Hosted IPTV Service

our partner approach to IPTV subscriber growth

Alexander VaglarovVestitel BG Jsc

Agenda

IPTV Hosting – service definition

Bulgaria – key market data

Our Strategic position

IPTV Hosting benefits

Our current offer

Next steps

Sources:

•TV studios

•Film Studios

•Content Aggregators

Vestitel:

•Content Management

•Encoding

•Encryption

•Provisioning

•Quality Monitoring

•Billing

•Skins

•Marketing

•L2 Support

Partner/ISP:

•Access network (FTTC/B/H)

•Customers

•Service Bundling (2 Play/3Play)

•Promotions

•Field support

Customer

Enjoying Services

TV Hosting – Service Eco-System

Bulgaria-Macro-Economic Picture

IndicatorChange (in %) Vs Previous Year

2005 2006 2007 2008

GDP 6,2 6,3 6,2 6,25

Industrial Production

6,7 5,9 9,2 5,2

Unemployment 10,1 9 6,9 5

Number of Households (HH) 2 500 000

Population (end of 2007) 7 640 238

Bulgaria - TV Market 2008

TV penetration > 90%, average 1,6 TV/HH

CATV and DTH penetration– 70 % of HH(1,75 Mil.)

CATV consolidated– 42% of HH,>38% by 2 players

CATV operators offer 3 Play, started in 2006

CATV ARPU – about 12 EUR/month incl. VAT

DTH penetration - 28% of HH, ARPU 9 EUR/month

Digitalization of TV – regulatory push till 2012

Web TV – started in 2007, niche product

IPTV – first steps, but the future

30% of HH connected to BB Internet (700K)

Average growth per year about 6%

Illegal content decreased dramatically

Bulgaria – BB Internet Market 2008

Our Strategic position

Vestitel installed high quality IPTV Eco-system

Vestitel collected 2 years of IPTV experience

Vestitel’s own FTTB/H network development was too slow – building permissions

Next 2-3 years will be critical for IPTV positioning in BG - 2 main players can survive

IPTV needs scale, to be profitable

Partners are needed to scale

Our Strategic position3 strategic partner choices

Cable TV

BTC(incumbent)

LAN ISPsFTTC/B/H

•biggest stake in BB Internet (in total)

•FTTC/B/H – best for IPTV

•fragmented >400

•good customer contact

•need 2 and 3Play to grow and protect positions

! Investments, no TV experience, QoS, multicast

•biggest customer base in one hand

•own IPTV project cancelled

•financially strong

! xDSL limitations, slow, decision making process, risk of starting own service

Competitors

Our market approach – LAN ISPs

Local focus – partner ISP with good reputation

No set-up fee, pay as you grow

ISP ability to create own bundles – 2 & 3Play

Motivating GM for ISP (TP= CP/2)

50-50 margin split of all VAS (e.g. VoD)

Free STBs for the service testing & start (100)

Free training for sales and technicians

Marketing support through (co branding)

Customers:

High Picture Quality (fully digital technology)

Interactive service, content navigation

ISPs:

Short time to market, protect market position

Easy start, low risk for ISP

Economies of scale for STB and content

Content providers: Controlled content distribution

Vestitel: one of the 2 main IPTV players in BG

IPTV Hosting win - win solution

IPTV service started in just 7 steps

Our current offering

74 TV channels + 20 radio stations

ISP individual vision – „Logo” & “Skin”

Centralized Provisioning and Billing

24/7 Layer 2 service support

Price for Sofia – 5.87 EUR/Subscriber/month

Marketing Support through

50-50 split of VoD and Pay TV margins

2 STB models (Motorola, 2-nd STB integr. in progress)

Features – now and next steps

Streaming TV - existing (74 ch)

Video on Demand - existing (Promo)

EPG & Reminders - existing

Individual TV profiles - existing

Information portal - existing

HDTV – planned Q2/2009

Time-shifted TV – planned Q3/2009

People metrics – planned E/2009

Targeted Advertising – planned 2010

NPVR – planned 2010

Thank you for the attention!

Alexander Vaglarov+359 89 334 6600avaglarov@vestitel.bg Illustration by Barton Stabler