iesy Repository GmbH - Irish Stock Exchange

television business generated €87.7 million (84.8%) of ish’s total revenues in the three months ended March 31, 2005 and
€359.5 million (84.8%) of its total revenues for the year ended December 31, 2004.
The basis for the subscription fees for ish’s basic cable television services for its residential subscribers and certain
business customers is its standard rate card. The rate card was originally established by DTAG. The fees with respect to the
rate card vary depending on the number of subscribers connected to ish’s network at each home connection point. In general,
the fewer subscribers there are connected to a connection point, the higher the unit monthly fee will be that is paid per
subscriber receiving signals through that point. Therefore, residential and certain business subscribers connected to the
network pay the highest monthly subscription fee, whereas business and strategic accounts customers that receive ish’s signal
for numerous subscribers per home connection point would typically pay substantially less per subscriber. For certain
business and strategic accounts customers, additional discounts may apply.
In 2002, ish last implemented a subscription fee increase across all basic cable customer segments. The increase was
between 5% and 30% depending on the customer segment. In April 2005, ish raised subscription fees for a limited customer
segment of approximately 366,000 subscribers (residential subscribers that entered into cable television contracts in 1991 or
earlier) by 8.6%. ish experienced increased churn following the 2002 price increase and has stated that it expects some
increased churn in connection with the 2005 price increase. See “—Factors Affecting ish’s Results of Operations—
Subscribers.”
Historically, as part of ish’s pricing arrangements with customers, ish offers several discounts to the standard rate card.
For example:
• For residential subscribers, ish offers a standard 5% discount to those who prepay the monthly subscription fees on
an annual basis.
• For business and strategic customers, ish offers discounts according to a number of factors, including the number
of homes serviced, payment terms and contract duration.
ish’s basic cable pricing is currently subject to regulatory review by RegTP. As a result of the new regulatory regime
established under the recently introduced EU’s “New Framework,” ish could become subject to more regulation in the future.
See “Risk Factors—Risks Relating to Regulatory and Legislative Matters—We do not have complete control over the prices
that we charge to broadcasters and customers, including Level 4 operators, and this may adversely affect our future cash
flows and profitability.”
ish believes that it will maintain its market share in basic cable by continuing to focus its sales and marketing activities
on specific market segments, to implement more customer retention programs to reduce customer churn, and to put in place
more stringent detection measures such as blocking to ensure that only paying subscribers have access to ish’s network. ish
also believes the bundled offerings of its premium cable television, high speed Internet and telephony services will
complement its basic cable offering and help retain subscribers. See “Risk Factors—Risks Relating to Our Business—We
operate in competitive industries, and competitive pressures could have a material adverse effect on our business” and “—If
we fail to introduce new or enhanced products or services successfully, our revenues and margins could be lower than
expected.”
Premium Cable Television Sales
ish’s premium cable television business generates sales primarily through subscription fees. ish’s premium cable
television business also generates revenues through carriage fees paid by Premiere to ish via MSG. These revenues are shown
below under “—Carriage fees.”
ish markets a variety of specialized programming packages to its general subscriber base in North Rhine-Westphalia
under the “ish Digital TV” brand. Packages offered are shown in the following table:
ish Digital TV Packages Description
ish music Music and music-related programming
ish Family General interest programming
ish Active Sports and adult related programming
ish Lifestyle Alternative lifestyle programming
ish Premium Includes all channels in the ish Digital TV packages shown above
ish Private Adult programming
“a la carte” Many of ish Digital TV channels are offered individually
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