Communications LimitedCommunications Limitedi-CABLEii--CABLECABLE

2010 Final Results15 March 2011

i-CA

BLE

Com

mun

icat

ions

Lim

ited

Results Highlights• Achieved sustained growth for TV business in a

challenging environmentOperating 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

• Broadband competition heightenedCross poaching of subscribers continued as penetration reaching saturation levels

• Continues to invest in network infrastructure to enhance broadband’s competitiveness 2

i-CA

BLE

Com

mun

icat

ions

Lim

ited

Subscription ServicesTelevision• 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 :

HD Sports (5 channels)HD MovieHD Entertainment

3

i-CA

BLE

Com

mun

icat

ions

Lim

ited

Television• With the best HD quality & viewing

experience in town, HDTV has proven to be a big draw driving customer acquisition

Subscription Services

4

i-CA

BLE

Com

mun

icat

ions

Lim

ited

High Definition TV• HD Winter Olympics• HD 2010 FIFA World Cup• HD BPL (2010/13)

200+ matches in 2010/11300+ matches in 2011/12All Big 4 matches :Manchester United, Chelsea, Arsenal & Liverpool

• HD Horse RacingTrackwork ExpressTrackside & Racing Review

• HD 2010 Guangzhou Asian Games

5

SportsSports

i-CA

BLE

Com

mun

icat

ions

Lim

ited

High Definition TV

• 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

• New HD Subscribers: HK$20 p.m. x 24-month contract

Entertainment HD PackEntertainment HD Pack

6

i-CA

BLE

Com

mun

icat

ions

Lim

ited

Original & Innovative Programming

7

i-CA

BLE

Com

mun

icat

ions

Lim

ited

Original & Innovative Programming

8

i-CA

BLE

Com

mun

icat

ions

Lim

ited

• The most watched Pay TV with average daily reach of 984,000

Viewership

Source: CSM Media Research Jan-Dec 2010, All Day All Time

984,000

470,000

9

i-CA

BLE

Com

mun

icat

ions

Lim

ited

ViewershipThe most watched Pay TV in all categories

News : 44% higher than key competitorSports : 80% higher than key competitorEntertainment : 6X key competitorMovie : 2X key competitor

10

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

i-CA

BLE

Com

mun

icat

ions

Lim

ited

1,101,000

228,000

143,000

Television BroadbandVoice

Subscribers• Total TV, broadband &

voice subscriber base grown to nearly 1.5 million

• Television’s new subscribers 11% higher than previous FIFA World Cup & churn rate 50% lower

• Food & Beverage revenue & no. of accounts 3.7X & 2.2X 2009’s respectively

• Close to 40% of BPL subscribers opt for HD

11

i-CA

BLE

Com

mun

icat

ions

Lim

ited

New Acquired Channels• CNC 新華社電視台

• Disney Channel

• Playhouse Disney Channel

• AHTV 安徽衛視

• Dragon TV東方衛視國際頻道

12

i-CA

BLE

Com

mun

icat

ions

Lim

ited

Television Subscribers

561,000

606,000

656,000

702,000738,000

786,000

882,000

917,000

1,000,000

500

600

700

800

900

1,000

1,100

1,200

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

1,101,0001,101,000

• Surpassed 1.1 million milestone with over 100K net additions

‘000

Year

13

i-CA

BLE

Com

mun

icat

ions

Lim

ited

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

14

i-CA

BLE

Com

mun

icat

ions

Lim

ited

Sundream Motion Pictures• Released 10 titles

theatrically, grossing over HK$20 million at the box office

• 14 films are in the 2011 line-up

15

i-CA

BLE

Com

mun

icat

ions

Lim

ited

Television2010 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/aDepreciation (79) (80) (158) (162) - 2%Operating Loss (102) (120) (222) (45) 391%

EBITDA Margin -3% -5% -4% 10%Operating Margin -14% -14% -14% -4%

2010

16

• 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

i-CA

BLE

Com

mun

icat

ions

Lim

ited

2010 2009HK$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%

EBITDA Margin 43% 43% 43% 48%

Operating Margin 24% 21% 22% 31%

2010Internet & Multimedia

• Fierce competition continued with no sign of letting up17

i-CA

BLE

Com

mun

icat

ions

Lim

ited

Operating Expenses2010 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%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

i-CA

BLE

Com

mun

icat

ions

Lim

ited

Consolidated Results2010 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 ofassociates (39) (2) (41) (0) n/a

Net interest income & others 1 (2) (0) (3) - 88%

Loss before taxation (146) (144) (290) (47) 515%

Taxation 1 23 23 7 227%

Net Loss (145) (121) (267) (40) 567%

2010

19

• Exclusive premier programming boosted subscription & airtime revenue but non-recurrent opex eroded operating margin

• HK$447M net cash

i-CA

BLE

Com

mun

icat

ions

Lim

ited

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 Kowloon & New Territories

• Activated 581K DOCSIS 3.0 homes today

20

i-CA

BLE

Com

mun

icat

ions

Lim

ited

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

• Working closely with regulator & expect licence award in the first half of 2011

21

i-CA

BLE

Com

mun

icat

ions

Lim

ited

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 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

i-CA

BLE

Com

mun

icat

ions

Lim

ited

Outlook

• Fantastic Television’s application for Free TV licencewill, 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 economy and be fully reflected in the Group’s financial performance in due course

i-CABLE Communications LimitedHKSE Stock Code: 1097.HK

DisclaimerAll 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.