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i - i -CABLE i -CABLE CABLE Communications Limited Limited Communications 2013 Interim Results 8 August 2013 Results Highlights Over-capacity continued but price competition stabilized Subscriber & revenue erosion during &

  1. i - i -CABLE i -CABLE CABLE Communications Limited Limited Communications 2013 Interim Results 8 August 2013

  2. Results Highlights • Over-capacity continued but price competition stabilized • Subscriber & revenue erosion during & subsequent to the period was relatively mild • Broadband revenue steadied despite slightly smaller customer base • Due to prudent investment in sports rights, operating costs are expected to decline at a faster rate than revenue decline in the second half of 2013 which may improve margin i-CABLE Communications Limited • Capex was one gear lower 2

  3. Subscription Services Television • The customer base declined partly due to the expiry of BPL rights. Thanks to a host of programming, marketing & service enhancement initiatives, efforts to retain customers paid off with attrition rates kept well in check • Due to prudent investment in sports rights, operating margin is expected to improve in the second half of 2013 i-CABLE Communications Limited 3

  4. Television 2012 2013 HK$M 1H 2H 1H vs 1H12 Turnover 855 901 820 - 4% Opex before dep’n (836) (951) (827) - 1% n/a EBITDA 20 (50) (7) Depreciation (79) (75) (70) - 12% Operating Loss (59) (125) (76) 29% EBITDA Margin 2% -6% -1% Operating Margin -7% -14% -9% i-CABLE Communications Limited • Lower turnover mainly attributable to a decrease in subscription revenue related to BPL as well as lower advertising income • Subscriber & revenue erosion during & subsequent to the period was relatively mild 4

  5. Programming Sports Sports • Sports continued to feature strongly with exclusive rights to the European, Australian & Japanese leagues & tournaments • Diversity was never overlooked, bringing viewers a wide range of prestigious international sports events spanning swimming, badminton, i-CABLE Communications Limited basketball, volley ball, darts, bowling, snooker, ice hockey, car racing, dancing, tennis, figure skating & table tennis 5

  6. Programming Sports Sports • Official broadcaster of the 17th Asian Games Incheon 2014 • All media rights with extensive live & archived coverage in multiple formats across media platforms i-CABLE Communications Limited 6

  7. Programming Entertainment Entertainment • Launched two flagship entertainment channels � HD FAN . Entertainment Channel 高清奇妙娛樂台 (Ch 12 / hd 212) � HD CABLE Drama Channel 高清奇寶劇集台 (Ch 13 / hd 213) i-CABLE Communications Limited 7

  8. Programming 8 i-CABLE Communications Limited

  9. Programming News News • Introduced in-depth weeknight reports, sharing unique perspective of the most topical news & current affairs on the mainland • Our local journalists not only provided professional coverage of news at home but also made news headlines themselves with their remarkable i-CABLE Communications Limited investigative reports often instantly & widely picked up & quoted by fellow media organisations 9

  10. Viewership TV Share Among CABLE TV 4+ subs Viewing Share Among Pay TV Operators 60% 50% 50% TVB Jade 50% CABLE TV (Analog+SD+HD) 37% 40% 43% 37% 43% 27% 30% 4% 16% 27% 20% 15% 15% 5% Other Pay TV Other Terrestrial & 15% 7% 7% 10% Satellite TV i-CABLE Communications Limited 0% CABLE TV Now TV* TVBNV^ bbTV HKC Now TV TVBNV bbTV Source: Nielsen HKTAM Source: Nielsen HKTAM Pay TV viewers aged 4+ CABLE TV individuals aged 4+ Jan – Jun 2013, All Day All Time Jan – Jun 2013, All Day All Time * Excluded 8 TVBNV channels via Now TV platform ^ Included 8 TVBNV channels via Now TV platform • CABLE TV viewership nearly 2X the closest follower 10

  11. Customers December 2012 June 2013 120,000 126,000 Telephony 201,000 199,000 Broadband Television 1,089,000 1,074,000 i-CABLE Communications Limited 11

  12. Subscription Services Internet & Multimedia • Our broadband business continued to come under pressure from both wire-line & wireless service providers • Competition remained intense with over-capacity in the sector, the first half of 2013, however, did not see any harsh price wars • Whilst the market has been relatively stable, the return to aggressive pricing to fight for market share remains a risk i-CABLE Communications Limited 12

  13. Internet & Multimedia 2012 2013 HK$M 1H 2H 1H vs 1H12 Turnover 169 169 171 1% Opex before dep’n (111) (110) (112) 1% 0% EBITDA 58 59 58 Depreciation (46) (46) (46) - 1% Operating Profit 12 14 13 2% EBITDA Margin 35% 35% 34% Operating Margin 7% 8% 7% i-CABLE Communications Limited • Broadband revenue steadied despite slightly smaller customer base 13

  14. Sundream Motion Pictures • Released 11 titles in the first half of 2013 i-CABLE Communications Limited 14

  15. Consolidated Results 2012 2013 HK$M 1H 2H 1H vs 1H12 Turnover 1,038 1,089 1,009 - 3% Opex before dep’n (1,010) (1,140) (1,007) 0% EBITDA 28 (51) 1 - 96% Depreciation (129) (124) (118) - 8% Operating Loss (100) (174) (117) 17% Finance Costs & Others 2 0 (1) n/a Loss before taxation (99) (174) (118) 20% Taxation 2 (7) 6 221% Net Loss (97) (181) (112) 16% i-CABLE Communications Limited Capex 113 96 78 - 31% • Margin may improve in the second half of 2013 with our prudent investment in sports rights • Capex was one gear lower 15

  16. Operating Expenses 2012 2013 HK$M 1H 2H 1H vs 1H12 Programming 657 770 662 1% Network 114 108 109 - 5% Selling, CS, G&A 186 203 186 0% Cost of Sales 52 58 51 - 2% Sub-total 1,010 1,140 1,007 0% Depreciation 129 124 118 - 8% Total 1,138 1,264 1,126 - 1% i-CABLE Communications Limited • Lower operating costs primarily due to lower sales acquisition cost & network related costs 16

  17. Outlook • In addition to the usual constraints of saturating markets, the business climate looks set to be even more challenging & competitive pressure stronger in the next few years • 3½ years have gone by since Group affiliate Fantastic Television Limited submitted an application for a free domestic TV programme service licence. Whilst it remains to be seen whether the Government will live up to its promise to open up the free TV market, the TV landscape has already seen significant changes • The overwhelmingly dominant TV player has become more aggressive than ever, from acquiring premier sports rights, to poaching programming, i-CABLE Communications Limited ideas & talents, and to setting up dedicated sports channels on its pay platform, making full use of “due process” to steadfastly challenge the Government’s decision to open up the free TV market • The overall operating environment is not expected to improve in the near term. However, operating costs are expected to decline in the second half of 2013 due to factors such as stringent cost control, prudent investments & the decrease in sports programming costs 17

  18. 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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