model and the stability now achieved at 

the platforms meant that cross selling from 

the customer attention service became 

one of the main sources of maintaining 

and increasing the ARPU of ONO’s clients. 

In particular, mention should be made of 

the results for TiVo®, with sales from the 

customer attention service up 66% in 

2012, and for mobile phone services, with 

sales up by over 400%. 

Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


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73



In addition, in 2012, reflecting the 

Company’s continued commitment to 

customer satisfaction and to complying 

with all norms and regulations in this 

area, ONO renewed its ISO 9001:2008 

Certification for the Quality Management 

System of its Customer Attention 

Services, following an audit by the 

Asociación Española de Normalización y 

Certificación (AENOR). 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

74



Customer loyalty 

2012 was a key year for ONO in the 

implementation of its strategy for 

increasing customer loyalty, which is based 

on raising customer perceptions of the 

value of the service, using the Company’s 

strategic products and services. 

The main achievements of ONO in the 

area of customer loyalty in 2012 include: 

- Launch of the free service: +15Mb. 

This has proved to be a proactive way of 

improving customer’s Internet speeds, 

increasing the speeds for more than 

273,000 customers in the year. 

- TiVo®. ONO has achieved high levels of 

satisfaction from this service. 

- Mobile. ONO improved its mobile 

product, rewarding the loyalty of fixed 

and mobile customers with better prices 

for convergent packages. In 2012, ONO 

reported 417,000 active lines (voice and 

data), meaning that the Company is one of 

the main mobile virtual network operators 

(MVNO) in the market. 

- Segmented loyalty actions for the 

customer base. 

Sales channels 

In 2012, ONO continued to redesign the 

mix of its sales channels to optimize the 

process of winning clients. 

Currently, ONO sells its products using the 

following channels: 

- Telephone channel. Calls to 1400 from 

customers interested in subscribing to ONO 

services are managed from internal and 

external platforms. 

In addition, to reinforce this area, ONO 

has about 400 sales people who carry out 

proactive calls to potential customers to 

offer them products and services. 

- Physical channel. Composed of: 

- Direct sales. In different parts of Spain, 

where they carry out sales visits and 

other local commercial actions. 

- Own stores and franchises, 

representing the brand across Spain in 

strategic locations in main shopping 

areas, designed to be showcase the 

company’s brand and its offers. 

- Indirect channels, in large stores 

such as El Corte Inglés and Mediamarkt, 

mobile telephone stores such as The 

Phone House and other independent 

points of sale. 

- On-line channel. This has become an 

essential channel for ONO to win customers, 

not only because of its importance in the 

acquisition process but also because of the 

low levels of churn that derive from this sort 

of connection with the client. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

75



Data protection and privacy 

In the area of telecommunications, which 

are now extensively used across society, 

it is becoming increasingly essential to 

ensure the digital confidence of customers 

in areas such as network security, data 

protection, protection of minors, etc. 

ONO is highly sensitive to these issues. It 

ensures its compliance with legislation on 

the personal data of its customers both 

internally, monitoring the correct use of 

data in all processes and ensuring that all 

security measures and procedures designed 

to protect the confidentiality of client 

information are implemented and up to date, 

and also externally, for example by complying 

with the rights of information and the need to 

obtain consent, as well as carefully managing 

all requests to exercise the rights of access, 

rectification, opposition, and cancellation of 

the data received from clients. 

Among other actions, the Company 

regularly undertakes reviews of its current 

procedures to guarantee that these respect 

all corresponding legal obligations and it 

continuously analyses new topics that may 

affect data protection. 

In this area, ONO’s data protection 

committee is playing a very effective 

role, making it easier to identify issues 

and to find solution. The committee has 

initiated projects that, for example, aim to 

review the quality of customer data on a 

regular basis or to update the document 

authorising the handling of personal data, 

which customers are provided in order to 

give their consent. 

Safe and responsible use of 

telecommunication services 

A key issue for ONO is promoting the safe 

and responsible use of telecommunications 

services, as this is an issue which is of 

concern to customers, the general public, 

and industry associations and the regulator. 

Over the course of recent years, ONO has 

implemented a range of actions in the area 

of protecting minors, such as initiatives 

to raise awareness and provide education 

about this issue. 

ONO has made available to its users tools for 

managing access to on-line content, as well 

as focusing on programming that is suitable 

for children and maintaining stringent rules 

about the classification and broadcasting 

of content and advertising at times when 

television can be seen by children, in 

accordance with Spanish legislation. 

On the company’s Corporate Responsibility 

website there is a special section with 

advice and recommendations about 

making the most of ICT, avoiding risks and 

poor usage practices. More information can 

be found at: http://www.ono.es/sobreono/ 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


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76



ONO’s brand 

In 2010, at the same time as the launch of 

real 50 Mb speeds, ONO began to make a 

major change to its brand. The Company 

was positioned as a leader in fibre optic 

cable and high-speeds, with the brand 

presenting an unprecedented product in 

the Spanish market and positioning the 

company as the most lucid and brilliant 

option. 

For customers, the colour purple has 

gradually become synonymous with 

the identity of ONO. It is a colour that 

suggests technology and modernity, and 

when combined with light, it supports 

the image of a company in the vanguard 

of technology and innovation, and with 

a bright future ahead of it. Only ONO 

has next generation network that can 

offer millions of clients high real Internet 

speeds (30, 50, 100 and 200 Mb). 

In 2012, work continued in the same 

line, but even more intensively. Today the 

customer can be told that fibre optic 

cable gives you more. Not only more and 

higher speeds, but also a new concept of 

television that is wildly popular in the US, 

and that is only possible with fibre optic 

cable: Tivo®, ONO’s intelligent TV service. 

The Tivo® service has reinvented TV 

and represents a quantum leap in 

technology: ONO is light years ahead of 

the competition, not only for Internet but 

also in television. ONO is recognized as 

a pioneering operator that continues to 

be committed to innovation, an operator 

which is focused not only on the best 

service but also the best products. 

With ONO, there is a before and an after. 

ONO’s entrepreneurial, proactive and 

innovative spirit makes it move ahead of 

the market and deliver unique solutions 

and experiences. It continues to move 

forward, and continues to represent and 

provide next generation connections. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


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77


Commitment to stakeholders | Employees 

3. Employees 


At the end of 2012, ONO had 2,778 

employees who each day demonstrate 

their high commitment to doing a job 

well and to overcoming new social and 

economic challenges. They are one of 

the Company’s strategic assets. ONO 

pays great attention to their needs and is 

focused on creating a corporate culture 

that identifies it as a socially responsible 

company. Its efforts and actions in this 

area are aimed at the personal and 

professional development of everyone at 

the Company. ONO is very aware that it is 

people who represent the most influential 

mechanism for creating value. 

Part of this work to support the growth 

of the Company’s employees is based 

on establishing a common identity and 

corporate values, and ONO is focused on 

ensuring that it is these values that identify 

the Company. 

Since 2010, ONO has worked hard to 

embed these values, developing action 

plans with all areas and levels of the 

Company so that these values can be 

shared, implemented and integrated into 

daily activity. 

Leadership 

We are leaders in fibre. 

You can feel proud of 

this, but never arrogant. 

Leadership implies 

Responsibility. 

Efficiency 

Make the most of your 

time and the resources 

available. You will find 

that what is best for the 

Company is also what is 

best for you. 

Corporate 

Values 

Innovation 

Look around you and 

observe. Think how to 

make things better. Apply 

this to your products and 

your way of working. Each 

day aspire to a proactive 

attitude and a creative 

approach. 

Costumer 

We are committed to 

improving their quality 

of life. Be an authentic, 

honest and open partner. 

They are your best 

source of information. 

Listen to them and learn 

what they need. 

Team 

Learn from your 

colleagues. Listen to 

them and support them. 

But have self-confidence 

and independence. We 

believe in you. 

Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


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78



In accordance with these values, 

at ONO the management of people 

is based on a socially responsible 

approach, applying management 

policies that guarantee the fair 

treatment of people and encourage 

their integration in the business and 

their professional development. 

Employee management at ONO 

The main asset of ONO is its people. 

The Company depends on them for its 

performance. ONO considers it essential 

to invest in these people, to ensure that 

recruitment and training are objective 

and of high quality (prioritising internal 

promotions), and to provide the right 

training plans for every requirement. 

ONO’s people are the best – they are 

people who are ethical, dynamic, flexible, 

eager to learn and to grow, able to work 

in a team, and constantly looking to 

overachieve. The Company is very focused 

on their development, so that it can make 

sure that the personal and professional 

capacities of its employees are in line with 

the duties they perform. 

Selection 

The incorporation of new professionals is the 

result of an exhaustive and rigorous selection 

process whose main aim is to attract talent, 

guaranteeing a transparent and objective 

process with equal opportunities to all. 

ONO manages its selection processes to 

ensure the best level of objectivity and 

quality possible. It has created the “Objective 

Selection” project, which defines the 

competencies required by each group of 

positions and collects the tests of the best 

candidates for each position, from interviews 

to critical incidents to technical tests. 

The Company classifies selection into two 

parts: 

1. External Selection 

ONO believes in people and believes that 

the success of its activity depends on 

the people who carry it out. As a result, 

it is focused on creating objective and 

exhaustive selection processes that 

guarantee the best professionals join the 

Company. 

To achieve this, ONO uses different 

recruitment methods, from well-known 

employment websites to more innovative 

sources such as social networks. 

The Company is not only interested 

in passive recruitment that reflects a 

selection need or process, but also in 

generating and maintaining its image as a 

good employer. ONO is carrying out two 

projects: 

1. The development of an innovative 

selection strategy which is based around 

the construction of relations of interest 

on social networks, with two separate but 

related aspects: 

- Employer Branding, which defines 

the actions that enables ONO to reach all 

potential candidates, to make the most 

talented of them feel an affinity with the 

Company and be interested in working at 

ONO. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


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- Recruitment 2.0 is mainly based on 

social networks such as: 

• LinkedIn, where a Company profile 

has been created, on which information 

is published, comments made, articles 

of interest shared, and major events 

debated. The profile also includes job 

offers and gives access to the BBDD of 

LinkedIn, using the professional tool 

LinkedIn Recruiter. At the end of 2012, 

there were 2,345 contacts and 5,555 

followers. 

• Twitter, where an ONO Employment 

profile has been created and which will 

serve to broadcast shared content on 

LinkedIn, but in a more flexible, dynamic 

and faster way. 

2. The development of the Cantera ONO 

programme, which aims to develop and 

train Young Talents who aim to start their 

career at the Company and become future 

high value employees, born and bred at 

ONO. 

The main areas where the Company 

incorporates these Young Talents and 

encourages them to develop their 

professional abilities include IT and 

Telecoms Engineering, Advertising 

and Public Relations, Audiovisual 

Communications and Marketing. 

The programme includes two types of 

profiles: 

- Trainees, who have completed their 

university studies and who carry out 

at ONO various tasks, as part of an 

obligatory rotation at the departments 

where they are allocated, as well 

as being able to access a training 

programme at the Francisco de Vitoria 

University. 

- Interns, students who have not yet 

finished university and want practical 

experience in a private sector company, 

to complete their training and in the 

future form part of a major company 

such as ONO. 

The duration of contracts for trainees is 

one year, while for interns the duration is 

that stipulated by the University. 

In addition, the programme is completed 

by an internal training programme, not 

only for trainees and interns but also for 

the “ONO young people collective”, which 

comprises of employees who are under 30, 

have been at the Company for less than 2 

years and have a profile that coincides with 

the corporate values. 

Currently, ONO has a reliable source 

of people who not only have excellent 

academic training but also have received 

complementary training about values and 

the Company’s attitudes and culture, which 

means that they are of high value for the 

Company. This sort of project has proven 

to be one of the best ways of joining the 

labour market. 

2. Internal Selection 

ONO is very concerned to support the 

development of its people. It considers 

internal promotion as the first option 

before starting an external selection 

process. 

A selection process that is free and open 

to all employees and guarantees that 

everyone gets an opportunity. ONO has an 

internal tool that publishes vacancies and 

is available to all employees, helping its 

internal selection processes. 

As well as publishing these offers, ONO 

also tries to be in the best position 

before publishing a vacancy, by analysing 

the competencies, experience, knowhow 

attitudes and expectations of its 

employees. This enables ONO to propose 

internal candidates for positions, which 

helps create closer relations with 

employees and ensures that in the 

organisation the right people are in the 

right positions. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

80



Training and Development 

The people in a company are its greatest 

asset, and for ONO training is an essential 

part of its strategy: a commitment to the 

professional development of employees 

is a commitment to the success of the 

Company. 

Despite difficult economic conditions 

in Spain, ONO has continued to invest in 

training, as a way of guaranteeing service 

excellence. In 2012, the Company provided 

61,513 hours of training. 

Training and education indicators 2011 2012 

Number of employees trained 2,132 2,147 

Employees in training (%) 71 75 

Employee training hours 87,425 61,513 

Employee on-line training hours 38,627 21,962 

Hours per employee 29 21 

Outside training (%) 85 79 

Inside training (%) 15 21 

Employees receiving performance review (%) 100 100 

Investment in training (thousand of euros) 1,218 989 

Investment per employee (euros) 403 346 

Investment per employee in on-line training (euros) 177 123 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 

Breakdown of training by categories (hours) 

10% 

17% 

Breakdown of training by categories (euros) 

24% 


Corporate 


The Figures 

Annexes 

73% 

62% 

14% 

Contact 

Information 

Manager 

Coordinator 

Technician 

Manager 

Coordinator 

Technician 

Note: Managers include Managers and Directors. 

Print 


The Figures 

81



Given the characteristics of the Company, 

training and development plans which are 

designed to give added value to people 

and to our organisation are fundamental 

for ONO. 

In the annual training plan for 2012, there 

was again a special place for training in 

general skills and in technical training, 

aimed at developing the capacities of 

employees and the maintenance and 

improvement of the fibre optic network. 

With this balance in its training 

programmes, ONO is achieving two 

objectives: making the most of its staff, and 

obtaining outstanding performance from 

its employees. 

Training at ONO is both internal and 

external, and is focused both on e-learning 

and on classroom courses. 

The annual training plan in 2012 included 

major roles for the following programmes: 

- Arquímedes 2012, the professional 

development programme for managers. 

This programme began in 2009 and aims 

to support the professional development 

of the Company’s management, using 

differentiated training and development 

(classroom courses, on-line training, 

outdoors, on-line training, business 

simulations, practical case studies, open 

sessions, etc.). 

In 2012, the third edition of the 

programme was held, with the 

participation of 252 students, who were 

assigned different professional route maps 

according to their profiles and functions. 

In March 2013, the fourth edition of 

the programme began in the ONO 

Development School, including for the 

first time access by people of potential 

with different profiles who can begin 

their professional development cycle, as 

well as from managers continuing their 

training. This has doubled the number of 

participants in the programme. 

- Impulso 2012. This programme is 

aimed at developing the competencies, 

professional abilities and potential of 505 

employees, and to develop the corporate 

values that are in line with the strategic 

plans for the professional future of the 

employees at ONO. 

Impulso is composed of three different 

training paths that use blended methodology 

(on-line and classroom training): 

• Perfecciono which develops core 

competencies for managing and leading 

teams, resolving conflicts and making 

decisions. 

• Gestiono which develops decisionmaking 

competencies, effective 

communications and planning. 

• Evoluciono which develops core 

competencies for managing projects and 

communicating and working in teams. 

In 2013, this Programme will form part of 

the Arquímedes Programme at the ONO 

Development School and will include 

Arquímedes Immersion. 

- ONO Campus. This on-line training 

platform is managed and implemented 

internally. It forms a virtual environment 

which encourages learning and 

communication between participants, 

using communication 2.0 tools. The 

platform includes high quality content 

that is adapted to the requirements of 

the position in both an open format (for 

any Company employee) or in the format 

that involves a tutor (when the course is 

followed on an ad hoc basis). The ONO 

Campus also serves as an information 

platform with the latest news about 

training inside and outside the Company. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

82



As a result, ONO is continuing to invest in 

mixed training and purely on-line training, 

leading to savings in transport and a 

better work/life balance. By minimising 

the need to attend a class in person, the 

company is also improving the flexibility 

and adaptability of its training, allowing 

bespoke training times to be established 

for each employee. 

- Internal Training Faculty. In 2011, 

ONO established this facility to support 

the Internal Training Programme and to 

improve the amount of training and the 

perception of its quality. 

The faculty comprises of mainly technical 

employees of the Company who have both 

the knowledge and the communications 

skills to be teachers. A corporate course 

in training provides them with the use of 

didactic resources and media, and they are 

also given specific incentives to encourage 

them to share their knowledge with their 

colleagues. 

At the end of 2012, ONO had trained 75 

internal trainers, leading to more than 

1,800 training hours. 

52% 

Category hours 

On-line 

Blended 

48% 

Category students 

70% 

On-line 

Blended 

30% 

Performance review 

All ONO employees participate in a 

standardised and continuous process of 

reviewing performance, communication 

and personal development. The aim is to 

assess the level of achievement of the 

goals set for employees at the beginning of 

the year, ending with a personal interview 

with the employee’s manager, sharing the 

results of the assessment and proposing 

action plans for those competencies 

or behaviours where there is room for 

improvement. 

In 2011, the second full year of 

performance reviews was completed for the 

whole company, and reviews for 2012 will 

be completed in the first quarter of 2013. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

83



Motivation 

Remuneration 

The remuneration model of ONO 

follows the criteria of internal equity, 

non-discrimination and transparency. 

All employees of ONO receive a fair 

and equitable treatment, with fixed 

remuneration within wide salary ranges 

that recognise the value of the most 

outstanding performances. There are no 

major differences in the minimum salaries 

applied in the regions where the Company 

operates. 

In 2010, ONO implemented a flexible 

remuneration system, ONO Flex, which 

consists in being able to exchange part of 

the salary (a maximum of 25%) and social 

benefits for goods or services included in 

the plan (computers, crèche, rent, etc.), 

goods or services which are tax deductible 

and which provide the employee with 

greater buying power without increasing 

personnel expenses, while adapting the 

benefits provided to the requirements of 

employees. 

This compensation system is personalised 

and flexible and enables each 

professional to decide, on a completely 

voluntary basis, how to receive part of 

their annual remuneration, adapting 

remuneration to their personal needs 

and the requirements of their family. In 

practical terms, the employee comes to an 

agreement with the company and decides 

how to receive the salary, receiving a 

flexible part of the salary in products and 

services. 

Working culture survey 

The working culture survey represents 

one of the most important channels for 

employee participation and for finding out 

the level of satisfaction and commitment 

of the Company’s personnel. ONO regularly 

carries out working culture surveys that 

aim to find out the level of satisfaction and 

engagement of its employees, as a result 

of which it can put in place action plans to 

strengthen the organisation and facilitate 

the professional and personal development 

of all employees, in a more constructive 

and productive environment. 

“7 out of 10 employees 

believe ONO is a good 

place to work” 

(24 points higher 

than in 2010) 

Average satisfaction 

of 63% 

(14 points higher 

than in 2010) 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Development of ONO Flex (% Signed up) 

2010 2011 2012 

51% 78% 79% 

In May 2012, ONO carried out its third 

working culture survey, following the first 

survey of 2009, and obtained positive 

results. Participation has increased year 

after year, from 58% in 2010 to 75% 

in 2012, which shows the high level of 

engagement from employees and enables 

the Company to demonstrate that its 

action plans are delivering results. 

A high number of 

answers to the open 

questions asked 

Print 


The Figures 

84



In 2012, ONO incorporated the Truthmark 

model, which obtains new and better 

indicators of employee opinion. One of 

these indicators is a Rating, which is similar 

to the Net Promoter Score for external 

clients, for every aspect of the working 

environment, analysing the number of 

positive and negative answers. This is 

different to other models, which tend to 

use only positive responses. As a result, 

the company is able to understand in more 

detail the progress and impact of the 

actions it has undertaken. 

Following the 2012 survey, ONO has 

implemented a range of actions to improve 

the key performance indicators of its 

employees. 

The work plan for 2013 includes improving 

results at all levels, holding focus groups 

to look into specific problems and design 

action plans, identify people in each area 

who can help to implement the plans, 

as well as reviewing and monitoring the 

action plans and the working climate. With 

all of these steps, ONO is assuming a new 

commitment to improve results in the next 

working culture survey. 

Internal communication 

Transparency, access to information, and 

constant dialogue, are the keys to effective 

internal communication at ONO. The 

selection of the right channel is essential. 

ONO’s internal communications strategy 

is based mainly on ensuring that its 

employees are responsible for, and benefit 

from, the Company’s results, providing 

these employees with the recognition and 

visibility. 

The web 2.0 internal communications 

portal called NOS, which the Company 

launched in 2009 continues to be used 

on a daily basis by Company employees. 

It is a modular mechanism which is very 

easy to use and which enables employees 

to express their opinions and criticisms 

in an anonymous and participative way. 

The introduction of NOS has represented 

a revolution in terms of its design and 

content. Its main modules include: 

- Complaints, for employees to 

anonymously express their disagreements 

with the Company and propose a possible 

solution. Every complaint can be voted 

for or against, so that it is the employees 

themselves who establish how significant 

the complaint is for ONO. The performance 

of this module reflects improvements at 

the Group, as the number of complaints 

has fallen from an average of around 85 

per month in the year of its launch to 26 in 

2012 and 22 in 2013. 

- Thanks. This module was introduces 

a year after the launch of NOS and has 

become a much appreciated way of 

recognising employees. Every note of 

gratitude is now also posted on the main 

Intranet wall, which increases its visibility 

and means that anyone can participate by 

expressing their positive opinion of the 

people or person who is thanked. 

- Incidents. This option on NOS allows 

anyone at ONO to respond to service 

incidents at customers who are family or 

friends. It is very simple. All they have to 

do is fill in a form, which is sent to a special 

team in the ONO Customer Care Service, 

which then manages the incident and 

informs the customer and the employee of 

all the steps they are taking. 

In 2013, ONO aims to have the opportunity 

to increase the range of options on 

NOS, with new modules including: 

Opinion (about any issue at ONO), 

Recommendations (products and services), 

Questions (of any type) and Me gusta 

(about things that people like at ONO). 

2012, following the same 2.0 line, ONO 

launched a new Intranet site, which 

integrates a social network that has totally 

changed the way in which the Company 

communicates internally. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

85



ONO’s new Intranet is a driver for cultural 

change, encouraging the maximum level 

of cooperation between teams and the 

sharing of knowledge and tools. It won 

a prestigious award from the Nielsen 

Norman Group, world experts in usability, 

as one of the 10 best Intranets in the world 

in the year. 

Teleworking 

Having the right work/life balance is one of 

the main challenges for many employees 

in their lives. To get the right balance 

requires flexibility from the company and a 

new concept of work. ONO has developed 

and implemented measures that reflect its 

concern for the personal circumstances 

and needs of its employees. 

The mission of teleworking is to respond to 

the needs of employees in their work and 

family lives with the needs of the company, 

and so increase the levels of efficiency in 

productive processes. 

- Optimize space in work centres. 

- Train both teleworkers and their 

managers. 

- Improve communications with 

teleworkers. 

At the end of 2012, many people were 

enjoying teleworking. 

The objective for 2013 is to increase the 

number of teleworkers, and for teleworking 

to be seen as an attractive, innovative and 

flexible option. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 

At the beginning of 2011, ONO launched its 

teleworking project and has since achieved 

very positive results. 

In 2012, ONO continued to pursue these 

aims and to work on various fronts: 

- Educate managers about the 

importance of a work/life balance 

in improving the productivity and 

satisfaction of teams and to support 

teleworking as an innovative way of 

improving the balance. 

For ONO, the keys to the success of 

teleworking are: 

- The right analysis of job positions. 

- The right selection of teleworkers. 

- Making the most of the benefits of ITC. 

- Establishing clear targets that can be 

measured. 

- The right training for teleworkers. 


Corporate 


The Figures 

Annexes 

Contact 

Information 

- Increase teleworking opportunities to 

more positions. 

- Design of a process for evaluation and 

monitoring. 

Print 


The Figures 

86



Attitude Awards 

Three years ago, ONO implemented its 

Attitude Awards, in which any employee 

can participate. The aim of the awards is 

to encourage good conduct, results and 

successes related to three core values: 

attention to the client, innovation, and results. 

These awards recognize the achievements 

of a team in projects that benefit ONO, 

and recognise the dedication of each 

team member. 

In March 2012, the awards ceremony for 

the second set of awards was held at ONO 

headquarters, with the presence of the 

winners from the first edition. Awards were 

given to workers from various areas: 

- The Client Award went to the 

Front Office team of Valencia, for their 

exceptional contribution to the satisfaction 

of external and internal clients; 

- The Innovation Award went to the 

Advertising, Media and Brand team in 

Madrid, for proposals for alternatives that 

are viable in time and cost and aimed at 

creating or changing processes, procedures 

and actions that improve the Company’s 

performance; and 

New headquarters in Pozuelo 

In mid-March 2013, ONO moved its 

headquarters from Aravaca in Madrid to 

Pozuelo de Alarcón. 

In 2011, the Company implemented a 

new Space Management Policy which 

aims to support a corporate culture that 

is based on team working, and also at a 

better distribution, modernization and 

optimization of ONO’s buildings. ONO 

decided to transfer headquarters as part 

of this, enabling the integration of its 

corporate areas in just one building. 

The new building, which has been renovated 

and adapted significantly, has been designed 

in accordance with the new policy and 

it will help support and consolidate the 

Company’s new corporate culture. 

The building comprises of 14,000 square 

metres on four floors, and will house 600 

people from different buildings that ONO 

had in Madrid. The Company’s real estate 

assets in Madrid will be reduced from five 

to three buildings at the end of 2013. 

The new space management policy 

includes the following concepts: 

- open and transparent spaces, to 

encourage the integration of different 

areas and teams. 

- digital formats, reducing spaces for 

storage and printing. 

- optimized meeting rooms, with a trend 

for informal meetings that encourage 

talent and teamwork. 

- energy efficiency: natural light for all 

positions. 

This is not just another building. It is the 

headquarters of ONO, uniting everyone 

who works in the Company’s corporate 

activities. The best symbol of the cultural 

change is the move to this site, which will 

encourage sharing in new spaces, with 

new services. It will be a much better 

representation of the Company whenever 

it welcomes customers, partners and 

suppliers. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

- The Results Award for the Companies 

and SME Team in Barcelona, for excellence 

in results in any area of activity of the 

Company, administrative, operational or 

strategic. 

Print 


The Figures 

87



ONO, looking after its employees 

Assistance to employees 

Social benefits and benefits in kind 

Restaurant vouchers 

Support for crèche services 

Special offer for employees. “You are ONO” Programme 

Health insurance for employees and family members 

Life and accident insurance 

Insurance for accidents in the workplace 

Pension Plan 

Social fund (which applies the terms of the Collective Agreement for ONO) 

Flexible working days, reduced in the summer and over Christmas 

Advances of up to 75% of fixed remuneration 

Presents for marriage, births… 

Services 

Company canteen 

Bus for employees 

Parking and car washing 

Travel agency with special discounts 

ONO Employee Club: agreements with exclusive offers, special discounts and promotions 

Medical services and campaigns 

Health and Medicine 

Health and safety at work is a priority for 

the management of the Company. 

ONO has made available to its employees 

private health insurance that covers the 

medical service desired. The Company 

pays for the full cost of the policy for its 

employees and 60% of the cost for family 

members. 

Meanwhile, ONO carries out basic 

preventative initiatives aimed at 

preventing health issues and/or improving 

the health of its employees. It has: 

- A medical assistance service in its 

offices, and physiotherapists who treat 

employees on special terms. 

- Employee discounts for gyms, health 

and beauty, physiotherapy, etc. 

- Rest spaces, with vending machines, 

water coolers, furniture, and open air 

balconies, etc. 

Health and safety activities include regular 

voluntary medical check-ups for new 

and existing employees (1,028 in 2012 

from 1,139 in 2011), and campaigns for 

giving blood. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

88



Labour relations 

ONO has continued to demonstrate its 

responsible labour relations policy in 

the various collective agreements that 

govern its labour relations, with the basic 

aim of guaranteeing the best working 

conditions for its employees, based on the 

principle of social dialogue. In 2012, 92% 

of the workforce was covered by these 

agreements, with the 8% represented by 

directors and managers excluded because 

of their strategic status. 

ONO continues to strive to improve the 

quality of life of its workforce. In April 

2013, it signed its Second Collective 

Agreement with representatives from 

the UGT, CCOO and STC Trade Unions, 

which covers working conditions and 

labour relations for 90% of the workforce 

until 2015, and may be extended for two 

additional years. 

The Company and the unions have 

exercised their responsibilities to 

achieve this agreement, which is an 

excellent achievement given today’s 

highly competitive scenario for the 

telecommunications market. 

ONO has worked hard to retain the main 

social benefits it provides to employees 

and to preserve the work/life balance, and 

it has focused on being able to guarantee 

employment for its workforce. 

ONO is aware of how important it is 

to integrate disabled people into the 

workplace, and runs initiatives to help 

them join the Company. It works with 

associations that support the disabled, 

and whenever it is possible it procures 

certain services from companies whose 

mission it is to provide employment to 

disabled people. In 2012, it completed 

the substitution of its cleaning contracts 

with cleaning contracts from Special 

Employment Centres, a source of pride and 

civic responsibility for ONO. 

In this way, ONO is making a positive 

contribution to society and is consolidating 

its position as a socially responsible 

company that integrates disabled people 

and carries out social actions. 

You are ONO 

ONO provides its employees with the 

possibility of acquiring Internet, television 

and telephony services in their homes with 

special terms. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

89



Risk prevention at work 

The prevention of risks at work aims to 

guarantee well-being in the workplace 

and is fully integrated into the daily 

management of the Company, and everyone 

who works at ONO is both responsible for 

this and a beneficiary of this policy. 

In 2012, 725 employees received health 

and safety training. 

The main indicators in this area are: 

ONO is committed to ensuring the 

health and safety of all its employees, by 

continually improving the conditions and 

the quality of working life at all its sites, 

and involving all levels of the Organisation. 

To meet this basic objective and this 

commitment, the Company has a Plan for 

Prevention of Risks in the Workplace 

which is integrated into the management 

system, with new instruments that affect 

and involve all levels. 

The basic principles on which the 

Prevention Policy was prepared are the 

following: 

Health and safety indicators 2010 2011 2012 

Accidents with sick leave 48 32 22 

Accident frequency rate 4.9 6.1 4.2 

Absenteeism rate 1.8 3.1 2.6 

- Every person who works at ONO is a 

protagonist of the prevention policy, with 

Management exercising leadership by 

example. 

- The physical health and safety of every 

worker must be guaranteed when carrying 

out their work, as well as the continuous 

improvement of the quality of life at 

workplace. 

- All accidents can and should be avoided, 

and risk assessment is an excellent 

instrument for achieving this. 

- Training and information, and the 

consultation and participation of workers 

are also essential instruments for 

preventative action. 

- It is essential to integrate prevention 

into all the activities of the Company. 

- Any accident or incident that takes 

place must be investigated and analysed, 

serving as tool to learn a lesson, adopt 

preventive measures, and improve working 

procedures. Likewise, every unsafe action 

or practice has to be disclosed, recognised, 

analysed and corrected, followed by if 

appropriate, prosecution. 

- At all times, workers, contracted staff 

and suppliers will all comply with the 

legislation that is in force. In addition to 

this, ONO will comply with the law in the 

acquisition, implementation and use of all 

goods and equipment that are acquired. 

On the Intranet, all the necessary 

preventative tools are available to 

employees: information dossiers on risks, a 

prevention portal, a function for requesting 

a medical appointment, accreditation of 

contracts, etc. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

90



ONO’s workforce 

Key employment indicators 2010 2011 2012 

Number of employees (total workforce) 3,085 2,952 2,778 

Number of employees (average workforce) 3,288 3,020 2,849 

% men/women 58 / 42 58 / 42 59 / 41 

Average age (years) 37 38 40 

Average time in ONO (years) 7 8 9 

Turnover rate (%) 18.3% 11.3% 10.31% 

Employees with permanent contract (%) 97.2% 98.2% 98.9% 

Employees with temporary contract (%) 2.8% 1.8% 1.1% 

At ONO, it is the talent of employees and 

professionals that makes the Company 

different and helps it achieve its goals. 

It is vital to invest in and support their 

professional development, facilitating their 

work/life balance, and motivating them to 

improve. 

The people in the workforce are based 

in Spain, and are highly qualified, in 

accordance with the technical functions 

that they carry out. 

Breakdown of workforce by professional 

group (%) 

80.1% 79.7% 79.2% 

11.7% 12.3% 12.5% 

8.1% 7.9% 8.3% 

2010 2011 2012 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Manager 

Coordinator 

Technician 

Note: Managers include Managers and Directors 

Print 


The Figures 

91



The distribution of the workforce by 

gender, age, and seniority reflects the 

recruitment policy of ONO, which is based 

on the principles of equal opportunities 

and non-discrimination. As a result in 

2012 no incidents of discrimination were 

recorded. 

In 2012, 40.6% of the workforce were 

women, and 25.5% of the management 

segment (directors and managers) were 

women. 

The average age was 40 and the 35 to 39 

year range was the most common (31.9% 

of the total). 

Breakdown of workforce by sex (number) 

1,782 1,717 1,651 

1,303 1,235 1,127 

2010 2011 2012 

Men 

Women 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 

Breakdown of workforce by age groups and gender (number) 

2010 2011 2012 

Men Women Total Men Women Total Men Women Total 

< 25 years 11 21 32 11 13 24 2 5 7 

25 - 29 years 132 137 269 91 85 176 49 41 90 

30 - 34 years 413 346 759 346 310 656 248 220 468 

35 - 39 years 578 434 1,012 555 426 981 503 383 886 

40 - 44 years 389 229 618 422 252 674 478 294 772 

45 - 49 years 172 74 246 199 86 285 253 117 370 

>50 years 87 62 149 93 63 156 118 67 185 

Total 1,782 1,303 3,085 1,717 1,235 2,952 1,651 1,127 2,778 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

92



Breakdown of Executive Committee by age 

groups in 2012 (%) 

22% 

Breakdown of Executive Committee by sex 

in 2012 (%) 

11% 


Who is ONO? 


ONO’s 


22% 

40 to 44 years 

45 to 49 years 

>50 years 

56% 

Men 

Women 

89% 

Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 

ONO has a sustainable approach to its 

workforce. All of its employees hold stable 

positions, with 98.9% on an indefinite 

contract in 2012, which reflects the 

stability that comes from our employees’ 

commitment to the company (with an 

average seniority of 9 years). 

In Madrid, Valencia and Barcelona, 

the cities where most of activity is 

concentrated, there is also more diversity 

of positions and contracts. 

Breakdown of workforce by regional 

clusters in 2012 (%) 

9% 

39% 

Center 

East 

South 

North 

6% 

46% 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


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93


Commitment to stakeholders | Suppliers 

2012 was a year of consolidation for 

the ONO purchasing department. 

The implementation of the new 

operating model for Purchasing, 

based on the principles of 

competition and advance planning, 

reinforces operational aspects of the 

previous model and provides more 

traceability and transparency in 

awarding supplier contracts. 

4. Suppliers 

In 2012, the Company also continued to 

implement specific projects to simplify its 

operations and support its requirements 

more efficiently and economically. ONO 

carries out continuous research of the 

market, to try to make the most efficient 

use of the capacities and know-how 

of its suppliers, who are leaders in the 

technologies and services that ONO 

requires of them. 

This task is carried out by the purchasing 

department, which is particularly sensitive 

when it comes to deciding which 

suppliers to work with and how. Aware 

of the importance of these suppliers for 

the company’s business, because of the 

products and services that they supply, it 

implements measures to soften the impact 

of the demands and commitments required 

from every supplier. 

In this area, ONO has continued to look 

for the optimal relation between quality, 

service and cost, and has increased 

the level of free competition between 

suppliers, striving to maintain maximum 

objectivity and transparency in the award 

process. All of this follows the procedures 

and processes that have been established 

and approved by the Company, which are 

summarised below. 

Norms of commercial conduct norms for 

purchasing at ONO 

This document defines the principles for 

conduct and action of ONO employees in 

their commercial relationship with suppliers. 

These basic principles include: 

- The need for purchasing to supply the 

requirements of ONO with the budget available. 

- Looking for the solutions available in 

the market and encouraging competition in 

selection processes. 

- Maintaining confidentiality in 

negotiation processes 

- Establishing a framework for a policy 

on gifts from suppliers. 

- Impartiality and objectivity in awards, 

avoiding conflicts of interest. 

Code of conduct for suppliers 

Likewise ONO aims to ensure that on the 

other side of purchasing negotiations the 

organisation of suppliers follows ethical and 

responsible principles in the procurement 

process, and in the management of their 

employees and resources. For several years, 

a process has been operational in which 

ONO requests from suppliers that they sign 

up to certain principles of action, signing a 

document that commits them to: 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


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Contact 

Information 

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Principles of action: 

Certification of suppliers 

Procurement desk 


- Ensure their compliance with the laws 

and regulations applicable to the sector 

they operate in and their country of origin. 

- Respect human rights, regardless 

of race, gender, age, nationality, sexual 

orientation or political or religious beliefs. 

- To act in accordance with protection of 

the environment, minimizing the generation 

of pollutants, and applying policies for 

recycling and waste management. 

- To monitor employment of labour, 

ensuring that minors are not hired, that 

work is not coercive, threatening, or 

abusive, and that policies for health and 

safety at the workplace and the prevention 

of risks are followed. 

- Maintain a high level of business 

ethics, expressly forbidding any payment 

of commissions, bribes, ostentatious 

gifts, or any other element that could 

significantly influence decision making in 

the purchasing process. 

Currently, more than 1,000 suppliers have 

signed this document, or 23% of the total 

supplier base, and a process has been 

established for any supplier who participates 

in a tender to understand and accept these 

basic principles. With this Code of Conduct, 

ONO aims to guarantee that its main suppliers 

respect basic human rights principles. 

The process described above forms an 

additional element of the more wide 

reaching process of supplier certification. 

ONO wants to know who its suppliers are, 

and what differentiates them from the 

others. To this end, five years ago, it started 

this process. 

To implement this process, suppliers are 

requested to fill in a self-assessment 

form, providing information on their 

shareholders, finances, resources, 

processes, possible relationships 

with management personnel of ONO, 

certifications they may possess from 

organisations. etc., which will allow the 

purchasing department to weight the 

scoring of the adjudication processes and 

act as transparently and objectively as 

possible. 

Thanks to the implementation of this 

process, over 800 suppliers have been 

assessed, using the process as a condition 

and as a filter for being able to participate 

in new negotiations and procurement 

processes. 

In addition, in some important cases, 

systems to measure service delivery are put 

in jointly by purchasing and the user areas, 

to monitor the quality and level of service, 

provide an opportunity to correct problems 

or to support a change in suppliers. 

ONO’s business model for Purchasing, 

implemented in 2011, is based on a system 

of “desks” in which all the areas involved 

in a transaction work together to assess 

and decide on the best solution for a 

purchasing need at ONO. This model also 

integrates internal policies for monitoring 

and supervising these decisions, the main 

principles of which include: 

- Guaranteeing that competition is used 

in all the cases where it is possible, or 

analysing the circumstances in which it is 

appropriate to renew existing suppliers. 

- Ensuring the highest level of 

transparency with all internal participants, to 

guarantee equal opportunities for external 

participants (suppliers or potential suppliers). 

- Looking for new alternatives to existing 

solutions and constantly analysing different 

alternatives and solutions that could help 

the Company meet its requirements more 

efficiently and economically. 

- Monitoring the compliance with the 

Company’s budgets, and the consolidation 

of savings achieved in negotiations for 

their possible reinvestment subsequently, 

or transfer to the P&L. 

In January 2013, the Purchasing department 

partly modified the model to provide more 

flexibility and better meet its requirements. 

The revised model clarifies the scope of its 

application. 

Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


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Annexes 

Contact 

Information 

Print 


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Purchasing portal 

Some years ago, ONO decided to establish 

a common point of entry for commercial 

relations with its suppliers and created 

a Purchasing Portal with the aim of 

maintaining all these interactions on the 

portal, as well as direct relations with 

suppliers in the following areas: 

- The certification and self-assessment 

process. 

- Negotiation of offers. 

- Access to orders that have been 

issued. 

- Access to orders for products and 

services. 

As a result, ONO has been able to achieve 

a high level of fluidity in the exchange of 

information, with the possibility of auditing 

the processes, providing suppliers with 

complete transparency in the purchasing 

process and simplifying the administrative 

process, which has led to an improvement in 

its payment commitments and convergence 

with new legislation on late payments. 

Financial / statistical data 

ONO works with over 4,200 suppliers and 

manages a volume of business of 1,122 

million euros (in 2012, including VAT for 

Spanish suppliers). 

A major part of these suppliers comes from 

two sectors that are in permanent contact 

with customers: 

- Companies which install equipment 

in the homes of clients and provide 

maintenance on the customer’s network. 

- Companies which provide customer 

care services to clients, as well as sales 

platforms and remote resolution of any 

service failures. 

These suppliers are of vital importance to 

ONO, both because of their financial scale, 

and because they are in permanent contact 

with customers, and as such are the face 

and voice of the company with clients. 

In addition, these companies are a 

significant source of job creation, both 

locally in the regions where ONO operates, 

and in developing countries. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

96


Commitment to stakeholders | Media 

ONO strives to maintain a fluid 

and constant relationship with 

the media, based on transparency 

and accuracy when disclosing 

information. In 2012, the Company 

invited the media to participate in 

all the main business and corporate 

events that took place, and remained 

true to these guiding principles. 

5. Media 

ONO’s external communications policy is 

based on sharing information directly with 

the national and financial press, with radio 

and television stations and on-line media, 

either at events or in press releases. 

In 2012, ONO had a high profile in the 

media, thanks to its press releases and 

the press conferences it organised. The 

Company focused on the regional press, 

presenting new products in cities such 

as Barcelona, Valencia, Alicante, Cadiz, 

Valladolid and Tenerife. Corporate affairs 

were also high on the agenda, especially 

information about the successful bond 

issue, financial results and the completion 

of the refinancing process. 

A total of over 4,000 impacts in the 

press, magazines, on-line media and blogs 

reflected the news and products launches 

of a year which saw many corporate 

milestones, such as the extension of the 

TiVo® service across all of ONO’s network, 

the launch of 200 Mb speeds for SMEs, the 

start of the first ONO WiFi pilot project in 

Alicante and the arrival of high-speeds in 

the Canary Islands. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

97



ONO is aware of its role in Spanish 

society and of the general interest 

in its services. It is committed to 

continued relationships built on 

cooperation and trust with the 

media and with the journalists who 

follow the company on a regular 

or occasional basis, as well as 

maintaining its commitment to 

accuracy and transparency. 

Financial releases 

Operational releases 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

98



TiVo®, ONO’s intelligent television service 

Information about the sector 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

ONO launchs Nubo, 

its new portal for 

cloud-based application 

Print 


The Figures 

99



Corporate website 

ONO’s website (www.ono.es) aims to 

disclose and highlight the products and 

services that ONO offers to the Spanish 

market and to explain the main features 

of the Company’s activity. 

Content available on the website includes 

information about the Company’s products 

for high-speed Internet, mobile telephony, 

fixed telephony, television and convergent 

offers. This range of services, accessible 

to individuals and businesses, enjoys 

differentiating advantages because they 

are provided over ONO’s own state of the 

art fibre optic network. 

Ono.es also includes a redesigned section 

with new functionalities that enables 

customers to manage their relationship with 

the company directly: the “Client Area”, 

which delivers specialist on-line assistance 

and numerous options for customers to 

manage their demands simply and directly 

without needing to make a telephone call. 

Moreover, ono.es includes detailed 

information on most of the Company’s 

activity, such as penetration data and 

figures for the Spanish market, for any 

customer or Internet user who wants to 

access main financial data in a transparent 

and direct manner. 

In 2012, the website received 36,061,192 

visits and recorded 16,711,389 unique 

users . The increase in the number of visits 

and operations carried out by customers 

confirms the growing importance of 

the ONO website, as a channel for 

communications, support and sales. 

Major content and services in 2012 that 

contributed to this growth included: 

- The growth of ONO on social 

networks, with an 85% increase in 

followers, with the goal of providing 

support, highlighting new technologies and 

helping customers get the most out of their 

ONO services. 

- The consolidation of on-line 

commercial actions, including TiVo®, 

ONO’s intelligent TV service and the ONO 

Móvil service. 

- The growth of the “Client Area”. Every 

month, more than 40% of clients visit the 

website, due to the change of image and 

focus (according to results from surveys) 

and to the increase in its functionalities, 

including: 

• On-line resolution of technical 

incidents for customers, by checking the 

network and accessing equipment. 

• Remote recording of TiVo®, without 

needing to be in front of the decoder. 

• Automated second copy of the bill, 

increasing this number of requests by 

1,000%. 

• Launch of virtual services managed online 

(Nubo). 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


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100


Commitment to stakeholders | Society 

6. Society 

In order to encourage a competitive and 

appropriate context for its activity, ONO 

aims to encourage and maintain a fluid 

dialogue with different players, both 

public and private, at the local, regional, 

national and European level. 

ONO makes a special effort with public 

institutions. It works with different 

representatives according to their area 

of action: local, regional, national, 

European and international. ONO talks 

mainly to telecoms regulators, as well as 

to representatives for R&D, innovation, 

consumption and institutions and bodies 

who support e-administration and 

the development of all aspects of the 

information society. 

Because of the nature of the sector, 

relations with various regulators are 

essential, in light of the important role that 

they play in the telecoms ecosystem. 

To maintain its relations with the various 

public institutions, the Company carries 

out various actions depending on each 

issue. Often, it is ONO that carries out the 

action directly, but when its demands and 

objectives are shared by the sector, the 

representation of these interests is carried 

out collectively, via the different sector 

associations in which ONO participates 

actively: 

- AMETIC (the Spanish association of 

companies in the electronics, information 

technology, telecommunications and 

digital content sectors), 

- Redtel (Association of telecoms 

operators with their own networks), 

- ASTEL (Association of telecoms 

operators and services companies), and 

- Cable Europe (for European affairs). 

Key issues for ONO include those related 

with the development of the information 

society, the delivery of new digital 

services, the future of the telecoms 

sector, investment in new technologies 

and innovation and all public policies 

with a direct or indirect impact on the 

development and delivery of its services. 

One of the main cornerstones of ONO’s 

strategy is to strengthen the development 

of digital technologies to benefit the 

citizens and companies of Spain. As part of 

this strategy, ONO has reached significant 

agreements with various institutions which 

are prestigious in their fields. These include: 

- Instituto de Empresa 

Since 2012, this renowned Business School 

has trusted in ONO for its most demanding 

service, WiFi connectivity for its students in 

its new intelligent headquarters in Madrid. 

In addition, as part of this agreement, 

ONO and the Instituto de Empresa have 

made a commitment to encourage 

entrepreneurship and innovation from a 

technological perspective and to support 

the development of new ITC services 

for the professional sector, with various 

initiatives aimed at entrepreneurs and 

independent professionals from all sectors, 

leveraging the innovative technologies 

provided by ONO. 

- Casa del Lector 

In 2012, ONO began to provide activities 

in the ONO centre of digital innovation in 

the Casa del Lector. This is a centre aimed 

at training, research and experimentation 

with all types of new digital contents and 

services that can help cultural, social and 

business development. 

Casa del Lector is a major cultural centre, 

comprising 8,000 square metres in the 

Matadero of Madrid which is focused on 

reading and readers. In this centre, ONO 

has the ideal location for researching all 

aspects of culture and in particular reading, 

exploring new formats and contents that 

use new technologies. 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

101


Commitment to stakeholders | Society 

- Fundetec 

As part of its commitment to the 

development of the information society 

and its benefits for society, and to make 

a greater contribution to social and 

economic development, in 2012 ONO 

signed an agreement with FUNDETEC. 

Fundetec is a public/private foundation 

that is focused on two clear targets: driving 

the adoption and general use of ITC by 

citizens, companies and institutions, and 

increasing Internet penetration in Spanish 

homes and small and medium enterprises. 

This second objective aims at reducing 

the digital divide, both between Spain and 

more advanced countries in the European 

Union and between different social groups 

and regions within Spain itself. 

As part of the agreement, both institutions 

are committed to rolling out joint actions 

to meet their common goals. 

- Mobile World Congress 

As part of its support for mobile services, 

for another year ONO was one of the main 

sponsors of the Mobile World Congress. 

This is the leading event in the industry, 

which takes place in the Mobile World 

Capital of Barcelona. People from 205 

countries attend the Mobile World 

Congress, with more than 40 conferences 

with the very highest level of speakers, 

more than 1,500 stands of leading 

companies and over 12,000 application 

developers. 

- Support and Sponsorship 

To support the understanding and 

development of issues which concern the 

sector and to discuss different visions of 

these topics and encourage a constructive 

debate, over the course of 2012 ONO 

sponsored a number of events, including: 

- The ITC, Tourism and Innovation 

National Congress, organised by AMETIC 

and FECATIC, (The Canaries Federation 

for IT, Innovation and Communications 

Businesses), in Las Palmas de Gran Canaria, 

with offered different outlooks on the 

latest trends and on the development 

of the market for new technologies 

and innovation in the tourism sector, in 

particular in promoting investments in the 

Canary Islands. 

- The IV Edition of the Summer Courses 

of AMETIC which in 2012 had the theme 

“ITC in the new social and economic 

environment: drivers of economic 

recovery and employment” which invited 

the main players in the sector to debate 

the importance of ITC in the current 

context and discuss the major role that 

they can play in Spain’s economic recovery. 

- Finally, in order to recognise the 

efforts being made by new generations, 

ONO sponsored the Awards for the Best 

Doctoral Theses and the Best End of 

Degree Projects of the Official College 

of Telecommunications Engineers, in 

the categories “Innovation in Advanced 

Services on Next Generation Networks” and 

“Innovation in Networks and Services for 

Delivery of Digital Television Services.” 

(See section: ONO’s Responsability_ 

Corporate Responsibility Focus) 


Who is ONO? 


ONO’s 


Corporate 


Commitment to 

stakeholders: 


and Investors 

2. Customers 

3. Employees 

4. Suppliers 

5. Media 

6. Society 


Corporate 


The Figures 

Annexes 

Contact 

Information 

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The Figures 

102


30, 50, 100 or 200 Mb. 

Our ambition isn’t only to 

achieve the highest real 

Internet speeds every year... 

these are all just stages 

in a race we believe will 

never end. 


Who is ONO? 


ONO’s 

Responsability 


Corporate 


The Figures 

Annexes 

Contact 

Information 

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The Figures 

103



ONO currently provides a wide range of 

fixed and mobile telephony, Internet and 

cable television services to residential 

customers and SMEs in the regions where 

the Company operates. 

Services (‘000) 

4,464 4,623 4,725 

121 

140 

192 

179 

417 

206 

Customers (‘000) (1) 

1,997 

77 

2,010 

93 

1,947 

105 


Who is ONO? 


ONO’s 


4,203 

4,252 

Fixed Residential (1) 

Fixed SME (1) 

Mobile (2) 

4,102 

2010 2011 2012 

1,920 

1,917 

2010 2011 2012 

Residential 

SME 

1,842 


Products and 

Services 

1. Fixed services 

2. Mobile services 

Financial information 

Management and 

Control of risks 

Corporate 


(1) 

Includes fibre, ADSL and Indirect Access 

(2) 

Includes voice and data (BAM) of Residential 

and SME 

ONO ended 2012 with a total of 4.7 

million subscription services. The company 

provided 102,000 more services in 

the year, with mobile and SME services 

recording the highest level of demand, 

with increases of 15.2% and 117.3% 

respectively. This was achieved despite a 

very difficult economic environment, with 

low levels of demand and new tax rates, 

which rose from 8% to 21% for television 

and from 18% to 21% for other services. 

These had the most significant impact on 

the residential fixed line business, where 

there was a 3.5% decline in the number of 

services. 

(1) 

Includes fibre, ADSL and Indirect Access 

Over the course of the year, the residential 

customer base decreased by 75,000 to 1.8 

million clients as of 31 December 2012. 

Despite the strong performance of high 

value clients (with bundles, high-speeds, 

TiVo® and mobile services), the difficult 

economic conditions had a negative 

impact on more price sensitive clients. 

In the SME segment, there was a very 

positive performance, as ONO increased 

its customer base by 12,000 to total 

105,000 at the end of 2012. 

The Figures 

Annexes 

Contact 

Information 

Print 


The Figures 

104


Products and Services | Fixed services 


1.1 Residential services 

Fibre services 

At the end of 2012, there were 7.1 million 

homes released to marketing, an increase 

of 0.3% from the previous year. 

Homes released to marketing (‘000) (Fibre) 

The number of residential fibre services 

declined to 3.9 million services at the end 

of 2012, due to the difficult economic 

environment, low levels of demand, and 

new tax rates. Despite this, ONO was able 

to maintain its ratio of residential fibre 

services at 2.25 per client. 

Residential Fixed Fibre Services (‘000)/ 

Services per customer 

2.22x 

2.25x 2.25x 

At the end of 2012, 39.9% of new 

residential fibre customers subscribed 

to a triple play bundle, and 45.7% took 

out a double play bundle. As a result of 

the high rate of customer acquisition 

based on bundled offerings and continued 

marketing campaigns, ONO managed to 

increase the customer base for bundles to 

85.6% in 2012. 

This successful commercial strategy 

has enabled ONO to position itself as 

the leading supplier in Spain of bundled 

telecommunications services, and in 

particular of triple play services. 


Who is ONO? 


ONO’s 



Products and 

Services 






4,030 7,043 7,063 

4,019 

4,060 3,941 

Residential Fixed Fibre Customer 

split per bundle (%) 

Corporate 


The Figures 

Annexes 

2010 2011 2012 

2010 2011 2012 

38.6% 

44.3% 

39.9% 

44.8% 

39.9% 

45.7% 

Contact 

Information 

17.1% 15.3% 14.4% 

2010 2011 2012 

Single play 

Double play 

Triple play 

Print 


The Figures 

105



Internet 

ONO ended 2012 with 1.4 million Internet 

clients, a decrease of 11,000 clients in the 

year. The penetration of Internet services 

in ONO’s customer base continued to 

increase and reached 81% at the end of 

the year. 


Who is ONO? 


ONO’s 


Internet customers (‘000) / 

% customers with Internet 

76.2% 

79.1% 

81.0% 

In 2012, ONO completed the roll-out of 

DOCSIS 3.0 technology in its fibre network, 

enabling it to offer a higher quality Internet 

service, reflecting the company’s strong 

commitment to high connection speeds for 

more than 7 million Spanish homes. 

This next generation technology has 

enabled ONO to make significant 

improvements to its commercial offering, 

with ‘real’ Internet speeds of 30, 50, 100 

and 200 Mbps now available, positioning 

ONO as the only operator that can offer 

speeds of 200 Mbps in the Spanish market. 

High-speed Internet customers (‘000) 

9.2% 

29.7% 

49.2% 


Products and 

Services 






Corporate 


The Figures 

Annexes 

1.328 1.429 1.418 

2010 2011 2012 

There has been a very positive market 

reaction to these ultra-fast Internet speeds 

and at the end of 2012 around 700,000 

clients enjoyed speeds of 30, 50 and 100 

Mbps, or almost 50% of the customer 

base for Internet services. These excellent 

results make ONO the undisputed leader 

of ultra-fast Internet speeds in the 

Spanish market. 

127 

424 

698 

2010 2011 2012 

Customers ≥30Mbps 

% customers with high-speed 

Internet 

Contact 

Information 

Print 


The Figures 

106



Television 

At the end of 2012, ONO has 862,000 

television clients, a decrease of 61,000. 

The service has been significantly impacted 

by the difficult economic conditions and 

the increase in VAT from 8% to 21%, which 

led to the most price sensitive clients 

giving up the service to preserve their 

disposable income. 

TV customers (‘000) / 

% customers with TV 

52.7% 51.1% 49.3% 

953 923 862 

2010 2011 2012 

To try to reverse this trend, in 2012 ONO 

stepped up the roll-out of TiVo® which 

is now available to practically all homes 

connected to the fibre network, and 

which is the best pay television offering 

in Spain, with a variety of content and 

functionalities not available elsewhere in 

the Spanish market, integrating Internet 

and fibre television. 

TiVo®, ONO’s exclusive intelligent 

television offering in Spain, had around 

100,000 clients at the end of 2012, or 

11% of ONO’s customer base for television. 

TiVo® users report very high levels of 

satisfaction to the Company, with the 

most popular characteristics including HD 

quality, 3D content, multimedia hard drive, 

the recording of various channels at the 

same time, and the possibility of watching 

Internet content on the television set. 

1% 

TiVo® customers (‘000) 

2% 

4% 

6% 

11% 

95 

56 

34 

8 

16 

Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 


Who is ONO? 


ONO’s 



Products and 

Services 






Corporate 


The Figures 

Annexes 

Contact 

Information 

TiVo® customers 

% of TV customer base 

Print 


The Figures 

107



Fixed Telephony 

At the end of 2012, ONO had 1.6 million 

fixed telephony clients, a decrease of 

46,000 clients in the year. In 2012, 

this service continued to be the most 

requested from the Company, with around 

95.0% of customers subscribing to a 

telephony product. 

In 2012, ONO made major improvements 

to its telephony service by upgrading its 

voice network with Huawei, which not only 

led to improved quality but also to reduced 

operating expenses and consumption with 

a corresponding rise in profitability. 

Average revenue per customer (ARPU) 

In 2012, average revenue per residential 

fixed fibre clients was maintained at 52.4 

euros per month. 

The high quality of ONO’s customer base 

and its excellent offering (high Internet 

speeds, TiVo® and mobile services) are 

responsible for maintaining ARPU in a 

context in which there has been a negative 

trend for the consumption of products. 

Acquisition and retention promotions are 

playing an important part in this. 


Who is ONO? 


ONO’s 



Products and 

Services 






Corporate 


Fixed Telephony customers (‘000) / 

% customers with Telephony Residential Fixed Fibre ARPU breakdown (€) 

The Figures 

Annexes 

93.1% 94.6% 95.0% 

51.5 

52.4 52.4 

Contact 

Information 

3.1 

4.6 

3.4 

4.0 

5.5 

3.1 

1,686 1,708 1,662 

43.7 

45.0 

43.8 

2010 2011 2012 

2010 2011 2012 

Monthly Fee 

Variable TLF+TV 

Other value-added services 

Fixed Fibre ARPU 

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Products and Services | Mobile services 

1.2 SME services 

Revenues generated by SME customers 

include fees for voice and data services, 

offered individually or in bundles. 

In 2012, ONO launched successful offers 

for SMEs and increased the number of 

services by 15.2% to 206,000 services at 

the end of the year. Likewise, the customer 

base performed very positively and 

increased by 12.7% to 105,000 SMEs at 

the end of 2012. 

These extraordinary results are the 

consequence of a series of initiatives to 

strengthen the business unit, including: 

(i) establishing a commercial offer that 

meets the requirements of this segment; 

(ii) redefining prices at more competitive 

levels; (iii) designing new sales channels; 

(iv) launching new speeds, such as 200 Mb 

for SMEs and a successful mobile service; 

and (v) value added services including 

registering domain names, hosting/housing 

services, cloud services and others. 


2012 was the year of fixed-mobile 

convergence and the acceleration of 

mobile telephony at ONO. This success 

was due largely to the launch of 

convergent rates and the “Todo en ONO” 

plan, providing very competitive rates, 

including calls to any number 24 hours a 

day as well as data. 

In 2012, ONO added 225,000 mobile lines, 

with a total of 417,000 lines at the end 

of the year. This enabled the Company to 

become one of the leading mobile virtual 

operators in Spain. 


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Products and 

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Corporate 


Fixed SME services (‘000) 

Mobile services (‘000) 

The Figures 

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417 

140 

179 

206 

121 

192 

2010 2011 2012 

2010 2011 2012 

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Revenues 

ONO’s revenues are based on the provision 

of residential services (including revenues 

for individual and bundled services of 

telephony, Internet and television over 

fibre, and ADSL revenues), indirect access 

services, voice and data services for SMEs, 

services to companies (large accounts 

and public bodies), and services to other 

carriers. The following table provides 

information on ONO’s revenues: 

2012 Revenue breakdown 

7.7% 

5.4% 

13.9% 

0.2% 

72.8% 

Residential 

SME 

Large Accounts and Corporations 

Wholesale 

Other 


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The Figures 

2011 2012 

Data in € million 

Residential 

Fibre 1,125 1,103 

ADSL, Indirect Access and Others 47 42 

Total 1,172 1,145 

Business 

SME 77 86 

Large Accounts and Corporations 129 121 

Wholesale 104 218 

Total 310 425 

Other 3 3 

Total revenues 1,485 1,573 

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In 2012, ONO recorded revenue growth 

of 5.9% to 1,573 million euros, despite a 

very difficult economic environment and 

a high level of competition in the sector. 

The Company was focused on fixed-mobile 

convergence and began to commercialize 

these services at the beginning of last 

year, services which have now become 

a trend in the market. In addition, the 

services that ONO delivers over its own 

fibre network lead the market in terms of 

quality and innovation, including the TiVo® 

intelligent television service, high-speed 

Internet and value added services to SMEs 

and corporates. 

The economic deterioration has mainly 

had an effect on household finances in 

Spain, and residential revenues contracted 

slightly by 2.3% from 2011 levels, to 

1,145 million euros. The increase in VAT in 

September 2012 had a negative impact on 

this segment, especially on the Television 

service, where VAT rose from 8% to 21%. 

However, on a quarter-on-quarter basis 

residential revenues moved higher at the 

end of the year, rising from 280 million 

euros in the third quarter to 287 million 

euros in the fourth quarter, a rise of 2.3%. 

Despite the difficult environment, monthly 

ARPU in the residential sector remained 

stable at 52.4 euros per client. 

best performing, with a very positive 

rise of 11.5% to 86 million euros. These 

results strengthen ONO’s position as a 

very attractive alternative for the rising 

demand from the professional sector, 

thanks to the Company’s high quality 

convergent services, specialist attention 

and competitive prices. 

Direct cost and Gross margin 

Direct costs include mainly the costs of 

the trunk network and interconnection 

costs for telephony services, connectivity 

costs for Internet, fibre and leased 

circuit costs, and programming costs for 

television services. 

Interconnection costs for telephony 

services are generated by the calls made 

by customers that terminate outside 

the network. Connectivity costs are due 

mainly to bandwidth used for Internet 

transit outside of Spain. Television 

programming costs are generated by the 

broadcast of third party content and films 

and football on pay-per-view. 

ONO’s direct costs increased by 

110 million euros in the year to 427 

million euros in 2012. Cost savings, 

which resulted from the continuous 

renegotiation of contracts, were offset 

by increased interconnection costs as a 

result of the successful mobile offering 

and strong results from the wholesale 

business. 

Direct costs (€m) / % over revenues 

78.9% 78.7% 

72.9% 

310 317 

The Business area grew solidly over the 

course of the year, especially in the SME 

segment. Business revenues rose by 

37.3% to 425 million euros at the end 

of the year. The SME segment was the 2010 2011 2012 

427 


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Operating expenses (Opex) 

Net operating expenses consist mainly of 

expenses related to salaries and wages, 

professional services, marketing and 

sales expenses, network operations and 

maintenance, information systems, and 

administrative and billing expenses. 

In 2012, ONO cut operating expenses by 

26 million euros to 395 million euros. 

Strict cost controls and continued 

initiatives for optimization and 

transformation have enabled the Company 

to maintain its operating expenses at a 

steady level despite the pressure on prices 

from high inflation. 

In 2012, ONO implemented a number of 

initiatives, including: (i) personnel savings 

by improving processes; (ii) increasing 

sales from more efficient sales channels, 

such as on-line; (iii) developing a new, 

more profitable business model for stores; 

and (iv) designing more efficient models 

for managing faults and for network 

maintenance. 

Net operating expenses (€m) / 

% over revenues 

29.7% 28.3% 

25.1% 

EBITDA 

EBITDA in 2012 rose to 752 million 

euros, thanks to the solid performance of 

revenues and improvements in efficiency 

as a result of the measures described in 

the operating expenses item. 

EBITDA (€m) / EBITDA margin 

49.2% 50.4% 47.8% 


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The Figures 

437 421 395 

725 748 752 

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2010 2011 2012 

2010 2011 2012 

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Net profit 

Operating free cash-flow 

Free cash-flow after debt service 


For the third consecutive year, ONO 

increased net profit, which rose by 3.9% 

to 52 million euros thanks to the success 

of its strategy for offering the market 

convergent, differentiated and high 

quality services. 

Net profit (€m) 

47 50 52 

Operating free cash flow is EBITDA less 

capital expenditure. In 2012, operating 

free cash flow was 453 million euros, 

a reduction of 4 million euros from the 

previous year as a result of increased 

investments to enhance the serviced 

offering. 

Operating free cash-flow (€m) 

480 456 453 

Free cash flow is operating cash flow 

less changes to working capital, other 

payments, and interest payments. 

Cash generation is one of the main 

priorities for the shareholders and 

management team at ONO. For the fourth 

consecutive year, ONO ended the year with 

positive free cash flow, of 45 million euros. 

Despite this good performance, expenses 

associated with the refinancing of the 

Company in 2012 had a negative impact 

on free cash flow in the year. 

Free cash-flow after debt service (€m) 

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2010 2011 2012 

2010 2011 2012 

Contact 

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164 179 

45 

2010 2011 2012 

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Financial structure 

One of the major achievements of 2012 

was the completion of the refinancing 

of ONO, resulting in a more mature and 

stable capital structure. In October 2010, 

ONO began the refinancing process, 

which ended in June 2012. By carrying 

out various bond issues, ONO has been 

able to reduce bank debt and extend 

maturities on its debt. 

These transactions demonstrate the 

confidence that investors have in the 

Company, thanks, among other factors, to 

the solid operating and financial results 

reported, the return to revenue growth 

and the solid cash generation profile. 

This new capital structure means that 

ONO is entering a new stage, with more 

flexibility and stability, completing the 

refinancing processes begun some two 

years ago. 

Grupo Corportivo 

ONO, S.A. (“GCO”) 

100% 


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The Figures 

2018 Senior 

Secured Notes 

ONOMidco 

Senior 

guarantee 

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Information 

Nara Cable 

Funding II Ltd 

100% 

Senior 

subordinated 

guarantee 

Subordinated Notes 

due 2019 

Nara Cable 

Funding II Ltd 

SPV Tranches 

Senior Bank 

Facility 

Cableuropa 

(Operating Company) 

Notes Proceeds 

Loans 

ONO Finance Plc II 

2020 Senior 

Secured Notes 

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114



In July 2012, ONO was recognised by The 

Banker, a prestigious magazine that is 

part of the Financial Times group, with 

the award for the best bond issue in 

Europe in 2012, thanks to the success of 

its 2,200 million euros bond issue, which 

successfully refinanced the Company’s 

debt. 

In February 2013 “Project Finance” 

magazine, part of the Euromoney group, 

presented ONO with the award for 

the best financial deal in 2012 in the 

European telecoms sector. The magazine 

described the refinancing process as “epic” 

and said the “extraordinary complexity and 

scale of the deal was successfully achieved 

in extremely difficult market conditions.” 

In early February 2013, ONO successfully 

completed a new bond issue of 260 

million euros, once again tapping the 

capital markets to continue to improve 

the maturity profile of its debt, extending 

the amortization timetable until 2017 and 

strengthening its current capital structure. 


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Management and Control of risks 

The incorporation of the risks model 

into ONO’s control system has enabled 

the understanding, management 

and identification of risks and the 

quantification of their financial impact, 

allowing the Company to define policies 

and actions to minimize and monitor these 

risks. 

A simple methodology is applied: 

1. Understand the risks. Identify and assess 

specific risks and have them present in 

management processes. 

2. Define a policy to manage and control 

risks, adapted for each specific case. 

Depending on the greater or lower risks 

and their impacts, appropriate measures 

are designed, which vary each financial 

year. 

3. Monitor risks just as other variables 

affecting the business are monitored. 

Risk management at ONO is based 

on the following principles: 

• Identifying, assessing and 

controlling relevant risks that could 

affect ONO’s targets and activities. 

• Establishing an integrated risk 

management system across all the 

organization. 

• Identifying, measuring and 

monitoring the main operational, 

business, financial, credit and 

counterparty risks. 

• Checking that all Company 

members understand and comply. 

The main activity of the risk management 

area is to manage in an integrated and 

efficient way those risks that could 

prevent the Company from meeting its 

targets, and to implement the measures 

needed to respond to these risks. 

The identification and assessment of risks 

uses a map that includes the main risks and 

which is regularly updated to include new 

events in accordance with the evolution of 

the business and its operating environment. 

This process means that all people in the 

Company can improve their understanding 

and management of risks, and enable 

informed, coherent and realistic decisionmaking. 

The main target which ONO is working 

towards is the consolidation of a culture 

of controlling risks, which flows from 

Management to the other levels of the 

organization. 


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Integrated Risk Model 

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Operational 

Risks 

Business 

Risks 

Financial 

Risks 

Counterpart 

Risks 


Identification - Evaluation - Mitigation 

Products and 

Services 






The methodology used by ONO is based 

on COSO (Committee of Sponsoring 

Organizations of the Treadway 

Commission) as a framework used for 

Enterprise Risk Management. It covers in 

particular the following elements: 

- Operational Risks. At ONO these risks 

are defined as possible losses of value 

or earnings derived from events caused 

by inappropriate processes or faults in 

processes, human resources, equipment 

and information systems, or derived from 

external factors. 

This definition includes compliance risk 

but excludes strategic and regulatory 

risks, which are covered by the Business 

Risks category. Operational losses include 

financial impacts, and non-financial and 

reputational impacts. 

The following aspects are included within 

this category: 

- Infrastructure, equipment, networks 

and systems. 

- Damage to the environment or third 

parties. 

- Low quality of service or service 

interruption. 

- Suppliers, counterparties, outsourcing 

and other agents. 

- Execution of Processes and Operations 

- Business Practices 

- Employment practices and safety at 

work. 

- Fraud and unauthorised activities. 

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- Business Risks. These are risks of losses 

derived from external factors such as 

regulation, economic cycles, levels of 

competition, changes in demand, industry 

structure, etc., and also the risk of losses 

from incorrect decisions being made in 

relation to the Company’s business plans 

and future strategies. 

There is special relevance in this risk 

category for regulatory risk, which is 

the risk associated with the regulatory 

framework in which business activities are 

carried out. 

The business risks model includes the 

following risks: 

- Market and competition 

- Regulatory and legal 

- Strategic 

- Financial risks. Financial risks include 

events related to the uncertainty of 

earnings due to adverse movements in 

financial variables such as interest rates, 

exchange rates, liquidity and other market 

factors. 

At ONO, financial risks include: 

- Liquidity risks 

- Interest rate risks 

- Exchange rate risks 

- Counterparty risks. These are defined at 

ONO as the risk of economic losses derived 

from non-compliance with the contractual 

obligations of a counterparty, based on 

the following criteria: the existence of 

a right/commitment (either original or 

derived); non-compliance in time (not 

respecting the established deadlines); noncompliance 

in form (the form of payment/ 

delivery is not that that has been agreed), 

and the probability of losses (not certain, 

but a possibility that must be considered). 

The following are included within the 

counterparty risks model: 

- Financial positions 

- Suppliers 

- Clients 

The risk management policy aims to 

try to reduce the probability of the 

defined risks occurring and to minimize 

the financial impact on results if they do 

materialize. 

ONO is developing both policies in order 

to achieve a global policy for controlling 

and managing risk in accordance with its 

responsibility as a Company. 


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Corporate 


Fibre is an innovative 

product, but we also 

want to be… 

innovative in all 

the services that 

use fibre. 


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Corporate Governance Report 

Corporate Governance 

Data as of 31 December 2012 

A. OWNERSHIP STRUCTURE 

A1. Share capital of the Company. 

Date of Number Number of 

latest modification Share capital of shares voting rights 

13/09/2012 1,817,269,942 1,817,269,942 1,817,269,942 

All shares are of the same class and series. 

A2. Direct and indirect holders of significant ownership interests at year-end, excluding directors. 

Number 

Number 

Name or company of direct of indirect % of total 

name of director voting rights voting rights * voting rights * 

CCMP Capital Advisors, LLC (1) 277,002,125 15.243% 

Providence Equity Partners, Inc. (2) 277,099,129 15.193% 

Thomas H. Lee Partners, L.L.P. (3) 273,132,152 15.030% 

General Electric Structured Finance, Inc. (4) 163,729,808 9.010% 

Quadrangle Capital Partners (5) 162,662,115 8.951% 

Caisse de Dépôt et Placement du Quebec (CDPQ) (6) 12,364,167 110,367,976 6.754% 

Grupo Multitel, S.A. (7) 29,732,775 80,381,196 6.059% 

Val Telecomunicaciones S.L. 97,242,293 5.351% 

(1) 

Via J.P. Morgan Partners (BCHA) Luxembourg, S.à.r.l., J.P. Morgan Partners (PTC) Luxembourg, S.à.r.l., J.P. Morgan Partners Global Investors Luxembourg, S.à.r.l., JPMP GCO Equity 

Investments, S.à.r.l., J.P. Morgan Partners Global Investors (Paul) Luxembourg, S.à.r.l., J.P. Morgan Partners Global Investors (Selldown) Luxembourg, S.à.r.l., J.P. Morgan Partners 

Global Investors (Cayman/Selldown) III Luxembourg, S.à.r.l., J.P. Morgan Partners Global Investors (Selldown) II Luxembourg, S.á.r.l. and Prospero Luxembourg Sàrl. 

(2) 

Via PEP GCO S.á.r.l., PEP GCO Co-invest, S.á.r.l., PEP GCO HL Co-invest, S.á.r.l., PEP ESP S.à.r.l. and Prospero Luxembourg Sàrl.. 

(3) 

Via THL GCO Investments I, S.á.r.l., THL GCO Investments II, S.á.r.l., THL GCO Investments III, S.á.r.l., THL GCO Investments HL, S.á.r.l., THL GCO Investments IV, S.á.r.l., THL GCO 

GmbH & Co KG. and Prospero Luxembourg Sàrl. 

(4) 

Via Global Telecom Investments, LLC, GE Capital Equity Holdings Inc, General Electric Pension Trust and Prospero Luxembourg, Sàrl 

(5) 

Via QCP GCO Investments S.á.r.l., QCP GCO Investments II S.á.r.l., QCP GCO Investments A S.á.r.l., QCP GCO Investments II-A S.á.r.l, Quadrangle Capital Partners LP, QCP GCO 

Equity Investors, S.á.r.l. and Prospero Luxembourg Sàrl.. 

(6) 

Via Particitel International Limited Partnership. 

(7) 

Via Telco Investment Europe, S.á.r.l. and Multitel Alfa, S.L.U. 

* Both the number of votes and the percentages are calculated according to the information available to the company. Amounts may vary slightly due to rounding. 


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A3. Members of the Board of Directors who own voting rights in the company and details of these. 

Number 

Number 

Name or company of direct of indirect % of total 

name of director voting rights voting rights voting rights 

Particitel International Limited Partnership 110,367,976 6.073% 

In addition, Val Telecomunicaciones Cartera, S.L. is a company whose sole shareholder is Val Telecomunicaciones, S.L., which has a total of 

97,242,293 shares with voting rights, representing 5.351% of total voting rights. 

A4. Family, commercial, contractual or corporate relationships between owners of significant shareholdings, insofar as these are 

known by the company. 

As established by the current Shareholder Contract, Val Telecomunicaciones, S.L., the Purchase Vehicles of Grupo Multitel (currently 

Multitel Alfa, S.L.U.) and Telco Investment Europe, S.á.r.l are directly or indirectly controlled by Mr. Eugenio Galdón, the founder and former 

chairman of the Company (EG Shareholders). 

Notwithstanding this, on 22 June 2009, Val Telecomunicaciones, S.L. informed the company that it was not an EG Shareholder as it was no 

longer controlled by Mr. Eugenio Galdón. 


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No information has been provided to the company about any changes concerning the other companies (Multitel Alfa, S.L.U and Telco 

Investments Europe, S.á.r.l.) 

A5. Any commercial, contractual or corporate relationships between owners of significant shareholdings, and the company 

and/or its group, unless they are insignificant or arise from ordinary trading activities. 

There were no relations of any commercial, contractual or corporate relationships between owners of significant shareholdings, and 

the company that were significant or did not arise from ordinary trading, notwithstanding the information provided, for purposes of 

transparency, in section C on transactions with related parties. 

A6. Shareholder Agreements involving the company in accordance with Article 112 of the Law on Securities Markets. 

Any concerted action by shareholders, and possible amendments or breaches of these pacts, agreements, or concerted actions. 

On 29 July 2005, a contract was signed between shareholders and the Company was notified of this contract. This contract was 

subsequently modified on 1 November 2005, 4 November 2005, and 7 March 2007. The Shareholder Contract covers various aspects of 

governance of the Company, including the system for electing directors, the chief executive officer and other senior management, high 

level corporate decisions, situations of a change in control, and voting rights. According to the terms of the pact, the voting rights of each 

shareholder and companies in their group are limited to one third of total voting rights. 

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The Company is not aware of any concerted actions by its shareholders, which are not allowed under the Shareholder Contract, in 2012. No 

amendments or breaches of the Contract have occurred in the year. 

A7. Individuals or legal entities that can exercise control over the company, in accordance with Article 4 of the Law 

on Securities Markets. 

There are no individuals or legal entities that can exercise control over the company, in accordance with Article 4 of the Law on Securities 

Markets. 

Regarding the ban on the issue of votes, established in article 14 of the Company Bylaws, see section E2 of this report. 

A8. Treasury Stock. 

At the end of 2012: 

Number of direct shares Number of indirect shares % of share capital 

18,110,206 0.997% 


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No treasury shares were acquired in 2012. 

A9. Conditions and time period of the current mandate from the Shareholder Meeting to the Board of Directors to acquire 

or transfer treasury stock. 

There is currently no authorisation to acquire treasury stock. 

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A10. Any restrictions imposed by Law or the company’s bylaws on exercising voting rights, as well as any legal restrictions 

on the acquisition or transfer of ownership interests in the share capital. 

Restrictions in the bylaws on the exercise of voting rights 

The restrictions on attending the General Shareholder Meeting are described in section E9 of this report. 

For the limitations on issuing voting rights, established in Article 14 of the Bylaws, see section E2 of this report. 

Legal restriction on the acquisition or transfer of stakes in the share capital 

In order to guarantee transparency, Article 6 of the Company Bylaws, covering the regime for transferring shares that is established in the 

Shareholder Contract, is reproduced here: 

“Article 6.- Rules governing the transfer of shares 

6.1. Transfers for valuable consideration 


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If any shareholder (the Transferring Shareholder) receives an offer from a third party or from another shareholder to acquire all or part of the 

shares in the capital of the Company that they own (the Offer), and intends to accept the Offer and transfer all or part of the shares in the 

Company for a valuable consideration (including but not limited to, a purchase, a non-cash transaction, exchange, execution of pledge, etc.), 

the shareholder will grant the Company and all other shareholders a preferential acquisition right to buy the shares being transferred, in the 

same terms and conditions as those of the Offer. The Transferring Shareholder will notify the Chairman of the Board of Directors of the Offer 

that has been received, in accordance with the terms of this article. 

The notification of the Transferring Shareholder that wants to transfer all or part of their shares (the Notification) will clearly identify the 

Transferred Shares and include full information about the price and all other terms and conditions in which the shareholder wants to sell the 

Transferred Shares, including validity, expiry date, and sufficient information about the identity of the third party or shareholder that is making 

the Offer to the Transferring Shareholder. 

The Transferring Shareholder will send the Notification of the Offer to the chairman of the Board of Directors at the registered headquarters of 

the Company. In a maximum period of five (5) calendar days from the receipt by the chairman of this Notification, he will send it to the other 

shareholders, who will then have a period of thirty (30) calendar days from the receipt of the Notification to inform the chairman of their desire 

to acquire all, and not less than all, the Transferred Shares in the terms of the Offer. Notwithstanding this, if the Transferred Shares represent 

five per cent (5%) or more of share capital, the period for the other shareholders to state their desire to acquire the Transferred Shares will be 

forty (40) calendar days from the receipt of the Notification. If no response is received in the applicable period, it will be understand that the 

exercise of the preferential acquisition rights has been waived. 

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At the same time as sending the Notification to the other shareholders, the chairman of the Board of Directors will call a meeting of the 

board to be held within two (2) calendar days of the sending of the Notification, so that the Company can decide whether to exercise its 

preferential acquisition rights on the Transferred Shares. If the Board approves the acquisition of all or part of the Transferred Shares, on 

the same day as the meeting of the Board, the chairman will call a General Shareholder Meeting to be held in as little time as possible in 

compliance with the legal time periods. The order of the day of this Meeting must include the exercise of the preferential acquisition rights 

of the Company on the shares that are the object of the Offer, and hence the authorisation of the acquisition of treasury stock in the terms 

of the Offer. 

The acquisition agreement by the Company for the shares that are the object of the Offer, which must fully comply with current legislation 

on the acquisition of treasury stock, will require the vote in favour of at least two thirds of share capital with voting rights. The chairman, 

or the person who carries out these duties at the General Shareholder Meeting in which it is decided whether the Company will exercise 

the preferential acquisition rights on the shares that are the object of the Offer, will expressly state at this Meeting that the Company will 

exercise this right. 

In all events, the shareholder that made the offer will not be obliged to accept the acquisition by the Company and/or other shareholders 

of less than the full one hundred per cent (100%) of the Transferred Shares. 

If the Company, at the Shareholder Meeting mentioned above, decides to acquire all the Transferred Shares, the formalisation of the 

relevant transfer documents will take place within thirty (30) calendar days of the date of the Shareholder Meeting. 


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Once the period referred to in the third paragraph of this section 6.1 has been completed, for the shareholders to state their desire to 

exercise their preferential acquisition rights, if one or more shareholders then want to acquire the Transferred Shares and the Company, 

at the Shareholder Meeting mentioned above, has decided to buy less than all the Transferred Shares, the chairman must state this to 

those shareholders who have stated their desire to acquire the Transferred Shares. In this case, the Transferred Shares that have not been 

requested by the Company will be distributed, pro rata for their stake in the capital of the Company, between the shareholders that have 

stated their desire to exercise their preferential acquisition rights. The formalisation of the transfer documents for these shareholders will 

take place within ten (10) calendar days from the date of expiry of the time granted them for notification of their desire to exercise their 

preferential acquisition rights. 

If the Company and shareholders decide not to exercise their preferential rights to acquire the full total of the Transferred Shares, the 

chairman will notify the Transferring Shareholder within five (5) calendar days of the last day of the period granted to shareholders to 

notify their desire to exercise this right. The Transferring Shareholder will then have the right to transfer the Transferred Shares to the third 

party or to the shareholder that made the Offer in a maximum period of sixty (60) calendar days from the receipt of the notification of the 

chairman cited in this paragraph, as long as the transfer price is not less than and the terms are not more favourable than those contained 

in the Offer. Once this period has gone by, and no transfer has been made, the procedure will have to restart at the beginning for any future 

transfers. 

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6.2. Annual offer to buy shares 

Notwithstanding the terms of section 6.1, from 1 January 2006 any shareholder will have the right to sell shares that represent less than 

one and a half per cent (1.5%) of the total share capital of the Company, as long as the total number of shares sold by all the shareholders 

in the terms of this paragraph 6.2, within one calendar year, does not total more than five per cent (5%) of the share capital of the 

Company, and these shares will not be subject to the preferential acquisition rights of the Company or other shareholders as covered by 

section 6.1, but rather by this current paragraph 6.2. 

Each shareholder (the selling shareholder) that within one calendar year wants to make the sale referred to in the above paragraph of 

section 6.2 (the Annual Offer), must inform the chairman of the Board of Directors before 31 December of the year underway of the shares 

that they want to transfer (the offered shares) in the following calendar year. 

The chairman, once he has received all the requests to make sales under the Annual Offer, will inform the selling shareholders is the total 

number of offered shares is above five per cent (5%) of the share capital of the Company. If the total number of offered shares is above five 

per cent (5%) than the chairman will inform the selling shareholders that the five per cent (5%) limit will be distributed pro rata for the 

number of shares offered by them. The chairman will inform the Company and non-selling shareholders of the total offered shares (within 

the limit of five per cent (5%)), and the identity of the selling shareholders, no later than 31 January each year. The Company will have 

the right to offer to buy from the selling shareholders all or part of the offered shares in terms specified by the Company, in accordance 

with the procedure described in paragraphs five and six of section 6.1 above, in terms of calling a meeting of the Board of Directors and 

a General Shareholder Meeting. If the Board of Directors approves the purchases of the offered shares, it will also determine the price at 

which the Company wants to acquire them, which the chairman will state to the selling shareholders. 


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The selling shareholders will have ten (10) calendar days from the receipt of the notification of the offer of the Company to accept or 

reject this. If the selling shareholders reject all or part of the offer of the Company, then the chairman will notify non-selling shareholders 

of the number of offered shares that will be at their disposal. The non-selling shareholders will then have ten (10) calendar days from the 

receipt of the notification of the chairman to state the terms in which they are disposed to acquire all the offered shares. No response in 

this period will be considered to be a waiver of the exercise of the right to acquire the Offered Shares that have been offered to them. 

If more than one non-selling shareholder wants to acquire the offered shares, the chairman will notify the selling shareholders of the most 

favourable offer for the shares. The selling shareholders will have a period of ten (10) calendar days to notify the chairman if they accept or 

reject the offer. 

If no non-selling shareholder wants to exercise their right to acquire the Shares offered in the annual offer, or if the selling shareholders reject 

the offer of the non-selling shareholders that has been notified by the chairman, the selling shareholders will have the right to sell the offered 

shares to a third party in a maximum period of sixty (60) calendar days from the receipt of the notification of the chairman referred to in this 

paragraph, as long as the sale price is not lower and the conditions not more favourable than those offered to the selling shareholders, if 

an offer has been made by the Company or the other shareholders. After this period, those shares that have not been transferred under this 

annual offer procedure cannot be transferred, and will be covered by the regime of this section 6.2, until the following calendar year. 

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6.3. Common rules for 6.1 and 6.2 

In the event that any transfer of shares referred to in this article is subject to administrative authorisation, the established periods will be 

extended as necessary. 

The transfer regime covered by this article 6 will apply, mutatis mutandis, to the transfer of any rights to subscribe to or acquire shares. 

6.4. Tag-along rights 

6.4.1. If any shareholder, individually or in concert with other shareholders, has agreed to exercise their voting rights in the Company 

in a coordinated form (hereinafter, the “Majority Shareholder”), acquires shares directly or indirectly, or voting rights, or any similar right 

that enables the Majority Shareholder to exercise control of over one third of the shares of the Company (“Acquisition of Control”), this 

shareholder must make an offer (“Acquisition Offer”) to all the other shareholders (“Minority Shareholders”) to acquire all the shares of 

these Minority Shareholders at the greater of the following values: 

(i) the fair market value determined by an investment bank established in Spain, of the following: Deutsche Bank, JPMorgan, 

Lehman Brothers, Goldman Sachs, Morgan Stanley, UBS, Citigroup, or any entity that succeeds these 


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(ii) the highest value paid for any of the shares acquired by the Majority Shareholder in the Acquisition of Control. 

6.4.2. The Majority Shareholder will make the Acquisition Offer in five (5) days following the date on which the reasonable market value 

has been determined in accordance with point 6.4.1 above. Each of the Minority Shareholders will have ten (10) days from the receipt of 

the notification of the Acquisition Offer to notify the Majority Shareholder of their intention to accept the Acquisition Offer. 

6.4.3. At the time of the Acquisition of Control, Minority Shareholders will appoint an investment bank established in Spain, of the 

following: Deutsche Bank, JPMorgan, Lehman Brothers, Goldman Sachs, Morgan Stanley, UBS, Citigroup, or any successor, and the Majority 

Shareholder will appoint another investment bank of those in this list to determine the fair market value of the shares of the Company. If 

there is a difference between the valuations of the shares of the Company made by the investment banks, than the fair market value of the 

shares of the Company will be understood to be the average value of the two valuations. If the difference between the two valuations is 

more than 10%, the two designated investment banks will appoint a third investment bank. For the purposes of this section, the investment 

banks will value the shares of the Company on the basis of an offer for one hundred per cent (100%) of the shares in the Company, with a 

control premium and no discount for liquidity or minorities. The fees and expenses of the investment banks will be paid by the Company. 

6.4.4. The Majority Shareholder will acquire all the shares of the Company that are owned by the Minority Shareholders that accept the 

Acquisition Offer, in accordance with the terms of section 6.2 above. 

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6.4.5. In the event that a Majority Shareholder acquires control because a capital increase at the Company is not subscribed, this 

Majority Shareholder will not be obliged to carry out the Acquisition Offer covered by this article. 

6.4.6. If as a consequence of the procedure described in this article, the Majority Shareholder acquires more than two thirds (2/3) of the 

shares of the Company, the voting restrictions established in Article 14 will not apply.” 

A11. Existence of a resolution by the General Shareholder Meeting to take neutralisation measures to respond to a public takeover bid, 

as covered by Law 6/2007. 

This section is not applicable, as the company is not listed. 

B. COMPANY MANAGEMENT STRUCTURE 

B1. Board of Directors. 

B.1.1. Maximum and minimum number of directors included in the bylaws. 


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In accordance with the terms of the Shareholder Agreement of 29 July 2005, Article 16 of the Company Bylaws and Article 3 of the 

Regulations for the Internal Functioning of the Board of Directors, this body is composed of 13 directors. 

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B.1.2. Members of the Board. 

At the end of the year: 

Name or company 

name of director Representative 

Position 

on board 

Date of 1 st 

appointment 

Date of last 

appointment 

Election 

procedure 

General Shareholder 

José María Castellano Ríos Chairman 25-05-2006 20-06-2012 Meeting 

1 st Vice General Shareholder 

John Hahn Chairman 04-11-2005 22-06-2011 Meeting 

Val Telecomunicaciones 

Cartera, S.L. 

Diego L. 

Lozano Romeral 

2 nd Vice 

Chairman 05-05-2009 20-06-2012 


Meeting 

Chief Executive 


Rosalía Portela de Pablo Officer 05-05-2009 20-06-2012 Meeting 


Alejandro Valencia Director 05-05-2009 20-06-2012 Meeting 


Soren Oberg Director 04-11-2005 22-06-2011 Meeting 


Thomas Walker Director 04-11-2005 22-06-2011 Meeting 


Peter Ezersky Director 09-02-2012 09-02-2012 Meeting 


Felipe Blanco Director 22-06-2011 22-06-2011 Meeting 


Eduardo Serra Rexach Director 26-06-2009 20-06-2012 Meeting 

Particitel International 

Limited Partnership Alain Michel Director 25-11-2009 26-04-2010 


Meeting 


Anthony Ball Director 29-06-2006 20-06-2012 Meeting 


José Luis Nueno Iniesta Director 26-06-2009 20-06-2012 Meeting 

Total number of directors 13 


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B.1.3. Members of the board and their categories. 

Executive directors 

Committee 

Position 

Name or company name of director proposing appointment in company 

José María Castellano Ríos ----- Chairman 

Rosalía Portela de Pablo ----- Chief executive officer 

Total number of executive directors 

% of Board 

2 15.38% 

External proprietary directors 

Name or company name 

Committee 

significant shareholder represented 

Name or company name of director proposing appointment or proposing appointment 

John Hahn ----- Providence Equity Partners, Inc. 

Soren Oberg ----- Thomas H. Lee Partners, L.L.P. 

Thomas Walker ----- CCMP Capital Advisors, L.L.C. 

Peter Ezersky ----- Quadrangle Capital Partners 

Anthony Ball 

Proposed by the 4 shareholders above 

Alejandro Valencia ----- Multitel 

General Electric 

Felipe Blanco ----- Structured Finance, Inc. 

Caisse de Dépôt et 

Particitel Internationel Limited Partnership ----- Placement du Quebec 

Val Telecomunicaciones Cartera, S.L. ----- Val Telecomunicaciones, S.L. 


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Total number of proprietary directors 

% of Board 

9 69.23% 

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External independent directors 

Committee 

Name or company name of director proposing appointment Profile 

Jose Luis Nueno Iniesta ----- See below 

Eduardo Serra Rexach ----- See below 

Número total de consejeros dominicales 

% total del Consejo 

2 15,38% 

The profiles of the external independent directors are as follows: 

José Luis Nueno Iniesta 

José L. Nueno is Ordinary Professor of Business Management at IESE. He holds a Doctorate in Business Administration (Marketing) from 

Harvard University, a Master’s in Business Administration from IESE, and a law degree from the University of Barcelona. His areas of interest 

are distribution channels and manufacturer/retailer relations. He has published articles on globalization, the marketing of consumer goods, 

luxury goods, and marketing. He has lectured at various business schools, including the Industrial Marketing course at INSEAD, France. He 

was guest professor at the University of Michigan and at the combined programmes of Michigan and IESE at Vevey in Switzerland and in 

Shanghai. In 2003, he gave lectures at the Harvard Business School, for AMP Middle East and for the Strategic Program for Retail Managers. 

He is a member of the Board of Directors of several international companies. He is also a corporate consultant (since 1986 he has carried 

out consulting activities for over 160 clients in more than 230 projects), and an adviser to national and multinational corporations in the 

areas of marketing and strategy. 

Eduardo Serra Rexach 

Mr. Serra studied law at the Universidad Complutense of Madrid and in 1974 joined the legal area of the public administration. He has 

devoted half of his career to the public sector, and is the only Spaniard to hold senior positions in the three governing parties since the 

restoration of democracy, notably as Minister of Defence from 1996 to 2000. In the private sector, he has held various roles; Chairman of 

Telettra España, Vice Chairman and Chairman of Cubiertas MZOV, Chairman of Peugeot-Talbot España, Chairman of Airtel and Chairman of 

UBS España. Eduardo Serra has dedicated part of his life to working for charitable organisations. He has been Vice Chairman and Chairman 

of INCIPE (1989-1996), Vice Chairman of the Foundation for Help against Drug Addiction (of which he was Managing Director and 

Chairman from 1987-1996), Chairman of the Board of Trustees of the Prado Museum (2000-2004), and Founding Chairman of the Real 

Instituto Elcano (2000-2004). He is currently Chairman of Eduardo Serra y Asociados Consulting, Chairman of the EVERIS Foundation, Vice 

Chairman of Everis, and Director, Adviser and trustee of various national and international institutions. 


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B.1.4. Appointment of proprietary director on proposal of shareholders with a stake of under 5% of capital. 

The appointment system for directors is defined in the Shareholder Contract, in article 16 of the Company Bylaws, and in Article 3 of the 

Regulations for the Internal Functioning of the Board of Directors. This system is described in item B.1.19 of this report. 

No representative directors have been appointed on the proposal of shareholders with a stake of under 5% of capital. 

No formal requests for presence on the Board have come from shareholders with a stake that is equal or greater than that of others at whose 

proposal representative directors have been appointed. 

B.1.5. Resignation of directors before the end of their mandate, and explanation for this. 

Don Joshua Steiner and the physical representative of Particitel International Limited Partnership, Robert Coallier, resigned as directors 

before the end of their mandates on the request of the shareholders they represented and who appointed them, due to their new 

responsibilities. 

B.1.6. Powers delegated to the chief executive officer. 


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As established in Article 20 of the Company Bylaws, the chairman of the Board of Directors will be chosen with the vote in favour of the 

majority of the directors present at the meeting, and notwithstanding any other powers that may be delegated, this chairman will be 

delegated all the powers that can be delegated legally and statutorily in the terms determined by the Board of Directors, subject to the 

provisions of Article 141 of the Law on Corporations (currently Article 249 of the Spanish Companies Act). 

In addition, Article 22 of the Bylaws states that the Board of Directors will appoint, on the proposal of the chairman, a chief executive 

officer to whom, without affecting the powers of attorney that may be conferred, will be delegated all the powers that can be delegated 

legally and statutorily in the terms determined by the Board of Directors, subject to the provisions of Article 141 of the Law on Corporations 

(currently Article 249 of the Spanish Companies Act). 

Item B.1.21 describes how these powers are exercised with third parties. 

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B.1.7. Members of the Board who have positions as directors or management in other companies that form part of the listed Company. 

Name or company name of director Company name of group entity Position 

José María Castellano Ríos ONO Midco, S.A.U. Chairman 

Cableuropa, S.A.U. 

Chairman 

Tenaria, S.A. 

Chairman 

Spanish Cable Holding, S.A.U. 

Chairman 

Rosalía Portela de Pablo ONO Midco, S.A.U. Chief Executive Officer 

Cableuropa, S.A.U. 


Spanish Cable Holding, S.A.U. 


Physical representative of the 

CEO of Cableuropa, S.A.U. 

B.1.8. Directors that are members of the Board of Directors of other listed companies in securities markets in Spain and disclosed 

to the company. 

The company has received no notification about this. 


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B.1.9. Rules about the number of boards that directors may form part of. 

There are no rules about the number of boards to which directors may belong. 

B.1.10. In relation with Recommendation 8 of the Unified Code, indicate the company’s general policies and strategies that are 

reserved for approval by the Board of Directors in plenary session. 

The plenary meeting of the Board has reserved for it the approval of the following policies and strategies: 

Investment and financing policy 

Design of the structure of the corporate group 

Corporate governance policy 

Corporate social responsibility policy 

The strategic or business plans, management targets and annual budgets 

Remuneration and evaluation of senior management 

Policy for risk management and control, including regular monitoring of internal information and control systems 

Dividends and treasury stock policy and limits 

Yes 

X 

X 

X 

X 

X 

X 

X 

X 

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B.1.11. Aggregate remuneration paid to directors during the year. 

a) In the Company. 

Concept 

Thousand euros 

Fixed remuneration 1,771 

Variable remuneration 720 

Per diems 96 

Stipulated remuneration 

Share options and/or other financial instruments 

Others 7 

Total 2,594 

Other benefits 


Advances 

Loans 

Pension funds and plans: contributions 

Pension funds and plans: obligations 

Life insurance premiums 2 

Guarantees issued by the company in favour of directors 


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b) For company directors sitting on other governing bodies and/or holding senior management posts within group companies. 

Concept 

Fixed remuneration 

Variable remuneration 

Per diems 

Stipulated remuneration 

Share options and/or other financial instruments 

Others 

Total 


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Other benefits 

Advances 

Loans 

Pension funds and plans: contributions 

Pension funds and plans: obligations 

Life insurance premiums 

Guarantees issued by the company in favour of directors 



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c) Total remuneration by type of director. 

Type of director By company By group 

Executive 2,388 

External proprietary 

External independent 216 

Other external 

Total 2,596 

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d) Remuneration as percentage of profit attributable to the parent company. 

Total remuneration for directors (thousand euros) 2,596 

Total remuneration for directors/profit attributable to parent company (%) 4.91% 

B.1.12. Members of senior management who are not also executive directors and total remuneration paid to them. 

Name or company name 

Carlos Sagasta Reussi 

Guillermo Mercader Herrero 

Víctor Manuel Guerrero Ferrer 

Rafael Brull Dans 

John Paul Kearney 

Carlos Porfirio Moreno Alonso 

Antonio de la Fuente Fernández 

Juan Luis Delgado Dominguez 

Position 

Chief Financial Officer 

Director General of Residential Business 

Director of Business Unit 

Director of On-line Business Unit 

Director of Networks and Technology 

Director of Systems 

Director of People, Teams and Resources 

Secretary General and Secretary to the Board 

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Total remuneration to senior management (in thousand euros) 2,406 

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B.1.13. Clauses that guarantee or provide “golden parachutes” in the event of dismissal or changes in control, for senior management, 

including executive directors, and whether these agreements must be reported to/approved by the administrative bodies of the company. 

Number of beneficiaries 4 

B.1.14. Processes for establishing the remuneration of the members of the Board of Directors and clauses of the bylaws concerning this. 

Article 25 of the company Bylaws establishes that the position of director will be remunerated. The General Shareholder Meeting will 

establish, preferably in the annual Ordinary General Meeting, the global sum that all directors will receive in the year underway. 

The Board of Directors will freely decide on the distribution of this amount, and can establish a sum, included in that set by the General 

Shareholder Meeting as above, that each director can receive for attendance at the meetings of the Board of Directors and any Committees 

of the Board, without this sum necessarily having to be the same for each director. 

In addition, the Board can, within this global sum that the General Shareholder Meeting establishes each year, remunerate certain directors 

for the responsibilities allocated to them or the functions they provide. 

In addition, directors may be remunerated by providing them with shares in the capital of the Company, or options on these shares or 

options linked to the value of the shares of the Company. The use of these types of remuneration will require the prior agreement of the 

General Shareholder Meeting. Any such resolution will include, as a minimum, the number of shares or options to be awarded to each 

director remunerated this way, which may differ, the strike price of the options, the value of the shares used as a benchmark, and the 

duration of this system of remuneration. 


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Similarly, article 17.1 c) of the Regulations for the Internal Functioning of the Board of Directors recognises the right of directors to receive 

attendance fees for their personal attendance at the meetings of the Board of Directors, and/or the remuneration established for their 

position or functions, in the terms established in the Bylaws. The remuneration of directors, for any concept, must follow the criteria and 

recommendations of the Appointments and Remuneration Committee, subject to the sovereignty of the General Shareholder Meeting in 

terms of this remuneration, as established in the Bylaws. 

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B.1.15. Whether the Board of Directors approves a detailed remuneration policy and specify the points included. 

The Board of Directors is informed by the Appointments and Remuneration Committee and approves, among others, the following aspects: 

- The remuneration framework for the Chairman of the Board of Directors and the Chief Executive Officer of the Company, and the 

distribution of the remuneration set by the General Shareholder Meeting of the Company among the members of the Board of Directors. 

- Proposes to the General Shareholder Meeting the total amount covering all concepts, of the remuneration to distribute among the 

directors in its ordinary annual meeting. 

- Approves or reviews the master contracts for senior managers of the Company and other group companies. 

- Maximum and minimum levels of gross annual compensation for the different segments of the group employees. 

- The remuneration of the senior management that is hired, ensuring that these are within the maximum and minimum levels of the 

segment in which they are included. 

- General group policy on variable remuneration for meeting targets, ensuring that there is an adequate proportion between fixed and 

variable remuneration. 


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- Salary reviews of senior group managers that represent an extraordinary increase in compensation because of exceptional reasons. 

- Employee loyalty programmes. 

B.1.16. Submission of a report by the Board of Directors on remuneration policy for directors to an advisory vote of the 

General Shareholder Meeting, as a separate point of the order of the day. 

A report by the Board of Directors on remuneration policy for directors is not submitted to an advisory vote of the General Shareholder 

Meeting, as a separate point of the order of the day. 

However, the General Shareholder Meeting establishes the total sum for directors to receive each year, as described in point B.1.14. 

In addition, the General Shareholder Meeting is the body that decides on loyalty plans for the group employees. 

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B.1.17. Members of the Board who are also members of the Board of Directors, management, or employees of companies that have 

significant stakes in the company and/or group entities. 

Company name 

Name or company name of director of significant shareholder Position 

John Hahn Providence Equity Partners Director General 

Peter Ezersky Quadrangle Capital Partners Co-Chairman and Director General 

Felipe Blanco General Electric Structured Finance, Inc. Executive Director 

Thomas Walker CCMP Capital Advisors, LLC Director General 

Soren Oberg Thomas H. Lee Partners, L.L.P. Director General 

Alejandro Valencia Multitel Director General 

B.1.18. Amendments to the Regulations for the Board in the year. 

There were no amendments to the Regulations for the Internal Functioning of the Board of Directors in the year. 

B.1.19. Procedures for appointing, re-electing, appraising and removing directors. Competent bodies and the processes and criteria 

to be followed for each procedure. 


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The Shareholder Contract covers appointments to the Board of Directors and establishes that the Board of Directors will be composed of 

13 directors, of which two will be executive, a Chairman and CEO, and another two will be independent directors. One of the independent 

shareholders will be proposed by shareholders before the date of the signing of the Shareholder Contract, and must be approved by the 

new shareholders. The second independent shareholder will be proposed by the new shareholders and must be approved by the former 

shareholders. 

For other directors, each stake representing 11.11% of share capital will have the right to propose a director. If the total number of 

directors cannot be reached, shareholders with stakes of less than 11.11% will have the right to appoint a director, in descending order. 

If the new shareholders hold together more than 50% of share capital, they will have the right to appoint 5 of the remaining 9 directors. 

The Board of Directors will name two Vice Chairmen, one proposed by shareholders existing before the date of signing of the Shareholder 

Contract, and another on the proposal of the new shareholders. 

The appointment of the CEO, on the proposal of the Chairman, must be based on the advice of a human resources, management 

recruitment, or similar company of high reputation in the market, with the experience to find the candidate who best fits the profile of the 

Company. 

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Both the Bylaws and the Regulations for the Internal Functioning of the Board of Directors are reflected in the Shareholder Contract. The 

Bylaws establish that directors cannot be shareholders and will exercise their role for three years, and can be re-elected one or more time 

for periods of the same duration. 

In addition, the Board will elect a Secretary, and may elect one or several vice secretaries, who cannot be directors. 

If there are vacancies on the Board of Directors, the Board can designate among the shareholders and co-opt the person to occupy this 

vacancy until the first General Shareholder Meeting. 

In the selection of independent directors to be proposed to the General Shareholder Meeting for appointment, the candidates must, as well 

as being individuals of high professional reputation, also have, as much as possible, the following conditions of impartiality and objectivity: 

i) Not have, or have had in the twelve months prior to the appointment, a working, commercial or contractual relationship, directly or 

indirectly, and of a significant nature, with the Company or its subsidiaries, members of the Management Committee, executive directors, 

representative directors or group companies whose interests they represent, credit institutions with a major position in the financing of 

the company, or organisations that receive significant subsidies from the Company. 

ii) Not be a director of another company that has proposed the appointment of representative directors at the Company. 


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iii) Not to be related closely to any executive or representative director or members of the Management Committee of Grupo ONO. 

In the event that a candidate, because he or she is especially well suited professionally, is proposed to be appointed as an independent 

director, and is affected by one of the relationships above, this must be stated to the General Shareholder Meeting at the same time as 

their candidacy, and if they are appointed a director, this will also be disclosed in the Annual Corporate Governance Report that must be 

produced in accordance with current legislation, if the Company lists on one or several securities markets. 

B.1.20. The cases in which directors must resign. 

Article 18 of the Regulations for the Internal Functioning of the Board of Directors, in sections 8, 9, 10 and 12, reproduced here, covers the 

circumstances under which Directors must resign: 

“18.8.- The directors must inform the Board of Directors of any situation of direct or indirect conflict with the interest of the Company. 

They must abstain from voting on any specific resolution in which there may be a conflict of interest, direct or indirect, between the 

director or a person linked to him, and the Company. In these cases, the director will not be included when counting majority votes. If the 

conflict of interest with the Company is permanent and not temporary, the director will be required to present his immediate resignation. 

18.9.- The directors are obliged to disclose, when elected, any possible legal or statutory incompatibilities for the exercise of their 

position that they may incur. If the reason for this incompatibility is supervening, then they will be required to resign immediately. 

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18.10.- Directors will be obliged to resign in the event that the functioning of the Board of Directors or the credit or reputation of the 

Company suffers as a result of their remaining on the Board. 

18.12.- Directors must disclose any stakes they may have in the capital of a company with the same, analogous or complementary 

activity as the corporate purpose of the company, and the positions or functions that they hold in it, and the carrying out individually or 

by a representative of the same, analogous or complementary activity as the corporate purpose of the company. This information must 

be provided to the Company when requested, to be included in the annual report. Directors from a competing company and people 

who in any way have interests that are opposed to those of the Company will resign their position at the request of any shareholder or 

director and with the resolution of the General Shareholder Meeting.” 

B.1.21. . Functions of the chief executive officer that fall upon the Chairman of the Board, and measures taken to limit the risks 

of accumulation of powers in a single person. 

The division of powers between the Chairman of the Board and the Chief Executive Officer are clearly laid out in the Bylaws and the 

Regulations for the Functioning of the Board. 

The Board of Directors has delegated to both all the powers that can be legally and statutorily delegated, notwithstanding the delegation of 

other powers that the Board of Directors can make, or the provisions of Article 141 of the Law on Corporations (currently Article 249 of the 

Spanish Companies Act). 


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With third parties, these faculties can be exercised individually by the Chairman or the CEO when the financial amount involved in the 

action is not more than five million euros. Above this limit, these faculties must be jointly exercised by the Chairman and CEO. 

Notwithstanding this, internally: 

(i) any decisions concerning operations included in the Annual Budget can be taken by the Chairman and/or CEO, in accordance with the 

framework noted above; 

(ii) for decisions concerning operations not included in the Annual Budget, the agreement of the Board of Directors will be required, 

except for the following cases: 

(a) Operations related to the ordinary course of business and not in excess of fifteen (15) million euros per year. 

(b) Debt that is not more than fifteen (15) million euros in excess of the highest level established in the Annual Budget. 

(c) Capital investments of no greater than thirty five (35) million euros per year. 

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(d) Award of guarantees for no more than ten (10) million euros per year above the highest level established in the Annual Budget. 

(e) Recognition or payment of compensation of not more than ten (10) million euros above the highest level of debt established in the 

Annual Budget. 

B.1.22. Requirement for qualified majorities, rather than legal majorities, for any type of decision. Adoption of resolutions by the 

Board of Directors, minimum quorum for meetings, and type of majorities needed for resolutions. 

As established by the Bylaws and the Regulations for the Internal Functioning of the Board, the Board is validly constituted when half 

plus one of its components are at the meeting or represented there, when the number of directors present is higher than the number of 

absentees, including, if applicable, any vacancies that may exist. 

Nevertheless, a meeting of the Board of Directors will also be validly constituted, even without a prior call, when all the directors with a 

current position on the board are either present, represented, or using video calling, and unanimously accept that the Board of Directors 

is constituted and hold a meeting. In this case, if the Secretary or any Vice Secretaries are not present, the youngest director will carry out 

these functions. 

Agreements will be adopted by the majority of directors present at the meeting, subject to those areas where the Bylaws, rule for 

functioning of the board, or the law, establish that a qualified majority is needed. In addition, this is all subject to following the previously 

established requirements of the shareholder contract that is force in the Company for the adoption of certain agreements. 


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As established by the current Shareholder Contract, for the business detailed below, the Chairman will present these issues to the vote 

of the Board of Directors only when instructions have been received that represent at least the simple majority of ordinary shares in 

the company (and for the matters in items (iii), (v) and (vi) at least 60%) confirming that they are in favour of adopting the resolutions 

submitted to a vote: 

(i) approval or amendment of the annual budget or business plan; 

(ii) remuneration of senior managers involved in the share loan scheme; 

(iii) remuneration and incentives for the chairman and CEO; 

(iv) authorisation of transactions with related parties that are not between group companies; 

(v) dismissal of Chairman and appointment of a new Chairman; 

(vi) dismissal of CEO and appointment of a new CEO 

(vii) debt not included in the annual budget that is in excess of 100 million euros; 

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(viii) execution of capital increases delegated by the General Shareholder Meeting; 

(ix) strategic transactions such as acquisitions or joint ventures that are significant to the business, financial situation or operations of 

the Company; 

(x) purchase of treasury stock in the circumstances described above in the framework of transferring shares for a consideration, and the 

annual share acquisition offer. 

B.1.23. Specific requirements, different to those for directors, to be appointed as Chairman. 

There are no specific requirements, different to those for directors, to be appointed as Chairman. 

B.1.24. Casting vote of Chairman. 

The Chairman currently has no casting vote. 

B.1.25. Age limit for directors established by the Statutes or the Regulations for the Board. 


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There is no age limit for directors established by the Statutes or the Regulations for the Board. 

B.1.26.Limit to the mandate of independent directors, established by the statutes or the Regulations for the Board. 

There is no limit to the mandate of independent directors, established by the statutes or the Regulations for the Board. 

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B.1.27. Initiatives taken to remedy the low number of female directors. Procedures established by the Appointments and Remuneration 

Committee so that the selection processes are not implicitly biased against the selection of female directors. 

The search for women who have the professional profile needed is a question of principle, and it is clear that the Company is committed to this 

principle. In accordance with this, it should be noted that on 5 May 2009, the General Shareholder Meeting appointed Ms. Rosalía Portela de 

Pablo as director of the Company, and that she was subsequently appointed Chief Executive Officer by the Board of Directors. 

In addition, the Regulations for the Internal Functioning of the Board of Directors establish that independent directors must have recognised 

reputation and experience, and that the selection process must consider whether the candidates, as much as possible, have certain conditions of 

impartiality and objectivity. The rules governing the functioning of the Company do not pose any obstacle to the selection of female directors. 

Hence, the procedure for selecting female directors is based exclusively on the personal merits of the candidate. 

B.1.28. Formal processes for granting proxies at the Board of Directors. 

As established in Article 18 of the Bylaws, any director can delegate their representation to another member of the Board. The proxy will be 

conferred in a letter to the Chairman and will be specific for each meeting of the Board of Directors that is held. 


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This right to representation in the meetings of the Board of Directors by another director is included in the rights of directors, in Article 17 

of the Regulations for Internal Functioning. Subject to this right of representation, Article 18 of the Regulations for Internal Functioning 

establishes the obligation of directors to personally attend all meetings of the Board, whether ordinary or extraordinary, and to diligently 

inform themselves about the development and business of the Company and the group. 

Article 12 of the Regulations for the Internal Functioning of the Board also establishes the right for representation. It establishes that directors 

will be able to be represented in the meetings of the Board of Directors, exclusively by another director with a current position on the Board. 

The proxy vote will be unique to each meeting and can be general and wide ranging, or it can be specific, with the direction of the vote 

indicated for each point on the order of the day. This proxy must be in writing, on paper with a written signature, or an email with an advanced 

electronic signature that complies with the requirements of the Spanish legislation applicable. Proxies can be sent by fax, notwithstanding 

that the original is sent immediately to the secretary of the Board of Directors for confirmation and storing. 

When there are directors who are represented by others using a specific proxy vote with the vote that the proxy must make indicated for 

each point of the order of the day, and a new point is submitted to the Board of Directors for vote, and is not on the order of the day, it will be 

understood that the director who is represented is abstaining from voting on these points. However, if circumstances allow it, the proxy can try 

to obtain, by fax, or email with an advanced electronic signature that complies with the requirements of the Spanish legislation applicable, a 

special proxy with the direction of the vote for this point or points, from the director being represented. This proxy by fax or email must always 

be confirmed, by sending the original signed paper to the secretary of the Board of Directors five days after the meeting. If the original is not 

received in this period, it will be understood that the director abstained from voting on the new points. 

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The personal attendance of the director who has organised a proxy for their vote with another director, will mean the automatic revocation of 

the proxy. 

The directors who, when present in a meeting of the Board of Directors, have to leave the meeting before it ends, can delegate their vote 

to another director who is present, to represent them on the business to be discussed in the rest of the meeting. This proxy can be either in 

writing or oral. In both cases, the secretary of the Board will disclose this in the minutes. 

B.1.29. Meetings of the Board of Directors in the year, and times that the Board has met without the Chairman. 

Number of meetings of the Board 9 

Number of meetings of the Board without the attendance of the Chairman 1 

Meetings held in the year by the different committees of the Board. 

Meetings of the Appointment and Remuneration Committee 2 

Meetings of the Audit and Compliance Committee 3 


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B.1.30. Meetings held by the Board of Directors during the year without the attendance of all members. This calculation of 

non-attendance will include the proxies without specific instructions. 

Number of non-attendances of directors in the year 22 

% of non-attendances of the total votes cast in the year 19.30% 

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B.1.31. Persons who have certified the individual and consolidated annual accounts of the Company, for their formulation by 

the Board of Directors. 

The individual and consolidated annual accounts of the Company are not certified for their formulation by the Board of Directors. 

However, there is an exhaustive process of preparing the accounts, which are prepared by the Accounts department and then reviewed by 

the Chief Financial Officer, the secretary of the Board, and by the Chairman and Chief Executive Officer before being presented to the Audit 

and Compliance Committee. 

The Audit and Compliance Committee reviews the annual accounts, with the attendance of the external auditor, and must inform the Board 

of Directors of any change in accounting standards and of the balance sheet and off balance sheets risks of this. 

The Audit and Compliance Committee, if it thinks it appropriate, agrees to propose to the Board the formulation of the individual and 

consolidated accounts of the Company. 

B.1.32. Mechanisms established by the Board of Directors to prevent the individual and consolidated financial statements it 

prepares from being submitted to the General Shareholders’ Meeting with a qualified Audit Report. 


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It is the job of the Audit and Compliance Committee to inform the Annual Accounts, alert the Board of Directors to any change in 

accounting standard and the balance sheet and off balance sheet risks of these, as well as monitoring the implementation of the annual 

external audit and monitoring those critical areas that could affect the auditors’ report. 

The external auditors inform the Audit Committee about the progress of their audit, and provide information to the meeting of the 

Committee in March, when the individual and consolidated accounts of the Company and the Group are reviewed for them to be proposed 

to the Board for formulation. In addition, the external auditors review the quarterly results of the Company and the Group. 

B.1.33. Whether the secretary of the Board is a director. 

The secretary of the Board is not a director. 

B.1.34. Procedures for appointment and removal of the Secretary 

Article 23 of the Company Bylaws establishes that the Secretary of the Board of Directors, who cannot be a director, will be elected with 

the vote in favour of the majority of the directors present at the meeting. The position will be of indefinite duration, or can be for a certain 

number of years. To be elected Secretary of the Board of Directors, it is essential to be a lawyer and a practising member of the professional 

body of lawyers for at least ten years. 

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The Regulations for the Internal Functioning of the Board govern the requirements for eligibility, powers, obligations, functions and other 

circumstances for the exercise of this position. 

The Secretary of the Board is also especially responsible to ensure the practice of good governance recommendations. 

B.1.35. Mechanisms established by the Company to preserve the independence of the auditor, financial analysts, investment banks, 

and rating agencies. 

In terms of the independence of the external auditor of the Company, both the Regulations for the Internal Functioning of the Board and 

the Audit and Compliance Committee establish that it corresponds to the Committee to propose to the Board of Directors the appointment 

or substitution of the external auditor, to be approved by the General Shareholder Meeting, and their fees, monitoring for any situation that 

could compromise their independence. 

B.1.36. Changes to the external auditor of the Company in the year. 

There were no changes to the external auditor of the Company in the year. 

B.1.37. Whether the audit firm carries out other work, the amount of fees received for this work, and that work as a percentage 

of the total fees invoiced to the Company. 


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The audit firm carries out other non-audit work for the company and the group, specifically: 

Amount of other non-audit work (in thousand euros) 217 

Amount of non-audit work / total amount invoiced by the audit firm (%) 39% 

B.1.38. Existence of reservations or qualifications in the Audit Report. 

There are no reservations or qualifications in the audit report for the annual accounts of the previous year. 

B.1.39. Number of years in which the current audit firm has uninterruptedly carried out the audit of the accounts, and the percentage 

this is of the number of years in which the accounts have been audited. 

The audit firm has been carrying out the audit of the company and group accounts for 11 years uninterruptedly, which represents 92% of 

the number of years in which the accounts of the Company have been audited. 

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B.1.40. Equity holdings of the members of the Board of Directors in other companies with the same, similar or complementary types 

of activity to that which constitutes the corporate purpose of the company and/or its group, and which have been reported to the 

company. The positions posts or duties they hold in these companies. 

The holdings disclosed to the Company are listed below: 


Position 

name of director Name of company % stake or functions Related party 

José María Castellano ONO Midco, S.A.U. --- Chairman --- 

CABLEUROPA, S.A.U. --- Chairman --- 

Spanish Cable Holding, S.A.U. --- Chairman --- 

Tenaria, S.A. --- Chairman --- 

Rosalía Portela ONO Midco, S.A.U. --- Chief Executive Officer --- 

Spanish Cable Holding, S.A.U. --- Chief Executive Officer --- 

CABLEUROPA, S.A.U. --- Chief Executive Officer --- 

Tenaria, S.A. --- Physical representative 

of Chief 

--- 

Executive Officer 

Soren Oberg Comcast


In addition, the director Peter Ezersky has disclosed that he holds the position of nonexecutive director at various investment funds of the 

Quadrangle group, which owns holdings in companies with a similar corporate purpose as the company 


Position 

name of director Name of company % stake or functions Related party 

Peter Ezersky Gest AS --- --- QCP Funds 

Hargray Holdings --- --- QCP Funds 

Ntelos Holdings Corp --- --- QCP Funds 

DAVE Wireless --- --- QCP Funds 

Tower Vision Mauritius Ltd --- --- QCP Funds 

Likewise, the director Val Telecomunicaciones Cartera, S. L. has informed the company that Val Telecomunicaciones, S.L., a shareholder in 

Grupo Corporativo ONO, owns 100% of its share capital, and is also its CEO. Val Telecomunicaciones, S.L. has stated that it does not have 

stakes in companies with the same, similar or complementary activity as the corporate purpose of the Company. 


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The director Particitel International Limited Partnership has declared that Caisse de dépôt et placement du Québec, a shareholder in the 

Company, has the following stakes: 


name of director Name of company % stake Related party 

Particitel International Quebecor Inc – Class B 5.30% Caisse de dépôt et placement du Québec 

Limited Partnership Cogeco Càble Inc 3.80% Caisse de dépôt et placement du Québec 

Quebecor Inc – Class A 1.59% Caisse de dépôt et placement du Québec 

Cyfrowy Polsat SA 0.30% Caisse de dépôt et placement du Québec 

Sirius xm Radio Inc 0.02% 

SES Sa 0.12% Caisse de dépôt et placement du Québec 

British Sky Broadcasting Group PLC 0.09% Caisse de dépôt et placement du Québec 

Kabel Deutchland Holding AG 0.13% Caisse de dépôt et placement du Québec 

Eutelsat Communications 0.08% Caisse de dépôt et placement du Québec 

Jupiter Telecommunications Co Ltd 0.04% Caisse de dépôt et placement du Québec 

Virgin Media Inc 0.03% Caisse de dépôt et placement du Québec 

Comcast Corp –Class A 0.14% Caisse de dépôt et placement du Québec 

DIRECTV 0.12% Caisse de dépôt et placement du Québec 

Time Warner Cable Inc 0.12% Caisse de dépôt et placement du Québec 

Comcast Corp – Special Class A 0.06% Caisse de dépôt et placement du Québec 

DISH Network Corp 0.04% Caisse de dépôt et placement du Québec 

Cablevision Systems-Ny Grp_A 0.11% Caisse de dépôt et placement du Québec 

Liberty Global Inc - A 0.03% Caisse de dépôt et placement du Québec 

Liberty Global Inc – Series C 0.03% Caisse de dépôt et placement du Québec 

CITIC Guoan Information Industry Co Ltd 0.01% Caisse de dépôt et placement du Québec 

Quebecor Media Inc 24.64% Caisse de dépôt et placement du Québec 

Shaw Communications Inc-B 0.95% Caisse de dépôt et placement du Québec 

Ripley Cable Holdings I LP 2.76% Caisse de dépôt et placement du Québec 

Beijing Gehua CATV Network - A 0.01% Caisse de dépôt et placement du Québec 

Finally, Diego L. Lozano and Alain Michel, as physical representatives of the directors Val Telecomunicaciones Cartera, S.L and Particitel 

International Limited Partnership have declared that neither they nor persons related to them have any stake or position in companies of 

the same, similar or complementary corporate purpose. 


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B.1.41. Procedures to provide directors with external advice. 

As established in Article 18.7 of the Regulations for the Internal Functioning of the Board of Directors, the directors have the obligation 

to prepare for the meetings that are called, by reading and reviewing the information that is sent to them in advance, and requesting any 

additional information that they think is necessary for an adequate preparation of the meeting. If necessary, the directors can be advised by 

external experts. The cost of these experts will be incurred by the Company, when it is the Board of Directors that requests them. The cost 

of individual advice to a particular director will be borne by that director or the shareholder they represent, unless the board determines 

otherwise. 

B.1.42. Procedures for the directors to have the necessary information for preparation of meetings of the governing bodies in 

sufficient time in advance. 

These procedures are established in Article 10 of the Regulations for the Internal Functioning of the Board of Directors. 

Directors, notwithstanding their compliance with the obligations of the Regulations for the Internal Functioning of the Board of Directors, 

and the Ethical Code of Conduct, if it exists, and in particular their obligations of loyalty and confidentiality, have the right to access any 

type of information and documents concerning the Company, the Group and its activities, in complying with the director’s role that has 

been granted to them. 


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Likewise, directors have free access to the offices and facilities of the Company and the Group, subject to being accompanied by technical 

or qualified staff in their visits to the facilities or telecommunications networks on which the Company’s or Group’s activity depends. 

Each of the points on the order of the day of a meeting of the Board of Directors or any other governing body of the Company, 

notwithstanding the information and debate that these points could generate in the meeting itself, can be accompanied, in the opinion 

of the Secretary of the Board of Directors or, if applicable, the Chairman, by an informative appendix that contains at least a succinct 

explanation of the business to be discussed, the aim of the point (information, debate and/or decision), and if applicable a proposal for 

the resolution to be adopted by the body. This can also consist of documents that must be approved or examined by the competent body. 

To prepare these appendices, the responsibility falls on the Secretary of the Board of Directors, who may be helped by employees of the 

Company or Group as he thinks appropriate. 

These informative dossiers for the order of the day must be sent, if possible, with the order and the calling of the meeting, and in any event, 

at least two working days before the day set for the meeting, if possible. These appendices are sent to directors by fax, email, messenger or 

any other way that the Secretary of the Board of Directors thinks appropriate. 

In addition, in compliance with the possibility established in the Regulations for the Internal Functioning of the Board of Directors, the 

Shareholder’s Office has been established, whose main mission is relations between shareholders and with the Company, and the relations 

of the directors between themselves, with the Company, and between directors and shareholders. 

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The Shareholder’s Office manages the “Virtual Board Room”, with access limited to directors and shareholders, that, among others, includes 

significant information about the company, its activity, composition, functioning of the Board of Directors, and documentation of the 

meetings that have been held. 

B.1.43. Rules obliging directors to inform the board of any circumstances that might harm the company’s name or reputation, 

tendering their resignation as the case may be. 

In accordance with Article 18.10 of the Regulations for the Internal Functioning of the Board of Directors, directors will be obliged to 

present their resignation in those cases when the functioning of the Board could be negatively impacted, or the credit or reputation of the 

Company hurt, as a result of their remaining on the board. 

B.1.44. Members of the Board who have notified the company that he/she has been indicted or tried for any of the offences stated 

in article 213 of the Spanish Companies Act (former Article 124 of the Law on Corporations). 

No member of the Board of Directors has informed the Company of this. 

B2. Committees of the Board of Directors 


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B.2.1. Committees of the Board and their members. 

Remuneration and Appointments Committee 

The Remuneration and Appointments Committee is formed by five members of the Board of Directors and is governed by the Norms of the 

Committee approved in December 2005. Its purpose is to supervise the remuneration, selection and human resources policies of Grupo 

ONO. The decisions taken by this Committee are then analysed by the Board of Directors for approval or amendments. 

Composition of the Remuneration and Appointments Committee as of 31 December 2012: 

Name 

John Hahn 

Peter Ezersky 

Eduardo Serra 

Anthony Ball 

Particitel International Limited Partnership. 

Position 

Chairman 

Member 

Member 

Member 

Member 

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Audit and Compliance Committee 

The Audit and Compliance Committee is formed by five members of the Board of Directors and is governed by the Norms of the Committee 

approved in December 2005. It meets regularly with the purpose of supervising the audit and internal control policies of Grupo ONO, 

among others. The decisions taken by this Committee are then analysed by the Board of Directors for approval or amendments. 

Composition of the Audit and Compliance Committee as of 31 December 2012: 


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Val Telecomunicaciones Cartera, S.L. 

Tom Walker 

Felipe Blanco 

José Luis Nueno 

Soren Oberg 

B.2.2. Functions of the Audit and Compliance Committee. 

To supervise the preparation process and monitor the integrity of financial information on the company and, 

if applicable, the group, reviewing compliance with regulatory requirements, the adequate boundaries of the 

scope of consolidation and correct application of accounting principles. 

To regularly review internal control and risk management systems, so main risks are correctly identified, 

managed and notified. 

To safeguard the independence and efficacy of the internal audit function; propose the selection, appointment, 

reappointment and removal of the head of internal audit; propose the department’s budget; receive regular report-backs 

on its activities; and verify that senior management are acting on the findings and recommendations of its reports. 

To establish and supervise a mechanism whereby staff can report, confidentially and, if necessary, anonymously, 

any irregularities they detect in the course of their duties, in particular financial or accounting irregularities, with 

potentially serious implications for the firm. 

To submit to the board proposals for the selection, appointment, reappointment and removal of the external 

auditor, and the hiring conditions. 

To receive regular information from the external auditor on the progress and findings of the audit programme and 

check that senior management are acting on its recommendations. 

To ensure the independence of the external auditor. 

For groups, to encourage the group auditor to assume the responsibility of auditing the companies in the group. 

Position 

Chairman 

Member 

Member 

Member 

Member 

Yes 

X 

X 

X 

X 

X 

X 

X 

X 

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B.2.3. Description of the rules of organisation, functioning, and responsibilities allocated to each of the Committees. 

Remuneration and Appointments Committee 

In accordance with the terms of the Company Statutes, the Regulations for the Internal Functioning of the Board of Directors and the 

Regulations for the Internal Functioning of the Remuneration and Appointments Committee, this committee is composed of five nonexecutive 

members of the Board of Directors, of which at least one will be an independent director. Another member will be one of the vice 

chairmen of the Board of Directors, if this position exists. It corresponds to the Board of Directors to appoint the other directors that must 

form part of the Committee. 

The Remuneration and Appointments Committee does not have any executive capacity except when the Board of Directors expressly 

delegates a power to it. Except for this, its functions are internal control, and are informative and aimed at discussion. 

The functions that correspond to the Remuneration and Appointments Committee include: 

a) Proposing to the Board of Directors the framework for compensation for the Chairman of the Board of Directors and the CEO of 

the Company and of any other Group companies, if applicable, and the distribution of the remuneration established by the General 

Shareholder Meeting of the Company among members of the Board, in accordance with the situation of the sector and their dedication 

and responsibilities, and subject to the requirements established in the shareholder contract in force at any time for the adoption of 

these agreements by the Board of Directors. Proposing to the Board of Directors for the Board to propose to the Shareholder Meeting 

the total sum that, for all concepts, should be established as remuneration to be distributed among the directors, in its annual general 

meeting. 


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b) Approving or reviewing the master contracts for the main managers of the Company and other Group companies. 

c) On the requirement of the Chairman of the Board of Directors, establish a succession plan for the CEO, and if necessary coordinate the 

search for a replacement, assessing and proposing to the Chairman the right candidates. 

d) Approving the maximum and minimum levels of gross annual compensation for the various bands in which the Group employees are 

included. Approving the remuneration of the senior managers who are hired. 

e) Approving the general policy of the Group on the variable remuneration awarded for meeting targets, ensuring that there is an 

appropriate relation between fixed and variable remuneration. 

f) Approving the salary reviews of senior management of the Group that include an extraordinary increase in their remuneration due to 

exceptional reasons. 

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g) Proposing to the Board of Directors the appointment of external advisers for this body, when they are considered necessary for 

adequate advice in matters of special importance. 

h) Reviewing, and if applicable proposing to the Board of Directors, the approval of loyalty plans for employees. 

i) Any other power delegated to the Remunerations and Appointments Committee by the Board, in the area of remuneration, 

appointment and human resources. 

j) Carrying out the functions of the Remunerations and Appointments Committee for any other company in Grupo ONO for which it is 

appropriate or necessary. 


As established in the Company Bylaws, the Regulations for the Internal Functioning of the Board of Directors and the Regulations for the 

Internal Functioning of the Committee, the Audit and Compliance Committee has no executive capacity except for those powers expressly 

delegated to it by the Board. Except for this, its functions and faculties are only of internal control, and are informative and aimed at 

discussion, with the purpose of proposing to the Board the adoption of any company agreements necessary. 


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The functions that correspond to the Audit and Compliance Committee include: 

a) Providing the Annual Accounts, and if applicable the bi-yearly or quarterly financial statements, that must be sent to regulators or 

supervisory authorities for the markets, informing the Board of Directors of any change in accounting standards and the balance sheet 

and off balance sheet risks of these. 

b) Proposing to the Board of Directors the appointment or substitution of the external auditor for approval by the General Shareholder 

Meeting, and the fees for them, monitoring any situations that threaten their independence. 

c) Monitoring the development of the external audit. 

d) Investigating, with the widest powers, any aspect of the financial, accounting, and risk control system of the Company or the Group. 

e) Propose to the Board the approval of the annual internal audit plan and monitor this. 

f) Informing the Board and formulating proposals for the Board about measures that it considers appropriate and in the area of audit, 

internal control system, and compliance with the legal norms for providing markets with transparent and accurate information. 

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g) Informing the Board of Directors in the process of selecting, appointing, renewing and removing the Internal Auditor, and in setting 

their compensation. 

h) Carrying out the functions of Audit and Compliance Committee for any other company in Grupo ONO for which it is appropriate or 

necessary. 

B.2.4. Advisory or consulting powers and, where applicable, the powers delegated to each of the committees. 

Neither the Appointments and Remuneration Committee nor the Audit and Compliance Committee have executive capacity, unless the 

Board of Directors expressly delegates a power to them. Except for this case, their functions are of internal control, to inform, and to 

discuss. 

B.2.5. Existence of regulations governing the board committees, the place where they can be consulted, and any amendments 

made during the year. Voluntary preparation of an annual report on the activities of each committee. 

Both the Shareholder Agreement of 29 July 2005 and the Bylaws of the Company establish that the Board of Directors will create an Audit 

and Compliance Committee and a Remuneration and Appointment Committee. 


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Both Committees are governed by their respective Rules for Internal Functioning, approved by the Board on the proposal of the Committees 

themselves. 

In both cases, the Rules for the Internal Functioning of the Board of Directors are applicable to the two Committees, “mutatis mutandis,” in 

all areas covered by these Rules that can be applicable to the Committees. 

The full text of these documents is available for consultation in the “Virtual Board Room”. 

No amendments have been made to the regulation of the Committees during the year. 

B.2.6. . Composition of the Executive Committee in relation to composition of the Board. 

Article 4.1 of the Shareholder Agreement of 29 July 2005 establishes that the Board of Directors will not appoint an Executive Committee. 

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C. RELATED PARTY TRANSACTIONS 

C1. Transactions of the company with its directors, significant shareholders or representatives on the Board, or with people related to these. 

C2. Relevant transactions entailing a transfer of assets or liabilities between the company or its group companies and the significant 

shareholders in the company. 

C3. Relevant transactions entailing a transfer of resources or liabilities between the Company or its group companies, and the 

company’s managers or directors. 

C4. Any relevant transactions undertaken with other companies in its group that are not eliminated in the process of drawing up the 

consolidated financial statements and do not form part of the company’s ordinary business. 

C1 to C4: See section: The Figures 

C5. Members of the Board of Directors who have in the course of the year been in some situation of conflict of interest, 

in the terms of articles 227, 228, 229.1, 229.2, 229.3, 230.1 and 230.2 of the Law of Capital Companies (Article 127 

of the Law on Corporations). 


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The director Val Telecomunicaciones Cartera, S.L is a company whose only shareholder is Val Telecomunicaciones, S.L., a minority 

shareholder in Grupo Corporativo ONO, S.A. This shareholder has presented a legal challenge against the resolution of the Board of 

Directors which authorised the Company to subscribe a shareholder loan for a maximum of two hundred million euros (200,000,000 

euros), regardless of which this loan has been subscribed, to a substantial degree, by this shareholder. Following the agreement reached 

between the company and the shareholder, the principal and part of the interest was capitalized in 2012, following which the shareholder 

abandoned the legal challenge. 

C6. Mechanisms established to detect, determine and resolve the possible conflicts of interests between the Company and 

its directors, managers or significant shareholders. 

Article 18 of the Regulations for the Internal Functioning of the Board of Directors establishes the following obligations for directors: 

“18.1.- The directors will carry out their role with the diligence of a reasonable businessperson and a loyal representative, prioritising 

corporate interest ahead of their own interests, the interest of their companies, or of any third party. The actions of the directors must be 

aimed to achieve the profits of the Company by developing its activity and exploring new business opportunities that arise, subject to the 

voting majorities established in the Bylaws and in the current Rules, and the creation of value for the Company and its shareholders. 

… 

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18.3.- Subject to the terms of the Ethical Code or the Rules of Conduct, in no case can the directors use any form of information to 

which their position gives them access for their own benefit or that of a third party. 

18.4.- Directors will not be able to use the name of the Company or any of the companies of Grupo ONO, or use their status as 

directors of the Company, to carry out transactions for themselves or for third parties, or to obtain a financial advantage for them or any 

related person. For the purposes of this article, related persons will be those included in item 5 of article 127 of the Law on Corporations or 

any norm that substitutes this law. 

18.5.- No director can carry out, to their own benefit or that of a third party, investments or any transactions linked to the goods of 

the Company or any of the companies of Grupo ONO, of which they have become aware of due to their position, when the investment or 

the transaction has been offered to one or various of these companies or they are interested in it, unless the Company has decided against 

this investment or transaction without the influence of the director. 

… 

18.8.- The directors must inform the Board of Directors of any situation of direct or indirect conflict of interest that they could have 

with the Company. In all events, they must abstain from voting on specific resolutions in which there is a conflict of interest, direct or 

indirectly, between the director or a related person and the Company. In these cases, the director in question will not be considered when 

counting voting majorities. When the conflict of interest with the Company is permanent and not temporary, the director will be obliged to 

present their immediate resignation. 


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18.9.- The directors are required to state, at the time of their election, any possible legal or statutory incompatibilities for the 

exercise of their role in which they may be involved. When the cause of this incompatibility is supervening, they will be obliged to inform 

the Company immediately and present their resignation. 

… 

18.12.- The directors must disclose any stakes they have in the capital of a company with the same, similar or complementary activities 

as that of the corporate purpose of the company, and the positions they hold or their functions in the company, as well as the carrying out, 

individually or via a representative, of the same, similar or complementary type of activity as that of the corporate purpose. This information 

must be provided when requested by the Company, to be included in the annual report. Directors who are directors at a competing 

company and people who have any form of interests opposed to the interests of the Company will leave their position when requested to 

by any shareholder or director, with the agreement of the Shareholder Meeting. 

18.13.- Directors must inform the Secretary of the Board of Directors if they or their spouses are involved in any of the incompatibilities 

established in community, national or regional legislation for employment with public administrations or incompatibilities for high office, 

with it being assumed that if no such disclosure is made, they are not incompatible. 

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18.14.- The directors will not be able to make use of the assets of the Company or group companies for their own benefit or that of a 

third party.” 

Currently, a binding Code of Ethics is being prepared for employees of the Company and Group. 

C7. Listing of more than one Group company in Spain. 

Neither the Company or any Group company are listed. 

D. RISK CONTROL SYSTEMS 

D1. General description of risk policy in the company and/or its group, detailing and evaluating the risks covered by the system, 

together with evidence that the system is appropriate for the profile of each type of risk. 

D2. Indicate if any of the different types of risk that affect the company have materialised in the year. 

D1-D2: See: Management and Control of risks section 


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D3. Committee or other governing body in charge of establishing and supervising these control systems. 

The risk management process involves, in different cases, the Board of Directors, the Audit and Compliance Committee, the Executive 

Committee, the Risk Committee, the Personal Data Protection Committee and the Management of each area, responsible for identifying, 

monitoring and mitigating risks. 

Board of Directors 

The body with the highest responsibility for the identification of the main risks of the group. 


The Audit and Compliance Committee assists the Board of Directors in its functions of monitoring the group, reviewing the internal control 

systems. The competences of this Committee are established in the Regulations for the Internal Functioning of the Board of Directors and 

in the Regulations for the Internal Functioning of the Committee itself. 

The Internal Auditor in the current organisational structure is directly linked to the Board of Directors, on which it depends functionally 

and which it reports to, and it must inform and advise the Audit and Compliance Committee. The Internal Auditor of the Company has the 

responsibility of advising all levels of management, the Audit and Compliance Committee and, when so required, the Board of Directors, 

about the quality of the operations of the group, and mainly its control systems. 

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Executive Committee 

This Committee participates actively in the identification, assessment, definition, and execution of risk management policies, establishing 

specific measures to mitigate their impact on the achievement of the group’s goals. 

Risk Committee 

A functional Committee that is responsible for identifying, analysing, advising, and proposing to the Executive Committee and the Audit and 

Compliance Committee mitigation measures for the risks identified. 

Personal Data Protection Committee 

This Committee is responsible for identifying, analysing, advising and proposing appropriate measures for the protection of personal data at 

ONO and compliance with the Law on Data Protection (LOPD, in Spanish). 

Business and Support Areas 

Responsible for identifying, reporting and assessing risks related to their business and support processes. In addition, they manage risks in 

accordance with the criteria approved by the Executive Committee on the proposal of the Risks Committee. 


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D4. Processes for compliance with the regulations applicable to the company. 

ONO operates in the telecommunication sector, which is subject to regulation. The specific controls on this sort of question are led by the 

Regulation and Competition team of the General Secretariat. 

In 2011, a Legal Compliance Manager was appointed to ensure compliance with legislation in other areas of the law. 

In 2012, the company also approved a Code of Ethics applicable to the directors, managers and employees, and established an Ethics 

Committee to manage all aspects concerning its implementation and compliance with the Code. 

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E. GENERAL SHAREHOLDER MEETING 

The General Shareholder Meeting is the sovereign body of the Company, with the power to decide over all the questions that fall within its 

competence, without any limits other than those due to the individual rights of shareholders and the agreements adopted by the directors 

in the exercise of their respective competences. 

It corresponds to the Shareholder Meeting, in accordance with the law, to decide about increasing and reducing share capital, issuing 

bonds, transforming, merging or winding up the Company, amending the statutes, censuring the management, approval of the annual 

accounts and management report, the distribution of results, appointment and dismissal of members of the Board of Directors, and the 

appointment of the Company’s auditors, if obliged to in accordance with the Law. 

E1. Indicate the quorum required for constitution of the General Shareholders’ Meeting established in the company’s bylaws. 

Describe how it differs from the system of minimum quorums established in the law on corporations. 

There are no differences between the minimum established in the Law and the quorum required for the Shareholder Meeting. 

E2. Describe any differences between the company’s system of adopting corporate resolutions and the framework set forth in the law. 


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Article 14 of the Company Bylaws, concerning debates at the Shareholder Meeting and voting, establishes that, among others, the debates 

at the Meeting will be directed by their Chairman, and agreements will be made using a majority of votes, with each share having one vote, 

subject to those questions for which the statutes or the law establishes that a qualified majority is needed for a valid resolution. However, 

for the ordinary or extraordinary Shareholder Meeting to be able to agree validly the issue of securities, obligations that are convertible or 

not, bonds, or any class of financial instrument that is convertible or exchangeable into shares of the Company, or that give their holders 

a preferential right to these shares; increase or reduction in share capital; transformation, merger, spin off, winding up or liquidation 

(except, for the last two, when these are legally enforced); transfer of registered headquarters to another municipality; amendment of the 

corporate purpose and, in general, any amendment to the Company Statutes; approval of dividend policy and the distribution of these; and 

authorisation to acquire treasury stock, the favourable vote of at least two thirds (2/3) of the total share capital with voting rights will be 

required. 

Subject to the provisions of the previous paragraph, and in accordance with Article 105.2 of the Law on Corporations (currently Article 

188 of the Spanish Companies Act),, no shareholder or group of shareholder companies that belong to the same business group as defined 

by Article 4 of the Law on Securities Markets, regardless of the percentage of capital with voting rights that they own, and that has been 

delegated to them, can issue a number of votes higher than the level that would correspond to one third (1/3) of the ordinary shares of the 

Company. For this purpose, a group of companies will refer to that established in Article 4 of the Law on Securities Markets of 28 July 1988, 

and a person will be understood to control one or various entities when that person and the corresponding entity or entities comply with 

any of the conditions established in this Article 4. 

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In the days prior to a General Shareholder Meeting, the Chairman can require written disclosure, within 48 hours of the receipt of this 

requirement by the shareholders, of the shares that are held directly and shares that are held by individuals or legal bodies that are directly 

or indirectly controlled by shareholders, as well as proxies, agreements on vote syndication, or any other agreement to vote jointly that 

is obligatory for the shareholders. The written response, which must be certified, must be accurate and refer both to the date of the 

certification and the date of the General Shareholder Meeting in question. 

E3. List all shareholders’ rights regarding the General Shareholders’ Meetings other than those established under the 

Spanish Companies Act. 

Among the rights established for shareholders in Article 93 of the Spanish Companies Act those relating to General Shareholder Meetings 

include: attending and voting in shareholder meetings, contesting any resolutions made, and information. 

The rights of shareholders in the Company in relation to General Shareholder Meetings are fully respected by the Company, in the terms 

established, in current legislation and in the Company Bylaws. 

Shareholders’ rights to information. 

The Department for Investor and Shareholder Relations is available to shareholders to facilitate all the information on the General 

Shareholder Meeting that they may require. Prior to the General Shareholder Meeting, it sends to the shareholders who have requested it a 

copy of the annual accounts and relevant documentation for the order of the day. 


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In addition, the Company responds to requests for information that shareholders make concerning business included in the order of the day 

of the General Shareholder Meeting, both before the meeting and by speaking in the meeting itself, which is open to all shareholders at the 

Meeting who wish to speak, and who are always responded to in the periods established in Article 197 of the Spanish Companies Act. 

Attendance at General Shareholder Meetings. Voting rights. 

Attendance rights are discussed in section E9. 

Each share has a voting right. 

Proxy voting at the General Shareholder Meeting. 

Proxy voting is discusses in section E10. 

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E4. Measures taken to encourage shareholder participation in General Shareholder Meetings. 

The Company Bylaws allow the issue of votes by post, electronically, or any other form of remote communication, as long as (i) the identity 

of the subject exercising their voting right is duly guaranteed, and (ii) the Company is aware of this at least one hour before the start of the 

meeting, as detailed in section E10. 

E5. Indicate whether the General Shareholder Meetings is presided by the Chairman of the Board of Directors. List measures, 

if any, adopted to guarantee the independence and correct operation of the General Shareholders’ Meeting. 

Article 9 of the Company Bylaws establishes that the Chairman and Secretary of the General Shareholder Meetings will be those of the 

Board of Directors. In their absence, the Vice Chairmen or Vice Secretaries, respectively, starting with the first Vice Chairman and the first 

Vice Secretary, and, if these positions do not exist, the oldest and/or the youngest director at the Meeting will respectively act as Chairman 

and Secretary. 

Once the Meeting has formulated a list of attendees, the Chairman will declare the Meeting valid and constituted. The Bylaws establish that 

the Chairman will direct the meeting, with debates held following the order of the day; he will provide the floor to the shareholders who 

request it at the appropriate time, and can withdraw this when he believes that a point has been sufficiently discussed, and will indicate 

when the resolutions must be voted on and announce the results of the votes. 


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In addition, to guarantee the independence and correct operation of the General Shareholder Meeting, it should be noted that the 

Chairman of the Board of Directors generally requires the presence of a Notary to prepare the minutes of the General Shareholder Meeting. 

E6. Amendments made in the year to the Regulations for the General Shareholder Meeting. 

As the company is not listed, it is not required to have Regulations for the General Shareholder Meeting. 

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E7. Attendance at General Shareholder Meetings in the year. 

Date of General Shareholder Meeting 09-02-2012 

% attending in person 0.00 

% proxy 78.88%* 

% remote voting 0.00 

Electronic votes 

Others 

Total 78.88% 

Date of General Shareholder Meeting 20-06-2012 

% attending in person 0.00 

% proxy 91.67%* 

% remote voting 0.00 

Electronic votes 

Others 

Total 91.67% 

*Excluding treasury stock. 


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E8. Resolutions adopted at the General Shareholders’ Meetings held during the year and the percentage of votes with which each 

resolution was adopted. 

General Shareholder Meeting – 9 February 2012 

Points of Order 

Result 

of the Day Summary of proposal Votes in favour Votes against Abstentions of vote 

Cese y, en su caso, nombramiento de 

I administradores 78,88% 0 0 Aprobado 

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Junta General de Accionistas – 20 de junio de 2012 

Points of Order 

Result 

of the Day Summary of proposal Votes in favour Votes against Abstentions of vote 

I 

Approval of annual individual 

accounts for 2011 91.67% 0 0 Approved 

II 

Approval of company 

management in 2011 91.67% 0 0 Approved 

III 

Distribution of 

result in 2011 91.67% 0 0 Approved 

IV 

Approval of annual consolidated 

accounts of the Company and 

subsidiaries in 2011 and distribution 

of the consolidated result 91.67% 0 0 Approved 

V 

Approval of consolidated 

management in 2011 91.67% 0 0 Approved 

VII Capital increase by €168,745,518 91.67% 0 0 Approved 

VII 

Delegation of powers for 

previous item 91.67% 0 0 Approved 

VIII 

Re-appointment of external auditors for 

verification of annual accounts for 2012. 79.93% 8.56% 3.17% Approved 

IX 

Dismissal, renewal and/or 

appointment of directors 91.67% 0 0 Approved 

X 

Approval of the maximum total annual 

remuneration, for all concepts, 

to be received by directors 91.67% 0 0 Approved 


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E9. Restrictions in the bylaws on the minimum number of shares needed to attend the General Shareholder Meeting. 

Shareholders who have the right to attend the meeting can organise proxy voting with another person, who may or may not be a 

shareholder of the Company. Likewise, it will be permitted to aggregate shares in order to have the right of attendance. Proxy votes 

must always be awarded in writing or by remote communication, with the same rules as for issuing votes, and must be unique to each 

shareholder meeting. 

This requirement is in accordance with the terms of Article 179.2 of the Spanish Companies Act. 

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E10. Policies followed by the Company in regards to proxy votes at the General Shareholder Meeting. 

Shareholders who have the right to attend the meeting can organise proxy voting with another person, who may or may not be a 

shareholder of the Company. Likewise, it will be permitted to aggregate shares in order to have the right of attendance. Proxy votes 

must always be awarded in writing or by remote communication, with the same rules as for issuing votes, and must be unique to each 

shareholder meeting. 

With the same requirements for share ownership as those referred to in section E9, shareholders will be able to cast a valid vote on the 

proposals included in the points of the order of the day of any class of Shareholder Meeting, by postal, electronic or other remote voting, as 

long as (i) the identity of the subject exercising their right to vote is duly guaranteed, and (ii) the Company is aware of this at least one hour 

before the start of the meeting. 

In order to duly guarantee the identity of the subject who will exercise their right to vote: 

Individual shareholders: 

- If a postal vote is cast, this must be in writing, clear, and with the signature of the shareholder certified by a notary. This can also be 

done using a notarial certificate or a public deed. 


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- If the vote is cast using e-mail, this vote must be accompanied by an advanced electronic signature based on a recognised certificate 

that complies with the requirements of the Spanish legislation that is applicable. 

- If the vote is cast by any other form of remote communication, it must comply with the requirements established by the Board of 

Directors for this form of communication. 

Shareholders who are legal entities: 

- If a postal vote is cast, this must be in writing, clear, and with the signature of the representative casting the vote certified by a notary. 

This vote must be accompanied by the certification of a notary of the delegation to the representative of the shareholder to cast the vote, 

in accordance with legislation. If the vote is to be cast by the governing body of the legal entity, a certification of the agreement on the 

vote will suffice, issued by a person with authority to certify this, and signatures certified by a notary. This can also be done using a notarial 

certificate or a public deed. 

- If the vote is cast by email, then it must be accompanied by an advanced electronic signature based on a recognised certificate that 

complies with the requirements of the Spanish legislation that is applicable, corresponding to the person who, by any medium and prior to 

the General Shareholder Meeting, provides a verifiable accreditation of the proxy for this vote, in accordance with the legislation in force, 

or, if cast directly by the governing body, corresponding to the person who has the authority to certify at the legal entity, in accordance 

with the applicable legislation. 

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- If the vote is cast by any other form of remote communication, it must comply with the requirements established by the Board of 

Directors for this form of communication. 

Shareholders who cast their votes remotely must be included as present when calculating the valid constitution of the General Shareholder 

Meeting. 

E11. Policy of institutional investors to participate in the decision-making process of the Company. 

This item is not applicable. 

E12. Address and access to corporate governance content on the company website. 

As the company is not listed, the legislation on these instruments of information is not applicable. As the shareholders of the Company 

are identified and have access to the Chairman, the secretary of the Board of Directors, and the Department of Investor and Shareholder 

Relations, the Company has not considered it necessary so far to include corporate governance information on its website. 

However, there is a dedicated section on our website that contains information of interest to shareholders and investors 

(http://www.ono.es/sobreono/). 


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1,573,000,000 

The Figures 

Fibre isn’t just 

a good idea... 

it’s also proved to be 

an excellent business. 

1,573 million 

euros in revenues 

in 2012. 


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The Figures 

GRUPO CORPORATIVO ONO, S.A. 

AND SUBSIDIARIES 

(ONO GROUP) 

Consolidated Annual Accounts 

and Consolidated Management Report 

for the year 2012 


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The Figures 

Audit report 


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A free translation of the 2012 consolidated annual accounts originally issued in Spanish and prepared in accordance with International Financial Reporting Standards. 

In the event of a discrepancy, the Spanish language version prevails. 

The Figures 

Contents 

Page 

Consolidated balance sheet 172 

Consolidated income statement 174 

Consolidated statement of comprehensive income 175 

Consolidated statement of changes in equity 176 

Consolidated statement of cash flows 177 

Notes to the consolidated annual accounts: 179 

1. General information 179 

2. Summary of significant accounting policies 180 

2.1. Basis of presentation 180 

2.2. Going Concern 180 

2.3. New standards, amendments and interpretations issued 181 

2.4. Consolidation 183 

2.5. Segment reporting 184 

2.6. Foreign currency translation 185 

2.7. Property, plant and equipment 185 

2.8. Intangible assets 186 

2.9. Interest costs 187 

2.10. Impairment losses on non-financial assets 187 

2.11. Financial assets 188 

2.12. Offsetting financial instruments 190 

2.13. Impairment of financial assets 190 

2.14. Derivative financial instruments and hedging activities 191 

2.15. Inventories 192 

2.16. Trade receivables 192 

2.17. Cash and cash equivalents 192 

2.18. Share Capital 193 

2.19. Trade payables 193 

2.20. Borrowings 193 

2.21. Financial liabilities at fair value through profit and loss 194 

2.22. Received Grants 195 

2.23. Current and deferred income tax 195 


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The Figures 

Contents 

Page 

2.24. Employee benefits 196 

2.25. Provisions 196 

2.26. Revenue recognition 197 

2.27. Leases 198 

2.28. Exceptional items 198 

3. Financial risk management 199 

3.1. Financial risk factors 199 

3.2. Capital management 203 

3.3. Fair value estimation 205 

4. Critical accounting estimates and judgements 206 

5. Segment information 208 

6. Property, plant and equipment 209 

7. Intangible assets 211 

8. Financial instruments by category 212 

9. Other financial assets 214 

10. Inventories 215 

11. Trade and other receivables 215 

12. Cash and cash equivalents 216 

13. Equity 217 

14. Trade and other payables 220 

15. Borrowings 222 

16. Derivative financial instruments 233 

17. Long term incentive plan 234 

18. Deferred income tax 236 

19. Provisions for other liabilities and charges 238 

20. Deferred income 239 

21. Income and expenses 240 

22. Finance result 243 

23. Income tax and tax situation 244 

24. Contingencies 248 

25. Commitments 248 


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The Figures 

Contents 

Page 

26. Related parties 249 

27. Board of Directors and Senior Management 251 

28. Environmental information 255 

29. Auditors fees 256 

30. Subsequent events 256 


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The Figures 

GRUPO CORPORATIVO ONO, S.A. AND SUBSIDIARIES (ONO GROUP) 

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2012 AND 31 DECEMBER 2011 (Thousands of Euros) 

ASSETS Note 31.12.2012 31.12.2011 

NON - CURRENT ASSETS 

Property, plant and equipment 6 3,976,448 4,113,290 

Intangible assets 7 110,215 95,763 

Deferred income tax assets 18 1,075,701 1,084,913 

Available-for-sale financial assets 8 544 557 

Derivative financial instruments 16 8,403 11,321 

Other financial assets 9 13,083 9,604 

5,184,393 5,315,448 

CURRENT ASSETS 

Inventories 10 1,366 1,353 

Trade and other receivables 11 151,955 145,662 

Other financial assets 9 11,793 10,274 

Derivative financial instruments 16 1,249 - 

Prepayments and accrued income 1,876 1.937 

Cash and cash equivalents 12 96,625 184,901 

264,864 344,127 

TOTAL ASSETS 5,449,257 5,659,575 

Notes 1 to 30 are an integral part of these consolidated annual accounts 


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The Figures 


CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2012 AND 31 DECEMBER 2011 (Thousands of Euros) 

EQUITY AND LIABILITIES Note 31.12.2012 31.12.2011 

EQUITY 

Equity attributable to owners of the parent 

Share Capital 13.a 1,817,270 1,648,525 

Share premium 13.a 362,776 362,776 

Own shares 13.b (27,861) (27,861) 

Other reserves 13.e (3,316) (775) 

Retained earnings 13.f (662,466) (714,777) 

1,486,403 1,267,888 

Non-controlling interests 13.g 5,168 4,573 

TOTAL EQUITY 1,491,571 1,272,461 

NON-CURRENT LIABILITIES 

Borrowings 15 3,378,750 3,583,524 

Other non-current liabilities 954 1,286 

Deferred income tax liabilities 18 38,004 37,244 


Deferred income 278 281 

Provisions for other liabilities and charges 19 48,653 54,817 

Government deferred grants 178 517 

3,482,666 3,677,669 

CURRENT LIABILITIES 

Trade and other payables 14 337,275 318,181 

Borrowings 15 82,040 208,075 


Other current liabilities 2,521 2,365 

Deferred income 20 45,903 155,662 

Provisions for other liabilities and charges 19 5,128 25,162 

475,020 709,445 

TOTAL EQUITY AND LIABILITIES 5,449,257 5,659,575 



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The Figures 


CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2012 AND 2011 (Thousands of Euros) 

Year ended 31 December 

Note 2012 2011 

Net revenue 5 1,573,251 1,485,419 

Work carried out by the Company for its assets 21.b 59,991 62,377 

Other revenue 21.c 339 446 

Cost of sales 21.d (426,657) (316,816) 

Staff costs 21.e (156,079) (160,958) 

Other operating expenses 21.f (298,587) (321,931) 

Depreciation and amortization 6,7 (389,869) (379,429) 

Overprovisions 19 - 9,015 

Impairment and gains or losses on disposal of fixed assets 6,7 (30,638) (9,638) 

Other results 21.g 53,936 (1,059) 

OPERATING RESULT 385,687 367,426 

Finance income 8,763 1,898 

Finance expenses (323,948) (285,553 

Fair value losses on financial instruments (3,751) - 

Impairment and results from financial instruments disposals (652) 215 

Exchange differences 5,856 3,178 

NET FINANCIAL RESULT 22 (313,732) (280,262) 

CONSOLIDATED RESULT BEFORE INCOME TAX 71,955 87,164 

Income tax 23 (19,049) (36,191) 

RESULT FOR THE YEAR 52,906 50,973 

Attributable to: 

Owners of the parent 52,311 50,359 

Non-controlling interest 595 614 



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The Figures 


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2012 AND 2011 (Thousands of Euros) 


2012 2011 

Result for the year 52,906 5,973 

Other comprehensive income 

Cash flow hedges (2,541) 276 

Other comprehensive income for the year, net of tax (2,541) 276 

Total comprehensive income for the year 50,365 51,249 

Attributable to: 

Owners of the parent 49,770 50,635 

Non-controlling interest 595 614 



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The Figures 


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2012 AND 2011 (Thousands of Euros) 

Attributable to owners of the parent 

Declared Share Own Other Retained Non-controlling 

Share Capital Premium Shares Reserves earnings interest Total 

(Nota 13.a) (Nota 13.a) (Nota 13.b) (Nota 13.e) (Nota 13.f) Total (Nota 13.g) Equity 

Balance at 

31 December 2010 1,648,525 362,776 (27,861) (1,051) (765,136) 1,217,253 3,959 1,221,212 

Comprehensive income 

Profit or (loss) - - - - 50,359 50,359 614 50,973 


Cash flow hedges - - - 276 - 276 - 276 

Total other 

comprehensive income - - - 276 - 276 - 276 

Total comprehensive income - - - 276 50,359 50,635 614 51,249 

Balance at 

31 December 2011 1,648,525 362,776 (27,861) (775) (714,777) 1,267,888 4,573 1,272,461 

Comprehensive income 

Profit or (loss) - - - - 52,311 52,311 595 52,906 


Cash flow hedges - - - (2,541) - (2,541) - (2,541) 

Total other 

comprehensive income - - - (2,541) - (2,541) - (2,541) 

Total comprehensive income - - - (2,541) 52,311 49,770 595 50,365 

Transactions with 

owners of the parent 

Capital increases / 

(decreases) (note 13.c) 168,745 - - - - 168,745 - 168,745 

Total transactions 

with owners of the parent 168,745 - - - - 168,745 - 168,745 

Balance at 

31 December 2012 1,817,270 362,776 (27,861) (3,316) (662,466) 1,486,403 5,168 1,491,571 



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CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2012 AND 2011 (Thousands of Euros) 



CASH FLOWS FROM OPERATING ACTIVITIES: 

Result for the year before tax 71.955 87.164 

Adjustments for 

Depreciation and amortization 6,7 389,869 379,429 

Fixed Assets Disposals 6 30,638 9,638 

Overprovisions 19 - (9,015) 

Finance Income 22 (8,763) (2,113) 

Finance Expense 22 323,948 285,553 

Fair value losses on derivative financial instruments 22 3,751 - 

Impairment of Financial instruments 22 652 - 

Exchange differences 22 (5,856) (3,178) 

Other income and expenses 22 (54,713) 613 

Other expenses 439 - 

Changes in working capital 

Inventories 10 (13) 740 

Trade and other receivables (9,923) 25,734 

Trade and other payables 22,091 (37,250) 

Other current liabilities (81,387) (32,514) 

Cash flows from operating activities 682,688 704,801 

Interest paid (332,503) (248,689) 

Interest received 1,231 1,384 

Taxes paid (8,767) - 

Other payments - (2,303) 

Net cash generated from operating activities 342,649 455,193 


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CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2012 AND 2011 (Thousands of Euros) 



CASH FLOWS FROM INVESTING ACTIVITIES: 

Acquisition of property, plant and equipment 6 (255,417) (235,817) 

Acquisition of intangible assets 7 (43,989) (55,910) 

Proceeds from sale of property, plant and equipment 1,289 21 

Proceeds from assets classified as held for sale - 15,652 

Payments for other financial assets (16,038) (11,817) 

Proceeds from other financial assets 3,319 343 

Net cash used in investing activities (310,836) (287,528) 

CASH FLOWS FROM FINANCING ACTIVITIES: 

Proceeds from New Senior Bank Facility 15.c 1,075,700 - 

Reimbursement of 2005 Senior Bank Facility 15.c (2,136,236) (330,000) 

Proceeds from Senior Secured Notes 15.d 950,597 300,000 

Proceeds from Senior Subordinated Notes 15.e - 460,575 

Reimbursement of Senior Subordinated Notes 15.e - (450,000) 

Reimbursement of ICO participative loan 15.a - (10,000) 

Reimbursement of other credit lines (971) 148 

Reimbursement of subsidised loans (7,569) (9,955) 

Reimbursement of other debts (1,610) (2,872) 

Net cash used in financing activities (120,089) (42,104) 

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (88,276) 125,561 

Cash and cash equivalents at beginning of year 184,901 59,340 

Cash and cash equivalents at end of year 96,625 184,901 



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NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEAR 2012 (Thousands of Euros) 

1. General information 

The main activity of Grupo Corporativo ONO, S.A. and its subsidiaries (hereinafter, “the Group”) is constructing and operating fibre networks 

in order to provide integrated television and telecommunications services in Spain by means of the transmission of images, voice and data. 

The Group, which operates in the market under the trade mark ONO, mainly comprises operating companies that are legally authorised to 

provide telecommunications and audiovisual services. 

Grupo Corporativo ONO, S.A. (hereinafter, “the Parent Company”) was incorporated on 31 May, 2000 for an indefinite term. The Parent 

Company has its registered offices and tax address at Edificio Belagua, calle Basauri, 7-9, urbanización La Florida, Aravaca, Madrid. 

The list of the companies that form the Group and the relevant information thereon is as follows: 

Subsidiaries 

% direct or % direct or 

Registered indirect stake indirect stake 

Company Activity office at 31.12.2012 at 31.12.2011 

ONO Midco, S.A.U. Telecommunications Madrid 100.00 100.00 

Cableuropa, S.A.U. Telecommunications Madrid 100.00 100.00 

Tenaria, S.A. Telecommunications Pamplona 92.81 92.81 

Spanish Cable Holding, S.A.U. Telecommunications Madrid 100.00 100.00 

Other companies 

% direct or % direct or 

Registered indirect stake indirect stake 

Company Activity office at 31.12.2012 at 31.12.2011 

Madrid Sistemas de Cable, S.A. (1) Telecommunications Madrid 100.00 100.00 

(1) 

Inactive company. 


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All subsidiaries close the financial year at 31 December. 

The company Madrid Sistemas de Cable, S.A is registered at acquisition cost. 

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2. Summary of significant accounting policies 

The principal accounting policies applied in the preparation of these consolidated annual accounts are set out below. These policies have 

been consistently applied to all the years presented, unless otherwise stated. 

2.1. Basis of presentation 

The figures shown in the document, that comprise these consolidated annual accounts are the consolidated balance sheet, consolidated 

income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated statement 

of cash flow and notes, are expressed in thousands of Euros, unless otherwise stated. 

The consolidated annual accounts of the Group have been prepared in accordance with International Financial Reporting Standards 

adopted by the European Union (IFRS-UE, hereinafter “IFRS”) and IFRIC interpretations. The consolidated annual accounts have been 

prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities (including derivative 

instruments) at fair value. 

The preparation of the annual accounts under IFRS requires the Group to use certain accounting critical estimates. It also requires to 

the Management to exercise his judgment when applying Group’s accounting policies. In Note 4 are outlined those areas involving a 

higher degree of judgment or complexity, or those in which the assumptions and estimates are significant to the consolidated financial 

statements. 


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These consolidated annual accounts have been prepared by the Board of Directors on 28 February 2013. These consolidated annual 

accounts for the year 2012 have not been yet approved by the General Shareholders Meeting of the Parent Company. However, the Board 

of Directors expects them to be approved without amendments. 

2.2. Going Concern 

At 31 December 2012, the Group has €210 million of negative working capital (365 million at 31 December 2011), which is a regular 

circumstance of the Group´s business and financial structure, and does not offer any impediment for the business from being carried 

out normally. 

At 31 December 2012 and 31 December 2011 all short term commitments had been settled within their periods, and it is expected that all 

debt maturities within the next twelve months will be settled in the required periods. 

The Directors consider that the following factors reasonably mitigate any uncertainty on the capacity of the Group to generate enough 

resources in order to operate under a going concern basis: 

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- The telecommunications sector has a short average collection period (less than 30 days) when average payment period is longer, which 

enables to generate operating cash to settle current payments. 

- The Group is generating positive operating cash flow 

- From 2009 to 2012 the Group has carried out a refinancing process, that ended in 2012 with the signing of a new Credit 

Agreement(hereinafter ‘New Senior Bank Facility’) as described in note 15. 

- The Group has the shareholders financial support. On 20 June 2012, according to the proposal of Board of Director’s, the General 

Shareholders Meeting of Grupo Corporativo ONO S.A. approved a share capital increase by offsetting the €125 million corresponding 

to the principal of the participative loan received from its shareholders, plus accrued interest until 30 June 2011, which amounted to 

€43,745 thousand (notes 13 and 15). 

- The Group has cash and financing facilities available to cover any payments arising in the normal course of its business. 

Accordingly, the Directors have prepared these consolidated annual accounts based on the principle of going concern. 

2.3. New standards, amendments and interpretations issued 


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As of today, the EU has adopted existing new standards, amendments and interpretations applicable to the Group, mandatory from all 

financial years starting on 1 January 2012. 

Effective for annual 

periods beginning 

Amendments Description on or after 

IFRS 7 Financial instruments; Disclosures on derecognition 1 July 2011 

The adoption of the standards listed above has not resulted on a significant impact in the consolidated annual accounts of the Group. 

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At the date of issuance of these consolidated annual accounts new and revised standards, amendments and interpretations that have been 

issued by the IASB and the IFRS Interpretations Committee, although the Group has not yet adopted them: 

Effective for annual 

periods beginning 

Amendments Description on or after 

IFRS 7 Financial instruments; Disclosures on asset and liability offsetting 1 January 2013 

IFRS 7 (*) Financial instruments; Effective date and transition disclosures - 

IFRS 9 (*) Financial instruments; Classification and measurement 1 January 2013 

IFRS 9 (*) Financial instruments; Effective date and transition disclosures - 

IFRS 10 Consolidated financial statements 1 January 2014 

IFRS 11 Joint arrangements 1 January 2014 

IFRS 12 Disclosures of interests in other entities 1 January 2014 

IFRS 13 Fair value measurement 1 January 2013 

IAS 1 Financial statement presentation; regarding ‘other comprehensive income’ 1 July 2012 

IAS 12 Deferred tax: Recovery of Underlying Assets 1 January 2013 

IAS 27 Separate financial statements 1 January 2014 

IAS 28 (*) Associates and joint ventures 1 January 2014 

IAS 19 Employee benefits 1 January 2013 

IAS 32 Financial instruments: Presentation on asset and liability offsetting 1 January 2014 


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2012 improvement projects, includes explanations on the following standards: 

IFRS 1 (*) First time adoption of International Financial Reporting Standards 1 January 2013 

IAS 1 (*) Financial statement presentation 1 January 2013 

IAS 16 (*) Property plant and equipment 1 January 2013 

IAS 32 (*) Financial instrument; Presentation 1 January 2013 

IAS 34 (*) Interim financial reporting 1 January 2013 

New standards and amendments 

IFRS 1 (*) Accounting for government grants and disclosure of government assistance 1 January 2013 

IFRS 10 (*) Consolidated financial statements – transitional provision 1 January 2013 

IFRS 10 (*) Consolidated financial statements – investment companies 1 January 2014 

IFRS 11 (*) Joint arrangements – transitional provision 1 January 2013 

IFRS 12 (*) Disclosures of interests in other entities – transitional provision 1 January 2013 

IFRS 12 (*) Disclosures of interests in other entities statements – investment companies 1 January 2014 

(*) 

Not yet adopted by the European Union. 


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The Group is analysing the possible impact that the application of the standards described above will have on the consolidated annual 

accounts and is not likely to be significant. 

2.4. Consolidation 

a) Subsidiaries 

Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating 

policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights 

that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully 

consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. 

The Group uses the acquisition method to account for business combinations. The consideration transferred for the acquisition of a 

subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration 

transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs 

are expensed as incurred. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured 

initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest 

in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. 

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Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the 

acquired subsidiary at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in ‘intangible assets’. Goodwill is tested 

annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and 

losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. 

Inter-company transactions, balances and unrealized gains on transactions between Group companies are eliminated. Unrealized losses are 

also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted 

by the Group. 

b) Transactions and non-controlling interests 

The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from noncontrolling 

interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of 

the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. 

When the Group ceases to have control or significant influence, any retained interest in the entity is remeasured to its fair value, with 

the change in carrying amount recognised in profit and loss. The fair value is the initial carrying amount for the purposes of subsequently 

accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other 

comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. 

This may mean that amounts previously recognised in other comprehensive income are reclassified to profit and loss. 


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If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts 

previously recognised in other comprehensive income are reclassified to profit and loss where appropriate. 

2.5. Segment reporting 

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The 

chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has 

been identified as the Board of Directors that makes strategic decisions. 

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2.6. Foreign currency translation 

a) Functional and presentation currency 

The euro is the functional and presentation currency of the Parent Company. The consolidated annual accounts are presented in thousands 

of Euros, unless otherwise stated. 

b) Transactions and balances 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the 

transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end 

exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement, except when 

deferred in other comprehensive income as qualifying cash flow hedges. Foreign exchange gains and losses are presented in the income 

statement under the caption ‘Net financial result’. 

2.7. Property, plant and equipment 

The items of property, plant and equipment are recognised at their acquisition price or production cost, less accumulated depreciation and 

the cumulative amount of the recognised losses. 


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The amount of work carried out by the Group for its own property, plant and equipment is calculated by adding the direct or indirect costs 

attributable to the assets to the acquisition price of the consumables. 

If applicable, the acquisition price includes the initial estimate of the costs associated to dismantling or removing the asset and the restoral 

of its location when, as a result of use of the asset, the Group is obliged to take said actions. 

The costs of expansion, modernisation or improvement of property, plant and equipment are included in the asset as an increase in its value 

only when they represent an increase in its capacity or productivity or a lengthening of its useful life, provided that it is possible to estimate 

the carrying amounts of the assets that are removed from the inventory because they have been replaced. 

Recurring repair and maintenance expenses are charged to the income statement in the year in which they are incurred. 

Depreciation of property, plant and equipment, except for land, which is not depreciated, is calculated systematically using the straight-line 

method over its estimated useful life, taking the impairment actually suffered due to operation, use and enjoyment into account. 

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The estimated useful lives are: 

Estimated years 

of useful life 

Technical facilities 10-35 

Indefeasible right of use and infrastructure leases 15-30 

Equipment at the client’s facilities 5.5 

Data-processing equipment 4-5 

Other property, plant and equipment 6-10 

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. 

Indefeasible right of use and infrastructure leases mainly relates to the amounts under contracts for the use of fibre optic and 

telecommunications infrastructure, less the accumulated amortization and the cumulative amount of the impairment adjustments 

recognised. 

Costs incurred under the contracts assigning the use of fibre optic and infrastructure are amortised on a straight-line basis in accordance 

with the terms of the respective contracts, which are between 15 and 25 years, except for contracts signed with electricity companies 

assigning the use and excess capacity rights of fibre optic networks, which are amortised over a maximum period of 30 years. 


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Gains and losses on the disposal of property, plant and equipment are calculated by comparing the income obtained from the sale with the 

carrying amount and are recorded in the income statement, under the caption ‘Impairment and gain or losses on disposal of fixed assets’. 

2.8. Intangible assets 

Intangible assets are initially recognised at their acquisition or production cost when they are internally developed, and are subsequently 

shown at cost less their accumulated amortization and any impairment losses they may have suffered. 

The main items included under this caption are the following: 

a) Administrative concessions 

This mainly includes the expenses incurred in preparing the bids that are submitted in tenders to obtain authorisation as a cable 

telecommunications operator and mobile spectrum licences in the different areas. 

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Administrative concessions are shown in the assets at cost less accumulated amortization and the accumulated amount of the impairment 

adjustments recognised. 

Administrative concessions are amortized on a straight-line basis over 20-25 years. 

b) Computer software 

Computer software licences acquired from third parties are capitalised on the basis of the costs incurred in acquiring them and preparing 

them to use the specific programme. These costs are amortized over their estimated useful lives (which do not exceed 4 years). 

Expenses related to computer software maintenance are recognised as an expense when incurred. 

c) Subscriber acquisition costs 

It mainly relates to the payment of commissions incurred in obtaining new subscribers. These costs are amortized on a straight-line basis in 

accordance with the average useful life of the client, estimated at 5.5 years. 

2.9. Interest costs 


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Finance costs directly attributable to the acquisition or construction of fixed assets that require a period of longer than one year to come 

into use is included in their cost until they become operative. 

2.10. Impairment losses on non-financial assets 

Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the 

carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds 

its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of 

assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). 

Non-financial assets other than goodwill that had suffered an impairment are reviewed for possible reversal of the impairment at each 

balance sheet date. 

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2.11. Financial assets 

The Group classifies its financial assets in the following categories: at fair value through profit and loss, loans and receivables, financial assets 

held for sale and hedging derivatives. The classification depends on the purpose for which the financial assets were acquired. 

Management determines the classification of its financial assets at initial recognition. 

a) Financial assets at fair value through profit and loss 

Financial assets at fair value through profit and loss are financial assets held for trading. A financial asset is classified in this category 

if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are 

designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are 

classified as non-current. 

Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the 

income statement. 

Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit and loss’ category are presented in 

the income statement within ‘Fair value losses on financial instruments’ in the period in which they arise. 


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b) Loans and receivables 

Loans and receivables are non-derivative financial assets with fixed or determinable reimbursements that are not quoted in an active 

market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date which are classified 

as non-current assets. The loans and receivables are included in ‘Trade and other receivables’, ‘Other financial assets’ and ‘Cash and cash 

equivalents’ in the balance sheet (notes 2.16 and 2.17). 

These financial assets are recognised initially at fair value, including any transaction costs directly attributable to them, and subsequently 

measured at amortized cost, recognising the interest accrued in accordance with the effective interest rate. 

Deposits given included under ‘Other financial assets’ are amounts paid under operating leases. The difference between their fair value 

and the amount paid is considered an advance lease payment that will be taken to the income statement during the lease term. When 

estimating the fair value of deposits given, the remaining period will be the minimum contractual term committed during which the amount 

cannot be refunded. 

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c) Available-for-sale financial assets 

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other 

categories. Financial assets which the Company intends to hold for an unspecified period of time and could be sold at any time are 

classified as available-for-sale. They are included in non-current assets unless the investment matures or management intends to dispose 

of it within 12 months of the end of the reporting period. 

Regular purchases and sales of financial assets are recognised on the trade-date – the date on which the Group commits to purchase or sell 

the asset. Investments are initially recognised at fair value plus transaction costs. Financial assets carried at fair value through profit and 

loss are initially recognised at fair value in equity. When fair value cannot be determined, they will be recognised at transaction cost. 

At 31 December 2012 the Group has registered available-for-sale financial assets for an amount of €544 thousand (€557 thousand at 31 

December 2011). These assets correspond to unlisted securities in an active market, with a fair value that cannot be determined, and which 

is recognised at cost. 

Dividend income from financial assets at fair value through profit and loss is recognised in the income statement as part of ‘Other income’ 

when the Group’s right to receive payments is established. 


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Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and 

the Group has transferred substantially all risks and rewards of ownership. 

d) Audiovisual productions 

Mainly relates to the investment made by the Group in film productions investments, registered under the caption ‘Other financial assets’. 

Investments in audiovisual production are carried at nominal value, both initially and in subsequent periods, as long as the difference with 

its fair value is not significant. 

At the year end, at least, the necessary value adjustments are made to account for impairment when there is objective evidence that all 

receivables will not be collected. 

The amount of the impairment loss is the difference between the asset’s carrying amount and the present value of estimated future 

cash flows, discounted at the effective interest rate prevailing at the date of initial recognition. Value adjustments, and reversals, where 

applicable, are recognised in the income statement. 

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2.12. Offsetting financial instruments 

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset 

the recognised amounts and there is an intention of the Group, to settle on a net basis or realise the asset and settle the liability simultaneously. 

2.13. Impairment of financial assets 

a) Assets carried at amortised cost 

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial 

assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective 

evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that 

loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be 

reliably estimated. 

The criteria that the Group uses to determine that there is objective evidence of an impairment loss include: 

- Significant financial difficulty of the debtor; 

- A breach of contract, such as a default or delinquency in interest or principal payments; 

- The Group, for economic or legal reasons relating to the debtor’s financial difficulty, granting him a concession that the lender would 

not otherwise consider; 

- It becomes probable that the debtor will enter bankruptcy or other financial reorganisation; 

- The disappearance of an active market for that financial asset because of financial difficulties; or 

- Observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets 

since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the 

portfolio, including adverse changes in the payment status of debtors in the portfolio; and national or local economic conditions that 

correlate with defaults on the assets in the portfolio. 


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The Group first assesses whether objective evidence of impairment exists. 

For receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value 

of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original 

effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated income 

statement. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the 

current effective interest rate determined under the contract. 

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring 

after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised 

impairment loss is recognised in the consolidated income statement. 

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b) Assets classified as available for sale 

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial 

assets is impaired. In the case of equity investments classified as available for sale, a significant or prolonged decline in the fair value of 

the security below its cost is also evidence that the assets are impaired. If any such evidence exists for available-for-sale financial assets, 

the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that 

financial asset previously recognised in profit and loss – is removed from equity and recognised in the consolidated income statement. 

Impairment losses recognised in the consolidated income statement on equity instruments are not reversed through the consolidated 

income statement. 

2.14. Derivative financial instruments and hedging activities 

Derivatives are recognised at fair value both initially and when subsequently re-measured, being shown as financial assets or financial 

liabilities depending on whether the fair value is positive or negative, respectively. The method of recognising the resulting gain or loss 

depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group 

designates certain derivatives as either hedges of a particular risk associated with a recognised asset or liability or a highly probable 

forecast transaction (cash flow hedge). 


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The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its 

risk management objectives and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at 

hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting 

changes in fair values or cash flows of hedged items. 

The fair values of derivative instruments used for hedging purposes and trading derivatives are disclosed in note 16. Movements on the 

hedging reserve in other comprehensive income are 

shown in note 13. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining hedged item 

is more than 12 months, and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading 

derivatives are classified as a current asset or liability. 

Cash flow hedges 

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other 

comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in the income statement under the 

caption ‘Net financial result’. 

Amounts accumulated in equity are reclassified to profit and loss in the periods when the hedged item affects profit and loss. 

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When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain 

or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the 

income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is 

immediately transferred to the income statement. 

2.15. Inventories 

Inventories are stated at the lower of cost and net realisable value. When the net realisable value of inventories is below cost, the necessary 

value adjustments are made and an expense is recorded in the income statement. If the circumstances that caused the value adjustment 

cease to exist, the adjustment is reversed and recognised as income in the income statement. 

Audiovisual productions which production costs are known and are ready for immediate commercialization in the following twelve months 

are registered under ‘Inventories’ caption as audiovisual rights. Those amounts are transferred to the income statement in the moment that 

the Group delivers the episodes. 

2.16.Trade receivables 

Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If 

collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. 


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Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, 

less provision for impairment. Notwithstanding the foregoing, trade receivables maturing at not more than one year without a 

contractual interest rate are stated, both initially and subsequently, at their face value when the effect of not discounting the cash 

flows is not significant. 

2.17. Cash and cash equivalents 

In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with banks, other shortterm 

highly liquid investments with original maturities of three months or less. 

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2.18. Share Capital 

The share Capital is represented by ordinary shares. 

Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from 

the proceeds. 

When any group company purchases the company’s equity share capital (own shares), the consideration paid, including any directly 

attributable incremental costs (net of income taxes) is deducted from equity attributable to the company’s equity holders until the shares 

are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable 

incremental transaction costs and the related income tax effects, is included in equity attributable to the company’s equity holders. 

2.19. Trade payables 

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. 

Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the 

business if longer). If not, they are presented as non-current liabilities. 


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Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. 

Notwithstanding the foregoing, trade payables maturing at not more than one year without a contractual interest rate are stated, both 

initially and subsequently, at their face value when the effect of not discounting the cash flows is not significant. 

2.20. Borrowings 

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; 

any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the 

period of the borrowings using the effective interest method. 

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some 

or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. 

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement for at least 12 months as 

from the balance sheet date. 

The company shall remove a financial liability from its statement of financial position when the obligation specified in the contract is 

discharged, or cancelled or expires. 

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An exchange between an existing borrower and lender of debt instruments with substantially different terms shall be accounted for as an 

extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the 

terms of an existing financial liability or a part of it (whether or not attributable to the financial difficulty of the debtor) shall be accounted 

for as an extinguishment of the original financial liability and the recognition of a new financial liability. 

For the purpose of the previous paragraph, the terms are substantially different if the discounted present value of the cash flows under the 

new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10 percent 

different from the discounted present value of the remaining cash flows of the original financial liability. If an exchange of debt instruments 

or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognised as part of the gain or loss on the 

extinguishment. If the exchange or modification is not accounted for as an extinguishment, any costs or fees incurred adjust the carrying 

amount of the liability and are amortised over the remaining term of the modified liability. 

2.21. Financial liabilities at fair value through profit and loss 

Financial liabilities at fair value through profit and loss are financial liabilities held for trading. A financial liability is classified in this 

category if acquired principally for the purpose of selling in the short term or are part of a portfolio of identified financial instruments that 

are managed together and for which there is evidence of a recent pattern of short-term profit-taking, as at fair value through profit and 

loss provided that doing so results in more relevant information. 


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Liabilities in this category are classified as current liabilities if expected to be settled within 12 months; otherwise, they are classified as 

non-current. 

Financial liabilities carried at fair value through profits or losses are initially recognised at fair value, and transaction costs are expensed in 

the income statement. Financial liabilities at fair value through profit and loss are subsequently carried at fair value. 

Gains or losses arising from changes in the fair value of the ‘financial liabilities at fair value through profit and loss’ category are presented 

in the consolidated income statement in the period in which they arise. 

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2.22. Received Grants 

Grants from the government are recognised at their fair value when there is a reasonable assurance that the grant will be received and the 

Group will comply with all attached conditions. 

Subsidised loans without interest are initially classified as liability at their fair value. The difference between the fair value and the carrying 

value is recognised as a grant, under the caption ‘Government deferred grants’, charged to profit and loss, with the depreciation of assets 

related to those projects. 

2.23.Current and deferred income tax 

The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent 

that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other 

comprehensive income or directly in equity, respectively. 

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date. 

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to 

interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. 


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Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and 

liabilities and their carrying amounts in the consolidated annual accounts. However, deferred tax liabilities are not accounted for if it arises 

from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects 

neither accounting nor taxable profit and loss. 

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date 

and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. 

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the 

temporary differences and tax credits can be utilised. Deferred income tax is provided on temporary differences arising on investments 

in subsidiaries and associates, except for deferred income tax liability where the timing of the reversal of the temporary difference is 

controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. 

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax 

liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either 

the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. 

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2.24.Employee benefits 

a) Termination benefits 

Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an 

employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably 

committed to a termination when the entity has a detailed formal plan to terminate the employment of current employees without 

possibility of withdrawal. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on 

the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are 

discounted to their present value. 

b) Bonus 

Group companies recognise a provision when are contractually obliged or when there is a past practice that has created a constructive 

obligation. 

c) Long term incentive plan 


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For cash-settled share-based payment transactions, the Group shall measure the liability incurred at the fair value, referred to the date 

when the requirements for recognition are met. Subsequently and until the liability is settled, the Group shall remeasure at the year-end 

the final value of each of the theoretical shares to be taken for the calculation of the incentive, with any changes in fair value recognised in 

profit and loss account for each period. 

2.25. Provisions 

Provisions for restructuring costs, legal claims and other risks are recognised when the Group has a present legal or constructive obligation 

as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been 

reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments. Provisions are not 

recognised for future operating losses. 

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering 

the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in 

the same class of obligations may be small. 

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that 

reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to 

passage of time is recognised as interest expense. 

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Provisions maturing at one year or less with non material financial effect are not discounted. 

Contingent liabilities are considered as a possible obligation that arises from past events and whose existence will be confirmed only by the 

occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a present obligation 

that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits 

will be required to settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability. These contingent 

liabilities are not recognised but details are set forth in the notes to the consolidated annual accounts. 

2.26. Revenue recognition 

Ordinary revenues comprise the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course 

of the Group’s activities. Revenue is shown net of Value-Added Tax, returns, rebates and discounts and after eliminating sales within the Group. 

The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow 

to the entity and when specific criteria have been met for each of the Group’s activities as described below. The Group bases its estimates 

on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement. 

The Group’s revenue comes from the individual or combined provision of telephone, television and broad-band internet services to 

residential direct-access customers, indirect-access customers and companies, together with the provision of services of interconnection 

with other operators. 


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Commercial packages that combine different elements are analysed to determine whether it is necessary to separate the different 

elements identified, applying the appropriate revenue recognition policy in each specific case. Total revenue from the package is 

distributed among its identified elements in accordance with their respective fair values (i.e. the fair value of each individual component in 

relation to the total fair value of the package). 

Traffic is recognised as revenue as consumed. 

If traffic or other services are sold at a fixed rate for a determined time period (flat rate), revenue is recognised on a straight-line basis over 

the time period covered by the rate paid by the customer. 

The periodic charges for use of the network (Telephony, Internet and Television) are credited to the income statement on a straight-line 

basis over the period to which they relate. Rentals and other services are credited to the income statement as the service is provided. 

Revenue from interconnection and other services used by customers is recognised in the period in which the customers generate the traffic. 

Revenue from the sale of terminals and equipment is recognised when, in addition to the aforegoing, the sale is deemed to be completed, 

i.e. when the significant risks and rewards have been transferred and neither the management nor effective control of the items is held. 

This moment usually coincides with the time of delivery to the final customer. 

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Likewise, the Group carries out commercial promotions based on the subscriber obtaining points in accordance with his consumption. 

The amount assigned to the points given is recorded as a decrease in revenue until the time that the points are exchanged, when they are 

recognised as revenue from sales or services, depending on the product or service chosen by the customer. In the event that the points are 

not used, they are recognised as income when they expire. The exchange may be for traffic or another type of service, depending on the 

amount of points obtained and the type of contract held. 

2.27. Leases 

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. 

Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straightline 

basis over the period of the lease. 

The Group leases certain property, plant and equipment.Leases of property, plant and equipment, for which the Group has substantially 

all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the 

lower of the fair value of the leased property and the present value of the minimum lease payments. 

Each lease payment is allocated between the liability and finance charges. The corresponding rental obligations, net of finance charges, 

are included in other long-term payables. The interest element of the finance cost is charged to the income statement over the lease 

period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and 

equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term. 


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2.28. Exceptional items 

Items that are material either because of their size or their nature, or that are non-recurring are considered as exceptional items and are 

presented within the line items to which they best relate. During 2012, the exceptional items have been included in the caption ‘Other 

results’ of the income statement (note 21.g). 

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3. Financial risk management 

3.1. Financial risk factors 

The Group’s activities are exposed to a variety of financial risks: market risk (including currency risk, fair value interest rate risk and cash 

flow interest rate risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of 

financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. The Group uses derivative financial 

instruments to hedge certain risk exposures. 

Risk management is carried out by the finance planning and corporate finance departments under policies approved by the Board of Directors. 

A valuation of the main financial risks affecting the Group is as follows: 

a) Market risk 

(i) Foreign exchange risk 

Foreign Exchange risk arises from the monetary nature of financial assets or liabilities which are designated against their functional currency. 


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It is the Group’s policy to control the exposure to foreign exchange risk controlling the borrowings denominated in foreign currency, for 

which the Group may engage derivative financial instruments. 

In January 2011, an issuance of $225 million Senior Subordinated Notes due 2019 was completed, proceeds of which were on-lent to 

Cableuropa, S.A.U. In order to reduce the uncertainty of exchange rate fluctuations, the Group engaged the hedging of coupon payments 

and the 100% of the principal until January 2014, being fully covered from exchange rate fluctuations within this period. 

In February 2012, an issuance of $1,000 million Senior Secured Notes due 2018 has been completed, proceeds of which were on-lent to 

Cableuropa, S.A.U. In order to reduce the uncertainty of exchange rate fluctuations, the Group engaged the hedging of coupon payments 

until December 2013, being fully covered from exchange rate fluctuations within this period. 

The Group holds with several financial institutions option contracts with respect to the 50% of the principal of the $1,000 million Senior 

Secured Notes issuance until December 2013, which has an associated net premium amounting €5 million, paid in the engagement date. 

The option contracts have been classified as held for trading as do not meet the criteria to be accounted for as a hedging instrument. 

Additionally, in June 2012, an issuance of $310 million Senior Secured Notes due 2018 has been completed, proceeds of which were onlent 

to Cableuropa, S.A.U. In order to reduce the uncertainty to exchange rate fluctuations, the Group engaged the hedging of coupon 

payments until December 2013, for 77% of the principal until December 2014 and the 23% of the principal until December 2015, being 

fully covered from exchange rate fluctuations within this period. 

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At 31 December 2012, the sensitivity in the result of a variation in the foreign exchange rates of those financial liabilities held with 

financial institutions, after giving effect to the hedging instruments engaged by the Group, is as follows: 

Thousands of euros 

Impact on results 

Currency Exchange rate 31.12.2012 10% Euro devaluation 10% Euro appreciation 

EUR/USD 1.319 (65,923) 78,774 

At 31 December 2011, the sensitivity at year end in the result of a variation in the foreign exchange rates of those financial liabilities does 

not represent a significant effect due to the effectively of the forward foreign exchange contracts engaged by the Group. 

(ii) Cash flow and fair value interest rate risk 

The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest 

rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. It is the Group’s policy to control the exposure 

to variable interest rate risk, by ensuring any outstanding amounts of variable rate debt, at which this occur can vary Group positions in 

interest rate hedging transactions, and perform operations in the bonds market. 


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The Group exposure to changes in the interest rate is mainly due to the New Senior Bank Facility. Debt related to the issuance of Senior 

Secured and Subordinated Notes accrue fixed rates and subsided loans accrue zero interest. 

As of 31 December 2012, borrowings under the New Senior Bank Facility (note 15) amounting to €1,076 million (€2,136 million at 31 

December 2011 of 2005 Senior Bank Facility) bore interest at a floating rate determined by reference to Euribor plus a margin, which 

ranged from 4.50% to 5.25% depending on the tranche (Euribor plus a margin from 1.60% to 2.95% in 2011 of 2005 Senior Bank Facility). 

In addition, other outstanding debt with credit entities usually bore interest at Euribor plus a margin. 

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Thousands of Euros 

31.12.2012 31.12.2011 

Variable rate debt (*) 1,076,288 2,139,407 

Fixed rate and zero interest rate debt (*) 2,462,369 1,480,423 

Total debt (*) 3,538,657 3,619,830 

(*) 

Amounts shown at redemption value (note 15). 

The sensitivity in the result, of interest rate variations on those liabilities with credit entities, is as follows: 

Millions of Euros 


Increase/decrease of interest rates (linked to Euribor) +/- 1% 

Impact in Result before income tax 14.5 22.8 

14.5 22.8 

b) Credit Risk 


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Financial assets mainly include cash and cash equivalents, trade and other receivables, which represent the maximum credit risk exposure 

of the Group relating to financial assets. 

Group credit risk is mainly related to accounts receivable balances. It is the Group policy to perform a periodical and systematic evaluation 

of credit risk to record provisions on the income statement accordingly and to evaluate the potential need to reduce customer’s credit 

level allowed (in this sense, the Group has restrictive credit scoring procedures prior to the acceptance of new residential customers). See 

also policy of impairment in note 11. 

For banks and financial institutions, the Group only accepts independent rated parties with a minimum quality. 

c) Liquidity risk 

It is the Group policy to match the schedule for its debt maturity payments to its capacity to generate cash flows to meet these maturities. 

In particular, the Group’s management attempts to ensure that the operations over the next twelve months are always fully financed 

without the need to substantially modify the conditions and structure of the Group’s debt. 

The following table contains a breakdown of the Group’s non-derivative financial liabilities and derivative financial liabilities, grouped 

together by maturity date based on the period from the balance sheet date to the maturity date stipulated in each contract. The amounts 

shown in the table relate to undiscounted cash flows. 

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At 31 December 2012 

Maturities 

Subsequent 

2013 2014 2015 2016 2017 years 

Borrowings 89,580 125,568 171,887 283,254 429,194 187,484 

Debt related to the issuance of Notes 227,461 227,604 227,604 227,604 227,604 2,705,797 

Shareholders’ Loan - - 35,676 - - - 

Subsidised loans 1,424 397 357 268 268 1,248 

Derivative financial instruments (*) 2,153 11,229 4,620 - - - 

Other payables 323,001 - - - - 954 

643,619 364,798 440,144 511,126 657,066 2,895,483 

(*) 

Included at their fair value. 



Maturities 

Subsequent 

2012 2013 2014 2015 2016 years 

Borrowings 235,418 2,012,448 167 20 - - 

Debt related to the issuance of Notes 139,697 139,827 140,174 140,482 140,482 1,789,539 

Shareholders’ Loan - - 348,622 - - - 

Subsidised loans 7,569 1,424 397 357 268 1,515 

Other payables 307,117 - - - - 1,286 

689,801 2,153,699 489,360 140,859 140,750 1,792,340 


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Management considers the Group has cash reserves and cash generation on hand to address its immediate needs for twelve months rolling 

forward. 

At 31 December 2012, the Group has liquidity of €199 million (€556 million at 31 December 2011) based on €102 million of undrawn 

debt (€371 million at 31 December 2011) and cash reserves of €97 million (€185 million at 31 December 2011). 

In order to mitigate the liquidity risk, during 2009 the Group started a process of refinancing debt and a contribution of new monies from 

shareholders. The refinancing process started in 2010, continued in 2011 and has been successfully completed in 2012 as described in the 

note 2.2 and note 15. 

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3.2. Capital management 

The objective of the Group in the management of the capital is to safeguard the capacity to continue to manage the recurrent activities as 

well as the capacity to continue growing in new projects, maintaining an optimum relationship between the capital and the debt. 

The optimum level of indebtedness of the Group is not fixed on the basis of a global ratio of debt over internal resources but with the 

objective of maintaining a level of indebtedness, that has the capacity for growth in the recurrent activities of the Group and confront 

growth opportunities, maintaining a moderate level of indebtedness, in accordance with future cash flows and delivering quantitative 

restrictions provided in their financial contracts. 

None of the main financial agreements concluded by the Group, establishes specific restrictions as concerns the debt to equity ratio. 

In accordance with note 15, within the main quantitative restrictions established by the New Senior Bank Facility is that of maintaining 

compliance with covenants over periods of twelve months ended at the end of each quarter, related to swaps, maximum debt level and 

debt service level. Therefore, the Group is monitoring the percentages regarding financial net debt at redemption value and EBITDA. In 

addition the New Senior Bank Facility also establishes an annual quantity limitation on the maximum fixed assets investment. 

The Group defines EBITDA as consolidated net income, excluding gains or losses on the disposal or revaluation of assets other than in the 

ordinary course of business, and excluding net income of any company disposed of during the period, and calculated before any amount 

charged to the provision for corporate income tax, financial interest expenses, amounts collected or paid as a consequence of a position 

related to the hedging financial instruments permitted under the New Senior Bank Facility, other extraordinary or exceptional items or 

any other non-cash item, amortisation of goodwill, realised and unrealised exchange gains and losses, any amounts for the amortisation 

or depreciation of intangible and tangible assets, profits or losses attributable to minority interests, any share of the profit of associated 

companies or investments, according to the definitions of the New Senior Bank Facility, except for dividends received in cash by a member 

of the Group, and any profits attributable to a debt purchase transactions according to the definitions of the New Senior Bank Facility. 


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The reconciliation of EBITDA to consolidated income statements is as follows: 



Net profit /(loss) 52,906 50,973 

Income Tax 19,049 36,191 

Net financial result 313,732 280,262 

Impairment and gains or losses on disposal of fixed assets 30,638 9,638 

Depreciation and amortization 389,869 379,429 

Overprovisions - (9,015) 

Other results (53,936) 1,059 

Other revenue (339) (446) 

EBITDA 751,919 748,091 

The net financial debt shown at redemption value was €3,442 million at 31 December 2012 (€3,434 million at 31 December 2011): 


31.12.2012 31.12.2011 

Current Debts 40,497 176,437 

40,497 176,437 

Non-current debts 

Senior Bank Facility 1,037,044 1,969,404 

Debt related to the issuance of Senior Secured Notes 1,992,875 1,000,000 

Debt related to the issuance of Subordinated Notes 465,532 468,893 

Other loans 2,708 5,096 

3,498,159 3,443,393 

Cash and cash equivalents 96,625 184,901 

Total net debt (*) 3,442,031 3,434,929 

EBITDA 751,919 748,091 

Net debt/EBITDA 4,58X 4,59X 

(*) 

Excluded the Shareholder’s Loan described in note 15, it does not compute in covenants ratios due to it is debt subjected to subordinated commitments. 

Debts are shown without considering the discount effect and they do not include earned interest payables as at 31 December. 

Up to now, the Group complies with all the restrictions imposed under its borrowing agreements and no default events are expected to 

occur in the future. 


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3.3. Fair value estimation 

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: 

- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1). 

- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly (level 2). 

- Inputs for the asset or liability that are not based on observable market data (level 3). 

The following table presents the Group’s assets and liabilities that are measured at fair value at 31 December 2012 and 31 December 2011: 


Level 1 Level 2 Level 3 Total 


Assets 

Financial assets at fair value through profit and loss: 

Derivatives used for hedging - 8,403 - 8,403 

Derivatives held for trading - 1,249 - 1,249 

- 9,652 - 9,652 

Liabilities 

Financial liabilities at fair value through profit and loss: 


- 18,002 - 18,002 

At 31 December 2011 

Assets 

Financial assets at fair value through profit and loss: 


- 11,321 - 11,321 

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by 

using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as 

possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included 

in level 2. 


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If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. 

Specific valuation techniques used to value financial instruments include: 

- The fair value of forward foreign exchange contracts and foreign exchange option contracts is determined using forward exchange 

rates at the balance sheet date, with the resulting value discounted back to present value. 

- Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments. 

4. Critical accounting estimates and judgements 

The preparation of the annual accounts requires the Group to use certain estimates and judgements in relation to the future that are 

continuously assessed and are based on historical experience and other factors, including expectations of future events deemed reasonable 

under the current circumstances. Actual results could differ from estimated ones. 

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities 

within the next financial year are outlined below: 


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Fixed assets 

The accounting treatment of investment in property, plant and equipment and intangible assets means that estimates must be made to 

determine their useful lives for the purposes of depreciation or amortization. 

The determination of useful lives requires estimates regarding expected technological evolution and alternative uses of the assets. 

Assumptions regarding the technological environment and its future development imply a significant degree of judgement, inasmuch 

as the time and the nature of future technological changes are difficult to predict. The Group periodically reviews the suitability of the 

assumptions used in the determination of the fixed assets useful lives. 

When impairment of fixed assets is identified, a value adjustment is recognised and charged to the income statement for the period. The 

determination of the need to recognise an impairment loss implies making estimates that include, among others, an analysis of the causes 

of the possible impairment and the time and the expected amount thereof. Likewise, factors such as technological obsolescence, the 

suspension of certain services and other changes in circumstances that create the need to assess possible impairment are taken into account. 

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Fair value of derivatives and other financial instruments 

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group 

selects a variety of methods and makes assumptions that are mainly based on market conditions existing at each balance sheet date. The 

Group has used discounted cash flow analysis as well as third party valuations to determine the fair value of the derivatives and other 

financial assets and liabilities. 

Deferred income tax and tax credits 

The Group assesses the recoverability of deferred income tax assets and tax credits on the basis of estimates of future results. The 

recoverability, in the final analysis, depends on the Group’s ability to generate taxable profits during the period in which the deferred 

income tax assets may be deducted. The analysis takes into account the taxable profits estimated on the basis of internal projections that 

are updated to reflect the most recent trends, assumptions and information. Actual flows of amounts received and paid for income tax may 

differ from the estimates made by the Group as a result of changes in tax legislation or unforeseen future transactions that might affect 

the tax balances. The Group updates annually the evaluation of the recoverability of the deferred income tax assets and the tax credits, and 

when there are changes in fiscal legislation. 

Provisions 


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Provisions are recognised when the Group has a present obligation as a result of past events, it is probable that an outflow of resources 

will be required to settle the obligation, and the amount has been reliably estimated. The obligation may be legal or constructive, derived 

from, among other factors, regulations, contracts, normal practices or public commitments that create a valid expectation for third parties 

that the Group will accept certain liabilities. The provision is measured by the best estimate of the payment that will be necessary to settle 

the relevant obligation, taking into consideration all the information available on the closing date, including the opinions of independent 

experts, such as legal advisors or consultants. Due to the unpredictability inherent to the estimates required to determine the amount of 

the provisions, the actual payments may differ from the amounts initially recognised on the basis of the estimates made. 

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5. Segment information 

Management has defined the operative segments based on reports previously reviewed by the Board of Directors and they are used for 

taking strategic decisions, monitoring of changes in results and resources assignment. The Board of Directors monitors the business in an 

operating income basis distinguishing by client typology. Given the nature of the services rendered by the Group, consisting of rendering 

telecommunication services through own and other’s network, it is not possible neither separate assets and liabilities by client nor allocate 

operating or financial results and taxes, following this criteria. 

The Group only provides services to the Spanish market, and therefore there is only one geographical segment. 

The information provided by the Group for 2012 and 2011 is as follows: 



Net Revenue 

Services to the residential market 1,145,150 1,172,353 

Residential fibre 1,103,116 1,125,056 

Residential ADSL and indirect access (*) 41,184 44,947 

Other 850 2,350 

Business and operators 425,100 309,635 

SME´s 85,741 76,930 

Businesses 121,070 128,563 

Wholesale 218,289 104,142 

Other 3,001 3,431 

Net Revenue 1,573,251 1,485,419 

(*)These subsegments were presented separately in 2011. 


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In 2012 and 2011, the amount invoiced to a sole client did not exceed 10% of the net revenue. 

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6. Property, plant and equipment 

Details of and movement on the items included in ‘Property, plant and equipment’ are as follows: 


Technical facilities Advances and fixed 

and other property, assets under 

Land plant & equipment construction Total 

Net book value at 31 December 2010 14,803 4,149,984 77,817 4,242,604 

Cost 14,803 7,183,392 77,817 7,276,012 

Accumulated depreciation - (2,973,248) - (2,973,248) 

Impairment losses - (60,160) - (60,160) 

Net book value 14,803 4,149,984 77,817 4,242,604 

Additions - 120,497 115,320 235,817 

Disposals (21) (10,457) (8,671) (19,149) 

Transfers - 109,036 (109,036) - 

Depreciation disposals - 8,947 - 8,947 

Impairment losses applied/ (recognised) in the year - (203) - (203) 

Depreciation charge - (354,726) - (354,726) 

Net book value at 31 December 2011 14,782 4,023,078 75,430 4,113,290 

Cost 14,782 7,402,468 75,430 7,492,680 



Net book value 14,782 4,023,078 75,430 4,113,290 


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Additions - 126,894 128,523 255,417 

Disposals (769) (411,419) (5,668) (417,856) 

Transfers - 110,260 (110,260) - 

Depreciation disposals - 357,967 - 357,967 

Impairment losses applied in the year - 28,384 - 28,384 

Depreciation charge - (360,754) - (360,754) 

Net book value at 31 December 2012 14,013 3,874,410 88,025 3,976,448 

Cost 14,013 7,228,203 88,025 7,330,241 



Net book value 14,013 3,874,410 88,025 3,976,,448 

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Additions under ‘Property, plant and equipment’ for 2012 and 2011 mainly correspond to customer installations. 

During 2012, assets amounting €263,455 thousand were written off, those assets were fully depreciated. Additionally, assets amounting 

€59,889 thousand of book value were retired, of which €28,384 thousand were fully provisioned. The Group has recognised a loss due to 

retired assets amounting to €30,217 thousand (€8,495 thousand at 31 December 2011). 

Disposals were mainly in relation with radio and voice networks. 

During 2011 no impairment adjustments were recognised for property, plant and equipment. 

During 2012 and 2011, no interests or financial burdens have been capitalized in the property, plant and equipment construction period. 

As of 31 December 2012 and 31 December 2011 there is no significant property, plant and equipment subject to ownership restrictions or 

pledged to secure liabilities. 

The Group has several insurance policies to cover the risks the property, plant and equipment is exposed to. The insurance cover is 

considered sufficient. 


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Property, plant and equipment contains the following amounts where the Group is the lessee under a finance lease, including the 

improvement made in these assets (note 15.g): 

Thousand of Euros 

31.12.2012 31.12.2011 

Cost – capitalised finance leases Technical facilities 10,893 18,738 

Other 1,967 3,282 

Acumulated depreciation Technical facilities (5,179) (8,097) 

Other - - 

Net book value Technical facilities 5,714 10,641 

Other 1,967 3,282 

Total 7,681 13,923 

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7. Intangible assets 

Details of and movement on the items included in ‘Intangible assets’ are as follows: 


Computer Other intangible 

Licenses software assets Total 

Net book value at 31 December 2010 3,774 26,268 34,514 64,556 

Cost 12,651 158,090 53,236 223,977 

Accumulated depreciation (8,877) (131,822) (18,722) (159,421) 

Net book value 3,774 26,268 34,514 64,556 

Additions 14,045 10,293 31,572 55,910 

Amortization charge (522) (14,307) (9,874) (24,703) 

Net book value at 31 December 2011 17,297 22,254 56,212 95,763 

Cost 26,696 168,383 84,808 279,887 


Net book value 17.297 22,254 56,212 95,763 


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Additions - 10,696 33,293 43,989 

Charge - (1,350) (3,340) (4,690) 

BAmortization charge - 928 3,340 4,268 

Provision for amortization (1,009) (10,300) (17,806) (29,115) 

Net book value at 31 December 2012 16,288 22,228 71,699 110,215 

Cost 26,696 177,729 114,761 319,186 


Net book value 16,288 22,228 71,699 110,215 

On 15 September 2011, the Group acquired 2.6GHz mobile spectrum licenses in 9 Spanish regions, including Madrid, Catalonia, C. 

Valenciana, Murcia, Navarra, La Rioja, Cantabria, Ceuta and Melilla, for a total consideration of €14 million, including taxes. 

The caption ‘Other intangible assets’ includes certain subscribers’ acquisition costs which meet the definition of intangible assets. As of 31 

December 2012, the net book value of these costs amount €62,350 thousand (€45,922 thousand at 31 December 2011). 

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During the years 2012 and 2011, no impairment losses have been recognized regarding intangible assets. 

As of 31 December 2012 and 2011, there are no intangible assets subject to ownership restrictions or pledged to secure liabilities. 

8. Financial instruments by category 

Details of ‘Financial instruments by category’ are as follows: 


Assets at fair 

Loans and value through Derivatives used Available 

receivables the profit and loss for hedging for sale Total 

31 December 2012 

Assets as per balance sheet 

Available-for-sale financial assets - - - 544 544 

Derivative financial instruments (note 16) - 1,249 8,403 - 9,652 

Trade and other receivables (*) (note 11) 151,352 - - - 151,352 

Other financial assets (note 9) 24,876 - - - 24,876 

Cash and cash equivalents (note 12) 96,625 - - - 96,625 

272,853 1,249 8,403 544 283,049 


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Loans and Derivatives used Available 

receivables for hedging for sale Total 

31 December 2011 

Assets as per balance sheet 

Available-for-sale financial assets - - 557 557 

Derivative financial instruments (note 16) - 11,321 - 11,321 

Trade and other receivables (*) (note 11) 145,359 - - 145,359 

Other financial assets (note 9) 19,878 - - 19,878 

Cash and cash equivalents (note 12) 184,901 - - 184,901 

350,138 11,321 557 362,016 

(*) 

Assets from legal requirements with Public Administration are excluded from the trade and other receivables balance, as this analysis is required only for 

financial instruments. 


Other financial 

Derivatives used liabilities at 

for hedging amortised cost Total 

31 December 2012 

Liabilities as per balance sheet 

Borrowings (note 15) - 3,460,790 3,460,790 

Derivative financial instruments (note 16) 18,002 - 18,002 

Trade and other payables (**) (note 14) - 320,480 320,480 

Other financial liabilities - 3,475 3,475 

18,002 3,784,745 3,802,747 


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Other financial 

Derivatives used liabilities at 

for hedging amortised cost Total 

Balance at 31 December 2011 

Liabilities as per balance sheet 

Borrowings (note 15) - 3,791,599 3,791,599 

Trade and other payables (**) (note 14) - 304,752 304,752 

Other financial liabilities - 3,651 3,651 

- 4,100,002 4,100,002 

(**) 

Liabilities from legal requirements with Public Administration are excluded from the trade payables balance, as this analysis is required only for financial instruments. 

9. Other financial assets 

Details of ‘Other financial assets’ are as follows: 


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31.12.2012 31.12.2011 

Non current: 

Investments in audiovisual productions 9,369 5,509 

Deposits and other 3,714 4,095 

13,083 9,604 

Current: 

Deposits and other 11,793 10,274 

11,793 10,274 

Total Other financial assets 24,876 19,878 

The carrying value of the trade and other receivables accounts is in line with its fair value and referred in Euros. 

The maximum credit risk exposure at the reporting date is the carrying value of the held-to-maturity financial assets. 

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10. Inventories 


31.12.2012 31.12.2011 

Rights 1,196 886 

Network materials 169 466 

Other materials 1 1 

1,366 1,353 

Under the caption ‘Rights’ there are audiovisual property rights and they are registered as consumption during the duration of the acquired 

rights in the income statement. 

11. Trade and other receivables 

Details of ‘Trade and other receivables’ are as follows: 


31.12.2012 31.12.2011 

Trade and other receivables: 

Trade receivables and sundry debtors 294,798 295,575 

Provision for impairment of trade receivables (167,326) (171,201) 

Public Administration 603 303 

Advances to suppliers and commercial creditors 23,880 20,985 

151,955 145,662 


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The caption ‘Trade receivables and sundry debtors’ relates mainly to receivables arising from the provision of telephone, television and 

broad-band internet services to direct-access residential customers, indirect-access customers and companies and the provision of 

interconnection services to other operators. 

The credit risk is caused by the possibility of the Group not recovering the financial assets for its registered value or at is expected 

maturity date. The Directors of the Group consider that the net carrying value of the trade and other receivables accounts is in line with its 

fair value. 

At 2012 and 2011, all the residential and SMEs trade receivables over one year are fully provided for. For trade receivables due below one 

year, there are partial accruals according to the age of the trade receivables. Regarding the rest of trade receivables (large companies, 

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operators and other sundry debtors) the Group has the policy of registering specific trade receivables provision based on the business 

segment, client characteristics and age of the receivables. 

Movement on the impairment provision for trade receivables is as follows: 



Beginning of year 171,201 172,220 

Impairment provision for trade receivables (note 21.f) 14,071 17,442 

Receivables written-off (17,946) (18,461) 

End of year 167,326 171,201 

The charge of provision for impaired receivables has been included in ‘other expenses’ in the income statement. Amounts charged to the 

allowance account are generally written off, when there is no expectation of recovering additional cash. 

The receivables written-off correspond to balances that were fully accrued. 


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The carrying values of loans and receivables are denominated in Euros. 

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group 

holds a trade credit insurance policy which covers risks from the fully or partial default in payment of credits superior to €50 thousand with 

a maximum of €3 million. 

12. Cash and cash equivalents 


31.12.2012 31.12.2011 

Cash in hand and at bank 96,603 129,879 

Cash equivalents 22 55,022 

96,625 184,901 

As of 31 December 2011, ‘Cash equivalents’ caption relates to short-term fixed-income securities for placing punctual cash exceedings with a 

less than three months maturity and a fixed remuneration between 1.6% and 2%. 

At 31 December 2012 and 31 December 2011 there are no restricted cash amounts. 

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13. Equity 

a) Share capital and premium 


31.12.2012 31.12.2011 

Declared capital 1,817,270 1,648,525 

1,817,270 1,648,525 

As of 31 December 2012, the share capital comprises 1,817,269,942 ordinary shares (1,648,524,524 ordinary shares in 2011) with a face 

value of 1 Euro each and a share premium of €363 million. Both share capital and share premium are fully disbursed. 

The share premium has no restrictions to be distributed. 

b) Own shares 

As of 31 December 2012 and 31 December 2011, the number of own shares amounts to 18,110,206 shares. 


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In 2012 and 2011 there were no operations with own shares. 

c) Capital increases 

In May 2010, Grupo Corporativo ONO, S.A. signed a participative loan with shareholders by which €125 million were immediately drawn 

and subsequently loaned to Cableuropa, S.A.U. in the form of participating loan. 

On 20 June 2012, according to the proposal of Board of Director’s, the General Shareholders Meeting of Grupo Corporativo ONO, S.A. 

approved a share capital increase of the Parent Company by offsetting the €125 million corresponding to the principal of the fully paid 

out participative loan, plus accrued interest until 30 June 2011, which amounted to €43,745 thousand. As a result, it is approved a capital 

increase of €168,745 thousand through the issue of 168,745,418 shares with a face value of €1, without share premium. 

The capital increase has been entered in the Mercantile Register Office (“Registro Mercantil”) on 26 September 2012. 

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d) Shareholders 

The shareholders of Grupo Corporativo ONO, S.A. as of 31 December 2012 and 31 December 2011 are the following: 

Total percentage of interest 

31.12.2012 31.12.2011 

CCMP Capital Advisors, LLC (1) 15.2% 15.0% 

Providence Equity Partners (2) 15.2% 15.0% 

Thomas H. Lee Partners (2) 15.0% 15.0% 

Quadrangle Capital Partners (2) 9.0% 9.0% 

Global Telecom Investments, LLC (3) 9.0% 8.8% 

Caisse de Dépôt et Placement du Québec (CDPQ) (4) 6.8% 6.6% 

Grupo Multitel, S.A. (5) 6.1% 6.3% 

Val Telecomunicaciones 5.4% 5.4% 

Ontario Teachers Pension Plan 4.8% 4.7% 

Capital Riesgo Global, SRC S.A. (6) 4.4% 4.4% 

Sodinteleco, S.L. (7) 3.9% 4.2% 

Northwestern Mutual Life Insurance Company 2.3% 2.2% 

Bregal Co-Invest 1.4% 1.4% 

Own shares and other 1.5% 2.0% 

100% 100% 

(1) 

Formerly JP Morgan Partners. These interests are held through several other companies in which stakes are held. 

(2) 

The shareholders mentioned hold these interests through several other companies in which they hold stakes. 

(3) 

Company in which General Electric holds an interest. 

(4) 

CDPQ’s interest is held by said company itself and another company belonging to its group. 

(5) 

The interests of Grupo Multitel, S.A. are held by said company and several controlled companies. 

(6) 

Company fully-held by Banco Santander, S.A. 

(7) 

Company into which most of the former shareholders of Retecal were integrated. 


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e) Other reserves - Hedge reserve 


At 1 January 2011 (1,051) 

Cash flow hedges: 

Gains/Losses at fair value 11,321 

Income tax expense at fair value (3,396) 

Transfers to comprehensive income (10,926) 

Income tax expense transferred to comprehensive income 3,277 

At 31 December 2011 (775) 

At 1 January 2012 (775) 

Cash flow hedges: 

Gains/Losses at fair value (9,599) 

Income tax expense at fair value 2,880 

Transfers to comprehensive income 5,969 

Income tax expense transferred to comprehensive income (1,791) 


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At 31 December 2012 (3,316) 

f) Retained earnings 


At 1 January 2011 (765,136) 

Result of the year 50,359 

At 31 December 2011 (714,777) 

At 1 January 2012 (714,777) 

Result of the year 52,311 

At 31 December 2012 (662,466) 

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g) Non-controlling interest 


At 1 January 2011 3,959 

Result of the year 2011 614 

At 31 December 2011 4,573 

At 1 January 2012 4,573 

Result of the year 2012 595 

At 31 December 2012 5,168 

14. Trade and other payables 

Details of ‘Trade and other payables’ are as follows: 


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31.12.2012 31.12.2011 

Trade payables 214,672 208,424 

Property, plant and equipment suppliers 86,425 78,870 

Short-term public authorities 16,795 13,429 

Outstanding employee remunerations 19,383 17,458 

337,275 318,181 

The carrying value of the trade and other payables accounts is in line with its fair value and referred in Euros. 

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Information regarding delays on payments to commercial suppliers 3rd A.D. ‘Information obligation’ in Law 15/2010, of 5 July. 

According to Law 15/2010 of 5 July, a maximum delay of 60 days on payments to suppliers in commercial transactions is established. For 

this purpose, a transitional payment calendar is established that has ended on 1 January 2013. According to the Second Transitory Provision 

of the aforementioned Law, from 1 January 2012 to 31 December 2012 the maximum delay period is 75 days (85 days since the entry into 

force until 31 December 2011). 

According to Law 15/2010 of 5 July, the following information is disclosed: 

2012 

Thousands of Euros % 

Payments for the financial year under the maximum legal deadline 959,607 79% 

Remaining 255,085 21% 

Total payments for the financial year 1,214,692 100% 

Average exceded payment (Days) 39 

Remaining payment amounts at the year end exceeding the maximum legal deadline 8,350 


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2011 

Thousands of Euros % 

Payments for the financial year under the maximum legal deadline 753,700 66% 

Remaining 393,636 34% 

Total payments for the financial year 1,147,336 100% 

Average exceded payment (Days) 43 

Remaining payment amounts at the year end exceeding the maximum legal deadline 22,633 

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15. Borrowings 

Details of ‘Borrowings’ are as follows: 


31.12.2012 31.12.2011 

Long-term debts and other non-current debt: 

Senior Bank Facility 987,059 1,959,486 

Debt related to the issuance of Senior Secured Notes 1,904,822 975,180 

Debt related to the issuance of Subordinated Notes 454,587 456,264 

Mortgage loans - 15 

Finance lease liabilities 171 1,120 

Subsidised loans (PROFIT) 2,360 3,444 

3,348,999 3,395,509 

Shareholders’ Loan 29,751 188,015 

Total non-current 3,378,750 3,583,524 

Short-term debts and other current debt: 

Senior Bank Facility 38,656 166,832 

Borrowings with other entities 1,560 8,697 

Finance lease liabilities 281 908 

Interest payable 41,543 31,638 

Total current 82,040 208,075 

Total 3,460,790 3,791,599 


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The payment calendar at redemption value as of 31 December 2012 and 31 December 2011 of the long and short-term debt with credit 

institutions and other debts is as follows: 

At 31 December 2012: 


Maturities 

Average Maximum 

interest available Subsequent Total Interest 

Type of debt rate 2012 at 31.12.12 2013 2014 2015 2016 2017 years debt payable 

Debt with 

credit institutions 

Senior Bank Facility (1) 4.99% 1,175,700 38,656 77,135 127,726 246,368 400,815 185,000 1,075,700 3,117 

Mortgage loan 4.12% 15 15 - - - - - 15 - 

Leasing 2.27% 452 281 152 19 - - - 452 - 

Other credit lines 3.60% 2,000 121 - - - - - 121 2 

Total debt with 

credit institutions 1,178,167 39,073 77,287 127,745 246,368 400,815 185,000 1,076,288 3,119 

Other debt 

Debt related to 

the issuance of 

Senior Secured Notess (1) 8.88% 1,992,876 - - - - - 1,992,876 1,992,876 14,739 



Senior Secured Notes (1) 11.03% 465,532 - - - - - 465,532 465,532 23,685 

Subsidised loans (2) - 3,962 1,424 397 357 268 268 1,248 3,962 - 

Total other debt 2,462,370 1,424 397 357 268 268 2,459,656 2,462,370 38,424 

Total long- and 

short-term debt 3,640,537 40,497 77,684 128,102 246,636 401,083 2,644,656 3,538,658 41,543 

(1) 

The payment calendar does not include the discount effect amounting €49,985 thousand, €88,054 thousand and €10,945 thousand, respectively. 

(2) 

The subsidised loans as shown in the balance sheet include the subsidy recognised for an amount of €177 thousand. 


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At 31 December 2011: 


Maturities 

Average Maximum 

interest available Subsequent Total Interest 

Type of debt rate 2011 at 31.12.11 2012 2013 2014 2015 2016 years debt payable 

Debt with 

credit institutions 

Senior Bank Facility (1) 3.13% 2,500,237 166,832 1,969,404 - - - - 2,136,236 381 

Mortgage loan 3.14% 51 36 15 - - - - 51 - 

Leasing 2.19% 2,028 908 935 165 20 - - 2,028 - 

Other credit lines 4.91% 8,300 1,092 - - - - - 1,092 7 

Total debt with 

credit institutions 2,510,616 168,868 1,970,354 165 20 - - 2,139,407 388 

Other debt 



Subordinated Notes (1) 8.82% 1,000,000 - - - - - 1,000,000 1,000,000 7,396 



Subordinated Notes (1) 11.11% 468,893 - - - - - 468,893 468,893 23,854 

Subsidised loans (2) - 11,530 7,569 1,424 397 357 268 1,515 11,530 - 

Total other debt 1,480,423 7,569 1,424 397 357 268 1,470,408 1,480,423 31,250 

Total long- and 

short-term debt 3,991,039 176,437 1,971,778 562 377 268 1,470,408 3,619,830 31,638 

(1) 

The payment calendar does not include the discount effect amounting €9,918 thousand, €24,820 thousand and €12,629 thousand, respectively. 

(2) 

The subsidised loans as shown in the balance sheet include the subsidy recognised for an amount of €517 thousand. 


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a) Refinancing process 

In 2009 the Group started a refinancing process with the lenders of the Senior Bank Facility originally issued in 2005 (hereinafter, ‘2005 

Senior Bank Facility’) in order to align the debt maturities to the new macroeconomic environment and business developments. In June 

2012, the Group completed the final stage of this refinancing process which substantially extended the maturities of the financial 

indebtedness until 2018. 

In May 2010, the Group completed the first step of the refinancing process, which consisted in the renegotiation of the 2005 Senior 

Facility with the aim of: (i) extend most of the maturities of existing financing tranches until 2013 and (ii) allow for additional financing 

tranches to facilitate future refinancings. As part of this first step, the Group received an additional support from its shareholders in the 

form of a deeply-subordinated participative loan, which amounted to €125 million; this loan has been capitalized in 2012 (note 13). 

In October 2010, the Group completed the second step of the refinancing process, which consisted of (i) the issuance of €700 million of 

Senior Secured Notes (maintaining the considerations of the New Senior Bank Facility tranches in terms of debt order of priority) by Nara 

Cable Funding Limited, the gross proceeds of which were on-lent to Cableuropa, S.A.U., (ii) the repayment of €700 million of existing bank 

tranches under the 2005 Senior Facility from the gross proceeds obtained from Nara Cable Funding Limited and (iii) the use of available 

cash to pay expenses related to the transaction. 


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The subsequent steps of the refinancing process taken in 2011 and 2012 are as follows: 

In January 2011, it was completed the third step of our refinancing process, which consisted of: (i) the issuance of €461 million (equivalent) 

Senior Subordinated Notes by ONO Finance II PLC, the proceeds of which were on-lent to Cableuropa, S.A.U., (ii) the prepayment of existing 

€450 million subordinated notes issued by ONO Finance PLC and ONO Finance II PLC in full, in 2004 and 2006 respectively, and (iii) the 

prepayment of €10 million fond ICO Participative Loan (completely repaid in January 2011). 

In July 2011, it was completed the fourth step of our refinancing process, which consisted of: (i) the issuance of €300 million Senior 

Secured Notes (maintaining the considerations of the New Senior Bank Facility tranches in terms of debt order of priority) by Nara Cable 

Funding Limited, the proceeds of which were on-lent to Cableuropa, S.A.U., (ii) the repayment of €300 million of existing bank tranches 

under the 2005 Senior Facility issued by Nara Cable Funding Limited and (iii) the use of available cash to pay expenses related to the 

transaction. 

In February 2012, it was completed the fifth step of our refinancing process, which consisted of: (i) the issuance of $1,000 million Senior 

Secured Notes (maintaining the considerations of the New Senior Bank Facility tranches in terms of debt order of priority) by Nara Cable 

Funding Limited, the gross proceeds of which were on-lent to Cableuropa, S.A.U. (€738 million equivalent), (ii) the prepayment of €738 

million of existing bank tranches under the 2005 Senior Facility issued by Nara Cable Funding Limited and (iii) the use of available cash to 

pay expenses related to the transaction. 

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In May 2012, Cableuropa, S.A.U. signed the New Senior Bank Facility achieving a mature and stable capital structure with a well balanced 

debt maturity profile during the following years and until 2018, ensuring adequate liquidity and adjusting Group’s financing structure to 

reflect operational and strategic requirements. At the date of the agreement, borrowings under the different tranches amounted €1,076 

million and the proceeds obtained were used for the repayment of the 2005 Senior Bank Facility. 

In June 2012, it was completed the last step of the refinancing process which consisted of: (i) the issuance of $310 million Senior Secured 

Notes (maintaining the considerations of the New Senior Bank Facility tranches in terms of debt order of priority) by Nara Cable Funding 

Limited, the proceeds of which were on-lent to Cableuropa, S.A.U. (€212 million equivalent), (ii) the prepayment of €212 million of existing 

bank tranches under the 2005 Senior Facility issued by Nara Cable Funding Limited and (iii) the use of available cash to pay expenses 

related to the transaction. 

The last two stages of the process, together with €110 million of available cash, had been used to fully prepay the 2005 Senior Bank 

Facility in 2012. The features of the New Senior Bank Facility are detailed in note 15.c. 

b) Shareholders’ Loan 

In May 2010, Grupo Corporativo ONO, S.A. signed a PIK participative loan agreement with shareholders by which €125 million were 

immediately drawn and subsequently loaned to Cableuropa, S.A.U. in the form of participating loan. 


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On 20 June 2012, according to the Board of Director’s proposal, the General Shareholders Meeting of Grupo Corporativo ONO, S.A approved 

a share capital increase of the Parent Company by offsetting the €125 million debt corresponding to the principal of the participative loan, 

plus accrued interest until 30 June 2011, which amounted to €44 million (note 13.c). From this moment on, according to the agreement 

adopted by the shareholders, this participative loan is considered expired. 

The accrued interest from 1 July 2011 to 14 May 2012, date of notice of the General Shareholders Meeting for the approval of the capital 

increase by the offsetting of the participative loan, not included in the capital increase described above and amounting to €35,676 

thousand, has been registered on 20 June 2012 as a new financial liability, different to the previous one, which is considered expired and 

ended according to the agreement adopted. The new financial liability has been recognized initially at its fair value, amounting to €28,351 

thousand, on the basis of the Parent’s Company Management best estimation, therefore, the Group has recognised an income of €7,325 

thousand in 2012, registered under the caption ‘Finance income’. This financial liability shall not bear interest and will be paid in cash, 

according to the Shareholder’s Agreement, when the leverage ratio of Cableuropa Group on a consolidated basis is equal to or lower than 

3.5x, or at the date on which the borrower or its subsidiaries has obtained financing for that purpose in the capital and/or financial markets, 

or in any other manner, taking into account the limitations of the financial agreements. As of 31 December 2012, it has been registered at 

amortized cost and amounts to €29,751 thousand. 

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Val Telecomunicaciones lawsuit 

Val Telecomunicaciones (shareholder of Grupo Corporativo ONO, S.A.) challenged in court the Board of Directors Resolution of May 2010 

which authorized the granting of the above referred Participative Loan despite the fact that it has subscribed for a substantial portion of 

it. The lawsuit sought to invalidate the Resolution on the basis that the Loan should have been authorized by a Shareholders’ Meeting of 

Grupo Corporativo ONO, S.A. and that various Board members of Grupo Corporativo ONO, S.A. had a conflict of interest in adopting the 

Resolution. Furthermore, this shareholder claimed that the interest rate agreed in the Loan, in addition to other ancillary terms, is unlawful, 

contrary to the by-laws of Grupo Corporativo ONO, S.A. and detrimental to the interests of Grupo Corporativo ONO, S.A. In its lawsuit the 

shareholder was not making any claims in relation to the participative loan granted to Cableuropa, S.A.U. nor it was making any claims 

against Cableuropa, S.A.U. 

The lawsuit was contested by Grupo Corporativo ONO, S.A. which believed the lawsuit to be without merit. 

On 11 May 2012, Grupo Corporativo ONO, S.A. and the shareholder Val Telecomunicaciones reached a agreement by which, after 

the public deed of the capital increase by offsetting the participative loan (note 13.c), which occurred on 26 September 2012, Val 

Telecomunicaciones had settle the matters in dispute in the lawsuit. On 30 October 2012, the court has dictated a decision by which the 

lawsuit is filed. 


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c) New Senior Bank Facility 

Background 

The Senior Bank Facility was originally signed on 27 October 2005 in the amount of €3,100 million (2005 Senior Bank Facility) and 

amended and restated on 20 June 2007, 31 July 2008, 13 May 2010, 22 October 2010,14 July 2011 and 20 January 2012. 

In May 2012, Cableuropa, S.A.U. signed the new Credit Agreement (New Senior Bank Facility), considering ended the 2005 Senior Bank 

Facility, with a substantial change of the agreed conditions with respect to the previous one, among other, related to the amount, financial 

entities involved, structure of the different tranches and performance ratios (financial covenants). The availability of the funds is structured 

in different trances up to €2,400 million and $1,000 million. This agreement has been amended and restated in 7 June 2012, to include a 

Senior Secured Notes tranche the debt related to the issuance on that date amounting to $310 million. 

The Senior Secured Notes issued by Nara Cable Funding Limited maturing in 2018, which include €700 million Senior Secured Notes issued in 

October 2010, the €300 million Senior Secured Notes issued in July 2011, the $1,000 million Senior Secured Notes issued in February 2012 

and the $310 million Senior Secured Notes issued in May 2012 are included as additional tranches to the New Senior Bank Facility. 

As of 31 December 2012, the amount drawn with credit entities is €1,076 million (€2,136 million at 31 December 2011) of which €1,037 

million are classified as long term debt (€1,969 million at 31 December 2011) and €39 million as short term (€167 million at 31 December 

2011), depending on its maturity. As of 31 December 2012, the undrawn tranches amounts €102 million (€364 million at 31 December 2011). 

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Interest and expense 

The Senior Bank Facility involves certain interests, expenses and commissions, including, among others: 

- Interest on amounts drawn linked to Euribor plus a spread, that ranges between 4.50% and 5.25% depending on the drawn tranches. 

- Availability commissions on the amounts granted but not drawn. 

- Agency commissions. 

Guarantees and conditions 

The following assets have been pledged by the Group to guarantee its Senior Bank Facility: 

- The shares in Cableuropa, S.A.U. belonging to ONO Midco, S.A.U. 

- ONO Finance II plc credit rights over the funds obtained in relation to the Senior Subortinated notes issued on January 2011. 


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- Participative loans between Grupo Corporativo ONO, S.A. and Cableuropa, S.A.U. and credit rights under the agreement dated February 2011. 

- Credit rights from certain Cableuropa, S.A.U. bank accounts. 

- Credit rights arising from certain insurance policies. 

The borrower of the Senior Bank Facility (Cableuropa, S.A.U.) has jointly and severally guaranteed all the amounts of the credit as senior debt. 

The Senior Bank Facility also contains financial and non-financial conditions, including voluntary early repayment and, under some 

circumstances, obligatory repayment, the establishment of mandatory conditions concerning the possibility of new borrowings, the sale of 

assets, sale and lease-back agreements, acquisitions, the possibility of granting loans and guarantees, early repayment of other borrowings, 

investments, dividends and the negotiation of significant contracts. 

The carrying value of the New Senior Bank Facility is in line with its fair value. 

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d) Debt related to the issuance of Senior Secured Notes 

As described in section a), in 2010, 2011 and 2012 several issuances of Senior Secured Notes had been completed by Nara Cable Funding, 

the proceeds of which were on-lent to Cableuropa, S.A.U. 

Nara Cable Funding Limited is an independent company established in Ireland with the corporate purpose of issuing notes and the 

subsequent financing of the ONO Group with the funds obtained from the issues. 

Details of the Senior Secured Notes are as follows: 

At 31 December 2012: 

Issue Number Unit face Nominal 

Issuer date of notes value interest rate Maturity 

Nara Cable Funding Limited 22 October 2010 700,000 1,000 Euros 8.875% 1 December 2018 

Nara Cable Funding Limited 14 July 2011 300,000 1,000 Euros 8.875% 1 December 2018 

Nara Cable Funding Limited 2 February 2012 1,000,000 1,000 Dollars 8.875% 1 December 2018 

Nara Cable Funding Limited 7 June 2012 310,000 1,000 Dollars 8.875% 1 December 2018 


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At 31 December 2011: 

Issue Number Unit face Nominal 


Nara Cable Funding Limited 22 October 2010 700,000 1,000 Euros 8.875% 1 December 2018 

Nara Cable Funding Limited 14 July 2011 300,000 1,000 Euros 8.875% 1 December 2018 

On 2 February 2012, the issuance of $1,000 million Senior Secured Notes was completed by Nara Cable Funding Limited at a discount price 

of 96.934% of their principal amount, the proceeds of which were on-lent to Cableuropa, S.A.U. (€738 million equivalent). 

On 7 June 2012, the issuance of $310 million Senior Secured Notes was completed by Nara Cable Funding Limited at a discount price of 

85% of their principal amount, the proceeds of which were on-lent to Cableuropa, S.A.U. (€212 million equivalent). 

These notes mature on 1 December 2018, but the issuer reserves the right to call the debt in advance, subject to certain conditions, after 1 

December 2013. 

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These issuances have the same guarantees that the New Senior Bank Facility. ONO Midco, S.A.U. and Cableuropa, S.A.U. are guarantors 

under the contracts that regulate the notes issue with similar terms to the existing New Senior Bank Faclility borrowers. 

All interest payments are paid semi-annually. 

The proceeds obtained by the Issuer were on-lent to Cableuropa, S.A.U. through a new tranche which was incorporated into the New Senior 

Bank Facility under the same conditions. This new tranche accrues interest at an annual rate of 8.875% plus a margin. Interests are paid 

semi-annually. 

The fair value of the debt related to the issuance of Senior Secured Notes, calculated on the quoted price basis as at 31 December 2012 is 

€2,022,032 thousand (€880,000 thousand at 31 December 2011). 

Nara Cable Funding Limited is not included under the Group’s consolidated annual accounts. According to the signed loan agreement 

between Cableuropa, S.A.U. and Nara Cable Funding, this incorporation does not represent significant effects for the Group’s consolidated 

annual accounts. 

e) Debt related to the issuance of Senior Subordinated Notes 


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On 28 January 2011, ONO Finance II PLC issued €461 million (equivalent) Senior Subordinated Notes due 2019 (comprising €295 million 

aggregate principal amount of 11.125% and €225 million aggregate principal amount of 10.875%). The issuer reserves the right to call the 

debt in advance, subject to certain conditions. 

The Notes are guaranteed on a senior basis by ONO Midco, S.A.U., and on a senior subordinated basis by Cableuropa, S.A.U., both members 

of the ONO Group. 

The gross proceeds of the January 2011 issuance were used to prepay in full the debt related to the previous notes issued with maturity in 

2014 and the Fond ICO Participative Loan. Therefore, this issuance, did not resulted in an increase of the Group’s leverage, but an extension 

of maturity of debt. 

ONO Finance II PLC is an independent company established in Ireland with the corporate purpose of issuing notes and the subsequent 

financing of the Cableuropa Group with the funds obtained from the issues. 

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Details of the Senior Subordinated Notes issuances at 31 December 2012 and 2011, is as follows: 

Issuer Number Unit face Nominal 


ONO Finance II PLC 28 January 2011 225,000 1,000 Dollars 10.875 % 15 July 2019 

ONO Finance II PLC 28 January 2011 295,000 1,000 Euros 11.125 % 15 July 2019 

All interest payments are paid semi-annually. 

ONO Midco, S.A.U. and Cableuropa, S.A.U. are guarantors under the contracts that regulate the notes issues. In relation to notes issuance, 

the Cableuropa Group, as the borrower and guarantor, and the issuers, as the lenders, signed a number of subordinated financing 

agreements to transfer the effective amount obtained from the notes issues to the guarantors and, in return, the borrower undertook the 

obligation to repay the issuers: 

- the face value of the debt from the notes issues upon maturity, equivalent to the issue value plus opening, maintenance and 

underwriting commissions; and 


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- sufficient interests to cover the interests’ payments associated to the notes, plus a margin. 

The fair value of the debt related to notes issuance, calculated on the quoted price basis is as follows: 


31.12.2012 31.12.2011 

- Notes issuance from ONO Finance II PLC 447,583 381,915 

447,583 381,915 

ONO Finance II PLC is not included under the Group’s annual accounts. According to the signed loan agreement between Cableuropa, S.A.U. 

and this entity, this incorporation does not represent significant effects for the Group’s consolidated annual accounts. 

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f) Credit Lines 

The Group has the following undrawn credit lines: 


31.12.2012 31.12.2011 

Variable rate: 

- maturing at less than one year 1,879 7,208 

1,879 7,208 

The credit lines maturing at less than one year are subject to revision in 2013. 

The carrying value of the credit lines is in line with its fair value. 

g) Finance lease liabilities 

Finance lease liabilities are effectively guaranteed if the rights over the leased asset revert to the lessor in the event of default. 


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Gross finance lease liabilities – minimum payment under finance leases, are as follows: 


31.12.2012 31.12.2011 

Up to 1 year 284 948 

Between 1 and 5 years 173 1,140 

Future finance charges on finance leases (5) (60) 

Present value of finance lease liabilities 452 2,028 

The present value of finance lease liabilities is as follows: 


31.12.2012 31.12.2011 

Up to 1 year 281 908 

Between 1 and 5 years 171 1,120 

Present Value 452 2,028 

The carrying value of finance lease liabilities is in line with its fair value. 

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h) Subsidised loanss 

Since 2001, within the framework of the ‘Programa para el Fomento de la Innovación Tecnológica’ (PROFIT) (Technological Innovation 

Promotion Programme), the Group has obtained a number of subsidised loans from the Ministry of Science and Technology to finance 

certain technological innovation projects. This subsidised funding is recorded as long-term borrowings and is received in the form of 

reimbursable advances in annual payments of the same amount, and from the third anniversary of its granting, the loan does not accrue 

interest and it is secured by bank guarantees. These subsidised loans mature between 2013 and 2024. 

The Group considers that it meets all the general and specific conditions fixed in the relevant individual decisions to grant all the subsidised 

loans. 

The fair value of subsidised loans amounts €3,748 thousand at 31 December 2012 (€11,080 thousand at 31 December 2011). 

16. Derivative financial instruments 


31.12.2012 31.12.2011 

Assets Liabilities Assets Liabilities 

Forward foreign exchange contracts – cash flow hedges 8,403 18,002 11,321 - 

Foreign exchange option contracts – trading derivatives 1,249 - - - 

Total 9,652 18,002 11,321 - 

Non-current portion 8,403 15,849 11,321 - 

Current portion 1,249 2,153 - - 


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a) Forward foreign exchange contracts 

To reduce the exposure to exchange rate fluctuations affecting cash flows from future coupon and principal payments in USD, the Group 

engaged with several financial institutions the hedging of coupon payment related to Senior Secured Notes issuances in dollars and 100% 

of the principal of the issuance in June 2012. 

Additionally, with the same purpose, the Group engaged with several financial institutions the hedging of coupon payments and 100% of 

the principal related to Subordinated Notes. 

Forward foreign exchange contracts have been classified as hedging derivatives as it fulfills the criteria for the designation. 

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As of 31 December 2012, hedging financial contracts amount to $466 million related to: 

- $81 million corresponding to coupon payments until December 2013 of February 2012 issuance. 

- $239 million corresponding to 77% of the principal issued in June 2012 until December 2014, $71 million corresponding to 23% of 

the principal issued in June 2012 until December 2015 for coupon and $25 million corresponding to coupon payments until 

December 2013. 

- $225 million corresponding to 100% of the principal issued in January 2011 and $50 million for coupon payments until January 2014. 

As of 31 December 2011, hedging financial contracts amounted to $286 million ($225 million related to the 100% of the principal of the 

issuance on 28 January 2012 and $61 million of the coupon payment until January 2014). 

As of 31 December 2012, the year end exchange rate was 1.3194 (1.2939 at 31 December 2011). 

Gains and losses recognised in the hedging reserve in equity on forward foreign exchange contracts will be continuously released to the 

income statement within finance cost until the maturity of the contracts. 


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b) Foreign exchange option contracts 

The Group holds with several financial institutions option contracts with regard to the 50% of the principal of the $1,000 million Senior 

Secured Notes issuance until December 2013. 

The net premium paid amounted to €5 million. The option contracts have been classified in current assets as a financial asset held for 

trading, being as it does not meet the criteria to be accounted for as an effective hedging instrument. 

17. Long term incentive plan 

On 25 May 2011, the Group’s Board of Directors approved a cash–settled share–based payment variable remuneration plan (the Long 

Term Incentive Plan), based on the evolution of the Parent Company’s share value. This plan was approved in 22 June 2011 by the General 

Meeting of Shareholders of Grupo Corporativo ONO, S.A. The incentive amount is determined by multiplying the theoretical number of 

shares granted to each participant by the difference between the final and initial reference value as defined in the plan. 

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The plan envisages two accrual potential outcomes: 

a) A Liquidity Event (IPO or change of control) happens during the life of the plan (up to 31 December 2017). 

b) If before 31 December 2017 the Liquidity Event has not occurred, both parts, the Company and participants, will agree a settlement in 

good faith. 

On July 2011 the Board of Directors communicated the theoretical shares for each participant on the basis of the following tranches: 

Tranche Initial reference Value Number of shares 

A 0.00 13,517,902 

B 0.90 22,419,934 

C 1.20 13,517,900 

49,455,736 

The incentive is accrued according to the service period of each participant as follows: 


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- 40 % as of 31 of December of the third year since the reference date fixed by the Board of Director for every participant. 

-40 % as of 31 of December of the fourth year since the reference date fixed by the Board of Director for every participant. 

-20 % as of 31 December 2017 or the Liquidity Event date, if earlier. 

As of 31 December 2012 the Group’s Management has made a reasonable estimation on the basis that the probability of occurrence of the 

Liquidity Event is considered as uncertain, and therefore the Long Term Incentive Plan will be settled in 2017 based on good faith between 

both parts. The amount registered in the income statement for 2012 is €0.7 million (€0.9 million at 31 December 2011). 

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18. Deferred income tax 

Details of deferred income tax are as follows: 


31.12.2012 31.12.2011 

Deferred income tax assets: 

Assets arising from tax loss carry-forwards and deductions 985,195 988,883 

Financial expenses to deduct in subsequent years 20,740 - 

Temporary differences 69,766 96,030 

1,075,701 1,084,913 

Deferred income tax liabilities: 

Temporary differences (38,004) (37,244) 

(38,004) (37,244) 

Deferred income tax 1,037,697 1,047,669 


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Movement on deferred income taxes in the year is as follows: 

a) Deferred income tax assets 


Balance at 

31.12.2010 Additions Disposals 

Balance at 

31.12.2011 

Tax credits and deductions 999,090 540 (10,747) 988,883 

Temporary differences 108,066 1,400 (13,436) 96,030 

Total deferred income tax assets 1,107,156 1,940 (24,183) 1,084,913 


Balance at 

Balance at 

31.12.2010 Additions Disposals 31.12.2012 

Tax credits and deductions 988,883 2,663 (6,351) 985,195 

Financial expenses to deduct in subsequent years - 20,740 - 20,740 

Temporary differences 96,030 2,699 (28,963) 69,766 

Total deferred income tax assets 1,084,913 26,102 (35,314) 1,075,701 

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b) Deferred income tax liabilities 


Balance at 

Balance at 

31.12.2010 Additions Disposals 31.12.2011 

Temporary differences (23,178) (14,066) - (37,244) 

Total deferred income tax liabilities (23,178) (14,066) - (37,244) 


Balance at 

Balance at 

31.12.2011 Additions Disposals 31.12.2012 

Temporary differences (37,244) (3,463) 2,703 (38,004) 

Total deferred income tax liabilities (37,244) (3,463) 2,703 (38,004) 

The sources of deferred income tax assets and liabilities at 31 December 2012 and 31 December 2011 are as follows: 


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31.12.2012 31.12.2011 

Deferred income tax 

Deferred income tax 

Assets Liabilities Assets Liabilities 

Property, plant and equipment 46,927 (14,826) 64,500 (14,066) 

Provisions 21,418 - 31,198 - 

Derivatives 1,421 - 332 - 

Investments in Group and associated companies - (23,178) - (23,178) 

Total 69,766 (38,004) 96,030 (37,244) 

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The deferred income tax balance charged to equity is as follows: 


31.12.2012 31.12.2011 

Cash flow hedge 1,421 332 

1,421 332 

Deferred income tax assets are recognised for tax loss carry-forwards to the extent that it is probable that the Company will obtain future 

tax profits that allow them to be applied (note 23.c). 

19. Provisions for other liabilities and charges 

Movements on the provisions recognised in the balance sheet are as follows: 


Onerous Litigations 

contracts and other Total 

Balance at 31 December 2010 57,870 60,530 118,400 

Increase (decrease) due to effect of discount 2,955 (130) 2,825 

(Reversal) - (8,732) (8,732) 

Applications (30,534) (1,980) (32,514) 

Balance at 31 December 2011 30,291 49,688 79,979 

Increase (decrease) due to effect of discount 2,118 - 2,118 

Provisions - 3,928 3,928 

Applications (27,281) (4,963) (32,244) 

Balance at 31 December 2012 5,128 48,653 53,781 


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The analysis of the total of these provisions is as follows: 


31.12.2012 31.12.2011 

Non-current 48,653 54,817 

Current 5,128 25,162 

53,781 79,979 

a) Onerous contracts 

Several contracts mainly corresponding to network maintenance and rental contracts, acquired as part of the Auna Telecomunicaciones 

Group purchase process with costs higher than market standards, were considered on the acquisition date onerous contracts. 

During 2013 the provision to be applied is expected to be approximately €5 million annually, after considering the future costs. 

b) Litigations and other liabilities 


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The amount represents a provision for certain complaints filed against the Group companies and other risks and liabilities. The amounts 

have been estimated in accordance with the sums claimed or the risk estimated by the Group. 

According to Directors’ opinion after receiving the relevant legal advice, the result of these litigations is not expected to represent 

significant losses higher than the amounts provided at 31 December 2012. 

As a result of the resolutions of the Telecommunications Market Commission in relation with the cost and contribution to the Universal 

Service Fun in June and December of 2011, the Group updated its best estimation for this item. As a consequence, during 2011 a €9 million 

provision was reversed. 

20. Deferred income 

On 1 December 2009, a sentence was passed against Prisa Televisión (current name of Sogecable, hereinafter ‘Prisa TV’), and on 3 March 

2010 against Prisa TV and Audiovisual Sport (hereinafter, ‘AVS’). In these sentences Prisa TV and AVS were condemned to pay a claim to 

Cableuropa, S.A.U. for damages caused. All the parties agreed a payment calendar by which Prisa TV advanced in cash to Cableuropa, S.A.U. 

€20 million in 2009, €38 in 2010 and €51 in 2011, totally amounting to €109 million. 

On 18 May 2012, Cableuropa, S.A.U and Prisa TV, reached two agreements pursuant to which Cableuropa, S.A.U. repaid Prisa TV €54.4 million, 

accounting for half of the amounts already paid to the Group by Prisa TV, and pursuant to which Prisa TV ended the appeal process. According 

to these agreements, all the credits that gave rise to the proceeding and the resulting sentence are considered fully settled by the parties. 

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As a consequence of both agreements reached on 18 May 2012, the Group has recognized an extraordinary income in 2012 of €54.4 

million under the caption ‘Other results’ (note 21.g), withdrawing the amounts collected in previous years registered under the caption 

“Deferred income” amounting to €109 million. 

As of 31 December 2012, the caption ‘Deferred income’ only registers customer advanced billing for invoiced services not yet accrued. 

21. Income 

a) Net revenue 

Net revenue by service line is analyzed in note 5 ‘Segment Information’. 

b) Work carried out by the company for its assets 

The expenses associated to the development and construction of the Group’s network, and several installation costs, are capitalised as a 

higher cost of the network. All these capitalised expenses are recognised as operating income under the caption ‘Work carried out by the 

company for its assets’ in the income statement. 


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c) Other revenues 

Since 2001, within the framework of the ‘Programa para el Fomento de la Innovación Tecnológica’ (PROFIT) (Technological Innovation 

Promotion Programme), the Group has obtained a number of subsidised loans to finance certain technological innovation projects. During 

the year, the Group has recognised as a revenue the amount of €339 thousand (€446 thousand in 2011). 

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d) Cost of sales 

Operating consumption is the Group’s direct sales cost and includes programming expenses, internet connectivity and the rental of fibre, 

circuits and channelling. 



Interconnection 203,145 91,955 

Content 76,759 84,315 

Intelligent network 48,816 50,387 

Trunk network 38,878 37,310 

Loop costs 13,194 14,353 

Circuit costs 9,214 9,142 

Others 36,651 29,354 

426,657 316,816 


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e) Staff costs 



Wages, salaries and similar 114,509 118,663 

Employer’s social security contributions 28,868 30,299 

Other employee expenses 7,706 8,012 

Severance payments 4,996 3,984 

156,079 160,958 

The average number of employees in the year, by category, is as follows: 


Directors 74 83 

Qualified, technical 2,088 1,959 

Administration 702 985 

2,864 3,027 

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Likewise, the distribution of the Group’s employees by sex and categories at the year end 31 December 2012 and 31 December 2011 

is as follows: 


Men Women Total Men Women Total 

Directors 64 9 73 72 9 81 

Qualified, technical 1,370 663 2,033 1,357 557 1,914 

Administration 217 455 672 287 669 956 

1,651 1,127 2,778 1,716 1,235 2,951 

f) Other operating expenses 



Leases and canons 45,714 49,374 

Repairs and maintenance 43,365 58,019 

Service of independent professionals 97,662 88,541 

Advertising 29,676 38,733 

Other services 33,353 34,167 

Taxes 34,746 35,655 

Impairment of trade receivables (note 11) 14,071 17,442 

Total other operating expenses 298,587 321,931 


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The caption ‘Taxes’ includes €12,959 thousand regarding the RTVE financing tax (€13,430 thousand in 2011). 

g) Other results 

According to the agreements reached with Prisa TV and AVS on 18 May 2012 (note 20) the Group has registered in 2012 an extraordinary 

income amounting to €54.4 million under the caption ‘Other results’. 

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22. Finance result 

The breakdown of finance cost and income is as follows: 



Finance income: 

Other finance income 8,573 1,578 

Unwinding of discount 190 320 

8,763 1,898 

Interest expense: 

Guarantee costs (516) (832) 

Availability commissions (3,949) (14,177) 

Interest on debt related to the issuance of notes (note 15.d and 15.e) (215,592) (137,362) 

Interest on Senior Bank Facility (note 15.c) (48,792) (73,887) 

Interest on Shareholders’ loan (note 15.b) (15,600) (39,200) 

Other finance costs (70) (2,417) 

(284,519) (267,875) 

Other financial charges: 

Provisions: unwinding of discount (note 19) (2,118) (2,955) 

Financial instruments: unwinding of discount related 

to the prepayment of the 2005 Senior Bank Facility (12,630) - 

Financial instruments: unwinding of discount (24,681) (14,723) 

(39,429) (17,678) 

Fair value losses on financial instruments: 

Losses on financial assets held for trading (3,751) - 

(3,751) - 

Impairment and results from financial instruments disposals: (652) 215 

Exchange differences 5,856 3,178 

Total net financial negative result (313,732) (280,262) 


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23. Income tax and tax situation 

a) Consolidated tax regime 

In 2002, Grupo Corporativo ONO, S.A. notified its election to apply the consolidated tax regime. The Group has consolidated for tax 

purposes since 1 January 2003. 

b) Income tax 

The analysis of income tax is as follows: 



Current tax 14,200 (540) 

Deferred tax 7,837 27,383 

Reversal deductions/additions (2,663) 9,178 

Other (325) 170 

Total Income tax expense 19,049 36,191 


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The conciliation between the Spanish rate applicable (30%) and the consolidated result before income tax and the income tax expense 

registered in 2012 and 2011, is as follows: 



Profit before income tax 71,955 87,164 

Spanish tax rate 30% 21,587 26,149 

Effect of tax rate: 

Non-deductible expenses 450 694 

Income tax expense 22,037 26,843 

Reversal deductions/additions (2,663) 9,178 

Other (325) 170 

Total Income tax expense 19,049 36,191 

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The tax credit/(debit) related to other comprehensive income is as follows: 


Before Tax credit/ Net of 

At 31 December 2011 tax (debit) tax 

Cash flow hedge 395 (119) 276 

Other comprehensive income 395 (119) 276 

Current tax - 

Deferred tax (119) 


Before Tax credit/ Net of 

At 31 December 2012 tax (debit) tax 

Cash flow hedge (3,630) 1,089 (2,541) 

Other comprehensive income (3,630) 1,089 (2,541) 

Current tax - 

Deferred tax 1,089 


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The Group has made advanced income tax payments of the income tax for 2012 amounting to €8,767 thousand (no advanced payments 

in 2011). 

c) Tax Loses: 

The Group has recognised tax credits, generated by the incurred losses, during the initial and penetrating stage. Their recoverability 

is reasonably likely, given recent developments in the business, that has recorded gains since 2009 and the forecast reflected in the 

business plan. 

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As of 31 December 2012 and 2011 the Group has the following tax loss carry-forwards that may be offset against tax profits generated 

from 2013 onwards: 


Year 31.12.2012 31.12.2011 

2000 239,870 239,870 

2001 330,110 330,110 

2002 679,447 679,447 

2003 344,537 344,537 

2004 66,686 66,686 

2005 1,330,071 1,330,071 

2006 - - 

2007 189,551 189,551 

2008 60,227 60,227 

2009 38,558 38,558 

2010 4,887 4,887 

2011 1,337 - 

3,285,281 3,283,944 


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The previous detail does not include the tax loss carry-forwards to be offset according to the tax income provision of 2012. 

On 31 March 2012 Royal Decree-Law 12/2012 entered into force. This RDL has introduced several amendments regarding Spanish 

Corporate Income Tax that have impacted the Group. Additionally, on 15 July 2012, RDL 20/2012 came into effect introducing important 

restrictions on the offsetting of tax losses. The Group does not expect impacts on the tax credit recovery concerning those measures. 

According to current legislation, the maximum allowed period for offsetting negative losses carry forwards is 18 years. 

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As of 31 December 2012, the Group maintains financial expenses to deduct in subsequent years generated by the general restriction in the 

deductibility of financial expenses approved by the Royal Decree-Law 12/2012. 


Year 31.12.2012 

2012 69,134 

69,134 

According to current legislation, the maximum allowed period for financial expenses to deduct in subsequent years offsetting is 18 years. 

d) Years open to inspection 

According to current legislation, taxes may not be deemed to have been definitively settled until the returns filed have been inspected by 

the tax authorities or the 4-year years from the last day of the voluntary period for filing statute of limitations has expired. 

The tax years open to tax audit are shown in the chart below: 


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Corporate 

Other 

Company Income Tax taxes 

Grupo Corporativo ONO, S.A. 2006 and 2008-2011 2009-2012 

Cableuropa, S.A.U. 2006 and 2008-2011 2009-2012 

ONO Midco, S.A.U. 2006 and 2008-2011 2009-2012 

Spanish Cable Holding, S.A.U. 2006 and 2008-2011 2009-2012 

Tenaria, S.A. 2006 and 2008-2011 2009-2012 

The Directors do not expect any significant additional liabilities to arise in the years open to inspection. 

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24. Contingencies 

a) Contingent liabilities 

The Group has contingent liabilities for litigations arising in the normal course of business. No significant liabilities other than those already 

provided for are expected to arise from these litigations (note 19). 

The Group holds guarantees with several Spanish credit institutions to secure compliance with certain financial, operating and technical 

commitments held with the Ministry of Industry, Tourism and Trade, City Councils and other organizations and entities. 

Details of commitments assumed as of 31 December 2012 and 2011 are as follows: 


31.12.2012 31.12.2011 

Ministry of Industry, Tourism and Trade 4,732 13,661 

City Councils and other entities 30,567 37,716 

35,299 51,377 


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25. Commitments 

a) Purchase and sale commitments 

As of 31 December 2012, the Group has fixed assets purchase commitments amounting to €83 million (€91 million at 31 December 2011). 

b) Operating lease commitments 

The Group leases fibre optic, circuits and channelling under operating lease agreements. These contracts have terms of between five and 

thirty years. 

The Group leases office and technical buildings under non-cancellable operating lease agreements. These contracts have terms of between 

five and ten years and most of them are renewable upon expiry under market conditions. 

The Group also leases infrastructure, installations and machinery under cancellable operating lease agreements. The Group is obliged to 

give six months’ advance notice of the termination of these agreements. 

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Total minimum future payments for non-cancellable operating leases are as follows: 



Less than one year 34,859 24,989 

Between 1 and 5 years 168,271 83,009 

Over 5 years 205,414 142,734 

408,544 250,732 

The expense recognized in the income statement in the year 2012 for operating leases is €61 million (€61 million in 2011). 

c) Other commitments: invest in audiovisual contents. 

On 1 April 2010, the new Audiovisual Communication Law was approved. As a consequence, the Group has become legally required to 

invest 5% of the revenues from television and audiovisual services into the production of new Spanish and European television and other 

audiovisual content. 

The financing of the audiovisual contents mentioned above may be done through direct production or through rights acquisitions. 


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26. Related parties 

The nature of Related-party transactions is the same as ordinary market transactions. 

Transactions completed are presented below: 

a) Shareholders’ Transactions 

Shareholders of the Parent Company are described in note 13.d. 

As of 31 December 2012, Grupo Corporativo ONO, S.A. has financial liability held with shareholder amounting €29,751 thousand (note 

15.b). Such borrowing does not accrue any interests. 

As of 31 December 2011, Grupo Corporativo ONO, S.A. had a non-current liability amounting €188,015 thousand due to the Shareholders’ 

Participative Loan described in the note 15.b. Interest expenses for the year 2011 amounted to €39,200 thousand. 

At 31 December 2012, the Group have financing transactions signed under fair market value with Banco Santander amounting €92 million 

and JP Morgan amounting €59 million already included under the caption of Borrowings in note 15. 

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At 31 December 2011, the Group had financing transactions signed under fair market value with Banco Santander amounting €43 million, 

with General Electric amounting €74 million and JP Morgan amounting €30 million already included under the caption of Borrowings in 

note 15. 

At 31 December 2012 there are bank guarantees granted from Banco Santander to the Group, at fair market value, amounting to €5 

million (13 million at 31 December 2011). 

b) Transactions with other Group companies 

During 2012 and 2011 no transactions were carried out with Group companies excluded from the consolidation perimeter. 

As of 31 December 2012 and 2011, there are no balances with Group companies. 

c) Transactions 

The Management Committee and Board of Directors which report directly to the Chief Executive Officer are considered as Senior 

Managements by the Group. 


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Company’s Board of Directors and Management have nothing to report pursuant to direct or indirect interest they and their related parties 

may hold in the capital of another company with the same, analogous or complementary type of activity to the Company’s corporate purpose. 

As to the obligation to notify the Board of Directors, or, in case of Sole Administrator, the General Meeting of Shareholders, of any direct or 

indirect conflict of interest with the Company, has been disaggregated in note 27. 

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27. Board of Directors and Senior Management 

a) Compensation of the members of the Board of Directors 

In the year 2012 and 2011, the amount accrued by the members of the Board of Directors was €3 million and €2 million respectively, 

comprising the following items and amounts: 



Salaries 1,160 1,168 

Per diem allowances 96 122 

Other compensation 1,340 1,044 

2,596 2,334 

b) Remuneration paid to Management 

The total compensation accrued in 2012 and 2011 by Senior Management both past and present amounts are as follows: 


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Salaries 2,260 2,222 

Other salaries 146 47 

Severance payments - 100 

2,406 2,369 

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c) Advances and credits 

During 2012 and 2011 no loans were granted to the members of the Board of Directors and Senior Management. 

d) Interests and positions held by members of the Board of Directors in other analogous companies. 

Art. 229 of the Spanish Companies Act, in the wording of Law 1/2010 of 2 July, impose on the Directors the obligation to notify the Board 

of Directors, or, in case of Sole Administrator, the General Meeting of Shareholders, of any direct or indirect conflict of interest with the 

Company. The involved Director shall be abstained from participating on the decisions or agreements in relation to any operations referring 

to such conflict. 

Likewise, the Directors may notify the direct or indirect interest they and their related parties may hold in the capital of another company 

with the same, analogous or complementary type of activity to the Company’s corporate purpose, together with any positions they may 

hold or functions they may perform therein. 

In this respect, the following information was provided to the Company by the Directors who held office on the Parent Company’s Board of 

Directors: 


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Companies with an 

analogous or complementary 

Related 

Director corporate purpose Activity % Position party 

José María Castellano ONO MIDCO, S.A.U. Telecommunications - President - 

Cableuropa, S.A.U. Telecommunications - President - 

Spanish Cable Holding, S.A.U Telecommunications - President - 

Tenaria S.A. Telecommunications - President - 

Rosalía Portela ONO MIDCO S.A.U. Telecommunications - C.E.O - 

Spanish Cable Holding S.A.U. Telecommunications - C.E.O - 

Cableuropa S.A.U. Telecommunications - C.E.O - 

Individual representing 

Tenaria S.A. Telecommunications - the C.E.O. - 

Soren Oberg Comcast Telecommunications < 0.1 - - 

2,049,451 

Univision Telecommunications shares - - 

Anthony Ball 31,452 Chairman Supervisory 

Kabel Deutschland Cable shares Board - 

16,157 

BT Group Telecommunications shares Non executive Director - 

Eduardo Serra Rexach - - - - - 

John Hahn - - - - - 

Thomas Walker - - - - - 

Peter Ezersky (1) Get As - - Director - 

Hargray Holdings - - Director - 

Ntelos Holdings Corporation - - Director - 

Dave Wireless - - Director - 

Tower Vision Mauritius LTD - - Director - 

Alejandro Valencia - - - - - 

José Luis Nueno Iniesta - - - - - 

Felipe Blanco López - - - - - 

Alain Michel (2) - - - - - 

Diego Lozano Romeral (3) - - - - - 

(1) 

Position held since 9 February 2012. 

(2) 

Individual representing Particitel International Ltd Partnership. Position held since 29 November 2012, replacing Robert Coallier. 

(3) 

Individual representing Val Telecomunicaciones Cartera, S.L. Position held since 24 February 2010. 


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The Director Val Telecomunicaciones Cartera, S.L. has notified the Company that Val Telecomunicaciones, S.L., shareholder of Grupo 

Corporativo ONO, holds 100% of its share capital, being at the same time its CEO Val Telecomunicaciones, S.L. has notified that holds no 

capital in other companies with the same, analogous or complementary type of activity to the Company’s corporate purpose. 

Director Particitel International Limited Partnership has notified that Caise de Dépôt et Placement du Québec, shareholder of the Company, 

holds the following capital investments: 

Companies with an 

analogous or complementary 

Related 

Director corporate purpose Activity % Position party 

Particitel Cogeco Cable Inc Cable and Satellite 3,80 - CDPQ 

International Naspers Ltd Cable and Satellite 0,00 - CDPQ 

Limited SES SA Cable and Satellite 0,12 - CDPQ 

Partnership British Sky Broadcasting Group Plc Cable and Satellite 0,09 - CDPQ 

Kabel Deutschland Holding AG Cable and Satellite 0,13 - CDPQ 

Eutelsat Communications Cable and Satellite 0,08 - CDPQ 

Jupiter Telecommunications Co Ltd Cable and Satellite 0,04 - CDPQ 

Virgin Media Inc Cable and Satellite 0,03 - CDPQ 

Time Warner Cable Inc Cable and Satellite 0,12 - CDPQ 

Cablevision Systems Corp Cable and Satellite 0,11 - CDPQ 

Quebecor Media Cable and Satellite 24,64 - CDPQ 

Ripley Cable Holdings I LP Cable and Satellite 2,76 - CDPQ 

Beijing Gehua CATV Nework Cable and Satellite 0,01 - CDPQ 

Citic Guoan Information Cable and Satellite 0,01 - CDPQ 

Comcast Corp Cable and Satellite 0,14 - CDPQ 

Comcast Corp Cable and Satellite 0,06 - CDPQ 

Cyfrowy Polsat S.A. Cable and Satellite 0,30 - CDPQ 

Directv Cable and Satellite 0,12 - CDPQ 

Dish Network Corp Cable and Satellite 0,04 - CDPQ 

Liberty Global Inc. Cable and Satellite 0,03 - CDPQ 

Liberty Global Inc. Cable and Satellite 0,03 - CDPQ 

Quebecor Inc. Cable and Satellite 1,59 - CDPQ 

Quebecor Inc. Cable and Satellite 5,30 - CDPQ 

Shaw Communication Inc. Cable and Satellite 0,95 - CDPQ 

Sirius XM Radio Inc. Cable and Satellite 0,02 - CDPQ 


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During the year 2012, Mr. Joshua L. Steiner was replaced as Director. The information available by the Group regarding their interests and 

positions in companies with the same, analogous or complementary corporate purpose was revealed in the 2011 annual accounts. 

During 2012, none of the Directors have been involved in any direct or indirect conflict of interest with Grupo Corporativo ONO, S.A and 

subsidiaries. 

During 2011, none of the Directors was involved in any direct or indirect conflict of interest with Grupo Corporativo ONO, S.A. and 

subsidiaries, except for Val Telecomunicaciones Cartera S.L. (represented by Diego L. Lozano Romeral), due to its Sole Administrator, 

Val Telecomunicaciones, S.L., shareholder of Grupo Corporativo ONO, S.A. challenged in court the Board of Directors’ resolution which 

authorized the granting of a participative loan with the shareholders (note 15.b). On 11 May 2012, Grupo Corporativo ONO, S.A. and 

Val Telecomunicaciones reached a agreement by which, after the execution in a public deed of the capital increase by offsetting the 

participative loan (note 13.c), which occurred on 26 September 2012, Val Telecomunicaciones will inform the local court the lawsuit 

withdraw. On 30 October 2012, the court has dictated a decision by which the lawsuit is filed. 

e) Long term incentive plan 

On 25 May 2011, the Group’s Board of Directors approved a cash–settled share–based payment variable remuneration plan (the Long Term 

Incentive Plan, note 17). 


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28. Environmental information 

In its global operations, the Group takes the laws on environmental protection into account and considers that it substantially complies 

with these laws and has procedures designed to promote and guarantee such compliance. 

Any operation the main purpose of which is to minimize the environmental impact and protect and improve the environment is considered 

an environmental activity. In December 2010, ONO became a sponsor of the ‘Sponsor a Tree Foundation’. Likewise it has not been 

considered necessary to record any provision for liabilities and charges in relation to environmental issues, since there are no contingencies 

or liability in this area. 

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29. Auditors fees 

The fees accrued in the year by PricewaterhouseCoopers Auditores, S.L. for audit services and other review services amount €233 thousand 

(€259 thousand in 2011) and €107 thousand (€179 thousand in 2011), respectively. 

Likewise, fees accrued in the year by other entities of the PwC net for other services amount €217 thousand (€301 thousand in 2011). 

The fees accrued to other auditors for audit services rendered during 2012 total €11 thousand (€11 thousand in 2011). Equally, the fees 

accrued for consulting services rendered during 2012 total €198 thousand (€385 thousand in 2011). 

30. Subsequent events 

Notes issuances 7 February 2013 

On 7 February 2013 the Group completed the issuance of €260 million Senior Secured Notes at a discount price of 98.69% which accrues 

interest at an annual rate of 8.50%. These notes mature on 1 March 2020, but the issuer reserves the right to call the debt in advance, 

subject to certain conditions, after 1 March 2016. 


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The notes have been issued by Nara Cable Funding II Limited and have the same guarantees as the Senior Bank Facility. 

Nara Cable Funding II Limited is an independent company established in Ireland with the corporate purpose of issuing notes and the 


The gross proceeds of the offering to Cableuropa, S.A.U., were used to prepay €252 million of existing bank tranches under the New Senior 

Bank Facility and the commissions related to the issuance of bonds. As a consequence of this voluntary prepayment, the Group has no debt 

maturities until June 2016. 

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DIRECTOR’S REPORT FOR 2012 

1. Business performance 

Grupo Corporativo ONO, S.A. is the single shareholder of ONO Midco, S.A.U., which is the parent company of the Cableuropa Group which 

does business under the ONO brand. 

ONO is the leading broadband communication and entertainment provider in Spain. It offers value-added telecommunications services to 

SMEs, large companies and institutions. ONO also offers integrated telephone, television and Internet services to its residential customers 

and professionals. ONO has the largest next generation fibre optic network available in Spain available for over 7 million users. ONO closed 

the year 2012 with total earnings of €1,573 million and operating profits (EBITDA) of €752 million. 

2. Analysis of results 

The Group’s turnover was €1,573 million in 2012. By business segments, income breaks down as follows: 



Net Revenue 

Services to the residential market 1,145,150 1,172,353 

Residential fibre 1,103,116 1,125,056 

Residential ADSL and indirect access (*) 41,184 44,947 

Other 850 2,350 

Business and operators 425,100 309,635 

SME´s 85,741 76,930 

Businesses 121,070 128,563 

Wholesale 218,289 104,142 

Other 3,001 3,431 

Net Revenue 1,573,251 1,485,419 

(*) 

These subsegments were presented separately in 2011. 


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Gross margin for 2012 stood at €1,207 million, 1.9% below previous year. 

Operating profits have reached €386 million, 5.2% above the €367 million achieved for 2011. 

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3. Own shares 

No operations have been carried out in 2012 with own shares. 

4. Research and development 

During 2012 there has been various research and development projects aimed at improving the quality of the services rendered to our 

customers. 

5. Financial risk management - Use of financial instruments 

The Group’s activities are exposed to a variety of financial risks: market risk (including currency risk, fair value interest rate risk and cash 

flow interest rate risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of 

financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. The Group uses derivative financial 

instruments to hedge certain risk exposures. 

Risk management is carried out by finance planning and corporate finance departments under policies approved by the Board of Directors. 


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6. Personnel 

The average number of employees in the year, by category, is as follows: 


Directors 74 83 

Qualified, technical 2,088 1,959 

Administration 702 985 

2,864 3,027 

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7. Environment 

In its global operations, the Group takes the laws on environmental protection into account and considers that it substantially complies 

with these laws and has procedures designed to promote and guarantee such compliance. 

Any operation the main purpose of which is to minimize the environmental impact and protect and improve the environment is considered 

an environmental activity. In December 2010, ONO became a Sponsor of the “Sponsor a Tree Foundation”. Likewise it has not been 

considered necessary to record any provision for liabilities and charges in relation to environmental issues, since there are no contingencies 

or liability in this area. 

8. Post balance sheet events 

Notes issuances 7 February 2013 

On 7 February 2013 the Group completed the issuance of €260 million Senior Secured Notes at a discount price of 98.69% which accrues 

interest at an annual rate of 8.50%. These notes mature on 1 March 2020, but the issuer reserves the right to call the debt in advance, 

subject to certain conditions, after 1 March 2016. 


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The notes have been issued by Nara Cable Funding II Limited and have the same guarantees as the Senior Bank Facility. 

Nara Cable Funding II Limited is an independent company established in Ireland with the corporate purpose of issuing notes and the 


The gross proceeds of the offering to Cableuropa, S.A.U., were used to prepay €252 million of existing bank tranches under the New Senior 

Bank Facility and the commissions related to the issuance of bonds. As a consequence of this voluntary prepayment, the Group has no debt 

maturities until June 2016. 

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Annexes 

Fibre gives you more... 

and it’s us who gives you 

the most fibre. 

45,000 km all over 

Spain. 


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45,000 

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Annexes 

Report scope 

Company: 

Grupo Corporativo ONO, S.A. 

Location: 

Spain 

Timeline: 

2011-2012 

Activities: 

Fixed and Mobile Telephony, Internet 

and Television 

Frequency of publication of the 

report: 

Annual 

Date of the most recent full report: 

2011 

With transparency as the main principle 

for our relations with society, this Report 

provides a fair view of the company’s 

performance in the area of sustainability, 

and a balanced financial, environmental 

and social overview. Various areas of the 

Company participated in the preparation 

of the Report, applying principles that 

guarantee a transparent, fair and balanced 

presentation. 

For the third consecutive year, the contents 

of the Report follow the international 

standards of the Sustainability Reporting 

Guidelines published by the Global 

Reporting Inititiative: GRI-G3, reaching 

application level A. ONO has applied the 

principles required by the GRI in terms of 

the quality of information. 

The GRI-G3 indicators are classified into 

core and additional. Core indicators are 

those which are important for ONO and 

most of its stakeholders. The additional 

indicators are those that represent a 

particular practice that is not currently 

widespread but which may in the future be 

a core indicator. 

This report is structured according to the 

guidance of the GRI into two main blocks 

of principles, around which the information 

about sustainability at the Company is 

presented. 


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preparation of this 


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indicators 

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Annexes 

Principles for the preparation of this Report 

“Principles for determining the topics 

and Indicators on which the organization 

should report” 

(For defining the content) 

Materiality. To define the most relevant 

topics and indicators for this Report, ONO 

has undertaken a process of internal 

reflection based on the results obtained 

from its direct dialogue with stakeholders, 

taking account of both internal and 

external factors. 

Stakeholder inclusiveness. ONO 

has identified relevant stakeholders 

(shareholders and investors, clients, 

employees, suppliers, media and society) 

and has held constant dialogue with them 

to meet their expectations and interests. 

Sustainability context. ONO analyses 

its performance in light of the limits to 

environmental or social resources in a 

sector, local, regional or global context. 

Over the course of 2011, the Company 

focused on a Corporate Responsibility Plan 

that has begun to deliver results. 

“Principles for ensuring the quality and 

appropriate presentation of reported 

information” 

(For defining the quality of the Report) 

Balance. The Report reflects both the 

positive and negative aspects of the 

performance of the organisation, to 

enable a reasoned assessment of overall 

performance. 

Comparability. Reported information is 

presented in charts and tables that enable 

stakeholders to analyse changes in the 

organization’s performance over time, and 

could support analysis relative to other 

organizations. 

Accuracy. The reported information is 

sufficiently accurate and detailed for 

stakeholders to assess the reporting 

organization’s performance. 

Timelines. ONO publishes this Report 

on a regular schedule and information is 

available in time for stakeholders to make 

informed decisions. 

Reliability. The information and processes 

used in the preparation of this Report are 

gathered, recorded, compiled, analysed, 

and disclosed in a way that can be subject 

to examination and that establishes the 

quality and materiality of the information. 


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Corporate 


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Index of GRI 

indicators 

Contact 

Information 

Completeness. The contents of the 

Report reflect the social, economic 

and environmental impacts, so that 

stakeholders can assess the performance 

of ONO during the period based on the 

information supplied. 

Clarity. Information in this Report 

is made available in a manner that 

is understandable and accessible to 

stakeholders. 

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262

Annexes 

Principles for the preparation of this Report 

In addition, since 2011 ONO has been a 

signatory of the United Nations Global 

Compact, committing the company to 

support in its activities the consolidation 

of this international project, which it 

believes to be of great value to the 

defence of human rights, the protection 

of the environment, the support for social 

development, respect for rights of workers 

and the fight against corruption. 

As a consequence of this, in the GRI table 

of this Report, which is also a Progress 

Report, an additional column has been 

included which connects the different 

parts of this document to the Principles 

of the Global Compact. There are ten 

principles in the Global Compact, in four 

blocks: 

Human rights 

• Principle 1. Businesses should 

support and respect the protection 

of internationally proclaimed human 

rights. 


make sure that they are not complicit 

in human rights abuses. 

Environment 


support a precautionary approach to 

environmental challenges. 


undertake initiatives to promote 

greater environmental responsibility. 


encourage the development and 

diffusion of environmentally friendly 

technologies. 

Labour 


uphold the freedom of association 

and the effective recognition of the 

right to collective bargaining. 


uphold the elimination of all forms of 

forced and compulsory labour. 


uphold the effective abolition of child 

labour. 


uphold the elimination of 

discrimination in respect of 

employment and occupation. 

Anti-Corruption 


work against corruption in all its 

forms, including extortion and bribery. 


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Index of GRI indicators 

GRI G3 INDEX 

GRI 

SECTION I: Profile indicators 

Pages 

Principles of 

Global Compact 


Who is ONO? 


ONO’s 


1. 1. STRATEGY AND ANALYSIS 

1.1 Statement from the most senior decision-maker of the 

organization. 8-11 

1.2 Description of key impacts, risks, and opportunities. 116-118; 199-202 

2. ORGANIZATIONAL PROFILE 

Description 

2.1 Name of the organization. 180; 261 

2.2 Primary brands, products, and/or services. 6; 28 

2.3 Operational structure of the organization, including main divisions, 

operating companies, subsidiaries, and joint ventures. 21; 26 

2.4 Location of organization's headquarters. 180; 282 

2.5 Number of countries where the organization operates, and names 

of countries with either major operations or that are specifically 

relevant to the sustainability issues covered in the report. 4; 13 

2.6 Nature of ownership and legal form. 180; 217-218 

2.7 Markets served (including geographic breakdown, sectors served, 

and types of customers/beneficiaries). 4; 13 

2.8 Scale of the reporting organization. 3; 6-7; 81; 104 

2.9 Significant changes during the reporting period regarding size, 

structure, or ownership. 16; 120-121; 180; 217-218 

2.10 Awards received in the reporting period. 29; 32; 86; 115 


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3. REPORT PARAMETERS 

Report Profile 

3.1 Reporting period (e.g., fiscal/calendar year) for information provided. 

168; 261 

3.2 Date of most recent previous report (if any). Cover on ONO’s website: 

http://www.ono.es/sobreono/inversores/ 

anual-report/ 

3.3 Reporting cycle (annual, biennial, etc.) 261 

3.4 Contact point for questions regarding the report or its contents. 282 

Report Scope and Boundary 

3.5 Process for defining report content. 5; 68; 261-263 

3.6 Boundary of the report (e.g., countries, divisions, subsidiaries, 

leased facilities, joint ventures, suppliers). See GRI Boundary Protocol 

for further guidance. 261 

3.7 State any specific limitations on the scope or boundary of the 

report (see completeness principle for explanation of scope). 261 

3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, 

outsourced operations, and other entities that can significantly 

affect comparability from period to period and/or between 

organizations. 183-187 

3.9 Data measurement techniques and the bases of calculations, 

including assumptions and techniques underlying estimations 

applied to the compilation of the Indicators and other information 

in the report. Explain any decisions not to apply, or to substantially 

diverge from, the GRI Indicator Protocols. 180-206 

3.10 Explanation of the effect of any re-statements of information 

provided in earlier reports, and the reasons for such re-statement 

(e.g.,mergers/acquisitions, change of base years/periods, nature 

of business, measurement methods). 

ONO has not been involved in any restatements 

of information provided in 

earlier reports 

3.11 Significant changes from previous reporting periods in the scope, 

boundary, or measurement methods applied in the report. 180-198 


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GRI Content Index 

3.12 Table identifying the location of the Standard Disclosures in the 

report. 2; 264 

Assurance 

3.13 Policy and current practice with regard to seeking external 

assurance for the report. 168 

4. GOVERNANCE, COMMITMENTS AND ENGAGEMENT 

Governance 

4.1 Governance structure of the organization, including committees 

under the highest governance body responsible for specific tasks, 

such as setting strategy or organizational oversight. 120; 128-130; 218 

4.2 Indicate whether the Chair of the highest governance body is 

also an executive officer. 8; 23; 128-129; 132 

4.3 For organizations that have a unitary board structure, state the 

number of members of the highest governance body that are 

independent and/or non-executive members. 128-130 

4.4 Mechanisms for shareholders and employees to provide 

recommendations or direction to the highest governance body. 63; 69; 85-86; 160-161 

4.5 Linkage between compensation for members of the highest 

governance body, senior managers, and executives (including 

departure arrangements), and the organization's performance 

(including social and environmental performance). 133-134; 241-242; 251 

4.6 Processes in place for the highest governance body to ensure 

conflicts of interest are avoided. 157-159 

4.7 Process for determining the qualifications and expertise of 

the members of the highest governance body for guiding the 

organization's strategy on economic, environmental, and social 

topics. 121-124 

4.8 Internally developed statements of mission or values, codes of 

conduct, and principles relevant to economic, environmental, 

and social performance and the status of their implementation. 14-15; 63-64; 78; 261-263 


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4.9 Procedures of the highest governance body for overseeing the 

organization's identification and management of economic, 

environmental, and social performance, including relevant 

risks and opportunities, and adherence or compliance with 

internationally agreed standards, codes of conduct, and 

principles. 63-64; 137-138 

4.10 Processes for evaluating the highest governance body's 

own performance, particularly with respect to economic, 

environmental, and social performance. 139-141 

Commitments to External Initiatives 

4.11 Explanation of whether and how the precautionary approach or 

principle is addressed by the organization. 116-118; 145 P7 

4.12 Externally developed economic, environmental, and social 

charters, principles, or other initiatives to which the organization 

subscribes or endorses. 65-66 P7 

4.13 Memberships in associations (such as industry associations) and/ 

or national/international advocacy organizations in which the 

organization: * Has positions in governance bodies; * Participates 

in projects or committees; * Provides substantive funding beyond 

routine membership dues; or * Views membership as strategic. 65-66; 101-102 


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Stakeholder Engagement 

4.14 List of stakeholder groups engaged by the organization. 68-69 

4.15 Basis for identification and selection of stakeholders with whom 

to engage. 

4.16 Approaches to stakeholder engagement, including frequency of 

engagement by type and by stakeholder group. 

68-69; 262 

ONO carries out a detailed analysis of 

its stakeholders in order to identify the 

impact of its activities on them and 

to develop a strategy to achieve the 

sustainability of its processes. 

ONO toma como base el principio de 

ONO uses the materiality principle as a 

foundation both the development of its 

sustainability strategy and for the preparation 

of the Annual Report. 

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Annexes 


4.17 Key topics and concerns that have been raised through 

stakeholder engagement, and how the organization has 

responded to those key topics and concerns, including through 

its reporting. 

SECTION II: Management approach and performance indicators 

68-69 

ONO is implementing a process to 

analyse its stakeholders for the next 

years. 


Who is ONO? 


ONO’s 



ECONOMIC 

Disclosure on Management Approach EC 3-4; 6-7; 69-70; 172-178; 255; 257 

Econmic Performance 

CORE EC1 Direct economic value generated and distributed, including 

revenues, operating costs, employee compensation, 

donations and other community investments, retained 

earnings, and payments to capital providers and 

governments. 

65-66; 110-113; 241-242 

Donations and other community 

investments, retained earnings, and 

payments to capital providers and 

governments are not found available the 

date of the closing of this report. 

CORE EC2 Financial implications and other risks and opportunities for 

the organization's activities due to climate change. 49-55; 117-118; 255 P7; P8 

CORE EC3 Coverage of the organization's defined benefit plan 

obligations. 65-66; 88; 101-102 

CORE EC4 Significant financial assistance received from government. During 2012, ONO has not received 

from government significant financial 

assistance. 

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Market Presence 

ADD EC5 Range of ratios of standard entry level wage compared to 

local minimum wage at significant locations of operation. 

The Group only has employees in 

Spanish territory and its salaries are 

compliant with employment law. 

CORE EC6 Policy, practices, and proportion of spending on locallybased 

suppliers at significant locations of operation. 94-96 

P1; P4 

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Annexes 


CORE EC7 Procedures for local hiring and proportion of senior 

management hired from the local community at significant 

locations of operation. 

79-80 

All of our employees proceed from the 

local community at significant locations 

of operation. 

P6 


Who is ONO? 


Indirect Economic Impacts 

CORE EC8 Development and impact of infrastructure investments 

and services provided primarily for public benefit through 

commercial, in-kind, or pro bono engagement. 39; 56-58 

ADD EC9 Understanding and describing significant indirect economic 

impacts, including the extent of impacts. 56-58 

ENVIRONMENTAL 

Disclosure on Management Approach EN 49-55; 66; 259 P7 

Materials 

CORE EN1 Materials used by weight or volume. 50-52 

At the end of the fourth quarter of 

2012, the Group deployed an online 

mechanism, JUNO, to facilitate 

communication, monitoring and 

control of traceability and to support 

other processes in the New Waste 

Management Model 

P8 

CORE EN2 Percentage of materials used that are recycled input 

materials. 50-52 P8; P9 

ONO’s 



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Energy 

CORE EN3 Direct energy consumption by primary energy source. 

This information is unavailable as there 

is no formal procedure for collecting the 

information. 

P8 

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Annexes 


CORE EN4 Indirect energy consumption by primary source. 53 

Total energy consumption is based on 

the use of electricity from the grid in 

the headquarters, in all other company 

locations and in the stores. 

Indirect energy consumption by primary 

source is unavailable as there is no 

formal procedure for collecting this 

information. 

P8 

ADD EN5 Energy saved due to conservation and efficiency 

improvements. 53-55 P9 

ADD EN6 Initiatives to provide energy-efficient or renewable energy 

based products and services, and reductions in energy 

requirements as a result of these initiatives. 53-55 P9 

ADD EN7 Initiatives to reduce indirect energy consumption and 

reductions achieved. 53-55 P9 

Water 

CORE EN8 Total water withdrawal by source. The supply of water in all locations 

comes from public, licensed networks, 

so ONO has no impact on protected 

habitats. The greatest consumption 

is for domestic uses (mainly cleaning 

and consumption) in the company 

headquarters. 

ADD EN9 Water sources significantly affected by withdrawal of 

water. 

There is no direct withdrawal of water. 

ADD EN10 Percentage and total volume of water recycled and reused. ONO has not used recycled and reused 

water. 

P7 


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Biodiversity 

CORE EN11 

CORE EN12 

Location and size of land owned, leased, managed in, or 

adjacent to, protected areas and areas of high biodiversity 

value outside protected areas. 

Description of significant impacts of activities, products, 

and services on biodiversity in protected areas and areas of 

high biodiversity value outside protected areas. 

There are not installations and activities 

in protected areas. 



ADD EN13 Habitats protected or restored. There are not installations and activities 


P8 

ADD EN14 Strategies, current actions, and future plans for managing 

impacts on biodiversity. 50-55 P8 

ADD EN15 

Number of IUCN Red List species and national conservation 

list species with habitats in areas affected by operations, by 

level of extinction risk. 

Emissions, Effluents and Waste 

CORE EN16 Total direct and indirect greenhouse gas emissions by 

weight. 

CORE EN17 

Other relevant indirect greenhouse gas emissions by 

weight. 



As the company’s activity is 

telecommunications, total direct and 

indirect greenhouse gas emissions by 

weight were not available. 


telecommunications, this indicator was 

not considered material for its activity. 

ADD EN18 Initiatives to reduce greenhouse gas emissions and 

reductions achieved. 53-55 P7; P8; P9 

CORE EN19 Emissions of ozone-depleting substances by weight. 53-55 

CORE EN20 

NOx, SOx, and other significant air emissions by type and 

weight. 




CORE EN21 Total water discharge by quality and destination. As the company’s activity is 



P8 

P8 

P8 

P8 

P8 

P8 


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CORE EN22 Total weight of waste by type and disposal method. At the end of the fourth quarter of 

2012, the Group deployed an online 

mechanism, JUNO, to facilitate 

communication, monitoring and 

control of traceability and to support 

other processes in the New Waste 

Management Model. This calculation 

is not found available the date of the 

closing of this report. 

CORE EN23 Total number and volume of significant spills. During 2011, ONO has not registered 

significant spills. 

ADD EN24 

ADD EN25 

Weight of transported, imported, exported, or treated 

waste deemed hazardous under the terms of the Basel 

Convention Annex I, II, III, and VIII, and percentage of 

transported waste shipped internationally. 

Identity, size, protected status, and biodiversity value of 

water bodies and related habitats significantly affected 

by the reporting organization's discharges of water and 

runoff. 

ONO has not transported waste deemed 

hazardous. 

ONO’s activity does not affect to water 

bodies and related habitats. 

P8 


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CORE EN26 Initiatives to mitigate environmental impacts of products 

and services, and extent of impact mitigation. 49-50 P7; P8; P9 

CORE EN27 Percentage of products sold and their packaging materials 

50-52 

that are reclaimed by category. 

Packages used in the market are 

recycled at the end of their useful life by 

authorised providers. 

P8; P9 

Contact 

Information 

Compliance 

CORE EN28 

Monetary value of significant fines and total number 

of non-monetary sanctions for non-compliance with 

environmental laws and regulations. 

ONO has not registered monetary 

value of significant fines and total 

number of non-monetary sanctions for 

noncompliance with environmental laws 

and regulations. 

P8 

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Transport 


ADD 

EN29 

Significant environmental impacts of transporting products 

and other goods and materials used for the organization's 

operations, and transporting members of the workforce. 

50-52 

The main impact of carriage of goods for 

the company is the energy consumption 

and the emissions stemming thereof 

P8 

Who is ONO? 


ONO’s 


Overall 

ADD 

EN30 

Total environmental protection expenditures and 

investments by type 

There is no quantitative information 

available about these, which are 

considered as operating expenses 


Corporate 


The Figures 

LABOR PRACTICES AND DECENT WORK 

Disclosure on Management Approach LA 78-93; 241-242 

Employment 

CORE LA1 Total workforce by employment type, employment contract, 

and region. 91-93 P6 

CORE LA2 Total number and rate of employee turnover by age group, This calculation is not found available 

gender, and region. 

the date of the closing of this report. 

P6 

ADD LA3 Benefits provided to full-time employees that are not 

provided to temporary or part-time employees, by major 

operations. 88 

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Index of GRI 

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Information 

Labour/Management Relations 

CORE LA4 Percentage of employees covered by collective bargaining 

agreements. 89 P1; P3 

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CORE LA5 

Minimum notice period(s) regarding significant operational 

changes, including whether it is specified in collective 

agreements. 

The collective agreements that are in 

force do not include minimum notice 

periods for formal communications of 

organisational changes at the Group. 

However, when a relevant event occurs, 

due notification is made in advance, in 

accordance with the Statute for workers. 

P3 


Who is ONO? 


ONO’s 



Occupational Health and Safety 

ADD LA6 Percentage of total workforce represented in formal joint 

management-worker health and safety committees that 

help monitor and advise on occupational health and safety 

programs. 

CORE LA7 

CORE LA8 

ADD LA9 

100% of workers are represented on 

five formal committees: a National 

Health and Safety Committee an four 

Health and Safety Committees (East/ 

Centre/South/North). In addition, these 

committees hold extraordinary quarterly 

meetings whenever any party proposes 

this. 

Rates of injury, occupational diseases, lost days, and 

absenteeism, and number of work-related fatalities by 

region. 90 P1 

Education, training, counselling, prevention, and risk-control 

programs in place to assist workforce members, their 

families, or community members regarding serious diseases. 

Health and safety topics covered in formal agreements with 

trade unions. 

In general terms, no workers have been 

identified who are involved in activities 

with high risk of accidents or specific 

illnesses. 

All health and safety issues are covered 

by formal agreements with trade unions, 

plus specific issues that the Legal 

Representative of Workers may want 

covered. 

P1 

P1 

P1 

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Training and Education 

CORE LA10 Average hours of training per year per employee by 

employee category. 81 P1 

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ADD LA11 

ADD LA12 

Programs for skills management and lifelong learning that 

support the continued employability of employees and 

assist them in managing career endings. 82-83 P1; P6 

Percentage of employees receiving regular performance 

and career development reviews. 83 P1 


Who is ONO? 


ONO’s 


Diversity and Equal Opportunity 

CORE LA13 Composition of governance bodies and breakdown of 

employees per category according to gender, age group, 

minority group membership, and other indicators of 

diversity. 

CORE LA14 Ratio of basic salary of men to women by employee 

category. 

ONO has not had minority group’s 

membership. 

This information is confidential, refers 

to key aspects of the business and ONO 

does not plan to disclose it in the future. 

HUMAN RIGHTS 

Disclosure on Management Approach HR 8-9; 84-96; 261-263 

Investment and Procurement Practices 

CORE HR1 Percentage and total number of significant investment 

agreements that include human rights clauses or that have 

undergone human rights screening. 8-9; 94-96; 261-263 

CORE HR2 Percentage of significant suppliers and contractors that 

have undergone screening on human rights and actions 

taken. 49-50; 94-97 

ADD HR3 Total hours of employee training on policies and procedures 

concerning aspects of human rights that are relevant to 

operations, including the percentage of employees trained. 66; 81 

Non-discrimination 

CORE HR4 Total number of incidents of discrimination and actions 

taken. 

ONO has not registered incidents of 

discrimination. 

P1; P6 

P1; P6 

P1; P2; P3; 

P4; P5; P6 

P1; P2; P3; 

P4; P5; P6 

P1; P2; P3; 

P5; P6 

P1; P2; P6 


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Freedom of Association and Collective Bargaining Core 


CORE HR5 

Operations identified in which the right to exercise 

freedom of association and collective bargaining may be at 

significant risk, and actions taken to support these rights. 

ONO has not identified activities that 

has been affected the right to exercise 

freedom of association. 

P1; P2; P3 

Who is ONO? 


Child Labour 

ONO’s 


CORE HR6 

Operations identified as having significant risk for incidents 

of child labour, and measures taken to contribute to the 

elimination of child labour. 

ONO does not have operations identified 

as having significant risk for incidents of 

child labour. 

P1; P2;P4; 

P5 


Corporate 


Forced and Compulsory Labour 

The Figures 

CORE HR7 

Operations identified as having significant risk for incidents 

of forced or compulsory labour, and measures to contribute 

to the elimination of forced or compulsory labour. 

Security Practices 

ADD HR8 Percentage of security personnel trained in the 

organization's policies or procedures concerning aspects of 

human rights that are relevant to operations. 

ONO does not have operations identified 

as having significant risk for incidents of 

forced or compulsory labour. 

ONO subcontracts these services 

to independent companies who are 

required to comply with its Code of 

Conduct for suppliers. 

P1; P2; P4; 

P6 

P1 

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Index of GRI 

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Information 

Indigenous Rights 

ADD HR9 

Total number of incidents of violations involving rights of 

indigenous people and actions taken. 

ONO operates in Spain, so no incidents 

have been identified of violations of the 

rights of indigenous peoples. 

P1 

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SOCIETY 

Disclosure on Management Approach SO 39; 49-50; 65-66; 77-78; 88-90; 94-96 

Community 

CORE SO1 Nature, scope, and effectiveness of any programs and 

practices that assess and manage the impacts of operations 

on communities, including entering, operating, and exiting. 40-50; 65-66 

Corruption 

CORE SO2 

CORE SO3 

Percentage and total number of business units analysed for 

risks related to corruption. 

Percentage of employees trained in organization's anticorruption 

policies and procedures. 

ONO has not been involved in any risks 

related to corruption. 

ONO has not been involved in any 

anticorruption policies and procedures. 

CORE SO4 Actions taken in response to incidents of corruption. ONO has not been involved in any 

actions related to incidents of 

corruptions. 

P10 

P10 

P10 


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Public policy 

CORE SO5 Public policy positions and participation in public policy 

development and lobbying. 

88-90; 94-96 

P1; P2; P3; 

P4; P4; P5; 

P6; P7; P8; 

P9; P10 

Contact 

Information 

ADD SO6 

Total value of financial and in-kind contributions to political 

parties, politicians, and related institutions by country. 

The management of the Company 

is based on the principle of political 

neutrality. Consequently, ONO does not 

make any donations in money or in kind 

to political parties or related institutions. 

Anti-Competitive Behaviour 

ADD SO7 Total number of legal actions for anti-competitive 

behaviour, anti-trust, and monopoly practices and their 

outcomes. 

Every action undertaken by the Group 

fully complies with the legislation that 

is applicable. In 2011, ONO registered 

no legal actions for unfair competition, 

antitrust, or monopoly practices. 

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Compliance 

CORE SO8 Monetary value of significant fines and total number of 

non-monetary sanctions for non-compliance with laws and 

regulations. 

After taking the corresponding legal 

advice, ONO does not expect that the 

result of these lawsuits will represent 

significant amounts that are in excess of 

the provisions made as of 31 December 

2012. 


Who is ONO? 


ONO’s 



PRODUCT RESPOSABILITY 

Disclosure on Management Approach PR 28-38; 71-77; 116-118 

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Customer Health and Safety 

CORE PR1 Life cycle stages in which health and safety impacts of 

products and services are assessed for improvement, and 

percentage of significant products and services categories 

subject to such procedures. 

71-77; 116-118 

The heatlh and safety standards for 

products and services are of general 

application and are obligatory for all of 

ONO's value chain. The methodology 

used covers all stages of the life cycle of 

the service delivered. 

P1 





Index of GRI 

indicators 

Contact 

Information 

ADD PR2 

Total number of incidents of non-compliance with 

regulations and voluntary codes concerning health and 

safety impacts of products and services during their life 

cycle, by type of outcomes. 


non-compliance with regulations and 

voluntary codes concerning health and 

safety impacts of products and services. 

P1 

Product and Service Labelling 

CORE PR3 

Type of product and service information required by 

procedures, and percentage of significant products and 

services subject to such information requirements. 

Cover on ONO's website: 

http://www.ono.es/productos/ 

P8 

ADD PR4 


regulations and voluntary codes concerning product and 

service information and labelling, by type of outcomes. 


non-compliance with regulations and 

voluntary codes concerning product and 

service information and labelling. 

P8 

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ADD PR5 

Practices related to customer satisfaction, including results 

of surveys measuring customer satisfaction. 71; 73-74 


Who is ONO? 

Marketing Communications 

CORE PR6 Programs for adherence to laws, standards, and voluntary 

codes related to marketing communications, including 

advertising, promotion, and sponsorship. 

ADD PR7 

ONO believes that there is a material 

risk that its products and services are 

the subject of public debate or are even 

banned in certain markets. 


regulations and voluntary codes concerning marketing 

communications, including advertising, promotion, and 

sponsorship by type of outcomes. 72-75 

Customer Privacy 

ADD PR8 Total number of substantiated complaints regarding 

breaches of customer privacy and losses of customer data. 72 

Compliance 

CORE PR9 Monetary value of significant fines for non-compliance with 

laws and regulations concerning the provision and use of 

products and services. 

ONO has not registered significant 

fines for non-compliance with laws and 

regulations concerning the provision and 

use of products and services. 

Note: we do not report against the indicator as our materiality process has determined that it is not relevant or significant for our business. 


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Index of GRI indicators | Statement GRI application level check 


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Contact 

Information 


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Contact Information 

Contact Information 

Headquarters 

Since 19 March 2013: 

C/Emisora, 20 

Pozuelo de Alarcón | 28224 | Madrid ...................................................................91 202 71 02 

Spain 

Contact telephone numbers 

Customer service ....................................................................................................... 902 929 000 

Information...............................................................................................................................11828 

Number for residential service acquisition.......................................................................... 1400 

Number for business service acquisition.............................................................................. 1403 

Contact websites 


Who is ONO? 


ONO’s 



Corporate 


The Figures 

Annexes 

Contact 

Information 

Corporate website.........................................................................................................www.ono.es 

Investor Relations................................................................................. investor.relations@ono.es 

Communications................................................................................. comunicacion.ono@ono.es 

ONO’s social networks 

................................................................................ http://www.linkedin.com/company/ono 

............................................................................................. https://es-es.facebook.com/ono 

.................................................................................................... https://twitter.com/ono_ono 

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The Figures 

282

Annual Report 2012 - Ono

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