iesy Repository GmbH - Irish Stock Exchange

populations, with approximately 2.7 million foreign inhabitants, representing approximately 11.0% of the total population
and an attractive target market for our foreign and English language programming packages.
Established customer base generating stable cash flow. A large proportion of our residential customers pay via
direct debit, and many of our housing association customers pay pursuant to multi-year contracts. These characteristics have
historically helped reduce our churn rates and are indicators of a stable subscriber base with reliable revenues, which when
combined with our relatively predictable cost base, have led to strong and stable operating cash flow. In addition, our billing
policies contribute to our strong cash flow. We collect a significant proportion of our subscription fees on an annual basis in
advance. This billing and collection system provides us with significant cash inflows in the first and fourth quarters of the
year.
Growth opportunities. Our attractive market demographics and high quality network offer growth opportunities for
new products and services. We believe that we have the opportunity to win new customers and to sell additional products to
existing customers by introducing premium cable television, high speed Internet services and telephony in our upgraded
areas. We intend to introduce ish products in Hesse, and iesy products in North Rhine-Westphalia, as appropriate. In addition,
we plan to expand our premium cable television offerings and to market our high speed Internet services more aggressively.
Modern network with ability to deliver premium services. With over 1.5 million upgraded homes, iesy and ish have
the largest number of homes upgraded to receive high speed Internet and telephony of the Level 3 operators in Germany. By
the end of 2005, the Kerpen NOC should technically be able to provide premium cable television signals to the vast majority
of homes connected to our network. This should allow us to reduce our reliance on MSG for certain services associated with
distributing our television programs. Based upon current network usage, we have the ability to deliver additional television
program streams without any significant network upgrades.
Flexible capital expenditures. The capital expenditure requirements for maintaining our network and providing
existing products and services are relatively low. Capital expenditures requirements for premium cable television services are
limited, because our state-of-the-art NOC will have the capacity to provide premium cable television signals throughout the
vast majority of our network by the end of 2005. Investments required for high speed Internet services are modular and can
be based on the level of customer demand. Incremental capital expenditures, such as the upgrade of housing association
Level 4 networks or the introduction of a new product, are designed to ensure that our return on investment thresholds are
met.
Proven management team. Our management team has significant experience in the German, European and U.S.
cable television industries. Members of our management team have held positions at leading cable operators, including
Telewest Communications, Liberty Media International and ntl. The management team mixes international cable experience
with strong local expertise. We believe the combination of the iesy and ish management teams will benefit the combined
entity with the sharing of best practices, cost reduction strategies and product development experiences.
Our Strategies
We aim to build on our existing subscriber base and improve cash flows through the following strategies:
Enhancing customer satisfaction across all segments. We seek to enhance customer satisfaction through product
innovation and service excellence. The key to this is segmentation, because a distinguishing feature of the German cable
market is the need to address both business and consumer needs. We have therefore organized our business around a detailed
segmentation of our customer base. Our strategic initiatives, investment decisions and product development are led by the
demand of specific customer segments. Our specialized sales forces use tailored marketing techniques to address the needs of
our customers within their specific segments. Our customer management and care operations as well are designed to handle
the different needs of our particular customers. For example, we have a unit within our sales force and customer care function
that caters to the needs of Level 4 operators and large housing associations.
Introducing new services for existing customers and winning new customers. We intend to continue to enhance the
value of our products and to develop our high value customer base, rather than increasing our subscriber base at any cost. We
will introduce and market new services, such as an expanded premium cable television offering and high speed Internet
access, as we see sufficient customer demand and willingness to pay for these new services. We also intend to introduce iesy
services in North Rhine-Westphalia, and ish services in Hesse. We believe these services will assist our efforts to retain
customers against competition from satellite and new technologies. No significant capital expenditures should be required to
offer expanded premium television services. High speed Internet access and telephony services can be offered without
substantial additional capital expenditures in places where our network and the local connections to our network are already
upgraded.
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