3Q11 - Zon

Cost savings materializing, with reducedlevels of churn and commercial activityOperating Costs 3Q11 / 3Q10[Millions of Euros]Operating Costs 9M11 / 9M10[Millions of Euros](5.6)%(4.9)%142.1134.1422.2401.63Q103Q119M109M11Operating Costs(millions of euros)9M11 Δ % DriversW&S (44.4) 3.9%Direct Costs (183.1) (2.5%)Commercial Costs (40.5) (22.7%)Other Operating Costs (133.6) (4.0%)Increase mainly related to rise in the average number of employees in the Triple Play business, mainly connected to the strengtheningof the operational team dedicated to developing the corporate market segmentReduction resulting from a decrease in programming costs on the back of lower premium channel subscriptions as well as a reduction inthe total costs in certain channels contracted, which more than offset an increase in traffic and capacity costs due to higher brodbandand voice usageSignificant decline in Commercial Costs linked to a less aggressive competitive and promotional environment, driving lower churn andlower sales related costs and to the lower level of commercial activity; and also to a more efficient use of available sales channelsOther operating costs posted a 4% decline due to significant savings in customer service, maintenance and repair related costs as aresult of the implementation of a number of efficiency improvement measures such as the “Unified Front-End” at the contact center level16