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Investor Strategy Briefing 2008 8Th December 2008 Investor Strategy Briefing 2008 Strategic Overview ‐ Michael Malone (MD) 8Th December 2008 Today’S Agenda

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Investor Strategy Briefing 2008 8Th December 2008 Investor Strategy Briefing 2008 Strategic Overview ‐ Michael Malone (MD) 8Th December 2008 Today’S Agenda Investor Strategy Briefing 2008 8th December 2008 Investor Strategy Briefing 2008 Strategic overview ‐ Michael Malone (MD) 8th December 2008 Today’s agenda 10:30 Introduction and strategic overview Michael Malone (Managing Director) 11:00 Westnet integration David Buckingham (Chief Financial Officer) 11:30 Infrastructure Greg Bader (Chief Technology Officer) 12:00 NBN update Steve Dalby (Chief Regulatory Officer) 12:30 Organic growth Mark White (Chief Operating Officer) 13:00 Lunch 13:30 Tour of the call centre Paul Cahill (General Manager Customer Service) Investor Strategy Briefing 2008 2 Historic financial performance Revenue $m 251 230 214 157 FY05 FY06 FY07 FY08 Underlying EBITDA Underlying NPAT $m $m 17.8 47.4 11.8 39.1 10.4 34.7 18.1 2.1 FY05 FY06 FY07 FY08 FY05 FY06 FY07 FY08 Investor Strategy Briefing 2008 3 Guidance – accelerating profit growth Key metrics 1H FY09 Set to break $400m revenue in FY09 Low High Revenue $203m $206m EBITDA $29m $31m NPAT $10m $12m Net Debt as Oct ‘08 $23m Note: H1 ‘09 EBITDA impacted by one‐off costs for set up of Cape Town Accelerating profit growth post the Westnet acquisition Investor Strategy Briefing 2008 4 Market developments • Solid market growth expected to continue • Significant opportunity for iiNet to grow market share (currently 6%) Source: Telsyte, 2008 Investor Strategy Briefing 2008 5 ADSL2+ remains the dominant technology • Analysis shows that DSL was the dominant technology in 2007 • Expectations are for this to remain the case for the next 5 years • Cable expected to decline with limited expected growth Australian Broadband Subscribers Share by Access Technology 2007 Source: Telsyte, 2008 Investor Strategy Briefing 2008 6 Competitor landscape –clear no 3 3,000 Top ISPs by Broadband Subscriber Numbers (000’s) 2,500 2,000 1,500 1,000 500 0 Investor Strategy Briefing 2008 7 Product evolution Internet Voice Content Dial PSTN FTP DSL VoIP Gaming DSL2+ SIP Trunking Streaming radio Naked Video on demand Mobile data IPTV VDSL2 FTTH Investor Strategy Briefing 2008 8 Strategic focus for growth Our aspiration is to be the leading challenger in the Australian Telecommunications Market Differentiating through: 1. Outstanding service 2. Cool products and attractive content 3. A loved brand 4. Leading industry consolidation Investor Strategy Briefing 2008 9 What does it mean? • Leading challenger means growing Broadband market share to >15% • Outstanding service – lifting Net Promoter Score to world class >50% • Cool products – 1 new product per month released to customers • A loved Brand – prompted awareness at >90% & unprompted at >70% • Content ‐ launch of IPTV in 2009, expanded “Media Lounge” and new website Investor Strategy Briefing 2008 10 Service is paramount • Cape Town officially launched on 26th October 2008 • Outstanding service – lifting Net Promoter Score to world class >50%, driving down churn. Investor Strategy Briefing 2008 11 And finally … Your questions? Investor Strategy Briefing 2008 12 Glossary of terms Term Description ARPU Average monthly revenue per user. or unlit fibre is the name given to individual fibres that have yet to be used within cables that have been already laid. They are hence not yet connected to any electronic Dark Fibre device, and are only there for future usage. Digital Subscriber Line or xDSL, is a family of technologies that provides digital data transmission over the wires of a local telephone network. DSL2+ extends the capability of DSL, DSL2+ the basic DSL in providing faster speeds. DSLAM Digital Subscriber Line Access Multiplexer is a device that connects a customer DSL line to iiNet’s infrastructure. FTP Means File Transfer Protocol –a network protocol used to transfer data from one computer to another through a network such as the internet. FTTH Means fibre to the home –this was the predecessor title for the now called National Broadband Network (NBN). IPTV Internet Protocol Television is the provision of digital television over the Internet. Line Sharing Service. A wholesale product provided by Telstra which allows iiNet to transmit data across the copper telephone line between the customer’s residence and the LSS exchange. Mobile Data Broadband supplied by a wireless digital modem sold to customers as a separate plug‐in device for computers. Prior to its release, a customer would have to purchase a phone line and pay line rental in order to have an ADSL service active. Naked eliminates the need to pay line rental yet Naked DSL still have a VoIP telephone service as backup for making calls if required. A measure of customer recommendation levels that has a direct correlation with future customer growth. NPS is calculated by asking a sample of customers how likely they are Net Promoter Score to recommend the brand to others. Off‐Net A customer that is provided a DSL service through another network (usually Telstra Wholesale). On‐Net A customer that is provided a DSL service through the iiNetwork. PSTN Public switched telephone network. The traditional copper network built to provide fixed line telephony in most developed countries. Stands for Session Initiation Protocol which allows internet telephony service providers and telecommunications carriers to deliver a single data connection to an enterprise, SIP Trunking upon which voice, internet, email and video can travel VCC Virtual Call Centre –a call centre where the representatives are geographically dispersed. VDSL2 Very high speed Digital Subscriber Line which provides higher speeds over copper than ADSL2+ but only over shorter distances. VoIP Voice over Internet Protocol –the routing of voice conversations over the Internet or through any other IP based network. Investor Strategy Briefing 2008 13 Disclaimer Some of the information contained in this presentation contains “forward‐looking statements” which may not directly or exclusively relate to historical facts. These forward‐looking statements reflect iiNet Limited’s current intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside the control of iiNet Limited. Important factors that could cause actual results to differ materially from the expectations expressed or implied in the forward‐looking statements include known and unknown risks. Because actual results could differ materially from iiNet Limited’s current intentions, plans, expectations, assumptions and beliefs about the future, you are urged to view all forward‐ looking statements contained herein with caution. Investor Strategy Briefing 2008 14 Investor Strategy Briefing 2008 Westnet integration –David Buckingham (CFO) 8th December 2008 Clear rationale for acquisition Delivering Results Rationale • Westnet revenue growth of 36% and growing • Accretive transaction pre synergies EBITDA run rate of $12m per annum in FY08 • Migration from pure reseller to iiNet • Network migration of 40k Metro customers infrastructure delivers significant savings ($19 on‐going per sub per month) • Cements position as 3rd Largest ISP in • 4,500 new broadband customers since Australia and clear leader in WA acquisition and 1,250 new DSL2+ on iiNetwork • Acquisition of best‐in‐class service and organic sales capabilities • NPS consistently > 65%, Voted “Best ISP” in 2008 PC Authority Awards last week • Complementary metro and regional customer bases • Complementary brands with different demographics & target customers Investor Strategy Briefing 2008 2 Confident of beating synergy target FY09 Target of $2.5m Being delivered through combination of voluntary migrations to iiNetwork and new Telstra volume rebates $m FY10 Target of $5m Options exist, migration model requires minimum 25k customer moves iiNetwork going into FY10 Investor Strategy Briefing 2008 3 “Best ISP in Australia and New Zealand” http://www.pcauthority.com.au/Awards2008/AwardsList.aspx Investor Strategy Briefing 2008 4 Integration strategy A simple integration • Operate Westnet independently and continue to grow the Westnet brand & customer base • Unique culture and service focus, critical to retain Westnet management and staff • Migration of metro customers onto iiNet infrastructure is key synergy goal • No legacy networks and existing billing platform is both robust and scalable • Opportunity for Westnet to offer innovative new products • iiNet customers who cannot get ADSL may be able to get Westnet satellite Investor Strategy Briefing 2008 5 Maximising value from Westnet • Financial benefit from Telstra rebate for FY09 • Delivers synergy target without the need to spend capex • Maintain potentially valuable long‐term wholesale relationship • Westnet customers favour mature products • In discussions for FY10 –increased volume rebate could retain attractive off‐ net margin but needs to deliver our internal synergy target Investor Strategy Briefing 2008 6 Leveraging Westnet’s customer base Progress to date • Launched ADSL2+ on the iiNetwork • iiNet products now on sale in over 100 Westnet reseller outlets • Mining of the iiNet dial up base for potential conversion to broadband via Westnet satellite • Cross development of new combined hosting platform • Sharing iiNet content and initiatives e.g. English Premier League, 3FL gaming • Synergy upside over and above pure network synergies previously highlighted Investor Strategy Briefing 2008 7 First national ADSL2+ launch …. by Westnet • Soft launched on 21st October 2008 • Provides access to more than 1,400 exchanges nationally, 998 of which are rural • Already >1,250 customers
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