Analog and digital cable TV

We are one of the four largest cable television operators in Poland who collectively account for approximately 47% of all cable television households. The Polish cable television market is exceptionally fragmented with over 630 smaller operators.

We were the first company in Poland to offer IPTV, which we launched in April 2006. The service is now available in Mielec, Kutno, Brzesko, Dębica, and a number of smaller towns in the south of Poland.

We were the first in Poland to roll out digital television for cable TV subscribers in May 2007, offering high definition television (HDTV) with a return path. This new technology opens doors not only to digital image and sound quality but also to interactive services never before available in Poland.

We were once again the first cable operator in Poland to roll out video on demand - virtual video rental - in September 2007.

In December 2009, we introduced a new digital functionality - PVR which allows users to record, rewind and replay programmes.

From January 2010, Multimedia Polska subscribers have access to the first interactive TV channel in Poland called aMazing. Using real-time communication, the viewers can vote, take part in contests and competitions and actively interact with television content.

We are planning to offer our customers a wide range of interactive services, such as:

• Time-Shift TV - a service which allows for viewing television programmes broadcast in the previous week
• T-Commerce - a service which enables customers to purchase products and services via television in a manner similar to internet shopping
• Games - including network games
• Mail and messenger

As of 30 June 2010, we delivered cable television, DTV and IPTV services to ca. 698,000 subscribers.

Broadband and mobile internet

We are one of the largest cable internet providers in Poland. We provide our service over our cable or PSTN network. We also offer to some of our subscribers internet access by means of Wi-Fi and Wi-Max technology.

As of 30 June 2010, we had some 337,000 broadband internet subscribers, including 285,000 cable subscribers and some 51,000 xDSL subscribers.

In November 2009, we added mobile internet to our offering under the brand name mobilNET.

Fixed-line and mobile telephony

Multimedia offers standard telephony services and a number of additional services provided over conventional PSTN networks as well as cable networks using VoIP (digital) or HDT (analogue) technology. We also offer wholesale telephony services to other telecommunications operators, as well as NDS (Network Access Number) services for other operators' clients involving the use of a prefix.

At the end of June 2010, Multimedia's clients used some 209,000 telephone lines, including ca. 108,000 PSTN lines and ca. 102,000 cable network connections (mostly VoIP).

In December 2009, we rolled out a mobile voice service called mobilFON.

Bundled services

Multimedia sells bundled services combining at least two of the three services: cable television, internet, and telephony. We refer to a package comprising two of the three services as double play, and a package of all three as triple play. The number of triple play subscribers has been growing rapidly.

At the end of June 2010, triple play was subscribed by ca. 93,000 clients. Some 311,000 subscribers took up at least two services.

We expect the number of double and triple play subscribers to continue to grow at a fast pace. This growth will be supported by the implementation of number portability which became effective in October 2006.

Triple play subscribers benefit from using three services in a bundle and pay less than they would for each service separately. Triple play subscribers receive one invoice for all three services. Double and triple play subscribers can also benefit from a number of loyalty programmes and discounted offers.

By offering bundled services, the company is able to increase its ARPU and reduce selling and marketing costs which are borne only once for all three services.

Triple play has increased customer loyalty; the churn rate among triple play subscribers is significantly lower than reported for single play subscribers.

We also continue to expand the standard triple play bundle by offering a number of value-added and hybrid services (such as VoD, DTV, mobilNET, mobilFON); however, we do not treat those services as part of our basic triple play bundle.