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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 6-K
 
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
 
For the month of May, 2003

Commission File Number 1-13758
 
 

PORTUGAL TELECOM, SGPS, S.A.
(Exact name of registrant as specified in its charter)
 

Av. Fontes Pereira de Melo, 40
1069 - 300 Lisboa, Portugal
(Address of principal executive office)
 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. 

Form 20-F ___X___ Form 40-F _______

 Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.  

Yes _______ No ___X____

 

RELEASE


PORTUGAL TELECOM REPORTS RESULTS
FOR THE FIRST QUARTER OF 2003

Lisbon, Portugal, April 29, 2003 – Portugal Telecom (“PT”) (BVLP: PTCO.IN; NYSE: PT) today announced its unaudited results for the first quarter ending March 31, 2003.

Consolidated operating revenues in the quarter amounted to Euro 1,313 million. EBITDA reached Euro 520 million, equivalent to a margin of 39.6%. EBITDA minus Capex reached Euro 398 million. Net income for the period amounted to Euro 85 million. Operating cash flow amounted to Euro 298 million, equivalent to 22.7% of revenues. Net Debt was reduced by Euro 203 million to Euro 3,834 million from December 31, 2002.

PT’s financial results have been prepared in accordance with Portuguese GAAP and include the results of Vivo (the joint-venture between Portugal Telecom and Telefónica for mobile telephony in Brazil), in which PT has a 50% economic interest, on a proportionally consolidated basis in the first quarter of 2003 and the results of Telesp Celular Participações (“TCP”) on a fully consolidated basis in the first quarter of 2002. Pro-forma information for the first quarter of 2002 including the proportional consolidation of 50% of Vivo’s results and excluding the full consolidation of TCP’s results has also been presented for comparative purposes.

CONSOLIDATED HIGHLIGHTS
(Amounts stated in millions of Euro)

  1Q03(1) 1Q02(2) 1Q02(1)
Pro-Forma 		D y.o.y D y.o.y
Pro-Forma 		4Q02(2) D 1Q/4Q
Operating Revenues 1,312.5 1,428.8 1,457.9 (8.1%) (10.0%) 1,367.6 (4.0%)
Operating Costs 1,021.0 1,120.3 1,155.2 (8.9%) (11.6%) 1,065.9 (4.2%)
EBITDA (3) 519.8 558.4 564.2 (6.9%) (7.9%) 535.5 (2.9%)
Operating Income 291.5 308.4 302.7 (5.5%) (3.7%) 301.7 (3.4%)
Net Income 84.8 90.2 117.1 (5.9%) (27.5%) 69.6 21.9%
Net Income excl. Curtailment 147.0 94.0 120.9 57.3% 21.6% 85.0 72.8%
Investments, of which (4): 141.2 283.3 299.6 (50.2%) (52.9%) 444.2 (68.2%)
    Capex (4) 121.9 158.4 174.7 (23.1%) (30.2%) 258.4 (52.8%)
    Financial 19.3 124.9 124.9 (84.5%) (84.5%) 185.8 (89.6%)
Capex (4) as % of Revenues 9.3% 11.1% 12.0% (1.8p.p.) (2.7 p.p.) 18.9% (9.6 p.p.)
EBITDA minus Capex (4) 397.9 400.0 389.4 (0.5%) 2.2% 277.1 43.6%
Operating Cash Flow (5) 297.5 339.0 n.a.  (12.2%) n.a.  6.8 n.m. 
Net Debt 3,834.1 5,162.8 n.a.  (25.7%) n.a.  4,037.0 (5.0%)
Key Financial Ratios (%)
EBITDA Margin (6) 39.6% 39.1% 38.7% 0.5 p.p. 0.9 p.p. 39.2% 0.4 p.p.
EBITDA/Net Interest 15.8 14.5 14.6 n.m.  n.m.  10.0 n.m. 
Total No. of Customers, 25,463  16,845  22,686  51.2% 12.2% 18,787  35.5%
of which ('000):
Wireline 4,298  4,452  4,452  (3.5%) (3.5%) 4,342  (1.0%)
    Broadband (Cable+Retail ADSL) 224  79  79  183.9% 183.9% 183  22.3%
Wireless 18,579  10,420  16,261  78.3% 14.3% 11,986  55.0%
(1)   Considering the proportional consolidation of 50% of Vivo.
(2)   Considering the full consolidation of TCP.
(3)   EBITDA = Operating Income + Depreciation and Amortization.
(4)   Taking into account the acquisition of the ownership of the fixed network which amounted to Euro 348 million, the total investment and Capex of PT in the fourth quarter of 2002 would have totalled Euro 793 million and Euro 606 million, respectively.
(5)   Operating Cash Flow = EBITDA +/- Non-Current Change in Provisions - Capex (including the acquisition of the ownership of the fixed network in the fourth quarter of 2002) +/- Change in Working Capital.
(6)   EBITDA Margin = EBITDA / Consolidated Operating Revenues.

1. HIGHLIGHTS

2. OVERVIEW

PT’s financial results by business segment have been prepared considering certain changes in its reportable segments, as further described in Section 4 below. The main changes comprise the definition of a Wireline reportable segment (which includes PTC, PT Prime and PTM.com), the replacement in the Brazilian Mobile reportable segment of 100% of TCP’s results by the proportional consolidation of 50% of Vivo’s results and the exclusion of PTM.com from the PT Multimedia (“PTM”) reportable segment.

The information presented throughout this release for the first quarter of 2002 has been adjusted to reflect the transfer of PTM.com to the Wireline reportable segment and to exclude its results from the PTM reportable segment. Additionally, pro-forma information is also presented for the first quarter of 2002 considering the proportional consolidation of 50% of Vivo’s results and excluding the full consolidation of TCP’s results.

Additionally, all comparative information regarding Vivo’s results during any quarter in year 2002 is based on pro-forma information on this company, which was formed at the end of 2002.

In the first quarter of 2003 the contribution by business segment for PT Group’s operating revenues, EBITDA, Capex and EBITDA minus Capex was as follows:

CONTRIBUTION BY BUSINESS SEGMENT: OPERATING REVENUES AND EBITDA

1Q03 Revenues(1) EBITDA
Euro mn % of Total D y.o.y Euro mn % of Total D y.o.y Mg.(2)
Wireline 541.3 41.2% (6.0%) 234.8 45.2% (7.6%) 40.3%
    Fixed Line/PTC 467.0 35.6% (7.2%) 225.8 43.4% (8.8%) 41.2%
    Data & Corporate/PT Prime 55.6 4.2% (6.7%) 9.4 1.8% 2.0% 13.0%
    ISP & Portals/PTM.com 18.8 1.4% 47.4% (0.4) (0.1%) n.m.  (1.8%)
Domestic Mobile/TMN 307.4 23.4% 2.3% 154.1 29.6% 4.6% 43.7%
Brazilian Mobile/Vivo (3) 242.8 18.5% (32.6%) 100.2 19.3% (28.2%) 41.3%
PT Multimedia, of which: 163.4 12.5% 7.7% 27.3 5.2% 45.6% 16.7%
    Pay TV & Cable Internet 100.9 7.7% 30.6% 24.1 4.6% 85.0% 23.6%
Other 57.5 4.4% 41.0% 3.4 0.7% n.m.  n.m. 
Total 1,312.5 100.0% (8.1%) 519.8 100.0% (6.9%) 39.6%
(1) Revenues are consolidated and therefore adjusted for intra-group transactions.
(2) Margin calculated based on unconsolidated revenues.
(3) The D y.o.y was calculated using on the 2002 results considering the full consolidation of TCP.

CONTRIBUTION BY BUSINESS SEGMENT: CAPEX AND EBITDA minus CAPEX

1Q03 Capex EBITDA minus Capex
Euro mn % of Rev. D y.o.y Euro mn % of Total D y.o.y
Wireline 27.4 5.1% (43.9%) 207.4 52.1% 1.0%
    Fixed Line/PTC 25.0 5.3% (37.1%) 200.8 50.5% (3.4%)
    Data & Corporate/PT Prime 1.2 2.2% (80.2%) 8.2 2.1% 172.9%
    ISP & Portals/PTM.com 1.2 6.5% (57.6%) (1.6) (0.4%) n.m. 
Domestic Mobile/TMN 46.7 15.2% (31.8%) 107.4 27.0% 36.1%
Brazilian Mobile/Vivo(1) 22.5 9.3% 35.0% 77.7 19.5% (36.7%)
PT Multimedia, of which: 15.9 9.7% 4.4% 11.4 2.9% n.m. 
    Pay TV & Cable Internet 12.8 12.7% (11.0%) 11.3 2.8% n.a. 
Other 9.4 n.m.  1.4% (6.0) (1.5%) (43.3%)
Total 121.9 9.3% (23.1%) 397.9 100.0% (0.5%)
(1) The D y.o.y was calculated using on the 2002 results considering the full consolidation of TCP.

The analysis by business segment is as set out below and has been based on non-consolidated revenues:

_______________________________
1CCPU (Cash cost per user) = Operating costs minus provisions, depreciation and amortization and sales of equipment per user.

In terms of contribution to PT Group results in Euros, Vivo’s operating revenues amounted to Euro 243 million, a decrease of 37.3% compared to the first quarter of 2002 (considering the proportional consolidation of Vivo and excluding the full consolidation of TCP). EBITDA decreased 30.1% to Euro 100 million. EBITDA minus Capex decreased 29.6% to Euro 78 million. Vivo accounted for 19.3% of PT’s EBITDA, 19.5% of EBITDA minus Capex and 13% of PT’s gross debt. PT’s exposure to Brazil (in terms of net assets denominated in Reais) now stands at Euro 2.0 billion, approximately 15% of PT’s total assets in the balance sheet as of March 31, 2003. Over 95% of this is accounted for by the 50% investment in Vivo.

3. FIRST QUARTER KEY EVENTS AND RECENT DEVELOPMENTS

4. ACCOUNTING AND REPORTING CONSIDERATIONS

During the first quarter of 2003, PT adopted a new criteria to recognize revenues relating to the provision of pre-paid services in its mobile businesses, thus aligning its policies with international best practice. This accounting change was effective as of January 1, 2003 and consists of the recognition of revenues related to pre-paid services on a accrued basis, based on the minutes of traffic consumed during the period, instead of on a cash-received basis. The main impact of this change relates to the initial adjustment corresponding to the amount of minutes already paid but not consumed on the day of adoption of the new criteria. The amount in Euros of this adjustment was approximately Euro 59 million as of January 1, 2003. PT had already recorded a provision on its balance sheet as of December 31, 2002 (Euro 59 million) to reflect the impact of this accounting change, and as such reported revenues in year 2003 shall not be affected.

In this release, PT’s financial results by business segment have been prepared considering certain changes to its reportable segments, as compared to previous years, in line with management’s current view of PT’s businesses. PT’s business segments are now as follows:

–      Wireline Businesses, which comprise:

–     Domestic Mobile – TMN
–      Brazilian Mobile – Vivo
–      Multimedia Businesses – PTM, which comprise:

–      Other Businesses

The main changes in PT’s reportable segments made in the first quarter of 2003 were the following:

5. CONSOLIDATED RESULTS

Operating Revenues

Consolidated operating revenues of PT amounted to Euro 1,313 million, a decrease of 8.1% over the first quarter of 2002. The breakdown of PT’s consolidated revenues by business segment is as set out below:

CONSOLIDATED OPERATING REVENUES
(amounts stated in millions of Euro)

  1Q03(1) 1Q02(2) 1Q02(1)
Pro-Forma 		D y.o.y D y.o.y
Pro-Forma 		4Q02(2) D 1Q/4Q
Wireline 541.3 575.5 575.5 (6.0%) (6.0%) 570.1 (5.1%)
    Fixed Line/PTC 467.0 503.3 503.3 (7.2%) (7.2%) 492.7 (5.2%)
      Fixed Telephone Service 332.0 361.3 361.3 (8.1%) (8.1%) 348.7 (4.8%)
      Wholesale 87.5 91.8 91.8 (4.6%) (4.6%) 93.7 (6.5%)
      Other 47.5 50.1 50.1 (5.2%) (5.2%) 50.3 (5.5%)
    Data & Corporate/PT Prime 55.6 59.6 59.6 (6.7%) (6.7%) 59.9 (7.2%)
    ISP & Portals/PTM.com 18.8 12.7 12.7 47.4% 47.4% 17.5 7.1%
Domestic Mobile/TMN 307.4 300.6 300.6 2.3% 2.3% 331.7 (7.3%)
Brazilian Mobile/Vivo(3) 242.8 360.0 387.4 (32.6%) (37.3%) 227.3 6.8%
PT Multimedia, of which: 163.4 151.8 151.8 7.7% 7.7% 179.3 (8.8%)
    Pay TV & Cable Internet 100.9 77.2 77.2 30.6% 30.6% 91.0 10.9%
Other 57.5 40.8 42.5 41.0% 35.3% 59.2 (2.8%)
Total Revenues 1,312.5 1,428.8 1,457.9 (8.1%) (10.0%) 1,367.6 (4.0%)
(1) Considering the proportional consolidation of 50% of Vivo.
(2) Considering the full consolidation of TCP.
(3) Considering a Real/Euro average exchange rate of 3.7438 in the 1Q03 and 2.0880 in the 1Q02.

Consolidated revenues from wireline businesses decreased 6.0% over the first quarter of 2002, amounting to Euro 541 million.

PTC’s consolidated revenues amounted to Euro 467 million, a drop of 7.2% over the first quarter of 2002 mainly due to continued weakness in the Portuguese economy and fixed-to-mobile cannibalization. This quarter saw a reduction in the number of access lines in service, lower traffic volumes and increased churn. PTC’s fixed telephony (retail) revenues dropped 8.1% to Euro 332 million. PTC’s wholesale revenues decreased 4.6% to Euro 88 million notwithstanding growth in wholesale volumes and mainly due to lower interconnection rates and leased lines tariff decreases.

PT Prime’s consolidated revenues amounted to Euro 56 million, a decrease of 6.7% over the first quarter of 2002, due to lower contributions from data communication services resulting from increased competition and pricing pressures, despite volume growth during the period.

PTM.com’s consolidated revenues increased to Euro 19 million in the first quarter of 2003 from Euro 13 million in the first quarter of 2002, driven basically by a take-up of the ADSL service, which has over 60 thousand customers and a market share of 80%.

TMN’s consolidated revenues rose by 2.3% over the first quarter of 2002 on the back of customer growth. Service revenues were up 2.7% in the first quarter of 2003 whilst handset sales were down by 1.8%. Revenues from data services accounted for 8.5% of service revenues, representing a 1.9 p.p improvement over the 6.6% contribution in the first quarter last year.

Vivo’s consolidated revenues in Euros decreased 32.6% (37.3% on a pro-forma basis) as a result of the 44.2% devaluation of the Brazilian Real in the first quarter of 2003. Vivo’s revenues, reported in Brazilian Reais amounted to R$ 1,818 million, a pro-forma increase of 12.4% over the first quarter of 2002. On a pro-forma basis, Vivo’s service revenues were up by 10.2% in the first quarter of 2003 whilst handset sales increased 28.9%.

PTM’s consolidated revenues rose 7.7% to Euro 163 million, underpinned by strong showing of TV Cabo, that saw revenues increase 30.6% in the first quarter of 2003. This performance was achieved notwithstanding a 14.8% drop in Lusomundo Media advertising revenues and a 10.8% reduction in revenues at Lusomundo Audiovisuais.

EBITDA

EBITDA decreased 6.9% as a result of the 44.2% devaluation of the Brazilian Real in the first quarter of 2003 and lower contribution of wireline businesses to PT Group EBITDA. The EBITDA contribution by business segment is as set out below:

EBITDA CONTRIBUTION BY BUSINESS SEGMENT
(amounts stated in millions of Euro)

  1Q03(1) 1Q02(2) 1Q02(1)
Pro-Forma 		D y.o.y D y.o.y
Pro-Forma 		1Q03(1)
EBITDA Mg. 		4Q02(2) D 1Q/4Q
Wireline 234.8 254.2 254.2 (7.6%) (7.6%) 40.3% 231.0 1.7%
    Fixed Line/PTC 225.8 247.6 247.6 (8.8%) (8.8%) 41.2% 228.1 (1.0%)
    Data & Corporate/PT Prime 9.4 9.3 9.3 2.0% 2.0% 13.0% 9.0 4.4%
    ISP & Portals/PTM.com (0.4) (2.7) (2.7) n.m.  n.m.  (1.8%) (2.6) (83.6%)
Domestic Mobile/TMN 154.1 147.3 147.3 4.6% 4.6% 43.7% 168.9 (8.8%)
Brazilian Mobile/Vivo 100.2 139.5 143.4 (28.2%) (30.1%) 41.3% 100.9 (0.7%)
PT Multimedia, of which: 27.3 18.7 18.7 45.6% 45.6% 16.7% 23.1 18.2%
    Pay TV & Cable Internet 24.1 13.0 13.0 85.0% 85.0% 23.6% 22.6 6.9%
Other 3.4 (1.3) 0.5 n.m.  n.m.  n.m.  11.6 (70.7%)
Total EBITDA 519.8 558.4 564.2 (6.9%) (7.9%) n.a.  535.5 (2.9%)
EBITDA Margin 39.6% 39.1% 38.7% 0.5p.p. 0.9p.p. n.a.  39.2% 0.4p.p.
(1) Considering the proportional consolidation of 50% of Vivo.
(2) Considering the full consolidation of TCP.

Wireline EBITDA in this first quarter amounted to 235 million, a 7.6% reduction over the first quarter of 2002 and equivalent to a margin of 40.3%.

PTC’s EBITDA in the first quarter of 2003 amounted to Euro 226 million, an 8.8% decrease over the same period last year. Notwithstanding the drop in volumes, PTC posted a 41.2% EBITDA margin in the first quarter of 2003 mainly due to PT’s focus on implementing cost cutting initiatives. Operating costs fell 3.4% despite a 19.7% rise in post retirement benefits. Excluding the increase in post retirement benefits costs (Euro 9 million), PTC’s EBITDA would have decreased by 5.2%.

PT Prime’s EBITDA amounted to Euro 9 million, equivalent to a margin of 13.0%. PT Prime margin performance continues to be affected by aggressive price-based competition.

TMN’s EBITDA in the first quarter of 2003 grew 4.6% to Euro 154 million as a result of an increased customer base and a higher contribution to overall revenues from data services. EBITDA margin in the period was 43.7%, a 1.9 p.p. improvement over the first quarter of 2002 due to lower subscriber acquisition costs and cost cutting initiatives, which contributed towards an 11.9% drop of CCPU.

Vivo’s contribution in Euros to PT’s EBITDA in the first quarter of 2003 amounted to Euro 100 million, a pro-forma decrease of 30.1% over the same period last year, which reflects the 44.2% devaluation of the Brazilian Real in the period. Vivo’s EBITDA margin was 41.3% in the first quarter of 2003, a 4.3 p.p. pro-forma increase over the first quarter of 2002. This achievement was largely due to lower costs per user (CCPU was down 13.6%).

PTM’s EBITDA amounted to Euro 27 million, an increase of 45.6% over the first quarter of 2002. This is equivalent to a margin of 16.7%, a 4.3 p.p. improvement over the first quarter last year. The Pay-TV business (TV Cabo) posted an EBITDA of Euro 24 million, a rise of 85.0% over the first quarter of 2002. TV Cabo EBITDA margin reached 23.6%, a 7.5 p.p. improvement over the same period last year. The media business is undergoing significant restructuring and its performance has also been impacted by the contraction of the advertising market. Lusomundo’s EBITDA in the period amounted to Euro 4 million, primarily from the contribution from cinema distribution and exhibition and sale of software (DVDs and PSII games).

Operating Costs

Consolidated operating costs amounted to Euro 1,021 million, a decrease of 8.9% over the first quarter of 2002 and higher than the 8.1% drop in consolidated operating revenues in the period. PT’s operating costs breakdown is as set out below:

CONSOLIDATED OPERATING COSTS
(amounts stated in millions of Euro)

  1Q03(1) 1Q02(2) 1Q02(1)
Pro-Forma 		D y.o.y D y.o.y
Pro-Forma 		1Q03(1)
%/Rev. 		4Q02(2) D 1Q/4Q
Wages and Salaries 166.5 167.6 169.3 (0.7%) (1.6%) 12.7% 179.0 (7.0%)
Post Retirement Benefits 54.5 45.5 45.7 19.7% 19.2% 4.2% 44.7 22.0%
Telecommunication Costs 147.7 171.1 180.6 (13.7%) (18.2%) 11.3% 143.8 2.7%
Consumables Costs 13.9 25.1 25.2 (44.8%) (45.1%) 1.1% 27.9 (50.4%)
Costs of Products Sold 92.1 116.3 115.1 (20.7%) (19.9%) 7.0% 133.2 (30.9%)
Marketing and Publicity 27.3 24.2 28.8 12.4% (5.3%) 2.1% 29.8 (8.4%)
Provision for Receivables 24.5 42.1 41.9 (41.9%) (41.6%) 1.9% 21.5 13.7%
OG&A 223.0 236.6 244.2 (5.8%) (8.7%) 17.0% 236.8 (5.9%)
D&A 228.3 249.9 261.4 (8.7%) (12.7%) 17.4% 233.8 (2.4%)
Other Operating Costs 43.2 41.8 43.0 3.8% 0.4% 3.3% 15.3 182.6%
Total Operating Costs 1,021.0 1,120.3 1,155.2 (8.9%) (11.6%) 77.8% 1,065.9 (4.2%)
(1) Considering the proportional consolidation of 50% of Vivo.
(2) Considering the full consolidation of TCP.

Wages and salaries amounted to Euro 167 million, a decrease of 0.7% over the first quarter of 2002. This cost item has been impacted by the in-sourcing of staff from franchised shops of TCP and the consolidation of PrimeSys as from the second half of 2002. Overall, wages and salaries currently represent 12.7% of consolidated operating revenues, compared to 11.7% in the first quarter of 2002. In the case of wireline businesses, which accounted for 47.6% of the total wages and salaries of PT, these costs fell 4.3% this quarter.

Post retirement benefits increased by Euro 9 million or 19.7% to Euro 55 million. This is primarily due to unfunded liabilities as at December 31, 2002 which stood at Euro 1,990 million, and also to higher charges resulting from the amortization of actuarial losses deferred in previous years as a result of lower returns of the pension funds against the 6% return considered in the actuarial studies. Post retirement benefits represent 4.2% of consolidated operating revenues.

Telecommunications costs amounted to Euro 148 million compared to Euro 171 million in the first quarter of 2002, decreasing 13.7% mainly due to lower volumes at PTC and lower fixed-to-mobile and mobile-to-mobile interconnection fees. Telecommunications costs represent 11.3% of consolidated operating revenues.

Raw materials and consumables costs decreased 44.8% primarily as a result of a reduction in the acquisition of raw materials and consumables. This cost item represents 1.1% of consolidated operating revenues.

Costs of goods sold fell by 20.7% due to lower sales of terminal equipment, which dropped 17.8% during the first quarter of 2003. Lower costs of goods sold also reflects the reduced subsidization of handset sales in mobile operations. This cost item represents 7.0% of consolidated operating revenues.

Marketing and publicity costs amounted to Euro 27 million, compared to Euro 24 million in the first quarter of 2002, equivalent to a 12.4% increase. The growth of marketing and publicity costs reflects mainly the Euro 3.3 million increase of this cost item at TMN as a result of increased advertising of new services, namely MMS. This cost item represents 2.1% of consolidated operating revenues.

Provisions for doubtful receivables, inventories and other decreased 41.9% as a result of higher than expected level of collection of doubtful receivables, which had been provided for in previous years and the effect of the devaluation of the Brazilian Real in relation to the provisions booked by Vivo during the period. This cost item represents 1.9% of consolidated operating revenues.

Other general and administrative costs decreased Euro 14 million or 5.8% to Euro 223 million, reflecting cost reduction initiatives implemented across the PT Group. This cost item represents 17.0% of consolidated operating revenues.

Depreciation and amortization decreased Euro 22 million to Euro 228 million, a decrease of 8.7% over the same period last year. Depreciation charges exceeded Capex, which amounted to Euro 122 million in the first quarter of 2003. This cost item represents 17.4% of consolidated operating revenues.

EBIT in the period amounted to Euro 292 million, a decrease of 5.5% over the first quarter last year. The Group operating margin improved 0.6 p.p. over the first quarter of 2002 to 22.2%.

Net Income

Consolidated Net Income amounted to Euro 85 million in the first quarter of 2003, compared to Euro 90 million in the first quarter of 2002. Excluding staff reduction (curtailment) costs, net income for the first quarter would have risen to Euro 147 million, 57% higher than in the first quarter of 2002.

Net interest Expense in the first quarter of 2003 decreased from Euro 39 million in the first quarter of 2002 to Euro 33 million in the first quarter of 2003. PT’s average cost of debt in the first quarter of 2003 was 3.4%.

Goodwill amortization in the period amounted to Euro 24 million, a decrease of 57.5% due to lower amortization of Vivo’s goodwill in the amount of Euro 18.5 million, as a result of the devaluation of the Brazilian Real and the impairment charge recorded in year 2002.

Equity accounting of losses of affiliated companies decreased to Euro 10 million in the first quarter of 2003, from Euro 56 million in the first quarter of 2002. This caption includes PT’s share of the losses of Médi Telecom amounting to Euro 9 million. The improvement in this caption over the same period last year was mainly due to the fact that the investment in GT is no longer being recorded based on the equity method of accounting and is now being fully consolidated by Vivo.

Net other financial income in the first quarter of 2003 amounted to Euro 42 million, compared to negative Euro 34 million booked in the first quarter of 2002. This caption includes gains from unwinding of certain interest rate derivatives instruments and from changes in the fair value of certain foreign currency derivatives that had been previously used for hedging purposes.

Curtailment and severance costs associated with the work force reduction programs covering 425 employees amounted to Euro 93 million in the first quarter of 2003, compared to Euro 5 million in the same period last year.

The non-cash provision for income taxes amounted to Euro 79 million. The corporate tax rate in Portugal is 33%, but as a number of items including goodwill amortization and equity accounting of earnings of affiliated companies are not considered as tax deductible items for tax purposes in Portugal, the effective income tax rate appears significantly higher. Whilst PT continues to record a provision for income taxes on its profit and loss statement, this is a non-cash item which is offset against a reduction of the same amount in the deferred tax asset relating to tax losses carriedforward (Euro 931 million as of December 31, 2002). These tax losses resulted primarily from the corporate restructuring of financial investments completed in December 2002, mainly related to PT’s Brazilian investments.

6. CAPEX

Capital expenditure has been falling consistently for the PT Group in line with PT’s announced focus on cash flow maximization. The breakdown of Capex by business segment is as set out below:

CAPEX BY BUSINESS SEGMENT
(amounts stated in millions of Euro)

  1Q03(1) 1Q02(2) 1Q02(1)
Pro-Forma 		D y.o.y D y.o.y
Pro-Forma 		4Q02(2) D 1Q/4Q
Wireline 27.4 48.9 48.9 (43.9%) (43.9%) 72.8 (62.3%)
    Fixed Line/PTC (3) 25.0 39.7 39.7 (37.1%) (37.1%) 64.8 (61.5%)
     Data & Corporate/PT Prime 1.2 6.2 6.2 (80.2%) (80.2%) 7.0 (82.4%)
     ISP & Portals/PTM.com 1.2 2.9 2.9 (57.6%) (57.6%) 0.9 29.4%
Domestic Mobile/TMN 46.7 68.4 68.4 (31.8%) (31.8%) 101.2 (53.9%)
Brazilian Mobile/Vivo 22.5 16.7 33.0 35.0% (31.9%) 38.5 (41.6%)
PT Multimedia, of which: 15.9 15.2 15.2 4.4% 4.4% 26.5 (40.1%)
    Pay TV & Cable Internet 12.8 14.4 14.4 (11.0%) (11.0%) 19.7 (34.8%)
Other 9.4 9.3 9.3 1.4% 1.4% 19.3 (51.1%)
Total (4) 121.9 158.4 174.7 (23.1%) (30.2%) 258.4 (52.8%)
(1) Considering the proportional consolidation of 50% of Vivo.
(2) Considering the full consolidation of TCP.
(3) Taking into account the acquisition of the ownership of the fixed network for Euro 348 million, the total Capex of PTC in the fourth quarter of 2002 would have reached Euro 413 million.
(4) Taking into account the acquisition of the ownership of the fixed network for Euro 348 million, the total Capex of PT Group in the fourth quarter of 2002 would have reached Euro 606 million.

Wireline’s Capex in the first quarter of 2003 decreased 43.9% to Euro 27 million, equivalent to 4.7% of revenues. PTC’s Capex in this first quarter amounted to Euro 25 million, a 37.1% drop over the first quarter of 2002. As a result, PTC was managed with a Capex to revenues ratio of 4.6%. Approximately 66% of PTC’s Capex was directed towards the upgrade and expansion of the core, local and access networks with state of the art technologies.

During the first quarter of 2003 TMN and Vivo were managed with Capex to revenues ratios of 13.2% and 9.3%, respectively. TMN’s Capex includes Euro 33 million relating to the acquisition of certain intangible assets including additional spectrum from OniWay. Excluding this investment, TMN’s capex-to-sales ratio in the first quarter would have been 3.8%.

Overall, PT’s Capex in the first quarter of 2003 totalled Euro 122 million, equivalent to 9.3% of consolidated revenues.

7. EBITDA MINUS CAPEX AND OPERATING CASH FLOW

The breakdown of EBITDA minus Capex by business segment is as set out below:

EBITDA minus CAPEX BY BUSINESS SEGMENT
(amounts stated in millions of Euro)

  1Q03(1) 1Q02(2) 1Q02(1)
Pro-Forma 		D y.o.y D y.o.y
Pro-Forma 		4Q02(2) D 1Q/4Q
Wireline 207.4 205.3 205.3 1.0% 1.0% 158.2 31.1%
     Fixed Line/PTC (3) 200.8 207.9 207.9 (3.4%) (3.4%) 163.3 22.9%
     Data & Corporate/PT Prime 8.2 3.0 3.0 172.9% 172.9% 2.0 305.6%
     ISP & Portals/PTM.com (1.6) (5.6) (5.6) (70.4%) (70.4%) (3.5) (53.1%)
Domestic Mobile/TMN 107.4 78.9 78.9 36.1% 36.1% 67.8 58.5%
Brazilian Mobile/Vivo 77.7 122.7 110.4 (36.7%) (29.6%) 62.4 24.5%
PT Multimedia, of which: 11.4 3.5 3.5 n.m.  n.m.  (3.5) n.a. 
     Pay TV & Cable Internet 11.3 (1.4) (1.4) n.a.  n.a.  2.9 n.m. 
Other (6.0) (10.6) (8.7) (43.3%) (31.2%) (7.7) (22.2%)
Total (4) 397.9 400.0 389.4 (0.5%) 2.2% 277.1 43.6%
(1) Considering the proportional consolidation of 50% of Vivo.
(2) Considering the full consolidation of TCP.
(3) Taking into account the acquisition of the ownership of the fixed network for Euro 348 million, the EBITDA minus Capex of PTC in the fourth quarter of 2002 would have reached negative Euro 185 million.
(4) Taking into account the acquisition of the ownership of the fixed network for Euro 348 million the EBITDA minus Capex of PT Group in the fourth quarter of 2002 would have reached negative Euro 71 million.

PT’s Portuguese businesses in the first quarter of 2003 accounted for over 80% of PT’s EBITDA minus Capex. The wireline businesses accounted for 52.1% of PT’s EBITDA minus Capex. Vivo contributed with 19.5% of EBITDA minus Capex in the first quarter of 2003. The breakdown of Operating Cash Flow of PT is as set out below:

OPERATING CASH FLOW
(amounts stated in millions of Euro)

  1Q03(1) 1Q02(2) D y.o.y 4Q02 D 1Q/4Q
EBITDA 519.8 558.4 (6.9%) 535.5 (2.9%)
Capex (1) (121.9) (158.4) (23.1%) (258.4) (52.8%)
Payment of the balance due related to discounts given  
     to retired Portuguese citizens(2) -  -  -  60.4 n.m. 
Acquisition of the ownership of the fixed network(3) -  -  -  (365.0) n.m. 
Non Current Increase/Decrease in Provisions 5.5 10.2 (45.6%) (2.3) (342.5%)
Increase/Decrease in Working Capital (105.9) (71.2) 48.8% 36.6 (389.6%)
Operating Cash Flow 297.5 339.0 (12.2%) 6.8 n.m. 
(1) Excluding the acquisition of the ownership of the fixed network in the fourth quarter of 2002.
(2) In negotiations with the Portuguese State for the acquisition of the ownership of the fixed network, the Portuguese Government agreed to pay the balance due at December 31, 2001 related to discounts given to retired Portuguese citizens amounting to Euro 60.4 million.
(3) Includes the concession rental of 2002 amounting to Euro 17 million. Accordingly, the increase in Capex resulting from this acquisition is Euro 348 million.

In line with PT’s stated focus on cash flow, the Group generated Euro 298 million of operating cash flow in the first quarter of 2003. PT’s net debt fell by over Euro 200 million to Euro 3,834 million.

8. FINANCIAL POSITION AND CONSOLIDATED NET DEBT

Consolidated Balance Sheet

PT’s Balance Sheet is as set out below:

CONSOLIDATED BALANCE SHEET(1)
(amounts stated in millions of Euro)

March 31, 2003 December 31, 2002
Current Assets 4,332.8 4,850.9
     Cash and Short Term Investments 1,720.6 2,276.5
     Accounts Receivable, Net 1,515.3 1,470.3
     Inventories, Net 136.4 149.8
     Deferred Tax Assets (Short Term) 805.9 820.0
     Prepaid Expenses and Other Current Assets 154.6 134.4
Investments, net 424.4 376.4
Fixed Assets, net 4,412.7 4,575.8
Intangible Assets, net 2,992.0 2,968.7
Deferred Tax Assets (Medium and Long Term) 794.8 877.3
Others 88.4 77.0
Total Assets 13,045.1 13,726.1
Current Liabilities 2,209.1 2,958.0
     Short Term Debt 421.6 1,094.4
     Accounts Payable 921.1 1,113.1
     Accrued Expenses 482.8 460.2
     Taxes Payable 103.7 71.1
     Deferred Income 236.5 175.1
     Deferred Tax Liabilities (Short Term) 43.3 44.2
Medium and Long Term Debt 5,133.0 5,219.1
Accrued Post Retirement Liability 1,166.0 1,061.5
Deferred Tax Liabilities (Medium and Long Term) 355.5 359.0
Provisions for other risks and charges 255.3 353.3
Others 235.1 216.7
Total Liabilities 9,354.0 10,167.6
Minority Interests 470.9 447.2
Total Shareholders' Equity 3,220.2 3,111.3
Total Liab. and Shareholders' Equity 13,045.1 13,726.1
Intangible Assets as a % of Total Assets 22.9% 21.6%
Intangible Assets as a % of Shareholders' Equity 92.9% 95.4%
(1) Proportionally consolidating 50% of assets and liabilities of Vivo.

PT’s Equity to Total Assets ratio increased from 22.7% on December 31, 2002 to 24.7% on March 31, 2003. The Equity plus Long Term Debt to Total Assets Ratio increased from 60.7% to 64.0%.

PT’s net exposure (assets minus liabilities) to Brazil amounts to R$ 7,387 million (Euro 2,018 million at the Real/Euro exchange rate prevailing at the end of March 2003), over 95% of which is accounted for by the PT’s 50% investment in Vivo. The assets denominated in Brazilian Reais in PT’s balance sheet as of March 31, 2003 amounted to Euro 3,332 million, equivalent to approximately 26% of total assets.

The increase in the accrued post retirement liability during the first quarter of 2003 amounting to Euro 105 million relates to the following items: (1) recording of curtailment costs of Euro 93 million relating to work force reduction covering 425 employees; (2) recording of cost of post retirement benefits for the quarter amounting to Euro 55 million; and (3) recognition of balance due to the pension funds and to PT ACS (healthcare) totalling Euro 43 million leading to a reduction of the same amount in this accrual.

The investment in working capital during the first quarter of 2003 amounted to Euro 106 million, as compared to Euro 72 million in the first quarter of 2002 mainly due to an EU legal requirement for reduction of payment term to suppliers to a maximum period of 60 days. Nevertheless, the investment in working capital is significantly lower than the Euro 195 million booked in the first half of 2002 and Euro 129 million for year 2002.

PT’s gearing ratio (Net Debt/(Net Debt+Equity)) as of March 31, 2003 decreased to 54.4% compared to 56.5% at the end of year 2002. The net debt to EBITDA ratio as of March 31, 2003 was 1.8 times and the EBITDA cover was 15.8 times.

Shareholders’ Equity

As of March 31, 2003, shareholders’ equity amounted to Euro 3,220 million, an increase of Euro 109 million over December 31, 2002, resulting from the net income generated during the period of Euro 85 million and to the positive translation adjustments of Euro 24 million due to the improvement of the Brazilian Real exchange rate against the Euro (Euro/R$ 3.7124 at year end 2002 compared to Euro/R$ 3.7438 at the end of March 2003).

Consolidated Net Debt

The breakdown of PT’s consolidated net debt as of March 31, 2003 is as set out below:

CONSOLIDATED NET DEBT (1)
(amounts stated in millions of Euro)

  March 31,2003 December 31,2002 D
Short Term 421.6 1,094.4 (61.5%)
Bank Loans 367.1 257.3 42.7%
Bond Loans 0.0 285.1 (100.0%)
Other Loans 54.5 551.9 (90.1%)
Medium and long term 5,133.0 5,219.1 (1.6%)
Convertible Bond 1,059.0 1,059.0 0.0%
Other Bond Loans 2,724.7 2,724.7 0.0%
Bank Loans 1,235.8 1,289.8 (4.2%)
Other Loans 113.5 145.5 (22.0%)
Total Indebtedness 5,554.6 6,313.5 (12.0%)
Cash and Short Term-Investments 1,720.6 2,276.5 (24.4%)
Net Debt 3,834.1 4,037.0 (5.0%)
Shareholders Loans to TCP/Vivo 653.4 765.6 (14.7%)
(1) Proportionally consolidating 50% of assets and liabilities of Vivo.

PT’s consolidated net debt as of March 31, 2003 amounted to Euro 3,834 million, a decrease of Euro 203 million compared to year end 2002. This debt reduction was achieved on the back of a Euro 298 million Operating Cash Flow generation and gains obtained on certain derivative instruments amounting to Euro 48 million.

The net debt change in the first quarter of 2003 is as set out below:

NET DEBT CHANGE DURING THE FIRST QUARTER OF 2003
(Amounts stated in millions of Euro)

Net Debt end of 2002 4,037.0
Operating Cash Flow 297.5
Acquisitions of Financial Investments (27.4)
Interest paid (94.6)
Translation effects of US dollar and Real Denominated Debt 5.8
Gains on Derivatives Instruments 48.4
Other (26.9)
Net Debt end of March 2003 3,834.1
D Net Debt (5.0%)
Net Debt Reduction (202.9)

As of March 31, 2003, 92.4% of PT’s total indebtedness is medium and long term as a result of the refinancing undertaken throughout 2001. As of March 31, 2003, 99.5% of the net debt was at fixed rates and 82.8% of PT’s consolidated net debt was denominated in Euros, 3.5% in US Dollars and 12.7% in Brazilian Reais. All of the debt of PT’s Brazilian subsidiaries is either Real denominated or has been swapped into Reais. PT’s average cost of debt in the first quarter of 2003 was 3.4%. The maturity of PT’s loan portfolio is currently 4.73 years. At the date of this release, the only loans of PT with rating triggers (if PT is downgraded to below BBB+) are two EIB loans totalling Euro 150 million. In addition, PT has fully underwritten and available commercial paper lines in excess of Euro 800 million, of which less than Euro 10 million has been drawn down.

The net debt maturity profile of PT as of March 31, 2003, was as set out below:

NET DEBT MATURITY PROFILE
(Amounts stated in millions of Euro)

Maturity Net Debt Notes
2003 (983.9) Net Cash position in 2003
2004 642.4 Includes an Euro 450.5 million Exchangeable Bond (1)
2005 1,272.0 Includes an Euro 585 million Eurobond (1)
2006 1,489.1 Includes an Euro 490 million Exchangeable Bond and an
     Euro 899.5 million Eurobond (1)
2007 128.6  
2008 109.4  
2009 957.5 Includes an Euro 879.5 million Eurobond (1)
2010 82.8  
2011 64.7  
2012 43.9  
2013 27.6  
Total 3,834.1  
(1) These amounts are net of the nominal value of outstanding Eurobonds and Exchangeable Bonds hold by PT as marketable securities.

Based on current market and business conditions, PT has no refinancing requirements for the remaining three quarters of year 2003.

PT also continues to hold as marketable securities certain of its outstanding Eurobonds and Exchangeable bonds which were acquired in 2002 with an acquisition value of Euro 340 million. As of March 31, 2003 PT holds 25.29%, 10.05% and 12.05% of its 2005 Eurobond, 2006 and 2009 Eurobonds, respectively, and also Euro 118 million of its 2004 and 2006 Exchangeable bonds. The nominal value of these bonds is Euro 354 million.

The gearing ratio (Net Debt/(Net Debt+Equity)) decreased to 54.4% compared to 56.5% at the end of year 2002. The net debt to EBITDA ratio as of March 31, 2003 was 1.8 times and the EBITDA cover was 15.8 times.

9. EMPLOYEES

EMPLOYEES AND PRODUCTIVITY RATIOS

At the end of March 2003, PT’s had 23,073 employees. The breakdown of PT’s employees by business segment is as set out below:

  1Q03(1) 1Q02(2) Change D y.o.y
Wireline 10,717  11,313  (596) (5.3%)
    PT Comunicações 10,022  10,306  (284) (2.8%)
    PT Prime 491  725  (234) (32.3%)
    ISP and Portals/PTM.com 204  282  (78) (27.7%)
Domestic Mobile/TMN 1,123  1,201  (78) (6.5%)
Brazilian Mobile/Vivo 2,735  1,675  1,060  63.3%
PT Multimedia, of which: 2,711  3,450  (739) (21.4%)
    Pay TV & Cable Internet 674  841  (167) (19.9%)
Other (3) 5,787  3,093  2,694  87.1%
Total Group Employees 23,073  20,732  2,341  11.3%
    Domestic Market 16,145  17,607  (1,462) (8.3%)
    International Market 6,928  3,125  3,803  121.7%
Fixed Main Lines per Employee - Portugal 409  413  (4) (0.9%)
Cards per Employee
    TMN 3,984  3,316  668  20.1%
    Vivo 5,035  7,164  (2,129) (29.7%)
(1) Considering the proportional consolidation of 50% of Vivo.
(2) Considering the full consolidation of TCP.
(3) The increase in this caption results basically from employees working in call center operations in Brazil which were outsourced externally in previous years.

The number of staff employed by PT in its Portuguese businesses decreased by 8.3% in the first quarter of 2003. The staff reductions in PT’s wireline businesses would have been greater except for the fact that certain staff previously redeployed to other PT subsidiaries such as PTM are being transferred back to PTC, upon the termination of their secondment contracts. The significant increase in staff in PT’s Brazilian businesses relates principally to the increase in call centre temporary staff members.

10. BUSINESSES PERFORMANCE

Wireline

Wireline 1Q03  1Q02  D y.o.y 4Q02  D 1Q/4Q
Operating Revenues 583.3 613.3 (4.9%) 610.8 (4.5%)
EBITDA 234.8 254.2 (7.6%) 231.0 1.7%
EBITDA Margin 40.3% 41.4% (1.2 p.p.) 37.8% 2.4 p.p.
Capex 27.4 48.9 (43.9%) 72.8 (62.3%)
EBITDA minus Capex 207.4 205.3 1.0% 158.2 31.1%
Capex as % of Revenues 4.7% 8.0% (3.3 p.p.) 11.9% (7.2 p.p.)
(amounts stated in millions of Euro)
More detailed financial information is set out in Table 4 of the Appendix.

Operating revenues from the Wireline businesses amounted to Euro 583 million in the first quarter of 2003, a decrease of 4.9% compared to the same period last year, mainly as a result of continued weakness in the Portuguese economy and fixed to mobile cannibalization. EBITDA decreased 7.6% to Euro 235 million, equivalent to an EBITDA margin of 40.3% and corresponding to a 1.2 p.p. decrease over the first quarter of 2002. Capex dropped 43.9% to Euro 27 million in the first quarter of 2003, equivalent to 4.7% of sales. EBITDA minus Capex amounted to Euro 207 million, a 1.0% increase over the same period last year.

Fixed Line — PT Comunicações

PT Comunicações 1Q03  1Q02  D y.o.y 4Q02  D 1Q/4Q
Financials
Operating Revenues 547.7 580.4 (5.6%) 572.1 (4.3%)
EBITDA 225.8 247.6 (8.8%) 228.1 (1.0%)
EBITDA Margin 41.2% 42.7% (1.4 p.p.) 39.9% 1.3 p.p.
Capex 25.0 39.7 (37.1%) 64.8 (61.5%)
EBITDA minus Capex 200.8 207.9 (3.4%) 163.3 22.9%
Capex as % of Revenues 4.6% 6.8% (2.3 p.p.) 11.3% (6.8 p.p.)
Operating Data
Total Lines ('000) 4,099  4,255  (3.7%) 4,143  (1.1%)
F2F Domestic (mn min.) 1,528  1,650  (7.4%) 1,670  (8.5%)
Orig. Traffic/Access/Day (min.) 10.5 10.8 (2.5%) 11.0 (4.4%)
ISDN Penetration Rate (%) 20.0 19.1 0.9 p.p. 19.9 0.1p.p.
Voice Mail Boxes ('000) 1,132  1,341  (15.6%) 1,222  (7.4%)
ADSL Accesses (wholesale) 78  5  n.m.  53  47.8%
Leased Lines Capacity ('000) 1,355  1,493  (9.3%) 1,421  (4.6%)
Call Completion Rate (%) 99.9 99.8 0.1 p.p. 99.9 0.0 p.p.
(amounts stated in millions of Euro)
More detailed financial information is set out in Table 5 of the Appendix.

At the end of March 2003, after three years of full liberalization of the telecommunications market, PTC has successfully maintained a 92% market share of total minutes of outgoing traffic and a 95% market share of access lines. This performance has been achieved on the back of a successful customer retention and recovery strategy based on product differentiation, competitive offer in terms of pricing packages, innovation, customer care, CRM and quality of service.

The current regulatory framework permits competition through alternative provision of telephone service with the build-out of own infrastructure or through carrier pre-selection, which is available for all types of calls. PTC has a track record of full compliance with regulatory requirements. As in other EU countries unbundling of local loop has been implemented progressively, and PTC’s offer has incorporated regulatory requirements relating to tariffs, full and shared access and local sub-loop unbundling.

The number of access lines in pre-selection as of March 31, 2003 was 285 thousand representing an 8.3% decrease over the same period last year. PTC has consistently gained back market share of indirect access traffic, mostly in domestic long distance and international calls, and currently is estimated to have market shares of 84% and 85%, respectively. Market shares of local and regional traffic were approximately 89% and 85%, respectively.

PTC updated its tariffs as from February 21, 2003, with a line rental increase of 3.8% and decreases of 10.7% and 15.2% in regional and in domestic long distance calls, respectively. This corresponds to an annualized price basket decrease of 0.25%, thus fully complying with the 2003 price cap of CPI-2.75%, assuming a 2.5% inflation rate as per the Portuguese State Budget. The price cap was settled within the current Universal Service Pricing Convention. These changes in tariffs represent a further rebalancing of fixed telephony’s prices and therefore enhance PTC’s competitive position in the domestic market.

PTC has restructured its interconnection network architecture to allow for more flexibility in interconnection and new tariffs were put in practice as from March, 1, 2003. Compared to the first quarter of 2002, interconnection fees decreased 24.6% for call termination, 28.9% for call origination and 19.6% for transit, to levels close to the European averages. Tariffs of wholesale leased lines were also updated representing an overall average decrease of the leased lines wholesale price basket of 14.6% compared to the first quarter of 2002.

PTC’s ADSL offer on a wholesale basis was re-launched in July 2002, under the brand “Network ADSL PT”. This ADSL package is a plug and play solution. The take up of the ADSL service has increased significantly with 78 thousand ADSL connections at the end of March 2003, compared with 53 thousand connections at the end of 2002. PT’s subsidiaries accounted for an 80% market share of the ADSL retail market at the end of March 2003.

In the first quarter, the number of access lines in service decreased 3.7% (156 thousand lines) to 4.1 million lines, as compared to the same period last year. ISDN penetration continued to increase to 20.0% of total equivalent main lines, whilst voice mail boxes penetration stands at 31.6%

TRAFFIC BREAKDOWN

(in millions of minutes, except *) 1Q03 1Q02 D y.o.y 4Q02 D 1Q/4Q
Total Traffic, of which: 4,770 5,045 (5.5%) 5,129 (7.0%)
  Retail 2,053 2,023 1.5% 2,215 (7.3%)
    F2F Domestic 1,528 1,650 (7.4%) 1,671 (8.5%)
      Local 935 1,045 (10.5%) 1,011 (7.5%)
      Regional 283 310 (8.5%) 305 (7.0%)
      DLD 234 248 (5.7%) 250 (6.2%)
      Other 75 48 56.1% 105 (28.7%)
    F2M 256 277 (7.6%) 276 (7.4%)
    Other 174 0 n.m. 169 3.1%
    International 95 96 (1.0%) 99 (4.4%)
  Wholesale, of which: 2,717 3,022 (10.1%) 2,914 (6.8%)
    Internet 1,470 1,720 (14.5%) 1,598 (8.0%)
Orig. Traffic on the Fixed Network 3,889 4,144 (6.1%) 4,196 (7.3%)
Orig. Traffic/Access/Day * (minutes) 10.5 10.8 (2.5%) 11.0 (4.4%)
F2F Domestic/Access/Day * (minutes) 4.1 4.3 (3.9%) 4.4 (5.7%)

Total fixed network traffic in minutes decreased 5.5% over the first quarter of 2002 mainly due to mobile substitution, a more challenging economic environment, higher take-up of broadband products and also due to an increased use of alternative infrastructures by the competition and mobile operators. In the first quarter 2003, retail traffic increased 1.5% year on year. Domestic fixed-to-fixed traffic decreased 7.4% in the first quarter of 2003 compared to a 17.6% drop in the first half of 2002 and a 7.4% reduction in the second half of 2002. Minutes of usage of originated traffic per line per day decreased 2.5% to 10.5 minutes compared to 10.8 minutes per line in the first quarter of 2002. Wholesale traffic posted a 10.1% drop in the first quarter of 2003 impacted by strong Internet access traffic drop of 14.5%, in great part due to the migration of heavy users to the broadband service, and a greater number of competitors using their own infrastructures.

ARPU in the first quarter was Euro 32.9 representing a 3.1% decrease over the Euro 34.0 posted in the first quarter 2002.

In February 2003 PTC launched several initiatives as part of an effort to “reinvent” the wireline business and aimed at improving customer retention and loyalty, increasing usage of the fixed network, enhancing market competitiveness and upgrading the value proposition of the service to customers. These initiatives being carriedout under a program of “Wireline Business Reinvention” include several new pricing packages, bundle offers including traffic and terminal equipment with new features, including SMS, an aggressive promotion of ADSL and new distribution schemes and concepts.

The “Wireline Business Reinvention” also covers new marketing methodologies, in terms of communication, branding, CRM, market segmentation and distribution, and a new wave of cost rationalization, namely through workforce reduction programs that have already covered 425 employees in the first quarter 2003.

Whilst developing its infrastructure with state of the art technologies, promoting an intensive use of SDH and DWDM in the core and access networks and FITL and ASDH based solutions in the local loop in order to provide adequate capacity and coverage for ADSL, PTC was able to reduce by 37.1% its Capex in the first quarter of 2003 to Euro 25 million, equivalent to 4.6% of revenues. Quality of service has been maintained with a call completion rate of 99.9% and less than 3 faults per 100 access lines.

As a result of declining volumes, PTC’s operating revenues decreased 5.6% to Euro 548 million. Fixed telephone service accounted for 61.2% of total operating revenues whilst wholesale accounted for 30.4% of total operating revenues. The breakdown of fixed telephone service revenues between subscription charges and traffic was 46.4% and 53.6%, respectively.

EBITDA amounted to Euro 226 million, corresponding to a decrease of 8.8% over the first quarter of 2002 and a decrease of 1.0% over the fourth quarter of 2002. EBITDA margin in the first quarter of 2003 reached 41.2%. Excluding the increase in post retirement benefits costs (Euro 9 million), EBITDA would have decreased by 5.2% (Euro 13 million) over the first quarter of 2002 and increased 2.9% over the fourth quarter of 2002. PTC was able to maintain solid margins due to effective cost control. PTC’s operating costs dropped Euro 15 million equivalent to 3.4% in the first quarter of 2003, notwithstanding a 19.7% increase in post retirement benefits.

At the end of March 2003 the number of employees was 10 thousand, corresponding to 409 main lines per employee.

Data and Corporate — PT Prime

PT Prime 1Q03 1Q02 D y.o.y  4Q02 D 1Q/4Q 
Financials
Operating Revenues 72.8 74.6 (2.4%) 77.6 (6.2%)
EBITDA 9.4 9.3 2.0% 9.0 4.4%
EBITDA Margin 13.0% 12.4% 0.6 p.p. 11.6% 1.3 p.p.
Capex 1.2 6.2 (80.2%) 7.0 (82.4%)
EBITDA minus Capex 8.2 3.0 172.9% 2.0 305.6%
Capex as % of Revenues 1.7% 8.4% (6.7 p.p.) 9.0% (7.3 p.p.)
Operating Data
Data Comm. Accesses ('000) 35.3 35.3 0.0% 35.7 (1.1%)
Data Comm. Capacity ('000) 513.5 412.1 24.6% 508.7 0.9%
Corp. WEB Capacity Sold (Mbps) 1,181.2 413.1 185.9% 846.8 39.5%
(amounts stated in millions of Euro)
More detailed financial information is set out in Table 6 of the Appendix.

PT Prime offers integrated voice and data telecommunications solutions, information systems, Internet, e-commerce, B2B and outsourcing of communications networks and services to PT’s 6,500 top accounts, thus constituting PT Group’s commercial front end for corporate customers.

Despite a more aggressive commercial approach by the competitors, both in terms of a broader commercial offer and lower pricing, PT Prime has succeeded in minimizing the Group´s market share loss and has been key in enabling the PT Group to maintain its leadership position in the fixed telephone business in Portugal. PT Prime has consolidated its customer base with an offer of state-of-the-art telecommunications solutions. PT Prime has currently more than a 80% share of the corporate data and integrated solutions market in Portugal.

Data communications capacity increased 24.6%. Frame relay accesses climbed 11.9% and broadband ATM based connections climbed 44.3%. Leased lines capacity to end-users increased 9.7% and leased line digital capacity reached 92.1% of the total leased line capacity. Corporate Internet capacity sold increased 186% compared to the first quarter of 2002, due to the expansion of ADSL. PT Prime has the largest Corporate Internet Data Centre in Portugal.

Operating revenues decreased 2.4% to Euro 73 million, notwithstanding volume growth and mainly due to pricing pressures and challenging economic environment. Significant increases in revenues from broadband, outsourcing and Internet related services were not sufficient to fully offset the drop in data communications and systems integration revenues. PT Prime’s EBITDA amounted to Euro 9 million, equivalent to an EBITDA margin of 13.0%, an increase of 0.6 p.p. over the first quarter of 2002. PT Prime’s Capex amounted to Euro 1 million in the first quarter of 2003, and EBITDA minus Capex to Euro 8 million.

ISP and Portals – PTM.com

PTM.com 1Q03 1Q02 D y.o.y 4Q02 D 1Q/4Q
Financials
Operating Revenues 22.8 17.6 29.4% 23.6 (3.6%)
EBITDA (0.4) (2.7) (84.3%) (2.6) (83.6%)
EBITDA Margin (1.8%) (15.1%) 13.3 p.p. (10.8%) 9.0 p.p.
Capex 1.2 2.9 (57.6%) 0.9 29.4%
EBITDA minus Capex (1.6) (5.6) (70.4%) (3.5) (53.1%)
Capex as % of Revenues 5.4% 16.4% (11.0 p.p.) 4.0% 1.4 p.p.
Operating Data
Dial-up Subscribers ('000) 989 673 46.9% 940 5.3%
Dial-up Traffic (mn hours) 7.1 8.5 (17.2%) 8.1 (13.2%)
ADSL customers ('000) 61.4 3.6 n.m.  42.5 44.5%
(amounts stated in millions of Euro)
More detailed financial information is set out in Table 7 of the Appendix.

PTM.com had 989 thousand dial-up customers at the end of first quarter of 2003, a rise of 46.9% over the same period last year. The dial-up customer base generated 7.1 million hours of Internet traffic during the first quarter of this year. PTM.com’s Sapo portal posted 256 million page views (an increase of 64.5% over March 2002) and 2.6 million unique visitors per month in March 2003.

“Sapo ADSL.PT”, a plug and play ADSL service, is available since the third quarter of 2002 and has been targeted mainly to residential customers. A tailor-made solution for SoHo and SMEs has also been available under the brand “Telepac ADSL.PT”. PTM.com added 18,900 ADSL customers in the first quarter of 2003 increasing its customer base to 61,400. PTM.com’s estimated market share in ADSL is approximately 80%.

PTM.com’s revenues amounted to Euro 23 million, an increase of 29.4% over the same period last year. Around 48% of PTM.com’s service revenues are subscription based. PTM.com’s EBITDA in the first quarter of 2003 amounted to a negative Euro 0.4 million. PTM.com has reduced staff numbers by 27.3% year-on-year and shut down a number of less profitable business initiatives in line with its objective to reach an EBITDA break even soon. Capex in the first three months amounted to Euro 1 million.

PT’s Mobile Businesses

PT’s key mobile assets include TMN in Portugal and 50% of Vivo in Brazil, the joint venture between Portugal Telecom and Telefónica for mobile services in Brazil. As of March 31, 2003, these mobile businesses covered approximately 110 million inhabitants and had 18.6 million customers, equivalent to 73.0% of PT’s total subscriber base. These mobile businesses accounted for 41.9% of revenues, 48.9% of EBITDA and 46.5% of EBITDA minus Capex of the PT Group.

Domestic Mobile — TMN

TMN 1Q03 1Q02 D y.o.y 4Q02 D 1Q/4Q
Financials
Operating Revenues 352.7 352.4 0.1% 380.8 (7.4%)
  Service Revenues 321.1 320.3 0.3% 338.1 (5.0%)
  Handset Sales 31.6 32.2 (1.7%) 42.7 (26.0%)
EBITDA 154.1 147.3 4.6% 168.9 (8.8%)
EBITDA Margin 43.7% 41.8% 1.9 p.p. 44.4% (0.7 p.p.)
Capex 46.7 68.4 (31.8%) 101.2 (53.9%)
EBITDA minus Capex 107.4 78.9 36.1% 67.8 58.5%
Capex as % of Revenues 13.2% 19.4% (6.2 p.p.) 26.6% (13.3 p.p.)
Operating Data
Active Customers ('000) 4,474 3,982 12.3% 4,426 1.1%
Net Additions ('000) 47 77 (38.3%) 221 (78.5%)
ARPU (Euro) 24.1 27.1 (11.2%) 26.3 (8.5%)
SAC (Euro) 65.5 73.9 (11.4%) 53.0 23.7%
ARPU minus CCPU (Euro) 12.0 13.4 (10.5%) 14.0 (14.4%)
(amounts stated in millions of Euro)
More detailed financial and operational information is set out in Table 8 of the Appendix.

TMN had 4,474 thousand active customers as of March 31, 2003, a 12.3% increase over the the end of the first quarter last year, having added 47 thousand customers in the first quarter of 2003. Approximately 30.7% of TMN’s net additions were postpaid customers, a 4.8 p.p. improvement over the first quarter of 2002. The increased focus on customer loyalty and customer retention led to a 59.9% increase in the number of customer upgrades, which totalled 76 thousand in the first quarter 2003.

Whilst total churn remained stable at 24.7% (8.7% excluding internal churn), the average minutes of usage (“MOU”) in the first quarter of 2003 posted a 7.3% decrease to 118 minutes, compared to 128 minutes in the same period of 2002, mainly driven by a drop in MOU of prepaid customers. The number of SMS messages in the first quarter of 2003 increased 20.4% to 326 million, corresponding to approximately 50 messages per month per active SMS user. The number of active SMS users reached 47.7% of the total customer base, a 2.8 p.p. improvement over the first quarter of 2002. MMS activated handsets at the end of the first quarter of 2003 were 23 thousand, in line with a selective subsidization policy. Video services based on MMS were recently launched. TMN also continued to upgrade its product appeal and differentiation with the launch of new services, like “Kolmi”, a pre-defined message to ask for a reply call. The number of GPRS handsets reached 184 thousand and 21.7% are active users.

ARPU in the first quarter of 2003 decreased to Euro 24.1 from Euro 27.1 last year mainly due to lower interconnection fees. The interconnect bill posted a 24.5% drop as a result of reductions of interconnection fees of 24.3% in mobile to mobile calls and 21.1% in fixed to mobile calls. The average customer bill decreased 4.6% to Euro 17.3 due to the decrease in the average minutes of usage.

Operating revenues of TMN remained flat at Euro 353 million. Service revenues increased 0.3% whilst revenues from handset sales decreased 1.7%. Revenues from data services, namely SMS and WAP services, accounted for 8.5% of service revenues in the first quarter of 2003, a 1.9 p.p. improvement over the first quarter of 2002.

TMN will increase its tariffs across the board by approximately 3% as from May 1, 2003. SMS services tariffs will also be increased by between 2.4% and 3%, but the tariffs of remaining data services including WAP, GPRS and MMS will remain unchanged.

SACs in the first quarter of 2003 stood at Euro 65.5, down from Euro 73.9 in the same period of last year as a result of reduced subsidization. CCPU dropped 11.9% to Euro 12.1 compared to the same period of 2002 reflecting cost control initiatives. ARPU minus CCPU in the first tree months of 2003 was Euro 12.0, a 10.5% decrease over the same period last year.

EBITDA amounted to Euro 154 million, a 4.6% increase over the first quarter of 2002, equivalent to an EBITDA margin of 43.7% and representing a 1.9 p.p. improvement.

Capex in the period totalled Euro 47 million, including Euro 33 million relating to the acquisition of certain intangible assets including additional spectrum from OniWay. Excluding this investment, TMN’s capex-to-sales ratio in the first quarter of 2003 would have reached 3.8% of revenues, a 15.6 p.p. decrease over the first quarter of 2002. Capex was mainly directed towards expansion of network capacity and coverage, improvement of quality of service and customer care.

TMN had 1,123 employees at the end March 2003 and 3,984 customers per employee, representing a 20.1% improvement over the same period of 2002.

Brazilian Mobile — Vivo

Vivo (100%) 1Q03 1Q02 * D y.o.y 4Q02 * D 1Q/4Q 
Financials
Operating Revenues 1,817.9 1,617.9 12.4% 1,951.6 (6.9%)
EBITDA 750.2 598.7 25.3% 668.5 12.2%
EBITDA Margin 41.3% 37.0% 4.3 p.p. 34.3% 7.0 p.p.
Capex 164.6 133.8 23.0% 427.2 (61.5%)
EBITDA minus Capex 585.6 464.9 26.0% 241.3 142.7%
Capex as % of Revenues 9.1% 8.3% 0.8 p.p. 21.9% (12.8 p.p.)
Operating Data
Customers ('000) 13,771 12,000 14.8% 13,742 0.2%
Net Additions ('000) 29 399 (92.8%) 752 (96.2%)
MOU (minutes) 98 107 (8.6%) 106 (7.7%)
ARPU (Reais) 37 41 (8.5%) 40 (7.8%)
ARPU minus CCPU (Reais) 18 19 (2.9%) 19 (5.1%)
(amounts stated in millions of Reais)
* Pro-forma.
The information provided is the proportional consolidation of 100% of Vivo in accordance with Portuguese GAAP.

Vivo had around 13.8 million customers on March 31, 2002, an increase of 14.8% over the first quarter of 2002. Vivo’s net additions in the first quarter of 2003 were 29 thousand. Postpaid customers totalled 3,718 thousand, representing 27.0% of Vivo’s total customer base.

Vivo disconnected 235 thousands prepaid customers in the first quarter of 2003, following the standardization of management practices and adopting a more rigorous criteria to the prepaid service.

As a result of the challenging economic environment in Brazil and the increase of prepaid in the overall customer mix, ARPU in the first quarter of 2003 decreased 8.5% to R$ 37. The blended average minutes of usage were 98, compared to 107 minutes in the same period of 2002. The minutes of usage of post paid customers increased 4.0% to 190 minutes. CCPU dropped 13.3% to R$ 19 in the first quarter of 2003 from R$ 22 in the same period of last year. ARPU minus CCPU amounted to R$ 18 in the first quarter of this year, a decrease of 2.9% over the first quarter of 2002.

Operating revenues, reported in Brazilian Reais, rose 12.4% over the same period of 2002 to R$ 1,818 million. Service revenues increased 10.2% to R$ 1,574 million and handset sales rose 28.9% to R$ 244 million. This performance was mainly achieved on the back of solid subscriber growth and on-going efforts to retain the best ARPU customers.

EBITDA, reported in Brazilian Reais, was R$ 750 million, a 25.3% increase over the first quarter of 2002. The EBITDA margin increased to 41.3% in the first quarter of 2003 from 37.0% in the first quarter of 2002. Vivo’s Capex in the first quarter of 2003 amounted to R$ 165 million, equivalent to 9.1% of sales. EBITDA minus Capex amounted to R$ 586 million, a 26.0% increase.

In terms of contribution to PT Group results in Euros, Vivo’s operating revenues amounted to Euro 243 million, a decrease of 37.3% over the pro-forma results in the first quarter of 2002 (considering the proportional consolidation of Vivo instead of the full consolidation of TCP). On a pro-forma basis, EBITDA decreased 30.1% to Euro 100 million. EBITDA minus Capex decreased 29.6% to Euro 78 million.

PT Multimedia

PT Multimedia 1Q03 1Q02 D y.o.y 4Q02 D 1Q/4Q
Financials
Operating Revenues 163.5 151.8 7.7% 179.4 (8.9%)
EBITDA 27.3 18.7 45.6% 23.1 18.2%
EBITDA Margin 16.7% 12.3% 4.3 p.p. 12.9% 3.8 p.p.
Capex 15.9 15.2 4.4% 26.5 (40.1%)
EBITDA minus Capex 11.4 3.5 n.m. (3.5) n.a.
Capex as % of Revenues 9.7% 10.0% (0.3 p.p.) 14.8% (5.1 p.p.)
Operating Data
Pay-TV Subscribers ('000) 1,346 1,187 13.4% 1,307 3.0%
Cable Broadband Accesses ('000) 162 75 115.7% 140 15.6%
Lusomundo Tickets Sold in Portugal (mn) 2.2 2.3 (2.3%) 1.9 18.5%
(amounts stated in millions of Euro)
More detailed financial information is set out in Table 9 of the Appendix.

PTM’s operating revenues amounted to Euro 164 million in the first quarter of 2003, a 7.7% increase over the first quarter of 2002 (14.7% excluding Deltapress in the first quarter of 2002). Around 57% of PTM’s revenues are subscription based and 11% are advertising revenues. EBITDA rose 45.6% to Euro 27 million, equivalent to an EBITDA margin of 16.7% and corresponding to a 4.3 p.p. improvement over the same period last year. PTM’s Capex increased 4.4% in the first quarter of 2003 to Euro 16 million, equivalent to 9.7% of revenues. EBITDA minus Capex increased from Euro 4 million in the first quarter of 2002 to Euro 11 million in the first quarter of 2003. TV Cabo contributed Euro 24 million of EBITDA and Euro 11 million of EBITDA minus Capex.

Pay-TV and Cable Internet – TV Cabo

TV Cabo has already passed 2,400 thousand homes. Approximately 87% of the homes are equipped with interactive capabilities. TV Cabo added 39 thousand clients in the quarter, reaching 1,346 thousand pay-TV customers (1,038 thousand cable and 308 thousand DTH) at the end of March 2003, a 13.4% increase over the same period last year, and equivalent to a market share estimated at 84%. The number of subscribers of the premium services increased 26.2% to 967 thousand, equivalent to a pay to basic ratio of 71.9% which compares to 64.6% in the first quarter of 2002. Pay-TV ARPU reached Euro 19.8, a 4.9% increase over Euro 18.9 booked in the first quarter last year.

The take up of the broadband internet access service using cable modem (Netcabo) is progressing well and at the end of March 2003 TV Cabo already had 162 thousand customers, equivalent to an estimated market share of 69% of the cable broadband market in Portugal. Approximately 22 thousand Netcabo customers were added in the first quarter. The penetration of the Internet service among cable TV subscribers stands at 16%. The ARPU of broadband Internet subscribers is Euro 30.6.

Overall ARPU in the first quarter of 2003 was Euro 23.4, representing an increase of 14.3% over the first quarter last year. Operating revenues amounted to Euro 102 million and EBITDA amounted to Euro 24 million, an increase of 25.8% and 85.0%, respectively, over the first quarter of 2002. EBITDA margin in the first quarter of 2003 (including the consolidation of TV Cabo Audiovisuais and Premium TV) was 23.6%, representing a 7.5 p.p. improvement over the first quarter last year. This was achieved as a result of an effective cost control and renegotiation of programming costs.

Tariffs of the pay-TV basic packages will be increased by approximately 5% as from May 1, 2003. Tariffs of the premium services will also be updated during the course of 2003.

Capex in the first quarter of 2003 decreased 11.0% to Euro 13 million, equivalent to 12.5% of revenues. The fall in Capex was achieved by a significant cut in investments in the interactive TV project and increased preference of customers to buy terminal equipment as opposed to renting. EBITDA minus Capex in the first quarter of 2003 was positive and amounted to Euro 11 million compared to negative Euro 1 million in the first quarter of 2002.

Cinema Distribution and Exhibition – Lusomundo Audiovisuais

In the first quarter of 2003 Lusomundo sold 2.2 million cinema tickets in Portugal and launched 17 new titles. On April 9, 2003 Lusomundo signed an agreement with Warner Bros. Entertainment to acquire the remaining 50% of Warner Lusomundo chain of multiplex cinemas in Portugal. Cinema revenues in the first quarter 2003 amounted to Euro 12 million, a 4.2% increase over the same period last year.

Video activities posted a good performance, notwithstanding a more challenging economic environment and the effect of Easter seasonality, with a 13.6% growth in revenues. Video games revenues decreased 45.5% over the first quarter of 2002, reflecting Easter seasonality and large retail stocks.

Lusomundo Audivisuais operating revenues amounted to Euro 28 million in the first quarter of 2003, representing a 10.8% decrease over the same period last year. EBITDA reached Euro 5 million, a rise of 16.3% over the first quarter of 2002 and equivalent to an 18.3% margin. Capex in the period totalled Euro 2 million, equivalent to 7.4% of revenues.

Newspapers and Radio — Lusomundo Media

Jornal de Notícias is the leading daily Portuguese newspaper, with a circulation of 109 thousand. Diário de Notícias, another daily newspaper owned by Lusomundo, is aiming to improve its market position and recently relaunched its graphics and design as well as its editorial content. The tabloid newspaper 24 Horas increased average circulation by 58.8%. The Portuguese version of National Geographic magazine has been successful, with an average circulation of 79 thousand copies in the first quarter of 2003, consolidating its presence in the market.

Lusomundo Media posted operating revenues of Euro 35 million in the first quarter of 2003, a 14.1% increase over the first quarter of 2002. The first quarter of 2003 was particularly weak in terms of advertising revenues, which contracted 14.8% compared to the same period last year, but was largely offset by increased newspapers circulation and product sales promotions.

Lusomundo Media’s EBITDA fell from Euro 2 million in the first quarter of 2002 to negative Euro 74 thousand in the first quarter of 2003. Recovery in the EBITDA performance of the media division is dependant on the improvement of the outlook of the advertising market and successful implementation of the cost cutting programme, which is in progress. Capex in the period totalled Euro 1 million, equivalent to 2.7% of revenues.

Other Operations

At the end of March 2003, Médi Telecom in Morocco, 31.34% owned by PT, had 1,684 thousand customers, representing a 41% market share. The prepaid customers accounted for 92.7% of total customers of Médi Telecom. The ARPU of Médi Telecom in the first quarter of 2003 was Euro 12. Operating revenues amounted to Euro 61 million, an increase of 30.0% over the first quarter of 2002. EBITDA amounted to Euro 19 million, compared to Euro 3 million in the first quarter of 2002. Capex amounted to Euro 31 million, as compared to Euro 9 million in the first quarter last year. PT reports its investment in Médi Telecom using the equity method of accounting. Its contribution in the first quarter of 2003 was negative Euro 9 million and was included in the income statement under “Equity in Losses/Earnings of Affiliated Companies”.

Mascom in Botswana, in which PT holds 50% plus one share economic and voting interest, had 288 thousand customers at the end of March 2003, an increase of 17.2% over the first quarter of 2002. Mascom has a market share of approximately 71% and prepaid customers account for 96.8% of its total customer base. The ARPU of Mascom was Euro 15. Operating revenues amounted to Euro 13 million, an increase of 0.9% over the first quarter of 2002 and EBITDA amounted to Euro 6 million, a 34.3% increase over the first quarter of 2002, equivalent to a margin of 41.5%, a 10.3 p.p. improvement over the first quarter last year. Capex amounted to Euro 1 million. PT reports this investment on a fully consolidated basis under “Other”.

TABLES TO FOLLOW:

Table 1: Consolidated Profit and Loss Statements
Table 2: Consolidated Balance Sheet
Table 3: Consolidated Operating Revenues
Table 4: Wireline
Table 5: PT Comunicacoes
Table 6: PT Prime
Table 7: PTM.com
Table 8: TMN
Table 9: PT Multimedia


This information is also available on PT’s website www.telecom.pt.


Contact:

Zeinal Bava, PT Group Chief Financial Officer
zeinal.bava@telecom.pt

Vitor Sequeira, PT Group Director, Investor Relations
vitor.j.sequeira@telecom.pt

Portugal Telecom
Tel.: +351.215001701
Fax: +351.213556623



This release contains forward-looking statements. Such statements are not statements of historical fact, and reflect goals of the company’s management. The words “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects” and “targets” and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties. Accordingly, the results of operations of the company to be achieved may be different from the company’s current goals and the reader should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date they are made, and the company does not undertake any obligation to update them in light of new information or future developments.

Portugal Telecom is listed on the Euronext Lisbon and New York Stock Exchanges. Information may be accessed on the Reuters 2000 Service under the symbols PTCO.IN and PT and on Bloomberg under the symbol PTC PL.

TABLE 1: CONSOLIDATED PROFIT AND LOSS STATEMENTS

PORTUGAL TELECOM AND SUBSIDIARIES
(amounts in millions of Euro)

  1Q 2003 (1) 1Q 2002 (2) 1Q 2002 (1)
Pro Forma 		D D
Pro Forma
Consolidated Operating Revenues, of which: 1,312.5 1,428.8 1,457.9 (8.1%) (10.0%)
Wireline 541.3 575.5 575.5 (6.0%) (6.0%)
    PT Comunicações 467.0 503.3 503.3 (7.2%) (7.2%)
    PT Prime 55.6 59.6 59.6 (6.7%) (6.7%)
    ISP and Portals / PTM.com 18.8 12.7 12.7 47.4% 47.4%
Domestic Mobile / TMN 307.4 300.6 300.6 2.3% 2.3%
Brazilian Mobile / Vivo 242.8 360.0 387.4 (32.6%) (37.3%)
PT Multimedia, of which: 163.4 151.8 151.8 7.7% 7.7%
    Pay TV and Cable Internet / TV Cabo 100.9 77.2 77.2 30.6% 30.6%
Other 57.5 40.8 42.5 41.0% 35.3%
Consolidated Operating Costs and Expenses, of which: 1,021.0 1,120.3 1,155.2 (8.9%) (11.6%)
Wages and Salaries 166.5 167.6 169.3 (0.7%) (1.6%)
Post Retirement Benefits 54.5 45.5 45.7 19.7% 19.2%
Costs of Telecommunications 147.7 171.1 180.6 (13.7%) (18.2%)
Depreciation and Amortisation 228.3 249.9 261.4 (8.7%) (12.7%)
Subsidies (5.1) (7.5) (7.5) (33.0%) (33.0%)
Maintenance and Repairs 32.0 32.3 32.0 (1.1%) (0.2%)
Own Work Capitalized (11.9) (23.3) (23.3) (49.0%) (49.0%)
Raw Materials and Consumables 13.9 25.1 25.2 (44.8%) (45.1%)
Costs of Products Sold 92.1 116.3 115.1 (20.7%) (19.9%)
Telephone Directories 22.8 23.0 23.0 (0.6%) (0.6%)
Marketing and Publicity 27.3 24.2 28.8 12.4% (5.3%)
Concession Fee 0.3 4.6 4.6 (93.2%) (93.2%)
Other General and Administrative 223.0 236.6 244.2 (5.8%) (8.7%)
Provision for Doubtful Receivables and Other 24.5 42.1 41.9 (41.9%) (41.6%)
Other Net Operating Income (8.3) (12.6) (16.4) (34.4%) (49.5%)
Taxes Other than Income Taxes 13.4 25.3 30.6 (46.9%) (56.1%)
Consolidated Operating Income 291.5 308.4 302.7 (5.5%) (3.7%)
Other Expenses / (Income) Net, of which: 113.3 183.1 130.7 (38.2%) (13.3%)
Interest Expenses 129.9 110.6 112.5 17.5% 15.5%
Interest Income (97.0) (72.0) (74.0) 34.7% 31.2%
Net Foreign Currency Exchange Losses / (Gains) (6.7) 27.6 20.2 n.a.  n.a. 
Net Other Financial Expenses / (Income) (42.2) 33.9 31.6 n.a.  n.a. 
Goodwill Amortization 24.0 56.6 46.0 (57.5%) (47.8%)
Losses / (Gains) on Sales and Disposals of Fixed Assets, Net 0.8 0.8 1.1 0.5% (27.9%)
Equity in Losses / (Earnings) of Affiliated Companies 9.5 56.0 20.4 (83.0%) (53.3%)
Work Force Reduction Programme Costs 93.1 5.0 5.0 n.m.  n.m. 
Other Non-Operating Expenses/(Income) 1.8 (5.1) (2.0) n.a.  n.a. 
Extraordinary Items (Losses / (Gains)) 0.0 (30.2) (30.2) n.a.  n.a. 
Consolidated Income Before Income Taxes 178.2 125.3 172.1 42.2% 3.6%
Provision for Income Taxes (78.8) (73.1) (78.2) 7.8% 0.8%
Loss / (Income) Applicable to Minority Interests (14.6) 37.9 23.2 n.a.  n.a. 
Consolidated Net Income for the Period 84.8 90.2 117.1 (5.9%) (27.5%)
(1) Considering the proportional consolidation of 50% of Vivo.
(2) Considering the full consolidation of TCP.

TABLE 2: CONSOLIDATED BALANCE SHEET

PORTUGAL TELECOM AND SUBSIDIARIES
(amounts in millions of Euro)

(Euro million) March 31, 2003 December 31, 2002
Current Assets 4,332.8 4,850.9
    Cash and Short Term Investments 1,720.6 2,276.5
    Accounts Receivable, Net 1,515.3 1,470.3
    Inventories, Net 136.4 149.8
    Deferred Taxes 805.9 820.0
    Prepaid Expenses and Other Current Assets 154.6 134.4
Investments, net 424.4 376.4
Fixed Assets, net 4,412.7 4,575.8
Intangible Assets, net 2,992.0 2,968.7
Deferred Taxes 794.8 877.3
Other Non-Current Assets, net 88.4 77.0
Total Assets 13,045.1 13,726.1
Current Liabilities 2,209.1 2,958.0
    Short Term Debt 421.6 1,094.4
    Accounts Payable 921.1 1,113.1
    Accrued Expenses 482.8 460.2
    Taxes Payable 103.7 71.1
    Deferred Income 236.5 175.1
    Deferred Taxes 43.3 44.2
Medium and Long Term Debt 5,133.0 5,219.1
Accrued Post Retirement Liability 1,166.0 1,061.5
Deferred Taxes 355.5 359.0
Provisions for Other Risks and Charges 255.3 353.3
Other non-Current Liabilities 235.1 216.7
Total Liabilities 9,354.0 10,167.6
Minority Interests 470.9 447.2
Total Shareholders' Equity 3,220.2 3,111.3
    Share Capital 1,254.3 1,254.3
    Issue Premium 2,149.6 2,149.6
    Reserves 1,973.9 1,582.8
    Foreign Currency Adjustments (2,242.4) (2,266.4)
    Net Income 84.8 391.1
Total Liabilities,M.I. and Shareholders' Equity 13,045.1 13,726.1
Note: The information provided regarding March 2003 and December 2002, corresponds to 50% of proportional consolidation of Brasilcel.

TABLE 3: CONSOLIDATED OPERATING REVENUES
(amounts in millions of Euro)

  1Q 2003 (1) 1Q 2002 (2) 1Q 2002 (1)
Pro Forma 		D D
Pro Forma
Wireline 541.3 575.5 575.5 (6.0%) (6.0%)
PT Comunicações 467.0 503.3 503.3 (7.2%) (7.2%)
Fixed Telephone Service 332.0 361.3 361.3 (8.1%) (8.1%)
    Domestic 305.8 332.4 332.4 (8.0%) (8.0%)
        Fixed Charges 155.3 159.4 159.4 (2.6%) (2.6%)
        Traffic 150.5 173.0 173.0 (13.0%) (13.0%)
            Local 31.4 37.0 37.0 (15.1%) (15.1%)
            Regional 15.3 19.7 19.7 (22.5%) (22.5%)
            National 17.4 19.9 19.9 (12.5%) (12.5%)
            Fixed-Mobile 81.8 94.1 94.1 (13.0%) (13.0%)
            Other 4.6 2.3 2.3 100.0% 100.0%
        International 26.2 28.9 28.9 (9.5%) (9.5%)
    Wholesale 87.5 91.8 91.8 (4.6%) (4.6%)
            Traffic 52.9 52.6 52.6 0.6% 0.6%
            Leased Lines 25.2 30.7 30.7 (17.9%) (17.9%)
            Telecast 7.7 8.5 8.5 (10.1%) (10.1%)
            ADSL 1.8 -  -  n.a.  n.a. 
    Sales 6.0 6.3 6.3 (4.4%) (4.4%)
    Directories 34.5 34.7 34.7 (0.5%) (0.5%)
    Other 6.9 9.1 9.1 (24.6%) (24.6%)
PT Prime 55.6 59.6 59.6 (6.7%) (6.7%)
    Data Communications 21.6 25.2 25.2 (14.3%) (14.3%)
    Leased Lines 13.8 14.3 14.3 (3.4%) (3.4%)
    Network Manag. & Outsourcing 4.7 2.7 2.7 73.8% 73.8%
    Sales and Other 15.5 17.4 17.4 (10.9%) (10.9%)
ISP and Portals / PTM.com 18.8 12.7 12.7 47.4% 47.4%
Domestic Mobile / TMN 307.4 300.6 300.6 2.3% 2.3%
    Services Rendered 277.2 269.8 269.8 2.7% 2.7%
    Sales and Other 30.3 30.8 30.8 (1.8%) (1.8%)
Brazilian Mobile / Vivo 242.8 360.0 387.4 (32.6%) (37.3%)
    Services Rendered 210.3 313.6 342.2 (33.0%) (38.6%)
    Sales and Other 32.5 46.3 45.2 (29.8%) (28.1%)
Multimedia / PTM 163.4 151.8 151.8 7.7% 7.7%
    Pay TV and Cable Internet 100.9 77.2 77.2 30.6% 30.6%
    Lusomundo - Audiovisuals 10.4 12.1 12.1 (14.3%) (14.3%)
    Lusomundo - Media 15.4 17.7 17.7 (13.0%) (13.0%)
    Other Multimedia Operations 36.7 44.7 44.7 (17.9%) (17.9%)
Other 57.5 40.8 42.5 41.0% 35.3%
Total Operating Revenues 1,312.5 1,428.8 1,457.9 (8.1%) (10.0%)
(1) Considering the proportional consolidation of 50% of Vivo.
(2) Considering the full consolidation of TCP.

TABLE 4: WIRELINE (1)
(amounts in millions of Euro)

PROFIT AND LOSS STATEMENTS 1Q 2003 1Q 2002 D
Services Rendered 540.8 571.0 (5.3%)
Sales and Other 42.5 42.3 0.5%
Operating revenues 583.3 613.3 (4.9%)
Wages and Salaries 79.2 82.8 (4.3%)
Post Retirement Benefits 53.8 44.9 19.7%
Costs of Telecommunications 114.2 124.8 (8.5%)
Depreciation and Amortization 101.5 105.2 (3.5%)
Own Work Capitalized (6.9) (18.1) (62.2%)
Marketing and Publicity 6.5 7.1 (8.4%)
Concession Fee 0.0 4.3 (100.0%)
Other General & Administrative 48.4 52.1 (6.9%)
Other Net Operating Costs 53.2 61.3 (13.2%)
Operating Costs and Expenses 450.0 464.3 (3.1%)
Operating Income 133.3 149.0 (10.5%)
Interest and Related Expenses 13.9 10.0 39.7%
Interest and Related Income (6.6) (9.0) (27.0%)
Losses / (Gains) on Sales and Disposals of Fixed Assets, Net 0.7 (0.5) n.a. 
Equity in Earnings of Affiliated Companies 1.0 4.1 (75.2%)
Work Force Reduction Program Costs 93.1 5.0 n.m. 
Other Non Operating Expenses / (Income) 1.3 1.9 (27.5%)
Income Before Income Tax 29.8 137.6 (78.3%)
Provision For Income Tax (12.0) (49.3) (75.6%)
Net Income 17.7 88.3 (79.9%)
OTHER FINANCIAL INFORMATION 1Q 2003 1Q 2002 D
EBITDA (Operating Income + Depreciation and Amortization) 234.8 254.2 (7.6%)
EBITDA Margin (EBITDA / Operating Revenues) 40.3% 41.4% (1.2p.p.)
Capex 27.4 48.9 (43.9%)
Capex as % of Revenues 4.7% 8.0% (3.3p.p.)
(1) Includes intra-group transactions.

TABLE 5: PT COMUNICAÇÕES (1)
(amounts in millions of Euro)

PROFIT AND LOSS STATEMENTS   1Q 2003  1Q 2002  D
Services Rendered   507.1 539.4 (6.0%)
Sales and Other   40.6 41.0 (1.1%)
Operating revenues   547.7 580.4 (5.6%)
Wages and Salaries   68.4 69.9 (2.2%)
Post Retirement Benefits   53.8 44.9 19.7%
Costs of Telecommunications   114.8 120.3 (4.6%)
Depreciation and Amortization   92.3 96.1 (4.0%)
Own Work Capitalized   (6.9) (17.6) (61.1%)
Marketing and Publicity   4.1 4.7 (14.5%)
Concession Fee   0.0 4.2 (100.0%)
Other General & Administrative   47.8 54.3 (12.0%)
Other Net Operating Costs   40.0 52.1 (23.2%)
Operating Costs and Expenses   414.2 428.9 (3.4%)
Operating Income   133.5 151.5 (11.9%)
OTHER FINANCIAL INFORMATION   1Q 2003  1Q 2002  D
EBITDA (Operating Income + Depreciation and Amortization)   225.8 247.6 (8.8%)
EBITDA Margin (EBITDA / Operating Revenues)   41.2% 42.7% (1.4p.p.)
Capex   25.0 39.7 (37.1%)
Capex as % of Revenues   4.6% 6.8% (2.3p.p.)
OPERATING DATA Units 1Q 2003  1Q 2002  D
Fixed Telephone Service
    Main Lines in Service thousand 4,099  4,255  (3.7%)
        Main Lines per 100 Inhabitants No. 41.7 42.2 (3.5%)
    ISDN Equivalent Main Lines thousand 819  812  0.9%
        ISDN Penetration Rate % 20.0 19.1 0.9 p.p.
    Total Traffic min.*106 4,770  5,045  (5.5%)
        Retail   2,053  2,023  1.5%
    Total Originated Traffic on the Fixed Network   3,889  4,144  (6.1%)
    Originated Traffic per Access per Day minutes 10.5 10.8 (2.5%)
    Average Weighted Price Change (price basket): % (1.2) (0.5) (0.7p.p.)
        Installation   0.0 0.0 0.0 p.p.
        Subscription   1.7 1.9 (0.3p.p.)
        Local   0.2 0.0 0.2 p.p.
        Regional   (4.6) (7.1) 2.5 p.p.
        National   (6.6) (6.0) (0.6p.p.)
        International   0.0 (0.7) 0.7 p.p.
Wholesale
        ADSL Accesses thousand 77.9 5.0 n.m. 
        Traffic min.*106 2,717  3,022  (10.1%)
            Internet   1,470  1,720  (14.5%)
        Interconnection Traffic Price Change: % (26.4) (7.0) (19.4 
            Call Origination   (28.9) (10.6) (18.3 
            Call Termination   (24.6) (10.0) (14.6 
            Transit   (19.6) (12.8) (6.8p.p.)
        Leased Lines
            Price Basket Change   (14.6) 0.0 (14.6 
            Number of Leased Lines thousand 56.4 59.1 (4.5%)
            Capacity (equivalent to 64 kbps) thousand 1,355  1,493  (9.3%)
            Digital % 98.6 98.6 (0.0 p.p.)
(1) Includes intra-group transactions.

TABLE 6: PT PRIME (1)
(amounts in millions of Euro)

PROFIT AND LOSS STATEMENTS   1Q 2003  1Q 2002 D
Services Rendered   72.0 73.5 (2.0%)
Sales   0.8 1.2 (28.5%)
Operating revenues   72.8 74.6 (2.4%)
Wages and Salaries   8.3 9.6 (13.3%)
Costs of Telecommunications   36.8 41.7 (11.9%)
Depreciation and Amortization   6.9 7.0 (1.6%)
Own Work Capitalized   (0.0) (0.5) (98.4%)
Marketing and Publicity   0.7 0.6 17.9%
Other General & Administrative   10.6 8.0 32.8%
Other Net Operating Costs   7.0 6.0 16.8%
Operating Costs and Expenses   70.2 72.4 (2.9%)
Operating Income   2.6 2.2 13.6%
OTHER FINANCIAL INFORMATION   1Q 2003  1Q 2002 D
EBITDA (Operating Income + Depreciation and Amortization)   9.4 9.3 2.0%
EBITDA Margin (EBITDA / Operating Revenues)   13.0% 12.4% 0.6 p.p.
Capex   1.2 6.2 (80.2%)
Capex as % of Revenues   1.7% 8.4% (6.7p.p.)
OPERATING DATA Units 1Q 2003  1Q 2002 D
Total Data Communication Accesses thousand 35.3 35.3 (0.0%)
    Frame Relay   10.9 9.7 11.9%
    Broadband   0.8 0.6 44.3%
Corporate WEB Capacity Sold Mbps 1,181  413  185.9%
Leased Lines to End Users
    Number of Leased Lines thousand 20.0 21.5 (6.9%)
    Capacity (equivalent to 64 kbps) thousand 121.1 110.4 9.7%
    Digital % 92.1 90.5 1.6 p.p.
(1) Includes intra-group transactions.

TABLE 7: PTM.COM (1)
(amounts in millions of Euro)

PROFIT AND LOSS STATEMENTS   1Q 2003 1Q 2002 D
Services Rendered   21.7 17.4 24.4%
Sales   1.1 0.2 n.m. 
Operating revenues   22.8 17.6 29.4%
Wages and Salaries   2.6 3.3 (22.1%)
Costs of Telecommunications   12.2 11.1 10.6%
Depreciation and Amortization   2.4 2.1 13.7%
Marketing and Publicity   1.8 1.8 2.0%
Other General & Administrative   4.7 3.1 49.2%
Other Net Operating Costs   1.9 1.0 90.2%
Operating Costs and Expenses   25.6 22.3 14.4%
Operating Income   (2.8) (4.8) (41.2%)
OTHER FINANCIAL INFORMATION   1Q 2003 1Q 2002 D
EBITDA (Operating Income + Depreciation and Amortization)   (0.4) (2.7) (84.3%)
EBITDA Margin (EBITDA / Operating Revenues)   (1.8%) (15.1%) (13.3 p.p.)
Capex   1.2 2.9 (57.6%)
Capex as % of Revenues   5.4% 16.4% (11.0 p.p.)
OPERATING DATA Units 1Q 2003 1Q 2002 D
PTM.com
ADSL Accesses thousand 61.4 3.6 n.m. 
Dial-up Subscribers thousand 989  673  46.9%
Sapo Portal (March): million
    Page Views per Month   256  156  64.5%
    Unique Visitors per Month   2.6 2.1 20.7%
1) Includes intra-group transactions.

TABLE 8: TMN (1)
(amounts in millions of Euro)

PROFIT AND LOSS STATEMENTS   1Q 2003  1Q 2002  D
Services Rendered   321.1 320.3 0.3%
Sales   31.6 32.2 (1.7%)
Operating Revenues   352.7 352.4 0.1%
Wages and Salaries   12.7 10.8 17.1%
Costs of Telecommunications   74.1 85.9 (13.7%)
Depreciation and Amortization   48.4 42.5 14.1%
Own Work Capitalized   (0.9) (1.3) (33.9%)
Cost of Products Sold   35.3 39.3 (10.1%)
Marketing and Publicity   6.4 3.1 107.6%
Other General & Administrative   49.6 46.5 6.7%
Other Net Operating Costs   21.4 20.8 2.8%
Operating Costs and Expenses   247.1 247.6 (0.2%)
Operating Income   105.7 104.9 0.8%
Interest and Related Expenses   3.8 2.2 74.1%
Interest and Related Income   (1.6) (0.7) 120.7%
Losses / (Gains) on Sales and Disposals of Fixed Assets, Net   0.1 1.4 n.m. 
Other Non Operating Expenses / (Income)   1.6 1.3 25.6%
Income Before Income Tax   101.8 100.8 1.0%
Provision for Income Tax   (25.4) (33.9) (25.2%)
Net Income   76.4 66.9 14.2%
OTHER FINANCIAL INFORMATION   1Q 2003  1Q 2002  D
EBITDA (Operating Income + Depreciation and Amortization)   154.1 147.3 4.6%
EBITDA Margin (EBITDA / Operating Revenues)   43.7% 41.8% 1.9 p.p.
Capex   46.7 68.4 (31.8%)
Capex as % of Revenues   13.2% 19.4% (6.2p.p.)
OPERATING DATA Units 1Q 2003  1Q 2002  D
TMN Active Customers thousand 4,474  3,982  12.3%
    Prepaid % 83.4 83.5 0.0 p.p.
    WAP Terminals thousand 906  637  42.1%
TMN Net Additions thousand 47  77  (38.3%)
Data (% of Service Revenues) % 8.5 6.6 1.9 p.p.
ARPU Euro 24.1 27.1 (11.2%)
    Customer Bill   17.3 18.1 (4.6%)
    Interconnection   6.8 9.0 (24.5%)
MOU Minutes 118.4 127.7 (7.3%)
ARPM Euro/100 20.4 21.2 (4.2%)
SAC Euro 65.5 73.9 (11.4%)
CCPU Euro 12.1 13.8 (11.9%)
ARPU minus CCPU Euro 12.0 13.4 (10.5%)
(1) Includes intra-group transactions.

TABLE 9: PT MULTIMEDIA (1)
(amounts in millions of Euro)

PROFIT AND LOSS STATEMENTS   1Q 2003 1Q 2002 D
Services Rendered   127.6 109.9 16.1%
Sales   35.9 42.0 (14.4%)
Operating Revenues   163.5 151.8 7.7%
Wages and Salaries   20.8 22.7 (8.3%)
Costs of Telecommunications   6.0 4.2 43.3%
Depreciation and Amortization   16.8 16.0 5.3%
Own Work Capitalized   (0.2) (1.1) (79.2%)
Costs of Products Sold   13.8 20.2 (31.5%)
Marketing and Publicity   6.3 6.8 (6.8%)
Other General & Administrative   77.1 74.0 4.2%
Other Net Operating Costs   12.5 6.4 95.7%
Operating Costs and Expenses   153.0 149.0 2.7%
Operating Income   10.5 2.8 278.0%
Interest and Related Expenses   2.4 8.8 (72.6%)
Goodwill Amortization   3.4 16.9 (80.1%)
Interest and Related Income   (1.2) (4.0) (69.7%)
Losses / (Gains) on Sales and Disposals of Fixed Assets, Net   (0.0) (0.1) (23.9%)
Equity in Earnings of Affiliated Companies   0.5 15.0 (96.4%)
Other Non Operating Expenses / (Income)   (0.0) 1.1 n.a. 
Income Before Income Tax   5.4 (34.9) n.a.
Provision for Income Tax   (3.8) (3.6) 5.9%
Loss/(Income) Applicable Minority Interest   (0.6) 0.1 n.a.
Net Income   1.1 (38.5) n.a.
OTHER FINANCIAL INFORMATION   1Q 2003 1Q 2002 D
EBITDA (Operating Income + Depreciation and Amortization)   27.3 18.7 45.6%
EBITDA Margin (EBITDA / Operating Revenues)   16.7% 12.3% 4.3 p.p.
Capex   15.9 15.2 4.4%
Capex as % of Revenues   9.7% 10.0% (0.3 p.p.)
OPERATING DATA Units 1Q 2003 1Q 2002 D
Pay TV          
  Homes Passed thousand 2,405 2,316 3.8%
  Homes Passed with interactive capabilities thousand 2,084 1,538 35.5%
  Customers thousand 1,346 1,187 13.4%
    Cable   1,038 947 9.6%
    DTH   308 240 28.4%
  Premium Customers thousand 968 767 26.2%
  Pay to Basic Ratio % 71.9 64.6 7.3 p.p.
  Internet Accesses (Netcabo) thousand 162.2 75.2 115.7%
  Blended ARPU Euro 23.4 20.4 14.3%
Lusomundo          
  Tickets Sold million        
    Portugal   2.2 2.3 (2.3%)
  Daily Circulation: thousand        
    Jornal de Notícias   108.9 105.9 2.9%
    Diário de Notícias   54.8 59.3 (7.7%)
    24 Horas   49.6 31.2 58.8%
(1) Includes intra-group transactions.

 

 

 
SIGNATURE
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 05, 2003

 
PORTUGAL TELECOM, SGPS, S.A.
By:
/S/  Vitor Sequeira
 
Vitor Sequeira
Manager of Investor Relations
 

 

 
FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations.