T-ONLINE IPTV : the next generation TV

Marie-Christine Levet,

CEO of Club Internet/ T-ONLINE France

Sources: ARCEP, Ipsos-Media, Financial reports & CI internal

French ADSL Market (in Million of Subscribers)

3,2

6,1

8,9

9,9 10,5

11,0 11,8

13,8

14,7 15,3

0

2

4

6

8

10

12

14

16

18

2003 2004 2005 Q1 2006 Q2 2006 Q3 2006 2006 2007 2008 2009

Mill

ion o

f S

ubscri

bers

+ 92%

+ 46%

+ 33%

+ 30%

• 27 Million Internet users in France +50% of penetration rate on the +15 years old.

• High penetration of broadband 41% of the French households (vs. 32% for Germany and 15% for Spain).

French market: a very dynamic ADSL Market with a strong growth potential for IPTV

High potential for IPTV/ VOD market in France

• Cable/Satellite pay TV market is mature Penetration rate stable at 35% (9 millions, 4M Cable/5 M Sat), low growth on TV &

Cable (+100 000 users), no ARPU increase Consolidation is on going : 2004/2005: cable sector, 2006 : Merge of TPS /Canal+

• IPTV represents a high growth relay 7 Million potential customers out of a 11 Million broadband market A low penetration :15% of ADSL subscribers have IPTV (approx.1,7M subscribers)

• VOD Market is emerging but represent a high potential 2 M VOD sold on line in the last 6 months 8% of french consumers have heard about VOD but only 1% have used it. Analyst forecast a market of 165 M € in 2010 and a budget/year/household of 70 €.

• TV and VOD services become strong differentiators in a very competitive market

Launch by Club Internet of an innovative Triple Play offer

• ADSL2+ access up to 24 Mbps• Unlimited free calls for France and international

(fixed lines over 40 countries)• Extensive IPTV service with Microsoft TV : one of the first

launch of MSTV in the world• Customer care focus: free Home set-up

• TV Very fast channel change over 130 broadcast TV channels within less than 50 mms

versus 2-5 sec for competition Ease of use and friendliness of the product: picture in picture and zapping banner, Live EPG for the next 14 days advanced functionalities such as search engine, parental control, multilingual

• PVR integrated with EPG – very easy recording Time shifting feature Set-up box includes a 80 Go hard disk: 50 hours of programming

• VOD 1000 assets catalogue (movies, music, children programming, documentaries, theatre

trailers) Flexible tariffs: by unit or SVOD (subscription VOD).

A complete integrated offer

A unique combination of services

and great customer experience

Club Internet3 offer

Club Basic40 chanels

Club Théma23 chanels

Packs and à la carte channels(43 channels)

TPS (110 channels)

TV

Free VODMovie Trailers

Club Vidéo : 1000 VODs, Movies, kids prog., music, documentaries, adult

Club Vidéo Pass : 150 hours of kids programs

PVR & time shifting (50hrs)

Customer care on TV

PVR on web and mobile

29,

90

€o

pti

on

s

VOD services

Internet ADSL2+ + unlimited VOIP

PVR2

PVR : so easy to record now !

VOD: movie at home for everyone !

• A choice of more than 1000 programs

• Launch of VOD HD as of september 20th

• A more and more personal and personalized consumption of TV : 1/3 of current customers have changed their consumption of TV in countries having implemented PVR, 30 to 40% of time spent in

front of TV is spent watching recorded TV

• The power to the consumer : With easy PVR features , consumers become self programmers “My channel” becomes my N°1 channel

The emergence of TV on demand

70% of eligible customers choose Club-Internet3

30% of active customers are subscribing to a pay TV channel or “bouquet”

1 out of 4 active customers use VOD (average consumption of 2 vods /user).

Large success and demand for current movies need for adaptation of media chronology

1st in the IPTV IP Label ranking

A very high satisfaction rate : 80% would recommend the service to their friends

Positive first results