iesy Repository GmbH - Irish Stock Exchange

transmit the signals to approximately 61 headends at the city level, via microwave links and fiber optic transmission. All
master headends and the vast majority of the headends are located in facilities owned by DTAG. iesy leases these facilities
from DTAG under the SLAs. To operate its microwave equipment and systems used to transmit the signals between the
master headend and the headends, iesy leases the tower space for the microwave equipment from DTAG. The capacity of this
microwave backbone is limited to 450 MHz. Therefore, in order to increase iesy’s backbone network capability, improve
efficiency and reduce costs, and offer to provide a single integrated network across Hesse, iesy has recently commenced
replacement of the microwave equipment with leased fiber optic links. To this end, iesy and DTAG entered into the BRNiesy
agreement in March 2005. iesy has the ability to activate further capacity up to 630 MHz in its distribution network
which it intends to do as content becomes available for that incremental capacity and alongside the replacement of the
microwave network. The incremental capital expenditures required are not material. Frankfurt and south Hesse are already
served by a leased fiber optic system. This serves approximately 56.2% of iesy’s total subscriber base from a single master
headend in Frankfurt and allows for higher bandwidth usage as required. The received signals at the headends are distributed
primarily by co-axial cable (approximately 98.2%), but in some cases fiber optic cable (approximately 1.8%), to
approximately 390 hubs. In most cases iesy operates the co-axial cable, but it typically leases the fiber optic network from
DTAG under the SLAs. The hubs are pure distribution points, as no content is added.
From the hubs, A-lines extend through public right of ways (öffentlich-rechtliche Wegerechte). From the A-lines,
primary extension lines, extension lines and drops, or B lines, C lines and D lines, respectively, extend via splitters to the
connection points. In total there are approximately 655,000 connection points available on the network. In the case of
multiple-dwelling units, the connection point may be located in the basement of the building. At the connection point, iesy’s
own Level 4 network, housing associations or professional Level 4 operators with their Level 4 network connect to iesy’s
network. All third parties connecting to the network are required to meet iesy’s technical standards.
In general, the network is comprised of co-axial cable that is either buried in the ground or housed in cable ducts. The
ducts are typically owned by DTAG, and iesy leases duct space for its network from DTAG under the SLAs. The distribution
plant is powered by approximately 19,070 amplifiers. With the exception of the duct and fiber, iesy operates all of the
distribution plant and associated electronics ourselves. iesy purchases the electrical power required to operate the master
headends, headends and amplifiers through DTAG under the SLAs. Purchasing the power from DTAG is necessary because,
in many cases, the same power source supplies DTAG’s telephone plant and iesy’s cable plant. In general, DTAG sells the
power to iesy at cost plus a margin of approximately 5%.
iesy has in the past and will continue to make improvements to its networks. Future upgrades above 450 MHz can be
executed in order to meet customer demand for high speed Internet services or in conjunction with long-term agreements. In
such instances, iesy can upgrade its 450 MHz network to bi-directional capability with minimal trenching by utilizing
existing fiber in the ground and by exchanging the amplifiers. If demand for future services require additional bandwidth,
iesy will remove the filters limiting the spectrum of the exchanged amplifiers without changing the basic network
architecture. Full bi-directional capabilities significantly increase iesy’s ability to upgrade its service offering.
160