Telenet Digital TV adds 64,000 subscribers in 3Q09

MECHELEN — Telenet Group Holding NV (“Telenet” or the “Company”) (Euronext Brussels: TNET) announces its unaudited consolidated results under International Financial Reporting Standards as adopted by the European Union (“EU GAAP”) for the nine months ended September 30, 2009.

Digital & Premium Television

At the end of September 2009, our digital cable TV subscriber base totaled 916,000 comprising 857,000 Telenet Digital TV subscribers and 59,000 customers on the INDI Digital TV platform, which we acquired as part of the Interkabel Acquisition. In line with our expectations and consistent with trends observed over recent quarters, INDI’s subscriber base continued to erode gradually, but with the majority of these customers migrating to our interactive Telenet Digital TV platform. Year”to”date, we welcomed 247,000 new subscribers to our Telenet Digital TV product compared to 128,000 net additions over the first nine months of 2008. We should reiterate that iDTV subscriber growth in the final quarter of last year and the first half of the year was largely driven by pent”up demand in the acquired Interkabel area and that most of this effect was fulfilled by the end of Q2 2009. Nevertheless, we succeeded in expanding our Telenet Digital TV subscriber base by 64,000 in Q3 2009, emphasizing the commercial traction of our interactive TV platform and the appeal of our multiple play bundles.

At the end of the quarter, 39% of our total cable TV subscriber base within the Combined Network had discovered the benefits and convenience of our digital TV offering either through a Telenet Digital TV or INDI set”top box. This compares to a like”for”like 28% digitalization rate at the end of last year and to 36% at the end of Q2 2009.

In addition to the aforementioned digital TV platforms, we still have 6,000 subscribers to the premium analog Pay TV service delivered through an alternative platform (former Canal+) which is only available on the Telenet Partner Network. Our premium analog pay TV subscriber base contracted by 4,000 in the quarter and continues to trend down. The majority of these customers migrated to the Telenet Digital TV platform.

Total video”on”demand transactions grew by 58% over the first nine months of 2009 to 22.8 million compared to 14.4 million over the first nine months of 2008. In Q3 2009 alone, we recorded 8.4 million transactions (up 68% year”on-year). Compared to the prior year period, the number of average monthly transactions per user remained stable around 3.5 over the first nine months of the year. In addition to video”on”demand revenue, our premium cable TV revenue is driven by the strong uptake in rentals of the high”end HD and PVR”enabled set”top boxes which provide a positive boost to our recurring monthly set”top box rental fees. The other contributors to our digital TV revenue include subscription fees to our thematic and premium channel packages, the latter marketed under the brand name PRIME, and interactive services.

Basic Cable Television

Subscribers to both basic analog and digital television services reached 2,363,000 at the end of September 2009 compared to 1,674,000 at the end of September 2008. This growth is principally attributable to the acquisition of Interkabel in October 2008, which allowed us to begin offering TV services (analog or digital) and bundles across the entire Flemish region.

Year”to”date, we recorded a net organic loss of 39,000 basic cable TV subscribers within our Combined Network. This net organic loss excludes migrations to our digital TV platform and represents customers churning to competitor’s platforms, such as other digital television providers and satellite operators. The rate of organic attrition in Q3 2009 was 11,000, broadly stable compared to the previous quarter, which we believe is a solid achievement given the tougher competition in the residential market. The penetration of basic cable TV (as a % of homes passed) within the Combined Network stood at 84.8% at the end of September 2009 versus 86.6% a year earlier. Although the net organic loss rate has moderated throughout the year, we continue to foresee greater competition from alternative television platforms going forward.

Highlights:

• Robust Telenet net additions (+64,000 in Q3 2009) driven by commercial traction of Shakes bundles and continuous platform improvements;
• Lower pace compared to previous quarters as pent”up demand in Interkabel region was fulfilled by the end of Q2 2009;
• 39% of TV subscribers watch digital TV either through a Telenet or INDI set”top box.
• HD set”top boxes already accounting for 47% of installed box types versus only 8% one year ago.

Premises serviced (in thousands):

For the three months ended          Sept 2009  Sept 2008  Change %
                                    ---------  ---------  --------
Total Analog Cable TV                   1,447      1,155       25%
  Analog Cable TV                       1,441      1,135       27%
  Pay-TV on Partner Network                 6         20      -70%

Total Digital Cable TV                    916        519       76%
  Telenet Digital TV                      857        519       65%
  INDI                                     59          -       n/a

Total Cable TV                          2,363      1,674       41%

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