The Euskaltel group posts a net profit of Euros 28.8 million for the first six months of the year, up 36.6%

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1 Euskaltel Group Results - First six months of 2018 The Euskaltel group posts a net profit of Euros 28.8 million for the first six months of the year, up 36.6% The Group builds on its growth in households and companies across all our business areas fixed-line and mobile phone services, broadband and TV. The Group's revenue is up 25% to Euros million in the first six months of the year. Ebitda increased 22.4% to over Euros million in the first six months of the year, with a revenue margin of 48.3%. Operating cash flow rises to Euros million, up 10% compared to the prior year, with a 28.9% revenue margin, which would rise to 31.3% if the Group's expansion plan was not taken into consideration. The Euskaltel Group's net profit in the first half of the year is therefore Euros 28.8 million, up 36.6% compared to the first six months of Euskaltel, R and Telecable customers have contracts for over million products, representing 32,000 new contracts in the last quarter. The fixed-line phone segment continues to record net growth in customer registrations for the second consecutive quarter, with the addition of 2,500 new users. This backs up the positive trend seen in the prior quarter with over 578,500 customers. Business segment performance confirms this year's positive trend with revenue growth of 1.3%, hitting Euros 97.2 million. The portfolio of high added-value customers on 3P and 4P contracts continues to grow to the industry's highest levels and now stands at 69.3% of all customers compared to 68.6% in the previous quarter. Each customer has a contract for an average of 3.6 products. Record penetration rates for all products across the customer base: broadband 85.7%, an increase of 33 basis points-, mobile phones 80.1%, an increase of 123 basis points -, pay TV 70.6%, an increase of 123 basis points-, compared to the first quarter of 2018.

2 The Group's customer loyalty is up, reducing churn across all markets to the lowest level seen in the last 18 months. It stood at 14.9% at the end of June, which is 70 basis points below the figure for the previous quarter. 18,500 new mobile phone lines in the second quarter, growing to 951,000 lines. There are 9,000 new pay TV customers in the quarter, exceeding 408,000 users, thanks to the new 4K Android decoder. The Group expects the number of TV customers to continue to grow with the introduction of the exclusive Netflix button on TV remote controls. Over 4,000 contracts for broadband products have been taken on in the first quarter, increasing to 496,000 users. The operator now has over 1,000 customers in Navarre, where a second sales point has opened. The Group expects to forge ahead with its expansion plan in the second half of the year, with new sales points in Navarre and over 4,000 new customers in this region by the end of the year. Bilbao, 27 July The Euskaltel Group has this morning presented its results for the first half of 2018, which show revenue growth of 25%, increasing turnover to Euros million with a net profit of Euros 28.8 million, which is 36.6% higher than in the first six months of Ebitda stands at Euros million, up 22.4% and with a 48.3% revenue margin. Operating cash flow (the difference between Ebidta and investments) hit Euros million, up 10% compared to the prior year with a 28.9% revenue margin, which would have risen to 31.3% if the Group's expansion plan had not been taken into consideration. The Euskaltel Group's CEO, Francisco Arteche, stressed to investors that these results reflect the way the operator has fulfilled all its commitments to the market: We have met the objectives we announced to the market, building on the growth seen in the first quarter and becoming one of the few operators to achieve better results in the second quarter than in the first quarter of the year. The balance sheet for these first six months of the year highlights the increase in contracts for products and services by customers across all business areas, with 32,000 new contract registrations in the first quarter there were 25,000, backing up the positive trend that started in Euskaltel, R and Telecable customers currently have contracts for over million products. As the CEO of the Euskaltel Group stated, Strong performance in the take-up of products by customers during the first six months of the year backs up our strategy of convergent bundles of high added-value products, which are viewed by our customers as a differentiating offer. It is important to note how we have built on the net growth in customer registrations for fixedline products for the second consecutive quarter, confirming the trend seen in the previous quarter with the addition of 2,500 new users, taking us beyond 578,500 customers. This growth in net customer registrations has been seen across each of our local markets in the Basque Country, Galicia and Asturias and also through the marketing of advanced products and

3 services in Navarre, where Euskaltel has opened its second sales point and has over 1,000 new customers. In the second half of the year, the Group hopes to forge ahead with its expansion plan, opening new sales points in Navarre where it expects to welcome an additional 4,000 new customers by the end of the year. In terms of the business segment, it is important to note the performance posted in these first six months of 2018, which confirms the improvement seen at the end of last year, leading to three consecutive quarters of growth, with a rise of 1.3% and revenues of Euros 97.2 million. Francisco Arteche, the Euskaltel Group's CEO: We have built on the growth seen in the first quarter As a result of the company's convergent strategy, the number of high-value customers with 3P and 4P contracts continues to grow and now stands at 69.3% of all customers, representing an average of 3.6 products per customer. The increase in contracts for services and products in the residential segment has led to record penetration rates among the customer base: 85.7% have broadband (up 33 basis points on the previous period), 80.1% have a contract for mobile phone services (an increase of 123 basis points) and 70.6% have pay TV (a rise of 123 basis points). The Group's customer loyalty is up, reducing churn across all markets to the lowest level seen in the last 18 months. It stood at 14.9% at the end of June, which is 70 basis points below the figure for the previous quarter (15.6%). More customers across all business areas The growth seen in the first six months is based on the strong performance of all business segments and areas. The mobile phone segment has built on its dominant position with 18,500 new lines, taking the total to over 951,000 lines. In the second quarter of the year, the Euskaltel Group has once again exceeded the market growth forecast, just as it did in the first quarter, hitting annualized growth of around 8%. In terms of pay TV, there are over 9,000 new customers this quarter, proving the success of initiatives and products such as the new 4K Android decoder. Over 408,000 users currently enjoy the additional services on offer from Euskaltel Group TV, including an exclusive button on the TV remote giving access to Netflix content.

4 Contracts for over 4,000 new broadband products were signed in the first three months of 2018, taking the figure to 496,000 users, which represents an annualized rate of above 3%. In the first six months of the year, the Euskaltel Group has continued to modernise the quality and capacity of its network. This work began in 2017 and mainly involves upgrading the network from Docsis 3.0 to Docsis 3.1. This change will ensure customers in the Basque Country, Galicia and Asturias have better speeds and more products and services. Strong cash generation and debt reduction The Euskaltel Group continues to stand out for its leading profitability margins in the industry, holding on to its dominant position in Europe in terms of the cash conversion ratio with a high revenue margin of 28.9% this figure would be 31.3% if the Group's expansion plan wasn't taken into consideration. This high cash flow conversion is mainly due to the Group having its own next generation fibre optic network and to the operator's business strategy, which allows it to concentrate its capital investments on maintenance and customer acquisition. This significant cash generation capacity has enabled the Euskaltel Group to distribute a dividend of Euros 49.6 million to its shareholders Euros per share against 2017 profit. This dividend reflects a 3.8% return on the weighted share price for the first six months of 2018 and amounts to a 100% payout of consolidated net profit. The Euskaltel Group's CEO expects the dividend per share distributed in 2019 against 2018 profits to grow on a double-digit basis.

5 CEO's assessment and forecast for the second half of the year At the presentation of results for the first half of 2018 to shareholders, the Euskaltel Group's CEO emphasised that the results achieved at the end of the first six months of 2018 are evidence that we have met the objectives we set for this period: to stabilise our customer base and improve business segment revenues and also to successfully launch our plan to expand into Navarre. Our objective is to keep up this momentum over the next few quarters. Over the coming two quarters, the Group expects to sustain the growth seen across the business in the first half of the year. We will continue to expand our residential customer base through new customers in our traditional markets and also by entering new markets in addition to Navarre", stated Arteche. The company expects business segment revenues to continue to rise as Euskaltel has become the best partner to help companies on their journey towards digital transformation. In the residential segment, the Group expects revenues to increase once again from 2019 onwards, following on from the recovery seen in 2018 with net growth in customer registrations in the first two quarters of the year. Arteche continued, "We will continue to meet all our market commitments as we have done to date. We will continue to expand our customer base and improve our results alongside a strong focus on long-term project sustainability and the creation of value for shareholders, which are the keys to our management. To conclude his presentation, the Euskaltel Group's CEO stressed that we will work to maintain our dominant position in our traditional markets and to become a leading operator in the new regions we operate in, without losing the focus of our core objective: to retain strong cash generation capacity with a view to maximising the value we create for our shareholders.

6 Euskaltel is the leading telecommunications group in convergent offerings in northern Spain. The company has strong territorial ties and a well-founded commitment to the Basque Country, Galicia and Asturias, where it operates via the operators Euskaltel, R and Telecable. The Euskaltel group employs 705 professionals, indirectly providing 4,200 jobs in the Basque Country, Galicia and Asturias. The Group offers services to a market of 6 million people, providing around 2.4 million services on a daily basis. The Group is the leading fibre-optic provider (broadband, phone services, pay TV and convergent telecommunications services), it has the largest WiFi network in the Basque Country, Galicia and Asturias with over 436,000 access points and it is a mobile phone operator with its own 4G licence, rolling out a proprietary network thanks to the LTE licence. As a telecommunications operator, its business sustainability is based on its human resources and its commitment to society. The group's customer and supplier-oriented focus, its Good Governance policy, responsible environmental management, community work, customer service in the language they choose and, generally speaking, management excellence, are the foundations upon which its business is built. The Euskaltel group undertakes a large number of social and institutional projects by forming partnerships that are aligned with its strategy in order to continue being a caring, committed company with a clear vocation, and to form a part of the technological progress being made in its markets, the Basque Country, Galicia and Asturias. For this reason the group takes part in innovative public-private programmes as a solutions and communications services provider and works in different fields focusing on creating a crosscutting ecosystem that includes educating young people in new digital skills and taking part in digital entrepreneurship programmes organised by the government. All of this enriches its value proposition in the market by providing solutions for companies and individuals in fields such as digital households, cybersecurity, health-related telemonitoring, Big Data, IoT and smart cities, etc. Euskaltel Communication Department comunicacion@euskaltel.com