X-Play Services: The Way to Consumer’s Heart

Sofia April 19th , 2006

Dates to Remember2003

January. The formal beginning of the liberalization of the telecom market in Bulgaria

October. The largest cable operator in Bulgaria is acquired by group of American investors.

December. The first independent F/O network starts operation between Sofia & Plovdiv. CableTEL gets publicly presented as the new company & brand name.

2004

September. CableTEL and few other alternative telecoms finally reach agreements to interconnect with the incumbent.

November. Launch of CableTEL’s Triple Play service in Sofia. The “NEW CABLE” is born.

2005

A complete alternative national F/O backbone network is completed in a joint project of CableTEL & Mtel

Begins the consolidation of the cable industry after CableTEL acquires several operators

2006

March. A new terrestrial fiber link to the telecom hub of Frankfurt is launched by CableTEL offering IP & Voice access to the residential & business customers

The Bigger Picture

S ource : IDATE, 2005

Broadband density(subscribers par 100 inhabitants)

0,0% 5,0% 10,0% 15,0% 20,0% 25,0%

Sweden

UK

France

Total UE-25

Spain

Germany

Italy

Poland

2001 2005

1. Broadband has become mas s

market

: TV over IP ?a reality or not quite yet

!New internet competition

Source: Alcatel 2005

What’s next for cable & telecom operators ?

The NEW CABLE …

Better, more personal, yet more sociable TV experienceBundled services – cheaper, simpler, more reliable

Better TV

Performance High-quality

Towards HDTV

Pers onal TV

“my content @ my time“ finally made simple

CommunityTV

“view together”community-specific

content

FACTSThe Average Revenue per Subscriber (ARPU) for 3-play enabled networks is 40% higher on average compared with non-3play networksCable in the US market is gaining market share from satellite operators for a first time in the last 10 years thanks to bundlingChurn is reduced dramatically when more then one service is used by the customerThe newly –acquired technological capabilities of the cable operators open to them the corporate business market for voice & data services

The NEW CABLE …

VOD in USUS households (millions)

“My content”

S ource : Forre s te r, te chnographics

DVR in the US

0.0

2.0

4.0

6.0

8.0

10.0

12.0

2001 2002 2003 2004 2005

Self-installed Satellite Cable

US households (millions)

“My time”

The New Challengers – THE BATTLE FOR THE BUNDLE

Fixed & Mobile telecoms are rushing to offer bundled data, voice & video services BUT:

IP-TV is still in its infancy as a technology – QoS & costs are hard to controlNo expertise in content acquisitionsMultimillion network upgrades required Bandwidth barriers to going HDTVMobile content – a whole new format – unavailable and customers unwilling to pay for it

Urban coverage

National coverage

Typically 18 channe ls

Typically 18-36 channe ls

Acces s to home video libraries

Remote PVRprogramming

TV at home TV on the GO

3G- +DVB H

Dis covery

Immers ion

ADSL

CableTEL Company Facts

The only alternative operator with sizable national access to the last mile: presence in 20 cities

network coverage of over 600,000 households

Broadband services in 10 cities - 256kbps to 2Mbps service plans providing direct internet access to Frankfurt and the major national IP peers

Investment program worth over 100 million leva since 2004

2600 km national optical infrastructure

Metropolitan F/O networks in different stages of construction in 17 cities

Carrier - class voice exchange with next-generation convergence capabilities

In-house call centre

650 experienced employees throughout the country

International management team

Plans for consolidation of the last cable mile

Direct terrestrial connectivity with Greece, Turkey, Romania and Macedonia

Strategy for broad expansion in newly-liberalized telecom markets in the region

The backbone of the Bulgarian alternative telecom market

CableTEL’s product solutions for residential and corporate customers

NationalFiber Ring

Internet

Other TelecomOperators

InternationalInterconnect

Global Switching Solution

Residential triple Play Customers

BusinessCustomers

VoIP

TDM

ADM

Router Additional Data Services

HFC Network FTTP

PBX

POTS POTS

FTTP

Info TV Services

Pay TV

EPS

Video conferencing

Public TV services

Basic Cable TV

Pay TV

(Near) VOD

EPS

Basic Cable TV

Pay TV

(Near) VOD

TV Shopping / EPS

Local Info Channels

Television

Unified number

Audio text

Services

Centrex

Call Centre

Total messaging

2+ lines with one number

Voice mail

Unified Messaging

1-2 lines with own numbering plan

Local, National, International calls

Conferencing

Telephony

МАN servicesIP TransitNational leased linesInternational leased linesInternational transit circuitsBroadcast video transferCollocation Backup / Disaster Recovery servicesDark Fiber LeaseWholesale voice/data services for operatorsTurn key infrastructure projects

24/7 Internet

Integrated Fax + e-mail

IP-VPN services

Leased lines

Corporate

24/7 Internet access

Integrated

e-Fax + e-mail

Online billcheck

SOHO

24/7 Unlimited Access

E-mail Server

Online Gaming

Webcam services

Online bill check

Residential

Capacity / HostingInternetProducts

Customer type

Product Portfolio

CableTEL vision for convergence of services

Premiere of Triple play services in BulgariaCable TV – basic package and premium channelsBroadband Symmetric Internet Access from 256kbs to 2MbsFixed telephony service, based on next generation convergence platform for IP & TDM signaling

Value Added servicesCATV – prepaid digital packages, (near)on demand video applications, electronic programming guide (EPG), local information channelsInternet – web hosting, e-mail servers, game servers, 2 ,Р Р antivirus services, chat servicesTelephony – online bill check information ; online payment, call hold, call transfer, call waiting and call restraint; caller identification, specialized numbers for access to services; phone support for clients; fax number; voice mail, wireless applications

Bundle Advantages for customer and operators

For the end userTelephone service – easy to use and without the need for new equipment Options for more than one fixed line, fax, etc. The best prices on the market.Attractive package price for the three servicesOne bill, one operator, one contact point for support

For the operatorPlatform for generating new income streams based on the existing infrastructure = better returnVirus Marketing EffectExpanding the client base by telephone service offersAccess to corporate clients as a new segment of the cable business Building loyalty and decreasing churn rate of customersTwo-way connectivity with clients enables development of new services: teleshopping, interactive applications, games, stakes Closing the circle of communication services for household needs by one single operator Better understanding of the clients’ needs and interests = winning business

Thank you for your attention !