iesy Repository GmbH - Irish Stock Exchange

High Speed Internet Sales
ish offers high speed Internet services to subscribers in upgraded areas. ish’s high speed Internet business generates
sales primarily through subscription fees. In addition, ish also derives revenues from activation charges, which are
periodically waived in connection with promotions to attract new subscribers. ish currently has the following three high speed
Internet products:
ish high speed Internet products Description
ish Internet flat 256 kbit/s product which is targeted at Internet beginners and occasional Internet
users
ish Internet flat plus up to a 2 Mbit/s product designed to compete with other high speed Internet
providers
ish Internet flat pro service that offers speed up to 5 Mbit/s downstream and 512 kbit/s upstream and
which represents one of the fastest in the German market for residential high
speed Internet services
As of March 31, 2005, ish served approximately 19,000 high speed Internet subscribers and approximately 16,000 high
speed Internet subscribers as of December 31, 2004. ish’s high speed Internet business generated €1.6 million (1.6%) of ish’s
total revenues in the three months ended March 31, 2005 and €5.3 million (1.2%) of its revenues for the year ended
December 31, 2004.
Going forward, ish expects to derive additional subscription and installation fees from increased subscriptions for ish’s
high speed Internet products. ish expects to continue to upgrade its network only, in conjunction with new business and
strategic accounts contracts to a full bi-directional capability. As of March 31, 2005, ish’s upgraded bi-directional network
passed 1.3 million homes in the North Rhine-Westphalia region.
Telephony Sales
ish offers telephony services to subscribers in upgraded areas. In 2003, ish discontinued marketing “ish Telefon” as a
stand alone service. Since the third quarter of 2004, ish has marketed telephony services only in a bundle with high speed
Internet access under the “ish Zusammen” brand for an additional €5.00 monthly fee on top of the respective ish Internet
tariff, as a way to increase ARPU at low additional cost. The number of telephony subscribers was approximately 7,000 as of
March 31, 2005 and approximately 5,000 as of December 31, 2004. ish’s telephony services generated €0.5 million (0.5%) of
ish’s total revenues for the three months ended March 31, 2005 and €1.1 million (0.3%) of its total revenues for the year
ended December 31, 2004.
Other Revenues
Other revenues primarily consists of own work capitalized, the release of accruals relating to prior periods and prior
period income. ish has historically recognized a fairly significant amount of other revenues. ish believes this item will decline
over time.
In the three months ended March 31, 2005, other revenues were €3.4 million (3.4%) of ish’s total revenues and €22.4
million (5.3%) of ish’s total revenues for the year ended December 31, 2004.
Own Work Capitalized.
Own work capitalized reflects that portion of personnel costs and related overhead which is directly attributable to the
planning and construction of projects related primarily to the upgrading of ish’s network. Under German GAAP, these costs
are also reflected in ish’s revenues to the extent capitalized. If and to the extent ish’s upgrading activities (and hence
capitalized costs) increase, the contribution from own work capitalized to revenues will also increase. Own work capitalized
in the three months ended March 31, 2005 was €1.3 million (1.3%) of ish’s total revenues and for the year ended December
31, 2004 was €6.0 million, or 1.4% of ish’s total revenues.
Other Operating Income.
Other operating income in the three months ended March 31, 2005 amounted to €2.1 million (2.1%) of ish’s total
revenues and for the year ended December 31, 2004 amounted to €16.4 million (3.9%) of ish’s total revenues mainly
resulting from income related to previous financial years and value adjustments.
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