Cable’s Drive to Accelerate Broadband

Manuel KohnstammManaging Director Public Policy & Communications

WIK Berlin, April 2010

April 2010 Page 2

Liberty Global Footprint

SwitzerlandSwitzerland

SlovakiaSlovakia

Puerto RicoPuerto Rico

AUSTRALIA

THE AMERICAS

WESTERN EUROPECENTRAL AND EASTERN

EUROPE

ChileChile

IrelandIreland

BelgiumBelgium

PolandPoland

AustriaAustriaHungaryHungary

RomaniaRomania

NetherlandsNetherlandsGermanyGermany

Czech RepublicCzech Republic

Video Broadband Voice

April 2010 Page 3

Infrastructure investor and competitor in Europe since 1995

Building scale, driving innovation, increasing choice for consumers

Superior network architecture and internet speeds

Pushing the customer experience

Developing Interactive Digital Television

Liberty Global Activities

April 2010 Page 4

Long-term Industrial Operator

Strong operational track record, investing in innovation and accelerating market development:

2000: LGI started real broadband forcing DSL investments

2003: LGI started (interactive) DTV in its markets

2005: LGI launches digital telephony (VoIP) forcing incumbents to follow and offer voice at lower cost

2009: LGI’s 120Mb Fibre Power broadband

forcing the competition to follow and to

accelerate investment in fibre networks

April 2010 Page 5

Cable grows, but size matters

April 2010 Page 6

German Communications Industry - a €47 market

Source: Screen Digest (2010), Wireless Intelligence

0

20

40

60

80

100%

Mobile

DT

Vodafone

O2

E-Plus

~23

Fixed telephony

DT

Other

~13.5

VodafoneDSL

Other altnets

DT

United

Kabel BW

Other

UnitymediaKDG

~6.5

Uni

tym

edia

KDG

KabelBW

Other

DT

~2

Unity-

media

Prem

iere

/Sky

Kabel BW

~1.5

Germany consumer spending telecom market (2009, €B)

KDG Other KableKabel BW

BroadbandTV

access

PayTV

Total = ~47

Vodafone

Vodafone

Vodafone

Vodafone

BasicBasic TV

April 2010 Page 7

Cable and Telco Revenues – Western Europe

D

NL

B

IR

UK

F

AT

11:1

5:1

6:1

5:1

13:1

19:1

5:1

Note: Revenues include fixed telephony, mobile telephony, internet access and TV distribution1) Figures not fully consistent due to different revenue categories2) Exchange rates as of 19.05.2009Source: Screen Digest, Annual Reports, oanda.com, Booz & Company analysis

Total Domestic Revenues of Telco Incumbent€ Bn, 2008 1)

*

*

*

* 2)

*

*

*

*

Total Cable Industry Revenues€ Bn, 2008

CableFragmentation

(# of cable operators to get acombined market share of 80%)

3

2

>5

1

1

1

>6

9:1

E

3.6 2)

April 2010 Page 8

• With limitations on size and geographic reach, we focus on our own unique selling propositions:

• Pushing the speed race: Cable starts where DSL ends

• Pushing lower tiers, the ‘sweet spot’ 25 for 25, and higher tiers at 120

• Cable acts as the catalyst for NGA investments

The European Speed Race

April 2010 Page 99

0

20

40

60

80

100%

Western Europe residential broadband internet connections(B)

2008

98

2009

105

2010

110

2011

113

2012

115

2013

117

2014

25-50Mbps

8-25Mbps

1-8Mbps

118

-45%-20%

25%

59%

65%

(08-14)>50Mbps

<1Mbps

CAGR

Note: Based on Gartner data until 2012; 2013-2014 based on extrapolation of Gartner overall growth and segment penetration evolution trend lines Source: Gartner 2008 (Dataquest Insight: The Future of Residential Broadband Internet Access Speeds)

Predicting demand starts getting more accurate

Range 1-7 Mbp/s 10-30 Mbp/s

April 2010 Page 10

Country Max. speeds

Sweden 100 Mb/s

Germany 100 Mb/s

France 100 Mb/s

Finland 200 Mb/s

Belgium 100 Mb/s

Austria 100 Mb/s

Czech Republic 100 Mb/s

Hungary 120 Mb/s

Netherlands 120 Mb/s

Poland 120 Mb/s

Slovak Republic 120 Mb/s

Switzerland 100 Mb/s

Portugal 200 Mb/s

10

Next-Generation Cable Broadband

April 2010 Page 11

Broadband subs: Continued double-digit growth

21.5 mn European cable broadband subscribers, a 18% jump from 2008German cable broadband subscriptions almost double compared to 2008

Source: Screen Digest; YE 2009 – EU 27

Total European Cable Internet Customers

11

April 2010 Page 12

Source: Solon

Cable pushed broadband penetration

Broadband penetration significantly higher in active Cable markets

Western Europe: + 30% penetration in cable driven markets

Central & Eastern Europe:

+ 50% penetration in cable driven markets

"Cable markets" reached higher penetration

quicker

Broadband Penetration in Europe (in % of HH, 2008)

Market Share of Cable > 20% Market Share of Cable < 20%

CEE

74% 74% 71%62% 60% 55% 54%

45%39%

66% 61% 57% 55%43%

33% 31%22%

74% 74% 71%62% 60% 55% 54%

45% 39%

DK NL SE UK BE MT AT ES PT

Ø 59%

66% 61% 57% 55%43%

33% 31%22%

FI LU FR DE IE CY IT GR

Ø 46%

54% 50% 45% 43% 40% 40% 38%28%28%31%

54% 50% 45% 43% 40% 40% 38%

EE SI HU LT CZ LV PL

28%28%31%

RO SK BG

Ø 44%

Ø 29%

WE

+30%

+50%

April 2010 Page 13

Cable operators structurally invested more

Source: Ovum; Credit Suisse; Annual reports

0

10

20

30%

AT

Cab

le

Form

erPT

T

16%

13%

DE

24%

16%

NL

20%

15%

PT

22%

14%

CH

24%

18%

06-08 average capex/sales ratio

Cable operators have invested over €22bn into the network over the past 6 years

On average, this is a Capex of 25% of revenues, compared to 15% for telco’s

Cable invested structurally more in past years

NGA requires investing

April 2010 Page 14

Leapfrogging DSL with 2.0, now DOCSIS 3.0Source: Solon

0.0646

50

25

50

>400 400

ISDN/ Modem ADSL EuroDOCSIS2.0

ADSL2+ VDSL EuroDOCSIS3.0

FTTH

2002 2004 2006 2007 2008 2010+Indi-

cative 20092002 2004 2006 2007 2008 2010+Indi-

cative 2009

Music/Video

VOD IPTV Single Stream UGCPhotoproc./

Gaming HDTVSingle Stream

HDTVMultiple Stream

E-mail

Music/Video

VOD IPTV Single Stream UGCPhotoproc./

Gaming HDTVSingle Stream

HDTVMultiple Stream

E-mail

NGA Networks

Cable technologyFixed-line / Fibre technology

April 2010 Page 15

Beyond speed: integrate the connected home

In your living room

On portable TV

Over the top on a PC

Over the top on a TV

On many different STBs

On Ethernet connected TVs

April 2010 Page 16

And enable any to any communication

STB/ PVR

Hybrid-STB (TiVo)

Satellite,Cable,IPTV

Internet

Desktop PC

Broadband STB

Game Console

DVD-Player

Open Box

iPadMobile TV

Smartphones

Widget Portale

Tru2Way

DVB-H / DMB

Source: Bitkom, TNS Infratest 2009, Typologie der Wünsche, Booz & Company analysis

April 2010 Page 17

Match the Telco challenge

Accelerating Docsis 3.0 roll-out

Forcing the next wave of infrastructure competition

Based on superior networks and good customer care

Constantly evolving the Digital Home

Future focus on Personalisation and Web integration

Cable’s Roadmap