Telenet adds 65,000 Digital TV customers in 1Q10

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 three months ended March 31, 2010.

Television

Digital & Premium Television

At the end of March 2010, we served 1,065,000 digital TV subscribers, up 37% compared to the prior year period. Our digital TV subscriber base comprised 1,003,000 Telenet Digital TV customers (+40% year-on-year) and the remaining 62,000 customers on the INDI digital TV platform which we acquired as part of the Interkabel Acquisition in October 2008. During the first three months of the year, we added 65,000 net new Telenet Digital TV customers compared to 107,000 in the prior year quarter, which was largely driven by pent-up demand in the acquired Interkabel area.

Our digitalization ratio, which measures the total base of digital TV customers (both Telenet Digital TV and INDI) relative to our total cable TV subscriber base, continued to grow, reaching 46% at the end of March 2010 compared to 33% a year earlier. In February this year, we unveiled a new customer interface for our interactive Telenet Digital TV platform. Together with the upcoming launch of Digiprogrammer, which enables customers to program their set-top boxes through the web, these innovations will create a wholly new experience for our digital TV customers.

Basic Cable Television

Subscribers to both basic analog and digital television services totaled 2,318,000 at the end of March 2010 compared to 2,342,000 at the end of December 2009. This implies a net organic loss of 24,000 basic cable TV subscribers for the first three months of the year. This 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, or customers terminating their TV service or having moved out of our service footprint. Given the historically high level of cable penetration in our footprint and the limited expansion of the number of homes passed, we believe that the number of cable TV subscribers will continue to show a decreasing trend.

In line with our expectations and the trends witnessed in Q4 2009, the level of organic attrition showed a year-on-year increase given a more intense competitive environment in the residential TV market. Yet, the level of organic attrition remained within our expectations and the strong growth in both digital TV and triple play subscribers significantly outweighed the higher net organic attrition for our basic cable TV service given the former’s far superior ARPU contribution compared to the basic cable TV ARPU.

Our 2010 outlook, which we provided at the end of February this year, fully captures our expectation of higher churn for our analog TV service given sustained competition in the residential TV market from competing platforms. In light of these challenges, we will increasingly pursue our strategy of converting the majority of our single play basic cable TV subscribers to multiple play, while greatly enhancing the customer experience of our interactive digital TV platform with new features and a revamped user interface. At the same time, our analog TV product continues to deliver great value for money, as it provides a diversified range of 27 basic channels and the complementary feature of connecting multiple TV-sets simultaneously at one of the lowest basic cable TV fees within Western Europe.

Operational Highlights (in 000 serviced premises):

                                                March 2010  March 2009  Change %
                                                ----------  ----------  --------
Total Cable TV                                       2,318       2,386       -3%
 Analog Cable TV                                     1,253       1,606      -22%
 Digital Cable TV (Telenet Digital TV + INDI)        1,065         780       37%

More: Earnings Release