iesy Repository GmbH - Irish Stock Exchange

Total revenues generated from the foreign language services subscriber for the three months ended March 31, 2005
€0.2 million, or 0.6%, of its total revenues and €0.6 million, or 0.4%, of iesy’s total revenues for the year ended December
31, 2004.
iesy’s Premium Cable Carriage Fees
iesy currently distributes Premiere’s premium cable television packages through its arrangement with MSG. Through
this arrangement, MSG charges Premiere an annual carriage fee covering encryption and distribution by MSG as well as the
carriage of its content over the digital channels on iesy’s network and on the networks of ish, KBW, and KDG. MSG retains
15% of the carriage fees from Premiere, while the balance from these carriage fees and the associated costs are allocated
among ish, KBW, KDG and iesy, based upon the respective number of digitally reachable subscribers. The Premiere
packages are not affected by MSG’s termination of Term Sheet 1. See “—Other Significant Supply Agreements—MSG.”
iesy’s Programming Content and Payments
iesy licenses its foreign language premium cable television programming from third party content providers such as
Mediapool, which procures iesy’s foreign language programming on its behalf. Fees are based upon a fixed fee per subscriber
per channel with no minimum guarantees.
For iesy’s English language programming content, iesy has entered into agreements directly with broadcasters. These
agreements provide for fees based upon the total number of subscribers to the package. A few of the agreements include
relatively low minimum guarantees, which means iesy must pay a fixed amount for the content regardless of the actual
number of subscribers.
During the three months ended March 31, 2005, total content fees for iesy amounted to €0.1 million, and €0.2 million
during the year ended December 31, 2004.
High speed Internet
As of March 31, 2005, iesy served approximately 2,300 high speed Internet subscribers. iesy recently reintroduced its
high speed Internet services to the market and it now offers three high speed Internet offers. iesy internet 256 is a lower speed
offering designed to encourage Internet users to upgrade from dial-up access. It is provided at a monthly flat rate of €14.95.
iesy internet 2000 provides access at a higher speed of 2 Mb/s. It is provided at a monthly flat rate of €19.95. iesy’s high
speed Internet products are only available for subscription using direct debit, in order to further encourage its subscribers to
switch to this preferred payment mechanism. In addition to monthly subscription fees, subscribers pay an activation fee of
€98.95 upon subscribing to iesy’s high speed Internet services. iesy’s high speed Internet operations generated €0.1 million
(less than 1.0%) of its total revenues for the year ended December 31, 2004.
iesy offers iesy Multimedia-Anschluss, a service tailored for housing associations to purchase Internet access at 128
kbit/s on a bulk basis and to enable their properties for Internet access. For instance, in November 2004 iesy entered into a
contract with GeWoBau Marburg, a housing association. Under this contract iesy just completed the upgrade of the existing
Level 4 in-house wiring for approximately 2,600 connected homes and now offers its iesy Multimedia-Anschluss service,
which includes high speed Internet access at 128 kbits/s. In addition to the monthly fees iesy will receive under this contract
for each connected home, it has the right to sell its premium cable television and high speed Internet products to all of
GeWoBau Marburg’s housing association residents. This contract underpins iesy’s investment in upgrading the Level 3
network in Marburg. iesy also offers as an additional service to housing associations in its upgraded areas, under the brand
name iesy Service Plus, a product which combines a service plan for housing associations, covering the maintenance of their
in-house networks in upgraded areas, with the ability for residents to receive iesy high speed Internet access. iesy’s Service
Plus offer is provided for a fixed fee per home; as of December 31, 2004 iesy had approximately 8,000 homes subscribed to
this offer.
In the fourth quarter of 2004, iesy commenced the upgrade of its network in Frankfurt (with 150,000 homes completed
by the end of 2004) to a 630-MHz bi-directional capability. In the third quarter of 2005, iesy expects to have upgraded an
additional 200,000 homes in Frankfurt. This upgrade, combined with iesy’s new range of products, including iesy
Multimedia-Anschluss and iesy Service Plus, which are tailored to the needs of housing associations, should allow iesy to
increase the number of subscribers to its high speed Internet service.
In March 2005, iesy entered into a contract with Viterra, a large housing association in Hesse, under which iesy will
upgrade the Level 4 network of Viterra and will be able to offer its analog and premium cable television and radio services,
and where possible its high speed Internet services, to the tenants of Viterra. The Viterra contract includes 6,000 homes
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