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i - i -CABLE i -CABLE CABLE Communications Limited Communications Limited 2010 Final Results 15 March 2011 Results Highlights Achieved sustained growth for TV business in a challenging environment Operating margin came under severe

  1. i - i -CABLE i -CABLE CABLE Communications Limited Communications Limited 2010 Final Results 15 March 2011

  2. Results Highlights • Achieved sustained growth for TV business in a challenging environment � Operating margin came under severe pressure, partly due to significant non-recurrent costs • Exclusive premier programming & the sharpest high definition (HD) service in the market � Stimulated significant increase in TV subscribers - by over 100,000 i-CABLE Communications Limited • Broadband competition heightened � Cross poaching of subscribers continued as penetration reaching saturation levels • Continues to invest in network infrastructure to enhance broadband’s competitiveness 2

  3. Subscription Services Television • Recovery in high-yield subscribers continued to gain momentum, spurred by unrivalled exclusive content & HD initiatives, most notably 2010 FIFA World Cup & Barclays Premier League (BPL) • Expanded the spectrum of genres on HD platform. Seven flagship channels broadcast in HD : i-CABLE Communications Limited � HD Sports (5 channels) � HD Movie � HD Entertainment 3

  4. Subscription Services Television • With the best HD quality & viewing experience in town, HDTV has proven to be a big draw driving customer acquisition i-CABLE Communications Limited 4

  5. High Definition TV Sports Sports • HD Winter Olympics • HD 2010 FIFA World Cup • HD BPL (2010/13) � 200+ matches in 2010/11 � 300+ matches in 2011/12 � All Big 4 matches : Manchester United, Chelsea, i-CABLE Communications Limited Arsenal & Liverpool • HD Horse Racing � Trackwork Express � Trackside & Racing Review • HD 2010 Guangzhou Asian Games 5

  6. High Definition TV Entertainment HD Pack Entertainment HD Pack • Launched HD Movie & HD Entertainment on 1 Jan 2011 • Three months free viewing for existing HD subscribers • Existing HD Subscribers : HK$10 p.m. x 24-month contract i-CABLE Communications Limited • New HD Subscribers: HK$20 p.m. x 24-month contract 6

  7. Original & Innovative Programming i-CABLE Communications Limited 7

  8. Original & Innovative Programming i-CABLE Communications Limited 8

  9. Viewership 984,000 470,000 i-CABLE Communications Limited • The most watched Pay TV with average daily reach of 984,000 S o urc e : CS M Me dia Re se arc h Jan-De c 2010, All Day All T ime 9

  10. Viewership The most watched Pay TV in all categories � News : 44% higher than key competitor � Sports : 80% higher than key competitor � Entertainment : 6X key competitor � Movie : 2X key competitor i-CABLE Communications Limited Remarks: TVRs comparison with the same no. of channels in each category Source: CSM Media Research All individuals aged 4+, Jan-Dec 2010, All Day All Time 10

  11. Subscribers • Total TV, broadband & voice subscriber base 143,000 grown to nearly 1.5 million 228,000 • Television’s new subscribers 11% higher Television than previous FIFA World Broadband 1,101,000 Voice Cup & churn rate 50% lower i-CABLE Communications Limited • Food & Beverage revenue & no. of accounts 3.7X & 2.2X 2009’s respectively • Close to 40% of BPL subscribers opt for HD 11

  12. New Acquired Channels 新華社電視台 • CNC • Disney Channel • Playhouse Disney Channel 安徽衛視 • AHTV • Dragon TV 東方衛視國際頻道 i-CABLE Communications Limited 12

  13. Television Subscribers ‘000 1,200 1,101,000 1,101,000 1,100 1,000,000 1,000 917,000 882,000 900 786,000 800 738,000 702,000 i-CABLE Communications Limited 700 656,000 606,000 561,000 600 500 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Year • Surpassed 1.1 million milestone with over 100K net additions 13

  14. Subscription Services Broadband • Cut-throat competition in pricing & service continued in a saturated market • To enhance competitiveness, we are speeding up the pace of service upgrade i-CABLE Communications Limited 14

  15. Sundream Motion Pictures • Released 10 titles theatrically, grossing over HK$20 million at the box office • 14 films are in the 2011 line-up i-CABLE Communications Limited 15

  16. Television 2010 2010 2009 HK$M 1H 2H FY FY % chg. Turnover 725 836 1,561 1,228 27% Opex before dep’n (748) (876) (1,625) (1,111) 46% EBITDA (23) (40) (64) 117 n/a Depreciation (79) (80) (158) (162) - 2% Operating Loss (102) (120) (222) (45) 391% i-CABLE Communications Limited EBITDA Margin -3% -5% -4% 10% Operating Margin -14% -14% -14% -4% • Rebuilding high-yield subscribers with premier programming • Operating margin under sever pressure, partly due to significant non-recurrent costs from 2010 FIFA World Cup, 2010 Guangzhou Asia Games & 2010 Winter Olympics 16

  17. Internet & Multimedia 2010 2010 2009 HK$M 1H 2H FY FY % chg. Turnover 231 201 433 522 - 17% Opex before dep’n (133) (116) (248) (273) - 9% EBITDA 98 86 184 249 - 26% Depreciation (44) (44) (88) (87) 1% Operating Profit 55 42 96 163 - 41% i-CABLE Communications Limited EBITDA Margin 43% 43% 43% 48% Operating Margin 24% 21% 22% 31% • Fierce competition continued with no sign of letting up 17

  18. Operating Expenses 2010 2009 HK$M FY FY % chg. Programming 1,274 819 56% Network 233 244 - 5% Selling, CS, G&A 435 425 2% Cost of Sales 55 52 6% Sub-total 1,997 1,541 30% i-CABLE Communications Limited Depreciation 254 258 - 2% Total 2,251 1,799 25% • Higher programming costs primarily due to BPL, as well as non-recurrent 2010 FIFA World Cup, 2010 Guangzhou Asian Games and 2010 Winter Olympics 18

  19. Consolidated Results 2010 2010 2009 HK$M 1H 2H FY FY % chg. Turnover 962 1,040 2,002 1,754 14% Opex before dep’n (944) (1,053) (1,997) (1,541) 30% EBITDA 18 (13) 5 214 - 98% Depreciation (126) (127) (254) (258) - 2% Operating Loss (108) (140) (249) (44) 462% Share of profit less losses of associates (39) (2) (41) (0) n/a Net interest income & others 1 (2) (0) (3) - 88% i-CABLE Communications Limited Loss before taxation (146) (144) (290) (47) 515% Taxation 1 23 23 7 227% Net Loss (145) (121) (267) (40) 567% • Exclusive premier programming boosted subscription & airtime revenue but non-recurrent opex eroded operating margin • HK$447M net cash 19

  20. New Opportunities DOCSIS 3.0 Broadband Network • Helps in subscriber acquisition & retention, also facilitates service upselling to existing subscribers to bring revenue benefits • HK Island mostly completed; proceeding in i-CABLE Communications Limited Kowloon & New Territories • Activated 581K DOCSIS 3.0 homes today 20

  21. New Opportunities Free TV Licence application •Expanding to Free TV is an important step for Group to monetize its programme investment, leveraging on content & infrastructure advantage i-CABLE Communications Limited •Working closely with regulator & expect licence award in the first half of 2011 21

  22. Outlook • The Group’s decision to reinvest in programming, service & system upgrades despite adverse conditions spurred record growth in customer base & boosted recurrent revenue • With unrivalled exclusive premier contents & an expanding HDTV service offering the best viewing experiences in the market, the Group is in a strong position to step up its drive to further push forward the i-CABLE Communications Limited growth momentum • While premier programming expenses will continue to exert considerable pressure on the Group’s operating cost in the medium term, these investments are key to maintain a leading position in the market where competitive pressure is unrelenting 22

  23. Outlook • Fantastic Television’s application for Free TV licence will, once approved, enable the Group to tap new revenue from its well-regarded content production capabilities • We are confident that the solid competitive advantages we have built up will enable us to more effectively capture opportunities in an improving i-CABLE Communications Limited economy and be fully reflected in the Group’s financial performance in due course

  24. i-CABLE Communications Limited HKSE Stock Code: 1097.HK Disclaimer All information and data are provided for information purposes only. All opinions included herein constitute i-CABLE’s judgement as of the date hereof and are subject to change without notice. i-CABLE and its subsidiaries and affiliates hereby disclaim (i) all express, implied, and statutory warranties of any kind to user and/or any third party including warranties as to accuracy, timeliness, completeness, or fitness for any particular purpose; and (ii) any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the information and data contained herein.

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