World’s First Interactive Cable TV Service and Receiver to Feature Digital Video Recording Launched by Portugal Telecom’s TV Cabo and Microsoft

LISBON, Portugal; LONDON; and REDMOND, Wash., May 17, 2001 — TV Cabo Portugal SA, a subsidiary of PT Multimedia, and Microsoft Corp. today announced details for the commercial deployment of the world’s first interactive cable TV service to include digital video recording (DVR) functionality delivered via an advanced set-top receiver. The service, which is powered by Microsoft® TV software, will be launched in Lisbon, Portugal, on June 7 by Murteira Nabo, chairman and CEO of Portugal Telecom, and Steve Ballmer, CEO of Microsoft, and will be commercially available to TV Cabo subscribers in Portugal.

TV Cabo’s IDTV Service represents the third interactive TV service based on Microsoft TV Advanced software to be deployed commercially and the first such service available on a broadband cable service, firmly positioning TV Cabo as one of the leading interactive TV providers in the world.

“We are delighted that TV Cabo has reached its goal of being the first cable network operator in the world to provide this full combination of services to its clients,”
said Jose Graca Bau, CEO of TV Cabo Portugal.
“This is an objective we have been aggressively pursuing. We are pleased that, following the very successful trial, we can offer a unique and broad range of services, including digital video recording, t-commerce, t-banking, e-mail and high-speed Internet access to our subscribers.”

TV Cabo, Portugal’s leading network operator, will use Microsoft TV Advanced software running on advanced set-top boxes in a two-way broadband infrastructure. TV Cabo’s offering will include a rich set of interactive services available to its subscribers, including an electronic program guide, e-mail, TV banking, online shopping and t-commerce, interactive electronic news, digital video recording, and high-speed Internet access. Additional features, such as Video-on-Demand, are planned for the near future.

In addition, TV Cabo will use Microsoft TV Server software to provision and manage the delivery of interactive TV services to its customers. Microsoft TV Server is a head-end solution designed to be the foundation of a network operator’s service, providing the tools to provision, manage and operate a large-scale, commercial-grade interactive TV service. Microsoft TV Server integrates with Microsoft TV Advanced client software, creating an optimized, end-to-end interactive TV software platform.

“TV Cabo’s launch represents an important step for the interactive TV industry worldwide and for Microsoft in particular,”
said Jon DeVaan, senior vice president of the TV Division at Microsoft.
“The TV Cabo service is clearly one of the most advanced interactive TV services in the world, and we are pleased to have been able to provide TV Cabo with the software to help it achieve its goals. Microsoft is fundamentally committed to the television industry and working with pioneering network operators such as TV Cabo to extend the benefits of interactive TV to consumers worldwide. We believe this launch is an important demonstration of the rich capabilities of the Microsoft TV platform.”

TV Cabo’s deployment will initially employ set-top boxes made by Octal TV and later by U.K. manufacturer Pace Technology. Octal TV is owned by Novabase SGPS, a leading consulting and system services company with headquarters in Portugal.

About TV Cabo

TV Cabo is the leading national cable operator in Portugal, with approximately
1 million subscribers and a total of 2.2 million homes. TV Cabo complements its cable coverage with a multichannel digital satellite (DTH) platform.

The company provides a large selection of 44 basic channels to its cable subscribers and over 40 channels to its DTH satellite subscribers. In addition, the company offers several premium channels, which include Telecine 1 and 2 (movie channels), Sport TV and two adult entertainment channels.

In November 1999, TV Cabo launched NetCabo, the first broadband Internet access via cable modem in Portugal. This service provides Internet access to high-end customers with speeds up to 640 Kbps, several orders of magnitude faster than conventional access. Currently, Netcabo has more than 30,000 subscribers.

TV Cabo is fully owned by PT Multimedia.

About PT Multimedia

PT Multimedia (BVL
) is a leading multimedia company in Portugal and one of the leading Internet services companies in Portugal and Brazil. Through its subsidiary TV Cabo, PT Multimedia operates the leading cable and DTH TV services in Portugal. Through its subsidiary, PT Multimedia operates the leading ISP and portal ( ) in Portugal and is completing the acquisition of an 18 percent stake in the leading ISP and portal in Brazil ( ). PT Multimedia also owns Lusomundo, one of the largest Portuguese media and entertainment groups, and a minority interest in Paginas Amarelas, Portugal’s leading yellow pages telephone directory business.

Since its inception, PT Multimedia has positioned itself to be the driving force behind media convergence in Portugal and the leading Internet services provider in the Portuguese-speaking world. PT Multimedia has further strengthened the strategic rationale of its Internet project in the Portuguese-speaking world with the exchange of its 100 percent stake in SA for a 17.937 percent stake in UOL Inc. SA (
). UOL is the undisputed ISP and portal market leader in Brazil with 923,000 paying ISP subscribers representing a 41 percent market share and an 82.3 percent reach as of December 2000.

PT Multimedia, through its subsidiary TV Cabo, has more than a 90 percent market share, with more than 1 million pay-TV subscribers. The company’s ISP has more than 500,000 subscribers, and its Portuguese portal networks has more than 97 million page views and 2.4 million unique users as of March 2001. Through Lusomundo, PT Multimedia holds a broad portfolio of businesses within the media and entertainment industry, including 150 cinema screens across Portugal and Spain, the Blockbuster video network in Portugal, the first and third leading newspapers in Portugal, the most popular radio service as well as a variety ot magazine titles and Sony Playstation rights for Portugal.

About the Microsoft TV Platform

The Microsoft TV platform is a standards-based, client and server software family that enables network operators and their partners to deliver the most compelling interactive TV services to consumers. The platform supports a range of TV devices – from current- and next-generation set-top boxes and digital video recorders to integrated television sets, entertainment appliances and other computing devices. Through the platform, network operators and hardware providers can team up to offer consumers an unparalleled range of services, from e-mail and Internet on TV to interactive programming, electronic program guides and digital video recording.

Microsoft TV also creates significant new economic opportunities for network operators and the more than 1,000 companies worldwide who have chosen to work with the platform to deliver or supply services, programming, hardware and software for the interactive TV industry. Microsoft TV supports open standards and is backed by the technical

expertise, support and broad third-party developer community Microsoft is known for. It is an integral part of Microsoft’s .NET vision of empowering people through great software — any time, any place and on any device. More information about the Microsoft TV platform can be found at .

About Microsoft

Founded in 1975, Microsoft (Nasdaq
) is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place and on any device.

Microsoft is a registered trademark of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

For more information about Microsoft TV:

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at on Microsoft’s corporate information pages.

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