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Communications Limited Communications Limited

i-CABLE i i-

• CABLE

CABLE

2011 Final Results

12 March 2012

Results Highlights

• Group revenue continued to rebuild, as it continued to strengthen

programming, improve service offerings, expand product diversity, introduce value-added services, streamline operations & effect infrastructure improvements

Record high advertising turnover with growth in TV

subscription base

• Loss position improved in 2011. The operating environment

remains challenging as the Group strives to return to profitability

Operating margin is under considerable pressure in the face

• f competition and rising costs. This situation would likely

remain a challenge in the foreseeable time ahead as we continue to invest in and for the future

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Subscription Services

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• Rebuilding nicely in many respects with higher viewership,

subscription revenue, subscriber yield, especially advertising income and EBITDA growing noticeably faster than TV subscriber base

• Effective marketing and promotional campaigns were executed to

leverage prized content and strong HD services

Television Television

Television

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2011 2010 2009

vs 2010

HK$M 1H 2H FY FY FY % chg. Turnover 874 875 1,749 1,561 1,228 12% Opex before dep’n (822) (858) (1,680) (1,625) (1,111) 3% EBITDA 51 17 69 (64) 117 n/a Depreciation (74) (90) (163) (158) (162) 3% Operating Loss (22) (72) (95) (222) (45)

• 57%

EBITDA Margin 6% 2% 4%

• 4%

10% Operating Margin

• 3%
• 8%
• 5%
• 14%
• 4%

2011

• Higher recurrent revenue mainly attributable to increase in higher

yield subscriptions & airtime sales

• Operating margin under considerable pressure in the face of

competition & rising costs

Value-added Services

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• Committed to deliver more value-

added services to enhance customer experience

• Launched 9 HD Channels with

best picture quality in town

5 HD Sports Channels

(hd200 – hd204)

3 HD Movie Channels (hd241,

hd243 & hd245)

1 HD Entertainment (hd212)

HD Channels HD Channels

Value-added Services

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• Hong Kong’s first-ever 3D BPL

matches broadcast live and exclusively on CABLE TV

• Life-like

excitement

• n

3D- capable TV sets at no additional charge to “HD BPL Pack” subscribers

• Ten 3D live BPL matches in the

2nd half of 2011/12 season

3 3D for TV D for TV

Value-added Services

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• Introduced Pay-Per-Day service,

allowing football fans & viewers to watch up to 3 BPL live matches & related programmes

• n Channel 690 (SD) at $30 per

day

Pay Pay-

• Per

Per-

• Day BPL

Day BPL

• The official broadcaster & exclusive holder of all media rights in

Hong Kong

• Unprecedented live coverage on multiple platforms enabling

viewers to watch it at any time, from anywhere and through multiple devices

• Carriage of high interest events as well as the opening &

closing ceremonies

• Leveraging on CABLE TV experience in broadcasting Beijing

2008 Olympics on new media, FIFA World Cups, Asian Games and Winter Olympics

London 2012 Olympics

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• The leading sports platform in

town

• Successful

renewal

• f

the exclusive broadcasting rights to

Europa League until 2015

• Comprehensive coverage of the

2011/2012 BPL season, boosting this platform to a total 11 HD & SD channels

Sports Sports

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Exclusive Sports Programmes

• Professional team maintained its

leadership position, serving the community with fast, accurate & independent reports & updates 24X7

• Plans

were underway to introduce HD capabilities to news platform and enrich the presentation of our newscasts

Original Programming

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News News

日本泡湯趣 日本泡湯趣 名廚 名廚 鄉土濃情甄文達 鄉土濃情甄文達 樂壇第一手 樂壇第一手 大 大Fun Fun享 享

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還看當年 還看當年

Original Programming

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Original Programming

Viewership

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940,000

440,000 127,000 78,000

Source: CSM Media Research Jan-Dec 2011, All Day All Time

• CABLE TV is the most watched Pay TV with average daily reach of

940,000

% 1 % 2 % 3 % 4 % 5 % 6 % HKC Now TV TVBPV bbTV

2009 2010 2011

Viewership

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Source: CSM Media Research All Day All Time (Individuals aged 4+)

58% 52% 37% 30% 9% 8% 2% 4%

• CABLE TV viewership almost 2X the closest follower
• Leadership position going stronger than ever, as it continued to

strengthen programming & improve service offerings

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Subscribers

1,106,000 1,103,000 218,000 225,000 149,000 157,000

Dec 2011 Jun 2011

Television Broadband Telephony

New Acquired Channels

• Phoenix Hong Kong Channel

鳳凰衛視香港台

• Hong Kong Satellite TV

香港衛視

• Liaoning Satellite TV

遼寧衛視

• Jiangsu Satellite TV

江蘇衛視

• Thrill

驚慄電影台

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Cross-platform Opportunities

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• Strengthened service offerings to meet customers’ fast-changing

needs and entertainment landscape not only TV services, but various alternatives available on the Internet & mobile platforms

• Further upside will come from cross-platform opportunities

including outdoor advertising, new media, content distribution & Free TV once approved

Cross-platform Opportunities

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• Substantial turnover increases in 2011, a record high surpassing

even the years when there were high-interest mega programming such as FIFA World Cup

• Newsline Express in MTRC’s trains also reported significant

growth in advertising revenue

• Taking this successful business venture further, an agreement

was reached to cover additional lines under a phased scheme starting in December 2011

Advertising & Outdoor Advertising & Outdoor

• Leveraging on CABLE TV experience on new media, we

endeavor to make the best use of various platforms & technologies providing cross-media & cross-platform services

The London 2012 Olympic Games will be available on

www.i-cable.com, enable citizens to watch it at any time from anywhere & through multiple means

Supply CABLE TV content to wireless operators

• Launched 'Joemud?', a multi-functional mobile app combining

the latest news in trends, entertainment, dining, shopping, TV programming, movie & social networking

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Cross-platform Opportunities

New Media New Media

• Designated

subscribers can watch programmes, anytime, anywhere at no additional fee

• 5 streaming channels providing

round-the-clock services

CABLE TV Goes Mobile CABLE TV Goes Mobile

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Cross-platform Opportunities

• Promotional offers

premier offers

• Programme guide

alerts for favourite programmes, programme schedule for coming week

• Personal interactive customer

service

account-related enquiries, technical support, frequently asked questions

CABLE TV Goes Mobile CABLE TV Goes Mobile

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Cross-platform Opportunities

Cross-platform Opportunities

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• Government is considering 3 applications for domestic free TV

licences that may lead to an imminent introduction of free territory-wide channels, including 2 proposed by CABLE TV on behalf of Fantastic Television

• Fantastic TV is all set for new licence and we are earnestly

waiting for regulatory approval to provide viewers with more & better choice including London 2012 Olympics in unprecedented coverage

Free TV Free TV

Subscription Services

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Internet Internet

• Broadband business is still eroding & under competitive pressure

from not only wire-line service providers but also wireless

• perators luring customers with aggressive service packages
• ften bundled with multiple products

Roll-out of 130Mbps covering HK Island was completed

earlier in the year and works for the rest of the territory were nearing completion

A plan is in place to arrest the erosion, with additional

upgrade alternatives being implemented

• r

under consideration

The

resulting expansion in network capacity and improvement in service quality would help reduce customer attrition, protect revenue through up-selling to existing customers and attract new ones

2011 2010 HK$M 1H 2H FY FY % chg. Turnover 167 172 340 433

• 21%

Opex before dep’n (98) (116) (213) (248)

• 14%

EBITDA 70 57 127 184

• 31%

Depreciation (39) (48) (88) (88) 0% Operating Profit 30 9 39 96

• 60%

EBITDA Margin 42% 33% 37% 43% Operating Margin 18% 5% 11% 22% 2011

Internet & Multimedia

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• Competition from both wire-line & mobile services providers reduced

EBITDA & Operating Margin

• Well acknowledged for its discerning

tastes & acute market sensibility, Sundream continued with its proven track record of identifying quality productions & bringing them to the HK audience

“The King’s Speech”, a major box

• ffice with critical success both in

HK & overseas

Award-winning productions in the

pipeline for theatrical release

Sundream Motion Pictures

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Consolidated Results

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2011 2010 HK$M 1H 2H FY FY % chg. Turnover 1,051 1,059 2,110 2,002 5% Opex before dep’n (983) (1,048) (2,031) (1,997) 2% EBITDA 68 11 78 5 1498% Depreciation (117) (142) (258) (254) 2% Operating Loss (49) (131) (180) (249)

• 28%

Share of profit less losses of associates (3) (0) (3) (41) n/a Net interest income & others (2) (1) (3) (0) n/a Loss before taxation (51) (132) (186) (290)

• 37%

Taxation (4) 7 4 23

• 84%

Net Loss (55) (125) (179) (267)

• 33%

2011

• Loss position improved but the operating environment remains

challenging as the Group strives to return to profitability

• Continue to rebuild revenue & manage costs

Operating Expenses

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2011 2010 HK$M FY FY % chg. Programming 1,305 1,274 2% Network 225 233

• 3%

Selling, CS, G&A 409 435

• 6%

Cost of Sales 92 55 67% Sub-total 2,031 1,997 2% Depreciation 258 254 2% Total 2,289 2,251 2%

• Higher programming costs due primarily to European soccer partly
• ffset by expenses relating to FIFA World Cup, Asian Games &

Winter Olympics which did not recur in 2011

• Acquisition of telephony business leads to higher cost of sales

Outlook

• Competitive pressure is not expected to ease & operating costs

will remain high across all business arms in 2012

• Despite the past few years’ significant increase in Pay TV

customer base, similar growth rates would be difficult to sustain in a fairly saturated Pay TV market

• Broadband & telephony business would continue to come under

pressure from aggressively priced offers by both wire-line and mobile services competitors. All these factors will continue to drag the Company’s return to profitability

• Despite such challenges, we will endeavor to strengthen our

programming offers, enhance the effectiveness of marketing initiatives, invest in service & infrastructure upgrades, introduce innovative value-added services & explore ways outside traditional broadcasting means to unlock the full potential of prized content so as to drive customer & revenue growths

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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.