Investor & Analyst Conference 2011 > Driving the future
London – February 28, 2011 New York – March 2, 2011 Safe Harbor Disclaimer
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995.
Various statements contained in this document constitute “forward-looking statements” as that term is defined under the U.S. Private Securities Litigation Reform Act of 1995. Words like “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expects,” “estimates,” “projects,” “positioned,” “strategy,” and similar expressions identify these forward-looking statements related to our financial and operational outlook, dividend policy and future growth prospects, which involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements or industry results to be materially different from those contemplated, projected, forecasted, estimated or budgeted whether expressed or implied, by these forward-looking statements. These factors include: potential adverse developments with respect to our liquidity or results of operations; potential adverse competitive, economic or regulatory developments; our significant debt payments and other contractual commitments; our ability to fund and execute our business plan; our ability to generate cash sufficient to service our debt; interest rate and currency exchange rate fluctuations; the impact of new business opportunities requiring significant up-front investments; our ability to attract and retain customers and increase our overall market penetration; our ability to compete against other communications and content distribution businesses; our ability to maintain contracts that are critical to our operations; our ability to respond adequately to technological developments; our ability to develop and maintain back-up for our critical systems; our ability tocontinue to didesign netktworks, itllinstall fac ilities, obta inand maitiintain any requidired governmentltal licenses or approvals and finance construction and development, in a timely manner at reasonable costs and on satisfactory terms and conditions; our ability to have an impact upon, or to respond effectively to, new or modified laws or regulations, pending debt exchange transactions, our ability to make value-accretive investments, and our ability to sustain or increase shareholder distributions in future periods. We assume no obligation to update these forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.
Adjusted EBITDA and Free Cash Flow are non-GAAP measures as contemplated by the U.S. Securities and Exchange Commission’s Regulation G. For related definitions and reconciliations, see the Investor Relations section of the Liberty Global, Inc. website (http://www.lgi.com). Liberty Global, Inc. is our controlling shareholder.
2 Agenda
1 Introduction & key higgghlights 2010 Duco Sickinghe, CEO
2 Our product portfolio Herbert Vanhove, SVP Product Management
3 How we target the market Inge Smidts, SVP Marketing
4 Efficiencies in sales and customer care Patrick Vincent, CCO
5 Coax in B2B Martine Tempels, SVP Business Solutions
6 Our core asset: our network Jan Vorstermans, COO
7 Attracting and retaining talent Claudia Poels, SVP HR
8 Our views on regulation for cable Luc Machtelinckx, EVP General Counsel
9 Financial results and shareholder returns Renaat Berckmoes, CFO
10 Concluding remarks and outlook Duco Sickinghe, CEO 3 A cable comppyany with a p roven track record
Strong • Fully upgraded , bi‐directional 600 MHz network • Continuous stable level of investments network • Active node splitting to create next‐gen network
Product • EuroDocsis 3.0 powered broadband products • Full interactive digital HDTV platform with true VOD leadership • Active beyond cable: WiFi and mobile
• Customer Loyalty closely measured Service is key • Management reward system based on satisfaction levels A strong • Leading service levels through efficiency
brand • Strong, diversified management team Our people • Balance between long track record and outside experience • Great company culture, promote from within
• Strong revenue growth and significant runway ahead Solid financi al s • Sustained focus on efficiency and disciplined cost control • Prudent balance sheet management 4 Active in a region with national characteristics
+ 1/3rd of Brussels
Legacy Telenet Network Interkabel Network = acquired Oct 1, 2008
. Flanders is a cohesive footprint with … . Our franchise area covers 2.9 million . … a focused, regional government households (63% of Belgium) . … a regional culture and langgguage . 2.8 million homes passed with our cable = 98% reach . … a regional media environment . 2.3 million unique customers . … a strong and growing economy = 81% cable penetration . … superior GDP per capita (23% above EU average) . In B2B, we cover the whole of Belgium and Luxembourg 5 Shareholder structure
Shareholder structure Last price: €31.39 52w High: €32.45 (Feb. 23, 2011) (Dec. 17, 2010)
ISIN: 41.8% 52w Low: €18.06 BE0003826436 50.2% (May 25, 2010)
Daily average # shares traded Market Cap: 5.0% 281,360 €3,530m
00%0.0% 3.0% EEtnterpri se VVlalue: €5,818m Liberty Global Consortium (*) BNP Paribas Investment Partners (**) Norges Bank Employees Public
(*) Including 94,827 Liquidation Dispreference Shares 6 (**) Former Fortis Investment Management SA Our ppgositioning: an innovator
1996 First to launch Value Added network leading to MPLS – B2B
1997 First to launch Broadband Internet
1998 First to launch Telephony on a competing infrastructure From service provider to leading infrastructure competitor 2001 First to launch Do‐It‐Yourself install, lowering entry barriers
2003 First to launch Free Anti‐Virus and Anti‐Spam service Proven track record on innovations 2004 First to launch FreePhone, a flat‐fee telephony offer with visible results for the customer 2005 First to launch Broadcast on Demand
2006 First to launch iDTV with Personal Video Recording
2007 First to launch Digital High Definition Accelerator of price com petition and enhanced value proposition 2009 First to launch social tariffs for broadband Internet
2009 First to negotiate and implement a Full MVNO deal
2010 First to launch 3DTV, web PVR and LTE trial Implementation of Business Overlay ‐ B2B 7 Our key strategy: cross- and upsell to cable TV customers
Fixed Digital TV Telephony
44% 29% penetration penetration
Broadband Internet Mobile Telephony 44% Basic penetration Cable TV 81% penetration
8 Penetration rates relate to total homes passed by the Telenet network One of the highest addressable markets in Europe with strong growth potential
Cable penetration per household Triple‐play penetration (Q3 2010) (Q3 2010)
63% 75% 72% 52%
51%
31%
25% 20% 14% 13%
BE UK DE PT NL Telenet Virgin Media Kabel DG ZON UPC
. Strong historical adoption of cable services . High cable penetration unlocks significant addressabl e marktket for up‐ and cross‐sell . Substitution of analog TV by digital TV (cable, IPTV, satellite, DTT) 9 Source: European Commission Household Survey, analyst reports The Belgian telecoms landscape today Still largel y d omi nat ed b y i ncumb ent operat or
Revenue telecom market Belgium FY2009 (Consumer & Business Services)
€ 4.082 mn € 4.431 mn € 815 mn Others 0% KPN/BASE 16% 16% 1% 30% 5%
15% 0% 0% Mobistar 36%
Telenet 0% 54%
64% Belgacom 48%
16%
Mobile Fixed data & voice TV
10 Source: Belgacom; Mobistar; KPN; Cable Belgium; Telenet; team analysis The Belgian telecoms landscape today AtA strong na tiona l competit or versus regional cabl e syst ems
Characteristics of our key competitors in fixed Other cable networks in Belgium
. Former telco incumbent is half state‐owned . All cable networks are adjacent . >80% VDSL coverage . Numéricable active in part of Brussels . Belgacom TV is top 3 IPTV platform (approx. 180,000 homes passed) . Fixed and mobile convergence . VOO active in Wallonia (approx. 171.7 million homes passed) . More than 75% market share in B2B
11 Our key competitors all compete with different pltflatform tec hno log ies
Services
FtitFootprint NtiNational NtiNational NtiNational Fland ers
Core technology VDSL / 3G ADSL / DTH / 3G 2G, upgrading to 3G Satellite
Relevant Fixed line: c.65% TV: c.3% marketshare Broadband: c.50% Mobile: c.35% Mobile: c.20% (Flanders only) (national) Mobile: c.45%
Bundling Quadruple Quadruple Triple –
12 Key accomplishments 2010 NdtNew product itiinnovations lay the foun da tion for ftfuture growth
Launch Fibernet 100 Reinforcement of LTE trial on E19 €209m prepayment Executive Team motorway of outstanding debt
NDTVGUINew DTV GUI and Capital reduction launch web PVR Acquisition of of €2.23 per share Launch of
Q1 2010 Q2 2010 Q3 2010 Q4 2010
Agreement with €500m debt issuance Norkring België on Voluntary debt use of DTT extension Introduction of Fair Use Policy Revised FY2010 outlook Major B2B contract Announcement win Axa Digit a l Wave 2015 €100m debt issuance
13 Operational highlights FY 2010 CtidContinued momentum in our residenti a l performance
Broadband internet subscribers (in 000) Fixed telephony subscribers (in 000) 1,227 29,800 815 1,116 741 985 net additions 883 in Q4 2010 629 729 548 624 455 +10% 364 +10% YoY YoY
2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010
Telenet Digital TV subscribers (in 000) Mobile telephony subscribers (in 000) 74, 200 1,183 net additions in Q4 2010 198 938 Equivalent to 129 674 84,500 boxes +54% 87 391 +26% 56 YoY 226 YoY 75 13
2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010
14 Solid improvement of multiple-play economics Strongest annual customer ARPU increase ever since
Single‐play vs multiple‐play (*) TiTripl e‐play subibbscribers (in 000) Single‐play Multiple‐play 719 651 31% 539 35% 41% 45% 52% 58% +10% 323 YoY 236 69% 176 65% 59% 55% 48% 42%
2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010
Services per customer relationship ARPU / unique customer (€/th)/month)
1.90 38.8 1.79 35.0 1.67 32.5 1601.60 29.4 1.50 +6% 26.7 +11% 1.42 YoY 24.8 YoY
2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 15 (*) multiple play represents customers subcribing to two or more products, but not necessarily in a bundle Financial highlights FY 2010 FChFree Cash Flow up 54% on Adj. EBITDA growth and lower cash capex
Revenue (€m) Adjusted EBITDA (€m)
1,299.0 1,197.4 668.7 607.7 +8% +10%
FY 09 FY 10 FY 09 FY 10 % of revenue 50.7% 51.5%
Accrued capital expenditures (€m) Free Cash Flow (€m) 316.3
30.7 DTT license 317.6 257.8 166.9 285.6 +54% ‐10%
FY 09 FY 10 FY 09 FY 10 % of revenue 26.5% 22.0% % of revenue 16 (excl DTT) 13.9% 19.8% The importance of multiple-play in our growth stttrategy
Growth opportunities Customer base Dec‐2008 Customer base Dec‐2010
23% 32% 32% 42% 42%
22% 55% 26% 26%
Single‐play Dual‐play Triple‐play Single‐play Dual‐play Triple‐play Single‐play Dual‐play Triple‐play
Triple‐play customers ARPU per unique subscriber ARPU / Unique customer (€/month) (€/month)
719,200 40.0 +85% 40.0 651,000 +9% +10% 36.8
Actual Single‐play Dual‐play Triple‐play Q4 2009 Q4 2010 Q4 2009 Q4 2010 17 Continuing our efforts for a sustainable environment
Ambition Become climate neutral by 2015
CO2-friendly Solar Electronic car policy panels bills Set‐top box power consumption 100% 90% 80% 70% ‐70% 60% 50% 40% 30% 20% 10% Renewable Power saving 0% Bike plan First‐Generation Basic Sleep Advanced Sleep energy set-top boxes STB Mode Mode
18 Agenda
1 Introduction & key higgghlights 2010 Duco Sickinghe, CEO
2 Our product portfolio Herbert Vanhove, SVP Product Management
3 How we target the market Inge Smidts, SVP Marketing
4 Efficiencies in sales and customer care Patrick Vincent, CCO
5 Coax in B2B Martine Tempels, SVP Business Solutions
6 Our core asset: our network Jan Vorstermans, COO
7 Attracting and retaining talent Claudia Poels, SVP HR
8 Our views on regulation for cable Luc Machtelinckx, EVP General Counsel
9 Financial results and shareholder returns Renaat Berckmoes, CFO
10 Concluding remarks and outlook Duco Sickinghe, CEO 19 Our strategic priorities: a superior service experience
360° EiExperience A unique service experience for our customers
Speed leadership through Fibernet
Internet Television Richest experience & OTT market convergence Platform
Bundles
Maximize ARPU per unique customer
20 Broadband Internet
Speed leadership with Fibernet Broadband internet Consistently growing by approx. 100, 000 subscribers per annum
Broadband penetration Internet net additions (000) (% of households) 131 Broadband penetration ‐ Belgium 114 116 112 111 105 102 100 95 100 72% 68% 64 64% 60% 19
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2007 2008 2009 2010
. Sustained net new subscriber growth driven by the Broadband penetration premium positioning of our cable broadband (% of households 2010) products over competing infrastructures; 92% 72% . New EuroDocsis 303.0 lineup to unlock upsell opportunities; +28% . Competition between infrastructures drives broadband penetration; BliBelgium NthlNetherland s . Compared to neighboring countries, still untapped growth potential. 22 Broadband internet Mar ke t s hare o f ne t a dditions consi st entl y ab ove currentktht market share
Broadband market shares ‐ Belgium Market share of net additions –Belgium (June 2010) 140 Belgacom’s 80% Telenet Belgacom VOO Mobistar acquisition KPN/BASE Coditel Other of SSltcarlet 120 70% 3% 2% 1% 60% 3% 100 50% 80 7% 40% 36% 60 30% 40 20%
20 10%
0 0% 48% Q4 2008Q1 2009Q2 2009Q3 2009Q4 2009Q1 2010Q2 2010Q3 2010
Telenet Other Market share of net adds
23 Source: European Commission, ISPA, company analysis Our customers benefit from most advanced broadband compared to other markets
Internet customer base by download speed
< 2 Mbps 2 ‐ 9 Mbps 10 ‐ 29 Mbps 30 ‐ 99 Mbps >100 Mbps
7% 3% 3% 16% 24% 22% 25% 22% 47% 20% 41%
57% 59% 74% 47% 50% 32%
12% 15% 11% 5% 5% 1% BE EU DE UK NL
24 Source: European Commission Broadband survey July 2010, company data Our strategy Keep our customers happy: bttbetter prodtducts for the same price
Price/MbpsPrice / Mbps downstream downstream (in €) . Retail prices kept 20.0 relatively stable 18.0 . Increased 16.0 specifications 14.0 . Price/Mbps 12.0 decreased on average 77% in 10.0 2010 vs. 2005 8.0 606.0 4.0 ‐77% 2.0 ‐ 2005 2006 2007 2008 2009 2010
Low tier Mid tier High tier
25 Lowest priced entry-level product, other tiers provide best value for money
Low‐tier Mid‐tier High‐tier €/month 44.95 (incl.VAT) 43.46 40.00 32.92 32.92 30.64 30.00 25.00 18. 90
Basicnet Start Basic Comfortnet Comfort Relax Fibernet40 Favorite Max
Downstream (Mbps) 4 3 6 15 12 16 40 25 16
Upstream (Mbps) 0.3 0.4 0.4 1.0 1.5 0.4 2.0 3.5 0.4
Volume (()GB) 15 15 35 50 50 70 100 100 Unlimit’d
26 Source: company websites Flanders has an above average broadband penetration and low entry prices for broadband
Lowest monthly charge (PPP) € 30
ES
€ 25 PT UK GR IE FI € 20 IT BE SE NL VL DK € 15 AT FR DE
€10€ 10 0% 10% 20% 30% 40% 50% Fixed broadband penetration per capita (mid 2010)
Sources: European Commission; OECD; Eurostat; Capgemini Consulting analysis Note: Broadband with at least 1 Mbps down; only flat fee broadband subscriptions included (> 15 GB volume down); prices include VAT; only recurring fees without temporary 27 discounts are included; required line rentals included; excl. social tariff;non‐recurring fees excluded; prices as per 21 January 2011 But… there is clearly going to be a need for more bandwidth
Consumer itinternet traffi cprojtijection In 2013, traffic on the TlTelenet 2009‐2014 network will equal… File Sharing Internet Video Internet Video to TV Web/Data Video Calling Online Gaming VoIP 101,674 million hours of music 1,298 CAGR Million 36% BlueRay DVDs
7, 626 million hours of video
3, 050 billion 2009 2010 2011 2012 2013 2014 digital photos 28 Source: Cisco Virtual Network Index, team analysis Fibernet ItInternet a ttht the spee d o f light
More bandwidth More connected devices More multidiltimedia
29 Fibernet NdtNew product lineup antici pat es growing bdidthbandwidth needs
Downstream 4 Mbps 15 Mbps 40 Mbps 60 Mbps 100 Mbps
Volume 15 GB 50 GB 100 GB FUP FUP
Price/month (incl. VAT) €18.90 €30.64 €44.95 €64.95 €99.00
Price with (**) triple‐play(*) €45.00 ‐ €54.95 €74.95 €99.00
(*) Excluding Basic Cable TV subscription 30 (**) In a triple‐play Shake, Basicnet downstream speed has been upgraded to 15 Mbps Broadband market ppgoised for further growth
Broadband penetration per inhabitant (JJluly 2010)
38.2% 38.7% . Belgium has well‐developed broadband internet market 30.1% 30.6% 31.3% 25.6% . Compared to leading broadband countries, still significant growth opportunity ahead . Assuming equal market penetration as NL, >25% broadband market growth
EU BE UK DE DK NL
Penetration growt h 2010 vs 2009 (in %pts)
0.98 0.90 0.85 0.80 0.70 . Above EU‐average bdbdbroadband markktet growth in 2010 0.40 . Markets with high penetration (NL) continue to develop strongly
31 DK UK EU DE BE NL Source: European Commission Broadband survey 2010 Television
Ric hest experience and convergence Digital TV SiltfSuperior platform appeals to 55% of TV customers i5in 5 years time
DDigitaligital TV net additions (000) Digitalization rate (%)
conversion rate of 329 Digital Analog total TV subscriber base 245 218 45% 57% 151 157 77% 72%
75 55% 9% 10% 11% 14% 11% 43% 23% 28%
2005 2006 2007 2008 2009 2010 2007 2008 2009 2010
. Advanced interactive digital TV platform offering HD, 3D and true‐VOD; IlldInstalled boxes (Dec‐2010)
. 65% of digital TV customers have HD; High Def Standard Def . New electronic programming guide (EPG) attracted more new users to video‐on‐demand; . PRIME lineup extended with Golf Channel; 35% . Interactive applications enriched with weather radar, online portal and other features. 65%
33 Digital TV CtidContinued strong marktket share oftf net additions
Digital TV market shares ‐ Belgium Relative market share of net additions –Belgium (*) (June 2010) 180 80% Telenet Belgacom Belgacom “Free TV” ASTRA VOO 160 70% Coditel TV Vlaanderen / TéléSat DTT 140 60%
2% 120 3% 50% 4% 100 40% 10% 80 30% 38% 60 20% 40 13% 20 10%
0 0% Q4 2008Q1 2009Q2 2009Q3 2009Q4 2009Q1 2010Q2 2010Q3 2010 30% Telenet Belgacom Market share of net adds
(*) Market share of net additions calculated on the basis of Telenet’s and Belgacom’s Digital TV subscribers and excludes other Digital TV platforms 34 Source: Belgacom; Telenet; team analysis Every analog TV customer converting to digital doubles the ARPU on average
Digitalization rate (%) ARPU per type of customer
Digital Analog Basic access fee Digital services
45% 57% 77% 72% x 2 86% 95%
55% 43% 23% 28% 14% 5% 2005 2006 2007 2008 2009 2010 Analog TV subscriber Digital TV subscriber
. Continued conversion of customers from . On average, each customer converting from analog to digital TV analog to digital doubles the ARPU . Increase from uptake of additional services: rental, content packages, VOD and interactivity
35 The value chain from analoggg to digital TV
Analog Rental Channel On-demand / Cable TV Box Packs Interactivity
€14.4 €8 €5 ‐ €27 Pay per use rental fee per additional pack
. 25 analog TV . Set‐top box with . Selection of . Video on channels HD and hard disk thematic Demand . 20 analog radio . 80 digital TV chlhannels . BdBroadcasti ng on channels channels . Selection of Demand . 4 TV sets . 30 digital radio payTV channels . Interactive connectable channels applications
36 All prices are retail prices per month and including VAT Very advanced customer base, technology penetration ahead of US markets
HD box VOD users / DVR penetration penetration total TV base
65% 77% 44% 45% 55% 71% 52% 34%
38%
2009 2010 US ‐ 2010 2009 2010 US ‐ 2010 2009 2010 US ‐ 2010
37 Source: Nielsen research, Telenet Video on demand >47 million VOD ttitransactions in 2010 or 373.7 per customer per month
VOD Transactions Growth opportunities: 20 5.0 Mio . Convince seniors transactions 4.5 15 4.0 . Improve awareness 4.2 10 3.5 . Improve ease of use 3.5 3.5 3.6 3.0 5 . Price perception 2.5 and definitely: 0 2.0 Q1 2010 Q2 2010 Q3 2010 Q4 2010 . Search & recommend
VOD transactions Average VOD use per iDTV per month
Improved GUI Extensive library Superior window
. All major studios Theatre . Characteristics All local and major VOD broadcasters . >500 movies PayTV . HD on‐demand Free to air 38 Our payTV offering: PRIME Movie & Sports Attrac tive linear pay TV c hanne ls comp lemen te d by r ic h VOD library
. 5 channels PRIME Movie . All major studios . HD channel
. 7 chlhannels PRIME Sport . International soccer .
PRIME On‐ . Unlimited VOD demand . Included in subscription 39 Opportunity to convert remaining 45% of analog TV subscriber base to digital
Total cable television subscribers 3000 Interkabel acquisition 2500
2000
1500 55% 1000
~20% conversion of remaining analog TV 500 customers to digital per annum
0 2004 2005 2006 2007 2008 2009 2010 2011e 2012e 2013e 2014e
Digital Analog
40 Innovation and time to market has been a key driver for digital TV
2011 2010 3D‐TV
2010 Remote PVR (web & mobile)
2007 High‐ Definition
2005 Interactivity and VOD
41 Yelo The next step: wathtch TV vitirtua lly everywhere
>90,000 downloads >1, 000, 000 sessions >1,500 co-creatorscreators
42 Yelo The next step: wathtch TV vitirtua lly everywhere
On TV Guide Live TV dddemand
43 Telephony
Mobile complementary to fixed and WiFi Fixed telephony Fixed li ne remai ns a rel evant prod uct as part of b undl es
Fixed telephony net additions (000) Fixed tel market share (%)* 112 Telenet Competition 91 93 81 77 78 74 67 65% 59% 56% 48 51 69% 29 44% 6 31% 35% 41%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2007 2008 2009 Q3 2010
(*) on Telenet footprint, competition data adjusted based on own estimations
. Continued penetration amongst our customer base, reaching 28.9% at the end of 2010; . Net new subibbscriber growth didriven by attract ive flat‐fee rate pl ans and mullitip le‐play growth ; . Sustained market share gains despite mature and intensely competitive market; . Reliability and cheap flat‐fee plans remain key advantages over mobile.
45 Mobile telephony So lid mark et sh are i n net additi ons f uel ed b y idSIMtititimproved SIM activation rate
Postpaid mobile market shares ‐ net Mobile telephony net additions (000) adds Belgium (YTD Q3 10) 69
4343 42 Telenet Proximus (CBU) Mobistar BASE 31 13
2006 2007 2008 2009 2010
18% SIM activation rate 27% 100% 90% 80% 70% 60% 50% 40% 16% 30% 39% 20% 10% 0% Jan‐09 May‐09 Sep‐09 Jan‐10 May‐10 Sep‐10
46 Source: Belgacom; Mobistar; KPN; Telenet; team analysis Mobile telephony Increased appetit e f or hig her rat e pl ans, sel ecti ve h and set sub s idies
Walk & Talk 0 Walk & Walk & WWlkalk & Walk & Talk 15 Talk 20 Talk 30 Talk 45
Minutes included(*) ‐ 88 118 176 206 OR SMS ‐ 125 166 250 291 included
Data ‐ ‐ ‐ ‐ 200 MB included Price/month €0.00 €15.00 €20.00 €30.00 €45.00 (incl. VAT)
Price per €0.17 €0.17 €0.17 €0.17 €0.17 minute(*)
Price per €0.12 €0.12 €0.12 €0.12 SMS €0.12
(*) To landline and mobile numbers in Belgium, during peak and off‐peak hours 47 (Walk & Talk 15, 20, 30 and 45 all have a 24‐month subscription period / can be complemented by separate mobile data subscription Mobile telephony AlithihltAppealing more to higher value customers
Light MVNO Launch new rateplans Today
Q3 2009 Q4 2009 Q4 2010 Mid
High Low New Sales Mid Low Low Mid
Q3 2009 Q4 2009 Q4 2010
Mid High Active Subscriber Mid Base Low Low Low
48 Unleash the power of WiFi
Telenet Hotspots / WiFi homezone + Telenet Mobile
. Telenet Hotspots: >1,200 locations (airports, train stations, hotels, highway parkings)
. Telenet residential WiFi >30% penetration
. International coverage >140,000 locations in 95 countries through iPass
49 The convergent future: mobile needs fixed internet
WiFi at home Connected through Home Gateway
50 Our stepped approach in Small Business (SoHo/SME)
1997 - 2009 2010 2011
Internet Telephony Residential 1 business business products prodtducts products
2 Residential Services Professional Managed “One size fits all” services services
Sales, Residential Sales Optimization of Marketing 3 Channel Approach sales channels Service excellence
51 Small Business Dedicated service and product innovation enables market penetration increase and ARPU uplift
69% > 20 employees . Represents 50% of B2B telecom market 104 M end 2010 >200K customers
11.8% 13.3% 9.6% 9.1% 7% 7.9% . Grow ing share within Telenet cstomercustomer base INT TEL
Jan/09 Jan/10 Jan/11
. EuroDocsis 3.0 business products strongly improve ARPU
. Telenet Small Business internet market share increased 7% yyyoy
52 Conclusion: PdProduct ldleaders hip
TV: the ultimate viewing experience •Analog to digital transition: reduce total cost of ownership of set top boxes •Multiscreen/device: Yelo •Richest experience: new user interface with search & recommend
Internet: extending speed leadership •Speed leadership: EuroDocsis 3.0 + “real speed” •The cable follows you: Homespots •Make hi‐speed relevant: multiscreen services (Yelo)
Mobile: lead the smartphone wave •Extend subsidty model to top‐end smartphones •Achieve price/value parity •Hotspot/WiFi coverage
Telephony: enhance value of the fixed line •Lowest marginal cost in triple play bundles •SME solutions •Fixed‐to‐mobile traffic
Bundles: best value for your money •Smartphone leadership •Price/value parity •Hotspot/WiFi coverage 53 Conclusion: Key growth didrivers
Migration factory – Mobile revenue Yelo virtuous circle improve NPV/customer
Basic fee Fixed services Fibernet/ NPV Mobile services WiFi
ARPU per customer Broadband
Migration engine
Single play Triple play Quad play Portable Online Iteration devices content
Smartphone New revenue Tablets Market events
54 Agenda
1 Introduction & key higgghlights 2010 Duco Sickinghe, CEO
2 Our product portfolio Herbert Vanhove, SVP Product Management
3 How we target the market Inge Smidts, SVP Marketing
4 Efficiencies in sales and customer care Patrick Vincent, CCO
5 Coax in B2B Martine Tempels, SVP Business Solutions
6 Our core asset: our network Jan Vorstermans, COO
7 Attracting and retaining talent Claudia Poels, SVP HR
8 Our views on regulation for cable Luc Machtelinckx, EVP General Counsel
9 Financial results and shareholder returns Renaat Berckmoes, CFO
10 Concluding remarks and outlook Duco Sickinghe, CEO 55 Maximum reach at minimum cost
Strong Efficient Segmented brand value campaigns approach
Young‐ sters
Mediors
Families Seniors
56 We measure what’s imppyortant to us: loyalty
Recommen‐ dation Processes
Overall Repurchase satisfaction intent Products Telenet Loyalty Score 74%74%
Segments Brand Price differen‐ tiation
57 Our core attributes
1. Fastest spee ds an d p lenty o f vol ume 2. Superior image quality and flexible recording 3. Simultaneous use of services without interruption 4. Flawless installation and service 5. Constant innovation and ease of use
58 The essential elements in customers’ appreciation
Our products Our service Our customer
Shops & Installation Customer Care Online
59 Agenda
1 Introduction & key higgghlights 2010 Duco Sickinghe, CEO
2 Our product portfolio Herbert Vanhove, SVP Product Management
3 How we target the market Inge Smidts, SVP Marketing
4 Efficiencies in sales and customer care Patrick Vincent, CCO
5 Coax in B2B Martine Tempels, SVP Business Solutions
6 Our core asset: our network Jan Vorstermans, COO
7 Attracting and retaining talent Claudia Poels, SVP HR
8 Our views on regulation for cable Luc Machtelinckx, EVP General Counsel
9 Financial results and shareholder returns Renaat Berckmoes, CFO
10 Concluding remarks and outlook Duco Sickinghe, CEO 60 More efficient customer operations Effici ency gai ns of fi xed operations finance inroa ds in to mo bile mark et
TtlTotal CtCustomer OtiOperations CtCost (€m)
Mobile Operations ‐4.2%
‐9.8% x1.5
Fixed Operations
61 Consistent focus on quality delivery PfProfessi onal operationa l peoplemonitor ing
Indirect Resellers (300 POS)
Telenet Centers Belcompany (50 POS) (42)
Consistent quality with motivated Install Sales Subcos people (231 FTE) (626 FTE)
Outsourced Internal Care Care (492 FTE) (()414 FTE)
62 New front end to inhale new customers
. Wizard approach: step by step order intake
. Intuitive and easy to use
. Less call center agent training required
63 Quality and self service drive lower calls AdAnd lower CtCost tSto Serve
Inbound Calls & RGU evolution (in 000) Cost to Serve (per RGU)
‐6.5%
2007 2008 2009 2010 2009 2010 RGUs Calls
. Decreasing Call volume in 2010 versus 2009 . Cross divisional call avoidance programme and remuneration of top management: . Reduce number of manual promotions . Positioning of electronic billing and direct debit . Technical improvements 64 Calls only represent 16% of all interactions OliOnline b usi ness: th e new way to itinterac twith customers
CCllalls, CC&ases & Hits
+14%
+35% . Increasing online contacts thanks to better knowledge base & search Social media engine Online support . Start conversion My Telenet management (SilSocial +10% Media) Calls . Improved “My Telenet”: manage your own account
‐6%
2009 2010
65 Low cost channel development Keeps cost of sales under contltrol
SlSales Channel dist rib uti on (inc l. Mobil e, EdEnd of year)
Other Service E-sales
17% 20%
. Push E‐Sales throughshop 25% conversion improvements 28% . Better search engine optimization . Focus own retail shops (BelCompany)
58% 52%
2009 2010
66 Innovation as a key to improvement BiBric k&Clik& Click – avoiding queues ithhin the shops
. Brick & Click principle
. Live conversation
. From remote location (shopping center, …)
. With our Customer Care Agent
67 Innovation as a key to improvement New online se t-tbtop box diagnosti c tltool
68 Innovation as a key to improvement SMS IiInvoice remidinder
8810 Telenet: Avoid additional reminder expenses by executing your payment now. Euro 42.18 through 405‐0504611‐48
. SMS notification
. Before invoice due date
. Avoiding unpaid invoices
69 Coffee Break
70 Agenda
1 Introduction & key higgghlights 2010 Duco Sickinghe, CEO
2 Our product portfolio Herbert Vanhove, SVP Product Management
3 How we target the market Inge Smidts, SVP Marketing
4 Efficiencies in sales and customer care Patrick Vincent, CCO
5 Coax in B2B Martine Tempels, SVP Business Solutions
6 Our core asset: our network Jan Vorstermans, COO
7 Attracting and retaining talent Claudia Poels, SVP HR
8 Our views on regulation for cable Luc Machtelinckx, EVP General Counsel
9 Financial results and shareholder returns Renaat Berckmoes, CFO
10 Concluding remarks and outlook Duco Sickinghe, CEO 71 Business services Revenue up 10% in 2010 didriven byorganicgrowth andCd C-CURE
Business services revenue (in €m) Revenue mix 2010
84.9 76.9 Voice, 18% +10% ATV, 6% Data, 30% Security, 24.6 5% 19.3 Other Hosting, BB Data, 3% +27% 5% internet, DTV, 3% 29% FY 2009 FY 2010 Q4 2009 Q4 2010
. 10% top line g rowth for our B2B division in 2010 driven by good traction for our data and fiber . Product revenue mix reflects recent innovation solutions and the acquisition of C‐CURE (as of May and limited legacy. 31, 2010); . Roll‐out and availability of EuroDocsis 303.0 will herald future growth for select, smaller sized B2B segments. 72 An integggrated go to market
Range of solutions
Connectivity Security Hosting Integrated Customer Experience • Data solutions • Security solutions • Hosting, housing • Internet access • Managed services • Hosted applications • Voice solutions • Security consulting • Dedicated servers • Multi‐TV products • Virtualization
73 Industry segmentation increases customer relevance in all domains
FINANCEFINANCE
GOVERNMENT
HEALTHCARE
RETAILRETAIL
INDUSTRYINDUSTRY
MANUFACTURING
NATIONAL ACCESS NETWORK
74 Our addressable market has increased through targeted acquisitions
+€150m Hosting
+€100m Security Expanded addressable market from €900 million to • Voice €1,150 million Connectivity • Data • Internet
75 Service excellence drives Telenet’s succes in Business
Key investment area’ s for customer satisfaction Telenet Enterprise Customer Satisfaction 1 Best network to support business critical applications
(*) . High, guaranteed, down‐ & upstream bandwidths: 100% Coax with DOCSIS 3.0 . Reliability: dedicated business network & combined access options Top Customer group 2 Organization aligned for maximum customer relevance
* 91% . Top performing service organization with dedicated operations & support . Segment‐based go‐to‐market Total customer base 3 Product Portfolio to fulfill customer requirements
. Climbing the value chain by integration of Value Added Services: security, hosting, integration, consulting, … 76 (*) Source: Synovate Key reference
. 5‐year contract for the provision of data connectivity services to their bank branches
980 bhbranches across BliBelgium
The deal was carried on the merit of Coax
1st time partnership with Walloon Cable
DSL from Telenet is better
The installation is going well which is reflected in their internal communication
77 (*) Current contract only covers AXA’s banking branches across Belgium Lay the foundations for sustainable and profitable growth
. We use COAX to deliver the quality required in business market
Business overlay is assuring Quality of Service SLA’s Business services are deployed on a dedicated infrastructure The capacity is dedicated for business services No interference with residential roadmap or maintenance activities Flexible and segmented capacity upgrade approach
. The combination with security and hosting services is accelerating our growth
78 Agenda
1 Introduction & key higgghlights 2010 Duco Sickinghe, CEO
2 Our product portfolio Herbert Vanhove, SVP Product Management
3 How we target the market Inge Smidts, SVP Marketing
4 Efficiencies in sales and customer care Patrick Vincent, CCO
5 Coax in B2B Martine Tempels, SVP Business Solutions
6 Our core asset: our network Jan Vorstermans, COO
7 Attracting and retaining talent Claudia Poels, SVP HR
8 Our views on regulation for cable Luc Machtelinckx, EVP General Counsel
9 Financial results and shareholder returns Renaat Berckmoes, CFO
10 Concluding remarks and outlook Duco Sickinghe, CEO 79 Strong next-generation IP network
. Fully upgraded bi‐directional Hybrid Fiber Coax network . Operating at 600 Mhz
Fiber
5 Switch Stations Fiber
47 Head Ends Fiber
2398 Optical Nodes 1400 Homes per Node
Coax
80 Statistical multiplexing through bandwidth sharing gives cable speed advantage
2011-2012
200 Mbps per
mm From: Up to 100 Mbps
group of 4 channel bonding per customer channels 50 Mbps per nstrea channel tistical tiplexing aa ll ww 400 Mbps per To: St Up to 200 Mbps mu
Do group of 8 channel bonding per customer channels
20 Mbps per From: Up to 5 Mbps
group of No channel bonding per customer
channels xing eam ical ee
rr 20 Mbps per channel 80 Mbps per Statist
Upst To:
multipl Up to 20 Mbps group of 4 channel bonding per customer channels
81 Increase in data traffic requires more cappyacity
Average monthly capacity usage per product Internet services breakdown 2009‐2010
% of customers
Average monthly volume in GB
Internet traffic growth expected to continue at the same exponential pace as over the previous years
82 The next step: increasing the bandwidth per home
TODAY Coax bandwidth spectrum (in MHz) Fiber 0 15 65 600 Loops Upstream Analog + Downstream Analog + Optical 50 MHz Diiigital TV 100 MHz Digital TV Node
~1,400 6 channels of 6.4 MHz 12 channels of 8 MHz hooes/mes/ node x x 20 Mbps per channel 50 Mbps per channel = = 120 Mbps 600 Mbps per node per node
TODAY: shared over ~1,400 homes
PULSAR
2015: shared over ~500 homes
83 DSL bandwidth capabilities in mid-term future limited to ~50 Mbps downstream
DSL bandwidth capacity versus looplength 100
. Next phase to upgrade DSL
80 spectrum to 17 MHz . Will allow for downstream of up Ideal copper pair, reality 50-70%, only to 50 Mbps in optimal conditions te [Mb/s] 60 aa VDSL2 17a pairs < 500m . Only valid for customers close to street cabinet (<500m)
40 VDSL2 8b/12a Ideal copper pair, stream bit r reality 40-60% down 20 ADSL2plus ADSL2
ADSL 0 012345 line length [km]
Current average speed DSL providers 84 Real speeds put Telenet far ahead in downstream and at par in upstream
. Broadband specification upgrades by Bel gacom not translated in customer experience . Telenet continues to offer c.60% more speed versus Belgacom in reality . Belgacom offers no products beyond 30 Mbps
Downstream speed Telenet versus competition
Competition Telenet
3 Basicnet 4
12 Comfortnet 15
25 Fibernet 40 40
30 Fibernet 60 60
n/a Fibernet 100 100
85 Cable network caters for unparallldlleled service offiffering
Bandwidth shared over all services Maximum download speed up to 30 Mbps
Dedicated bandwidth per service
Maximum download speed up to 100 Mbps
. Video will make high broadband speeds relevant
. Added value of cable = simultaneous services into the house
. New devices (tablet PCs) will require ample streaming capacity 86 Digital Wave 2015: deeper fiberization to retain speed leadership position
TODAY
~1,400 Telenet Service homes/ Offering node
Optical Node Fiber loops 2015
~500 homes/ Optical node IP Backbone CMTS Nodes
Fiber Coax HFC (Hybrid Fiber Coax Network) 87 The potential of cable beyond 2012
2013 - … mm
800 Mbps per 50 Mbps per Up to 500 Mbps 16 channel bonding group of nstrea channel per customer atistical ltiplexing ww channels tt S mu Do
120 Mbps per 4 channel bonding Up to 30 Mbps 20 Mbps per group of per customer
channel channels xing eam ical ee tt rr to 30 Mbps per 180 Mbps per Statis Upst
multipl Up to 50 Mbps channel 6 channel bonding(*) group of per customer channels
(*) Still under development in the standardization bodies 88 Our network has seen a constant path of upgrades
• Analog to Digital • Absolute capex levels to be Future projects Further Fiberization maintained at current levels for • Docsis 3.x • More bonding network investments Digital Wave 2015: Node Splitting Started, upgrade until 2015 (Pulsar)
Digital Wave 2015: Channel Bonding Done
Bandwidth Expansion Done to 600 MHz (Mach3)
Advanced Done Compression
Higher spectrum Done Efficiency (256 QAM) Digital Wave 2015
89 Telenet Connected Home strategy: Cross-device networking and content sharing
Digital Wave 2015
In-home IP network Slave set- top box
Connected TV
90 Digital Wave 2015: preparing for our life in the new digital world
VISUAL INTERACTIVITY 360 GAMING
SECURITY SMARTGRID
BACK UP DIAGNOSTIC ENTERTAINMENT VIRTUAL OFFICE E SAFE E GOV HOME MANAGEMENT SMART TV Digital HOSPITALITY BANKING E HEALTH Wave MOBILITY
3D TV WIFI
IP TV STREAMING
91 Agenda
1 Introduction & key higgghlights 2010 Duco Sickinghe, CEO
2 Our product portfolio Herbert Vanhove, SVP Product Management
3 How we target the market Inge Smidts, SVP Marketing
4 Efficiencies in sales and customer care Patrick Vincent, CCO
5 Coax in B2B Martine Tempels, SVP Business Solutions
6 Our core asset: our network Jan Vorstermans, COO
7 Attracting and retaining talent Claudia Poels, SVP HR
8 Our views on regulation for cable Luc Machtelinckx, EVP General Counsel
9 Financial results and shareholder returns Renaat Berckmoes, CFO
10 Concluding remarks and outlook Duco Sickinghe, CEO 92 Some facts and figures
Vacancies FTEs Gender diversity internally filled Male Female
2000 1887 34%
1597 30%
35%
65%
2008 2009 2010 2009 2010
93 Telenet Emppyloyer Branding
94 Our ppprinciples of talent management
Talent attraction
Proactive Talent onboarding Talent & retention Talent integration Management @ Telenet
Talent Talent growth rewarding
95 Focus on the customer
Employees with Customer CifiCertificate 95% 74%
2009 2010 1 2 3
Assist in a Assist in a call Assist our shop center installation workforce 96 It’s about the Telenet culture
Promote from within
Diversification
Internal mobility
TiiTraining
Well‐being
97 Agenda
1 Introduction & key higgghlights 2010 Duco Sickinghe, CEO
2 Our product portfolio Herbert Vanhove, SVP Product Management
3 How we target the market Inge Smidts, SVP Marketing
4 Efficiencies in sales and customer care Patrick Vincent, CCO
5 Coax in B2B Martine Tempels, SVP Business Solutions
6 Our core asset: our network Jan Vorstermans, COO
7 Attracting and retaining talent Claudia Poels, SVP HR
8 Our views on regulation for cable Luc Machtelinckx, EVP General Counsel
9 Financial results and shareholder returns Renaat Berckmoes, CFO
10 Concluding remarks and outlook Duco Sickinghe, CEO 98 Regulatory update ItInten tion to itintro duce remedies for TV and bdbdbroadband itinternet marktket
. Market stud y o f regional TV‐bdbroadcasting market in Flldanders, Wallonia and Basis Brussels
. Telenet (and other cable operators) have significant market share in their Results respective footprint for TV‐broadcasting
Proposed 1. Wholesale offering of analog TV remedies 2. Access to digital TV platform (also applies to Belgacom) 3. Wholesale offering of broadband internet, only in combination with access to digital TV platform
Rationale . More competition and fair prices in TV market . Alleged importance of bundles expanded remedies to broadband internet
99 Regulators have imposed a number of remedies on the broadcasting & broadband market
BIPT BIPT, VRM, CSA, Medienrat
Broadband Broadcast
BGC SMP BGC SMP Cable SMP Market 4 Market 5 on analog & digital
Resale Digital TV Resale LLU Bitstream Incl. multicast analog tiitransmission bdbdbroadband
. Channel . Bundle with CATV flexibility . Speed and volume flexibility
100 Regulators should follow a prescribed methodology to determine if additional remedies are needed
Regulatory methodology DSL Clear definition of the market Local loop unbundling Assess if consumer harm exists
Bitstream Access/Multicasting Apply modified greenfield analysis
Cable Satellite DVB-T Apply three criteria test Broadcast transmission Assess if SMP exists Consumer Retail TV harm? …Then assign propor tiona l & necessary remedies, if needed
101 Regulators should take a more wholistic view on the Regulatory methodology
product markets and geographical dynamics Clear definition of the market
Assess if consumer harm exists
Apply modified greenfield analysis
Apply three criteria test
Clear definition of the market ? Assess if SMP exists
…Then assign proportional & necessary remedies, if needed Product market Geographical dynamic
Analog cable- TV
TV over Digital Internet cable- IPTV Satellite DVB-T /Mobile TV TV
VRM definition of TV-market
Correct definition of TV-market
102 Regulators ignore the vibrant nature of the market which Regulatory methodology
offers low prices, innovation and choice Clear definition of the market
Assess if consumer harm exists
Apply modified greenfield analysis
Apply three criteria test
Evidence of consumer harm ? Assess if SMP exists
…Then assign proportional & necessary remedies, if needed Market situation Current situation
. Low prices + regulated
. High level of service, quality and innovation
. Consumer has choice of platforms
103 Source: Screen Digest, 2010; Bain analysis 2010. Regulators should first consider remedies – and enforce them – starting with the highest levels of the Regulatory methodology
Clear definition of the market upstream market Assess if consumer harm exists
Apply modified greenfield analysis
Apply three criteria test
Apply modified greenfield analysis Assess if SMP exists
…Then assign proportional & necessary remedies, if needed Down & Up-stream markets Appropriate order
DSL
Local loop unbundling First regulate here
Bitstream Access/Multicasting Secondly, here
Cable Satellite DVB-T
Broadcast transmission If needed, then regulate here
Retail TV
104 Regulators should take a realistic and prospective view Regulatory methodology
on market competition Clear definition of the market
Assess if consumer harm exists
Apply modified greenfield analysis
Apply three criteria test
Apply three criteria test Assess if SMP exists
…Then assign proportional & necessary remedies, if needed Three Criteria Current situation
. No high non-transitory barriers Satellit Kabel IPTV to entry e
Satellit IPTV + Kabel Kabel OTT OTT IPTV IPTV e satellite . Sufficiency of competition law 2002 6/2005 8 6/2006 2009 3/2010 10/201 /2005 0
Digit a l part of TV marke t Electricity market
DTT, 2% other 7% satellite, Nuon 17% . Telenet 8% Move to effective competition other 39% SPE cable, 20% 13% Electrabel 65% Belgacom; 30%
105 Source: Capgemini Consulting, 2010. Regulators should recognize that Telenet already faces
high competition from new competing Regulatory methodology
Clear definition of the market
platforms Assess if consumer harm exists
Apply modified greenfield analysis
Apply three criteria test
Assess if SMP exists Assess if SMP exists
…Then assign proportional & necessary remedies, if needed SMP Analysis Current situation
. Shrinking market share, especially to IPTV
. Competition from other infrastructures like Satellite, DTT, OTT
. Low price in international European on-line users accessing video benchmarks / price increases below inflation notwithstanding increases in quality and quantity of DTV offer /regulated prices
106 Source: European Commission E-communication household survey, 2010; Capgemini Consulting, 2010. Before imposing new remedies, regulators should be
competent and align with the analysis of other Regulatory methodology
Clear definition of the market
regulators Assess if consumer harm exists
Apply modified greenfield analysis
Apply three criteria test
Apply regulatory remedies Assess if SMP exists
…Then assign proportional & necessary remedies, if needed
VRM/CSA are not competent to regulate broadband
No prove of necessity, no definition nor analysis of bundle market, no 3 BIPT BIPT, VRM, CSA, Medienrat criteria test, no SMP,…
Contradiction with SMP analysis of Broadband Broadcast Bundles ? bdbdbroadband
BGC SMP BGC SMP Cable SMP Market 4 Market 5 on analog & digital
Bitstream Digital TV Resale Resale LLU Including trans- analog broadband multicast mission
107 And lastly, regulators should be aware that disproportional Regulatory methodology
remedies lead to real consumer harm Clear definition of the market
Assess if consumer harm exists
Apply modified greenfield analysis
Apply three criteria test
Apply regulatory remedies Assess if SMP exists
…Then assign proportional & necessary remedies, if needed
Infrastructure competition ? . Other operators : creation of free ride Belgacom no access to cable !
BIPT BIPT, VRM, CSA, Medienrat . Telenet : de-focus, paralysed + higher costs
Broadband Broadcast
BGC SMP BGC SMP Cable SMP Leads to real consumer harm Market 4 Market 5 on analog & digital
Bitstream DigitalDigital TVTV ResaleResale Resale LLU Including trans-trans- analoganalog broadband multicast missionmission Need for Cost – Benefit analysis
108 In conclusion, there is no case for cable regulation
Regulatory methodology DSL X Clear definition of the market Local loop unbundling X Assess if consumer harm exists Bitstream Access/Multicasting X Apply modified greenfield analysis Cable Satellite DVB-T X Apply three criteria test Broadcast transmission X Assess if SMP exists Consumer Retail TV harm? X …Then assign propor tiona l & necessary remedies, if needed
109 We have just begun what is likely to be a long journey
Not to scale Public Could adjust Hearing ? decision
2 months 1 month 1 month
Publication CRC Consultation – Competition council European Commission results or regulators
21/12/2010 In parallel with 18/02/2011 end 03/2011 mid 04/2011 mid-end 05/2011 consultation? Beyond May EC can If serious doubts recommend to 2 months Potential for appeal : withdraw remedies BIPT/CRC – Court of Appeal VRM/CSA – Council of State
6 months 6 months 3 months max 3 months
Preparation draft Public consultation Reference Negotiations Final decision reference offer on reference offer offer into force with operators
mid 06/2011 12/2011 6/2012 9/2012 at the earliest
110 Source: Draft decision of the regulators. Agenda
1 Introduction & key higgghlights 2010 Duco Sickinghe, CEO
2 Our product portfolio Herbert Vanhove, SVP Product Management
3 How we target the market Inge Smidts, SVP Marketing
4 Efficiencies in sales and customer care Patrick Vincent, CCO
5 Coax in B2B Martine Tempels, SVP Business Solutions
6 Our core asset: our network Jan Vorstermans, COO
7 Attracting and retaining talent Claudia Poels, SVP HR
8 Our views on regulation for cable Luc Machtelinckx, EVP General Counsel
9 Financial results and shareholder returns Renaat Berckmoes, CFO
10 Concluding remarks and outlook Duco Sickinghe, CEO 111 A company with a solid growth profile and strong Free Cash Flow generation
Revenue (€m) Adjusted EBITDA (€m) and EBITDA margin (%) 668.7 CAGR 1,299 607.7 1,197 CAGR 10% 506.4 1,019 51.5% 932 12% 50.7% 814 443.4 734 49.7% 339.7 368.3 47.6% 46.3% 45.3%
2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010
Net profit (()loss) (€m) Free Cash Flow (€m) 233.1 257.8
CAGR 166.9 89.3 43% 121.2 103.5 20.7 8.5 29.6 13.6 2005 2006 2007 2008 2009 2010 (15.2) 2005 2006 2007 2008 2009 2010 (77.0) 112 Strong focus on efficiency gains and cost control reduce cost to revenue ratios
Cost of services provided (€m) SG&A (in €m)
800 735.8 65% 250 25% 218.7 688.9 210.0 700 62.8% 62.3% 589.3 63% 200 190.8 23% 600 553.5 173.1 510.7 159.0 145.6 500 456.7 61% 150 21% 59.4% 19.9% 19.5% 400 18.6% 18.7% 300 59% 100 19% 57.8% 57.5% 17.5% 200 56.6% 16.8% 57% 50 17% 100
0 55% 0 15% 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010
COGS % of revenue SG&A % of revenue
. Majority of cost increase related to subscriber . Sales and marketing expenses relatively flat growth (content, maintenance, service) . G&A expenses down ‐4% 2010 vs 2009 . Process improvements, scale benefits and triple . Increase related to stock‐based compensation play efficiencies more than offset 113 Profitability and Free Cash Flow generation continues to increase
Adjusted EBITDA (€m) Free Cash Flow (€m)
800 55% 300 40% 257.7 700 668.7 35% 607.7 53% 250 600 51.5% 30% 506.4 50.7% 200 500 443.4 51% 166.9 25% 49.7% 19.8% 368.3 400 339.7 150 20% 121.2 49% 300 103.5 15% 47.6% 100 200 46.3% 13.9% 10% 47% 29.6 12.7% 50 11.9% 100 45.3% 13.6 5% 0 45% 4.0% 0 1.5% 0% 2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010
Adj. EBITDA % of revenue FCF % of revenue
. Improving profitability of fixed business . Free Cash Flow up 54% in 2010 vs 2009 operations offset inroads in mobile with lower . Driven by strong Adj. EBITDA progress and margin lower cash capex levels . Efficiency gains from triple‐play leverage . No cash tax impact 114 Finance strategy focuses on Free Cash Flow conversion
Free Cash Flow Conversion Finance strategy 2011
800 45% . Ensure stable Adjusted EBITDA margins 700 40% . Improve efficiency of fixed business to allow 600 39% 35% future growth in mobile without changing the 28% 30% 500 24% financial profile 25% 400 27% . Strict prioritization of capital expenditures 20% bdbased on (long‐term) revenue generating 300 15% potential 200 10% . Further optimization of capital structure and 100 9% 5% interest rate hedggging instruments 0 3% 0% 2005 2006 2007 2008 2009 2010
Adj. EBITDA FCF FCF Conversion
115 Capital expenditures Investments predominantly growth -led, but declining as a % of revenue
Capex 2011 Accrued capital expenditures(*) (€m) . Pulsar node‐splitting project will ramp up 350 29% 27% 317.6 316.3 compared to 2010; 300 27% 26% . Majority of our capex remains growth‐led; 245.9 223.2 27% 250 222.5 25% . Stable capex in absolute numbers compared to 187.3 24% 200 24% 24% 23% 2010 (excluding DTT license); 150 22% 21% . Capex/revenue ratio will continue to decline moderately. 100 19%
50 17%
0 15% Guidance 2005 2006 2007 2008 2009 2010 Accrued capex % of revenue .Short‐term: stable absolute capex levels, Excl DTT license but declining on per revenue basis
.Longer‐term:moderate decline in absolute capex levels, larger decline on per revenue basis
116 (*) FY 2010 accrued capital expenditures includes €30.7 million related to the DTT (Digital Terrestrial Television) license Capital expenditures composition MjMajorit yof ittinvestments are scalbllableorsubibbscriber reltdlated
Accrued Capital Expenditures (€m) Accrued Capital Expenditures FY 2010 (%)
~76% 317.6 316.3 SCALABLE OR SUBSCRIBER 10% RELATED 20% ~10% ONE‐TIME 24% CAPEX RELATED 141.4 TO DTT LICENSE 102.4 16%
30% FY 2009 FY 2010 Other capex Network growth Customer install Rental STB Customer install Network growth Rental STB DTT Other capex DTT
% of revenue 26.5% 24.3% 32.5% 42.6%
% of revenue, 22.0% excluding DTT 33.3%
117 Improved capital structure Recent transactions pushed average maturities more than 4 years ahead
2007 €23bn2.3bn SCF Issuance of Senior Credit Facility
3.2 y
Extension of maturities through voluntary 09/2009 Phase I exchange process
Extension of maturities through voluntary 09/2010 Phase II exchange process + swap to Luxembourg entity
Issuance of €600 million of additional debt; 11/2010 Phase III repayment of €208 million bank debt with short maturities
Issuance of €300 million of additional debt; 02/2011 Phase IV repayment of €286 million bank debt with short maturities
737.3 y
Weighted average maturity from Feb 28, 2011, excluding Revolving Facility 118 New debt issuances For an aggregate of €900 million under the Senior Credit Facility
. Opportunity for further extension of debt maturities Rationale . Ideal timing: all‐time low interest rates and solid financing climate . Net Total Debt/EBITDA(*) ratio below target of at least 3.5x . Optimization of tax position
. Repayment of Term Loans with shortest maturities for ~494 million Use of . Proceeds Remainder of €386 million available for shareholder disbursements or potential value‐ accretive M&A
. Part of further optimization of capital structure following extension; Financing . Target to increase Net Total Debt/EBITDA(*) ratio to at least 3.5x; Framework . Will allow for future shareholder disbursements and flexibility to grow and invest in the business.
> Prudent and sustainable leverage strategy 119 (*) Calculated as per Senior Credit Facility definition, using net total debt, excluding subordinated shareholder loans, capitalized elements of indebtedness under the clientele and annuity fees and any other finance leases, divided by last two quarters’ annualized EBITDA. Long-term debt overview Debt composition partially shifted from floating to fixed
DbtDebt overview ‐ drawn (in €m) Cash interest expenses (in €m)
Bank debt HY Bond 10/2010 Floating Hedging Leases Fixed Retail Bond 11/2010 HY Bond 02/2011 179 2,530 +31% 300 6.625% fixed +27% 137 48 1,990 100 5.300% fixed ‐ 500 6.375% fixed 19 27 34 21 FLOATING 1,990 Euribor‐based FLOATING 1, 630 Euribor‐based 84 83
Dec 2009 Feb 2011 2010 2011 (E)
Weighted average cost of debt (excl. capital leases, incl. hedging) 5.4% 6.4%
Underlying average 1M‐EURIBOR rate 1.2% (on floating + hedging) 0.5% 120 Debt maturity profile NiifitNo significant matititurities bfbefore 2017; current leverage ratio o f 2. 8x
NtNeLteverage TtlTotal Dbt/EBITDADe bt/EBITDAratio (1) (*) DbtDebt matitturity profile – fllfully drawn (€m)
6 6.25x AS OF DECEMBER 31, 2009 6.0x 5 4 3 2 2.8x 175 979 1 453 419 0 77 76 38 83 Q1 08 Q3 08 Q1 09 Q3 09 Q1 10 Q3 10 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Tranche A Tranche B1 & B2 Tranche C Tranche D Senior Credit Facility EBITDA Covenant Tranche E1 & E2 Tranche F Revolver PRO FORMA – FEBRUARY 28, 2011 Availability of committed Senior Credit Facility
(€m) 175 1, 551
500 175 300 2,530 79 100 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Revolver ‐ undrawn Drawn Tranche G Tranche J Tranche M Tranche N Tranche O Revolver
(*) Calculated as per Senior Credit Facility definition, using net total debt, excluding subordinated shareholder loans, capitalized elements of indebtedness under the clientele and annuity fees and any other finance leases, divided by last two quarters’ annualized EBITDA. 121 Shareholder remuneration strategy Stabl e leverage tttarget = recurring shhldhareholder remuneration
CONCEPT
Additional leverage Combination of EBITDA 3.5x leverage on growing growth EBITDA and Free Cash Flow generation provides for long‐term Recurring shareholder Free Cash remuneration – in EBITDA Flow absence of M&A
. EBITDA . Long‐term declining cash capex . Partially offset by increase in cash interest expenses in line with higher leverage 122 Shareholder remuneration strategy Pro-forma projtijection 2011-2013 bdbased on consensus
Leverage ratio –hypothesis assuming no use of cash LEVERAGE PROJECTION 2011‐2013 4.0 . AtiAssumptions: Debt Cash 3.5 . €506m payout in 2011 0.5x 3.0 . Consensus EBITDA and FCF 1.5x 2.5 Leverage capacity . Assumes no cash taxes
2.0
1.5 Additional leverage capacity 1.0 Continuing level of cash generation 0.5
0.0 2010 2011 2012 2013 1.5x EBITDA additional leverage capacity
Projected leverage Target leverage available for 2011‐2013 (excluding €050.5 billion payout scheduled for 2011)
123 Tax update No cas h tax payments foreseen be fore FY 2014
Numbers in Belgian GAAP TlTelenet Group HHldiolding NV €2, 159.2 million equity (()*)
Telenet NV €798.7 million equity (*) 100% €263.9 million of effectively useable Telenet Vlaanderen NV Telenet Int. Finance SSà.à rrl.l. 99.65% 100% NOLs as of December 31, 2010 Hostbasket NV Telenet Lux Finance 99.99% Center SàS.à rrl.l. 100% Telenet Mobile NV Telenet Solutions Lux SA 99.9% 100% T‐VGAS NV No cash tax 99.99% payments foreseen Pebble Media before FY 2014 C‐CURE NV 33.33% 100%
124 Uses of cash: basis for consideration Priority to M&A/growth, followed by shareholder disbursements
ChCash GiGeneration
BlBalanced assessment bdbased on (i) bibusiness performance, (ii) long‐term outlook , (iii) competitive situation and (iv) economic conditions
1 2 3 4
M&A / Shareholder Debt new growth Cash disbursements management opportunities
. When available, invest . Enhance shareholder . Upon assessment of . Keep cash buffer in value accretive M&A value by distributing economic situation, or new business recurring cash to maturity levels and opportunities shareholders business progress, embedding clear taking into account Net growth prospects Total Debt/EBITDA ratio
125 Agenda
1 Introduction & key higgghlights 2010 Duco Sickinghe, CEO
2 Our product portfolio Herbert Vanhove, SVP Product Management
3 How we target the market Inge Smidts, SVP Marketing
4 Efficiencies in sales and customer care Patrick Vincent, CCO
5 Coax in B2B Martine Tempels, SVP Business Solutions
6 Our core asset: our network Jan Vorstermans, COO
7 Attracting and retaining talent Claudia Poels, SVP HR
8 Our views on regulation for cable Luc Machtelinckx, EVP General Counsel
9 Financial results and shareholder returns Renaat Berckmoes, CFO
10 Concluding remarks and outlook Duco Sickinghe, CEO 126 Conclusion: key investment considerations
Future growth
Sustainable competitive advantage
Sound financial profile
Strong shareholder value potential
127 Future growth: TlTelene ttiibthlt active in both legacy an d grow th segmen tfthtlts of the telecom mar ktket
1 Cash flow 2009 market size 2009, EUR mn VOICE in €bn revenue . Fixed voice market: high 700 MARKET cash flow but limited 650 growth – Telenet growth 600 from increase in market 550 share 3.7 Mobile Voice 500 Fixed Services . Mobile voice market: 450 Fixed Voice & OTT impacted b y MTR cuts 400 – Telenet has no legacy 350 1.4 . Data market: near‐to‐mid 300 0.8 term market growth + 250 1.1 Mobile Data Fixe d DDtata upsell opportunity to 200 Mobile DATA higher tiers 150 MARKET services/OTT 100 0.8 TV EMERGING . TV market: further MARKET digitalization entails more 50 030.3 010.1 0 media spending ‐5% 0% 5% 10% 15% 20% 25% 30% . Mobile data & services: Expected growth yet small emerging 2010 ‐ 20 revenue CAGR, percent maaet,rket, but str ong gogrowt h opportunity 1 Cash Flow = EBITDA –CAPEX 128 Source: Yankee Group research; Pyramid reports; team analysis Future growth: OfOur four axes o f key growth
1 2 . Continued expansion of . Further conversion of analog TV broadband market in our footpint subscribers to digital > from 76% today to at least 90% . 45% of TV subscribers were still in next three years on analog Internet . Digital TV Speed leadership positioning of . Migration from analog to digital our products TV doubles the ARPU
3 4 . Mobile as complement to fixed . Integration of security and . Unique positioning through hosting solutions will expand subsidized handsets addressable market . Strong focus on SME segment Mobile . Focus on high‐tier rate plans B2B targeting smartphone users . EuroDocsis 3.0 data connectivity . Combination with extensive WiFi solutions over coax coverage caters for new mobility needs 129 Future growth: Additional ggppyrowth opportunities by unlocking individuals versus households
House‐ Individuals holds
2.3 million 6.3 million
130 Sustainable competitive advantage: PdProduct ldleadershi premains a cornerstone
Key characteristics Our positioning
. Leading digital TV platform . Improve customer experience TV . Full interactivity, VOD and HD/3D . TV everywhere (Yelo)
. Speed leadership . Capitalize and enforce leadership Broadband . Good value for money . Move customers up the broadband ladder
. Cheap and reliable fixed telephony . Fixed telephony as part of bundle Telephony . Unique mobile offering . Attract higher end of mobile market
. Integrated product offering . Focus on SME/SoHo Business services . High level of service . Cable as alternative to DSL/PABX
Bundles
131 Sustainable competitive advantage: Lt’Let’s em brace our s treng ths
Brand Network Service Innovation
Prosper our . Cable leads the . Continued focus on . Product, price and brand bandwidth race customer care service innovation . EuroDocsis 3.0 . Expand online care . Leading TV platform outperforms VDSL presence with ample development . Node splitting project . Service goes social: opportunities will cater for 200 Mbps customer interaction via by 2012 Facebook and Twitter . Home gateway . Facilitates advanced . Dedicated B2B sales and . WiFi community services: HDTV, 3DTV, care channels VOD
132 Sound financial profile: Strong fdfundamen tltalswith tttransparent focus
. Solid top line and Adjusted EBITDA growth; Profitability . Balanced revenue mix underlines defensive characteristics; . Market leading EBITDA margins of >51%; . Strong focus on efficiency improvements and cost control; . Structural net profit.
. Active debt management – average maturity >7 years; Balance sheet . Prudent leverage target of at least 3.5x; . Opportunistic refinancing approach based on market conditions;
. Strong focus and prioritization of capital expenditures Cash based on (long‐term) revenue generation opportunity; . Cash interest risk exposure fully hedgg;ed; . No cash impact from taxes expected before 2014; . Sound basis for recurring shareholder disbursements.
133 Outlook 2011 Confident to deliver another year of healthy operational and financial growth
FY 2011 ou tloo k
Revenue growth Around 6%
Adjusted EBITDA margin Stable relative to FY 2010
Capital Expenditures(*) Around 21% of revenue
Free Cash Flow In excess of €250 million
(*) Accrued capital expenditures, including rental set‐top boxes and non‐cash capital lease additions 134 Telenet is bound to deliver long-term strong shareholder potential
• Cross‐sell to remaining 42% single play Exploit triple‐play customers • Upsell more media consumption and higher prodtduct tiers
• From fixed market to mobile market Invest in growth domains • Develop services based business (()Yelo, cloud) • Leverage coax in B2B
Shareholder • Customer excellence improves loyalty value Improve profitability • Control of opex and capex levels • Solid Free Cash Flow generation
• 3.5x target provides for significant cash Leverage approach availability • In absence of M&A, attractive and recurring shareholder disbursement potential
135 Thank You!
Questions & Answers
136 Contact – Investor Relations Telenet Liersesteenweg 4 Vincent Bruyneel Rob Goyens 2800 Mechelen, Belgium Vice President Investor Relations, Manager Investor Relations Corporate Finance & Development investors.telenet.be + 32 (0)15 33 30 54 + 32 (0)15 33 56 96 [email protected] [email protected] 137